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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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WASHINGTON, D.C. 20549
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): March 25, 1997
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FIRST SECURITY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-06906 87-6118148
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(State or other Jurisdiction (Commission File Number (I.R.S.employer
of Incorporation) Identification No.)
79 South Main
P.O. Box 30006
Salt Lake City, Utah 84130-0006
(Address of principal executive offices)
Registrant's telephone number, including area code: 801
Page 1 of 4
Exhibit Index appears on Page 4
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ITEM 5. OTHER EVENTS
On March 18, 1997, the Underwriting Agreement, dated as of March 18,
1997, by and between First Security Bank, N.A., a subsidiary of the registrant,
and J.P. Morgan Securities Inc., as Representative of the several underwriters
listed on Schedule I thereto, was executed and delivered by the respective
parties thereto. On March 25, 1997, the Pooling and Servicing Agreement, dated
as of March 25, 1997 (the "POOLING AND SERVICING AGREEMENT"), by and between
First Security Bank, N.A., as seller and servicer, and Bankers Trust Company, as
trustee, was executed and delivered by the respective parties thereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
1.1 Underwriting Agreement, dated as of March 18, 1997, by and
between First Security Bank, N.A., and J.P. Morgan
Securities Inc., as Representative of the several
underwriters listed on Schedule I thereto.
4.1 Pooling and Servicing Agreement, dated as of March 25, 1997,
by and between First Security Bank, N.A., as seller and
servicer, and Bankers Trust Company, as trustee.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: March 31, 1997
FIRST SECURITY CORPORATION
(Registrant)
By: /S/ Scott C. Ulbrich
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Name: Scott C. Ulbrich
Title: Chief Financial Officer
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INDEX TO EXHIBITS
Sequentially
Exhibit Number Exhibit Numbered Page
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1.1 Underwriting Agreement, dated as of March 18,
1997, by and between First Security Bank,
N.A., and J.P. Morgan Securities Inc., as
Representative of the several underwriters
listed on Schedule I thereto.
4.1 Pooling and Servicing Agreement, dated as of
March 25, 1997, by and between First Security
Bank, N.A., as seller and servicer, and
Bankers Trust Company, as trustee.
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Exhibit 1.1
FIRST SECURITY AUTO GRANTOR TRUST 1997-A
6.30% ASSET BACKED CERTIFICATES, CLASS A
6.50% ASSET BACKED CERTIFICATES, CLASS B
FIRST SECURITY BANK, N.A.
(Seller and Servicer)
UNDERWRITING AGREEMENT
March 18, 1997
J.P. Morgan Securities Inc.
As Representative of the Several Underwriters
Listed in Schedule I (the "Representative")
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
First Security Bank, N.A. (the "BANK"), proposes to sell to the
several Underwriters listed on Schedule I hereto (the "UNDERWRITERS")
$187,568,473.85 principal amount of 6.30% Asset Backed Certificates, Class A
(the "CLASS A CERTIFICATES") and $12,503,000.00 principal amount of 6.50% Asset
Backed Certificates, Class B (the "CLASS B CERTIFICATES," and together with the
Class A Certificates, the "CERTIFICATES") to be issued by the First Security
Auto Grantor Trust 1997-A. Each Certificate will represent an undivided
interest in the First Security Auto Grantor Trust 1997-A (the "TRUST"). The
assets of the Trust will include, among other things, a pool of retail motor
vehicle installment sale contracts and installment loans secured by new and used
automobiles and light trucks (collectively, the "RECEIVABLES") and certain
monies due thereunder after the close of business of the Bank on February 25,
1997 (the "CUTOFF DATE"), such Receivables and other property to be sold to the
Trust by the Bank and to be serviced for the Trust by the Servicer. The Class B
Certificates are, to the extent specified in the Pooling and Servicing
Agreement, subordinated to the rights of the holders of the Class A
Certificates. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"), by and among the
Bank, as seller (in such capacity, the "SELLER") and as servicer (in such
capacity, the "SERVICER"), and Bankers Trust Company, a New York banking
corporation ("Bankers Trust"), as trustee (in such capacity, the "TRUSTEE"), and
as collateral agent for the Yield Supplement Account and the Reserve Account (in
such capacity, the "COLLATERAL AGENT").
The Bank has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") in accordance with the provisions of the
Securities Act of 1933, as amended (the "ACT"), and the rules and regulations of
the Commission thereunder (the "RULES AND REGULATIONS"), a registration
statement, including a prospectus, relating to the Certificates. The
registration statement as amended at the time when it shall become effective,
or, if a post-effective amendment is filed with respect thereto, as amended by
such post-effective amendment at the time of its effectiveness, including in
each case information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Act, is referred to
in this
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Agreement as the "REGISTRATION STATEMENT," and the prospectus in the form used
to confirm sales of the Certificates is referred to in this Agreement as the
"PROSPECTUS."
The terms which follow, when used in this Agreement, shall have the
meanings indicated. "EFFECTIVE DATE" shall mean each date that the Registration
Statement and any post-effective amendment or amendments thereto became or
become effective. "EXECUTION TIME" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "RULE 424" and "RULE
430A" refer to such rules under the Act. To the extent not defined herein,
capitalized terms used herein have the meanings assigned to such terms in the
Pooling and Servicing Agreement.
The Bank represents and warrants to, and agrees with, the Underwriters
as follows:
1. The Bank hereby agrees to sell and deliver the Certificates to
the several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Bank the respective principal amount of the Certificates set forth
opposite such Underwriter's name in Schedule I hereto. The Class A Certificates
and the Class B Certificates are to be purchased by the Underwriters at the
purchase price of 99.672500 and 99.594234, respectively, of the aggregate
principal amount thereof plus accrued interest on the principal amount thereof
at the applicable Pass-Through Rate calculated from (and including) March 15,
1997, to (but excluding) the Closing Date.
2. The Bank understands that the Underwriters intend (i) to make a
public offering of their respective portions of the Certificates as soon after
the Registration Statement and this Agreement have become effective as in the
judgment of the Representative is advisable and (ii) initially to offer the
Certificates upon the terms set forth in the Prospectus.
3. Payment for the Certificates shall be made to the Bank or to its
order, by wire transfer of same day funds at the office of Kirkland & Ellis, 153
East 53rd Street, New York, New York 10022, at 9:00 a.m. (New York time) on
March 25, 1997 (the "CLOSING DATE"), or at such other time on the same or such
other date, not later than the fifth Business Day thereafter, as the
Representative and the Bank may agree upon in writing. As used herein, the term
"BUSINESS DAY" means any day other than a day on which banks are permitted or
required to be closed in the City of New York.
Payment for the Certificates shall be made against delivery to the
Representative for the respective accounts of the several Underwriters of the
Certificates registered in the name of Cede & Co. as nominee of The Depositary
Trust Company and in such denominations, as permitted by the Pooling and
Servicing Agreement, as the Representative shall request in writing not later
than two full Business Days prior to the Closing Date, with any transfer taxes
payable in connection with the transfer to the Underwriters of the Certificates
duly paid by the Bank. The certificates for the Certificates will be made
available for inspection and packaging by the Representative at the office
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of Kirkland & Ellis, 153 East 53rd Street, New York, New York 10022, not later
than 1:00 p.m. (New York time) on the Business Day prior to the Closing Date.
4. The Bank hereby represents and warrants to, and agrees with, each
Underwriter that:
(a) The Registration Statement on Form S-1 (no. 333-18089),
including the Prospectus and such amendments thereto as may have been required
on or prior to the date hereof, relating to the Certificates, has been filed
with the Commission and such Registration Statement as amended has become
effective. With respect to the Registration Statement, the conditions to the
use of a registration statement on Form S-1 under the Act, as set forth in the
General Instructions to Form S-1, have been satisfied by the Bank;
(b) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Bank, threatened by the Commission,
and on the Effective Date of the Registration Statement, the Registration
Statement and the Prospectus conformed in all respects to the requirements of
the Act and the Rules and Regulations, and did not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and, on the
Closing Date, the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished to the Bank in
writing by any Underwriter through the Representative expressly for use therein;
(c) The computer tape with respect to the Receivables to be sold
to the Trust created as of the Cutoff Date (the "COMPUTER TAPE"), and made
available to the Representative by the Bank, was complete and accurate in all
material respects as of the date thereof;
(d) The Bank has been duly organized and is validly existing as
a United States banking association, is in good standing under the laws of the
United States, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material adverse
effect on the Bank;
(e) The Certificates have been duly authorized, and, when issued
and delivered pursuant to the Pooling and Servicing Agreement, duly
authenticated by the Trustee and paid for by the Underwriters in accordance with
the terms of this Agreement, will be duly and validly issued, authenticated and
delivered and entitled to the benefits provided by the Pooling and
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Servicing Agreement; each of the Pooling and Servicing Agreement, the Yield
Supplement Agreement and this Agreement have been duly authorized by the Bank
and, when executed and delivered by the Bank and the other parties thereto (in
the case of the Pooling and Servicing Agreement and the Yield Supplement
Agreement), each of the Pooling and Servicing Agreement, the Yield Supplement
Agreement and this Agreement will constitute a valid and binding agreement of
the Bank; the Certificates, the Pooling and Servicing Agreement and the Yield
Supplement Agreement will conform to the descriptions thereof in the Prospectus
in all material respects;
(f) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required to be obtained or
made by the Bank for the consummation of the transactions contemplated by this
Agreement, the Pooling and Servicing Agreement or the Yield Supplement Agreement
except such as have been obtained and made under the Act, such as may be
required under state securities laws and the filing of any financing statements
required to perfect the Trust's interest in the Receivables;
(g) The Bank is neither in violation of its articles of
association or by-laws nor is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any agreement or
instrument to which it is a party or by which it or its properties is bound
which would have a material adverse effect on the transactions contemplated
herein or in the Pooling and Servicing Agreement or the Yield Supplement
Agreement. The execution, delivery and performance of this Agreement, the
Pooling and Servicing Agreement and the Yield Supplement Agreement, and the
issuance and sale of the Certificates and compliance with the terms and
provisions hereof and thereof, will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any statute,
rule, regulation or order of any governmental agency or body or any court having
jurisdiction over the Bank or any of its properties or any agreement or
instrument to which the Bank is a party or by which the Bank is bound or to
which any of the properties of the Bank is subject, or the articles of
association or by-laws of the Bank; and the Bank has full power and authority to
authorize and to sell, and to establish the Trust that will issue, the
Certificates as contemplated by this Agreement and to enter into this Agreement,
the Pooling and Servicing Agreement and the Yield Supplement Agreement;
(h) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to the knowledge of
the Bank, threatened, to which the Bank is or may be a party or to which any
property of the Bank is or may be the subject which, if determined adversely to
the Bank, could individually or in the aggregate reasonably be expected to have
a material adverse effect on the general affairs, business, prospects,
management, financial position, stockholders, equity or results of operations of
the Bank or that would reasonably be expected to materially adversely affect the
interests of the holders of the Certificates; and there are no contracts or
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or the Prospectus which are not filed or described as required; and
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(i) By assignment and delivery of each of the Receivables to the
Trust as of the Closing Date, the Bank will transfer all of its right, title and
interest in, to and under the Receivables and certain related property to the
Trust, subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
5. The Bank covenants and agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the
Certificates, the Bank will not file or cause to be filed any amendment of the
Registration Statement or supplement to the Prospectus which shall be reasonably
disapproved of promptly by the Representative after reasonable notice thereof.
Subject to the foregoing sentence, if the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Bank will cause the Prospectus,
properly completed, and any supplement thereto, to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Underwriters of such
timely filing. The Bank will promptly advise the Underwriters (i) when the
Prospectus, and any supplement thereto, shall have been filed (if required) with
the Commission pursuant to Rule 424(b), (ii) when, prior to termination of the
offering of the Certificates, any amendment to the Registration Statement shall
have become effective, (iii) of any request by the Commission for any amendment
of the Registration Statement or supplement to the Prospectus or for any
additional information, (iv) of the receipt by the Bank of notification with
respect to 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 Bank of
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 Bank 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) The Bank will deliver or cause to be delivered, at its
expense, to the Representative, two signed copies of the Registration Statement
(as originally filed) and each amendment thereto, in each case including
exhibits, and to each other Underwriter a conformed copy of the Registration
Statement and each amendment thereto, in each case without exhibits, and, during
the period mentioned in paragraph (e) below, to each of the Underwriters as many
copies of the Prospectus (including all amendments and supplements thereto) as
the Representative may reasonably request. The Bank will furnish or cause to be
furnished to the Representative copies of all reports on Form SR required by
Rule 463 under the Act;
(c) The Bank will, if (i) during such period of time after the
first date of the public offering of the Certificates as in the opinion of
counsel for the Underwriters a Prospectus relating to the Certificates is
required by law to be delivered in connection with sales by an underwriter or
dealer, (ii) any event shall occur as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or (iii) it is necessary to amend or supplement the Prospectus to
comply with the applicable law, forthwith prepare and furnish, at the
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expense of the Bank, to the Underwriters and to the dealers (whose names and
addresses the Representative will furnish to the Bank) to which the Certificates
may have been sold by the Representative on behalf of the Underwriters and upon
request by the Representative to any other dealers identified by the
Representative, such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus will comply with the law;
(d) The Bank will qualify the Certificates for offer and sale
under the securities or "BLUE SKY" laws of such jurisdictions as the
Representative shall reasonably request and will continue such qualification in
effect so long as reasonably required for distribution of the Certificates and
will pay all fees and expenses (including fees and disbursements of counsel to
the Underwriters) reasonably incurred in connection with such qualification and
in connection with the determination of the eligibility of the Certificates for
investment under the laws of such jurisdictions as the Representative may
designate; PROVIDED, HOWEVER, that the Bank shall not be obligated to qualify to
do business in any jurisdiction in which it is not currently so qualified; and
PROVIDED FURTHER that the Bank shall not be required to file a general consent
to service of process in any jurisdiction;
(e) On or before March 31, 1998, the Bank will cause the Trust
to make generally available to the Certificateholders and to the Representative
as soon as practicable an earnings statement covering a period of at least
twelve months beginning with the first fiscal quarter of the Trust occurring
after the effective date of the Registration Statement, which shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Commission
promulgated thereunder;
(f) For the period from the date of this Agreement until the
retirement of the Certificates the Servicer will furnish to the Representative
(x) copies of each certificate and the annual statements of compliance delivered
to the Trustee pursuant to the Pooling and Servicing Agreement and the annual
independent certified public accountant's servicing reports furnished to the
Trustee pursuant to the Pooling and Servicing Agreement, by first-class mail as
soon as practicable after such statements and reports are furnished to the
Trustee and (y) copies of each amendment to the Pooling and Servicing Agreement,
and on each Determination Date or as soon thereafter as practicable, the
Servicer shall give notice substantially in the form of Schedule II hereto by
telex or telecopy to the Representative of the Class A Pool Factor and the Class
B Pool Factor as of the related Record Date;
(g) During the period beginning on the date hereof and
continuing to and including the Business Day following the Closing Date, the
Bank will not offer, sell, contract to sell or otherwise dispose of any
securities of or guaranteed by the Bank which are substantially similar to the
Certificates without the prior written consent of the Representative;
(h) To the extent, if any, that the rating provided with respect
to the Certificates by the rating agency or rating agencies rating the
Certificates (the "RATING AGENCY") is
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conditional upon the furnishing of documents or the taking of any other action
by the Bank agreed upon on or prior to the Closing Date, the Bank shall use its
reasonable best efforts to furnish such documents and take any such other
action; and
(i) So long as any of the Certificates are outstanding, the Bank
will furnish to the Representative, by first class mail, (i) as soon as
practical after the end of the Bank's fiscal year, copies of all documents,
records and financial statements required to be distributed to
Certificateholders (including Certificate Owners) or filed with the Commission
pursuant to the Exchange Act, or any order of the Commission thereunder and
(ii) from time to time, any other information concerning the Bank filed with any
government or regulatory authority or national securities exchange which is
otherwise publicly available, as the Representative may reasonably request.
6. The Bank will pay all costs and expenses incident to the
performance of its obligations under this Agreement, including, without limiting
the generality of the foregoing, all costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the
Certificates, (ii) incident to the preparation, printing and filing under the
Act of the Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements thereto),
(iii) incurred in connection with the registration or qualification and
determination of eligibility for investment of the Certificates under the laws
of such jurisdictions as the Underwriters may designate (including fees and
disbursements of counsel for the Underwriters with respect thereto),
(iv) related to any filing with the National Association of Securities Dealers,
Inc., (v) in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the Pooling and Servicing
Agreement, the Yield Supplement Agreement and any Blue Sky Memorandum and the
furnishing to the Underwriters and dealers of copies of the Registration
Statement and the Prospectus as herein provided, (vi) the fees and disbursements
of the Bank's counsel and accountants and that portion of the Underwriters'
counsel fees and disbursements that are chargeable to the Bank, and (vii) any
fees and expenses payable to the Rating Agencies in connection with the rating
of the Certificates.
7. The obligations of the several Underwriters to purchase and pay
for the Certificates will be subject to the accuracy of the representations and
warranties on the part of the Bank herein, to the accuracy of the statements of
officers of the Bank made pursuant to the provisions hereof, to the performance
by the Bank of its obligations hereunder and to the following additional
conditions precedent:
(a) At the time this Agreement is executed and delivered by the
Bank and at the Closing Date, Deloitte and Touche, L.L.P. shall have furnished
to the Representative letters dated, respectively, as of the date of this
Agreement and as of the Closing Date substantially in the forms of the drafts to
which the Representative previously agreed.
(b) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the Rules and
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Regulations and in accordance with Section 5(a) of this Agreement; no stop order
suspending the effectiveness of the Registration Statement shall be in effect,
and no proceedings for such purpose shall be pending before or, to the knowledge
of the Bank, threatened by the Commission; and all requests for additional
information from the Commission with respect to the Registration Statement shall
have been complied with to the satisfaction of the Representative.
(c) The Representative shall have received an officer's
certificate, dated the Closing Date, signed by the Chairman of the Board, the
President, or any Vice President of the Bank representing and warranting that,
as of the Closing Date, except to the extent that they relate expressly to
another date (in which case they will be true and correct as of such date on the
Closing Date), the representations and warranties of the Bank in this Agreement
are true and correct, that the Bank has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, that no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to the best of its knowledge, are contemplated by the
Commission.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, the Bank or the Servicer which, in the judgment of the
Representative, materially impairs the investment quality of the Certificates or
makes it impractical or inadvisable to proceed with completion of the sale of
and payment for the Certificates or (ii) any downgrading in the rating of any
debt securities of the Bank or any of its direct or indirect subsidiaries by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any such debt
securities (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating).
(e) Ray, Quinney & Nebeker, special counsel to the Bank, shall
have furnished to the Representative its written opinion, dated the Closing
Date, in form and substance satisfactory to the Representative, to the effect
that:
(i) The Bank has been duly organized and is validly
existing as a United States banking association in good standing under the
laws of the United States with full corporate power and authority to own
its properties and conduct its business as described in the Prospectus, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or the ownership of its
property requires such qualification except where the failure to be so
qualified or in good standing would not have a material adverse effect on
the Bank.
(ii) The Pooling and Servicing Agreement and the Yield
Supplement Agreement have been duly authorized, executed and delivered by
the Bank.
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(iii) This Agreement has been duly authorized, executed
and delivered by the Bank.
(iv) The execution, delivery and performance of this
Agreement, the Pooling and Servicing Agreement and the Yield Supplement
Agreement by the Bank will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any of
the properties or assets of the Bank, pursuant to its articles of
association or by-laws, any statute, regulation or publicly issued rule or
order, or, to the best of such counsel's knowledge, after due inquiry, any
privately issued rule or order of any governmental agency or body or any
court having jurisdiction over the Bank, or its properties or any agreement
or instrument known to such counsel to which the Bank, is a party or by
which the Bank, or any of its respective properties is bound.
(v) To the best of such counsel's knowledge, after due
inquiry, no authorization, approval or consent of any court or governmental
agency or authority is necessary in connection with the execution, delivery
and performance by the Bank of this Agreement, the Pooling and Servicing
Agreement or the Yield Supplement Agreement, except such as may be required
under the Act or the Rules and Regulations and state securities laws, and
except for such authorizations, approvals or consents (specified in such
opinion) as are in full force and effect as of the Closing Date.
(vi) The Certificates have been duly authorized by the Bank.
(vii) Nothing has come to such counsel's attention that
would cause it to believe that as of the latest Effective Date and at the
Closing Date (x) the Registration Statement and the Prospectus (other than
the financial statements and the other accounting, statistical and
financial information contained therein or omitted therefrom) contained or
contain any untrue statement of a material fact or omitted or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and (y) the descriptions therein of statutes and
governmental proceedings and contracts and other documents are inaccurate
in any material respect or do not fairly present the information required
to be shown therein.
(viii) Such counsel does not know of any contract or
other document of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which is not filed or described as required.
(ix) There are no legal or governmental proceedings pending
to which the Bank is a party, or of which any property, of the Bank is the
subject, and no such proceedings are known by such counsel to be threatened
or contemplated by governmental authorities or threatened by others, in
each such case, (A) that are required to be disclosed
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in the Registration Statement or (B) asserting the invalidity of all or
part of this Agreement, the Pooling and Servicing Agreement or the Yield
Supplement Agreement, (C) seeking to prevent the issuance of the
Certificates, (D) that could materially and adversely affect the Bank's
obligations under this Agreement, the Pooling and Servicing Agreement or
the Yield Supplement Agreement, as applicable, or (E) seeking to affect
adversely the federal or state income tax attributes of the Certificates.
(x) The Bank has 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 pursuant to the Pooling and Servicing
Agreement and has duly authorized such sale and assignment to the Trustee
by all necessary corporate action.
(xi) To the best of such counsel's knowledge, immediately
prior to the transfer of Receivables by the Bank pursuant to the Pooling
and Servicing Agreement, the Bank was the sole owner of all right, title
and interest in its Receivables and the other property to be transferred by
it to the Trust.
(xii) To the best of such counsel's knowledge,
Receivables transferred to the Trust by the Bank are "chattel paper" as
defined in the Relevant UCC.
(xiii) Such counsel is familiar with the Bank's standard
operating procedures relating to the Bank's acquisition of a perfected
first priority security interest in the vehicles financed by the Bank
pursuant to retail installment sale contracts in the ordinary course of the
Bank's business. Assuming that the Bank's standard procedures have been
followed with respect to the perfection of security interests in the
Financed Vehicles (and such counsel has no reason to believe that the Bank
has not followed its standard procedures in connection with the perfection
of security interest in the Financed Vehicles), the Bank has acquired or
will acquire a perfected first priority security interest in each of the
Financed Vehicles.
(xiv) To the extent that the Relevant UCC applies to the
perfection of the Trustee's security interests in the Receivables and other
property, rights and interests conveyed by the Bank to the Trust pursuant
to the Pooling and Servicing Agreement, when financing statements have been
duly executed and delivered and filed or recorded, as appropriate, in the
appropriate filing offices, such security interests will be perfected.
Under the Relevant UCC, no other security interest of any other creditor of
the Bank is equal or prior to the security interest of the Trustee in such
Receivables and other property conveyed to the Trust.
(xv) All filings necessary under applicable law to perfect
both the sale of, and grant of a security interest in, Receivables and the
proceeds thereof by the Bank to the Trustee as Trustee of the Trust
pursuant to the Pooling and Servicing Agreement have been made and,
provided that the Bank does not relocate its chief executive office in a
state
-10-
<PAGE>
other than Utah, and that the Trustee maintains the list of Receivables for
inspection by interested parties, and no administrative errors are made by
state or local agencies, no other filings (other than the filing of
continuation statements) need be made to maintain the perfection of the
transfer of the Receivables and the proceeds thereof to the Trustee as
Trustee of the Trust pursuant to the Pooling and Servicing Agreement.
(xvi) The statements in the Registration Statement and
the Prospectus under the headings "ERISA Considerations" and "Certain Legal
Aspects of the Receivables," to the extent they constitute descriptions of
matters of law or legal conclusions with respect thereto, have been
prepared or reviewed by such counsel and are correct in all material
respects.
(xvii) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of 1939, as amended,
and the Trust is not required to be registered as an "investment company"
under the Investment Company Act of 1940, as amended.
(xviii) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or, to the best of such
counsel's knowledge, threatened by the Commission; the Registration
Statement and the Prospectus (other than the accounting, financial and
statistical data contained in the Registration Statement or the Prospectus,
or omitted therefrom, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the Act
and the Rules and Regulations.
(xix) The Certificates, this Agreement, the Pooling and
Servicing Agreement and the Yield Supplement Agreement each conform in all
material respects with the descriptions thereof contained in the
Registration Statement and the Prospectus.
(f) Kirkland & Ellis shall have furnished to the Representative
its written opinion, dated the Closing Date, in form and substance satisfactory
to the Representative, to the effect that, (i) assuming the due authorization,
execution and delivery of the Pooling and Servicing Agreement and the Yield
Supplement Agreement by the Bank, each of the Pooling and Servicing Agreement
and the Yield Supplement Agreement constitutes the legal, valid and binding
obligation of the Bank, enforceable against the Bank in accordance with its
terms, and (ii) when executed and authenticated by the Trustee in accordance
with the Pooling and Servicing Agreement and delivered and paid for in
accordance with this Agreement, the Certificates will be validly issued and
outstanding and entitled to the benefits provided by the Pooling and Servicing
Agreement. Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Pooling and Servicing Agreement and the Yield
Supplement Agreement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and the remedy of specific performance and injunctive and
other forms of equitable
-11-
<PAGE>
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(g) Kirkland & Ellis shall have furnished to the Representative
its written opinion, dated the Closing Date, in form and substance satisfactory
to the Representative, to the effect that:
(i) The Trust created by the Pooling and Servicing
Agreement will not be classified as an association taxable as a corporation
for federal income tax purposes and, instead, under subpart E, part I of
subchapter J of the Internal Revenue Code of 1986, as amended, the Trust
will be treated as a grantor trust and, subject to possible
recharacterization of certain fees paid by the Trust to the Bank or the
Servicer, each Certificate Owner will be treated as the owner of an
undivided PRO RATA interest in the income and corpus attributable to the
Trust.
(ii) The statements in the Registration Statement and
Prospectus under the heading "Federal Income Tax Consequences," to the
extent that they constitute descriptions of matters of law or legal
conclusions with respect thereto, have been prepared or reviewed by such
counsel and are correct in all material respects.
(iii) The Yield Supplement Account and the Reserve
Account will not be treated as an association taxable as a corporation or
other separate taxable entity for federal tax purposes; and neither the
Trustee nor the Certificate Owners will be treated as the owner of any
portion of the Yield Supplement Account or the Reserve Account and the
funds therein for such purposes.
(h) Ray, Quinney & Nebeker, special Utah tax counsel to the
Bank, shall have furnished to the Representative its written opinion, dated the
Closing Date, in form and substance satisfactory to the Representative, to the
effect that:
(i) The Trust will not be classified as a separate entity
on which Utah franchise tax will be imposed, and will not be subject to
other Utah taxes measured by income, capital, profits or receipts (other
than sales, excise, or AD VALOREM taxes that might be imposed upon the
ownership or sale of a vehicle acquired upon default of a Receivable);
(ii) Certificate owners who would not otherwise be subject
to tax in Utah will not be subject to Utah income or franchise taxes with
respect to interest or other amounts (including payments under the Yield
Supplement Agreement and from the Yield Supplement Account and the Reserve
Account) attributable solely to the beneficial ownership of a Certificate
(other than such Certificate Owner's share of sales, excise, or AD VALOREM
taxes that might be imposed upon the ownership or sale of a vehicle
acquired upon default of a Receivable);
-12-
<PAGE>
(iii) The Yield Supplement Account and the Reserve
Account will not be treated as an association taxable as a corporation or
other separate taxable entity for Utah state tax purposes;
(iv) and neither the Trustee nor the Certificate Owners will
be treated as the owner of any portion of the Yield Supplement Account or
the Reserve Account and the funds therein for Utah state tax purposes.
(i) Moffatt, Thomas, Barrett, Rock & Fields, special Idaho tax
counsel to the Bank, shall have furnished to the Representative its written
opinion, dated the Closing Date, in form and substance satisfactory to the
Representative, to the effect that:
(i) The Trust will not be classified as a separate entity
on which Idaho franchise tax will be imposed, and will not be subject to
other Idaho taxes measured by income, capital, profits or receipts (other
than sales, excise, or AD VALOREM taxes that might be imposed upon the
ownership or sale of a vehicle acquired upon default of a Receivable);
(ii) Certificate owners who would not otherwise be subject
to tax in Idaho will not be subject to Idaho income or franchise taxes with
respect to interest or other amounts (including payments under the Yield
Supplement Agreement and from the Yield Supplement Account and the Reserve
Account) attributable solely to the beneficial ownership of a Certificate
(other than such Certificate Owner's share of sales, excise, or AD VALOREM
taxes that might be imposed upon the ownership or sale of a vehicle
acquired upon default of a Receivable);
(iii) The Yield Supplement Account and the Reserve
Account will not be treated as an association taxable as a corporation or
other separate taxable entity for Idaho state tax purposes;
(iv) and neither the Trustee nor the Certificate Owners will
be treated as the owner of any portion of the Yield Supplement Account or
the Reserve Account and the funds therein for Idaho state tax purposes.
(j) Kirkland & Ellis, special New York tax counsel to the Bank,
shall have furnished to the Representative its written opinion, dated the
Closing Date, in form and substance satisfactory to the Representative, to the
effect that:
(i) The Trust will not be classified as a separate entity
on which New York franchise tax will be imposed; and the Trust will not be
subject to other New York taxes measured by income, capital, profits or
receipts (other than sales, excise, or AD VALOREM taxes that might be
imposed upon the sale of a vehicle acquired upon default of a Receivable).
-13-
<PAGE>
(ii) Certificate Owners who would not otherwise be subject
to tax in New York will not be subject to New York income or franchise
taxes with respect to interest or other amounts (including payments under
the Yield Supplement Agreement and from the Yield Supplement Account and
the Reserve Account) attributable solely to the beneficial ownership of a
Certificate (other than such Certificate Owner's share of sales, excise, or
AD VALOREM taxes that might be imposed upon the sale of a vehicle acquired
upon default of a Receivable).
(iii) The Yield Supplement Account and the Reserve
Account will not be treated as an association taxable as a corporation or
other separate taxable entity for New York state tax purposes; and neither
the Trustee nor the Certificate Owners will be treated as the owner of any
portion of the Yield Supplement Account or the Reserve Account and the
funds therein for such purposes.
(k) The Representative shall have received an opinion of
Kirkland & Ellis, dated the Closing Date, with respect to such matters as the
Representative shall require and the Bank shall have furnished or caused to be
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(l) The Representative shall have received an opinion of counsel
to Bankers Trust, addressed to the Underwriters and the Bank, dated the Closing
Date and satisfactory in form and substance to the Representative and its
counsel, to the effect that:
(i) Bankers Trust is a New York banking corporation duly
organized and validly existing under the laws of the United States.
(ii) Bankers Trust has the power and authority to enter into
and perform the Pooling and Servicing Agreement. The execution, delivery
and performance of the Pooling and Servicing Agreement have been duly
authorized by all requisite action, and the Pooling and Servicing Agreement
has been duly executed and delivered by Bankers Trust.
(iii) No consent, approval, authorization, order of or
filing with any court, governmental agency or body (including without
limitation, any banking regulatory agency or body or arbitrator having
jurisdiction over Bankers Trust) is required in connection with the
execution and delivery by Bankers Trust of the Pooling and Servicing
Agreement and the performance by Bankers Trust of the transactions
thereunder.
(iv) The Pooling and Servicing Agreement, assuming due
authorization, execution and delivery thereof by the Bank and the Servicer,
constitutes a valid and legally binding agreement of Bankers Trust and is
enforceable against Bankers Trust in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting the enforcement of
-14-
<PAGE>
creditors' rights generally and the rights of creditors of banks in
particular and by general principles of equity.
(v) The Certificates have been duly executed, authenticated
and delivered by Bankers Trust.
(vi) If Bankers Trust were acting as Servicer under the
Pooling and Servicing Agreement as of the date of this Agreement, Bankers
Trust would have the corporate power and authority to perform the
obligations of the Servicer as provided in the Pooling and Servicing
Agreement.
(m) The Representative shall have received a letter or letters
from each counsel delivering any written opinion to any Rating Agency in
connection with the transaction described herein which is not otherwise
described in this Agreement allowing the Underwriters to rely on such opinion as
if it were addressed to the Underwriters.
(n) The Representative shall have received an officer's
certificate dated the Closing Date of the Chairman of the Board, the President
or any Vice President and by a principal financial or accounting officer of the
Bank and the Servicer in which each such officer shall state that, the
representations and warranties of the Bank or the Servicer, as applicable,
contained in the Pooling and Servicing Agreement are true and correct in all
material respects and that the Bank or the Servicer, as applicable, has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied under such agreements at or prior to the Closing Date in all material
respects.
(o) The Class A Certificates shall have been rated "Aaa" by
Moody's and "AAA" by S&P and the Class B Certificates shall have been rated "A3"
by Moody's and "A" by S&P.
(p) On the Closing Date, the representations and warranties of
the Bank in the Pooling and Servicing Agreement will be true and correct.
(q) Any taxes, fees and other governmental charges which are due
and payable in connection with the execution, delivery and performance of this
Agreement, the Pooling and Servicing Agreement, the Yield Supplement Agreement
and the Certificates shall have been paid by the Bank at or prior to the Closing
Date.
8. (a) The Bank agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the legal fees and other expenses reasonably incurred in
connection with investigating, preparing or defending any suit, action or
proceeding or any claim asserted, except as otherwise provided below regarding
the limitation on use of counsel) caused by
-15-
<PAGE>
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Bank shall have furnished such amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished to the Bank in writing by any Underwriter through the
Representative expressly for use therein; PROVIDED that the foregoing indemnity
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) from
whom the person asserting any losses, claims or damages purchased Certificates
if such untrue statement or omission or alleged untrue statement or omission
made in such preliminary prospectus is eliminated or remedied in the Prospectus
(as amended or supplemented if the Bank shall have furnished any amendments or
supplements thereto) and, if the furnishing of a copy of the Prospectus (as so
amended or supplemented) to such person was required by law or was requested in
writing by the Bank, a copy of the Prospectus (as so amended or supplemented)
shall not have been furnished to such person at or prior to the written
confirmation of the sale of such Certificates to such person.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Bank, each director and officer of the Bank who
signed the Registration Statement, and each person who controls the Bank within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Bank to each Underwriter,
but only with reference to information furnished to the Bank in writing by such
Underwriter through the Representative expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
(c) If any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of Sections 8(a) or (b), such person (the "INDEMNIFIED PERSON") shall
promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PERSON") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them, in
which case such counsel for the Indemnified Person shall be reasonably
satisfactory to the Indemnifying Person. It is understood that the Indemnifying
Person shall not, in
-16-
<PAGE>
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to one local counsel in each applicable jurisdiction) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Underwriters and such control persons
of the Underwriters shall be designated in writing by the Representative and any
such separate firm for the Bank or either of its directors or officers who sign
the Registration Statement or control persons shall be designated in writing by
the Bank. The Indemnifying Person shall not be liable for any settlement of any
claim or proceeding effected without its written consent. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the third sentence of this Section 8(c), the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in Sections 8(a) and (b)
is unavailable other than in accordance with its terms to an Indemnified Person
in respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under either of Sections 8(a) or (b), in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Bank on the one hand and the Underwriters on
the other hand from the offering of the Certificates or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Bank on the one hand
and the Underwriters on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Bank on the one hand and the Underwriters on the other shall be deemed to be in
the same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the Bank and the total underwriting discounts
and the commissions received by the Underwriters, in each case as set forth in
the table on the cover of the Prospectus, bear to the aggregate public offering
price of the Certificates. The relative fault of the Bank on the one hand and
the Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Bank or by any of the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
-17-
<PAGE>
(e) The Bank and the Underwriters agree that it would not be
just and equitable if contribution pursuant to Section 8 were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 8(d). The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such Indemnified Person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of Section 8, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Certificates underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective principal amount of the Certificates set forth opposite their names
in Schedule I hereto, and not joint.
(f) The indemnity and contribution agreements contained in this
Section 8 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
(g) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Bank set forth in this
Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Bank, or any of its officers or directors or any other person
controlling the Bank and (iii) acceptance of and payment for any of the
Certificates.
9. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representative, by notice given to
the Bank, if after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, the New York Stock Exchange or the
American Stock Exchange; (ii) trading of any securities of or guaranteed by the
Bank shall have been suspended on any exchange or in any over-the-counter
market; (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities; or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Representative is material and adverse and which, in the judgment of the
Representative, makes it impracticable to market the Certificates on the terms
and in the manner contemplated in the Prospectus.
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<PAGE>
10. (a) This Agreement shall become effective upon the later of
(x) execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
(b) If on the Closing Date any one or more of the Underwriters
shall fail or refuse to purchase Certificates which it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Certificates which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Certificates to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the principal amount of
Certificates set forth opposite their respective names in Schedule I bears to
the aggregate principal amount of Certificates set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as the
Representative may specify, to purchase the Certificates which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; PROVIDED that in no event shall the principal amount of Certificates that
any Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 10(b) by an amount in excess of one-ninth of such
principal amount of Certificates without the written consent of such
Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail
or refuse to purchase Certificates which it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Certificates with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of Certificates to be purchased on such date, and arrangements
satisfactory to the Representative and the Bank for the purchase of such
Certificates are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Bank. In any such case either the Representative or the Bank shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this Section 10(b) shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
11. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Bank to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Bank shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters cannot be fulfilled, the Bank
agrees to reimburse the Underwriters or such Underwriters as have so terminated
this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and expenses of their counsel) reasonably incurred
by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
12. Any action by the Underwriters hereunder may be taken by the
Representative alone on behalf of the Underwriters, and any such action taken by
the Representative alone shall be binding upon the Underwriters. All notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed, delivered by hand or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be given to the
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<PAGE>
Representative, c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New
York 10260 (Facsimile No.: 212-648-5909), Attention: Syndicate Desk. Notices
to the Bank shall be given to it at First Security Bank, N.A., 79 South Main
Street, Salt Lake City, Utah 84111 (Facsimile No.: 801-359-6928), Attention:
Executive Vice President and Chief Financial Officer.
13. This Agreement shall inure to the benefit of and be binding upon
the Bank, the Underwriters, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of the
Certificates from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
14. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
* * * * *
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Bank and the Underwriters in
accordance with its terms.
Very truly yours,
FIRST SECURITY BANK, N.A.
BY:
----------------------------------
Name: Scott C. Ulbrich
Title: Authorized Officer
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
J.P. MORGAN SECURITIES INC.
As Representative of
the Underwriters
By: J.P. MORGAN SECURITIES INC.
By:
-----------------------------
Name:
Title:
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<PAGE>
SCHEDULE I
UNDERWRITERS
PRINCIPAL AMOUNT
----------------
J.P. Morgan Securities Inc.
---------------------------
Class A Certificates $93,784,236.93
Class B Certificates $ 6,251,500.00
First Chicago Capital Markets, Inc.
-----------------------------------
Class A Certificates $93,784,236.93
Class B Certificates $ 6,251,500.00
A-1
<PAGE>
SCHEDULE II
FORM OF SERVICER'S CERTIFICATE
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Attention:
Re: Pooling and Servicing Agreement dated as of March __, 1997
(as amended, supplemented or otherwise modified and in
effect, the "Pooling and Servicing Agreement") between First
Security Bank, N.A., as seller and servicer and Bankers
Trust Company, as trustee AND COLLATERAL AGENT
Determination Date to which this Certificate relates:
------------------------,------------
For Monthly Period ending on
------------, ----
1. The undersigned Servicing Officer does hereby certify that the
Class A Pool Factor is
--------------.
2. The undersigned Servicing Officer does hereby certify that the
Class B Pool Factor is .
----------------------------
3. Capitalized terms used in this Certificate shall have the same
meanings as in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of the
above-referenced Determination Date.
as Servicer
-----------------,
By:
---------------------------------
Servicing Officer
A-2
<PAGE>
Exhibit 4.1
================================================================================
FIRST SECURITY BANK, N.A.
AS SELLER AND SERVICER,
AND
BANKERS TRUST COMPANY
AS TRUSTEE
ON BEHALF OF THE CERTIFICATEHOLDERS
AND AS COLLATERAL AGENT
--------------------------------------------
POOLING AND SERVICING AGREEMENT
--------------------------------------------
DATED AS OF MARCH 25, 1997
FIRST SECURITY AUTO GRANTOR TRUST 1997-A
6.30% ASSET BACKED CERTIFICATES, CLASS A
6.50% ASSET BACKED CERTIFICATES, CLASS B
================================================================================
<PAGE>
TABLE OF CONTENTS
------------------
PAGE
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.....................................................1
Section 1.2 Usage of Terms.................................................18
Section 1.3 Calculations...................................................18
Section 1.4 References.....................................................18
Section 1.5 Section References.............................................18
Section 1.6 Action by or Consent of Certificateholders.....................18
ARTICLE II
THE TRUST PROPERTY
Section 2.1 Conveyance of Trust Property...................................18
Section 2.2 Warranties of the Seller as to Each Receivable.................19
Section 2.3 Warranties as to the Receivables in the Aggregate and Actions of
the Seller...............................................22
Section 2.4 Repurchase upon Breach.........................................23
Section 2.5 Custody of Receivable Files....................................24
Section 2.6 Duties of the Servicer as Custodian............................25
Section 2.7 Instructions; Authority to Act.................................26
Section 2.8 Custodian's Indemnification....................................26
Section 2.9 Effective Period and Termination...............................26
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.1 Duties of the Servicer.........................................27
Section 3.2 Collection of Receivable Payments; Credit Deferrals; Optional
Payment Deferrals..............................................29
Section 3.3 Realization upon Receivables...................................31
Section 3.4 Physical Damage Insurance......................................31
Section 3.5 Maintenance of Security Interests in Financed Vehicles.........32
Section 3.6 Covenants of the Servicer......................................32
Section 3.7 Purchases by the Servicer......................................33
Section 3.8 Servicing Compensation.........................................33
Section 3.9 Servicer's Certificate.........................................34
Section 3.10 Annual Statement as to Compliance..............................34
Section 3.11 Independent Certified Public Accountants' Reports..............34
Section 3.12 Access to Certain Documentation and Information Regarding
Receivables....................................................35
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Section 3.13 Reports to the Commission......................................35
Section 3.14 Reports to the Rating Agencies.................................35
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS
Section 4.1 Establishment of Accounts......................................35
Section 4.2 Collections....................................................39
Section 4.3 Advances.......................................................41
Section 4.4 Additional Deposits; Net Deposits..............................41
Section 4.5 Distributions..................................................42
Section 4.6 Reserve Account................................................43
Section 4.7 Statements to Certificateholders...............................43
ARTICLE V
YIELD SUPPLEMENT ACCOUNT
Section 5.1 Yield Supplement Agreement.....................................45
Section 5.2 Yield Supplement Account.......................................45
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates...............................................48
Section 6.2 Authentication of Certificates.................................48
Section 6.3 Registration of Transfer and Exchange of Certificates..........49
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates..............49
Section 6.5 Persons Deemed Owners..........................................50
Section 6.6 Access to List of Certificateholders' Names and Addresses......50
Section 6.7 Maintenance of Office or Agency................................50
Section 6.8 Book-Entry Certificates........................................50
Section 6.9 Notices to Clearing Agency.....................................51
Section 6.10 Definitive Certificates........................................51
ARTICLE VII
THE SELLER
Section 7.1 Representations and Warranties of the Seller...................52
Section 7.2 Liability of the Seller; Indemnities...........................53
Section 7.3 Merger or Consolidation of the Seller..........................54
Section 7.4 Limitation on Liability of the Seller and Others...............54
Section 7.5 Seller May Own Certificates....................................55
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ARTICLE VIII
THE SERVICER
Section 8.1 Representations and Warranties of the Servicer.................55
Section 8.2 Liability of the Servicer; Indemnities.........................56
Section 8.3 Merger or Consolidation of the Servicer........................57
Section 8.4 Limitation on Liability of the Servicer and Others.............58
Section 8.5 Servicer Not to Resign.........................................58
Section 8.6 Servicer May Own Certificates..................................58
ARTICLE IX
SERVICING TERMINATION
Section 9.1 Events of Servicing Termination................................58
Section 9.2 Trustee to Act; Appointment of Successor Servicer..............60
Section 9.3 Effect of Servicing Transfer...................................60
Section 9.4 Notification to Certificateholders.............................61
Section 9.5 Waiver of Past Events of Servicing Termination.................61
Section 9.6 Transfer of Accounts...........................................61
ARTICLE X
THE TRUSTEE
Section 10.1 Acceptance by Trustee..........................................62
Section 10.2 Duties of Trustee..............................................62
Section 10.3 Trustee's Certificate..........................................63
Section 10.4 Trustee's Assignment of Purchased Receivables..................63
Section 10.5 Certain Matters Affecting the Trustee..........................64
Section 10.6 Trustee Not Liable for Certificates or Receivables.............65
Section 10.7 Trustee May Own Certificates...................................66
Section 10.8 Trustee's and Collateral Agent's Fees and Expenses.............66
Section 10.9 Trustee May Enforce Claims Without Possession of Certificates..67
Section 10.10 Eligibility Requirements for Trustee...........................67
Section 10.11 Resignation or Removal of Trustee and Collateral Agent.........67
Section 10.12 Successor Trustee..............................................68
Section 10.13 Merger or Consolidation of Trustee.............................68
Section 10.14 Appointment of Co-Trustee or Separate Trustee..................69
Section 10.15 Representations and Warranties of Trustee......................70
Section 10.16 Reports by Trustee.............................................70
Section 10.17 Tax Accounting.................................................70
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ARTICLE XI
TERMINATION
Section 11.1 Termination of the Trust.......................................71
Section 11.2 Optional Purchase of All Receivables...........................71
ARTICLE XII
MISCELLANEOUS PROVISION
Section 12.1 Amendment......................................................72
Section 12.2 Protection of Title to Trust...................................73
Section 12.3 Limitation on Rights of Certificateholders.....................74
Section 12.4 Governing Law..................................................75
Section 12.5 Notices........................................................75
Section 12.6 Severability of Provisions.....................................75
Section 12.7 Assignment.....................................................75
Section 12.8 Certificates Nonassessable and Fully Paid......................76
Section 12.9 Intention of Parties...........................................76
Section 12.10 Counterparts...................................................76
Section 12.11 Limitation of Liability of the Trustee and the Collateral
Agent..........................................................76
SCHEDULES
Schedule A Schedule of Receivables
Schedule B Receivables File Locations
EXHIBITS
Exhibit A Form of Class A Certificate
Exhibit B Form of Class B Certificate
Exhibit C Form of Servicer's Certificate
Exhibit D Form of Depository Agreement
Exhibit E Form of Yield Supplement Agreement
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POOLING AND SERVICING AGREEMENT
POOLING AND SERVICING AGREEMENT, dated as of March 25, 1997 (as
amended, supplemented or otherwise modified and in effect, this "AGREEMENT"), by
and among FIRST SECURITY BANK, N.A., a national banking association, as Seller
and Servicer, and BANKERS TRUST COMPANY, a New York banking corporation, as
trustee hereunder (in such capacity, the "TRUSTEE") and as collateral agent with
respect to the Reserve Account and the Yield Supplement Account (in such
capacity, the "COLLATERAL AGENT") .
In consideration of the premises and of the mutual agreements herein
contained, and other good and valuable consideration, the receipt of which is
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, whenever
capitalized shall have the following meanings:
"ACCOUNTS" mean, collectively, the Certificate Account, the Class A
Distribution Account and the Class B Distribution Account.
"ACCOUNT PROPERTY" means all amounts and investments held from time to
time in any Account, the Reserve Account or the Yield Supplement Account, as the
case may be (whether in the form of deposit accounts, Physical Property,
book-entry securities, uncertificated securities or otherwise), and all proceeds
of the foregoing.
"ADVANCES" shall have the meaning specified in Section 4.3.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGGREGATE NET LOSSES" means, for any Collection Period, the aggregate
amount allocable to principal of all Receivables newly designated during such
Collection Period as Defaulted Receivables minus all Liquidation Proceeds to the
extent allocable to principal collected during such Collection Period with
respect to all Defaulted Receivables (whether or not newly designated as such).
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"AMOUNT FINANCED" in respect of a Receivable means the amount advanced
under the Receivable and related costs and shown as such in the contract
evidencing such Receivable and as disclosed for truth-in-lending purposes.
"AUTHORIZED OFFICER" means any officer within the Corporate Trust
Office of the Trustee, including any managing director, vice president,
assistant vice president, assistant treasurer, assistant secretary or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"AVAILABLE INTEREST" means, with respect to any Distribution Date, the
excess of (a) the sum of (i) Interest Collections, (ii) the Yield Supplement
Amount for such Distribution Date and (iii) all Advances made by the Servicer
with respect to such Distribution Date pursuant to Section 4.3(a), over (b) the
amount of Outstanding Advances to be reimbursed on or with respect to such
Distribution Date pursuant to Section 4.3(c).
"AVAILABLE PRINCIPAL" means, with respect to any Distribution Date,
the sum of the following amounts with respect to the related Collection Period:
(i) that portion of all Collections received during such Collection Period and
allocable to principal in accordance with the terms of the Receivables and the
Servicer's customary servicing procedures; (ii) to the extent attributable to
principal, the Purchase Amount received with respect to each Receivable
repurchased by the Seller or purchased by the Servicer under an obligation which
arose during the related Collection Period; and (iii) all Liquidation Proceeds,
to the extent allocable to principal. "Available Principal" on any Distribution
Date shall exclude all payments and proceeds of any Receivables the Purchase
Amount of which has been distributed on a prior Distribution Date.
"AVAILABLE RESERVE AMOUNT" shall mean, for each Distribution Date, an
amount equal to the lesser of (i) the amount on deposit in the Reserve Account
(exclusive of investment earnings) and (ii) the Specified Reserve Account
Balance.
"AVERAGE DELINQUENCY RATIO" means, as of any Distribution Date, the
average of the Delinquency Ratios for the preceding three Collection Periods.
"AVERAGE NET LOSS RATIO" means, as of any Distribution Date, the
average of the Net Loss Ratios for the preceding three Collection Periods.
"BASIC SERVICING FEE" means, with respect to any Distribution Date, an
amount equal to the product of (i) one-twelfth of the Basic Servicing Fee Rate
and (ii) the Pool Balance as of the first day of the preceding Collection
Period.
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"BASIC SERVICING FEE RATE" shall be 1.0% per annum, calculated on the
basis of a 360-day year consisting of twelve 30-day months.
"BENEFIT PLAN" has the meaning specified in Section 6.3.
"BOOK-ENTRY CERTIFICATES" mean beneficial interests in the Definitive
Certificates, the ownership of which shall be evidenced, and transfers of which
shall be made, through book entries by a Clearing Agency as described in
Section 6.8.
"BUSINESS DAY" means a day on which the Trustee and commercial banks
located in the State of Utah, the State of Idaho and the City of New York, are
open for the purpose of conducting commercial banking business; PROVIDED,
HOWEVER, that for purposes of determining any Distribution Date, the term
"Business Day" shall mean a day on which the Trustee and commercial banks
located in the State of New York generally and the City of New York are open for
the purpose of conducting a commercial banking business.
"CERTIFICATE" means any Class A Certificate or Class B Certificate.
"CERTIFICATE ACCOUNT" means the account or accounts established and
maintained as such pursuant to Section 4.1.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate,
the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules, regulations and procedures of such Clearing Agency).
"CERTIFICATE REGISTER" means the register maintained by the Trustee
for the registration of Certificates and of transfers and exchanges of
Certificates as provided in Section 6.3.
"CERTIFICATEHOLDER" means the Person in whose name a Certificate shall
be registered in the Certificate Register, EXCEPT THAT, solely for the purpose
of giving any consent, request or waiver pursuant to this Agreement, the
interest evidenced by any Certificate registered in the name of the Seller, the
Servicer, or any Person actually known to an Authorized Officer of the Trustee
to be an Affiliate of the Seller or the Servicer, shall not be taken into
account in determining whether the requisite percentage necessary to effect any
such consent, request or waiver shall have been obtained.
"CLASS A CERTIFICATE" means a certificate executed by the Trustee on
behalf of the Trust and authenticated by the Trustee, substantially in the form
of EXHIBIT A hereto.
"CLASS A CERTIFICATEHOLDER" or "CLASS A HOLDER" means the Person in
whose name a Class A Certificate shall be registered in the Certificate
Register, EXCEPT THAT, solely for the purpose of giving any consent, request or
waiver pursuant to this Agreement, the interest evidenced by any Class A
Certificate registered in the name of the Seller, the Servicer, or any Person
actually known to an Authorized Officer of the Trustee to be an Affiliate of the
Seller or the Servicer, shall not be taken into account in determining whether
the requisite percentage necessary to effect any such consent, request or waiver
shall have been obtained.
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"CLASS A CERTIFICATE BALANCE" at any time, means the Original Class A
Certificate Balance as reduced by all amounts allocable to principal on the
Class A Certificates distributed to Class A Certificateholders prior to such
time.
"CLASS A CERTIFICATE OWNER" means, with respect to a Book-Entry
Certificate representing a beneficial interest in the Class A Certificates, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant in accordance
with the rules, regulations and procedures of such Clearing Agency).
"CLASS A DISTRIBUTION ACCOUNT" means the account established and
maintained as such pursuant to Section 4.1.
"CLASS A INTEREST CARRYOVER SHORTFALL" means, (i) with respect to the
initial Distribution Date, zero and (ii) with respect to any other Distribution
Date, the excess of Class A Monthly Interest for the preceding Distribution Date
and any outstanding Class A Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest that is actually
deposited into the Class A Distribution Account on such preceding Distribution
Date, plus 30 days of interest on such excess, to the extent permitted by law,
at the Class A Pass-Through Rate.
"CLASS A INTEREST DISTRIBUTION" means, with respect to any
Distribution Date, the sum of Class A Monthly Interest for such Distribution
Date and the Class A Interest Carryover Shortfall for such Distribution Date.
"CLASS A MONTHLY INTEREST" means, with respect to any Distribution
Date, one-twelfth of the Class A Pass-Through Rate multiplied by the Class A
Certificate Balance as of the preceding Distribution Date (after giving effect
to any distributions made on such Distribution Date) or, in the case of the
first Distribution Date, as March 15, 1997.
"CLASS A MONTHLY PRINCIPAL" means, with respect to any Distribution
Date, the Class A Percentage of Available Principal for such Distribution Date
plus the Class A Percentage of Realized Losses (to the extent allocable to
principal) with respect to the related Collection Period.
"CLASS A PASS-THROUGH RATE" means 6.30% per annum, calculated on the
basis of a 360-day year consisting of twelve 30-day months.
"CLASS A PERCENTAGE" means a fraction the numerator of which is the
Original Class A Certificate Balance and the denominator of which is the
Original Class A Certificate Balance plus the Original Class B Certificate
Balance.
"CLASS A POOL FACTOR" means, with respect to any Distribution Date,
the Class A Certificate Balance as of the immediately preceding Distribution
Date (after giving effect to any payments made on such Distribution Date)
divided by the Original Class A Certificate Balance, expressed as a seven-digit
decimal.
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"CLASS A PRINCIPAL CARRYOVER SHORTFALL" means, (i) with respect to the
initial Distribution Date, zero and (ii) with respect to any other Distribution
Date, the excess of Class A Monthly Principal for such Distribution Date and any
outstanding Class A Principal Carryover Shortfall from the preceding
Distribution Date over the amount in respect of principal that is actually
deposited into the Class A Distribution Account on such Distribution Date.
"CLASS A PRINCIPAL DISTRIBUTION" means, with respect to the initial
Distribution Date, the Class A Monthly Principal for such Distribution Date and,
with respect to any Distribution Date other than the initial Distribution Date,
the sum of Class A Monthly Principal for such Distribution Date and the Class A
Principal Carryover Shortfall as of the close of the preceding Distribution
Date. In addition, on the Final Scheduled Distribution Date, the Class A
Principal Distribution shall include the amount that is necessary (after giving
effect to the other amounts described above to be distributed to the Class A
Certificateholders on such Distribution Date and allocable to principal) to
reduce the Class A Certificate Balance to zero.
"CLASS B CERTIFICATE" means a certificate executed by the Trustee on
behalf of the Trust and authenticated by the Trustee, substantially in the form
of EXHIBIT B hereto.
"CLASS B CERTIFICATEHOLDER" or "CLASS B HOLDER" means the Person in
whose name a Class B Certificate shall be registered in the Certificate
Register, EXCEPT THAT, solely for the purpose of giving any consent, request or
waiver pursuant to this Agreement, the interest evidenced by any Class B
Certificate registered in the name of the Seller, the Servicer, or any Person
actually known to an Authorized Officer of the Trustee to be an Affiliate of the
Seller or the Servicer, shall not be taken into account in determining whether
the requisite percentage necessary to effect any such consent, request or waiver
shall have been obtained.
"CLASS B CERTIFICATE BALANCE" at any time, equals the Original Class B
Certificate Balance, as reduced by all amounts allocable to principal on the
Class B Certificates distributed to Class B Certificateholders prior to such
time.
"CLASS B CERTIFICATE OWNER" means, with respect to a Book-Entry
Certificate representing a beneficial interest in the Class B Certificates, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant in accordance
with the rules, regulations and procedures of such Clearing Agency).
"CLASS B DISTRIBUTION ACCOUNT" means the account established and
maintained as such pursuant to Section 4.1.
"CLASS B INTEREST CARRYOVER SHORTFALL" means, (i) with respect to the
initial Distribution Date, zero and (ii) with respect to any other Distribution
Date, the excess of Class B Monthly Interest for the preceding Distribution Date
and any outstanding Class B Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest that is actually
deposited into the Class B Distribution Account on such preceding Distribution
Date, plus 30 days of interest on such excess, to the extent permitted by law,
at the Class B Pass-Through Rate.
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"CLASS B INTEREST DISTRIBUTION" means, with respect to any
Distribution Date, the sum of Class B Monthly Interest for such Distribution
Date and the Class B Interest Carryover Shortfall for such Distribution Date.
"CLASS B MONTHLY INTEREST" means, with respect to any Distribution
Date, one-twelfth of the Class B Pass-Through Rate multiplied by the Class B
Certificate Balance as of the preceding Distribution Date (after giving effect
to any distributions made on such Distribution Date) or, in the case of the
first Distribution Date, as of the Closing Date.
"CLASS B MONTHLY PRINCIPAL" means, with respect to any Distribution
Date, the Class B Percentage of Available Principal for such Distribution Date
plus the Class B Percentage of Realized Losses with respect to the related
Collection Period.
"CLASS B PASS-THROUGH RATE" means 6.50% per annum, calculated on the
basis of a 360-day year consisting of twelve 30-day months.
"CLASS B PERCENTAGE" means a fraction the numerator of which is the
Original Class B Certificate Balance and the denominator of which is the
Original Class A Certificate Balance plus the Original Class B Certificate
Balance.
"CLASS B POOL FACTOR" means, with respect to any Distribution Date,
the Class B Certificate Balance as of the immediately preceding Distribution
Date (after giving effect to any payments made on such Distribution Date)
divided by the Original Class B Certificate Balance, expressed as a seven-digit
decimal.
"CLASS B PRINCIPAL CARRYOVER SHORTFALL" means, (i) with respect to the
initial Distribution Date, zero and (ii) with respect to any other Distribution
Date, the excess of Class B Monthly Principal for such Distribution Date and any
outstanding Class B Principal Carryover Shortfall from the preceding
Distribution Date over the amount in respect of principal that is actually
deposited into the Class B Distribution Account on such Distribution Date.
"CLASS B PRINCIPAL DISTRIBUTION" means, with respect to the initial
Distribution Date, the Class B Monthly Principal for such Distribution Date and,
with respect to any Distribution Date other than the initial Distribution Date,
the sum of Class B Monthly Principal for such Distribution Date and the Class B
Principal Carryover Shortfall as of the close of the preceding Distribution
Date. In addition, on the Final Scheduled Distribution Date, the Class B
Principal Distribution shall include the amount that is necessary (after giving
effect to the other amounts described above to be distributed to the Class B
Certificateholders on such Distribution Date and allocable to principal) to
reduce the Class B Certificate Balance to zero.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The initial Clearing Agency shall be The Depository Trust Company.
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"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers of securities deposited with the Clearing
Agency.
"CLOSING DATE" means the date of the initial issuance of the
Certificates hereunder.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL AGENT" means Bankers Trust Company, a New York banking
corporation, in its capacity as collateral agent for the benefit of the
Certificateholders with respect to the Reserve Account and the Yield Supplement
Account and any successor collateral agent appointed and acting pursuant to
Section 10.11.
"COLLECTION PERIOD" means, during the term of this Agreement, the
period from and including the 26th day of a calendar month to and including the
25th day of the next succeeding calendar month or, in the case of the initial
Collection Period, the period from the close of business of the Servicer on the
Cutoff Date to and including March 25, 1997. With respect to any Determination
Date, Deposit Date or Distribution Date, the "related Collection Period" shall
mean the Collection Period preceding the month in which such Determination Date,
Deposit Date or Distribution Date occurs.
"COLLECTIONS" means all collections on the Receivables.
"COMMISSION" means the Securities and Exchange Commission, or any
successor thereto.
"COMPUTER TAPE" means the computer tape generated by the Seller which
provides information relating to the Receivables and which was used by the
Seller in selecting the Receivables conveyed to the Trust hereunder.
"CONTRACT RATE" means, with respect to a Receivable, the rate per
annum of interest charged on the outstanding Principal Balance of such
Receivable.
"CONTROL" over a Security Entitlement shall be considered obtained by
the Trustee if:
(i) the Trustee is the Securities Intermediary for the Account in
which such Security Entitlement is held, or (b) the Trustee (1)
is registered on the records of the Securities Intermediary as
the person having such a Security Entitlement against the
Securities Intermediary, or (2) has obtained the agreement, in
writing, of the Securities Intermediary for such Security
Entitlement that it will comply with orders of the Trustee
regarding the sale or redemption of the Security Entitlement
without further consent of any other person; and
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(ii) the "Securities Intermediary" for such Security Entitlement (a)
is the registered owner of the related Financial Asset, (b) is
the holder of the Security Certificate for the related Financial
Asset, or (c) holds its interest in the related Financial Asset
directly through a clearing corporation (as defined in Revised
Article 8).
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at date of execution of this Agreement is located at Bankers Trust
Company, Four Albany Street, 10th Floor, New York, New York 10006, Attention:
Corporate Trust and Agency Group - Structured Finance, or at such other address
as the Trustee may designate from time to time by notice to the
Certificateholders, the Seller and the Servicer, or the principal corporate
trust office of any successor Trustee (the address of which the successor
Trustee will notify the Certificateholders, the Seller and the Servicer).
"CREDIT DEFERRAL" has the meaning specified in Section 3.2.
"CUTOFF DATE" means February 25, 1997.
"CUTOFF DATE PRINCIPAL BALANCE" means, with respect to any Receivable,
the initial Principal Balance of such Receivable minus the sum of the portion of
all payments received under such Receivable from or on behalf of the related
Obligor on or prior to the close of business of the Servicer on the Cutoff Date
and allocable to principal in accordance with the terms of the Receivable.
"DEALER" means, with respect to a Receivable, the seller of the
related Financed Vehicle, who originated and assigned the Receivable relating to
such Financed Vehicle to the Seller under a Dealer Agreement and a Dealer
Assignment.
"DEALER AGREEMENT" means an agreement between the Seller and a Dealer
relating to the assignment of Receivables to the Seller and all documents and
instruments (other than the related Dealer Assignments) relating thereto.
"DEALER ASSIGNMENT" means the executed assignment conveying a
Receivable from a Dealer to the Seller.
"DEALER LOAN" means a motor vehicle retail installment sale contract
originated by a Dealer and conveyed to the Seller pursuant to a Dealer
Assignment.
"DEFAULTED RECEIVABLE" means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) which the Servicer, on behalf of
the Trust, has determined to charge off during such Collection Period in
accordance with its customary servicing practices; PROVIDED, HOWEVER, that any
Receivable which the Seller or the Servicer is obligated to repurchase or
purchase shall be deemed not to be a Defaulted Receivable during a Collection
Period unless the Seller or the Servicer fails to deposit the Purchase Amount on
the related Deposit Date when due,
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unless such Receivable is otherwise repurchased or purchased on or prior to the
last day of the Collection Period in which such Receivable is determined to be a
Defaulted Receivable.
"DEFERRAL FEE" means the fee associated with any Optional Payment
Deferral or Credit Deferral.
"DEFINITIVE CERTIFICATES" shall have the meaning specified in
Section 6.8.
"DELIVERY" when used with respect to Account Property means:
(a) with respect to Physical Property other than a certificated
security, 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 or its
nominee, agent or custodian or endorsed in blank, and, with respect to a
"certificated security" (as defined in Section 8-102(1)(a) of the Relevant
UCC) transfer thereof (i) by delivery of such certificated security
endorsed to, or registered in the name of, the Trustee or its nominee,
agent or custodian or endorsed in blank to a "financial intermediary" (as
defined in Section 8-313(4) 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 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 8-102(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 purchase by the
Trustee 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
applicable, or its respective nominee, agent or custodian, and, in any
event, any such Physical Property in registered form shall be in the name
of the Trustee 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 or its nominee, agent or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
(b) with respect to any item of Account Property that is an
Uncertificated Security and that is not a Federal Book-Entry Security,
registration on the books and records of the issuer thereof in the name of
the financial intermediary, the sending of a confirmation by the financial
intermediary of the purchase by the Trustee or its nominee, agent or
custodian of such uncertificated security, the making by such financial
intermediary of entries on its
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books and records identifying such uncertificated certificates as belonging
to the Trustee or its nominee, agent or custodian; and
(c) with respect to any Federal Book-Entry Security, 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 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 or its nominee,
agent or custodian and indicating that such custodian holds such Account
Property solely as agent for the Trustee 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 to the Trustee or its nominee, agent or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof.
"DELINQUENCY RATIO" means, for any Collection Period, the ratio,
expressed as a percentage, of (i) the principal amount of all outstanding
Receivables (other than Purchased Receivables and Defaulted Receivables) which
are 60 or more days delinquent as of the last day of such Collection Period,
determined in accordance with the Servicer's, customary practices, divided by
(ii) the Pool Balance as of the last day of such Collection Period.
"DEPOSIT DATE" means, with respect to any Collection Period, the
Business Day preceding the related Distribution Date.
"DEPOSITORY AGREEMENT" means the agreement among the Seller, the
Servicer, the Trustee and the initial Clearing Agency, dated March 25, 1997,
substantially in the form attached hereto as EXHIBIT D.
"DETERMINATION DATE" means the tenth day of each month (or, if such
day is not a Business Day, the next succeeding Business Day).
"DIRECT MOTOR VEHICLE LOAN" means a Receivable that is a motor vehicle
retail installment loan originated by the Seller.
"DISTRIBUTION DATE" means the 15th day of each month (or, if such day
is not a Business Day, the next succeeding Business Day), commencing April 15,
1997.
"ELECTRONIC LEDGER" means the electronic master record of the retail
installment sale contracts and retail installment loans of the Seller.
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"ELIGIBLE DEPOSIT ACCOUNT" means either (i) a segregated account with
an Eligible Institution or (ii) a segregated trust account with the trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having trust powers and acting as
trustee for funds deposited in such account, so long as the long-term unsecured
debt rating of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories which signifies investment
grade.
"ELIGIBLE INSTITUTION" means any depository institution with trust
powers (which may include the Seller, the Servicer or the Trustee), organized
under the laws of the United States, any state thereof, the District of Columbia
or any domestic branch of a foreign bank, having combined capital and surplus in
excess of $50,000,000, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation, which is subject
to supervision and examination by Federal or state banking authorities and which
has (i) a rating of at least P-1 from Moody's and A-l from S&P with respect to
short-term deposit obligations, or (ii) if such institution has issued long-term
unsecured debt obligations, a rating of A2 or higher from Moody's and A or
higher from S&P with respect to long-term unsecured debt obligations. If such
depository institution publishes reports of condition at least annually,
pursuant to law or the requirements of the aforesaid supervising or examining
authority, then 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.
"ELIGIBLE INVESTMENTS" shall mean, at any time, any one or more of the
following types of investments, each of which shall mature on or prior to the
next succeeding Distribution Date:
(a) direct marketable obligations of the United States having a
maturity of not more than 30 days from the date of acquisition;
(b) marketable obligations directly and fully guaranteed by the
United States as to the full and timely payment of principal and interest
having a maturity of not more than 30 days from the date of acquisition;
(c) bankers' acceptances and certificates of deposit denominated in
U.S. Dollars in each case having a maturity of not more than 30 days from
the date of acquisition, and issued by any bank with capital, surplus and
undivided profits aggregating at least $100,000,000, the short-term
unsecured securities of which are rated at least A-l by S&P and P-1 by
Moody's; and
(d) commercial paper having a maturity of not more than 30 days and
which is rated at least A-l by S&P and P-1 by Moody's;
(e) freely redeemable shares in no-load money market funds which
invest solely in obligations, bankers' acceptances, certificates of deposit
and commercial paper of the types described in clauses (a) through (d),
without regard to the limitations as to the maturity of
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such obligations, bankers' acceptances, certificates of deposit or
commercial paper set forth in such clauses, rated at least AAAm by S&P and
Aaa by Moody's; and
(f) any Bankers Trust Company money market fund so long as it shall
be rated by each Rating Agency as either AAAm, Aaa, as an eligible
investment for AAA/Aaa rated transactions, or in the highest short-term
rating assigned by a particular Rating Agency.
Eligible Investments may include, if otherwise eligible pursuant to
paragraphs (a) to (e) above, debt securities of the Trustee, the Seller or any
of their Affiliates for which the Trustee, the Seller or any of their Affiliates
is an investment manager or investment advisor.
"ELIGIBLE SERVICER" means (a) any Affiliate of the Seller, (b) Bankers
Trust Company or (c) any Person which, at the time of its appointment as
Servicer or as a subservicer, (i) has a net worth of not less than $50,000,000,
(ii) is servicing a portfolio of motor vehicle retail installment sale contracts
and/or motor vehicle loans, (iii) is legally qualified, and has the capacity, to
service the Receivables, (iv) has demonstrated the ability to service a
portfolio of motor vehicle retail installment sale contracts and/or motor
vehicle loans similar to the Receivables professionally and competently in
accordance with standards of skill and care that are consistent with prudent
industry standards, and (v) is qualified and entitled to use pursuant to a
license or other written agreement, and agrees to maintain the confidentiality
of, the software which the Servicer or any subservicer uses in connection with
performing its duties and responsibilities under this Agreement or the related
subservicing agreement or obtains rights to use, or develops at its own expense,
software which is adequate to perform its duties and responsibilities under this
Agreement or the related subservicing agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF SERVICING TERMINATION" means an event specified in
Section 9.1.
"FEDERAL BOOK-ENTRY SECURITY" means an obligation issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or the Federal National
Mortgage Association, or any other direct obligation of, or obligation fully
guaranteed as to timely payment of principal and interest by, the United States
of America, that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations.
"FINANCIAL ASSET" has the meaning given such term in Revised Article
8. As used herein, the Financial Asset "related to" a Security Entitlement is
the Financial Asset in which the entitlement holder (as defined in Revised
Article 8) holding such Security Entitlement has the rights and property
interest specified in Revised Article 8.
"FINAL SCHEDULED DISTRIBUTION DATE" means the August 15, 2003
Distribution Date.
"FINAL SCHEDULED MATURITY DATE" means the last day of the Collection
Period preceding the Final Scheduled Distribution Date.
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"FINANCED VEHICLE" means the Motor Vehicle, together with all
accessions thereto, securing an Obligor's indebtedness under a Receivable.
"INSURANCE POLICIES" means all comprehensive and collision, fire and
theft insurance policies maintained by the Obligors naming the Seller as an
additional insured or loss payee and any credit and disability and physical
damage insurance policies maintained by the Obligors and benefitting any holder
of the Receivables.
"INTEREST COLLECTIONS" means, for any Distribution Date, the sum of
the following amounts for the related Collection Period: (i) that portion of
the Collections on the Receivables received during the related Collection Period
that is allocable to interest in accordance with the Servicer's customary
procedures, (ii) all Liquidation Proceeds, to the extent allocable to interest,
(iii) all Recoveries and (iv) to the extent attributable to accrued interest,
the Purchase Amount of all Receivables that are repurchased or purchased by the
Seller or the Servicer as of any day in the related Collection Period.
"Interest Collections" for any Distribution Date shall exclude all payments and
proceeds of any Receivables the Purchase Amount of which has been distributed on
a prior Distribution Date.
"LIQUIDATION PROCEEDS" means, with respect to any Distribution Date
and a Receivable that became a Defaulted Receivable during the related
Collection Period, (i) insurance proceeds received during such Collection Period
by the Servicer, with respect to insurance policies relating to the Financed
Vehicles or the Obligors, (ii) amounts received by the Servicer during such
Collection Period from a Dealer in connection with such Defaulted Receivable
pursuant to the exercise of rights under a Dealer Agreement, and (iii) the
monies collected by the Servicer (from whatever source, including proceeds of a
sale of a Financed Vehicle or deficiency balance recovered after the charge-off
of the related Receivable) during such Collection Period on such Defaulted
Receivable net of any expenses incurred by the Servicer in connection with the
collection of such Receivable and the disposition of the Financed Vehicle and
any payments required by law to be remitted to the Obligor, but, in any event,
not less than zero. Liquidation Proceeds shall be applied first to accrued and
unpaid interest on the Receivable and then to the Principal Balance thereof.
"MOODY'S" means Moody's Investors Service, Inc.
"MOTOR VEHICLE" means a new or used automobile or light-duty truck
which is the subject of a retail installment sale contract originated by a
dealer or a retail installment loan originated by the Seller.
"NET LOSS RATIO" means, for any Collection Period, an amount,
expressed as a percentage, equal to (i) the Aggregate Net Losses minus
Recoveries for such Collection Period, divided by (ii) the average of the Pool
Balances on each of the first day of such Collection Period and the last day of
such Collection Period.
"OBLIGOR" means the purchaser or the co-purchasers of a Financed
Vehicle purchased in part or in whole by the execution and delivery of the
related Receivable or the borrower or co-borrowers under the related Receivables
the proceeds of which were applied to purchase in part or
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in whole the Financed Vehicle, and any other co-signer of the Receivable who
owes or may be liable for payments under such Receivable.
"OFFICER'S CERTIFICATE" means a certificate signed by the chairman,
the president, any vice president or the treasurer of the Seller or the
Servicer, as the case may be, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel (who may be
outside counsel to the Seller or the Servicer) acceptable in form to the
Trustee.
"OPTIONAL PAYMENT DEFERRAL" shall have the meaning specified in
Section 3.2(c).
"ORIGINAL CERTIFICATE BALANCE" means the sum of the Original Class A
Certificate Balance and the Original Class B Certificate Balance.
"ORIGINAL CLASS A CERTIFICATE BALANCE" means $286,568,473.85.
"ORIGINAL CLASS B CERTIFICATE BALANCE" means $13,503,000.00.
"ORIGINAL POOL BALANCE'' means, as of the Cutoff Date,
$300,071,473.85.
"OUTSTANDING ADVANCES" means, with respect to any Distribution Date,
the aggregate of all Advances made by the Servicer with respect to prior
Distribution Dates that have not been reimbursed pursuant to Section 4.3(c).
"PASS-THROUGH RATE" means the Class A Pass-Through Rate and the Class
B Pass-Through Rate.
"PERSON" means a legal person, including any individual, corporation,
limited liability company, estate, partnership, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PHYSICAL PROPERTY" means (i) 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 of physical delivery and (ii) certificated securities (as
defined in Section 8-102 of the Relevant UCC).
"POOL BALANCE" means, on any date of determination, the aggregate
outstanding Principal Balance of the Receivables on such date.
"PRINCIPAL BALANCE" means, as of any time, for any Receivable, the
Cutoff Date Principal Balance minus the sum of the portions of all payments
received from or on behalf of the related Obligor after the close of business of
the Servicer on the Cutoff Date and prior to such time that are allocable to
principal in accordance with the terms of the Receivable plus the amount of any
Deferral Fee.
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"PURCHASE AMOUNT" of any Receivable means, with respect to any Deposit
Date, an amount equal to the sum of (i) the outstanding Principal Balance of
such Receivable as of the last day of the related Collection Period and (ii) an
amount equal to the amount of accrued and unpaid interest on such Principal
Balance at the related Contract Rate through the last day of the related
Collection Period, in each case, after giving effect to Collections on such
Receivable in such Collection Period.
"PURCHASED RECEIVABLE" means, on any date of determination, a
Receivable as to which payment of the Purchase Amount has been made by the
Seller or the Servicer pursuant to this Agreement.
"RATING AGENCY" means at any time any nationally recognized
statistical rating agency providing a rating for the Certificates at the request
of the Seller at such time.
"REALIZED LOSSES" means, with respect to any Distribution Date and a
Receivable that became a Defaulted Receivable during the related Collection
Period, the excess of (i) the aggregate Principal Balance of such Receivable as
of the first day of the related Collection Period over (ii) Liquidation Proceeds
received with respect to such Receivable during such Collection Period to the
extent allocable to principal.
"RECEIVABLE" means a motor vehicle retail installment sale contract or
a motor vehicle retail installment loan described in the Schedule of
Receivables, but excluding any Purchased Receivables.
"RECEIVABLE FILE" means, with respect to a Receivable, the electronic
entries, documents, instruments and writings specified in Section 2.5.
"RECORD DATE" means, with respect to each Collection Period and the
related Distribution Date, the day immediately preceding such Distribution Date
(or, if Definitive Certificates are issued, the last day of such Collection
Period).
"RECOVERIES" means, with respect to any Distribution Date, all monies
received by the Servicer with respect to any Defaulted Receivable during the
related Collection Period if such Collection Period follows the Collection
Period in which such Receivable became a Defaulted Receivable, net of the sum of
(i) any expenses incurred by the Servicer in connection with the collection of
such Receivable and the disposition of the Financed Vehicle (to the extent not
previously reimbursed) and (ii) any payments required by law to be remitted to
the Obligor, but, in any event, not less than zero.
"RELEVANT UCC" shall mean the Uniform Commercial Code as in effect in
the relevant jurisdiction, as amended from time to time.
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"REQUIRED RATING" means a rating with respect to short-term deposit
obligations of at least P-1 by Moody's and at least A-1 by S&P.
"RESERVE ACCOUNT" means the fund established pursuant to Section 4.1
and maintained as such pursuant to Section 4.6.
"RESERVE ACCOUNT INITIAL DEPOSIT" means, with respect to the Closing
Date, $7,501,786.85.
"REVISED ARTICLE 8" means Revised Article 8 (1994 Version) (and
corresponding amendments to Article 9) as promulgated in 1994 by the National
Conference of Commissioners on Uniform State Laws. From and after the Revised
Article 8 Effective Date, "Revised Article 8" means such version in the form in
which it is adopted in the State of New York.
"REVISED ARTICLE 8 EFFECTIVE DATE" means the date (if any) on which
Revised Article 8 (with such changes thereto as shall be effected by the State
of New York) becomes effective in the State of New York.
"S&P" means Standard & Poor's Ratings Service, a Division of the
McGraw Hill Companies.
"SCHEDULE OF RECEIVABLES" means the list identifying the Receivables
attached hereto as Schedule A.
"SCHEDULED PAYMENT" means, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid by
the Obligor in such Collection Period (without giving effect to deferments of
payments pursuant to Section 3.2 or any rescheduling in any insolvency or
similar proceedings).
"SECURITY CERTIFICATE" has the meaning given such term in Revised
Article 8.
"SECURITY ENTITLEMENT" has the meaning given such term in Revised
Article 8.
"SELLER" means First Security Bank, N.A. (including all Persons merged
into or otherwise consolidated with, and all other predecessors thereto) in its
capacity as seller of the Receivables to the Trust under this Agreement, and
each successor thereto (in the same capacity) pursuant to Section 7.3.
"SERVICER" means First Security Bank, N.A., in its capacity as
servicer of the Receivables under this Agreement, each successor thereto (in the
same capacity) pursuant to Section 8.3, and each successor servicer appointed
and acting pursuant to Section 9.2.
"SERVICER'S CERTIFICATE" has the meaning specified in Section 3.9.
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"SERVICING OFFICER" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables, whose name
appears on a list of servicing officers attached to an Officer's Certificate
furnished to the Trustee by the Servicer on the Closing Date, as such list may
be amended from time to time by the Servicer in writing.
"SIMPLE INTEREST METHOD" means the method of allocating a fixed level
payment between principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the Contract
Rate multiplied by the unpaid principal balance multiplied by the period of time
elapsed since the preceding payment of interest was made and the remainder of
such payment is allocable to principal.
"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.
"SPECIFIED RESERVE ACCOUNT BALANCE" with respect to any Distribution
Date, means 4.50% of the Pool Balance as of the last day of the preceding
Collection Period, but in any event will not be less than the lesser of (i)
$6,001,429.48 and (ii) the sum of such Pool Balance and an amount sufficient to
pay interest on (a) the Class A Percentage of such Pool Balance at a rate equal
to the sum of the Class A Pass-Through Rate and the Basic Servicing Fee Rate
through the Final Distribution Date and (b) the Class B Percentage of such Pool
Balance at a rate equal to the sum of the Class B Pass-Through Rate and the
Basic Servicing Fee Rate through the Final Scheduled Distribution Date; PROVIDED
that the Specified Reserve Account Balance will be calculated using a percentage
of 9.00% for any Distribution Date (beginning June 16, 1997) on which the
Average Net Loss Ratio exceeds 1.50% or the Average Delinquency Ratio exceeds
1.25%. The Specified Reserve Account Balance may be reduced to a lesser amount
as determined by the Seller; PROVIDED that such reduction does not adversely
affect the ratings of the Certificates by the Rating Agencies.
"SPECIFIED YIELD SUPPLEMENT BALANCE" means, with respect to any
Distribution Date, an amount equal to at least the sum of all projected Yield
Supplement Amounts for all future Distribution Dates, assuming that future
scheduled payments on the Receivables are made on their scheduled due dates;
PROVIDED that if on any date the Seller shall fail to pay the amount payable
under the Yield Supplement Agreement in accordance with the terms thereof, then,
in such event, the Specified Yield Supplement Balance shall not thereafter be
reduced hereunder.
"SUPPLEMENTAL SERVICING FEE" shall have the meaning set forth in
Section 3.8.
"TRADES" means regulations promulgated by the U.S. Department of the
Treasury governing book-entry Treasury bonds, notes and bills, 31 C.F.R. Part
357, which replace prior Treasury regulations and which designate Revised
Article 8 as the applicable governing law.
"TRADES EFFECTIVE DATE" means with respect to a Federal Book-Entry
Security, the date (which is January 1, 1997, in the case of securities issued
by the U.S. Treasury) on which TRADES or an equivalent set of regulations
becomes effective.
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"TRANSFER DATE" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"TRUST" means the First Security Auto Grantor Trust 1997-A created by
this Agreement.
"TRUSTEE" means Bankers Trust Company, a New York banking corporation,
as Trustee under this Agreement, or any successor, and any successor trustee
appointed and acting pursuant to Sections 10.11 and 10.12.
"TRUST PROPERTY" means the Receivables; all monies received under the
Receivables after the close of business of the Servicer on the Cutoff Date; the
Certificate Account, the Class A Distribution Account and the Class B
Distribution Account and such amounts as from time to time may be held therein
(including the Account Property related thereto); security interests in the
Financed Vehicles; all rights of the Trust under the Yield Supplement Agreement;
the Seller's rights (if any) to receive proceeds from claims on Insurance
Policies covering the Financed Vehicles or the Obligors; the Seller's rights
relating to the Receivables under the Dealer Agreements and Dealer Assignments;
the Seller's rights to all documents and information contained in the Receivable
Files; the rights of the Trust under this Agreement; and all proceeds (within
the meaning of the Relevant UCC) of the foregoing. Notwithstanding anything to
the contrary contained herein, the Trust Property shall not include, and the
Trust shall not have any right to, the Reserve Account, the Yield Supplement
Account, any funds actually or deemed to be deposited in such accounts or any
investments therein or any amounts paid by the Servicer for physical damage
insurance pursuant to Section 3.4.
"UNCERTIFICATED SECURITY" as of any date, has the meaning given to
such term under the Relevant UCC as in effect on such date.
"YIELD SUPPLEMENT ACCOUNT" shall mean the account established,
maintained and designated as the "Yield Supplement Account" pursuant to Section
5.2.
"YIELD SUPPLEMENT ACCOUNT PROPERTY" shall have the meaning set forth
in Section 5.2.
"YIELD SUPPLEMENT AGREEMENT" means the Yield Supplement Agreement
dated as of the Closing Date between the Seller and the Trustee, substantially
in the form attached hereto as EXHIBIT E.
"YIELD SUPPLEMENT AMOUNT" shall have the meaning specified in Section
5.l.
"YIELD SUPPLEMENT INITIAL DEPOSIT" means cash or Eligible Investments
having a value of at least $36,484.04.
Section 1.2 USAGE OF TERMS. With respect to all terms used in this
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
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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 this
Agreement; references to Persons include their permitted successors and assigns;
and the terms "include" or "including" mean "include without limitation" or
"including without limitation."
Section 1.3 CALCULATIONS. All calculations of the amount of
interest accrued on the Certificates during any Collection Period and all
calculations of the amount of the Basic Servicing Fee payable with respect to a
Collection Period shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
Section 1.4 REFERENCES. All references to the first day of a
Collection Period shall refer to the opening of business on such day. All
references to the last day of a Collection Period shall refer to the close of
business of the Servicer on such day.
Section 1.5 SECTION REFERENCES. All section references shall be to
Sections in this Agreement unless otherwise specified.
Section 1.6 ACTION BY OR CONSENT OF CERTIFICATEHOLDERS. Whenever
any provision of this Agreement refers to action to be taken, or consented to,
by Certificateholders, such provision shall be deemed to refer to
Certificateholders of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consented to by Certificateholders.
ARTICLE II
THE TRUST PROPERTY
Section 2.1 CONVEYANCE OF TRUST PROPERTY. (a) In consideration of
the Trustee's delivery to, or upon the written order of, the Seller of
authenticated Certificates, in authorized denominations, in an aggregate amount
equal to the Original Certificate Balance and the rights to receive certain
amounts as specified herein, the Seller hereby sells, transfers, assigns and
conveys to the Trustee, on the behalf of the Trust, for the benefit of the
Certificateholders, upon the terms and conditions hereof, the Trust Property to
the Trust, without recourse. The sale, transfer, assignment and conveyance made
hereunder shall not constitute and is not intended to result in an assumption by
the Trustee, any Certificateholder or any Certificate Owner of any obligation of
the Seller to the Obligors, the Dealers, or any other Person in connection with
the Receivables and the other Trust Property or any agreement, document or
instrument related thereto.
(b) The Seller intends that the transfer and conveyance of the Trust
Property to the Trust hereunder constitutes a complete sale and assignment of
all of the Seller's right, title and interest in, to and under the Trust
Property to the Trust and that the beneficial interest of the Seller in, and
title to, the Trust Property will not be a part of the Seller's estate in the
event of any liquidation, reorganization or similar insolvency proceeding with
respect to the Seller. In the event that the transfer hereunder is not
respected as a complete sale and assignment of the Trust Property
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to the Trust, then, in such event, the Seller hereby grants to the Trustee on
behalf of the Certificateholders a security interest in the Trust Property.
This Agreement shall constitute a security agreement under applicable law.
Section 2.2 WARRANTIES OF THE SELLER AS TO EACH RECEIVABLE. The
Seller hereby makes the following warranties as to each Receivable conveyed by
it to the Trust hereunder on which the Trustee shall rely in accepting the Trust
Property in trust and authenticating the Certificates. Unless otherwise
indicated, such warranties shall speak as of the Closing Date, but shall survive
the sale, transfer, and assignment of the Receivables and the other Trust
Property to the Trust.
(i) CHARACTERISTICS OF RECEIVABLES. The Receivable has
been fully and properly executed by the parties thereto and (a) (x) has
been originated by the Seller or (y) has been originated by a Dealer for
the retail sale of a Motor Vehicle in the ordinary course of such Dealer's
business, and has been purchased by the Seller from such Dealer in the
ordinary course of the Seller's business and has been validly assigned by
such Dealer to the Seller, (b) is secured by a valid, subsisting, and
enforceable first priority security interest in favor of the Seller in the
Financed Vehicle (subject to administrative delays and clerical errors on
the part of the applicable government agency), which security interest is
assignable together with such Receivable, and has been so assigned, by the
Seller to the Trustee, (c) contains or is accompanied by a security
agreement which contains customary and enforceable provisions such that the
rights and remedies of the secured party are adequate for realization of
the benefits of the security interest in the subject collateral, (d)
provides at origination for level monthly payments (PROVIDED that the first
and the last payment may be less than or minimally more than the level
payment), which fully amortize the Amount Financed over the original term
and provides for interest at the related Contract Rate and (e) provides for
a payment that will fully pay the Principal Balance of such Receivable as
of the first day of the Collection Period in which the Receivable is
prepaid, together with interest accrued at least to the date of prepayment
at the related Contract Rate.
(ii) SCHEDULE OF RECEIVABLES. The information set forth in
the Schedule of Receivables with respect to such Receivable has been
produced from the Electronic Ledger and was true and correct as of the
close of business of the Servicer on the Cutoff Date; and the Cutoff Date
Principal Balance and the Contract Rate of the Receivable has been
accurately and correctly calculated.
(iii) COMPLIANCE WITH LAWS. To the best knowledge of
the Seller, the Receivable, and the sale of the related Financed Vehicle,
complied at the time it was originated or made, and will comply as of the
Closing Date, in all material respects with all requirements of applicable
federal, state, and local laws, and regulations thereunder, including, to
the extent applicable, usury laws, the Federal Truth-in-Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, Federal Reserve
Board Regulations B and Z, and any other consumer credit, equal
opportunity, and disclosure laws; PROVIDED, HOWEVER, that if,
notwithstanding the best knowledge of the Seller, any Receivable, or the
sale of the related
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Financed Vehicle, fails to comply with applicable law in the manner and to
the extent set forth herein, the Seller shall repurchase such Receivable in
accordance with the terms and conditions set forth in Section 2.4, but such
failure to comply with such laws shall not constitute a breach of this
warranty except for purposes of Section 2.4.
(iv) BINDING OBLIGATION. The Receivable constitutes the
genuine, legal, valid, and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally.
(v) NO GOVERNMENT OBLIGOR. The Obligor on the Receivable
is not the United States of America or any State thereof or any local
government, or any agency, department, political subdivision or
instrumentality of the United States of America or any State thereof or any
local government.
(vi) RECEIVABLES IN FORCE. The Receivable has not been
satisfied, subordinated, or rescinded and the Financed Vehicle has not been
released from the lien granted by the Receivable in whole or in part.
(vii) NO AMENDMENT OR WAIVER. No material provision of
the Receivable has been amended, waived, altered or modified in any
respect, except pursuant to a document, instrument or writing included in
the Receivable File and reflected in the Electronic Ledger and no such
amendment, waiver, alteration or modification causes such Receivable not to
conform to the other warranties contained in this Section.
(viii) NO DEFENSES. The Receivable is not subject to any
right of rescission, setoff, counterclaim or defense, including the defense
of usury, and the operation of any of the terms of the Receivable, or the
exercise of any right thereunder, will not render the Receivable
unenforceable in whole or in part or subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and no
such right of rescission, setoff, counterclaim or defense has been asserted
with respect thereto.
(ix) NO LIENS. To the best knowledge of the Seller, there
are no liens or claims, including liens for work, labor, materials or
unpaid state or federal taxes relating to the Financed Vehicle, that are or
may be liens prior to, or equal to or coordinate with, the lien granted by
the Obligor.
(x) NO DEFAULT. Except for payment delinquencies
continuing for a period of not more than 30 days as of the Cutoff Date, no
default, breach, violation, or event permitting acceleration under the
terms of any Receivable exists; and no continuing condition that with
notice or lapse of time, or both, would constitute a default, breach,
violation, or event permitting acceleration under the terms of any
Receivable has arisen; and the Seller has not waived any of the foregoing.
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(xi) INSURANCE. If the Principal Balance of the Receivable
exceeds $2,000, the Financed Vehicle securing such Receivable is insured
under an Insurance Policy, the premiums for which have been paid in full,
and such Insurance Policy is in full force and effect.
(xii) GOOD TITLE. The Receivable has not been sold,
assigned, pledged or otherwise conveyed by the Seller to any Person other
than the Trust, and, immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to the
Receivable free and clear of any encumbrance, equity, lien, pledge, charge,
claim, security interest or other right or interest of any other Person,
was the sole owner thereof and had full right and power to transfer and
assign the Receivable to the Trust. Immediately upon the transfer and
assignment of the Receivable to the Trust, the Trust shall have good and
marketable title to the Receivable, free and clear of any encumbrance,
equity, lien, pledge, charge, claim, security interest or other right or
interest of any other Person; and all filings and actions required by the
Relevant UCC with respect to the transfer of Receivables associated with
the sale of the same have been accomplished for the purpose of complying
with the Relevant UCC provisions governing the relative priority of
interests of parties in the Receivables.
(xiii) LAWFUL ASSIGNMENT. The Receivable has not been
originated in, and is not subject to the laws of, any jurisdiction under
which the sale, transfer, and assignment of such Receivable hereunder or
pursuant to transfers of the Certificates are unlawful, void, or voidable.
(xiv) ALL FILINGS MADE. All filings have been made,
including filings under the Relevant UCC, which are necessary in any
jurisdiction to cause the ownership and title interests of the Trust in the
Receivables to be afforded priority over competing claims of the holders of
security interests or other claims against whom such filings can assure
priority.
(xv) VALID SECURITY INTEREST. On the Closing Date, there
will exist a valid, subsisting and enforceable first priority perfected
security interest in the Financed Vehicle securing the Receivable (subject
to administrative delays and clerical errors on the part of the applicable
government agency and to any statutory or other lien arising by operation
of law after the Closing Date which is prior to such security interest).
With respect to the foregoing, the Seller hereby covenants to take all
action necessary such that, at such time as enforcement of such security
interest is sought, there shall exist a valid, subsisting and enforceable
first priority perfected security interest in the Financed Vehicle for the
benefit of the Trust (subject to administrative delays and clerical errors
on the part of the applicable government agency and any statutory or other
lien arising by operation of law after the Closing Date which is prior to
such interest).
(xvi) CAPACITY OF PARTIES. All parties to the
Receivable had capacity to execute the Receivable.
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(xvii) ONE ORIGINAL. There is only one executed original
of each Receivable, which original has been delivered by the Seller to the
Trustee as provided in Section 2.5(i).
(xviii) OBLIGATIONS; NO IMPAIRMENT. The Seller has duly
fulfilled all obligations on its part to be fulfilled under, or in
connection with, the Receivable and has done nothing to impair the rights
of the Trust, the Class A Certificateholders or the Class B
Certificateholders in the Receivable or the proceeds thereof.
(xix) NO FRAUD OR MISREPRESENTATION. To the best
knowledge of the Seller, in the case of a Receivable originated by a
Dealer, the Receivable was originated by a Dealer and sold by such Dealer
to the Seller without any conduct constituting fraud or misrepresentation
on the part of such Dealer; PROVIDED, HOWEVER, that if, notwithstanding the
best knowledge of the Seller, any Receivable was originated and sold under
conduct constituting fraud or misrepresentation on the part of such Dealer,
the Seller shall repurchase such Receivable in accordance with the terms
and conditions of Section 2.4, with the existence of such conduct not
constituting a breach of this warranty, except for purposes of Section 2.4.
(xx) POSSESSION. Immediately prior to the Closing Date, the
Seller (or an Affiliate thereof) will have possession of the original
Receivable and the related Receivable File, and there are and there will be
no custodial agreements in effect materially adversely affecting the right
or ability of the Seller to make, or cause to be made, any delivery
required hereunder.
(xxi) BULK TRANSFER LAWS. The transfer, assignment and
conveyance of the Receivable and Receivable Files by the Seller pursuant to
this Agreement is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
Section 2.3 WARRANTIES AS TO THE RECEIVABLES IN THE AGGREGATE AND
ACTIONS OF THE SELLER. The Seller hereby makes the following warranties as to
the Receivables conveyed by it to the Trust hereunder on which the Trustee shall
rely in accepting the Trust Property in trust and authenticating the
Certificates. Unless otherwise indicated, such warranties shall speak as of the
Closing Date, but shall survive the sale, transfer, and assignment of the
Receivables and the other Trust Property to the Trust.
(i) AMOUNTS. The aggregate Cutoff Date Principal Balances
of the Receivables are equal to the Original Pool Balance.
(ii) INDIVIDUAL CHARACTERISTICS. The Receivables have the
following individual characteristics as of the close of business of the
Servicer on the Cutoff Date: (a) the obligations of the Obligors on the
Receivables are secured by security interests in new or used automobiles or
light-duty trucks; (b) each Receivable has a Contract Rate of at least 6%
and not more than 14%; (c) each Receivable had a remaining maturity, as of
the Cutoff
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Date, of not less than six months and not more than 60 months; (d) each
Receivable had a remaining Principal Balance of not less than $100 and
not more than $77,000 as of the Cutoff Date; (e) no Receivable was more
than 30 days delinquent as of the Cutoff Date; (f) no Financed Vehicle had
been repossessed as of the Cutoff Date; (g) each Receivable is a motor
vehicle retail installment sale contract or motor vehicle retail installment
loan; (h) each Receivable provides for allocation of payments between
principal and interest by the Simple Interest Method; (i) the Dealers of
the Financed Vehicles, if any, have no participation in, or other
right to receive, any proceeds of the Receivable; and (j) each Receivable
was originated on or after December 15, 1990. The Receivables were
selected utilizing selection procedures that were not adverse to the
Certificateholders.
(iii) AGGREGATE CHARACTERISTICS. The Receivables had
the following characteristics in the aggregate as of the Cutoff Date: (a)
approximately 40.25% of the Original Pool Balance was attributable to loans
for purchases of new Financed Vehicles, and approximately 59.75% of the
Original Pool Balance was attributable to loans for purchases of used
Financed Vehicles; (b) approximately 62.75% of the Original Pool Balance
was attributable to Receivables the mailing addresses of the Obligors with
respect to which are located in the States of Utah and Idaho; (c) the
weighted average Contract Rate of the Receivables was 10.009%; (d)
approximately 93.69% of the Original Pool Balance was attributable to
Receivables originated by the Seller; (e) approximately 93.69% of the
Original Pool Balance was attributable to Receivables that are Dealer
Loans; and (f) approximately .95% of the Original Pool Balance was
attributable to Receivables that are subject to a repurchase obligation by
the originating Dealer upon default and repossession.
(iv) COMPUTER TAPE. The Computer Tapes made available by
the Seller were complete and accurate as of the Cutoff Date and include a
description of the same Receivables that are described in the Schedule of
Receivables.
(v) MARKING RECORDS. By the Closing Date, the Seller will
have caused the portions of the Electronic Ledger relating to the
Receivables to be clearly and unambiguously marked to show that such
Receivables constitute part of the Trust Property and are owned by the
Trust in accordance with the terms of the trust created hereunder.
(vi) NO ASSIGNMENT. As of the Closing Date, the Seller
shall not have taken any action to convey any right to any Person that
would result in such Person having a right to payments received under the
Insurance Policies, the Dealer Agreements, the Dealer Assignments or
payments due under the Receivables that is senior to, or equal with, that
of the Trust.
Section 2.4 REPURCHASE UPON BREACH. The Seller, the Servicer, or
the Trustee, as the case may be, shall inform the other parties promptly, in
writing, upon the discovery of any breach or failure to be true of the
warranties (including in the case of Sections 2.2(iii), (ix) and (xix) any
breach or failure which would have occurred if such warranty had not been made
to the best knowledge of the Seller) made by the Seller pursuant to Section 2.2
or Section 2.3. Unless the breach or failure shall have been cured by the last
day of the Collection Period which includes the
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60th day after the date on which the Seller becomes aware of, or receives
written notice from the Trustee or the Servicer of, such breach or failure, the
Seller shall repurchase from the Trust, without recourse, representation or
warranty, other than that the Trustee, on behalf of the Trust, has not imposed
any liens on the Receivable to be repurchased, any Receivable, the interests of
the Trust and the Certificateholders in which is materially and adversely
affected by the breach or failure, on the Deposit Date related to such
Collection Period. Such purchase shall occur as of the last day of such
Collection Period. Any breach of a representation relating to the status of a
Receivable as a Simple Interest Receivable or the Contract Rate of a Receivable
shall be deemed to materially and adversely affect the Certificateholders. In
consideration of the repurchase of a Receivable hereunder, the Seller shall
remit the Purchase Amount of such Receivable, no later than the close of
business (New York time) on the applicable Deposit Date, in the manner specified
in Section 4.3(b). Except as provided in Section 7.2, the sole remedy of the
Trust, the Trustee, or the Certificateholders with respect to a breach or
failure to be true of the warranties made by the Seller pursuant to Section 2.2
or Section 2.3 shall be to require the Seller to repurchase Receivables pursuant
to this Section.
Section 2.5 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 this Agreement,
revocably appoints the Servicer, as agent, and the Servicer accepts such
appointment and revocably appoints First Security Service Company, to act as
custodian on behalf of the Trustee of the following documents or instruments,
which are hereby constructively delivered to the Trustee with respect to each
Receivable (collectively, a "RECEIVABLE FILE"):
(i) the original of the Receivable;
(ii) any documents evidencing the existence of any Insurance
Policies;
(iii) copies of the original credit application, fully
executed by the Obligor;
(iv) either (x) the original certificate of title, or such
other documents as the Seller shall keep on file, in accordance with its
customary procedures, evidencing the security interest of the Seller in the
Financed Vehicle or the efforts (including the proof of application for
notice of lien or other evidence of such security interest) made by the
Seller to perfect such security interest; or (y) with respect to
jurisdictions in which the certificate of title or other evidence of
ownership is not issued to the holder of a lien, evidence of the Seller's
security interest in the Financed Vehicle (or the efforts made by the
Seller to perfect such security interest (including the proof of
application for notice of lien or other evidence of such security
interest)), in each case issued by the appropriate governmental agency of
the State in which such Financed Vehicle is registered;
(v) electronic entries and originals or true copies of all
documents, instruments or writings relating to extensions, amendments or
waivers of the Receivable;
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(vi) in the case of a Dealer Loan, the Dealer Assignment;
and
(vii) any and all other documents or electronic records
that the Seller or the Servicer, as the case may be, shall keep on file, in
accordance with its customary procedures, relating to the Receivable, the
Obligor or the Financed Vehicle.
Section 2.6 DUTIES OF THE SERVICER AS CUSTODIAN. (a) SAFEKEEPING.
The Servicer, in its capacity as custodian, shall hold, or cause an Affiliate to
hold, the Receivable Files on behalf of the Trustee for the benefit of all
present and future Certificateholders, and maintain such accurate and complete
accounts, records, and computer systems pertaining to each Receivable as shall
enable the Servicer and the Trustee to comply with the terms and provisions of
this Agreement applicable to it. In performing its duties as custodian
hereunder, the Servicer shall act with reasonable care, exercising the degree of
skill and care that the Servicer exercises with respect to similar motor vehicle
retail installment sale contracts owned and/or serviced by it and that is
consistent with industry standards. The Servicer shall implement written
policies and procedures, signed by a Servicing Officer, with respect to the
handling and custody of the Receivable Files, so that the integrity and physical
possession of the Receivable Files shall be maintained, and, in general, shall
attend to all details in connection with maintaining custody of the Receivable
Files as agent of the Trustee, for the benefit of the Trust and the
Certificateholders. The Servicer shall also maintain a current inventory of the
Receivables and conduct, or cause to be conducted, periodic audits (to the
extent required by Section 3.11) of the Receivable Files held by it under this
Agreement and the related accounts, records, and computer systems, and shall
otherwise maintain the Receivable Files in such a manner as shall enable the
Trustee to verify, if the Trustee so elects, the accuracy of the record keeping
of the Servicer. The Servicer shall promptly report to the Trustee any failure
on its part to hold the Receivable Files and maintain its accounts, records, and
computer systems as herein provided, and promptly take appropriate action to
remedy any such failure.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall
maintain each Receivable File at the location specified in Schedule B to this
Agreement, or at such other office of the Servicer or an Affiliate within the
State of Utah or Idaho (or, in the case of any successor servicer, within the
State in which its principal place of business is located) as shall be specified
to the Trustee by 30 days' prior written notice. The Servicer shall make
available to the Trustee or its Authorized Officers (or, when requested in
writing by the Trustee, to its attorneys or auditors) and to Certificateholders
(for legitimate business purposes relating to the Trust) the Receivable Files
and the related accounts, records, and computer systems maintained by the
Servicer at such times during the normal business hours of the Servicer as the
Trustee shall reasonably instruct.
(c) RELEASE OF DOCUMENTS. Upon written instructions from the
Trustee, the Servicer shall release any document in the Receivable Files to the
Trustee, the Trustee's agent, or the Trustee's designee, as the case may be, at
such place or places as the Trustee may designate, as soon thereafter as is
practicable. Any document so released shall be handled by the Trustee with due
care and returned to the Servicer for safekeeping as soon as the Trustee or its
agent or designee, as the case may be, shall have no further need therefor.
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(d) TITLE TO RECEIVABLES. The Servicer agrees that, in respect of
any Receivable held by it as custodian hereunder, the Servicer will not at any
time have or in any way attempt to assert any interest in such Receivable or the
related Receivable File, other than solely for the purpose of collecting or
enforcing the Receivable for the benefit of the Trust and that the entire
equitable interest in such Receivable and the related Receivable File shall at
all times be vested in the Trust.
Section 2.7 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by an Authorized Officer of the
Trustee. A certified copy of excerpts of bylaws or certain resolutions of the
Board of Directors of the Trustee shall constitute conclusive evidence of the
authority of any such Authorized Officer to act and shall be considered in full
force and effect until receipt by the Servicer of written notice to the contrary
given by the Trustee.
Section 2.8 CUSTODIAN'S INDEMNIFICATION. The Servicer, in its
capacity as custodian, shall indemnify and hold harmless the Trustee, its
officers, directors, employees and agents and the Certificateholders from and
against any and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses (including legal fees if any) of any kind whatsoever
that may be imposed on, incurred, or asserted against the Trustee or the
Certificateholders as the result of any act or omission relating to the
maintenance and custody of the Receivable Files; PROVIDED, HOWEVER, that the
Servicer shall not be liable hereunder to the extent, but only to the extent,
that such liabilities, obligations, losses, compensatory damages, payments,
costs or expenses result from the willful misfeasance, bad faith, or negligence
of the Trustee. The obligations of the Servicer, in its capacity as custodian
under this Section 2.8, shall survive the resignation or removal of the Servicer
as custodian under Section 2.9 hereof.
Section 2.9 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 2.9.
If the Servicer resigns as a Servicer under Section 8.5, or if all of the rights
and obligations of the Servicer shall have been terminated under Section 9.1,
the appointment of the Servicer as custodian hereunder may be terminated by the
Trustee or by the holders of Certificates evidencing not less than a majority of
the aggregate outstanding principal balance of the Class A Certificates and the
Class B Certificates taken together as a single class, in the same manner as the
Trustee or such holders may terminate the rights and obligations of the Servicer
under Section 9.1. The Trustee may terminate the Servicer's appointment as a
custodian hereunder at any time with cause, or with 30 days' prior notice
without cause, upon written notification to the Servicer. As soon as
practicable after any termination of such appointment the Servicer shall
deliver, or cause to be delivered, the Receivable Files to the Trustee, the
Trustee's agent or the Trustee's designee at such place or places as the Trustee
may reasonably designate. Notwithstanding any termination of the Servicer as
custodian hereunder (other than in connection with a termination resulting from
the termination of the Servicer, as such, pursuant to Section 9.1), the Trustee
agrees that, from and after the date of such termination, and for so long as the
Servicer is acting as such pursuant to this Agreement, the Trustee shall
provide, or cause the successor custodian to provide, access to the Receivable
Files to the Servicer, at the times as the Servicer shall request, for the
purpose of carrying out its duties and responsibilities with respect to the
servicing of the Receivables hereunder.
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ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST PROPERTY
Section 3.1 DUTIES OF THE SERVICER. (a) The Servicer, acting alone
and/or through subservicers as provided in this Section 3.1, shall administer
the Receivables serviced by it with reasonable care. The Servicer's duties
shall include, but not be limited to, the collection and posting of all
payments, responding to inquiries by Obligors on the Receivables, or by federal,
state, or local governmental authorities, investigating delinquencies, reporting
tax information to Obligors, furnishing monthly and annual statements to the
Trustee with respect to distributions, monitoring the status of the Insurance
Policies with respect to Financed Vehicles and providing collection and
repossession services in the event of Obligor default. The Servicer shall also
administer and enforce all rights and responsibilities of the holder of the
Receivables provided for in the Dealer Agreements, the Dealer Assignments and
the Insurance Policies, to the extent that such Dealer Agreements, Dealer
Assignments and Insurance Policies relate to the Receivables, the Financed
Vehicles or the Obligors. In performing its duties as Servicer hereunder, the
Servicer will exercise that degree of skill and care that the Servicer exercises
with respect to similar motor vehicle retail installment sale contracts or motor
vehicle retail installment loans owned and/or serviced by the Servicer and that
is consistent with prudent industry standards. Without limiting the generality
of the foregoing, the Servicer is hereby authorized and empowered by the Trustee
to execute and deliver, on behalf of itself, the Trust, the Trustee, and the
Certificateholders, any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable instruments,
with respect to the Receivables or to the Financed Vehicles, all in accordance
with this Agreement; PROVIDED, HOWEVER, that notwithstanding the foregoing, the
Servicer shall not, except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under any
Receivable or waive the right to collect the unpaid balance (including accrued
interest) of any Receivable from the Obligor, except in connection with a DE
MINIMIS deficiency which the Servicer would not attempt to collect in accordance
with its customary procedures. If the Servicer shall commence a legal
proceeding to enforce a Receivable, the Trustee shall thereupon be deemed to
have automatically assigned such Receivable to the Servicer, which assignment
shall be solely for purposes of collection. The Trustee shall furnish the
Servicer with any powers of attorney and other documents or instruments
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
From time to time during the term of this Agreement, the Servicer may
enter into agreements with (i) one or more Affiliates for the servicing and
administration of certain of the Receivables; PROVIDED, HOWEVER, that any such
subservicer shall be and shall remain, for so long as it is acting as
subservicer, an Eligible Servicer, and any fees paid to such subservicer shall
be paid by the Servicer and not out of the proceeds of the Trust, and any such
subservicer shall agree to service the Receivables in a manner consistent with
the terms of this Agreement or (ii) subcontractors who are in the business of
performing specific duties delegated to it.
(b) References in this Agreement to actions taken, to be taken,
permitted to be taken, or restrictions on actions permitted to be taken by the
Servicer in servicing the Receivables
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and other actions taken, to be taken, permitted to be taken, or restrictions on
actions to be taken with respect to the Trust Property shall include actions
taken, to be taken, permitted to be taken, or restrictions on actions permitted
to be taken by a subservicer or subcontractor on behalf of the Servicer and
references herein to payments or Recoveries received by the Servicer shall
include payments or Recoveries received by a subservicer or subcontractor,
irrespective of whether such payments or Recoveries are actually deposited in
the Certificate Account by such subservicer or subcontractor. Any subservicing
agreement will contain terms and provisions substantially identical to the terms
and provisions of this Agreement and such other terms and provisions as are not
inconsistent with this Agreement and as the Servicer and the subservicer have
agreed.
(c) The Servicer shall be entitled to terminate any subservicing or
subcontracting agreement in accordance with the terms and conditions of such
subservicing or subcontracting agreement and without any limitation by virtue of
this Agreement; PROVIDED, HOWEVER, that, in the event of termination of any
subservicing or subcontracting agreement by the Servicer, the Servicer shall
either act directly as servicer of the related Receivable or enter into a
subservicing or subcontracting agreement with a successor subservicer or
subcontractor which will be bound by the terms of the related subservicing or
subcontracting agreement.
(d) As a condition to the appointment of any subservicer other than
an Affiliate of the Seller, the Servicer shall notify the Trustee in writing and
the Rating Agencies before such assignment becomes effective and such
subservicer shall be required to execute and deliver an instrument in which it
agrees that, for so long as it acts as subservicer of the Receivables and the
other Trust Property being serviced by it, the covenants, conditions,
indemnities, duties, obligations and other terms and provisions of this
Agreement applicable to the Servicer hereunder shall be applicable to it as
subservicer, that it shall be required to perform its obligations as subservicer
for the benefit of the Trust as if it were the Servicer hereunder (subject,
however, to the right of the Servicer to direct the performance of such
obligations in accordance with this Agreement) and that, notwithstanding any
provision of a subservicing agreement to the contrary, such subservicer shall be
directly liable to the Trustee and the Trust (notwithstanding any failure by the
Servicer to perform its duties and obligations hereunder) for the failure by
such subservicer to perform its obligations hereunder or under any subservicing
agreement, and that (notwithstanding any failure by the Servicer to perform its
respective duties and obligations hereunder) the Trustee may enforce the
provisions of this Agreement and any subservicing agreement against the
subservicer for the benefit of the Trust and the Certificateholders, without
diminution of such obligations or liabilities by virtue of any subservicing
agreement, by virtue of any indemnification provided thereunder or by virtue of
the fact that the Servicer is primarily responsible hereunder for the
performance of such duties and obligations, as if a subservicer alone were
servicing and administering, under this Agreement, the Receivables and the other
Trust Property being serviced by it under the subservicing agreement.
(e) Notwithstanding any subservicing or subcontracting agreement, any
of the provisions of this Agreement relating to agreements or arrangements
between the Servicer or a subservicer or subcontractor or reference to actions
taken through such Persons or otherwise, the Servicer shall remain obligated and
liable to the Trust, the Trustee and the Certificateholders for the servicing
and administering of the Receivables and the other Trust Property serviced by it
in accordance with the provisions of this Agreement (including for the deposit
of payments and
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Recoveries received by a subservicer or subcontractor, irrespective of whether
such payments or Recoveries are actually remitted to the Servicer or deposited
in the Certificate Account by such subservicer or subcontractor; PROVIDED that
if such amounts are so deposited, the Servicer shall have no further obligation
to do so) without diminution of such obligation or liability by virtue of such
subservicing or subcontracting agreements or arrangements or by virtue of
indemnification from a subservicer or subcontractor, to the same extent and
under the same terms and conditions as if the Servicer alone were servicing and
administering the Receivables and the other Trust Property. The Servicer shall
be entitled to enter into any agreement with a subservicer or subcontractor for
indemnification of the Servicer, and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.
(f) In the event the Servicer shall for any reason no longer be
acting as such (including by reason of the occurrence of an Event of Servicing
Termination), the successor servicer may, in its discretion, thereupon assume
all of the rights and obligations of the outgoing Servicer under a subservicing
agreement. In such event, the successor servicer shall be deemed to have
assumed all of the outgoing Servicer's interest therein and to have replaced the
outgoing Servicer as a party to such subservicing agreement to the same extent
as if such subservicing agreement had been assigned to the successor servicer,
except that the outgoing Servicer shall not thereby be relieved of any liability
or obligation on the part of the outgoing Servicer to the subservicer under such
subservicing agreement. The outgoing Servicer shall, upon request of the
Trustee, but at the expense of the outgoing Servicer, deliver to the successor
servicer all documents and records relating to each such subservicing agreement
and the Receivables and the other Trust Property then being serviced thereunder
and an accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the subservicing
agreement to the successor servicer. In the event that the successor servicer
elects not to assume a subservicing agreement, the outgoing Servicer, at its
expense, shall cause the subservicer to deliver to the successor servicer all
documents and records relating to the Receivables and the other Trust Property
being serviced thereunder and all amounts held (or thereafter received) by such
subservicer (together with an accounting of such amounts) and shall otherwise
use its best efforts to effect the orderly and efficient transfer of servicing
of the Receivables and the other Trust Property being serviced by such
subservicer to the successor servicer. The relationship of the Servicer (and of
any successor to the Servicer as servicers under this Agreement) to the Trustee
under this Agreement is intended by the parties to be that of independent
contractors and not that of joint venturers, partners or agents.
Section 3.2 COLLECTION OF RECEIVABLE PAYMENTS; CREDIT DEFERRALS;
OPTIONAL PAYMENT DEFERRALS. (a) 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 otherwise act with
respect to the Receivables, the Dealer Agreements, the Dealer Assignments, the
Insurance Policies and the other Trust Property in such manner as will, in the
reasonable judgment of the Servicer, maximize the amount to be received by the
Trust with respect thereto, in accordance with the standard of care required by
Section 3.1. Other than as explicitly permitted in Section 3.2(b) or Section
3.2(c) below, the Servicer will not increase or decrease the number or amount of
any Scheduled Payment, or the Amount Financed under a Receivable or the Contract
Rate of a Receivable, or extend, rewrite or otherwise modify the payment terms
of a Receivable, release collateral securing a Receivable, or otherwise modify
or waive any material term of a Receivable.
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(b) Notwithstanding the foregoing, the Servicer may grant to an
Obligor one or more payment deferrals (each, a "CREDIT DEFERRAL") if (i) the
Servicer determines that, absent such deferral, a payment default by the Obligor
is reasonably foreseeable; (ii) the Servicer would grant such Credit Deferral if
the Receivable were serviced by it for its own account and in accordance with
its customary standards; (iii) 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 immediately preceding the Final Scheduled
Distribution Date; (iv) such extensions in the aggregate do not exceed two
months for each twelve months of the original term of the Receivable; and (v)
interest continues to accrue on the outstanding Principal Balance of the
Receivable during the term of such Credit Deferral. The Servicer may charge a
fee in connection with the grant of Credit Deferrals in accordance with its
customary practices and procedures, which fee shall be added to the Principal
Balance of the related Receivable. In the event that the Servicer fails to
comply with the provisions of the first sentence of this Section 3.2(b), the
Servicer shall be required to purchase the Receivable or Receivables affected
thereby, for the Purchase Amount, in the manner specified in Section 3.7 as of
the close of the Collection Period in which such failure occurs.
(c) On or after the Closing Date, the Servicer shall notify each
Obligor meeting the requirements set forth below, in writing, at least three
weeks prior to the first month with respect to which such Obligor would be
entitled to an optional extension pursuant to this Section 3.2(c), that such
qualifying Obligor, at such Obligor's option during the remaining term of the
Receivable, shall be entitled to a non-credit related extension of any regularly
scheduled payment due under a Receivable (each, an "OPTIONAL PAYMENT DEFERRAL")
if such qualifying Obligor satisfies the following conditions:
(i) at the time of such extension, such Receivable shall
not have been the subject of two such Optional Payment Deferrals in the
related fiscal year of the Trust;
(ii) such Receivable shall (x) not have been the subject of
any Credit Deferral within 90 days of the related Optional Payment
Deferral, or (y) not have been the subject of more than two Credit
Deferrals since its date of origination;
(iii) at the time of such Optional Payment Deferral, the
Receivable shall not have been more than 30 days past due twice or more;
(iv) at the time of such Optional Payment Deferral, the
Receivable shall not be more than 15 days or more delinquent;
(v) at the time of such Optional Payment Deferral, the
remaining term of the Receivable at such time shall be greater than 20%,
but not more than 95%, of the original specified term of such Receivable;
and
(vi) in the reasonable judgment of the Servicer, the
Receivable is not likely to become a Defaulted Receivable following such
Optional Payment Deferral.
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The Servicer may charge a fee in connection with the grant of Optional
Payment Deferrals in accordance with its customary practices and procedures,
which fee shall be added to the Principal Balance of the related Receivable.
If, as an inadvertent result of any extension granted pursuant to this Section
3.2(c), such extension breached any of the terms of the preceding criteria (i)
through (vi) or caused the term of such Receivable to extend beyond the last day
of the Collection Period immediately preceding the Final Scheduled Distribution
Date, then the Servicer shall be obligated to purchase such Receivable pursuant
to Section 3.7. For the purpose of such purchases pursuant to Section 3.7,
notice shall be deemed to have been received by the Servicer at such time as
shall make such purchase mandatory as of the Record Date immediately following
the discovery of such breach.
Section 3.3 REALIZATION UPON RECEIVABLES. On behalf of the Trust,
the Servicer shall charge off a Receivable as a Defaulted Receivable in
accordance with its customary servicing procedures and shall use its best
efforts to repossess and liquidate the Financed Vehicle securing any Defaulted
Receivable as soon as feasible after default, in accordance with the standard of
care required by Section 3.1. In taking such action, the Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of motor vehicle retail installment sale contracts,
and as are otherwise consistent with the standard of care required under Section
3.1, which shall include the exercise of any rights of recourse to Dealers under
the Dealer Agreements and Dealer Assignments (or rights to compel repurchase
against third Persons) and selling the Financed Vehicle at public or private
sale. The Servicer shall be entitled to recover all reasonable expenses
incurred by it in the course of repossessing and liquidating a Financed Vehicle
into cash proceeds, but only out of the cash proceeds of such Financed Vehicle,
any deficiency obtained from the Obligor or any amounts received from the
related Dealer. The foregoing shall be subject to the provision that, in any
case in which a Financed Vehicle shall have suffered damage, the Servicer shall
not expend funds in connection with the repair or the repossession of such
Financed Vehicle unless it shall determine in its discretion that such repair
and/or repossession will increase the Liquidation Proceeds or Recoveries of the
related Receivable by an amount equal to or greater than the amount of such
expenses (which, in any event, shall not be unreasonable).
If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Trustee to the Servicer of the rights of
recourse under such Dealer Agreement and Dealer Assignment. If, however, in any
enforcement suit or legal proceeding, it is held that the Servicer may not
enforce a Dealer Agreement or Dealer Assignment on the grounds that it is not a
real party in interest or a Person entitled to enforce the Dealer Agreement or
Dealer Assignment, the Trustee, at the Servicer's expense, or the Seller, at the
Seller's expense, shall take such steps as the Servicer deems necessary to
enforce the Dealer Agreement or Dealer Assignment, including bringing suit in
its name or the names of the Certificateholders.
Section 3.4 PHYSICAL DAMAGE INSURANCE. (a) The Servicer, in
accordance with the standard of care required by Section 3.1, shall require that
each Financed Vehicle be insured under an Insurance Policy naming the Seller as
loss payee. In the event that an Insurance Policy shall lapse or shall be
otherwise terminated and the Principal Balance of the Receivable related thereto
is in
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excess of $2,000, the Servicer, at its expense (and not at the expense of the
Trust), shall procure a substitute policy of insurance, issued by an insurer
having a claims-paying ability the same as, or better than, that of the insurer
under the terminated Insurance Policy and naming the Servicer or the Seller as
loss payee. Any substitute Insurance Policy procured hereunder shall provide
coverage against similar risks, shall be subject to the same, or a lower,
deductible and shall contain loss payable clauses and other provisions no less
favorable to the named insured than those contained in the terminated Insurance
Policy. The cost of such Insurance Policy may, to the extent consistent with
applicable law and the terms of the applicable Receivable, be added to the
amount owing by an Obligor, but shall be treated as a separate receivable not
owned by the Trust for all purposes hereunder and, in furtherance of the
foregoing, shall not be included in the definition of Principal Balance or Pool
Balance and collections with respect thereto shall not be part of Available
Interest or Available Principal. In the event that any payment by an Obligor is
insufficient to pay the payment currently due on the Receivable and the amount
due on the receivable arising from the cost of such Insurance Policy, the
payment shall be divided PRO RATA based on the amount currently due on each.
(b) The Servicer may sue to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent for the Trust. If the
Servicer elects to commence a legal proceeding to enforce an Insurance Policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Trust under such Insurance Policy to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce an Insurance Policy on the grounds that
it is not a real party in interest or a holder entitled to enforce the Insurance
Policy, the Trustee, on behalf of the Trust, at the Servicer's expense, or the
Seller, at Servicer's expense, shall take such steps as the Servicer deems
necessary to enforce such Insurance Policy, including bringing suit in its name
or the names of the Certificateholders.
Section 3.5 MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
The Servicer, in accordance with the standard of care required under Section
3.1, shall take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle for
the benefit of the Trust. The Trustee, on behalf of the Trust, hereby
authorizes the Servicer, and the Servicer hereby agrees, to take such steps as
are necessary to re-perfect such security interest on behalf of the Trust in the
event the Servicer receives notice of the relocation of a Financed Vehicle. If
there has been an Event of Servicing Termination (or the occurrence of an event
specified in clause (iii) or (iv) of Section 9.1(a) with respect to the Seller),
upon the request of the Trustee, the Servicer, at its expense, shall promptly
and duly execute and deliver such documents and instruments, and take such other
actions as may be necessary, as evidenced by an Opinion of Counsel delivered to
the Trustee, to perfect the Trust's interest in the Trust Property against all
other Persons, including the delivery of the Receivables and the Receivable
Files to the Trustee, its agent, or its designee, the endorsement and delivery
of the Insurance Policies or the notification of the insurers thereunder, the
execution of transfer instruments, and the endorsement to the Trustee and the
delivery of the certificates of title to the Financed Vehicles to the
appropriate department or departments of motor vehicles (or other appropriate
governmental agency).
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Section 3.6 COVENANTS OF THE SERVICER. The Servicer makes the
following covenants upon which the Trustee relies in accepting the Trust
Property in trust and in executing (on behalf of the Trust) and authenticating
the Certificates:
(i) SECURITY INTEREST TO REMAIN IN FORCE. The Financed Vehicle
securing each Receivable will not be released from the security interest
granted by the Receivable in whole or in part, except as contemplated
herein.
(ii) NO IMPAIRMENT. The Servicer will not (nor will it permit
any subservicer to) impair in any material respect the rights of the
Certificateholders in the Receivables, the Dealer Agreements, the Dealer
Assignments or the Insurance Policies or, subject to clause (iii) below,
otherwise amend or alter the terms thereof if, as a result of such
amendment or alteration, the interests of the Trust and the
Certificateholders hereunder would be materially adversely affected.
(iii) AMENDMENTS. The Servicer will not increase or decrease
the number or amount of Scheduled Payments or the Amount Financed under a
Receivable, or extend, rewrite or otherwise waive, amend, or modify any
material term of a Receivable, except in accordance with Section 3.2.
Section 3.7 PURCHASES BY THE SERVICER. The Seller, the Servicer or
the Trustee, as the case may be, shall inform the other parties promptly, in
writing, upon the discovery (which, in the case of the Trustee, shall occur only
upon the actual knowledge of an Authorized Officer of the Trustee) of any breach
by the Servicer of its covenants under Section 3.6. Unless the breach shall have
been cured by the last day of the Collection Period which includes the 60th day
after the date on which the Servicer becomes aware of, or receives written
notice of, such breach, the Servicer shall purchase the Receivable or
Receivables from the Trust, without recourse, representation or warranty, other
than that the Trustee, on behalf of the Trust, has not imposed any liens on the
Receivable or Receivables to be repurchased materially and adversely affected
thereby on the related Deposit Date; PROVIDED, HOWEVER, that in the case of a
breach of the covenant contained in Section 3.6(iii), the Servicer shall be
obligated to purchase the affected Receivable or Receivables on the Deposit Date
related to the Collection Period during which the Servicer becomes aware of, or
receives written notice of, such breach (which in all cases shall be deemed to
have a material adverse effect on the Certificateholders). If the Servicer
grants an Optional Payment Deferral pursuant to Section 3.2(c) and such deferral
causes the term of the applicable Receivable to extend beyond the last day of
the Collection Period immediately preceding the Final Scheduled Distribution
Date, the Servicer shall be obligated to purchase the applicable Receivable on
the Deposit Date related to the Collection Period during which the Servicer
grants such Optional Payment Deferral. Such purchase shall occur as of the last
day of the related Collection Period. In consideration of the purchase of a
Receivable hereunder, the Servicer shall remit the Purchase Amount of such
Receivable in the manner specified in Section 4.3. Except as provided in
Section 8.2, the sole remedy of the Trust, the Trustee, or the
Certificateholders against the Servicer with respect to a breach pursuant to
Section 3.6 shall be to require the Servicer to purchase Receivables pursuant to
this Section 3.7.
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Section 3.8 SERVICING COMPENSATION. On each Distribution Date, the
Servicer shall be paid the Basic Servicing Fee for such Distribution Date and
any unpaid Basic Servicing Fees related to it from prior Distribution Dates to
the extent of funds available therefor in accordance with the provisions of
Section 4.5, but solely from Interest Collections. If it is acceptable to each
Rating Agency without a reduction in the rating of the Certificates, the Basic
Servicing Fee in respect of a Collection Period (together with any portion of a
Basic Servicing Fee that remains unpaid from prior Distribution Dates) at the
option of the Servicer may be paid at or as soon as possible after the beginning
of such Collection Period out of the first collections of interest received on
the Receivables serviced by the Servicer for such Collection Period. In
addition, the Servicer shall retain any late fees, prepayment charges (other
than Deferral Fees) or other fees and charges collected during the Collection
Period and the Servicer shall be paid any interest earned during the Collection
Period on deposits in the Accounts of Collections on the Receivables
(collectively, the "SUPPLEMENTAL SERVICING FEE"). The Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder (including fees and expenses of the Trustee (and any custodian
appointed by the Trustee) and independent accountants, any subservicer, taxes
imposed on the Servicer or any subservicer, and expenses incurred in connection
with distributions and reports to Certificateholders) except expenses incurred
in connection with realizing upon Receivables under Section 3.3. No transfer,
sale, pledge or other disposition of the Servicer's right to receive all or any
portion of the Basic Servicing Fee shall be made, and any such attempted
transfer, sale, pledge or other disposition shall be void, unless such transfer
is made to one or more successor servicers in connection with the assumption by
any such successor servicer of the duties hereunder pursuant to Section 9.2 and
all (and not a portion) of the Basic Servicing Fee is transferred to any such
successor servicer.
Section 3.9 SERVICER'S CERTIFICATE. On or before the Determination
Date immediately preceding each Distribution Date, the Servicer shall deliver to
the Trustee and Collateral Agent a report of a Servicing Officer substantially
in the form of EXHIBIT C hereto, as certified by such officer (each, a
"SERVICER'S CERTIFICATE") containing all information necessary to make the
distributions pursuant to Section 4.5, and all information necessary for the
Trustee to send statements to Certificateholders pursuant to Section 4.7. The
Servicer also shall separately identify (by account number of the Receivable as
it appears in the related Schedule of Receivables) in a written notice to the
Trustee the Receivables to be repurchased by the Seller or to be purchased by
the Servicer, as the case may be, on the related Deposit Date, and each
Receivable which became a Defaulted Receivable during the related Collection
Period.
Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. (a) The Servicer
shall deliver to the Trustee, on or before March 31 of each year, commencing
March 31, 1998, an Officer's Certificate, stating that (i) a review of the
activities of the Servicer during the preceding calendar year (or shorter
period, in the case of the first such Officer's Certificate) and of its
performance of its obligations under this 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 this Agreement
throughout such year (or shorter period, in the case of the first such
certificate), 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.
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(b) The Servicer shall deliver to the Trustee, promptly upon having
knowledge thereof, but in no event later than five Business Days thereafter,
written notice in an Officer's Certificate of any event which constitutes or,
with the giving of notice or lapse of time, or both, would become, an Event of
Servicing Termination under Section 9.1.
Section 3.11 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORTS. The
Servicer shall cause a firm of independent certified public accountants (who may
also render audit and other services to the Servicer and the Seller) to deliver
to the Trustee on or before March 15 of each year, commencing March 15, 1998, a
report of examination addressed to the Board of Directors of the Servicer and to
the Trustee to the effect that such firm has examined the automobile and
light-duty truck receivable servicing functions of the Servicer over the
previous calendar year (or shorter period, in the case of the first such report)
and that such examination (i) included tests relating to automobile and
light-duty truck loans serviced for others and such other auditing procedures as
such firm considered necessary under the circumstances and (ii) except as
described in such report, disclosed no exceptions or errors in the records
relating to automobile and light-duty truck loans serviced for others that in
such firm's opinion, requires such firm to report. In the event such firm
requires the Trustee to agree to the procedures performed by such firm, the
Servicer shall direct the Trustee in writing to so agree; it being understood
and agreed that the Trustee will deliver such letter of agreement in conclusive
reliance upon the written direction of the Servicer, and the 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 3.12 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING RECEIVABLES. The Servicer shall provide the Trustee and the
Certificateholders with access to the Receivable Files (in the case of the
Certificateholders, where the Certificateholder shall be required by applicable
statutes or regulations to have access to such documentation). Such access
shall be afforded without charge, but only upon reasonable request and during
normal business hours at the office of the Servicer. Nothing in this Section
3.12 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. Any Certificateholder, by its
acceptance of a Certificate, shall be deemed to have agreed to keep any
information obtained by it pursuant to this Section confidential, except as may
be required by applicable law.
Section 3.13 REPORTS TO THE COMMISSION. The Servicer shall, on
behalf of the Trust, cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
Section 3.14 REPORTS TO THE RATING AGENCIES. The Servicer shall
deliver to each Rating Agency, at such address as each Rating Agency may
request, a copy of all reports or notices furnished or delivered pursuant to
this Article and a copy of any amendments, supplements or modifications to this
Agreement and, if any subservicer is not an Affiliate of the Seller, any
subservicing agreement and any other information reasonably requested by such
Rating Agency to monitor this transaction.
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ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS
Section 4.1 ESTABLISHMENT OF ACCOUNTS. (a) (i) The Trustee, on
behalf of the Trust and for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee one or more Eligible
Deposit Accounts (the "CERTIFICATE ACCOUNT"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders. The Trustee, on behalf of the Trust and for the
benefit of the Class A Certificateholders, shall establish and maintain in
the name of the Trustee an Eligible Deposit Account (the "CLASS A
DISTRIBUTION ACCOUNT"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Class A
Certificateholders. The Trustee, on behalf of the Trust and for the
benefit of the Class B Certificateholders, shall establish and maintain in
the name of the Trustee an Eligible Deposit Account (the "CLASS B
DISTRIBUTION ACCOUNT"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Class B
Certificateholders.
(ii) Funds on deposit in the Accounts shall be invested by the
Trustee in Eligible Investments selected by the Servicer (as provided in a
writing signed by it); PROVIDED, HOWEVER, it is understood and agreed that
the Trustee shall not be liable for any loss arising from such investment
in Eligible Investments or incurred as a result of the liquidation of any
investment prior to its stated maturity or the failure of the Servicer to
provide timely written investment direction. In no event shall the Trustee
be liable for the selection of Eligible Investments. The Trustee shall
have no obligation to invest or reinvest any amounts held hereunder in the
absence of written investment direction. All such Eligible Investments
shall be held by the Trustee for the benefit of the beneficiaries of the
applicable Account; PROVIDED that on each Distribution Date, all interest
and other investment income (net of losses and investment expenses) on
funds on deposit therein shall be withdrawn from the Accounts at the
direction of the Servicer and shall be paid to the Seller. Funds on
deposit in the Accounts shall be invested in Eligible Investments that will
mature so that such funds will be available at the close of business (New
York time) on the Transfer Date preceding the following Distribution Date.
Funds deposited in an Account on a Transfer Date which immediately precedes
a Distribution Date upon the maturity of any Eligible Investments are not
required to be (but may be) invested overnight.
(iii) The Accounts shall initially be established at Bankers
Trust Company. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Accounts and in all proceeds
thereof (including all income thereon) and all such funds, investments,
proceeds and income shall be part of the Trust Property. The Accounts
shall be under the sole dominion and control of the Trustee. If, at any
time, any of the Accounts ceases to be an Eligible Deposit Account, the
Trustee (or the Servicer on its behalf) shall within 10 Business Days (or
such longer period, not to exceed 30 calendar days, as to which each Rating
Agency shall consent) establish a new Account as an Eligible Deposit
Account
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and shall transfer any cash and/or any investments that are in the existing
Account which is no longer an Eligible Deposit Account to such new Account.
(iv) With respect to the Account Property in respect of any
Account:
(A) any Account Property that is held in deposit accounts
shall be held solely in an Eligible Deposit Account; and each such
Eligible Deposit Account shall be subject to the exclusive custody and
control of the Trustee, and the Trustee shall have sole signature
authority with respect thereto;
(B) prior to the Revised Article 8 Effective Date, any
Account Property that constitutes Physical Property shall be delivered
to the Trustee in accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or disposition, solely
by the Trustee or a financial intermediary (as such term is defined in
Section 8-313(4) of the Relevant UCC) acting solely for the Trustee;
(C) prior to the Revised Article 8 Effective Date, any
Account Property that is an "uncertificated security" under Article 8
of the Relevant UCC and that is not a Federal Book-Entry Security
shall be delivered to the Trustee in accordance with paragraph (b) of
the definition of "Delivery" and shall be maintained by the Trustee,
pending maturity or disposition, through continued registration of the
Trustee's (or its nominee's) ownership of such security;
(D) prior to the TRADES Effective Date, any Account
Property that is a Federal Book-Entry Security shall be delivered in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Trustee, pending maturity or disposition,
through continued book-entry registration of such Account Property as
described in such paragraph;
(E) on and after the Revised Article 8 Effective Date (with
respect to any Account Property that constitutes a Security
Entitlement or an Uncertificated Security) and on and after the TRADES
Effective Date (with respect to any Account Property that constitutes
a Federal Book-Entry Security), the Trustee shall maintain Control
over each Account in which any such Account Property is held; and
(F) on and after the Revised Article 8 Effective Date (with
respect to any Account Property that constitutes either a Security
Certificate or any other Account Property that constitutes Physical
Property and that is not a Security Entitlement), transfer of such
Security Certificate or other Account Property to the Trustee or its
nominee or custodian by physical delivery to the Trustee or its
nominee or custodian endorsed to, or registered in the name of, the
Trustee or its nominee or custodian or endorsed in blank.
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(v) The Servicer shall have the power, revocable by the Trustee,
to instruct the Trustee to make withdrawals and payments from the Accounts
for the purpose of permitting the Servicer to carry out its duties
hereunder or permitting the Trustee to carry out its duties.
(b) (i) The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of Bankers Trust Company, as
Collateral Agent, an Eligible Deposit Account (the "RESERVE ACCOUNT"),
which account shall bear a designation clearly indicating that such account
has been pledged to the Collateral Agent for the benefit of the
Certificateholders. The Reserve Account and any amounts therein shall not
be property of the Trust, but will be pledged to and held by the Collateral
Agent, as secured party for the benefit of the Certificateholders.
(ii) Funds on deposit in the Reserve Account shall be invested by
the Collateral Agent in Eligible Investments selected by the Servicer (as
provided in writing signed by it); PROVIDED, HOWEVER, it is understood and
agreed that the Collateral Agent shall not be liable for any loss arising
from such investment in Eligible Investments or incurred as a result of the
liquidation of any investment prior to its stated maturity or the failure
of the Servicer to provide timely, written investment direction. In no
event shall the Collateral Agent be liable for the selection of Eligible
Investments. The Collateral Agent shall have no obligation to invest or
reinvest any amounts held hereunder in the absence of written investment
direction. All such Eligible Investments shall be held by the Collateral
Agent for the benefit of the Certificateholders; PROVIDED that on each
Distribution Date all interest and other investment income (net of losses
and investment expenses) on funds on deposit therein shall be withdrawn
from the Reserve Account at the direction of the Servicer and shall be paid
to the Seller. Funds on deposit in the Reserve Account shall be invested
in Eligible Investments that will mature so that such funds will be
available at the opening of business on the next following Transfer Date;
PROVIDED, HOWEVER, that to the extent permitted by the Rating Agencies,
funds on deposit in the Reserve Account may be invested in Eligible
Investments that mature later than the next Transfer Date.
(iii) The Reserve Account shall be under the sole dominion
and control of the Collateral Agent. If, at any time, the Reserve Account
ceases to be an Eligible Deposit Account, the Servicer shall within 10
Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Reserve Account as an
Eligible Deposit Account and shall transfer any cash and/or any investments
that are in the existing Account which is no longer an Eligible Deposit
Account to such new Reserve Account.
(iv) With respect to the Account Property in respect of the
Reserve Account:
(A) any Account Property that is held in deposit accounts
shall be held solely in an Eligible Deposit Account; and each such
Eligible Deposit Account
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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) prior to the Revised Article 8 Effective Date, any
Account Property that constitutes Physical Property shall be delivered
to the Collateral Agent in accordance with paragraph (a) of the
definition of "Delivery" (except that all references therein to the
"Trustee" shall be deemed to be references to the Collateral Agent)
and shall be held, pending maturity or disposition, solely by the
Collateral Agent or a financial intermediary (as such term is defined
in Section 8-313(4) of the Relevant UCC) acting solely for the benefit
of the Certificateholders;
(C) prior to the Revised Article 8 Effective Date, any
Account Property that is an "uncertificated security" under Article 8
of the Relevant UCC and that is not a Federal Book-Entry Security
shall be delivered to the Collateral Agent in accordance with
paragraph (b) of the definition of "Delivery" (except that all
references therein to the "Trustee" shall be deemed to be references
to the Collateral Agent) and shall be maintained by the Collateral
Agent, pending maturity or disposition, through continued registration
of the Collateral Agent's (or its nominee's) ownership of such
security;
(D) prior to the TRADES Effective Date, any Account
Property that is a Federal Book-Entry Security shall be delivered in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Trustee, pending maturity or disposition,
through continued book-entry registration of such Account Property as
described in such paragraph;
(E) on and after the Revised Article 8 Effective Date (with
respect to any Account Property that constitutes a Security
Entitlement or an Uncertificated Security) and on and after the TRADES
Effective Date (with respect to any Account Property that constitutes
a Federal Book-Entry Security), the Trustee shall maintain Control
over each Account in which any such Account Property is held; and
(F) on and after the Revised Article 8 Effective Date
(with respect to any Account Property that constitutes either a
Security Certificate or any other Account Property that constitutes
Physical Property and that is not a Security Entitlement), transfer of
such Security Certificate or other Account Property to the Trustee or
its nominee or custodian by physical delivery to the Trustee or its
nominee or custodian endorsed to, or registered in the name of, the
Trustee or its nominee or custodian or endorsed in blank.
(v) The Servicer shall have the power, revocable by the
Collateral Agent, to instruct the Collateral Agent to make withdrawals and
payments from the Reserve Account for the purpose of permitting the
Servicer to carry out its duties hereunder or permitting the Collateral
Agent to carry out its duties.
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(vi) The Seller (and any successor to the Seller in accordance
with Section 7.3) and the Servicer agree to take or cause to be taken such
further actions, to execute, deliver and file or cause to be executed,
delivered and filed such further documents and instruments (including,
without limitation, any financing statements under the Relevant UCC or this
Agreement) as may be determined to be necessary, in order to perfect the
interests created by this Section 4.1 and otherwise fully to effectuate the
purposes, terms and conditions of this Section 4.1(b). The Seller (and any
successor to the Seller in accordance with Section 7.3) and the Servicer
shall:
(A) promptly execute, deliver and file any financing
statements, amendments, continuation statements, assignments,
certificates and other documents with respect to such interests and
perform all such other acts as may be necessary in order to perfect or
to maintain the perfection of the Collateral Agent's security
interest; and
(B) make the necessary filings of financing statements or
amendments thereto within five days after the occurrence of any of the
following: (1) any change in their respective names or any trade
names; (2) any change in the location of their respective chief
executive offices or principal places of business and (3) any merger
or consolidation or other change in their respective identities or
corporate structures; and all promptly notify the Collateral Agent of
any such filings.
Section 4.2 COLLECTIONS. (a) Subject to the provisions of
subsections (b) and (c) below, the Servicer shall remit to the Certificate
Account all payments by or on behalf of the Obligors on the Receivables,
including all Liquidation Proceeds and Recoveries received by the Servicer
during any Collection Period, as soon as practicable, but in no event after the
close of business (New York time) on the second Business Day after receipt
thereof. Subject to the provisions of subsection (c) hereof, on the Closing
Date, the Servicer shall deposit in the Certificate Account all payments by or
on behalf of the Obligors on the Receivables received by the Servicer after the
close of business of the Servicer on the Cutoff Date and on or prior to the
second Business Day immediately preceding the Closing Date.
(b) Notwithstanding the provisions of Section 4.2(a), if (i) the
Servicer shall have the Required Rating or (ii) (a) the Servicer shall have
obtained a letter of credit or surety bond (or similar form of performance
guaranty) in favor of the Trustee, on behalf of the Trust for the benefit of the
Certificateholders, providing that the Trustee may demand payment (up to the
amount then available thereunder) in the event that the Servicer fails to make
any payment or deposit required hereunder (other than with respect to Advances)
and (b) the Trustee shall have received written notice from each of the Rating
Agencies that the then outstanding rating on the Class A Certificates and the
Class B Certificates would not be lowered or withdrawn as a result, the Servicer
may deposit the amounts referred to in subsection (a) above into the Certificate
Account not later than the close of business on the Deposit Date immediately
succeeding the last day of the related Collection Period, for so long as the
Servicer shall have the Required Rating or such letter of credit, surety bond or
similar form of performance guaranty is in full force and effect, as the case
may be; PROVIDED, HOWEVER, that (i) if an Event of Servicing Termination has
occurred and is continuing, (ii) the
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Servicer has been terminated as such pursuant to Section 9.1 or (iii) the
Servicer ceases to have the Required Rating (and the Servicer has not obtained a
letter of credit (or similar form of performance guaranty) satisfying the
conditions specified above), the Servicer shall deposit such amounts (including
any amounts then being held by the Servicer) into the Certificate Account as
provided in Section 4.2(a). Notwithstanding the foregoing, the provisions of
the proviso to the preceding sentence shall not be applicable to a successor
servicer solely by reason of the occurrence of an event specified in clauses
(i), (ii) and (iii) of such proviso with respect to the outgoing Servicer.
Following the occurrence of an event specified in clauses (i), (ii) or (iii) in
the preceding proviso, on a monthly basis, all Collections shall be segregated
by book-entry or similar form of identification on the Servicer's books and
records and identified as the property of the Trust. The Servicer shall
promptly notify the Trustee in writing if it shall obtain or lose the Required
Rating or the benefit of such letter of credit, surety bond, or similar form of
performance guaranty.
(c) Notwithstanding the provisions of subsections (a) and (b) hereof,
the Servicer may retain, or will be entitled to be reimbursed, from amounts
otherwise payable into, or on deposit in, the Certificate Account with respect
to a Collection Period and the Receivables originated by it any amounts
previously deposited in the Certificate Account but later determined to have
resulted from mistaken deposits or postings or checks returned for insufficient
funds, in each case, with respect to which the Servicer has not been previously
reimbursed hereunder. The amount to be retained or reimbursed hereunder shall
not be included in Collections with respect to the related Distribution Date.
(d) In those cases where a subservicer is servicing a Receivable, the
Servicer shall cause the subservicer to remit to the Certificate Account as soon
as practicable, but in no event later than the close of business (New York time)
on the second Business Day after receipt thereof by the subservicer (but subject
to the provisions of Section 4.2 (b) and the limitations contained in Section
4.2(c) of this Agreement) the amounts referred to in Section 4.2(a) in respect
of a Receivable being serviced by the subservicer.
Section 4.3 ADVANCES. (a) On each Deposit Date, the Servicer shall
make a payment with respect to each Receivable serviced by it (other than a
Defaulted Receivable) equal to the excess, if any, of (i) the product of the
Principal Balance of such Receivable as of the first day of the related
Collection Period and one twelfth of its Contract Rate (calculated on the basis
of a 360-day year comprised of twelve 30-day months) over (ii) Interest
Collections actually received by the Servicer as of the last day of such
Collection Period with respect to such Receivable (each such payment, an
"ADVANCE"). With respect to each Receivable, the Advance shall increase
Outstanding Advances. If such calculation results in a negative number, an
amount equal to such amount shall be paid to the Servicer. The Servicer may
elect not to make any Advance of due and unpaid interest with respect to a
Receivable to the extent that the Servicer, in its sole discretion, determines
that such Advance is not recoverable from subsequent payments on such Receivable
or from funds in the Reserve Account. The Servicer shall not make any advance
with respect to principal of Receivables.
(b) The Servicer shall deposit in the Certificate Account the
aggregate Advances on Receivables serviced by the Servicer pursuant to Section
4.3(a). To the extent that the Servicer fails to make an Advance pursuant to
Section 4.3(a) on the date required, the Servicer shall so notify
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the Trustee, and the Trustee shall withdraw such amount (or, if determinable,
such portion of such amount as does not represent advances for delinquent
interest) from the Reserve Account and deposit such amount in the Certificate
Account. The Servicer and the Seller shall deposit or cause to be deposited in
the Certificate Account the aggregate Purchase Amount with respect to Purchased
Receivables. All such deposits shall be made in immediately available funds on
the Distribution Date. The Trustee shall deposit in the Certificate Account the
aggregate of any amounts received pursuant to the Yield Supplement Agreement on
the date of receipt thereof.
(c) On each Distribution Date, prior to making any of the
distributions set forth in Section 4.5, the Servicer shall be reimbursed for all
Outstanding Advances with respect to prior Distribution Dates to the extent of
the Interest Collections for such Distribution Date and, to the extent such
Interest Collections are insufficient, to the extent of the funds in the Reserve
Account. If it is acceptable to each Rating Agency without reduction in the
rating of the Certificates, the Outstanding Advances at the option the Servicer
may be paid at or as soon as possible after the beginning of the related
Collection Period out of the first collections of interest received on the
Receivables for such Collection Period.
Section 4.4 ADDITIONAL DEPOSITS; NET DEPOSITS. The Servicer may
make the remittances to be made by it pursuant to Section 4.2 net of amounts to
be distributed to it pursuant to Section 4.5 (but subject to the priorities set
forth therein), for so long as (i) no Event of Servicing Termination has
occurred and is continuing and (ii) the Servicer has not been terminated as such
pursuant to Section 9.1 hereof; PROVIDED, HOWEVER, that the Servicer shall
account for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately; and PROVIDED FURTHER that, if
an error is made by the Servicer in calculating the amount to be deposited or
retained by it and a shortfall in the amount deposited into the Certificate
Account results, the Servicer shall make a payment of the deficiency to the
Certificate Account, immediately upon becoming aware, or receiving notice from
the Trustee, of such shortfall.
Section 4.5 DISTRIBUTIONS. (a) On or before each Determination
Date, the Servicer shall calculate all amounts to be deposited in the Class A
Distribution Account and the Class B Distribution Account, which calculations
shall be set forth in the Servicer's Certificate delivered to the Trustee on or
before such Determination Date.
(b) On each Distribution Date, after making the reimbursements to the
Servicer of Outstanding Advances to the extent provided in Section 4.3(c), the
Trustee will make the following deposits and distributions from the Certificate
Account to the extent of the sum of Available Interest and any Available Reserve
Amount remaining after such reimbursements (and, in the case of shortfalls
occurring under clause (ii) below in the Class A Interest Distribution, the
Class B Percentage of Available Principal to the extent of such shortfalls), in
the following priority, all in accordance with the direction contained in the
Servicer's Certificate:
(i) to the Servicer, any unpaid Basic Servicing Fee owing to
the Servicer for the related Collection Period and all unpaid Basic
Servicing Fees from prior Collection Periods, but only from Interest
Collections;
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(ii) to the Class A Distribution Account, the Class A Interest
Distribution for such Distribution Date; and
(iii) to the Class B Distribution Account, the Class B
Interest Distribution for such Distribution Date.
On each Distribution Date, the Trustee will make the following deposits and
distributions, to the extent of the portion of Available Principal, Available
Interest and Available Reserve Amount remaining after the application of clauses
(i), (ii) and (iii) above, in the following priority:
(iv) to the Class A Distribution Account, the Class A Principal
Distribution for such Distribution Date;
(v) to the Class B Distribution Account, the Class B Principal
Distribution for such Distribution Date;
(vi) to the Collateral Agent for deposit in the Reserve Account,
any amounts remaining, until the amount on deposit in the Reserve Account
equals the Specified Reserve Account Balance; and
(vii) to the Collateral Agent for distribution to the Seller,
any amounts remaining.
(c) On each Distribution Date, all amounts on deposit in the Class A
Distribution Account will be distributed to the Class A Certificateholders by
the Trustee, all amounts on deposit in the Class B Distribution Account will be
distributed to the Class B Certificateholders by the Trustee and all amounts on
deposit in the Reserve Account in excess of the Specified Reserve Account
Balance will be distributed to the Seller by the Collateral Agent; provided
however that upon distribution with respect to the Class A Certificates of an
amount, together with all prior distributions with respect to the Class A
Certificates, equal to the Original Class A Certificate Balance plus interest
thereon, the Class A Certificateholders shall have no right to any additional
distribution and the Trustee shall make no distributions with respect to the
Class A Certificates, and upon distribution with respect to the Class B
Certificates of an amount, together with all prior distributions with respect to
the Class B Certificates, equal to the Original Class B Certificate Balance plus
interest thereon, the Class B Certificateholders shall have no right to any
additional distributions and the Trustee shall make no distributions with
respect to the Class B Certificates. Except as provided in Section 11.1,
payments under this subsection (c) shall be made to the Certificateholders by
check mailed by the Trustee to each Certificateholder's respective address of
record (or, in the case of Certificates registered in the name of a Clearing
Agency or its nominee, by wire transfer of immediately available funds). To the
extent that the Trustee is required to wire funds to the Certificateholders from
the Class A Distribution Account or the Class B Distribution Account, as
applicable, it shall request the bank maintaining the Class A Distribution
Account or the Class B Distribution Account, as applicable, to make a wire
transfer of the amount to be distributed and the bank maintaining the Class A
Distribution Account or the Class B Distribution Account, as applicable, shall
promptly deliver to the Trustee a confirmation of such wire transfer. To the
extent
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that the Trustee is required to make payments to Certificateholders by check
hereunder, it shall request the bank maintaining the Class A Distribution
Account or the Class B Distribution Account, as applicable, to provide it with a
supply of checks to make such payments. The bank shall, if a request is made by
the Trustee for a wire transfer by 9:00 a.m. (New York time) on any Distribution
Date, wire such funds to the Trustee in accordance with such instructions by
10:00 a.m. (New York time) on such Distribution Date, and it will otherwise act
in compliance with the provisions of this Section and the other provisions of
this Agreement applicable to it as the bank maintaining the Class A Distribution
Account or the Class B Distribution Account, as applicable. The Servicer shall
take all necessary action (including requiring an agreement to such effect) to
ensure that any bank maintaining the Class A Distribution Account or the Class B
Distribution Account, as applicable, agrees to comply, and complies, with the
provisions of this Section and the other provisions of this Agreement applicable
to it as the bank maintaining the Class A Distribution Account or the Class B
Distribution Account, as applicable.
Section 4.6 RESERVE ACCOUNT. On the Closing Date, the Seller shall
deposit the Reserve Account Initial Deposit into the Reserve Account. The
Seller hereby grants to the Collateral Agent for the benefit of the
Certificateholders a security interest in and to the Reserve Account and any and
all property credited thereto from time to time, including, but not limited to,
Eligible Investments, to secure payment of the Certificates according to their
terms. Amounts held from time to time in the Reserve Account will continue to
be held by the Collateral Agent for the benefit of Class A Certificateholders
and the Class B Certificateholders, but the Reserve Account shall not be an
asset of the Trust and upon any distribution to the Seller of amounts from the
Reserve Account, the Certificateholders will not have any rights in, or claims
to, such amounts. By acceptance of their Certificates, Certificateholders shall
be deemed to have appointed Bankers Trust Company as Collateral Agent. Bankers
Trust Company hereby accepts such appointment as Collateral Agent.
Section 4.7 STATEMENTS TO CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Servicer shall provide to the Trustee (with a copy to the
Rating Agencies) for the Trustee to forward on such date to each
Certificateholder of record a statement substantially in the form of EXHIBIT C
setting forth at least the following information as to the Certificates for the
related Collection Period, to the extent applicable:
(i) the amount of the distribution allocable to principal on the
Class A Certificates and the Class B Certificates;
(ii) the amount of the distribution allocable to interest on the
Class A Certificates and the Class B Certificates;
(iii) the Yield Supplement Amount;
(iv) the amount of the Basic Servicing Fee paid to the Servicer
with respect to the related Collection Period;
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(v) the Class A Certificate Balance, the Class A Pool Factor,
the Class B Certificate Balance and the Class B Pool Factor as of such
Distribution Date, after giving effect to payments allocated to principal
reported pursuant to clause (i) above;
(vi) the Pool Balance as of the close of business of the Servicer
on the last day of the related Collection Period;
(vii) the amount of the aggregate Realized Losses, if any,
for such Collection Period;
(viii) the amount of the aggregate Defaulted Receivables, if
any, for such Collection Period;
(ix) the amount otherwise distributable to the Class B
Certificateholders that is distributed to the Class A Certificateholders
for the related Collection Period;
(x) the aggregate Purchase Amount of Receivables repurchased by
the Seller or purchased by the Servicer;
(xi) the amount of Advances made in respect of such Collection
Period and the amount of unreimbursed Advances on such Distribution Date;
(xii) the balance of the Reserve Account on such Distribution
Date, after giving effect to changes therein on such Distribution Date;
(xiii) (x) the excess, if any, of the Class A Certificate
Balance over the Pool Balance and (y) the excess, if any, of the Class B
Certificate Balance over the amount by which the Pool Balance exceeds the
Class A Certificate Balance; and
(xiv) the aggregate outstanding balances of the Receivables
which were delinquent 30-59 days, 60-89 days, 90 or more days,
respectively, as of the close of business on the last day of the related
Collection Period.
Each amount set forth pursuant to clauses (i) through (iv) above shall be
expressed in the aggregate and as a dollar amount per $1,000 of original
denomination of the Certificates.
(b) Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the Servicer shall
furnish a report to the Trust and the Trustee shall furnish, or cause to be
furnished, to each Person who at any time during such calendar year shall have
been a Certificateholder, a statement based upon such report as to the sum of
the amounts determined in clauses (i) through (iv) above 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, and such
other information as is available to the Servicer as the Servicer deems
necessary or desirable to enable the Certificateholders to prepare their federal
income tax returns.
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ARTICLE V
YIELD SUPPLEMENT ACCOUNT
Section 5.1 YIELD SUPPLEMENT AGREEMENT. Simultaneously with the
execution of this Agreement, the Seller conveyed the Yield Supplement Agreement
to the Trust as part of the Trust Property and has deposited the Yield
Supplement Initial Deposit into the Yield Supplement Account. The Yield
Supplement Agreement, with respect to each Receivable (other than Purchased
Receivables and Defaulted Receivables), provides for the payment by the Seller
on or prior to each Deposit Date of an amount (if positive) calculated by the
Servicer equal to one-twelfth of the difference between (i) the sum of interest
on the Class A Percentage of such Receivable's Principal Balance as of the first
day of the related Collection Period at a rate equal to the sum of the Class A
Pass-Through Rate and the Basic Servicing Fee Rate and interest on the Class B
Percentage of such Receivable's Principal Balance as of the first day of the
related Collection Period at a rate equal to the sum of the Class B Pass-Through
Rate and the Basic Servicing Fee Rate and (ii) interest on such Receivable's
Principal Balance as of the first day of the related Collection Period at a rate
equal to the Contract Rate (in the aggregate for all Receivables with respect to
any Distribution Date, the "YIELD SUPPLEMENT AMOUNT").
Section 5.2 YIELD SUPPLEMENT ACCOUNT. (a) The Seller shall
establish and maintain in the name of the Collateral Agent an Eligible Deposit
Account to secure the Seller's obligations under the Yield Supplement Agreement
(the "YIELD SUPPLEMENT ACCOUNT"). The Yield Supplement Account and any amounts
therein shall not be property of the Trust, but shall be pledged to the
Collateral Agent for the benefit of Certificateholders. The Yield Supplement
Account shall initially be maintained at Bankers Trust Company.
(b) In order to provide for the prompt payment by the Seller of the
Yield Supplement Amount, to assure availability of the amounts maintained in the
Yield Supplement Account and as security for the performance by the Seller of
its obligations under the Yield Supplement Agreement the Seller, on behalf of
itself and its successors and assigns, hereby pledges to the Collateral Agent
and its successors and assigns for the benefit of the Certificateholders, all of
its right, title and interest in and to the Yield Supplement Account, and all
proceeds of the foregoing, including, without limitation, all other amounts and
investments held from time to time in the Yield Supplement Account (whether in
the form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise) including, without limitation, the Yield
Supplement Initial Deposit, subject, however, to the limitations set forth
below, and solely for the purpose of securing payment of the Yield Supplement
Amount (all of the foregoing, subject to the limitations set forth in this
Section, the "YIELD SUPPLEMENT ACCOUNT PROPERTY"), to have and to hold all the
aforesaid property, rights and privileges unto the Collateral Agent, its
successors and assigns, in trust for the uses and purposes, and subject to the
terms and provisions, set forth in this Section. The Collateral Agent hereby
acknowledges such transfer and accepts the trust hereunder and shall hold and
distribute the Yield Supplement Account Property in accordance with the terms
and provisions of this Section.
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(c) Funds on deposit in the Yield Supplement Account shall be
invested by the Collateral Agent in Eligible Investments selected by the Seller
and designated in writing by the Seller to the Collateral Agent; PROVIDED,
HOWEVER, it is understood and agreed that the Collateral Agent shall not be
liable for any loss arising from such investment in Eligible Investments or
incurred as a result of the liquidation of any investment prior to its stated
maturity or the failure of the Servicer to provide timely, written direction.
In no event shall the Collateral Agent be liable for the selection of Eligible
Investments. The Collateral Agent shall have no obligation to invest or
reinvest any amounts held hereunder in the absence of written investment
direction. Funds on deposit in the Yield Supplement Account shall be invested
in Eligible Investments that will mature so that all such funds will be
available at the opening of business on each Deposit Date; PROVIDED, HOWEVER,
that to the extent permitted by the Rating Agencies, funds on deposit in the
Yield Supplement Account may be invested in Eligible Investments that mature
later than the next Deposit Date. Funds deposited in the Yield Supplement
Account on a Deposit Date upon the maturity of any Eligible Investments are not
required to be (but may be) invested overnight. The Seller will treat the
funds, Eligible Investments and other assets in the Yield Supplement Account as
its own for Federal, state and local income tax and franchise tax purposes and
will report on its tax returns all income, gain and loss from the Yield
Supplement Account.
(d) No later than 11:00 a.m. (New York time) on each Deposit Date,
the Seller shall deposit to the Certificate Account an amount equal to the Yield
Supplement Amount for the related Collection Period; PROVIDED that if, on any
Distribution Date, the Seller fails to pay the Yield Supplement Amount, then, in
such event, the Trustee shall direct the Collateral Agent to withdraw from the
Yield Supplement Account an amount equal to such deficiency and deposit such
amount into the Certificate Account.
(e) The Yield Supplement Account shall be under the sole custody and
control of the Collateral Agent. If, at any time, the Yield Supplement Account
ceases to be an Eligible Deposit Account, the Collateral Agent shall within 10
Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Yield Supplement Account
as an Eligible Deposit Account and shall transfer any cash and/or any
investments that are in the existing Yield Supplement Account which is no longer
an Eligible Deposit Account to such new Yield Supplement Account.
(f) Amounts on deposit in the Yield Supplement Account will be
released to the Seller on each Distribution Date to the extent that the amount
on deposit in the Yield Supplement Account would exceed the Specified Yield
Supplement Balance. Upon a distribution to the Seller of amounts from the Yield
Supplement Account, the Certificateholders will not have any rights in, or
claims to, such amounts. Amounts properly distributed to the Seller from the
Yield Supplement Account or otherwise shall not be available under any
circumstances to the Trust, the Trustee, the Collateral Agent or the
Certificateholders and the Seller shall in no event thereafter be required to
refund any such distributed amounts.
(g) With respect to the Yield Supplement Account Property:
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(i) any Yield Supplement Account Property that is held in
deposit accounts shall be held solely in the name of the Collateral Agent
at one or more depository institutions having the Required Rating; each
such deposit account shall be subject to the exclusive custody and control
of the Collateral Agent, and the Collateral Agent shall have sole signature
authority with respect thereto;
(ii) any Yield Supplement Account Property that constitutes
Physical Property shall be delivered to the Collateral Agent in accordance
with paragraph (a) of the definition of "Delivery" (except that all
references therein to the "Trustee," shall be deemed to be references to
the Collateral Agent) and shall be held, pending maturity or disposition,
solely by the Collateral Agent or a financial intermediary (as such term is
defined in the Relevant UCC) acting solely for the benefit of
Certificateholders;
(iii) any Yield Supplement Account Property that is a
book-entry security held through the Federal Reserve System pursuant to
Federal book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be maintained by
the Collateral Agent, pending maturity or disposition, through continued
book-entry registration of such Yield Supplement Account Property as
described in such paragraph; and
(iv) any Yield Supplement Account Property that is an
"uncertificated security" under the Relevant UCC and that is not governed
by clause (iii) above shall be delivered to the Collateral Agent in
accordance with paragraph (c) of the definition of "Delivery" (except that
all references therein to the "Trustee" shall be deemed to be references to
the Collateral Agent) and shall be maintained by the Collateral Agent,
pending maturity, or disposition, through continued registration of the
Collateral Agent's (or its nominee's) ownership of such security.
Effective upon Delivery of any Yield Supplement Account Property in the form of
Physical Property, book-entry securities or uncertificated securities, the
Collateral Agent shall be deemed to have represented that it has purchased such
Yield Supplement Account Property for value, in good faith and without notice of
any adverse claim thereto.
(h) The Seller (and any successor to the Seller in accordance with
Section 7.3) and the Servicer agree to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments (including, without limitation, any
financing statements under the Relevant UCC or this Agreement) as may be
determined to be necessary, in order to perfect the interests created by this
Section 5.2 and otherwise fully to effectuate the purposes, terms and conditions
of this Section 5.2. The Seller (and any successor to the Seller in accordance
with Section 7.3) and the Servicer shall:
(i) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, certificates and other
documents with respect to such interests and perform all such other acts as
may be necessary in order to perfect or to maintain the perfection of the
Collateral Agent's security interest; and
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(ii) make the necessary filings of financing statements or
amendments thereto within five days after the occurrence of any of the
following: (A) any change in their respective names or any trade names, (B)
any change in the location of their respective chief executive offices or
principal places of business and (C) any merger or consolidation or other
change in their respective identities or corporate structures; and shall
promptly notify the Collateral Agent of any such filings.
(i) Investment earnings attributable to the Yield Supplement Account
Property and proceeds therefrom shall be held by the Collateral Agent for the
benefit of the Seller. Investment earnings attributable to the Yield Supplement
Account Property shall not be available to pay the Yield Supplement Amount and
shall not otherwise be subject to any claims or rights of the Certificateholders
or the Servicer. The Collateral Agent shall cause all investment earnings
attributable to the Yield Supplement Account to be distributed on each
Distribution Date to the Seller.
ARTICLE VI
THE CERTIFICATES
Section 6.1 THE CERTIFICATES. The Trustee shall, upon written order
or request signed in the name of the Seller by one of its officers authorized to
do so and delivered to an Authorized Officer of the Trustee, execute on behalf
of the Trust, authenticate and deliver the Certificates to or upon the order of
the Seller in the aggregate principal amount and denominations as set forth in
such written order or request. The Certificates shall be issuable in
denominations of $1,000 and integral multiples thereof; PROVIDED, HOWEVER, that
one Class A Certificate and one Class B Certificate may be issued in a
denomination that represents the residual amount of the Original Class A
Certificate Balance and the Original Class B Certificate Balance, respectively.
Upon initial issuance, the Class A Certificates and the Class B Certificates
shall be in the form of EXHIBIT A and EXHIBIT B, respectively, which are
incorporated by reference herein, and shall be issued as provided in Section
6.8, in an aggregate amount equal to the Original Class A Certificate Balance
and the Original Class B Certificate Balance, respectively. The Certificates
shall be executed by the Trustee on behalf of the Trust by manual signature of
an Authorized Officer of the Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
valid and binding obligations of the Trust, notwithstanding that such
individuals shall have ceased to be so authorized prior to the authentication
and delivery of such Certificates or did not hold such offices at the date of
such Certificates.
Section 6.2 AUTHENTICATION OF CERTIFICATES. No Certificate shall
entitle the Certificateholders thereof to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication, substantially in the form set forth in the form
of Certificates attached hereto as EXHIBIT A and EXHIBIT B, executed by the
Trustee by manual signature. Such authentication shall constitute conclusive
evidence, and the only
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evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Section 6.3 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
The Trustee shall maintain, or cause to be maintained, at the office or agency
to be maintained by it in accordance with Section 6.7, 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. Upon surrender for registration
of transfer of any Class A Certificate or Class B Certificate at such office or
agency, the Trustee shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Class A Certificates or
Class B Certificates, as the case may be, in authorized denominations of a like
aggregate amount. At the option of a Certificateholder, Class A Certificates or
Class B Certificates may be exchanged for other Class A Certificates or Class B
Certificates, as the case may be, of authorized denominations of a like
aggregate amount at the office or agency maintained by the Trustee in accordance
with Section 6.7. Every Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
duly executed by the Certificateholder and in a form satisfactory to the
Trustee. No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates. All Certificates
surrendered for registration of transfer or exchange shall be cancelled and
disposed of in a commercially reasonable manner approved by the Trustee.
The Class B Certificates and any beneficial interest in such Class B
Certificates may not be acquired by (a) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title 1 of ERISA,
(b) a plan described in Section 4975(e)(1) of the Code or (c) any entity whose
underlying assets include plan assets by reason of a plan's investment in the
entity (each, a "BENEFIT PLAN"). By accepting and holding a Class B Certificate
or an interest therein, the Certificateholder thereof or Class B Certificate
Owner thereof shall be deemed to have represented and warranted that it is not a
Benefit Plan.
Section 6.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Class A Certificate or Class B Certificate shall be
surrendered to the Trustee, or if the Trustee shall receive evidence to its
satisfaction of the destruction, loss, or theft of any Class A Certificate or
Class B Certificate and (b) there shall be delivered to the Trustee such
security or indemnity as it may require to save it harmless, then in the absence
of notice that such Class A Certificate or Class B Certificate shall have been
acquired by a bona fide purchaser, the Trustee shall execute on behalf of the
Trust, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost, or stolen Class A Certificate or Class B
Certificate, a new Class A Certificate or Class B Certificate of like tenor and
denomination. In connection with the issuance of any new Certificate under this
Section 6.4, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection herewith.
Any replacement Certificate issued pursuant to this Section 6.4 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.
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Section 6.5 PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Trustee may treat the Person in
whose name any Certificate shall be registered as the owner of such Certificate
for the purpose of receiving distributions pursuant to Section 4.5 and for all
other purposes, and the Trustee shall not be bound by any notice to the
contrary.
Section 6.6 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Trustee shall furnish or cause to be furnished to the Servicer,
within 15 days after receipt by the Trustee of a request therefor from the
Servicer in writing, a list of the names and addresses of the Certificateholders
as of the most recent Record Date. If Definitive Certificates have been issued,
the Trustee, upon written request of the holders of Class A Certificates or
Class B Certificates evidencing not less than 25% of the aggregate outstanding
principal balance of either the Class A Certificates or the Class B
Certificates, as the case may be, will, within five Business Days after the
receipt of such request, afford such Class A Certificateholders or Class B
Certificateholders access during normal business hours to the most current list
of Certificateholders for purposes of communicating with other
Certificateholders with respect to their rights under the Agreement. Each
Certificateholder, by receiving and holding a Certificate, shall be deemed to
have agreed to hold neither the Seller, 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 6.7 MAINTENANCE OF OFFICE OR AGENCY. The Trustee shall
maintain, or cause to be maintained, at its expense, in New York, New York, an
office or agency where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and this Agreement may be served. The Trustee
initially designates the Corporate Trust Office as its office for such purposes.
The Trustee shall give prompt written notice to the Servicer and to
Certificateholders of any change in the location of any such office or agency.
Section 6.8 BOOK-ENTRY CERTIFICATES. Upon original issuance, the
Class A Certificates and the Class B Certificates, other than the Class A
Certificate and the Class B Certificate representing the residual amount of the
Original Class A Certificate Balance and the Original Class B Certificate
Balance, respectively, which shall be issued upon the written order of the
Seller, shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to the initial
Clearing Agency, by, or on behalf of, the Seller. Such Certificates shall
initially be registered on the Certificate Register in the name of CEDE & Co.,
the nominee of the initial Clearing Agency, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Class A Certificates or the Class B Certificates, as the case may be,
except as provided in Section 6.10. Unless and until definitive, fully
registered Certificates (collectively, "DEFINITIVE CERTIFICATES") have been
issued to Class A Certificateholders or Class B Certificateholders, as the case
may be, pursuant to Section 6.10:
(i) the provisions of this Section 6.8 shall be in full force
and effect;
(ii) the Seller, the Servicer, the Trustee and their officers,
directors, employees and agents may deal with the Clearing Agency for all
purposes (including the
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making of distributions on the Certificates and the taking of actions by
the Certificateholders) as the authorized representative of the Certificate
Owners;
(iii) to the extent that the provisions of this Section 6.8
conflict with any other provisions of this Agreement, the provisions of
this Section 6.8 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, the rules, regulations and procedures of the Clearing Agency and
agreements between such Certificate Owners and the Clearing Agency and all
references in this Agreement to actions by Certificateholders shall refer
to actions taken by the Clearing Agency upon instructions from the Clearing
Agency Participants, and all references in this Agreement to distributions,
notices, reports and statements to Certificateholders shall refer to
distributions, notices, reports and statements to the Clearing Agency or
its nominee, as registered holder of the Certificates, as the case may be,
for distribution to Certificate Owners in accordance with the rules,
regulations and procedures of the Clearing Agency; and
(v) pursuant to the Depository Agreement, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Certificates to the Clearing Agency Participants, for
distribution by such Clearing Agency Participants to the Certificate Owners
or their nominees.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, holders of
Certificates evidencing specified percentages of the aggregate outstanding
principal balance of such Certificates, such direction or consent may be given
by Certificate Owners having interests in the requisite percentage, acting
through the Clearing Agency.
Section 6.9 NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Certificateholders is required under this Agreement unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.10, the Trustee shall give all such notices and
communications specified herein to be given to Certificateholders to the
Clearing Agency.
Section 6.10 DEFINITIVE CERTIFICATES. If (i) (A) the Seller advises
the Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement and (B)
the Trustee or the Seller is unable to locate a qualified successor, (ii) the
Seller, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Servicing Termination, with respect to the Class A
Certificates, Class A Certificate Owners representing in the aggregate not less
than a majority of the aggregate outstanding principal balance of the Class A
Certificates or, with respect to the Class B Certificates, Class B Certificate
Owners representing in the aggregate not less than a majority of the aggregate
outstanding principal balance of the Class B Certificates, advise the Trustee
and the Clearing Agency through the Clearing Agency Participants
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in writing, and the Clearing Agency shall so notify the Trustee, that the
continuation of a book-entry system through the Clearing Agency is no longer in
the Class A Certificate Owners' or the Class B Certificate Owners', as the case
may be, best interests, the Trustee shall notify the Clearing Agency, which
shall be responsible to notify the Class A Certificate Owners or the Class B
Certificate Owners or both, as the case may be, of the occurrence of any such
event and of the availability of Definitive Certificates to Class A Certificate
Owners or Class B Certificate Owners or both, as the case may be, requesting the
same. Upon surrender to the Trustee by the Clearing Agency of the Class A
Certificates or the Class B Certificates or both, as the case may be, registered
in the name of the nominee of the Clearing Agency, accompanied by
re-registration instructions from the Clearing Agency for registration, the
Trustee shall execute, on behalf of the Trust, authenticate and deliver
Definitive Certificates in accordance with such instructions. The Seller shall
arrange for, and will bear all costs of, the printing and issuance of such
Definitive Certificates. Neither the Seller, the Servicer nor the Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates, the Trustee shall recognize the holders of
the Definitive Certificates as Certificateholders hereunder.
ARTICLE VII
THE SELLER
Section 7.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER. The
Seller makes the following representations and warranties, on which the Trustee
relies in accepting the Receivables and the other Trust Property in trust and
executing and authenticating the Certificates. These representations are made
as of the Closing Date, but shall survive the sale, transfer and assignment of
the Receivables and the other Trust Property to the Trust.
(i) ORGANIZATION AND GOOD STANDING. The Seller has been duly
incorporated and is validly existing as a national banking association,
with the power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is
presently conducted, and had at all relevant times, and has, full power,
authority and legal right to acquire, own and sell its Receivables.
(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 where the failure to
do so would materially and adversely affect the ownership or servicing of
the Receivables or render any of the Receivables unenforceable.
(iii) POWER AND AUTHORITY. The Seller has the power,
authority and legal right to execute and deliver this Agreement and to
carry out its terms and to sell and assign the property to be sold and
assigned to and deposited with the Trustee as Trust Property; and the
execution, delivery, and performance of this Agreement and all of the
documents required pursuant hereto have been duly authorized by the Seller
by all necessary action.
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(iv) NO CONSENT REQUIRED. The Seller is not required to obtain
the consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery or
performance of this Agreement, other than as may be required under the blue
sky or securities laws of any State or the Securities Act of 1933, as
amended, under state laws governing the perfection of the interests created
under this Agreement and under ERISA.
(v) VALID SALE; BINDING OBLIGATION. This Agreement effects a
valid sale, transfer and assignment of the Receivables and the other Trust
Property conveyed by the Seller to the Trust hereunder, enforceable against
creditors of and purchasers from the Seller; and this Agreement constitutes
a legal, valid, and binding obligation of the Seller, enforceable against
the Seller in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).
(vi) NO VIOLATION. The execution, delivery and performance by
the Seller of this Agreement, the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof will not
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or bylaws of the Seller, or conflict with,
or breach any of the terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture, agreement,
mortgage, deed of trust or other instrument to which the Seller is a party
or by which the Seller is bound or any of its properties are subject, or
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument (other than this Agreement), or violate any law,
order, rule, or regulation, applicable to the Seller or its properties, of
any federal or state regulatory body, any court, administrative agency, or
other governmental instrumentality having jurisdiction over the Seller or
any of its properties.
(vii) NO PROCEEDINGS. There are no proceedings or
investigations pending, or, to the knowledge of the Seller, threatened,
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality having jurisdiction over the Seller or its
properties: (a) asserting the invalidity of this Agreement or the
Certificates, (b) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this Agreement,
(c) seeking any determination or ruling that might materially and adversely
affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement or the Certificates, or (d)
that may adversely affect the federal or state income, excise, franchise or
similar tax attributes of the Certificates.
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Section 7.2 LIABILITY OF THE SELLER; INDEMNITIES. (a) The Seller
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement and shall have no
other obligations or liabilities hereunder.
(b) The Seller shall indemnify, defend and hold harmless the Trustee,
its directors, officers, employees and agents, the Trust and the
Certificateholders from and against any taxes that may at any time be asserted
against the Trustee, its directors, officers, employees and agents, the Trust or
a Certificateholder with respect to, and as of the date of, the sale, transfer
and assignment of the Trust Property to the Trust or the issuance and original
sale of the Certificates, including any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or license
taxes (but not, except as provided below, including any taxes asserted with
respect to ownership of the Trust Property or federal or other income taxes,
including franchise taxes measured by net income, arising out of the
transactions contemplated by this Agreement or transfer taxes arising in
connection with the transfer of the Certificates), and reasonable costs and
expenses in defending against the same. Notwithstanding the foregoing, the
Seller shall indemnify, defend and hold harmless the Trustee, its directors,
officers, employees and agents, the Trust and the Certificateholders from and
against any taxes due on Collections allocable (in accordance with the
Servicer's customary procedures) to interest on Receivables originated in the
state of Washington pursuant to Washington Revenue Code Section 82.04.290(2) and
the Seller agrees to pay such amounts to the appropriate taxing authorities when
due.
(c) The Seller shall indemnify, defend and hold harmless the Trustee,
its directors, officers, employees and agents, the Trust and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith, or negligence in the
performance of its duties hereunder, or by reason of reckless disregard of the
obligations and duties hereunder; or (ii) any action taken, or failed to be
taken, by the Seller in respect of any portion of the Trust Property.
(d) The Seller shall indemnify, defend and hold harmless the Trustee,
its directors, officers, employees and agents, the Trust and the
Certificateholders from and against any loss, liability or expense incurred by
reason of the violation by the Seller of federal or state securities laws in
connection with the registration or the sale of the Certificates.
(e) The Seller shall indemnify, defend and hold harmless the Trustee,
its directors, officers, employees and agents, the Trust and the
Certificateholders from and against any loss, liability or expense imposed upon,
or incurred by, the Trustee, the Trust or the Certificateholders as the result
of the failure of any Receivable conveyed by it to the Trust hereunder, or the
sale of the related Financed Vehicle, to comply with all requirements of
applicable law.
(f) Indemnification under this Section 7.2 shall include reasonable
fees and expenses of counsel and expenses of litigation and shall survive
termination of the Trust or the earlier resignation or removal of the Trustee.
If the Seller shall have made any indemnity payments to the Trustee pursuant to
this Section 7.2 and the Trustee thereafter shall collect any of such amounts
from Persons other than the Seller, the Trustee shall immediately upon receipt
thereof repay such amounts to the Seller, without interest.
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Section 7.3 MERGER OR CONSOLIDATION OF THE SELLER. Any corporation
or other entity (i) into which the Seller may be merged or consolidated, (ii)
that may result from any merger, conversion, or consolidation to which the
Seller is a party, or (iii) that may succeed by purchase and assumption to all
or substantially all of the business of the Seller, where the Seller is not the
surviving entity, which corporation or other entity shall execute an agreement
of assumption to perform every obligation of the Seller under this Agreement,
shall be the successor to the Seller hereunder without the execution or filing
of any document or any further act by any of the parties to this Agreement. The
Seller shall promptly inform the Trustee and the Rating Agency of any such
merger, conversion, consolidation or purchase and assumption, where the Seller
is not the surviving entity.
Section 7.4 LIMITATION ON LIABILITY OF THE SELLER AND OTHERS. The
Seller, and any of its directors, officers, employees or agents may rely in good
faith on any document of any kind, believed by it to be genuine and properly
executed and submitted by any Person respecting any matters arising hereunder.
The Seller shall be under no obligation under this Agreement to appear in,
prosecute or defend any legal action that shall be unrelated to its obligations
under this Agreement and that in its opinion may involve it in any expense or
liability.
Section 7.5 SELLER MAY OWN CERTIFICATES. The Seller, and any
Affiliate of the Seller, may in its individual or any other capacity become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as otherwise provided in the
definition of "Certificateholder," "Class A Certificateholder" and "Class B
Certificateholder" in Section 1.1. Certificates so owned by or pledged to the
Seller or such controlling, controlled or commonly controlled Person shall have
an equal and proportionate benefit under the provisions of this Agreement,
without preference, priority, or distinction as among all of the Certificates.
ARTICLE VIII
THE SERVICER
Section 8.1 REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer makes the following representations and warranties on which the Trustee
relies in accepting the Receivables and the other Trust Property in trust and in
authenticating the Certificates. These representations are made as of the
Closing Date, but shall survive the sale, transfer and assignment of the
Receivables and the other Trust Property to the Trust.
(i) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
incorporated and is validly existing as a national banking association,
with the power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is
presently conducted, and had at all relevant times, and shall have, the
power, authority and legal right to service the Receivables.
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(ii) DUE QUALIFICATION. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions where the failure to
do so would materially and adversely affect the ability of the Servicer to
service, or the enforceability of, the Receivables.
(iii) POWER AND AUTHORITY. The Servicer has the power,
authority and legal right to execute and deliver this Agreement and to
carry out its terms; and the execution, delivery and performance of this
Agreement has been duly authorized by the Servicer by all necessary
corporate action.
(iv) NO CONSENT REQUIRED. The Servicer is not required to obtain
the consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery or
performance of this Agreement other than as may be required under ERISA.
(v) BINDING OBLIGATION. This Agreement constitutes a legal,
valid, and binding obligation of the Servicer, enforceable against the
Servicer in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).
(vi) NO VIOLATION. The execution, delivery and performance of
this Agreement, the consummation of the transactions contemplated hereby
and the fulfillment of the terms hereof will not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the certificate of
incorporation or bylaws of the Servicer, or conflict with or breach any of
the terms or provisions of, or constitute (with or without notice or lapse
of time) a default under, any indenture, agreement, mortgage, deed of trust
or other instrument to which the Servicer is a party or by which the
Servicer is bound or to which any of its properties are subject, or result
in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument (other than this Agreement), or violate any law,
order, rule, or regulation applicable to the Servicer or its properties of
any federal or state regulatory body, any court, administrative agency, or
other governmental instrumentality having jurisdiction over the Servicer or
any of its properties.
(vii) NO PROCEEDINGS. There are no proceedings or
investigations pending, or, to the Servicer's knowledge, threatened, before
any court, regulatory body, administrative agency, or tribunal or other
governmental instrumentality having jurisdiction over the Servicer or its
properties: (a) asserting the invalidity of this Agreement or the
Certificates, (b) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this Agreement,
(c) seeking any determination or ruling that might materially and adversely
affect the performance by the Servicer of its obligations
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under, or the validity or enforceability of, this Agreement or the
Certificates, or (d) that may adversely affect the federal or state income,
excise, franchise or similar tax attributes of the Certificates.
Section 8.2 LIABILITY OF THE SERVICER; INDEMNITIES. (a) The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this Agreement and
shall have no other obligations or liabilities hereunder.
(b) The Servicer shall indemnify, defend and hold harmless the
Trustee, the Collateral Agent, their directors, officers, employees and agents,
the Trust, and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising out of or resulting from
the use, ownership, or operation by the Servicer or any Affiliate thereof of any
Financed Vehicle or in respect of any action taken, or failed to be taken, by
the Servicer with respect to any Receivable or other portion of the Trust
Property.
(c) The Servicer shall indemnify, defend and hold harmless the
Trustee, the Collateral Agent, their directors, officers, employees and agents,
the Trust and the Certificateholders from and against any taxes that may at any
time be asserted against the Trustee, the Trust or the Certificateholders with
respect to the transactions contemplated hereby, including any sales, gross
receipts, general corporation, tangible or intangible personal property,
privilege, or license taxes (but not including any taxes asserted with respect
to, and as of the date of, the sale, transfer and assignment of the Trust
Property to the Trust or the issuance and original sale of the Certificates, or
asserted with respect to ownership of the Receivables or other Trust Property,
federal or other income taxes, including franchise taxes measured by net income,
arising out of distributions on the Certificates or any other transactions
contemplated by this Agreement or transfer taxes arising in connection with
transfers of the Certificates) and reasonable costs and expenses in defending
against the same.
(d) The Servicer shall indemnify, defend and hold harmless the
Trustee, the Collateral Agent, their 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, or incurred by, the Trust, the Trustee or the Certificateholders as a
result of the willful misfeasance, negligence, or bad faith of the Servicer in
the performance of its duties under this Agreement.
(e) The Servicer, or, in the event that the Trustee is also a
servicer, a predecessor Servicer, shall indemnify, defend and hold harmless the
Trustee, the Collateral Agent and their directors, 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 Trust and the duties herein contained, except to the extent
that such costs, expenses, losses, claims, damages or liabilities: (i) shall be
due to the willful misfeasance, negligence or bad faith of the Trustee; (ii)
relates to any tax other than the taxes with respect to which either the Seller
or the Servicer shall be required to indemnify the Trustee; (iii) shall arise
from the Trustee's breach of any of its representations or warranties set forth
in Section 10.15; (iv) shall be one as to which the Seller
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is required to indemnify the Trustee; or (v) shall arise out of, or be incurred
in connection with, the acceptance or performance by the Trustee of its duties
as a successor servicer hereunder.
(f) Indemnification under this Section 8.2 shall include reasonable
fees and expenses of counsel and expenses of litigation. The indemnity
obligations of the Servicer hereunder shall survive any termination of the
Servicer pursuant to Section 9.1, but only with respect to obligations arising
prior thereto, and any payment of the amount owing under, or the Purchase Amount
with respect to, any Receivable and shall survive the termination of the Trust
or the earlier removal or resignation of the Trustee. If the Servicer shall
have made any indemnity payments pursuant to this Section 8.2 and the Trustee
thereafter collects any of such amounts from others, the Trustee shall, as soon
as practicable upon receipt thereof, repay such amounts to the Servicer, without
interest.
Section 8.3 MERGER OR CONSOLIDATION OF THE SERVICER. Any
corporation or other entity (i) into which the Servicer may be merged or
consolidated, (ii) that may result from any merger, conversion, or consolidation
to which the Servicer is a party, or (iii) that may succeed by purchase and
assumption to all or substantially all of the business of the Servicer, where
the Servicer is not the surviving entity, which corporation or other entity
shall be an Eligible Servicer and shall execute an agreement of assumption to
perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer under this Agreement (without relieving the outgoing
Servicer of its responsibilities hereunder, if it survives such merger,
conversion or consolidation) without any further act on the part of any of the
parties to this Agreement. The Servicer shall promptly inform the Trustee and
the Rating Agencies of any such merger, conversion, consolidation or purchase
and assumption where the Servicer is not the surviving entity.
Section 8.4 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
(a)Except as provided in this Agreement, the Servicer shall be under no
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 this
Agreement and that in its opinion may cause it to incur any expense or
liability; PROVIDED, HOWEVER, that the Servicer may undertake, at its expense,
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties to this Agreement and the
interests of the Certificateholders under this Agreement.
(b) 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, believed by it
to be genuine and properly executed and submitted by any Person respecting any
matters arising hereunder.
Section 8.5 SERVICER NOT TO RESIGN. The Servicer shall not resign
from its obligations and duties under this Agreement except upon a determination
that the performance of its duties is no longer permissible under applicable
law. Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel (which counsel shall be outside counsel to
the Servicer) to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor servicer shall have
assumed the responsibilities and obligations of the outgoing Servicer in
accordance with Section 9.2.
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Section 8.6 SERVICER MAY OWN CERTIFICATES. The Servicer, and any
Affiliate of the Servicer, 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 Servicer or an Affiliate thereof, except as otherwise provided in
the definition of "Certificateholder," "Class A Certificateholder" and "Class B
Certificateholder" in Section 1.1. Certificates so owned by or pledged to the
Servicer or such Affiliate shall have an equal and proportionate benefit under
the provisions of this Agreement, without preference, priority or distinction as
among all of the Certificates.
ARTICLE IX
SERVICING TERMINATION
Section 9.1 EVENTS OF SERVICING TERMINATION. (a) If any one of the
following events ("EVENTS OF SERVICING TERMINATION") shall occur and be
continuing:
(i) Any failure by the Servicer to deliver to the Trustee the
Servicer's Certificate for any Collection Period, which shall continue
beyond the earlier of three Business Days from the date the Servicer's
Certificate was due to be delivered and the related Deposit Date, or any
failure by the Servicer to deliver to any of the Accounts, the Reserve
Account or the Yield Supplement Account any proceeds or payment required to
be so delivered under the terms of the Certificates and this Agreement,
which shall continue unremedied for a period of five Business Days
following the due date therefor (or, in the case of a payment or deposit to
be made no later than a Deposit Date immediately preceding a Distribution
Date, the failure to make such payment or deposit by such Distribution
Date); or
(ii) Any failure on the part of the Servicer duly to observe or
to perform in any material respect any other covenants or agreements set
forth in the Certificates or in this Agreement (which determination shall
be made without regard to whether funds are available to the
Certificateholders pursuant to the Reserve Account), which failure shall
(a) materially and adversely affect the rights of Certificateholders and
(b) continue unremedied for a period of 90 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given (1) to the Servicer by the Trustee, or (2) to the Trustee
and the Servicer by the holders of Certificates evidencing not less than a
majority of the aggregate outstanding principal balance of the Class A
Certificates and the Class B Certificates taken together as a single class;
or
(iii) The entry of a decree or order by a court or agency or
supervisory authority of competent jurisdiction for the appointment of a
conservator, receiver, liquidator or trustee for the Servicer in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings, or for the winding up or liquidation
of its affairs, and any such decree or order continues unstayed and in
effect for a period of 60 consecutive days; or
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(iv) The consent by the Servicer to the appointment of a
conservator, receiver, liquidator or trustee in any bankruptcy, insolvency,
readjustment of debt, marshaling of assets and liabilities, or similar
proceedings of or relating to the Servicer or relating to substantially all
of its property, the admission in writing by the Servicer of its inability
to pay its debts generally as they become due, the filing by the Servicer
of a petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, the making by the Servicer of an assignment for the
benefit of its creditors or the voluntary suspension by the Servicer of
payment of its obligations; or
(v) The failure by the Servicer to be an Eligible Servicer;
then, and in each and every case and so long as an Event of Servicing
Termination shall not have been cured or waived, either the Trustee, or the
holders of Certificates evidencing not less than a majority of the aggregate
outstanding principal balance of the Class A Certificates and the Class B
Certificates taken together as a single class, by notice then given in writing
to the Servicer, may terminate all of the rights and obligations of the Servicer
under this Agreement. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Certificates or the Trust Property or otherwise, shall pass
to and be vested in the Trustee or successor servicer appointed by the Trustee
pursuant to Section 9.2; and thereupon the Trustee shall be authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivable Files or the Insurance Policies, the certificates
of title to the Financed Vehicles, or otherwise. The Servicer shall cooperate
with the Trustee or such successor servicer in effecting the termination of
their responsibilities and rights as Servicer under this Agreement, including
the transfer to the Trustee or such successor servicer for administration of all
cash amounts that are at the time held by the Servicer for deposit, shall have
been deposited by the Servicer in the Certificate Account, or thereafter shall
be received with respect to a Receivable, all Receivable Files and all
information or documents that the Trustee or such successor servicer may
require. In addition, the Servicer shall transfer its electronic records
relating to the Receivables to the successor servicer in such electronic form as
the successor servicer may reasonably request. All reasonable costs and
expenses incurred by the successor servicer, including allowable compensation of
employees and overhead costs, in connection with the transfer of servicing shall
be paid by the outgoing Servicer upon presentation of reasonable documentation
of such costs and expenses.
(b) If any of the foregoing Events of Servicing Termination occur,
the Trustee shall have no obligation to notify Certificateholders or any other
Person of such occurrence prior to the continuance of such event through the end
of any cure period specified in Section 9.1(a).
Section 9.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR SERVICER.
Upon the Servicer's resignation pursuant to Section 8.5, or upon the Servicer's
receipt of notice of termination as Servicer pursuant to Section 9.1, the
Trustee shall be the successor in all respects to the Servicer in its capacity
as Servicer under this Agreement, and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions of this Agreement,
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except that the Trustee, when acting as a successor servicer, shall not be
obligated to purchase Receivables pursuant to Section 3.7 unless the obligation
to purchase arose after the date of the notice of termination given to the
Servicer pursuant to Section 9.1, and the Trustee shall not be liable for any
acts or omissions of such terminated Servicer or for any breach by the
terminated Servicer of any of its representations or warranties contained herein
or in any related documents or agreements. As compensation therefor, the
Trustee shall be entitled to such compensation (whether payable out of the
Certificate Account or otherwise) as the Servicer would have been entitled to
under this Agreement if no such notice of termination or resignation had been
given. Notwithstanding the above, the Trustee may, if it shall be unwilling or
legally unable so to act, appoint, or petition a court of competent jurisdiction
to appoint, an Eligible Servicer as the successor to the terminated Servicer
under this Agreement. In connection with such appointment, the Trustee may make
such arrangements for the compensation of such successor servicer out of
payments on Receivables as it and such successor shall agree, which, in no
event, shall be greater than that payable to First Security Bank, N.A. in its
capacity as the Servicer hereunder. The Trustee or such successor servicer
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. No Servicer shall resign or be relieved of its
duties under this Agreement until a newly appointed servicer shall have assumed
the responsibilities and obligations of the terminated Servicer under this
Agreement.
Section 9.3 EFFECT OF SERVICING TRANSFER.(a) After the transfer of
servicing hereunder, the Trustee or the successor servicer shall notify Obligors
to make directly to the successor servicer payments that are due under the
Receivables after the effective date of such transfer.
(b) Except as provided in Sections 8.2 and 10.8 after the transfer of
servicing hereunder, the outgoing Servicer shall have no further obligations
with respect to the management, administration, servicing, custody or collection
of the Receivables and the successor servicer shall have all of such
obligations, except that the outgoing Servicer will transmit or cause to be
transmitted directly to the successor servicer for its own account, promptly on
receipt and in the same form in which received, any amounts held by the outgoing
Servicer (properly endorsed where required for the successor servicer to collect
any such items) received as payments upon or otherwise in connection with the
Receivables and the outgoing Servicer shall continue to cooperate with the
successor servicer by providing information and in the enforcement of the Dealer
Agreements, the Dealer Assignments and the Insurance Policies.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities of
the Seller pursuant to Sections 2.4, 3.3, 7.1 and 7.2 or, with respect to
obligations and indemnities arising prior to, or concurrently with, a transfer
of servicing hereunder, the outgoing Servicer pursuant to Section 3.7, 8.1 or
8.2) other than those relating to the management, administration, servicing,
custody or collection of the Receivables and the other Trust Property. The
successor servicer shall, upon its appointment pursuant to Section 9.2 and as
part of its duties and responsibilities under this Agreement, promptly take all
action it deems necessary or appropriate so that the outgoing Servicer (in
whatever capacity) is paid or reimbursed all amounts it is entitled to receive
under this Agreement on each Distribution Date subsequent to the date on which
it is terminated as Servicer hereunder.
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(d) Any successor servicer shall provide the Seller with access to
the Receivable Files and to the successor servicer's records (whether written or
automated) with respect to the Receivable Files. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the successor servicer. Nothing in this Section 9.3
shall affect the obligation of the successor servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the successor servicer to provide access to information as a result
of such obligation shall not constitute a breach of this Section 9.3.
Section 9.4 NOTIFICATION TO CERTIFICATEHOLDERS. Upon any notice of
an Event of Servicing Termination or upon any termination of, or appointment of
a successor to, the Servicer pursuant to this Article IX, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses of record, and to the Rating Agencies at the following addresses:
Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007,
Attention: ABS Monitoring Department, 4th Floor; Standard & Poor's Ratings
Group, 26 Broadway, New York, New York 10004-1064, Attention: Asset Backed
Surveillance Group.
Section 9.5 WAIVER OF PAST EVENTS OF SERVICING TERMINATION. The
holders of Certificates evidencing not less than a majority of the aggregate
outstanding principal balance of the Class A Certificates and the Class B
Certificates taken together as a single class, may, on behalf of all holders of
Certificates waive any Event of Servicing Termination hereunder and its
consequences, except an event resulting from the failure to make any required
deposits to, or payments from, any of the Accounts or the Reserve Account in
accordance with this Agreement. Upon any such waiver of a past Event of
Servicing Termination, such event shall cease to exist, and shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other event or impair any right arising therefrom,
except to the extent expressly so waived.
Section 9.6 TRANSFER OF ACCOUNTS. Notwithstanding the provisions
of Section 9.1, if any of the Accounts, the Yield Supplement Account or the
Reserve Account is maintained with the Servicer or any Affiliate of the Servicer
and an Event of Servicing Termination shall occur and be continuing, the
Servicer shall promptly, and in any event within five Business Days, give notice
to the Trustee and the Seller of such Event of Servicing Termination, and the
Trustee or the Seller, as the case may be, within five days after the receipt of
such notice, shall establish new Eligible Deposit Accounts conforming with the
requirements of this Agreement and promptly shall transfer all funds in any such
Accounts, the Yield Supplement Account or the Reserve Account to such new
Eligible Deposit Accounts.
ARTICLE X
THE TRUSTEE
Section 10.1 ACCEPTANCE BY TRUSTEE. The Trustee, by its execution
of this Agreement, accepts all consideration conveyed by the Seller pursuant to
Section 2.1 and the Trust created hereunder and declares that it shall hold such
consideration in trust upon the terms hereof set forth for the benefit of the
Certificateholders.
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Section 10.2 DUTIES OF TRUSTEE. (a) The Trustee, both prior to and
after the curing or waiver of an Event of Servicing Termination, undertakes to
perform only such duties as are specifically set forth in this Agreement, and no
implied covenants or obligations shall be read into this Agreement against the
Trustee. If an Event of Servicing Termination shall have occurred and shall not
have been cured (the appointment of a successor servicer (including the Trustee)
to constitute a cure for the purposes of this Article X) or otherwise waived,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and shall use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs; PROVIDED, HOWEVER, that if the Trustee assumes the duties of
the Servicer pursuant to Section 9.2, the Trustee in performing such duties
shall use the degree of skill and attention required by Section 3.1.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders, or other instruments furnished
to the Trustee that are required specifically to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, its own willful misconduct or its own bad faith; PROVIDED, HOWEVER,
that:
(i) prior to the occurrence of an Event of Servicing
Termination, and after the curing or waiver of all such Events of Servicing
Termination that may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee, the permissible right of the Trustee (solely
in its capacity as such) to do things enumerated in this Agreement shall
not be construed as a duty and, in the absence of bad faith on the part of
the Trustee, or manifest error, the Trustee (solely in its capacity as
such) may conclusively rely on the truth of the statements and the
correctness of the computations and opinions expressed upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) the Trustee shall not be liable for an error of judgment
made in good faith by an officer of the Trustee, unless it shall be proved
that the Trustee shall have been negligent in performing its duties in
accordance with the terms of this Agreement; and
(iii) the Trustee shall not be liable with respect to any
action taken, suffered, or omitted to be taken in good faith in accordance
with the direction of the holders of Certificates evidencing not less than
a majority of the aggregate outstanding principal balance of the Class A
Certificates and the Class B Certificates taken together as a single class,
as set forth in Section 9.1, relating to the time, method and place of
conducting any proceeding or any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement.
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(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds or
indemnity satisfactory to it against such risk or liability shall not be assured
to it, and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer under this Agreement except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Servicer in accordance with
the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to impair the security interests
created or existing under any Receivable or Financed Vehicle or to impair the
value of any Receivable or Financed Vehicle.
(f) The Trustee shall have no power to vary the corpus of the Trust
including (i) accepting any substitute obligation for a Receivable initially
assigned to the Trustee under this Agreement, (ii) adding any other investment,
obligation or security, or (iii) withdrawing any Receivable, except for a
withdrawal permitted under this Agreement.
Section 10.3 TRUSTEE'S CERTIFICATE. As soon as practicable after
each Deposit Date on which Receivables shall be assigned to the Seller pursuant
to Section 2.4 or to the Servicer pursuant to Section 3.7 or 11.2, as
applicable, the Trustee shall execute a certificate, prepared by the Servicer,
including its date and the date of the Agreement, and accompanied by a copy of
the Servicer's Certificate for the related Collection Period. The Trustee's
certificate shall operate, as of such Deposit Date, as an assignment pursuant to
Section 10.4.
Section 10.4 TRUSTEE'S ASSIGNMENT OF PURCHASED RECEIVABLES. With
respect to all Receivables repurchased by the Seller pursuant to Section 2.4, or
purchased by the Servicer pursuant to Section 3.7 or 11.2, the Trustee shall
assign, without recourse, representation, or warranty, to the Seller or the
Servicer, as the case may be, all the Trustee's right, title, and interest in,
to and under such Receivables, and all security and documents and all other
Trust Property conveyed pursuant to Section 2.1 with respect to such
Receivables. Such assignment shall be a sale and assignment outright, and not
for security. If, in any enforcement suit or legal proceeding, it is held that
the Seller or the Servicer, as the case may be, may not enforce any such
Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce the Receivable, the Trustee shall, at the expense of
the Seller or the Servicer, as the case may be, take such steps as the Seller or
the Servicer, as the case may be, deems necessary to enforce the Receivable,
including bringing suit in the Trustee's name or the names of the
Certificateholders.
Section 10.5 CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 10.2:
(i) The Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate of auditors or accountants or any other certificate, statement,
instrument, opinion, report, notice, request, direction,
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consent, order, appraisal, bond, note or other paper or document believed
by it to be genuine and to have been signed or presented by the proper
party or parties.
(ii) The Trustee may consult with counsel and any Opinion of
Counsel or any advice of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it under this Agreement in good faith and in accordance with
such Opinion of Counsel or any advice of such counsel.
(iii) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or in
relation to this Agreement, at the request, order or direction of any of
the Certificateholders pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses, and liabilities
that may be incurred therein or thereby. Nothing contained in this
Agreement, however, shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Servicing Termination that is not timely cured or
waived pursuant to Section 9.5, to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon it by
this Agreement.
(v) Prior to the occurrence of an Event of Servicing Termination
and after the curing or waiver of all Events of Servicing Termination that
may have occurred, the Trustee shall not be bound to make any investigation
into the facts of any matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
direction, order, approval, bond, note or other paper or document, unless
requested in writing so to do by holders of Certificates evidencing not
less than a majority of the aggregate outstanding principal balance of the
Class A Certificates and the Class B Certificates taken together as a
single class; PROVIDED, HOWEVER, that if the payment within a reasonable
time to the Trustee of the costs, expenses, or liabilities likely to be
incurred by it in the making of an investigation requested by the
Certificateholders is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require indemnity satisfactory to it against
such cost, expense, or liability as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Servicer,
or, if paid by the Trustee, shall be reimbursed by the Servicer upon
demand. Nothing in this clause (v) shall affect the obligation of the
Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors; provided, further, that the Trustee
shall be entitled to make such further inquiry or investigation into such
facts or matters as it may reasonably see fit, and if the Trustee shall
determine to make such further inquiry or investigation it shall be
entitled to examine the books and records of the Servicer or the Seller,
personally or by agent or attorney, at the sole cost and expense of the
Servicer or the Seller, as the case may be.
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(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties under this Agreement either directly or by
or through agents, attorneys, nominees or a custodian, and shall not be
liable for the acts of, or for the supervision of, such agents, attorneys,
nominees or custodians, PROVIDED that they have been appointed with due
care.
(vii) The Trustee shall not be required to make any initial
or periodic examination of any documents or records related to the
Receivables or Financed Vehicles for the purpose of establishing the
presence or absence of defects, the compliance by the Seller with their
representations and warranties or for any other purpose.
Section 10.6 TRUSTEE NOT LIABLE FOR CERTIFICATES OR RECEIVABLES.
The Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as expressly provided herein, the
Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than the Trustee's execution of, and the
certificate of authentication on, the Certificates), or of any Receivable or
related document, or for the validity of the execution by the Seller and the
Servicer of this Agreement or of any supplements hereto or instruments of
further assurance, or for the sufficiency of the Trust Property hereunder, and
the Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any covenants, conditions or agreements on the part of the Seller
or the Servicer under this Agreement except as herein set forth; but the Trustee
may require the Seller or the Servicer to provide full information and advice as
to the performance of the aforesaid covenants, conditions and agreements. The
Trustee (solely in its capacity as such) shall have no obligation under any
circumstance to perform any of the duties of the Seller or of the Servicer
except as explicitly set forth in this Agreement. The Trustee shall have no
liability in connection with compliance of the Servicer or the Seller with
statutory or regulatory requirements related to the Receivables. The Trustee
shall not make or be deemed to have made any representations or warranties with
respect to the Receivables or the validity or sufficiency of any assignment of
the Receivables to the Trust or the Trustee. The Trustee (solely in its
capacity as such) shall at no time have any responsibility or liability for, or
with respect to, the legality, validity or enforceability of any security
interest in any Financed Vehicle or (prior to the time, if any, that the
Servicer is terminated as custodian hereunder) any Receivable, or the perfection
and priority of such a security interest or the maintenance of any such
perfection and priority, the efficacy of the Trust or its ability to generate
funds sufficient to provide for the payments to be distributed to
Certificateholders under this Agreement, the existence, condition, location, and
ownership of any Financed Vehicle, the existence and enforceability of any
Insurance Policy, the existence and contents of any Receivable or any computer
or other record thereof, the validity of the assignment of any Receivable to the
Trust or of any intervening assignment, the completeness of any Receivable, the
performance or enforcement of any Receivable, the compliance by the Seller with
any warranty or representation made by it under this Agreement or in any related
document and the accuracy of any such warranty or representation, prior to the
Trustee's receipt of notice or other discovery of any noncompliance therewith or
any breach thereof, any investment of monies by the Servicer or any loss
resulting therefrom (it being understood that the Trustee shall remain
responsible for any Trust Property that it may hold), the acts or omissions of
the Seller, the Servicer, or any Obligor, any action of the Servicer taken in
the name of the Trustee, or any action by the Trustee taken at the
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instruction of the Servicer in the absence of bad faith on the part of the
Trustee or manifest error in such instruction; PROVIDED, HOWEVER, that the
foregoing shall not relieve the Trustee of its obligation to perform its duties
under this Agreement. Except with respect to a claim based on the failure of
the Trustee to perform its duties under this Agreement (whether in its capacity
as Trustee or as successor servicer) or based on the Trustee's willful
misconduct, negligence, or bad faith, or based on the Trustee's breach of a
representation and warranty contained in Section 10.15, no recourse shall be had
to the Trustee (whether in its individual capacity or as a Trustee) for any
claim based on any provision of this Agreement, the Certificates, or any
Receivable or assignment thereof against the Trustee in its individual capacity;
the Trustee shall not have any personal obligation, liability, or duty
whatsoever to any Certificateholder or any other Person with respect to any such
claim. The Trustee shall not be accountable for the use or application by the
Seller of the proceeds of such Certificates, or for the use or application of
any funds paid to the Servicer in respect of the Receivables prior to the time
such amounts are deposited in the Certificate Account (whether or not the
Certificate Account is maintained with the Trustee). The Trustee shall have no
liability for any losses from the investment or reinvestment in Eligible
Investments made in accordance with Section 4.1.
Section 10.7 TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
and may transact banking business with the Seller, the Servicer and their
respective Affiliates with the same rights as it would have if it were not
Trustee.
Section 10.8 TRUSTEE'S AND COLLATERAL AGENT'S FEES AND EXPENSES.
The Servicer agrees to pay to the Trustee and the Collateral Agent, and the
Trustee and the Collateral Agent 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
in the execution of the trusts created by this Agreement and in the exercise and
performance of any of the powers and duties under this Agreement as the Trustee
or the Collateral Agent, as applicable, and the Servicer shall pay or reimburse
the Trustee or the Collateral Agent, as applicable, upon its request for all
reasonable expenses (including, without limitation, expenses incurred in
connection with notices or other communications to Certificateholders),
disbursements, and advances (including the reasonable compensation and the
reasonable expenses and disbursements of its counsel and of all persons not
regularly in its employ) incurred or made by the Trustee or the Collateral Agent
in accordance with any of the provisions of this Agreement (including the
reasonable fees and expenses of its agents, any co-trustee and counsel) or in
defense of any action brought against it in connection with this Agreement
except any such expense, disbursement, or advance as may arise from its
negligence, willful misfeasance, or bad faith. The Servicer's covenant to pay
the expenses, disbursements and advances provided for in the preceding sentence
shall survive the termination of this Agreement or the earlier resignation or
removal of the Trustee or the Collateral Agent, as applicable. When the Trustee
incurs expenses or renders services in connection with an Event or Servicing
Termination described in Sections 9.1(a)(iii) or 9.1(a)(iv), such expenses
(including the fees and expenses of its counsel) and the compensation for such
services are intended to constitute expenses of administration under any
bankruptcy law or law relating to creditor's rights generally.
Section 10.9 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced
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by the Trustee without the possession of any of the Certificates or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been obtained.
Section 10.10 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
under this Agreement shall at all times have an office in the same state as the
Corporate Trust Office is located on the date of this Agreement or which is
otherwise consented to by the Seller. The Trustee shall be organized and doing
business under the banking laws of such state or of the United States, shall be
authorized under such laws to exercise corporate trust powers, shall have a
consolidated net worth of at least $50,000,000, shall have a credit rating of at
least Baa3 from Moody's and shall be subject to supervision or examination by
federal or state banking authorities. If such corporation shall publish reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 10.10, the consolidated net worth of such corporation shall be deemed to
be its consolidated capital and surplus as set forth in its most recent
consolidated report of condition so published. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
10.10, the Trustee shall resign immediately in the manner and with the effect
specified in Section 10.11.
Section 10.11 RESIGNATION OR REMOVAL OF TRUSTEE AND COLLATERAL AGENT.
(a) The Trustee may at any time resign and be discharged from the Trust hereby
created by giving 30 days' prior written notice thereof to the Servicer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee, by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 10.10 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver, conservator or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Servicer may remove the Trustee. If the Trustee is
removed under the authority of the immediately preceding sentence, the Servicer
shall promptly appoint a successor trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Trustee so removed, the
successor trustee, the Certificateholders at their respective addresses of
record and the Rating Agencies.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 10.11 shall
not become effective until acceptance of appointment by the successor trustee
pursuant to Section 10.12.
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(d) The respective obligations of the Seller and the Servicer
described in this Agreement shall survive the removal or resignation of the
Trustee as provided in this Agreement.
(e) Upon the removal or termination of the Trustee for any reason,
the Collateral Agent shall also be removed or terminated and the successor
trustee appointed pursuant to Section 10.12 shall be appointed and become the
successor collateral agent so that the Trustee and the Collateral Agent remain
the same Person.
Section 10.12 SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed
pursuant to Section 10.11 shall execute, acknowledge, and deliver to the
Servicer and to its predecessor Trustee an instrument accepting such appointment
under this Agreement, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all rights,
powers, duties, and obligations of its predecessor under this Agreement, with
like effect as if originally named as Trustee. The predecessor Trustee shall
deliver to the successor Trustee all documents and statements held by it under
this Agreement, and the Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties, and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 10.12 unless at the time of such acceptance such successor trustee shall
be eligible pursuant to Section 10.10.
(c) Upon acceptance of appointment by a successor trustee pursuant to
this Section 10.12, the Servicer shall mail notice of such acceptance by the
successor trustee under this Agreement to all Certificateholders at their
respective addresses of record and to the Rating Agencies. If the Servicer
shall fail to mail such notice within 10 days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
mailed at the expense of the Servicer. No Trustee hereunder shall be liable for
the acts or omissions of any successor trustee.
Section 10.13 MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation or
banking association which is eligible to be a successor trustee under Section
10.10 (i) into which the Trustee may be merged or consolidated, (ii) that may
result from any merger, conversion, or consolidation to which the Trustee shall
be a party, or (iii) that may succeed by purchase and assumption to the business
of the Trustee, where the Trustee is not the surviving entity, which corporation
or banking association executes an agreement of assumption to perform every
obligation of the Trustee under this Agreement, shall be the successor of the
Trustee hereunder, without the execution or filing of any instrument or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee shall promptly notify the Servicer and
the Rating Agencies of any such merger, conversion, consolidation or purchase
and assumption where the Trustee is not the surviving entity.
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Section 10.14 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a)Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Property or any Financed Vehicle may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person,
in such capacity and for the benefit of the Certificateholders, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 10.14, 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 case an Event of Servicing Termination shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.10 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.12.
Notwithstanding the appointment of a co-trustee or separate trustee hereunder,
the Trustee shall not be relieved of any of its obligations under this
Agreement.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties, and obligations conferred or
imposed upon the Trustee shall be conferred upon and exercised or performed
by the Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee under this Agreement or as
successor to the Servicer under this Agreement), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of title to
the Trust Property or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee.
(ii) No co-trustee or separate trustee under this Article shall
be personally liable by reason of any act or omission of any other trustee
under this Agreement.
(iii) The Servicer and the Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
in particular to the provisions of this Article X. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein,
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subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Each such instrument shall be
filed with the Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may, at any time, appoint the
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of the Trustee
as a new or successor trustee. The Trustee shall promptly notify the Servicer
and the Rating Agencies of any appointment made pursuant to this Section 10.14.
Section 10.15 REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee
makes the following representations and warranties on which the Seller, the
Servicer, and Certificateholders may rely:
(i) ORGANIZATION AND GOOD STANDING. The Trustee is a banking
corporation duly organized, validly existing, and in good standing under
the laws of the State of New York;
(ii) POWER AND AUTHORITY. The Trustee has full power, authority
and legal right to execute, deliver, and perform this Agreement and has
taken all necessary action to authorize the execution, delivery, and
performance by it of this Agreement; and
(iii) ENFORCEABILITY. This Agreement has been duly executed
and delivered by the Trustee and this Agreement constitutes a legal, valid
and binding obligation of the Trustee, enforceable against the Trustee in
accordance with its terms, subject as to enforceability, to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
Section 10.16 REPORTS BY TRUSTEE. The Trustee shall provide to any
Certificateholder or Certificate Owner who so requests in writing (addressed to
the Corporate Trust Office) a copy of any Servicer's Certificate, the annual
statement described in Section 3.10, and the annual accountant's examination
described in Section 3.11. The Trustee may require any Certificateholder or
Certificate Owner requesting such report to pay a reasonable sum to cover the
cost of the Trustee's complying with such request.
Section 10.17 TAX ACCOUNTING. The Servicer shall prepare or shall
cause to be prepared any tax returns required to be filed by the Trust and shall
remit such returns to the Trustee for signature at least five days before such
returns are due to be filed. The Trustee, upon request, will furnish the
Servicer with all such information known to the Trustee as may be reasonably
required in connection with the preparation of all tax returns of the Trust, and
shall, upon request,
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execute such returns. The Servicer shall prepare the tax returns of the Trust
in accordance with (i) the Code and any regulations (including, to the extent
applicable by their terms, proposed regulations) thereunder or (ii) any
applicable state or local statute or regulation.
ARTICLE XI
TERMINATION
Section 11.1 TERMINATION OF THE TRUST. (a) The Trust, and the
respective obligations and responsibilities of the Seller, the Servicer, and the
Trustee hereunder shall terminate (except as otherwise expressly provided
herein) upon the earliest of: (i) the Distribution Date next succeeding the
purchase by the Servicer at its option, pursuant to Section 11.2, of the
Receivables (other than Defaulted Receivables) remaining in the Trust, (ii) the
payment to Certificateholders, the Trustee and the Collateral Agent of all
amounts required to be paid to them pursuant to this Agreement or (iii) the
Distribution Date next succeeding the month which is six months after the
maturity or the liquidation of the last Receivable held in the Trust and the
disposition of any amounts received upon liquidation of any property remaining
in the Trust; PROVIDED, HOWEVER, that in no event shall the Trust created by
this 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 11.1, which notice shall contain the information
required by the Trustee to give its notice thereunder.
(b) Notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender the Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to Certificateholders of record and the Rating Agencies
mailed not earlier than the 15th day and not later than the 25th day of the
month next preceding the specified Distribution Date stating the amount of any
such final payment and that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Trustee therein
specified. Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders amounts distributable on
such Distribution Date pursuant to Section 4.5. Amounts remaining after
distribution, or providing for distribution, to the Certificateholders shall be
distributed to the Seller.
(c) In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. The Trustee shall after giving such notice deliver or cause to be
delivered to the Servicer a list of those Certificateholders who have not
surrendered Certificates for cancellation. If, within one year after the second
notice, all the Certificates shall not have been surrendered for cancellation,
the Servicer may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that shall remain subject to this Agreement. Any funds
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remaining in the Trust after exhaustion of such remedies shall be distributed by
the Trustee to the Seller and the Certificateholders shall thereafter look
solely to the Seller for such payment.
Section 11.2 OPTIONAL PURCHASE OF ALL RECEIVABLES. In the event
that the Pool Balance shall be 10% or less of the Original Pool Balance as of
the last day of any Collection Period, the Servicer shall have the option to
purchase the corpus of the Trust on any Distribution Date occurring in a
subsequent Collection Period. To exercise such option, the Servicer shall
notify the Trustee no later than the 10th day of the month in which such
purchase is to be effected and deposit the aggregate Purchase Amount for the
Receivables (other than Defaulted Receivables) into the Certificate Account on
the Deposit Date occurring in the month in which such purchase is to be
effected. The payment shall be made in the manner specified in Section 4.3, and
shall be distributed pursuant to Section 4.5. Upon such payment the Servicer
shall succeed to and own all interests in and to the Trust and the Trust
Property.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1 AMENDMENT. (a) This Agreement may be amended by the
Seller, the Servicer and the Trustee, without the consent of any of the
Certificateholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or modifying
in any manner the rights of the Certificateholders; PROVIDED, HOWEVER, that such
action shall not, as evidenced by an Opinion of Counsel to the Seller delivered
to the Trustee, materially and adversely affect the interests of any
Certificateholder or cause the Trust to be classified for federal tax purposes
as an association taxable as a corporation.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Trustee, with the consent of the holders of
Certificates evidencing not less than a majority of the aggregate outstanding
principal balance of the Class A Certificates and the Class B Certificates taken
together as a single class, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the Certificateholders; PROVIDED,
HOWEVER, that no such amendment shall (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, or change the allocation or
priority of, collections of payments on Receivables or distributions that are
required to be made on any Certificate, without the consent of all adversely
affected Certificateholders, (ii) reduce the percentage of the aggregate
outstanding principal balance of the Certificates, the holders of which are
required to consent to any such amendment, without the consent of all
Certificateholders, (iii) materially and adversely affect the interests of
either the Class A Certificateholders or the Class B Certificateholders without
the consent of the holders of Class A Certificates or Class B Certificates, as
the case may be, evidencing not less than a majority of the aggregate
outstanding principal balance of the Class A Certificates or the Class B
Certificates, as the case may be, (iv) adversely affect the rating of the Class
A Certificates or the Class B Certificates by the Rating Agencies without the
consent of holders of Class A Certificates or Class B Certificates, as the case
may be, evidencing not less than two-thirds of the aggregate outstanding
principal balance of the Class A
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Certificates or the Class B Certificates, as the case may be, or (v) cause the
Trust to be classified as an association taxable as a corporation. Promptly
after the execution of any such amendment or consent, the Trustee shall furnish
written notification of the substance of such amendment or consent to each
Certificateholder.
(c) It shall not be necessary for the consent of Certificateholders
pursuant to this Section 12.1 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(d) Notice of any amendment of this Agreement shall be sent by the
Servicer to the Rating Agencies, at such address as the Rating Agencies may from
time to time specify in writing.
(e) The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's own rights, duties, indemnities or
immunities under this Agreement or otherwise.
(f) In connection with any amendment pursuant to this Section 12.1,
the Trustee shall be entitled to receive an Opinion of Counsel to the effect
that such amendment is authorized or permitted by the Agreement.
Section 12.2 PROTECTION OF TITLE TO TRUST. (a) The Servicer shall
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 under this Agreement in the Trust Property
and in the proceeds thereof. The Servicer shall deliver (or cause to be
delivered) to the Trustee file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
In the event the Servicer fails to perform its obligations under this
subsection, the Trustee may (but shall not be obligated to) do so, at the
expense of the Servicer.
(b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed by the Servicer in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the Relevant UCC, unless it shall have given the Trustee at
least 60 days' prior written notice thereof.
(c) The Seller and the Servicer shall give the Trustee at least 60
days' prior written notice of any relocation of their principal executive
offices if, as a result of such relocation, the applicable provisions of the
Relevant UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement. The
Seller and 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.
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(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, as of the most recent monthly calculation, the status of such
Receivable, including payments, Liquidation Proceeds and Recoveries made and
payments owing (and the nature of each), and (ii) reconciliation between
payments or Recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Certificate Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Trustee, the Servicer's master computer records (including archives) that shall
refer to a Receivable indicate clearly that such Receivable is owned by the
Trust. Indication of the Trust's ownership of a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
Receivable shall be paid or shall become a Purchased Receivable.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in motor
vehicle retail installment sale contracts to any prospective purchaser, lender
or other transferee, the Seller or the Servicer, as the case may be, shall give
to such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Trust.
(g) Upon request, the Servicer, at its expense, shall furnish to the
Trustee, within 10 Business Days, a list of all Receivables then held as part of
the Trust, together with a reconciliation of such list to each Schedule of
Receivables and to the Servicer's Certificate furnished pursuant to Section 3.9
indicating removal of Receivables from the Trust.
(h) The Servicer shall deliver to the Trustee upon the Closing Date,
upon the date which is 60 months after the initial filings required hereunder to
perfect the security interest of the Trustee and upon the execution and delivery
of each amendment, if any, of this Agreement, an Opinion of Counsel to the
Servicer either (x) stating that, in the opinion of such counsel, no filings or
other action, other than the filings required in the appropriate filing offices
as described in such opinion, are necessary to perfect and maintain (i) the
security interest of the Trustee in the Financed Vehicles, subject to certain
exceptions stated therein, and (ii) the interest of the Trustee in the
Receivables, the Dealer Agreements or the Dealer Assignments and in each case
the proceeds thereof against third parties, subject to certain exceptions stated
therein, and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (y) stating that, in the opinion
of such counsel, no such action shall be necessary to perfect or continue the
perfected status of such interest.
Section 12.3 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (a) The
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, or entitle the Certificateholder's legal representatives
or heirs to claim an accounting or to take any action or commence any proceeding
in any court for a partition or winding up of the Trust, or otherwise affect the
rights, obligations, and liabilities of the parties to this Agreement or any of
them.
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(b) No Certificateholder shall have any right to vote (except as
expressly provided herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties to this Agreement,
nor shall anything set forth in this Agreement, or contained in the terms of the
Certificates, be construed so as to constitute the holders as partners or
members of an association; nor shall any Certificateholder be under any
liability to any third party by reason of any action taken pursuant to any
provision of this Agreement.
(c) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless the holders of the Certificates evidencing not less than a
majority of the aggregate outstanding principal balance of the Class A
Certificates and the Class B Certificates taken together as a single class shall
have made written request upon the Trustee to institute such action, suit, or
proceeding in its own name as Trustee under this Agreement and shall have
offered to the Trustee such indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 30 days after its receipt of such notice, request, and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; no one or more holders of Certificates shall have any right in any
manner whatever by virtue or by availing itself or themselves of any provisions
of this Agreement to affect, disturb or prejudice the rights of the holders of
any other Certificates, or to obtain or seek to obtain priority over or
preference to any other such holder or to enforce any right, under this
Agreement, except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Class A Certificateholders or Class B
Certificateholders, as the case may be. For the protection and enforcement of
the provisions of this Section 12.3, each Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 12.4 GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEABILITY OF THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR
PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
Section 12.5 NOTICES. All demands, notices, directions and
communications under this Agreement shall be in writing, personally delivered,
or sent by telecopier, overnight courier or mailed by certified mail, return
receipt requested, and shall be deemed to have been duly given upon receipt (a)
in the case of the Seller or the Servicer, to First Security Bank, N.A. at
Office of the General Counsel, 79 South Main Street, Salt Lake City, Utah 84111,
Attention: Executive Vice President and General Counsel, Facsimile No.:
801-246-5422, or at such other address as shall be designated by the Seller or
the Servicer in a written notice to the Trustee, with a copy to David Cowley,
Vice President, Corporate Finance, First Security Bank, 41 East 100 South, 3rd
Floor, Salt Lake City, Utah 84111, Facsimile No.: 801-246-5973 and (b) in the
case of the Trustee, at the Corporate Trust Office, Facsimile No.: 212-250-6439.
Any notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of record of
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such holder. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice.
Section 12.6 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement, and shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of the Certificates or the rights of the
holders thereof.
Section 12.7 ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.3, this Agreement may not be
assigned by the Servicer. This Agreement may not be assigned by the Trustee
except as provided by Sections 10.11 through 10.14 hereof.
Section 12.8 CERTIFICATES NONASSESSABLE AND FULLY PAID. The
interests represented by the Certificates shall be nonassessable for any losses
or expenses of the Trust or for any reason whatsoever, and, upon authentication
thereof by the Trustee pursuant to Section 6.1, each Certificate shall be deemed
fully paid.
Section 12.9 INTENTION OF PARTIES. (a) The execution and delivery of
this Agreement shall constitute an acknowledgment by the Seller and the Trustee,
on behalf of the Certificateholders, that it is intended that the assignment and
transfer herein contemplated constitute a sale and assignment outright, and not
for security, of the Receivables and the other Trust Property, conveying good
title thereto free and clear of any liens, from the Seller to the Trust, and
that the Receivables and the other Trust Property shall not be a part of the
Seller's estate in the event of the bankruptcy, insolvency, receivership,
conservatorship or the occurrence of another similar event of, or with respect
to, the Seller. In the event that such conveyance is determined to be made as
security for a loan made by the Trust or the Certificateholders to the Seller,
the parties intend that the Seller shall have granted to the Trustee a security
interest in all of the Seller's right, title and interest in, to and under the
Trust Property conveyed to the Trust pursuant to Section 2.1 in order to secure
the obligations under the Certificates, and that this Agreement shall constitute
a security agreement under applicable law.
(b) The execution and delivery of this Agreement shall constitute an
acknowledgment by the Seller and the Trustee on behalf of the Certificateholders
that they intend that the Trust be classified (for Federal tax purposes) as a
grantor trust under Subpart E, Part I of Subchapter J of the Code of which the
Certificateholders are owners, rather than as an association taxable as a
corporation. The powers granted and obligations undertaken in this Agreement
shall be construed so as to further such intent. The Seller, the Trustee and
the Certificateholders shall take no action that is inconsistent with treating
the Trust as a grantor trust for federal income tax purposes.
Section 12.10 COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed in one or more counterparts, and
-79-
<PAGE>
by different parties hereto on separate counterparts, each of which counterparts
shall be deemed to be an original, and all of which counterparts shall
constitute one and the same instrument.
Section 12.11 LIMITATION OF LIABILITY OF THE TRUSTEE AND THE
COLLATERAL AGENT. Notwithstanding anything contained herein to the contrary (i)
this Agreement has been accepted by Bankers Trust Company, not in its individual
capacity but solely as Trustee and as Collateral Agent with respect to the
Reserve Account and the Yield Supplement Account and in no event shall Bankers
Trust Company have any liability for the representations, warranties, covenants,
agreements or other obligations of the Seller hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Seller and (ii) under no
circumstances shall Bankers Trust Company be personally liable for the payment
of any indebtedness or expenses of the Trust; PROVIDED, HOWEVER, nothing
contained herein shall relieve Bankers Trust Company of its obligations
contained herein in its capacity as successor servicer. Notwithstanding
anything to the contrary contained herein, the Collateral Agent shall have the
same rights, protections, immunities and indemnities afforded to the Trustee
hereunder.
* * * * *
-80-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Pooling and
Servicing Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
FIRST SECURITY BANK, N.A.,
as Seller and Servicer
By:
----------------------------------
Name: Scott C. Ulbrich
Title: Authorized Officer
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Trustee
By:
-----------------------------------
Name:
----------------------------
Title:
---------------------------
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Collateral Agent
By:
-----------------------------------
Name:
----------------------------
Title:
---------------------------
-81-
<PAGE>
EXHIBIT A
FORM OF CLASS A CERTIFICATE
---------------------------
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN THE TRUST AND
DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF FIRST SECURITY BANK, N.A. OR
ANY AFFILIATE THEREOF. THIS CERTIFICATE AND THE RECEIVABLES ARE NOT DEPOSITS
AND ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
FIRST SECURITY AUTO GRANTOR TRUST 1997-A
6.30% ASSET BACKED CERTIFICATE, CLASS A
Evidencing a fractional undivided interest in the Trust, as
defined below, the property of which includes a pool of motor
vehicle retail installment sale contracts and motor vehicle
retail installment loans secured by the new and used automobiles
and light-duty trucks financed thereby and sold to the Trust by
First Security Bank, N.A.
NUMBER CUSIP 336211 AC 1
- ---------------- $
------------------------
Original Principal Amount
THIS CERTIFIES THAT CEDE & Co. is the registered owner of a
$_________, nonassessable, fully paid, fractional undivided interest in the
First Security Auto Grantor Trust 1997-A (the "Trust") formed by First Security
Bank, N.A., a national banking association, as seller (the "Seller"). The Trust
was created pursuant to a Pooling and Servicing Agreement dated as of March ,
1997 (as amended, supplemented or otherwise modified and in effect from time to
time, the "Agreement"), by and among the Seller, First Security Bank, N.A. as
servicer (the "Servicer"), and Bankers Trust Company, as trustee (the "Trustee")
and as collateral agent, a summary of certain of the provisions of which is set
forth on the reverse hereof.
<PAGE>
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 "6.30% Asset Backed
Certificates, Class A" (herein called the "Certificates"). This Certificate is
issued under and is subject to the terms, provisions, and conditions of the
Agreement, to which the holder of this Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The Trust Property includes
(as more fully described in the Agreement) a pool of retail installment sale
contracts and retail installment loans (the "Receivables") for the purchase of
the new and used automobiles and light-duty trucks financed thereby (the
"Financed Vehicles"), certain monies owing or received thereunder after the
close of business of the Servicer on February 25, 1997 (the "Cutoff Date"), the
Seller's security interests in the Financed Vehicles, the right to receive
payments under certain circumstances from the Reserve Account and all proceeds
of the foregoing.
Subject to the terms and conditions of the Agreement (including the
availability of funds for distributions) and until the obligations created by
the Agreement shall have terminated in accordance therewith, there will be
distributed, but only from funds on deposit in the Class A Distribution Account,
on the 15th day of each month or, if such 15th day is not a Business Day, the
next succeeding Business Day (each such date, a "Distribution Date"), commencing
April 15, 1997 to the Person in whose name this Certificate is registered at the
close of business of the Trustee on the day immediately preceding such
Distribution Date (or, if Definitive Certificates are issued, the last day of
the Collection Period immediately preceding such Distribution Date) (the "Record
Date"), such Certificateholder's fractional undivided interest in the amounts to
be distributed to Class A Certificateholders pursuant to the Agreement on such
Distribution Date.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Certificateholder of record at its address as it appears in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon, except that with respect to a Certificate
registered in the name of a Clearing Agency or its nominee, distributions will
be made by wire transfer of immediately available funds. 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.
This Certificate does not purport to summarize the Agreement and
reference is hereby made to the Agreement for information with respect to the
rights, benefits, obligations and duties evidenced thereby. A copy of the
Agreement may be examined during normal business hours at the Corporate Trust
Office of the Trustee, located at Bankers Trust Company, Four Albany Street,
10th Floor, New York, New York 10006 Attention: Corporate Trust and Agency
Group-Structured Finance, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
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.
A-2
<PAGE>
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in
its individual capacity, has caused this Certificate to be duly executed.
FIRST SECURITY AUTO GRANTOR TRUST
1997-A
By: Bankers Trust Company,
not in its capacity, but solely as Trustee
By:
------------------------------------
Authorized Officer
DATED: March , 1997
Trustee's Certificate of
Authentication:
This is one of the Class A Certificates referred to in the within-mentioned
Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:
------------------------------------
Authorized Officer
A-3
<PAGE>
REVERSE OF CERTIFICATE
FIRST SECURITY AUTO GRANTOR TRUST 1997-A
6.30% ASSET BACKED CERTIFICATE, CLASS A
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Seller, the Servicer and the Trustee with
the consent of the holders of Certificates evidencing not less than a majority
of the aggregate outstanding principal balance of the Class A Certificates and
the Class B Certificates taken together as a single class. Any such consent by
the holder of this Certificate shall be conclusive and binding on such holder
and on all future holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain circumstances, 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 registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee 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.
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 interest in the Trust, 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 Seller, the Servicer, the Trustee, and any agent of the Seller,
the Servicer or the Trustee may treat the person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Seller, the
Servicer, the Trustee, or any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby will terminate upon the earliest of (i) the Distribution
Date immediately succeeding the purchase by the Servicer, at its option, of the
Receivables (other than Defaulted Receivables) remaining in the Trust, as
described below, (ii) the payment to Certificateholders of all amounts required
to be paid to them pursuant to the Agreement, or (iii) the Distribution Date
which is six months after the maturity or the liquidation of the last Receivable
held in the Trust and the disposition of any amounts received upon liquidation
of any property remaining in the Trust. The Agreement provides that the
Servicer may, at its option, purchase the Receivables remaining in the Trust
(other than Defaulted Receivables) at a price equal to the aggregate Purchase
Amounts thereof,
A-4
<PAGE>
and such purchase of the Receivables will effect early retirement of the
Certificates; however, such right of purchase is exercisable only after the
first day of a Collection Period as of which the Pool Balance is 10% or less of
the original Pool Balance.
Notwithstanding anything contained in the Agreement to the contrary
(i) the Agreement has been accepted and this Certificate has been executed by
Bankers Trust Company not in its individual capacity but solely as Trustee and
as Collateral Agent with respect to the Reserve Account and the Yield Supplement
Account and in no event shall Bankers Trust Company have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Seller thereunder or in any of the certificates, notices or agreements delivered
pursuant thereto, as to all of which recourse shall be had solely to the assets
of the Seller and (ii) except in its capacity as successor Servicer, under no
circumstances shall Bankers Trust Company be personally liable for the payment
of any indebtedness or expenses of the Trust.
A-5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or typewrite name and address, including postal zip code, of
assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney to transfer said Certificate on the books of the 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. The signature must be guaranteed
by an institution which is a member of one of the following recognized Signature
Guaranty Programs: (i) The Securities Transfer Agent Medallion Program; (ii)
The New York Stock Exchange Medallion Program; (iii) The Stock Exchange
Medallion Program; or (iv) in such other guarantee program acceptable to the
Trustee.
A-6
<PAGE>
EXHIBIT B
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN THE TRUST AND
DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF FIRST SECURITY BANK, N.A. OR
ANY AFFILIATE THEREOF. THIS CERTIFICATE AND THE RECEIVABLES ARE NOT DEPOSITS
AND ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE AND ANY BENEFICIAL INTEREST IN THIS CERTIFICATE MAY NOT BE
ACQUIRED BY (a) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), THAT IS
SUBJECT TO THE PROVISIONS OF TITLE 1 OF ERISA, (b) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (c) ANY ENTITY
WHOSE UNDERLYING ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY (EACH A
"BENEFIT PLAN"). BY ACCEPTING AND HOLDING THIS CERTIFICATE OR AN INTEREST
HEREIN, THE HOLDER HEREOF OR OWNER HEREOF SHALL BE DEEMED TO HAVE REPRESENTED
AND WARRANTED THAT IT IS NOT A BENEFIT PLAN.
FIRST SECURITY AUTO GRANTOR TRUST 1997-A
6.50% ASSET BACKED CERTIFICATE, CLASS B
Evidencing a fractional undivided interest in the Trust, as
defined below, the property of which includes a pool of motor
vehicle retail installment sale contracts and motor vehicle
retail installment loans secured by the new and used automobiles
and light-duty trucks financed thereby and sold to the Trust by
First Security Bank, N.A.
NUMBER CUSIP 336211 AD 9
- ---------- $
------------------------
<PAGE>
Original Principal Amount
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a $________,
nonassessable, fully paid, fractional undivided interest in the First Security
Auto Grantor Trust 1997-A (the "Trust") formed by First Security Bank, N.A., a
national banking association, as seller (the "Seller"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of March , 1997 (as
amended, supplemented or otherwise modified and in effect from time to time, the
"Agreement") by and among the Seller, First Security Bank, N.A., as servicer (in
such capacity, the "Servicer"), and Bankers Trust Company, as trustee (the
"Trustee") and as collateral agent, a summary of certain of the provisions of
which is set forth an the reverse hereof.
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 "6.50% Asset Backed
Certificates, Class B" (herein called the "Certificates"). This Certificate is
issued under and is subject to the terms, provisions, and conditions of the
Agreement, to which the holder of this Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The Trust Property includes
(as more fully described in the Agreement) a pool of retail installment sale
contracts and retail installment loans (the "Receivables") for the purchase of
the new and used automobiles and trucks financed thereby (the "Financed
Vehicles"), certain monies owing or received thereunder after the close of
business of the Servicer on February 25, 1997 (the "Cutoff Date"), the Seller's
security interests in the Financed Vehicles, the right to receive payments under
certain circumstances from the Reserve Account and all proceeds of the
foregoing.
Subject to the terms and conditions of the Agreement (including the
availability of funds for distributions) and until the obligations created by
the Agreement shall have terminated in accordance therewith, there will be
distributed, but only from funds on deposit in the Class B Distribution Account,
on the 15th day of each month or, if such 15th day is not a Business Day, the
next succeeding Business Day (each such date, a "Distribution Date"), commencing
April 15, 1997, to the Person in whose name this Certificate is registered at
the close of business of the Trustee on the day immediately preceding such
Distribution Date (or, if Definitive Certificates are issued, the last day of
the Collection Period immediately preceding such Distribution Date) (the "Record
Date"), such Certificateholder's fractional undivided interest in the amounts to
be distributed to Class B Certificateholders pursuant to the Agreement on such
Distribution Date.
Pursuant to the Agreement distributions of interest and principal on
the Class B Certificates will be subordinated in priority of payment to interest
and principal due on the Class A Certificates in the event of defaults and
delinquencies on the Receivables. The Class B Certificateholders will not
receive any distributions of interest with respect to a Collection Period until
the full amount of interest on the Class A Certificates relating to such
Collection Period has been deposited in the Class A Distribution Account, and
the Class B Certificateholders will not receive any distributions of principal
with respect to such Collection Period until the full amount of interest on and
principal of the Class A Certificates relating to such Collection Period has
been deposited in the Class A Distribution Account as set forth in the
Agreement.
B-2
<PAGE>
Distributions on this Certificate will be made by the Trustee by check
mailed to the Certificateholder of record at its address as it appears in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon, except that with respect to a Certificate
registered in the name of a Clearing Agency or its nominee, distributions will
be made by wire transfer of immediately available funds. 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.
This Certificate does not purport to summarize the Agreement and
reference is hereby made to the Agreement for information with respect to the
rights, benefits, obligations and duties evidenced thereby. A copy of the
Agreement may be examined during normal business hours at the Corporate Trust
Office of the Trustee, located at Bankers Trust Company, Four Albany Street,
10th Floor, New York, New York 10006, Attention: Corporate Trust and Agency
Group-Structured Finance, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose.
B-3
<PAGE>
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in
its individual capacity, has caused this Certificate to be duly executed.
FIRST SECURITY AUTO GRANTOR
TRUST 1997-A
By: Bankers Trust Company,
not in its capacity, but solely as Trustee
By:
------------------------------------
Authorized Officer
DATED: March , 1997
Trustee's Certificate of
Authentication:
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:
------------------------------------
Authorized Officer
B-4
<PAGE>
REVERSE OF CERTIFICATE
FIRST SECURITY AUTO GRANTOR TRUST 1997-A
6.50% ASSET BACKED CERTIFICATE, CLASS B
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Seller, the Servicer and the Trustee with
the consent of the holders of Certificates evidencing not less than a majority
of the aggregate outstanding principal balance of the Class A Certificates and
the Class B Certificates taken together as a single class. Any such consent by
the holder of this Certificate shall be conclusive and binding on such Holder
and on all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain circumstances, 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 registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee 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.
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 interest in the Trust, 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 Seller, the Servicer, the Trustee, and any agent of the Seller,
the Servicer or the Trustee may treat the person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Seller, the
Servicer, the Trustee, or any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby will terminate upon the earliest of (i) the Distribution
Date immediately succeeding the purchase by the Servicer, at its option, of the
Receivables (other than Defaulted Receivables) remaining in the Trust, as
described below, (ii) the payment to Certificateholders of all amounts required
to be paid to them pursuant to the Agreement, or (iii) the Distribution Date
which is six months after the maturity or the liquidation of the last Receivable
held in the Trust and the disposition of any amounts received upon liquidation
of any property remaining in the Trust. The Agreement provides that the
Servicer may, at its option, purchase the Receivables remaining in the Trust
(other than Defaulted Receivables) at a price equal to the aggregate Purchase
Amounts thereof,
B-5
<PAGE>
and such purchase of the Receivables will effect early retirement of the
Certificates; however, such right of purchase is exercisable only after the
first day of a Collection Period as of which the Pool Balance is 10% or less of
the Original Pool Balance.
Notwithstanding anything contained in the Agreement to the contrary
(i) the Agreement has been accepted and this Certificate has been executed by
Bankers Trust Company not in its individual capacity but solely as Trustee and
as Collateral Agent with respect to the Reserve Account and the Yield Supplement
Account, and in no event shall Bankers Trust Company have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Seller thereunder or in any of the certificates, notices or agreements delivered
pursuant thereto, as to all of which recourse shall be had solely to the assets
of the Seller and (ii) except in its capacity as successor Servicer, under no
circumstances shall Bankers Trust Company be personally liable for the payment
of any indebtedness or expenses of the Trust.
B-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
Please print or typewrite name and address, including postal zip code, of
assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney to transfer said Certificate on the books of the 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. The signature must be
guaranteed by an institution which is a member of one of the following
recognized Signature Guaranty Programs: (i) The Securities Transfer Agent
Medallion Program; (ii) The New York Stock Exchange Medallion Program; (iii) The
Stock Exchange Medallion Program; or (iv) in such other guarantee program
acceptable to the Trustee.
B-7
<PAGE>
EXHIBIT C
FORM OF SERVICER'S CERTIFICATE
The undersigned certifies that he is a duly authorized officer of
First Security Bank, N.A., a national banking association organized under the
laws of the United States (the "BANK"), and that he is duly authorized to
execute and deliver this certificate on behalf of the Bank pursuant to Section
3.9 of the Pooling and Servicing Agreement, dated as of March 25, 1997, by and
between the Bank, as seller and servicer, and Bankers Trust Company, as trustee
(the "POOLING AND SERVICING AGREEMENT"), and he further HEREBY CERTIFIES that:
1. the report for the period from ___________________ to ___________
attached to this certificate is complete and accurate and contains all
information required by Section 3.9 of the Pooling and Servicing Agreement; and
2. as of the date hereof, no Event of Servicing Termination or event
that with notice or lapse of time or both would become an Event of Servicing
Termination, has occurred.
Any capitalized terms used herein but not defined shall have the
meanings assigned to such term in the Pooling and Servicing Agreement.
IN WITNESS HEREOF, the undersigned has affixed hereunto his signature
and the corporate seal of the Bank as of this ___ day of ______________.
FIRST SECURITY BANK, N.A.
By:
----------------------------------
Name:
Title: Authorized Officer
<PAGE>
EXHIBIT D
FORM OF DEPOSITORY AGREEMENT
(See attached)
<PAGE>
EXHIBIT E
FORM OF YIELD SUPPLEMENT AGREEMENT
(See attached)
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
(See attached)
<PAGE>
SCHEDULE B
RECEIVABLE FILE LOCATIONS
On the date hereof, the Receivables and Receivable Files for the Servicer
are held by the Consumer Loan Servicing Department of First Security Service
Company, an affiliate of the Servicer, located at 4540 Overland Road, Boise,
Idaho 83705.
