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EXHIBIT 10.3
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INSURANCE, INDEMNITY AND PLEDGE AGREEMENT
Dated as of , 1998
among
WFS FINANCIAL 1998-A OWNER TRUST,
WFS FINANCIAL AUTO LOANS, INC.,
WFS FINANCIAL INC,
WFS INVESTMENTS, INC.,
FINANCIAL SECURITY ASSURANCE INC.,
and
BANKERS TRUST COMPANY,
as Collateral Agent, Proceeds Agent and Indenture Trustee
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WFS FINANCIAL 1998-A OWNER TRUST
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TABLE OF CONTENTS
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INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE I
DEFINITIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations and Warranties of the Trust . . . . . . . . 7
Section 2.02. Affirmative Covenants of the Trust . . . . . . . . . . . . . 10
Section 2.03. Negative Covenants of the Trust . . . . . . . . . . . . . . 12
Section 2.04. Representations and Warranties of WII . . . . . . . . . . . 13
Section 2.05. Affirmative Covenants of WII . . . . . . . . . . . . . . . . 14
Section 2.06. Negative Covenants of WII . . . . . . . . . . . . . . . . . 17
Section 2.07. Representations and Warranties of the Company . . . . . . . 19
Section 2.08. Representations and Warranties of WFS . . . . . . . . . . . 23
Section 2.09. Affirmative Covenants of the Company . . . . . . . . . . . . 25
Section 2.10. Negative Covenants of the Company . . . . . . . . . . . . . 28
Section 2.11. Affirmative Covenants of WFS . . . . . . . . . . . . . . . . 29
ARTICLE III
THE POLICIES; INDEMNIFICATION
Section 3.01. Agreement to Issue Policies . . . . . . . . . . . . . . . . 31
Section 3.02. Conditions Precedent to Issuance of Policies . . . . . . . . 31
Section 3.03. Premium . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.04. Reimbursement Obligation . . . . . . . . . . . . . . . . . . 36
Section 3.05. Non-Recourse Obligation . . . . . . . . . . . . . . . . . . 37
Section 3.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.07. Liability Absolute . . . . . . . . . . . . . . . . . . . . . 42
Section 3.08. Liability of Financial Security . . . . . . . . . . . . . . 43
Section 3.09. Payment of Costs, Fees and Expenses . . . . . . . . . . . . 43
Section 3.10. Payment Procedure . . . . . . . . . . . . . . . . . . . . . 44
Section 3.11. Business Days . . . . . . . . . . . . . . . . . . . . . . . 44
Section 3.12. Waivers and Consents by the Company and WFS . . . . . . . . 45
ARTICLE IV
PLEDGE OF COLLATERAL
Section 4.01. Obligations Secured Hereby . . . . . . . . . . . . . . . . . 45
Section 4.02. Granting Clause . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.03. Release of Collateral . . . . . . . . . . . . . . . . . . . 47
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ARTICLE V
INTERCREDITOR PROVISIONS
Section 5.01. Financial Security's Direction Upon Servicer Default . . . . 47
Section 5.02. Financial Security's Direction of Insolvency Proceedings . . 49
ARTICLE VI
THE COLLATERAL AGENT; REMEDIES
Section 6.01. Appointment and Powers of Collateral Agent . . . . . . . . . 49
Section 6.02. Successor Collateral Agent . . . . . . . . . . . . . . . . . 49
Section 6.03. Remedies Available to Collateral Agent . . . . . . . . . . . 50
Section 6.04. Waiver of Stay or Extension Laws; Marshalling of Assets . . 52
Section 6.05. Restoration of Rights and Remedies . . . . . . . . . . . . . 52
Section 6.06. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . 53
Section 6.07. Control by Financial Security . . . . . . . . . . . . . . . 53
Section 6.08. Proceeds Agent as Custodian and Bailee of Collateral Agent . 53
Section 6.09. Indemnification of Collateral Agent . . . . . . . . . . . . 54
Section 6.10. Compensation Payable to Collateral Agent . . . . . . . . . . 54
Section 6.11. Protection of Financial Security's Security Interest . . . . 55
Section 6.12. Representations and Warranties of Indenture Trustee . . . . 56
Section 6.13. Certain Guaranties . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . 56
Section 7.02. Remedies; Waivers . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Amendments, Changes and Modifications . . . . . . . . . . . 59
Section 8.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.03. Method of Payment . . . . . . . . . . . . . . . . . . . . . 59
Section 8.04. Further Assurances and Corrective Instruments . . . . . . . 59
Section 8.05. Term of Agreement . . . . . . . . . . . . . . . . . . . . . 60
Section 8.06. Assignments; Third-Party Rights; Reinsurance . . . . . . . . 60
Section 8.07. Consent of Financial Security . . . . . . . . . . . . . . . 61
Section 8.08. Right to Enforce Sale and Servicing Agreement . . . . . . . 61
Section 8.09. WFS and WII as Parties Only for Certain Provisions . . . . . 61
Section 8.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . 61
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Section 8.11. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.13. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.14. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.15. Trial by Jury Waived . . . . . . . . . . . . . . . . . . . . 62
Section 8.16. Limited Liability . . . . . . . . . . . . . . . . . . . . . 62
Section 8.17. Limited Liability of Chase Manhattan Bank Delaware . . . . . 63
EXHIBITS
EXHIBIT A Forms of WFS Assignment and Collateral Assignment
EXHIBIT B-1 Form of Financial Guaranty Insurance Policy with respect
to the Certificates, together with form of Endorsement
No. 1 thereto
EXHIBIT B-2 Form of Financial Guaranty Insurance Policy with respect
to the Notes, together with form of Endorsement No. 1
thereto
EXHIBIT C Form of Opinion of Counsel to the Company, WFS and WII
EXHIBIT D Form of Opinion of Special Tax Counsel to WFS
EXHIBIT E Form of Certificate of the Indenture Trustee and the
Collateral Agent
EXHIBIT F Form of Opinion of Counsel to the Indenture Trustee and
the Collateral Agent
EXHIBIT G Form of Opinion of Counsel to the Trust and the Owner
Trustee
EXHIBIT H Form of Letter of Independent Accountants
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INSURANCE, INDEMNITY AND PLEDGE AGREEMENT
THIS INSURANCE, INDEMNITY AND PLEDGE AGREEMENT is made as of
, 1998, by and among WFS FINANCIAL 1998-A OWNER TRUST, a Delaware business
trust (the "Trust"), WFS FINANCIAL AUTO LOANS, INC., a California corporation
(the "Company"), WFS FINANCIAL INC, a California corporation ("WFS"), WFS
INVESTMENTS, INC., a California corporation ("WII"), FINANCIAL SECURITY
ASSURANCE INC., a New York financial guaranty insurance company ("Financial
Security"), and BANKERS TRUST COMPANY, a New York banking corporation, in its
capacities as Collateral Agent and Proceeds Agent (each as defined below), and
in its capacity as Indenture Trustee under the Indenture referred to below (the
"Indenture Trustee").
INTRODUCTION
The Company is the owner of the Contracts. The Company
proposes to sell to the Trust all of its right, title and interest in and to
the Contracts and certain other property pursuant to the Sale and Servicing
Agreement. The Trust will issue Certificates pursuant to the Trust Agreement
and Notes pursuant to the Indenture.
Each Certificate will represent a fractional undivided
interest in the Trust. Each Note will be secured by the Indenture Property.
The Company has agreed to convey a security interest in the
Collateral and all the property conveyed by the Company to the Trust (with the
exception of the Policies) pursuant to the Sale and Servicing Agreement in
favor of Financial Security prior in right to all liens, claims, rights or
interests other than those of the Trust.
The Trust has requested that Financial Security issue the Note
Policy to the Indenture Trustee to guarantee payment of the Scheduled Payments
(as defined in such Note Policy) on each Distribution Date in respect of the
Notes, and has requested that Financial Security issue the Certificate Policy
to Owner Trustee, as Owner Trustee under the Trust Agreement, to guarantee
payment of the Guaranteed Distributions (as defined in such Certificate Policy)
on each Distribution Date in respect of the Certificates.
Financial Security is willing to issue the Policies for the
purpose stated above if the Trust, the Company, WFS, WII and the Indenture
Trustee enter into this Agreement and, in order to secure the Company's
obligations hereunder, the Company pledges the Collateral to the Collateral
Agent for the benefit of Financial Security, subject to the provisions hereof.
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The parties hereto desire to specify the indemnity and
reimbursement obligations to be provided in respect of amounts paid by
Financial Security under the Policies, the security to be provided in respect
of such indemnity and reimbursement obligations, and certain other matters.
AGREEMENTS
In consideration of the mutual promises, covenants,
representations and warranties hereinafter set forth, the parties hereto agree
to as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All words and phrases defined
in the Trust Agreement and the Sale and Servicing Agreement shall have the same
meanings in this Agreement unless a different meaning is set forth in this
Agreement. In addition, the following words and phrases shall have the
following respective meanings:
"Administration Agreement" means the Administration Agreement
dated as of the date hereof, among the Trust, WFS Financial Inc, as
Administrator, the Seller and the Indenture Trustee.
"Agreement" means this Insurance, Indemnity and Pledge
Agreement, as the same may be amended, modified or supplemented from time to
time.
"Authorized Officer" means, with respect to WFS, the Company,
WII or any corporation, the president, the chief financial officer or any vice
president.
"Bank" means, Western Financial Bank, a federally-chartered
savings association.
"Certificates" means the Certificates issued under the Trust
Agreement.
"Certificate Policy" means the financial guaranty insurance
policy, including any endorsements thereto, issued by Financial Security with
respect to the Certificates, substantially in the form of Exhibit B-1 hereto.
"Collateral" means all of the Contracts listed in the Schedule
of Contracts attached to the Sale and Servicing Agreement, including, without
limitation, all payments of Monthly P&I (exclusive of Retained Yield, if any)
due on or after the Cut-Off Date (excluding the amount allocable to principal
and interest due prior to the Cut-Off Date), all Net Liquidation Proceeds and
Net
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Insurance Proceeds with respect to any Financed Vehicle to which a Contract
relates received on or after the Cut-Off Date and all other proceeds received
in respect of such Contracts (other than payments of Monthly P&I due prior to
the Cut-Off Date), and any and all security interests in the Financed Vehicles;
the Contract Documents relating to the Contracts (except the Contract Documents
for Contracts which have been the subject of a Full Prepayment received on or
after the Cut-Off Date but no later than one Business Day prior to the Closing
Date, in lieu of which the Company shall have deposited in or credited to the
Collection Account on or prior to the Closing Date an amount equal to such Full
Prepayment); all Spread Account Collateral; and all proceeds in any way
delivered with respect to the foregoing, all rights to payments with respect to
the foregoing and all rights to enforce the foregoing.
"Collateral Agent" means, initially, Bankers Trust Company, as
collateral agent for Financial Security pursuant to this Agreement and,
thereafter, any successor Collateral Agent named pursuant to this Agreement.
"Collateral Assignment" means, with respect to any Contracts,
the original instrument of collateral assignment of such Contracts by the
Company, as Seller, to the Collateral Agent, substantially in the form included
in Exhibit A hereto.
"Controlling Party" means Financial Security so long as no
Financial Security Insolvency shall have occurred and no Financial Security
Default shall have occurred and be continuing and, at any other time, the
Indenture Trustee.
"Event of Default" has the meaning set forth in Section 7.01
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Financial Security's Authorized Agent" means each Authorized
Officer of Financial Security and each other Person that Financial Security
designates as its authorized agent with notice to the Company.
"Indemnification Agreement" means the Indemnification
Agreement, dated as of the date hereof, among the Company, WFS, Financial
Security and the Representative.
"Indenture Property" means the property pledged to the
Indenture Trustee on behalf of the Noteholders pursuant to the Indenture.
"Independent Accountant" means an independent accountant
within the meaning of the Securities Act and the Exchange Act.
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"Late Payment Rate" means the greater of a per annum rate
equal to 3% in excess of (i) Financial Security's cost of funds, determined on
a monthly basis, or (ii) the arithmetic average of the prime or base lending
rates publicly announced by The Chase Manhattan Bank, N.A. (New York, New York)
and Citibank, N.A. (New York, New York), as in effect on the last day of the
month for which interest is being computed, but in no event greater than the
maximum rate permitted by law.
"Note Policy" means the financial guaranty insurance policy,
including and endorsements thereto, issued by Financial Security with respect
to the Notes, substantially in the form attached as Exhibit B-2 hereto.
"Notice Address" means
(a) as to the Company:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(b) as to WFS:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
(c) as to WII:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
(d) as to the Trust:
WFS Financial 1998-A Owner Trust
c/o Chase Manhattan Bank Delaware
as Owner Trustee
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Department
(e) as to Financial Security:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Surveillance Department
Telecopier Nos.: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(in each case in which the notice or other
communication to Financial Security refers to an
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Event of Default or a claim under the Policy or is a
notice or other communication as to which a failure
on the part of Financial Security to respond shall be
deemed to constitute consent or acceptance, then with
a copy to the attention of the Senior Vice President
- Surveillance)
(f) as to the Collateral Agent:
Four Albany ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Department - Asset Backed Group
(g) as to the Proceeds Agent:
Four Albany ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Department - Asset Backed Group
(h) as to the Indenture Trustee:
Four Albany ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Department - Asset Backed Group
"Obligations" has the meaning set forth in Section 4.01
hereof.
"Owner Trustee" means Chase Manhattan Bank Delaware or its
successors in interest, acting not individually but solely on owner trustee
under the Trust Agreement.
"Policies" means the Note Policy and the Certificate Policy.
"Premium" means the premium payable to Financial Security by
the Company as consideration for the issuance of the Policies, as set forth in
a letter agreement between the Company and Financial Security.
"Proceeds Agent" means, initially, Bankers Trust Company, as
proceeds agent for Financial Security and, thereafter, any successor appointed
by the Indenture Trustee and Financial Security.
"Prospectus" has the meaning set forth in Section 2.07(g) of
this Agreement.
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"Registration Statement" has the meaning set forth in Section
2.07(g) of this Agreement.
"Representative" means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, as representative of the several Underwriters.
"Rules and Regulations" has the meaning set forth in Section 2.07(g) of this
Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement, dated as of the date hereof, among the Company, WFS and the Trust,
as the same may be amended or modified from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Assignments" means the Assignments, as such term is
defined in the Sale and Servicing Agreement.
"Spread Account" means the Spread Account established by the
Company, pursuant to the Sale and Servicing Agreement, in favor of the
Indenture Trustee on behalf of the Holders of Notes and Certificates and as
Collateral Agent for Financial Security.
"Spread Account Collateral" means (i) the Spread Account
Initial Deposit, (ii) all other amounts deposited in or credited to the Spread
Account from time to time under the Sale and Servicing Agreement, (iii) all
Eligible Investments made with amounts on deposit in such Account, and (iv) all
earnings and distributions on, and proceeds of, any and all of the foregoing.
"Transaction Agreements" means this Agreement, the WFS
Assignments, the Seller Assignments, the Collateral Assignment, the Sale and
Servicing Agreement, the Trust Agreement, the Certificate of Trust, the
Indenture, the Administration Agreement, the Underwriting Agreement, the
Subservicing Agreement, the Indemnification Agreement and the RIC.
"Trust Agreement" means the Trust Agreement, dated as of
, 1998, as amended and restated as of , 1998 among the Company, WFS,
WII, Financial Security and Chase Manhattan Bank Delaware, as Owner Trustee.
"Underwriter Information" has the meaning set forth in Section
3.06(a)(i) of this Agreement.
"Underwriters" means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation and each other institution, if any, named as an underwriter in the
Underwriting Agreement.
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"Underwriting Agreement" means the Underwriting Agreement,
dated , 1998, among the Company, WFS and the Representative.
"Western Entities" means the Company, WFS and WII.
"WFS Assignments" means, with respect to the Contracts, the
original instrument or instruments of assignment of such Contracts by WFS, as
seller, to the Company, substantially in the form included in Exhibit A hereto.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations and Warranties of the Trust.
The Trust represents and warrants to Financial Security as follows:
(a) Due Organization and Qualification. The Trust is
duly formed and validly existing as a Delaware statutory business trust and is
in good standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business and had at all
relevant times, and has, power, authority, and legal right to acquire the
Contracts; the Trust is duly qualified to do business, is in good standing and
has obtained all necessary licenses, permits, charters, registrations and
approvals (together, "approvals") necessary for the conduct of its business as
described in the Prospectus and the performance of its obligations under the
Transaction Agreements, in each jurisdiction in which the failure to be so
qualified or to obtain such approvals would render the Contracts in such
jurisdiction or any Transaction Agreement unenforceable in any respect or would
otherwise have a material adverse effect upon the Trust; the Trust holds all
material licenses, certificates and permits from all governmental authorities
necessary for the conduct of its business as presently conducted.
(b) Power and Authority. The Trust has all necessary
trust power and authority to conduct its business as presently conducted; the
Trust has the power and authority to execute and deliver this Agreement and
each other Transaction Agreement to which the Trust is a party and to carry out
the terms of each such agreement, and has full power and authority to issue the
Notes and the Certificates and pledge and assign its assets pursuant to the
Indenture and has duly authorized the issuance of the Notes and Certificates
and the assignment of its assets by all necessary trust proceedings, and the
execution, delivery and performance of this Agreement and each other
Transaction Agreement to which the Trust is a party has been duly authorized by
all necessary action on the part of the Trust.
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(c) Valid and Binding Obligations. Each of the
Transaction Agreements to which the Trust is a party constitutes a legal, valid
and binding obligation of the Trust enforceable in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, receivership or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general equitable principles, regardless
of whether such enforceability shall be considered a proceeding in equity or at
law. The Certificates, when executed, authenticated and delivered in
accordance with the Trust Agreement, will be validly issued and outstanding and
entitled to the benefits of the Trust Agreement and will evidence the entire
beneficial ownership interest in the Trust. The Notes, when executed,
authenticated and delivered in accordance with the Indenture, will be entitled
to the benefits of the Indenture and will constitute legal, valid and binding
obligations of the Trust, enforceable in accordance with their terms.
(d) Noncontravention. The consummation of the
transaction contemplated by this Agreement and by each other Transaction
Agreement to which the Trust is a party, and the fulfillment of the terms
hereof and thereof shall not conflict with, result in any breach of any of the
terms and provisions of, nor constitute a default (nor an event which, with the
giving of notice or passage of time, or both, would constitute a default) under
the Certificate of Trust or the Trust Agreement, or any indenture, agreement or
other instrument to which the Trust is a party or by which it shall be bound;
nor result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than this Agreement and the Collateral Assignment); nor violate any law
or any order, rule, or regulation applicable to the Trust of any court or of
any federal or state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Trust or its
properties.
(e) No Consents. No consent, license, approval or
authorization from, or registration, or declaration with, any governmental
authority, bureau or agency, nor any consent, approval, waiver or notification
of any creditor, lessor or other non-governmental person, is required in
connection with the execution, delivery and performance by the Trust of this
Agreement or of any other Transaction Agreement to which the Trust is a party,
except (in each case) such as have been obtained and are in full force and
effect.
(f) Pending Litigation or Other Proceeding. To the
Trust's best knowledge, there are no proceedings or investigations pending, or
threatened, before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Trust or its
properties: (A) asserting the invalidity of this Agreement or any other
Transaction Agreement to which the Trust is a party; (B) seeking to prevent the
issuance of the Notes or the Certificates, or the consummation of the
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transactions contemplated by any of the Transaction Agreements to which the
Trust is a party; (C) seeking any determination or ruling that might materially
and adversely affect the validity or enforceability of, this Agreement or any
other Transaction Agreement to which the Trust is a party, or (D) involving the
Trust and which might adversely affect the federal or state tax attributes of
the Notes, the Certificates or the Trust.
(g) Incorporation of Representations and Warranties. The
representations and warranties of the Trust set forth in each Transaction
Document are (in each case) true and correct as if set forth herein.
(h) Security Interest in Contracts. This Agreement,
together with possession of the Collateral by the Master Servicer pursuant to
the Sale and Servicing Agreement and the filing referred to below, creates as
security for the Company's obligations under this Agreement a security interest
in favor of the Collateral Agent, as collateral agent for Financial Security,
in each item of the Collateral, as constituted as of the Closing Date; such
security interest has been perfected and is a valid, binding and enforceable
first priority security interest, subject only, to the extent set forth in
Section 5.01(d) hereof, to the interest of the Indenture Trustee with respect
to the Indenture Property and the Securityholders; a financing statement with
respect to the Contracts has been filed with the California Secretary of State
pursuant to the California UCC, and the marking required by Section
3.01(b)(xvi) of the Sale and Servicing Agreement has been made on each
Contract, except to the extent (if any) that Financial Security has waived in
writing compliance with such requirement; no other filings in any jurisdiction
or any other actions are necessary to perfect the security interest of the
Collateral Agent, as collateral agent for Financial Security, in the
Collateral, as constituted as of the Closing Date, as against any third
parties.
(i) Security Interest in Other Collateral. Assuming the
acquisition of Eligible Investments in accordance with the Sale and Servicing
Agreement, such Eligible Investments will be subject to a valid, binding and
enforceable first priority security interest in favor of the Collateral Agent,
as collateral agent for Financial Security, subject only, to the extent set
forth in Section 5.01(d) hereof, to the interest of the Indenture Trustee with
respect to the Indenture Property and the Securityholders; assuming deposit of
each check constituting proceeds of the Contracts in the Collection Account or
Holding Account, as applicable, within ten days of receipt of such check by the
Master Servicer, such check will be subject to a valid, first priority
perfected security interest in favor of the Collateral Agent, subject, to the
extent set forth in Section 5.01(d) hereof, to the interest of the Indenture
Trustee with respect to the Indenture Property and the Securityholders; at such
time as it is received by the Master Servicer and until deposited in the
Collection Account or Holding Account, as applicable; the proceeds of such
deposited check that remain in the
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Collection Account or the Holding Account will be subject to a valid, first
priority security interest in favor of the Collateral Agent, subject, to the
extent set forth in Section 5.01(d) hereof, to the interest of the Trust under
the Sale and Servicing Agreement.
Section 2.02. Affirmative Covenants of the Trust. The
Trust hereby covenants and agrees with Financial Security that, at all times
during the term of this Agreement:
(a) Compliance with Agreements. The Trust will comply
with all terms and conditions of this Agreement and each other Transaction
Agreement to which it is a party. The Trust will not cause or permit to become
effective any amendment to or modification of any of the Transaction Agreements
unless Financial Security shall have previously approved in writing the form of
such amendment or modification.
(b) Financial Statements; Accountants' Reports; Other
Information. The Trust shall keep or cause to be kept proper books and records
in which full and correct entries shall be made of financial transactions and
the assets and business of the Trust in accordance with generally accepted
accounting principles consistently applied. The Trust shall furnish to
Financial Security, simultaneously with the delivery of such documents to the
Indenture Trustee, the Noteholders or the Certificateholders, as the case may
be, copies of all reports, certificates, statements, financial statements or
notices furnished to the Indenture Trustee, the Noteholders or the
Certificateholders, as the case may be, pursuant to the Transaction Agreements.
(c) Certificate of Compliance. The Trust shall deliver to
Financial Security concurrently with the delivery of the financial statements
required pursuant to paragraph (b) above, a certificate signed by an Authorized
Officer of the Administrator stating that:
(i) a review of the Trust's performance under
this Agreement and the other Transaction Agreements to which the Trust
is a party during such period has been made under such officer's
supervision; and
(ii) to the best of such officer's knowledge based
upon such review, the Trust has fulfilled all its obligations under
this Agreement and the other Transaction Agreements to which the Trust
is a party during such period, or, if there has been a default of any
such obligation, specifying each such default known to such officer
and the nature and status thereof.
(d) Access to Records; Discussions with Officers and
Accountants. The Trust shall, upon the reasonable request of Financial
Security, permit Financial Security's Authorized Agent at reasonable times (i)
to inspect such books and records of the Trust
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as they may relate to the Notes, the Certificates and the obligations of the
Trust under this Agreement and the other Transaction Agreements to which the
Trust is a party; and (ii) to discuss the affairs, finances and accounts of the
Trust with any of its respective officers, directors and representatives,
including its Independent Accountants.
(e) Financing Statements and Further Assurances. The
Trust will file all necessary financing statements, assignments or other
instruments, and any amendments or continuation statements relating thereto,
necessary to be kept and filed in such manner and in such places as may be
required by law to preserve and protect fully the lien and security interest
in, and all rights of the Collateral Agent with respect to the Collateral, and
the Trust shall, upon the request of Financial Security, from time to time,
execute and deliver and, if necessary, file such further instruments and take
such further action as may be reasonably necessary to effectuate the provisions
of this Agreement or to protect the security interest of the Collateral Agent
in the Collateral.
(f) Retirement of Notes and Certificates. The Trust
shall, upon retirement of the Certificates and upon retirement of the Notes
furnish to Financial Security a notice of such retirement, and, upon such
retirement and the expiration of the term of the applicable Policy, to
surrender the applicable Policy to Financial Security for cancellation.
(g) Maintenance of Separate Existence. The Trust shall
at all times hold itself out to the public, including the Company, WFS and the
Bank, under the Trust's own name and as a separate and distinct entity from the
Company, WFS and the Bank. The Trust shall maintain trust records and books of
account separate from those of the Company, WFS and the Bank, shall not
commingle its assets with any other Person (except to the limited extent (if
any) permitted by the approval of Financial Security) and shall obtain proper
authorization from its equity owners of all trust action in accordance with
applicable law. The Trust shall maintain an arm's-length relationship with the
Bank, the Company and WSF and each Affiliate of any of them.
(h) Compliance with Article 76 of New York Insurance Law.
The Trust shall ensure that the Prospectus, and any supplements or amendments
thereto, and every preliminary prospectus delivered with respect to the Notes
and the Certificates, clearly disclose that the Policies are not covered by the
property/casualty insurance security fund specified in Article 76 of the New
York Insurance Law.
(i) Tax Matters. The Trust will take all actions
necessary to ensure that the Trust is taxable as a partnership for federal and
state income tax purposes and not as an association (or publicly traded
partnership), taxable as a corporation.
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Section 2.03. Negative Covenants of the Trust. The Trust
agrees and covenants with Financial Security that at all times during the term
of this Agreement:
(a) Amendments to Organizational Documents. The Trust
shall not amend, supplement or otherwise modify or cause to permit any
amendment, supplement or other modification of, any of the provisions of the
Certificate of Trust or the Trust Agreement without the prior written consent
of Financial Security.
(b) No Liens. Without the prior written consent of
Financial Security, the Trust shall not create, incur, assume or suffer to
exist any mortgage, deed of trust, security interest, assignment, deposit
arrangement or other preferential arrangement, charge or encumbrance (including
without limitation any conditional sale or other title retention agreement or
finance lease) of any nature upon or with respect to any of its properties or
assets, now owned or hereafter acquired, or sign or file under the Uniform
Commercial Code of any jurisdiction any financing statement that names the
Trust as debtor, or sign any security agreement authorizing any secured party
thereunder to file such a financing statement, except as contemplated in the
Transaction Agreements.
(c) Creation of Indebtedness. Without the prior written
consent of Financial Security, the Trust shall not create, incur, assume or
suffer to exist any indebtedness other than indebtedness guaranteed or approved
in writing by Financial Security, except as contemplated in the Transaction
Agreements.
(d) Guarantees, Etc. Without the prior written consent
of Financial Security, the Trust shall not assume, guarantee, endorse or
otherwise be or become directly or contingently liable for the obligations of
any Person by, among other things, agreeing to purchase any obligation of
another Person, agreeing to advance funds to such Person or causing or
assisting such Person to maintain any amount of capital.
(e) Subsidiaries. Without the prior written consent of
Financial Security, the Trust shall not form, or cause to be formed, any
Subsidiaries.
(f) Insolvency. The Trust shall not commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, consolidation or other relief with
respect to it or (B) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its assets
or make a general assignment for the benefit of its creditors. The Trust shall
not take any action in furtherance of, or indicating the consent to, approval
of, or acquiescence in any
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of the acts set forth above. The Trust shall not admit in writing its
inability to pay its debts.
(g) Impairment of Rights. The Trust shall not take any
action, or fail to take any action that will interfere with the enforcement of
any rights under this Agreement or the other Transaction Agreements.
(h) Successor Parties. The Trust will not remove or
replace, or cause to be removed or replaced, the Master Servicer, the Indenture
Trustee, the Owner Trustee or the Administrator.
Section 2.04. Representations and Warranties of WII. WII
represents and warrants to Financial Security as follows:
(a) Due Organization. WII is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California, with power and authority to own its properties and to conduct its
business and had at all relevant times, and has, power, authority, and legal
right to acquire, pledge and sell the Contracts; WII is duly qualified to do
business as a foreign corporation in good standing under the laws of each
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except such jurisdictions, if
any, in which the failure to be so qualified will not have a material adverse
effect on the business or properties of WII; WII holds all material licenses,
certificates and permits from all governmental authorities necessary for the
conduct of its business as presently conducted. WII's principal place of
business, chief executive office and the office where it keeps its records is
located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(b) Corporate Power and Authority. WII has full right,
power and authority to own its properties and to conduct its business as
presently conducted; WII has the power and authority to execute and deliver
this Agreement and each other Transaction Agreement to which WII is a party and
to carry out the terms of each such agreement.
(c) Valid and Binding Obligations. Each of the
Transaction Agreements to which WII is a party constitutes a legal, valid, and
binding obligation of WII, enforceable in accordance with its terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, receivership or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity, regardless
of whether such enforceability shall be considered in a proceeding in equity or
at law.
(d) Noncontravention. The consummation of the
transactions contemplated by this Agreement and by each other Transaction
Agreement to which WII is a party and the fulfillment of the terms hereof and
thereof shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute a
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default (nor an event which, with the giving of notice or passage of time, or
both, would constitute a default) under, the articles of incorporation or
by-laws of WII, or any indenture, agreement, or other instrument to which WII
is a party or by which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, or other instrument; nor violate any law or any
order, rule, or regulation applicable to WII of any court or of any federal or
state regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over WII or its properties.
(e) No Consents. No consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency, nor any consent, approval, waiver or notification
of any creditor, lessor or other non-governmental person, is required in
connection with the execution, delivery and performance by WII of this
Agreement or of any other Transaction Agreement to which WII is a party, except
(in each case) such as have been obtained and are in full force and effect.
(f) Pending Litigation or Other Proceeding. To WII's
best knowledge, there are no proceedings or investigations pending, or
threatened, before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over WII or its properties:
(A) asserting the invalidity of this Agreement, any other Transaction Agreement
to which WII is a party, the Notes or the Certificates, (B) seeking to prevent
the issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by any of the Transaction Agreements to which WII is
a party, (C) seeking any determination or ruling that might materially and
adversely affect the performance by WII of its obligations under, or the
validity or enforceability of, this Agreement or any other Transaction
Agreement to which WII is a party, or (D) involving WII and which might
adversely affect the federal income tax attributes of the Notes, the
Certificates or the Trust.
(g) Incorporation of Representations and Warranties. All
of the representations and warranties made by WII in the Transaction Agreements
are incorporated herein as if set forth herein and each such representation and
warranty is true and correct as of the Closing Date.
Section 2.05. Affirmative Covenants of WII. WII covenants
and agrees with Financial Security that, at all times during the term of this
Agreement:
(a) Compliance with Agreements. WII will comply with all
terms and conditions of this Agreement and each other Transaction Agreement to
which it is a party. WII will not cause or permit to become effective any
amendment to or modification of the Transaction Agreements unless Financial
Security shall have
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previously approved in writing the form of such amendment or modification.
(b) Financial Statements, Accountants' Reports, Other
Information. WII shall keep proper books and records, in which full and
correct entries shall be made of financial transactions and the assets and
business of WII in accordance with generally accepted accounting principles
consistently applied. WII shall furnish to Financial Security, simultaneously
with the delivery of such documents to the Owner Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders, as the case may be, copies
of all reports, certificates, statements or notices furnished to the Owner
Trustee, the Indenture Trustee, the Noteholders or the Certificateholders, as
the case may be, pursuant to the Sale and Servicing Agreement.
(c) Certificate of Compliance. WII shall deliver to
Financial Security, concurrently with the delivery of the financial statements
required pursuant to paragraph (b) above, a certificate signed by an Authorized
Officer of WII stating that:
(i) a review of WII's performance under this
Agreement and the other Transaction Agreements to which WII is a party
during such period has been made under such officer's supervision; and
(ii) to the best of such officer's knowledge,
based upon such review, WII has fulfilled all its obligations under
this Agreement and the other Transaction Agreements to which WII is a
party during such period, or, if there has been a default of any such
obligation, specifying each such default known to such officer and the
nature and status thereof.
(d) Access to Records; Discussions With Officers and
Accountants. WII shall, upon the reasonable request of Financial Security,
permit Financial Security's Authorized Agent at reasonable times (i) to inspect
such books and records of WII as may relate to the Notes, the Certificates and
the obligations of WII under this Agreement and the other Transaction
Agreements to which WII is a party; and (ii) to discuss the affairs, finances
and accounts of WII with any of its respective officers, directors and
representatives, including its Independent Accountants.
(e) Maintain Licenses. WII shall maintain all licenses,
permits, charters and registrations that are material to the performance by WII
of its obligations under the Transaction Agreements to which it is a party or
by which WII is bound.
(f) Maintain Existence; Merger. WII shall keep in full
effect its existence, rights and franchises under the laws of the State of
California, and shall at all times continue to be duly organized, duly
qualified and duly authorized (as described in Sections 2.04(a) and (b) hereof)
and shall conduct its business in accordance with the terms of its corporate
charter and bylaws. WII
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shall not consolidate with or merge into any other Person or convey, transfer
or lease substantially all of its assets as an entirety to any Person unless
the Person formed by such consolidation or into which WII has merged or the
Person which acquires by conveyance, transfer or lease substantially all the
assets of WII as an entirety, can lawfully perform the obligations of WII
hereunder and executes and delivers to the Owner Trustee an agreement, in form
and substance reasonably satisfactory to the Owner Trustee and Financial
Security, which contains an assumption by such Person of the due and punctual
performance and satisfaction of each covenant and condition to be performed or
satisfied by WII under this Agreement.
(g) Maintenance of Separate Corporate Existence. WII
shall at all times hold itself out to the public, including the Company, WFS
and the Bank, under WII's own name and as a separate and distinct entity from
the Company, WFS and the Bank. At all times at least one director and one
executive officer of WII (or one individual serving in both capacities) shall
be a Person who is not a director, officer or employee of any Person owning
beneficially more than 10% of the outstanding common stock of WII. WII shall
maintain separate corporate records and books of account from those of the
Company, WFS and the Bank, shall not commingle its assets with any other Person
(except to the limited extent (if any) permitted by the approval of Financial
Security) and shall authorize its corporate actions in accordance with
applicable law. WII shall not engage in business transactions with any of its
Affiliates on terms and conditions less favorable to WII than those available
to WII for comparable transactions from Persons who are not Affiliates of WII.
WII shall maintain its chief executive office, principal place of business and
the office where it keeps its records in the State of California and separate
and apart from any office of the Company, the Bank, the Master Servicer or any
Affiliate of any of them.
(h) Retirement of Notes and Certificates. WII shall
cause the Trust, upon retirement of the Certificates, to furnish to Financial
Security a notice of such retirement, and, upon such retirement and the
expiration of the term of the Certificate Policy, to surrender the Certificate
Policy to Financial Security for cancellation.
(i) Incorporation of Covenants. WII agrees to comply
with each of the covenants of WII set forth in the Transaction Agreements and
hereby incorporates such covenants by reference as if each were set forth
herein.
(j) Tax Matters. As of the Closing Date, the Trust is,
and shall remain during the term of this Agreement, taxable as a partnership
for federal and state income tax purposes and not as an association (or
publicly traded partnership) taxable as a corporation.
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(k) Certificates. WII shall purchase from the
Underwriters and thereafter retain beneficial and record ownership of
Certificates representing at least 1% of the Certificate Balance.
Section 2.06. Negative Covenants of WII. WII agrees and
covenants with Financial Security that at all times during the term of this
Agreement:
(a) Amendments to Organizational Documents. WII shall
not amend, supplement or otherwise modify, or cause to permit any amendment,
supplement or other modification of, Articles 2 or 4 of its charter (or any
other Articles of its charter that relate to the matters addressed by such
Articles 2 or 4) or its bylaws without the prior written consent of Financial
Security.
(b) No Liens. Without the prior written consent of
Financial Security, WII shall not create, incur, assume or suffer to exist any
mortgage, deed of trust, security interest, assignment, deposit arrangement or
other preferential arrangement, charge or encumbrance (including, without
limitation, any conditional sale or other title retention agreement or finance
lease) of any nature upon or with respect to any of its properties or assets,
now owned or hereafter acquired, or sign or file under the Uniform Commercial
Code of any jurisdiction any financing statement that names WII as a debtor, or
sign any security agreement authorizing any secured party thereunder to file
such financing statement.
(c) Creation of Indebtedness. Without the prior written
consent of Financial Security, WII shall not create, incur, assume or suffer to
exist any indebtedness other than indebtedness guaranteed or approved in
writing by Financial Security.
(d) Guarantees, Etc. Without the prior written consent
of Financial Security, WII shall not assume, guarantee, endorse or otherwise be
or become directly or contingently liable for the obligations of any Person by,
among other things, agreeing to purchase any obligation of another Person,
agreeing to advance funds to such Person or causing or assisting such Person to
maintain any amount of capital.
(e) Subsidiaries. Without the prior written consent of
Financial Security, WII shall not form, or cause to be formed, any
subsidiaries.
(f) Insolvency. WII shall not commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seek appointment of a receiver, trustee, custodian
or
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other similar official for it or for all or any substantial part of its assets,
or make a general assignment for the benefit of its creditors. WII shall not
take any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in any of the acts set forth above. WII shall not be unable
to, or admit in writing its inability to, pay its debts.
(g) Impairment of Rights. WII shall not take any action
or fail to take any action that will interfere with the enforcement of any
rights under this Agreement or the other Transaction Agreements.
(h) Insolvency of Trust. WII shall not, for any reason,
institute proceedings for the Trust to be adjudicated a bankrupt or insolvent,
or consent to the institution of bankruptcy or insolvency proceedings against
the Trust, or file a petition seeking or consenting to reorganization or relief
under any applicable federal or state law relating to the bankruptcy of the
Trust, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or a substantial
part of the property of the Trust or cause or permit the Trust to make any
assignment for the benefit of creditors, or admit in writing the inability of
the Trust to pay its debt generally as they become due, or declare or effect a
moratorium on the debt of the Trust or take any action in furtherance of any
such action.
(i) No Withdrawal. WII shall not, for any reason,
withdraw or attempt to withdraw from the Trust Agreement, dissolve, institute
proceedings for it to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against it, or file a
petition seeking or consenting to reorganize or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of it or a substantial part of its property, or make any assignment
for the benefit of creditors, or admit in writing its inability to pay its
debts generally as they become due, or declare or effect a moratorium on its
debt or take any action in furtherance of any such action.
(j) Compliance with Transaction Agreements and similar
transactions. The provisions of subsections 2.06(c), (d) and (g),
notwithstanding, WII's execution and performance of its covenants and
obligations under the Transaction Agreements and under any similar documents
executed in connection with one or more other owner trust transactions as to
which Financial Security has issued one or more insurance policy similar to the
Policies shall not require the prior written consent of Financial Security and
shall not be deemed to impair the rights of WII under this Agreement or the
other Transaction Agreements.
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Section 2.07. Representations and Warranties of the
Company. The Company represents and warrants to Financial Security as follows:
(a) Due Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California, with power and authority to own its properties and to conduct its
business and had at all relevant times, and has, power, authority, and legal
right to acquire, pledge and sell the Contracts; the Company is duly qualified
to do business as a foreign corporation in good standing under the laws of each
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except such jurisdictions, if
any, in which the failure to be so qualified will not have a material adverse
effect on the business or properties of the Company; the Company holds all
material licenses, certificates and permits from all governmental authorities
necessary for the conduct of its business as presently conducted. The
Company's principal place of business, chief executive office and the office
where it keeps its records is located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(b) Corporate Power and Authority. The Company has full
right, power and authority to own its properties and to conduct its business as
presently conducted; the Company has the power and authority to execute and
deliver this Agreement and each other Transaction Agreement to which the
Company is a party and to carry out the terms of each such agreement, and has
full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Owner Trustee as part of the Trust and has
duly authorized such sale and assignment to the Trustee by all necessary
corporate action; and the execution, delivery, and performance of this
Agreement and each other Transaction Agreement to which the Company is a party
has been duly authorized by the Company by all necessary corporate action.
(c) Valid and Binding Obligations. Each of the
Transaction Agreements to which the Company is a party constitutes a legal,
valid, and binding obligation of the Company, enforceable in accordance with
its terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, receivership or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles of
equity, regardless of whether such enforceability shall be considered in a
proceeding in equity or at law. The Certificates, when executed, authenticated
and delivered in accordance with the Trust Agreement, will be validly issued
and outstanding and entitled to the benefits of the Trust Agreement and will
evidence the entire beneficial ownership in the Trust. The Notes when
executed, authenticated and delivered in accordance with the Indenture, will be
entitled to the benefits of the Indenture and will constitute legal, valid and
binding obligations of the Trust, enforceable in accordance with their terms.
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(d) Noncontravention. The consummation of the
transactions contemplated by this Agreement and by each other Transaction
Agreement to which the Company is a party and the fulfillment of the terms
hereof and thereof shall not conflict with, result in any breach of any of the
terms and provisions of, nor constitute a default (nor an event which, with the
giving of notice or passage of time, or both, would constitute a default)
under, the articles of incorporation or by-laws of the Company, or any
indenture, agreement, or other instrument to which the Company is a party or by
which it shall be bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement, or other instrument (other than this Agreement and the Collateral
Assignment); nor violate any law or any order, rule, or regulation applicable
to the Company of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over the Company or its properties.
(e) No Consents. No consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency, nor any consent, approval, waiver or notification
of any creditor, lessor or other non-governmental person, is required in
connection with the execution, delivery and performance by the Company of this
Agreement or of any other Transaction Agreement to which the Company is a
party, except (in each case) such as have been obtained and are in full force
and effect.
(f) Pending Litigation or Other Proceeding. To the
Company's best knowledge, there are no proceedings or investigations pending,
or threatened, before any court, regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the Company or its
properties: (A) asserting the invalidity of this Agreement, any other
Transaction Agreement to which the Company is a party, the Notes or the
Certificates, (B) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by any
of the Transaction Agreements to which the Company is a party, (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, this Agreement or any other Transaction Agreement to which
the Company is a party, or (D) involving the Company and which might adversely
affect the federal income tax attributes of the Notes, the Certificates or the
Trust.
(g) Registration Statement; Prospectus. The Company has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-1, and a related preliminary prospectus for
the registration of the Certificates and the Notes under the Securities Act,
has filed such amendments thereto, if any, and such amended preliminary
prospectuses as may have been required to the date hereof, and will file such
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additional amendments thereto and such amended prospectuses as may hereafter be
required. Such registration statement (as amended, if applicable) and the
prospectus constituting a part thereof (including in each case all documents,
if any, incorporated by reference therein and the information, if any, deemed
to be part thereof pursuant to the rules and regulations of the Commission
under the Securities Act (the "Rules and Regulations")), as from time to time
amended or supplemented pursuant to the Securities Act or otherwise, are
hereinafter referred to as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be provided by the
Company for use in connection with the offering of the Certificates or the
Notes which differs from the Prospectus on file at the Commission at the time
the Registration Statement became effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424 of the
Rules and Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters for
such use. As of the date hereof, the Registration Statement and Prospectus
filed under the Securities Act or pursuant to the Rules and Regulations
complies in all material respects with the Securities Act and the Rules and
Regulations, and the Registration Statement at the time it became effective and
at all times subsequent thereto complied, and at each time that the Prospectus
is provided to the Underwriters for use in connection with the offering or sale
of any Certificate will comply, in all material respects with the requirements
of the Securities Act and the Rules and Regulations. The Registration
Statement and the Prospectus at the time the Registration Statement became
effective did not and on the date hereof does not, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and the
Prospectus at the time it was filed under the Securities Act or the Rules and
Regulations and at the time it was first provided to the Underwriters for use
in connection with the offering of the Certificates and the Notes did not, and
on the Closing Date does not, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the representations and
warranties in this subparagraph shall not apply to statements in or omissions
from the Registration Statement or the Prospectus or any preliminary prospectus
made in reliance upon information furnished to the Company in writing by
Financial Security expressly for use therein.
(h) Incorporation of Representations and Warranties. All
of the representations and warranties made by the Company as Seller in Section
3.01(b) of the Sale and Servicing Agreement and as Depositor in, Section 2.10
of the Trust Agreement and in the Underwriting Agreement are incorporated
herein as if set forth herein and each such representation and warranty is true
and correct as of the Closing Date.
(i) Security Interest in Contracts. This Agreement,
together with possession of the Collateral by the Master Servicer
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pursuant to the Sale and Servicing Agreement and the filing referred to below,
creates as security for the Company's obligations under this Agreement a
security interest in favor of the Collateral Agent, as collateral agent for
Financial Security, in each item of the Collateral, as constituted as of the
Closing Date; such security interest has been perfected and is a valid, binding
and enforceable first priority security interest, subject only, to the extent
set forth in Section 5.01(d) hereof, to the interest of the Indenture Trustee
with respect to the Indenture Property and the Securityholders; a financing
statement with respect to the Contracts has been filed with the California
Secretary of State pursuant to the California UCC, and the marking required by
Section 3.01(b)(xvi) of the Sale and Servicing Agreement has been made on each
Contract, except to the extent (if any) that Financial Security has waived in
writing compliance with such requirement; no other filings in any jurisdiction
or any other actions are necessary to perfect the security interest of the
Collateral Agent, as collateral agent for Financial Security, in the
Collateral, as constituted as of the Closing Date, as against any third
parties.
(j) Security Interest in Other Collateral. Assuming the
acquisition of Eligible Investments in accordance with the Sale and Servicing
Agreement, such Eligible Investments will be subject to a valid, binding and
enforceable first priority security interest in favor of the Collateral Agent,
as collateral agent for Financial Security, subject only, to the extent set
forth in Section 5.01(d) hereof, to the interest of the Indenture Trustee with
respect to the Indenture Property and the Securityholders; assuming deposit of
each check constituting proceeds of the Contracts in the Collection Account or
Holding Account, as applicable, within ten days of receipt of such check by the
Master Servicer, such check will be subject to a valid, first priority
perfected security interest in favor of the Collateral Agent, subject, to the
extent set forth in Section 5.01(d) hereof, to the interest of the Indenture
Trustee with respect to the Indenture Property and the Securityholders; at such
time as it is received by the Master Servicer and until deposited in the
Collection Account or Holding Account, as applicable; the proceeds of such
deposited check that remain in the Collection Account or the Holding Account
will be subject to a valid, first priority security interest in favor of the
Collateral Agent, subject, to the extent set forth in Section 5.01(d) hereof,
to the interest of the Trust under the Sale and Servicing Agreement.
(k) Valid Transfer of Contracts. The Sale and Servicing
Agreement and the Seller Assignments constitute a valid sale, transfer and
assignment of the Contracts, enforceable against creditors of and purchasers
from the Company, except as such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, receivership or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law.
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(l) Financial Information. The audited financial
statements of the Company for the fiscal year ended December 31, 1996 and the
unaudited financial statements of the Company for the fiscal quarter ended
September 30, 1997, copies of which have been furnished to Financial Security,
as of the dates and for the periods referred to therein (i) are true, complete
and correct in all material respects, (ii) fairly present the financial
condition of the Company and the results of operations and changes in financial
position of the Company and (iii) have been prepared in accordance with
generally accepted accounting principles consistently applied (subject, in the
case of the quarterly financial statements, to normal year-end adjustments),
and such financial statements indicate that the Company is solvent and will not
be rendered insolvent by the execution, delivery and performance of the
Transaction Agreements. Since September 30, 1997, there has been no material
adverse change in the business, financial condition or operations of the
Company.
Section 2.08. Representations and Warranties of WFS. WFS
represents and warrants to Financial Security as follows:
(a) Due Organization. WFS is duly organized and validly
existing as a licensed consumer finance company organized and existing and in
good standing under the laws of the State of California, with power and
authority to own its properties and to conduct its business and had at all
relevant times, and has, power, authority, and legal right to acquire and own
the Contracts and is duly qualified to do business as a foreign corporation in
good standing, and shall have obtained all necessary licenses and approvals, in
all jurisdictions in which the ownership or lease of property or the conduct of
its business requires such qualification.
(b) Corporate Power and Authority. WFS has the power and
authority to execute and deliver this Agreement and each other Transaction
Agreement to which WFS is a party and to carry out the terms of each such
agreement, and has full power and authority to sell and assign the property to
be sold and assigned to the Company for inclusion in the Trust and the Spread
Account and has duly authorized such sale and assignment to the Company by all
necessary corporate action; and the execution, delivery, and performance of
this Agreement and each other Transaction Agreement to which WFS is a party has
been duly authorized by WFS by all necessary corporate action.
(c) Valid and Binding Obligations. The WFS Assignments
constitute a valid sale, transfer, and assignment of the Contracts to the
Company, enforceable against creditors of and purchasers from WFS, and each of
the Transaction Agreements to which WFS is a party constitutes a legal, valid,
and binding obligation of WFS, enforceable in accordance with its terms, except
as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, receivership or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general
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principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law. The Certificates, when
executed, authenticated and delivered in accordance with the Trust Agreement,
will be validly issued and outstanding and entitled to the benefits of the
Trust Agreement and will evidence the entire beneficial ownership in the Trust.
The Notes when executed, authenticated and delivered in accordance with the
Indenture, will be entitled to the benefits of the Indenture and will
constitute legal, valid and binding obligations of the Trust, enforceable in
accordance with their terms.
(d) Noncontravention. The consummation of the
transactions contemplated by this Agreement and by each other Transaction
Agreement to which WFS is a party and the fulfillment of the terms hereof and
thereof shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute a default (nor an event which, with the giving of
notice or passage of time, or both, would constitute a default) under, the
articles of organization or by-laws of WFS, or any indenture, agreement, or
other instrument to which WFS is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, or other instruments;
nor violate any law or any order, rule, or regulation applicable to WFS of any
court or of any federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over WFS or its
properties.
(e) No Consents. No consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency, nor any consent, approval, waiver or notification
of any creditor, lessor or other non-governmental person, is required in
connection with the execution, delivery and performance by WFS of this
Agreement or of any other Transaction Agreement to which WFS is a party, except
(in each case) such as have been obtained and are in full force and effect.
(f) Pending Litigation or Other Proceeding. To WFS's
best knowledge, there are no proceedings or investigations pending, or
threatened, before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over WFS or its properties:
(A) asserting the invalidity of this Agreement or any other Transaction
Agreement to which WFS is a party, (B) seeking to prevent the consummation of
any of the transactions contemplated by any of the Transaction Agreements to
which WFS is a party, (C) seeking any determination or ruling that might
materially and adversely affect the performance by WFS of its obligations
under, or the validity or enforceability of, this Agreement or any other
Transaction Agreement to which WFS is a party, or (D) involving WFS and which
might adversely affect the federal income tax attributes of the Certificates.
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(g) Affirmation and Incorporation of Certain
Representations and Warranties. WFS represents and warrants to Financial
Security that the representations and warranties of the Company set forth in
Section 2.07 hereof, in the Underwriting Agreement and in Section 3.01(b) of
the Sale and Servicing Agreement and Section 2.10 of the Trust Agreement are
(in each case) true and correct as if set forth herein and that the
representations and warranties of WFS set forth in the Underwriting Agreement
and by WFS as Master Servicer set forth in Section 4.06 of the Sale and
Servicing Agreement are (in each case) true and correct as if set forth herein.
(h) Valid Transfer of Contracts. The WFS Assignments
constitute a valid sale, transfer and assignment of the Contracts to the
Company, enforceable against creditors of and purchasers from WFS, except as
such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law.
(i) Financial Information. The audited consolidated
financial statements of WFS for the fiscal year ended December 31, 1996 and the
unaudited consolidated financial statements of WFS for the fiscal quarter ended
September 30, 1997, copies of which have been furnished to Financial Security,
as of the dates and for the periods referred to therein (i) are true, complete
and correct in all material respects, (ii) fairly present the consolidated
financial condition of WFS and the consolidated results of operations and
changes in cash flows of WFS and its consolidated subsidiaries, and (iii) have
been prepared in accordance with generally accepted accounting principles
consistently applied (subject, in the case of the quarterly financial
statements, to normal year-end adjustments), and such financial statements
indicate that WFS is solvent and will not be rendered insolvent by the
execution, delivery and performance of the Transaction Agreements. Since
September 30, 1997, there has been no material adverse change in the business,
financial condition or operations of WFS.
Section 2.09. Affirmative Covenants of the Company. The
Company covenants and agrees with Financial Security that, at all times during
the term of this Agreement:
(a) Compliance with Agreements. The Company will comply
with all terms and conditions of this Agreement and each other Transaction
Agreement to which it is a party. The Company will not cause or permit to
become effective any amendment to or modification of the Transaction Agreements
unless Financial Security shall have previously approved in writing the form of
such amendment or modification.
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(b) Financial Statements, Accountants' Reports, Other
Information. The Company shall keep proper books and records, in which full
and correct entries shall be made of financial transactions and the assets and
business of the Company in accordance with generally accepted accounting
principles consistently applied. The Company shall furnish to Financial
Security, simultaneously with the delivery of such documents to the Owner
Trustee, Indenture Trustee, the Noteholders or the Certificateholders, as the
case may be, copies of all reports, certificates, statements or notices
furnished to the Owner Trustee, the Noteholders or the Certificateholders, as
the case may be, pursuant to the Transaction Agreements.
(c) Certificate of Compliance. The Company shall deliver
to Financial Security, concurrently with the delivery of the financial
statements required pursuant to paragraph (b) above, a certificate signed by an
Authorized Officer of the Company stating that:
(i) a review of the Company's performance under
this Agreement and the other Transaction Agreements to which the
Company is a party during such period has been made under such
officer's supervision; and
(ii) to the best of such officer's knowledge,
based upon such review, the Company has fulfilled all its obligations
under this Agreement and the other Transaction Agreements to which the
Company is a party during such period, or, if there has been a default
of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(d) Access to Records; Discussions With Officers and
Accountants. The Company shall, upon the reasonable request of Financial
Security, permit an authorized agent of Financial Security at reasonable times
(i) to inspect such books and records of the Company as may relate to the
Notes, the Certificates and the obligations of the Company under this Agreement
and the other Transaction Agreements to which the Company is a party; and (ii)
to discuss the affairs, finances and accounts of the Company with any of its
respective officers, directors and representatives, including its Independent
Accountants.
(e) Maintain Licenses. The Company shall maintain all
licenses, permits, charters and registrations that are material to the
performance by the Company of its obligations under the Transaction Agreements
to which it is a party or by which the Company is bound.
(f) Financing Statements and Further Assurances. The
Company will file all necessary financing statements, assignments or other
instruments, and any amendments or continuation statements relating thereto,
necessary to be kept and filed in such manner and in such places as may be
required by law to preserve and protect
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fully the Lien and security interest in and all rights of Financial Security
with respect to the Collateral, subject to the Sale and Servicing Agreement,
and the Company shall, upon the request of Financial Security, from time to
time, execute and deliver and, if necessary, file such further instruments and
take such further action as may be reasonably necessary to effectuate the
provisions of this Agreement or to protect the security interest of Financial
Security, subject to the Sale and Servicing Agreement, in the Collateral.
(g) Maintain Existence; Merger. The Company shall keep
in full effect its existence, rights and franchises under the laws of the State
of California, and will obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of the Contract
Documents and the Transaction Agreements to which the Company is a party. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease substantially all of its assets as an entirety to any Person
unless the Person formed by such consolidation or into which the Company has
merged or the Person which acquires by conveyance, transfer or lease
substantially all the assets of the Company as an entirety, can lawfully
perform the obligations of the Company hereunder and executes and delivers to
the Owner Trustee an agreement, in form and substance reasonably satisfactory
to the Owner Trustee and Financial Security, which contains an assumption by
such Person of the due and punctual performance and satisfaction of each
covenant and condition to be performed or satisfied by the Company under this
Agreement.
(h) Maintenance of Separate Corporate Existence. The
Company shall at all times hold itself out to the public, including WFS and the
Bank, under the Company's own name and as a separate and distinct entity from
WFS and the Bank. At all times at least one director and one executive officer
of the Company (or one individual serving in both capacities) shall be a Person
who is not a director, officer or employee of any Person owning beneficially
more than 10% of the outstanding common stock of the Company. The Company
shall maintain separate corporate records and books of account from those of
WFS and the Bank, shall not commingle its assets with any other Person (except
to the limited extent (if any) permitted by the approval of Financial Security)
and shall authorize its corporate actions in accordance with applicable law.
The Company shall not engage in business transactions with any of its
Affiliates on terms and conditions less favorable to the Company than those
available to the Company for comparable transactions from Persons who are not
Affiliates of the Company. The Company shall maintain its chief executive
office, principal place of business and the office where it keeps its records
in the State of California and separate and apart from any office of the Master
Servicer.
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(i) Compliance with Article 76 of New York Insurance Law.
The Company shall ensure that the Prospectus, and any supplements or amendments
thereto, and every preliminary prospectus delivered with respect to the Notes
and the Certificates, clearly disclose that the Policies are not covered by the
property/casualty insurance security fund specified in Article 76 of the New
York Insurance Law.
Section 2.10. Negative Covenants of the Company. The
Company agrees and covenants with Financial Security that at all times during
the term of this Agreement:
(a) Amendments to Organizational Documents. The Company
shall not amend, supplement or otherwise modify, or cause to permit any
amendment, supplement or other modification of, Articles 2 or 5 of its charter
(or any other Articles of its charter that relate to the matters addressed by
such Article 2 or 5) or its bylaws without the prior written consent of
Financial Security.
(b) No Liens. Without the prior written consent of
Financial Security, the Company shall not create, incur, assume or suffer to
exist any mortgage, deed of trust, security interest, assignment, deposit
arrangement or other preferential arrangement, charge or encumbrance
(including, without limitation, any conditional sale or other title retention
agreement or finance lease) of any nature upon or with respect to any of its
properties or assets, now owned or hereafter acquired, or sign or file under
the Uniform Commercial Code of any jurisdiction any financing statement that
names the Company as a debtor, or sign any security agreement authorizing any
secured party thereunder to file such financing statement.
(c) Creation of Indebtedness. Without the prior written
consent of Financial Security, the Company shall not create, incur, assume or
suffer to exist any indebtedness other than indebtedness guaranteed or approved
in writing by Financial Security.
(d) Guarantees, Etc. Without the prior written consent
of Financial Security, the Company shall not assume, guarantee, endorse or
otherwise be or become directly or contingently liable for the obligations of
any Person by, among other things, agreeing to purchase any obligation of
another Person, agreeing to advance funds to such Person or causing or
assisting such Person to maintain any amount of capital.
(e) Subsidiaries. Without the prior written consent of
Financial Security, the Company shall not form, or cause to be formed, any
subsidiaries.
(f) Insolvency. The Company shall not commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or
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seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seek appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or make a
general assignment for the benefit of its creditors. The Company shall not
take any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in any of the acts set forth above. The Company shall not be
unable to, or admit in writing its inability to, pay its debts.
(g) Impairment of Rights. The Company shall not take any
action or fail to take any action that will interfere with the enforcement of
any rights under this Agreement or the other Transaction Agreements.
Section 2.11. Affirmative Covenants of WFS. WFS covenants
and agrees with Financial Security that, at all times during the term of this
Agreement:
(a) Compliance With Agreements. WFS will comply with all
terms and conditions of this Agreement and each other Transaction Agreement to
which it is a party. WFS will not cause or permit to become effective any
amendment to or modification of the Transaction Agreements to which it is a
party unless Financial Security shall have previously approved in writing the
form of such amendment or modification.
(b) Financial Statements, Accountants' Reports, Other
Information. WFS shall keep proper books and records, in which full and
correct entries shall be made of financial transactions and the assets and
business of WFS in accordance with generally accepted accounting principles
consistently applied. WFS shall furnish to Financial Security, simultaneously
with the delivery of such documents to the Indenture Trustee, the Noteholders
or the Certificateholders, as the case may be, copies of all reports,
certificates, statements or notices furnished to the Indenture Trustee or the
Certificateholders, as the case may be, pursuant to the Sale and Servicing
Agreement. WFS shall also deliver to Financial Security, simultaneously with
the delivery of such documents to the relevant federal or state department or
agency copies of all Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, and periodic reports on Form 8-K required to be filed by WFS with the
Securities and Exchange Commission.
(c) Certificate of Compliance. WFS shall deliver to
Financial Security, concurrently with the delivery of the financial statements
required pursuant to paragraph (b) above, a certificate signed by an Authorized
Officer of WFS stating that:
(i) a review of WFS's performance under this
Agreement and the other Transaction Agreements to which WFS is a party
during such period has been made under such officer's supervision; and
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(ii) to the best of such officer's knowledge,
based upon such review, WFS has fulfilled all its obligations under
this Agreement and the other Transaction Agreements to which WFS is a
party during such period, or, if there has been a default of any such
obligation, specifying each such default known to such officer and the
nature and status thereof.
(d) Access to Records; Discussions With Officers and
Accountants. WFS shall, upon the reasonable request of Financial Security,
permit Financial Security's Authorized Agent at reasonable times (i) to inspect
such books and records of WFS as may relate to the Notes, the Certificates and
the obligations of WFS under this Agreement and the other Transaction
Agreements to which WFS is a party; and (ii) to discuss the affairs, finances
and accounts of WFS with any of its respective officers, directors and
representatives, including its Independent Accountants.
(e) Maintain Licenses. WFS shall maintain all licenses,
permits, charters and registrations that are material to the performance by WFS
of its obligations under the Transaction Agreements to which it is a party or
by which WFS is bound.
(f) Maintain Existence; Merger. WFS shall keep in full
effect its existence, rights and franchises under the laws of the State of
California, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of the Contract
Documents and the Transaction Agreements to which WFS is a party. WFS shall
not consolidate with or merge into any other Person or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless the
Person formed by such consolidation or into which WFS has merged or the Person
which acquires by conveyance, transfer or lease substantially all the assets of
WFS as an entirety, can lawfully perform the obligations of WFS hereunder and
executes and delivers to the Owner Trustee an agreement, in form and substance
reasonably satisfactory to the Owner Trustee and Financial Security, which
contains an assumption by such Person of the due and punctual performance and
satisfaction of each covenant and condition to be performed or satisfied by WFS
under this Agreement.
(g) Subservicing. WFS, as Master Servicer, shall not
appoint, pursuant to Section 4.01 of the Sale and Servicing Agreement, any
Subservicer that has not been approved in advance by Financial Security. WFS
as Master Servicer shall not cause or permit to become effective any
Subservicing Agreement that is in a form that varies substantially from the
form thereof set forth as Exhibit E to the Sale and Servicing Agreement unless
the form of such varying agreement shall have been approved in writing by
Financial Security.
(h) No Petition Agreement. WFS covenants and agrees
that, for a period of one year plus one day after payment in full of all
amounts payable in respect of the Notes and the
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Certificates, it will not institute against, or join any other Person in
instituting against the Company any bankruptcy, reorganization, arrangement,
conservatorship, receivership, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy, receivership or similar law,
in connection with any amounts due WFS (or any Affiliate or parent thereof)
under any Transaction Agreement or otherwise without the prior written consent
of Financial Security. The provisions of this paragraph shall survive
termination of this Agreement.
ARTICLE III
THE POLICIES; INDEMNIFICATION
Section 3.01. Agreement to Issue Policies. Financial
Security agrees to issue the Policies subject to the satisfaction of the
conditions hereinafter set forth.
Section 3.02. Conditions Precedent to Issuance of Policies.
(a) The obligation of Financial Security to issue the
Policies is subject to the following having occurred or being true (as the case
may be): (i) WFS shall have assigned, conveyed and transferred, or caused to
be assigned, conveyed and transferred, the Collateral to the Company, (ii) the
Company shall have created a valid security interest in the Collateral in favor
of the Collateral Agent, (iii) the Company shall have assigned, conveyed and
transferred the Collateral to the Trust, (iv) no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the best
knowledge of the Company, threatened by the Commission and any request for
additional information on the part of the Commission (to be included in the
Registration Statement, the Prospectus or otherwise) shall have been complied
with to the reasonable satisfaction of the Commission, (v) the Premium shall
have been paid in accordance with Section 3.03 hereof, (vi) the representations
and warranties of the Trust and each Western Entity set forth or incorporated
by reference in this Agreement shall be true and correct on and as of the
Closing Date, and (vii) each Transaction Agreement shall be in full force and
effect as of the Closing Date and no default (or event which, with the giving
of notice or passage of time, or both, would become a default) thereunder shall
have occurred and be continuing.
(b) The obligation of Financial Security to issue the
Policies is further subject to the condition precedent that Financial Security
shall have received on the Closing Date, or, in its sole and absolute
discretion, received the opportunity to review prior to and on the Closing
Date, the following, each dated the Closing Date and in full force and effect
on such date, except as otherwise provided herein, in form and substance
satisfactory to Financial Security and its counsel:
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(i) a certificate of an Authorized Officer of
each Western Entity other than WII stating that nothing has come to
the attention of such Western Entity to indicate that the Registration
Statement or the Prospectus, on the date the Registration Statement
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus on any date on which it was furnished to the Underwriters
for use in connection with the offering of the Certificates and Notes
contained, or on the Closing Date contains, any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary in order to make the statements made therein not
misleading;
(ii) copies, certified to be true copies by the
Secretary or an Assistant Secretary of each Western Entity, of (i) the
resolutions of the Board of Directors of such Western Entity
authorizing the execution, delivery and performance of this Agreement
and each other Transaction Agreement to which such Western Entity is a
party and all other transactions and documents contemplated hereby and
thereby, and of all other documents evidencing any other necessary
action of such Western Entity (which certification shall state that
such resolutions have not been modified, are in full force and effect
and constitute the only resolutions adopted by such Western Entity's
Board of Directors or any committee thereof with respect thereto),
(ii) the articles of association, as amended, of such Western Entity
and (iii) the by-laws, as amended, of such Western Entity;
(iii) copies, certified to be true copies by an
Authorized Officer of the Owner Trustee, of (i) the resolutions of the
board of directors of the Owner Trustee authorizing the execution,
delivery and performance by the Owner Trustee of this Agreement and
each other Transaction Agreement to which the Owner Trustee is a party
and all transactions and documents contemplated hereby and thereby,
and of all other documents evidencing any other necessary action of
the Owner Trustee (which certification shall state that such
resolutions have not been modified, are in full force and effect and
constitute the only resolutions adopted by the Owner Trustee's board
of directors or any committee thereof with respect thereto and (ii)
the Certificate of Trust, certified by the Secretary of State or other
appropriate official of the State of Delaware;
(iv) a certificate of an Authorized Officer of
each Western Entity stating that (i) attached thereto are true and
complete copies, if any, of all consents, licenses and approvals
necessary for each Western Entity to execute, deliver and perform this
Agreement, the other Transaction Agreements to which such Western
Entity is a party and all other documents and instruments on the part
of such Western
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Entity to be delivered pursuant hereto or thereto, and (ii) all such
consents, licenses and approvals are in full force and effect, such
Western Entity has not received any notice of any proceeding for the
revocation of any such license, charter, permit or approval, and, to
such Western Entity's knowledge, there is no threatened action or
proceeding or any basis therefor;
(v) a certificate of an Authorized Officer of the
Owner Trustee stating that (i) attached thereto are true and complete
copies, if any, of all consents, licenses and approvals necessary for
the Owner Trustee to execute, deliver and perform this Agreement, the
other Transaction Agreements to which the Owner Trustee is a party and
all other documents and instruments on the part of the Owner Trustee
to be delivered pursuant hereto or thereto have been obtained, and
(ii) all such consents, licenses and approvals are in full force and
effect, the Owner Trustee has not received any notice of any
proceeding for the revocation of any such license, charter, permit or
approval, and, to the Owner Trustee's knowledge, there is no
threatened action or proceeding or any basis therefor;
(vi) a certificate of the Secretary or an
Assistant Secretary of such Western Entity certifying (i) the names
and true signatures of the officers of such Western Entity executing
and delivering this Agreement, the other Transaction Agreements to
which such Western Entity is a party and the other documents to be
executed and delivered by such Western Entity hereunder and
thereunder, (ii) that approval by such Western Entity's stockholders
of the execution and delivery of this Agreement, the other Transaction
Agreements and all other such documents to be executed and delivered,
by such Western Entity hereunder, has been obtained or is not
required, and (iii) that no resolution for the dissolution of such
Western Entity has been adopted or contemplated and that no such
proceedings have been commenced or are contemplated;
(vii) a certificate of an Authorized Officer of the
Owner Trustee certifying (i) the names and the true signatures of the
officers of the Owner Trustee executing and delivering this Agreement,
the other Transaction Agreements to which the Owner Trustee is a party
and the other documents to be executed and delivered by the Owner
Trustee hereunder and thereunder, (ii) that approval by the Owner
Trustee's equity holders of the execution and delivery of this
Agreement, the other Transaction Agreements and all other such
documents to be executed and delivered, by the Owner Trustee
hereunder, has been obtained or its not required, and (iii) that no
action for the dissolution of the Owner Trustee has been adopted or
contemplated and that no such proceedings have commenced or
contemplated;
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(viii) a certificate of an Authorized Officer of
each Western Entity to the effect that (x) the representations and
warranties of such Western Entity set forth or incorporated by
reference in this Agreement are true and correct on and as of the
Closing Date and (y) confirming that the conditions precedent set
forth herein with respect to such Western Entity are satisfied;
(ix) a certificate of an Authorized Officer of the
Trust to the effect that (x) the representations and warranties of the
Trust set forth or incorporated by reference in this Agreement are
true and correct on and as of the Closing Date and (y) confirming that
the conditions precedent set forth herein with respect to the Trust
are satisfied;
(x) a favorable opinion of Messrs. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, counsel to the Company, WFS, the Bank and
WII, and such counsel shall have been instructed by its client to
deliver such opinion to the addressees thereof, in form and substance
satisfactory to counsel to Financial Security;
(xi) a letter dated the Closing Date from Messrs.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, counsel to the Company, WFS and the
Bank, to the effect that Financial Security may rely upon their
opinions as to certain bankruptcy and insolvency matters as if such
opinions were addressed to Financial Security, and such counsel shall
have been instructed by its client to deliver such reliance letter to
Financial Security;
(xii) a favorable opinion of Messrs. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, special tax counsel to the Company, WFS, the
Bank and WII, and such counsel shall have been instructed by its
client to deliver such opinion to the addressees thereof, in form and
substance satisfactory to counsel to Financial Security;
(xiii) a favorable opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Finger, counsel to the Trust and the Owner Trustee, and such counsel
shall have been instructed by its client to deliver such opinion to
the addressees thereof, substantially in the form of Exhibit G hereto;
(xiv) a certificate from the Collateral Agent and
the Indenture Trustee, substantially in the form of Exhibit E hereto;
(xv) a favorable opinion of White & Case, counsel
to the Collateral Agent, the Proceeds Agent and the Indenture Trustee,
and such counsel shall have been instructed by its client to deliver
such opinion to the addressees thereof, substantially in the form of
Exhibit F hereto;
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(xvi) evidence that amounts due and payable to
Financial Security under Section 3.03 of this Agreement have been paid
or that acceptable provisions therefor have been made;
(xvii) a fully executed copy of each of the
Transaction Agreements;
(xviii) evidence that all actions necessary or, in
the opinion of Financial Security, desirable to perfect and protect
the interests transferred by the Sale and Servicing Agreement and the
liens and security interests created by this Agreement, including,
without limitation, the filing of any financing statements required by
Financial Security or its counsel, have been taken or promptly shall
be taken;
(xix) a certificate or opinion of Independent
Accountants addressed to Financial Security to the effect set forth in
Exhibit H hereto;
(xx) a certificate of the Master Servicer, signed
by an Authorized Officer, identifying those Contracts as to which the
Title Documents are not in the possession of the Company and
certifying that such Title Documents showing WFS or the Bank as first
lienholder have been applied for and as to which Section 3.09 of the
Sale and Servicing Agreement applies;
(xxi) evidence that the Company shall have
deposited, or caused to have been deposited, in the Collection
Account, the deposits required under the eighth paragraph of Section
4.01 of the Sale and Servicing Agreement, the deposits required in the
Spread Account and any other deposits required to be made on the
Closing Date under the Transaction Agreements to which the Company is
a party; and
(xxii) such other documents, instruments, approvals
(and, if requested by Financial Security, certified duplicates of
executed copies thereof) or opinions as Financial Security may
reasonably request.
Section 3.03. Premium. In consideration of the issuance by
Financial Security of the Policies, the Company shall pay to Financial Security
the initial installment of the Premium at the time of delivery of the Policies
and further installments of the Premium, all in accordance with the terms of
the letter agreement between the Company and Financial Security referred to in
the definition of "Premium" set forth herein. Failure by the Company to pay
any such further installments of the Premium shall not cause the Policies to be
cancelled and shall not in any way relieve Financial Security of its
obligations to make any payments under the Policies. Anything herein to the
contrary notwithstanding, it is hereby agreed between the parties hereto that
the full amount of the Premium shall have been earned by Financial Security
upon its issuance of the Policies on the Closing Date and upon the
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occurrence of a Servicer Default under Section 8.01 of the Sale and Servicing
Agreement (including without limitation, the failure of the Company to pay any
installment of the Premium as and when due), the entire outstanding balance of
further installments of the Premium shall be immediately due and payable. The
Premium shall be nonrefundable without regard to whether Financial Security
makes any payment under the Policies, any prepayment or early retirement of the
Notes or the Certificates occur or any other circumstances occur relating to
the Notes or the Certificates.
Section 3.04. Reimbursement Obligation.
(a) Each of the Trust and the Company agrees absolutely
and unconditionally to pay to Financial Security, in the manner provided in
Section 3.04(b), as follows:
(i) a sum equal to the total of all amounts which
may be paid by Financial Security under the Policies;
(ii) any accrued but unpaid installments of the
Premium and any and all reasonable charges and expenses which
Financial Security may pay or incur relating to any payment under the
Policies, including, but not limited to, any fees and charges in
connection with any accounts established to facilitate payments under
the Policies, to the extent Financial Security has not been
immediately reimbursed on the date that any amount is paid by
Financial Security under the Policies;
(iii) the amount of any reasonable costs or
expenses (including attorneys' and accountants' fees and expenses)
incurred by Financial Security (A) in connection with the enforcement
of this Agreement or any of the other Transaction Agreements or (B) in
connection with the foreclosure upon, sale or other disposition of the
Collateral, to the extent that such costs and expenses are not
recovered from such foreclosure, sale or other disposition;
(iv) the amount of any payments made by Financial
Security on behalf of the Company other than amounts specified under
Section 3.04(a)(i) above, including, without limitation, the fees and
expenses of the Collateral Agent, the Indenture Trustee, the Owner
Trustee, the Trust and any Independent Accountants, and the amount of
any payments made by Financial Security to (i) the Owner Trustee in
respect of amounts (if any) owing by the Trust to the Owner Trustee
pursuant to, Section 8.02 of the Trust Agreement and (ii) the
Indenture Trustee pursuant to Section 6.07 of the Indenture to the
extent that such amounts shall not have been paid by the Trust and are
paid by Financial Security;
(v) any federal, state or local tax (other than
taxes payable in respect of the gross income of Financial Security) or
other governmental charge imposed in connection
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with the issuance of the Policies or the business or operations of the
Company, including, without limitation, by reason of the Company's
being deemed to do business in the State of California;
(vi) Financial Security's cost of providing to the
Company (or to any Person at the request of the Company) any audited
or unaudited financial statements, including, without limitation, the
fees and expenses of Financial Security's Independent Accountants in
reviewing such financial statements in connection with such provision
and mailing and incremental printing costs;
(vii) any amount otherwise required to be paid to
or on behalf of Financial Security under this Agreement;
(viii) any payments made by Financial Security as,
or in lieu of, servicing, management, trustee, custodial or
administrative fees payable, in the sole discretion of Financial
Security, to third parties in connection with the transaction, to the
extent (in each case) that such payment occurs following (i) the
occurrence of an Event of Default (or event or circumstance that, with
the giving of notice or the passage of time or both, would become an
Event of Default) or (ii) the failure of any Person to perform its
obligation to pay any such amount at the time and in the manner
specified in this Agreement or any other Transaction Agreement; and
(ix) interest on any and all such amounts from the
date of payment by Financial Security of such amounts until payment
thereof in full and interest on any and all amounts described in
Sections 3.03 and 3.09 hereof, from the date due until payment thereof
in full, in each case, payable at the Late Payment Rate.
(b) All amounts to be paid by the Trust or the Company
pursuant to subsection (a) above shall be due and payable without demand, and
shall be payable in the priority and in the manner provided in the Sale and
Servicing Agreement; provided, however, that upon the occurrence of any
Servicer Default under the Sale and Servicing Agreement, Financial Security
shall have the rights provided for herein and therein.
Section 3.05. Non-Recourse Obligation. Notwithstanding any
provision to the contrary contained in Section 3.04(a), the payment obligations
provided in Sections 3.04(a)(i) (to the extent that such payment obligations do
not arise from any failure or default in the performance by the Bank of any of
its payment obligations under the RIC), 3.04(a)(ii) and (to the extent that
such payment obligations do not arise from any failure or default in the
performance by the Company of any of its obligations under the Transaction
Agreements) 3.04(a)(iii)(A) and (B), and any interest on the foregoing in
accordance with Section 3.04(a)(ix), shall not be recourse to the Company, WFS,
WII, the Owner Trustee,
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the Indenture Trustee, the Collateral Agent or the Proceeds Agent, but shall be
payable solely by application of moneys (excluding the Retained Yield) received
from time to time in accordance with the Sale and Servicing Agreement
(including but not limited to all amounts paid into the Collection Account, the
Note Distribution Account, the Certificate Distribution Account or the Holding
Account pursuant to the Sale and Servicing Agreement by any Western Entity, but
not including the Retained Yield to the extent that any amount thereof is
deposited into either such Account) and by realization on the Collateral
pursuant to Section 6.03 hereof. Such payment obligations shall be limited,
except as set forth in the preceding sentence, solely to application of monies,
if any, in the Spread Account from time to time in accordance with Transaction
Agreements.
Section 3.06. Indemnification.
(a) In addition to any and all rights of indemnification
or any other rights of Financial Security pursuant hereto or under law or
equity, the Company agrees to pay, and to protect, indemnify and save harmless,
Financial Security and its officers, directors, shareholders, employees, agents
and each person, if any, who controls Financial Security within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, from
and against any and all claims, losses, liabilities (including penalties),
actions, suits, judgments, demands, damages, costs or expenses (including,
without limitation, fees and expenses of attorneys, consultants and auditors
and reasonable costs of investigations) or obligations whatsoever (herein
collectively referred to as "Liabilities") of any nature arising out of or
relating to the transactions contemplated by this Agreement and the other
Transaction Agreements by reason of:
(i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
or the Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon 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 Liabilities arise out of or are
based upon any such untrue statement or omission or allegation thereof
based upon (A) information set forth in the Prospectus under the
caption "Financial Security" or in the financial statements of
Financial Security, including any information in any amendment or
supplement to the Prospectus furnished by Financial Security in
writing expressly for use therein that amends or supplements such
information (all such information being referred to herein as
"Financial Security Information"), or (B) information set forth under
the caption "Underwriting" in the Prospectus, including any
information in any amendment or supplement to the Prospectus furnished
by the Underwriters through the Representative in writing expressly
for use therein that amends or supplements such information (all such
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information being referred to herein as "Underwriter Information");
(ii) to the extent not covered by clause (i)
above, any act or omission of the Company, WII or the Trust in
connection with the offering, issuance, sale or delivery of the Notes
or the Certificates other than by reason of false or misleading
Financial Security Information;
(iii) the misfeasance or malfeasance of, or theft
committed by, any director, officer, employee or agent of the Company,
WII or the Trust;
(iv) the violation by the Company, the Trust or
WII of any federal or state securities, banking or antitrust laws,
rules or regulations in connection with the issuance, offer and sale
of the Notes or the Certificates or the transactions contemplated by
this Agreement and the other Transaction Agreements;
(v) the violation by the Company, WII or the
Trust of any federal or state laws, rules or regulations relating to
the maximum amount of interest permitted to be received on account of
the loan of money or with respect to the Contracts;
(vi) the negligence or willful misconduct of the
Company, the Trust or WII or any of its directors, officers, employees
or agents;
(vii) the breach by the Company, WII or the Trust
of its obligations under this Agreement or any of the other
Transaction Agreements;
(viii) the breach by the Company, WII or the Trust
of any representation or warranty on the part of the Company, WII or
the Trust, respectively, contained in or incorporated by reference in
this Agreement or any other Transaction Agreement or in any
certificate furnished or delivered to Financial Security hereunder and
thereunder, or the occurrence, in respect of the Company or the Trust,
under any of the Transaction Agreements of any event of default or any
event which, with the giving of notice or lapse of time or both, would
constitute any event of default; and
(ix) the use, ownership or operation by the
Company or the Trust, WII or any affiliate of the Company, of a
Financed Vehicle.
(b) In addition to any and all rights of indemnification
or any other rights of Financial Security pursuant hereto or under law or
equity, WFS agrees to pay, and to protect, indemnify and save harmless,
Financial Security and its officers, directors, shareholders, employees, agents
and each person, if any, who controls Financial Security within the meaning of
either Section 15
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of the Securities Act or Section 20 of the Exchange Act, from and against any
and all claims, losses, liabilities (including penalties), actions, suits,
judgments, demands, damages, costs or expenses (including, without limitation,
fees and expenses of attorneys, consultants and auditors and reasonable costs
of investigations) or obligations whatsoever (herein collectively referred to
as "Liabilities") of any nature arising out of or relating to the transactions
contemplated by this Agreement and the other Transaction Agreements by reason
of:
(i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
or the Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon 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 Liabilities arise out of or are
based upon any such untrue statement or omission or allegation thereof
based upon (A) information set forth in the Prospectus under the
caption "Financial Security" or in the financial statements of
Financial Security, including any information in any amendment or
supplement to the Prospectus furnished by Financial Security in
writing expressly for use therein that amends or supplements such
information (all such information being referred to herein as
"Financial Security Information"), or (B) information set forth under
the caption "Underwriting" in the Prospectus, including any
information in any amendment or supplement to the Prospectus furnished
by the Underwriters through the Representative in writing expressly
for use therein that amends or supplements such information (all such
information being referred to herein as "Underwriter Information");
(ii) to the extent not covered by clause (i)
above, any act or omission of WFS in connection with the offering,
issuance, sale or delivery of the Notes or the Certificates other than
by reason of false or misleading Financial Security Information;
(iii) the misfeasance or malfeasance of, or theft
committed by, any director, officer, employee or agent of WFS;
(iv) the violation by WFS or any Affiliate (other
than Westcorp) thereof of any federal or state securities, banking or
antitrust laws, rules or regulations in connection with the issuance,
offer and sale of the Notes or the Certificates or the transactions
contemplated by this Agreement and the other Transaction Agreements;
(v) the violation by WFS or any Affiliate (other
than Westcorp) thereof of any federal or state laws, rules or
regulations relating to the maximum amount of interest
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permitted to be received on account of the loan of money or with
respect to the Contracts;
(vi) the negligence or willful misconduct of WFS
or any of their respective directors, officers, employees or agents;
(vii) the breach by WFS of its obligations under
this Agreement or any of the other Transaction Agreements;
(viii) the breach by WFS of any representation or
warranty on the part of WFS contained in or incorporated by reference
in this Agreement or any other Transaction Agreement or in any
certificate furnished or delivered to Financial Security hereunder and
thereunder;
(ix) the use, ownership or operation by WFS, or
any Affiliate thereof (other than Westcorp), of a Financed Vehicle;
and
(x) the violation by the Company, the Trust or
WII of any of the provisions of (a) above caused by or at the
direction of WFS.
(c) If any action or proceeding (including any
governmental investigation) shall be brought or asserted against Financial
Security or any person controlling Financial Security (hereinafter collectively
referred to as a Financial Security Indemnified Party) in respect of which
indemnity may be sought from the Company pursuant to Section 3.06(a)(i) or (ii)
or WFS pursuant to Section 3.06(b)(i), (ii) or (x) (such Western Entity or
Western Entities, as the case may be, herein referred to as the Indemnifying
Western Entity), then Financial Security or such controlling person shall give
the Indemnifying Western Entity written or telegraphic notice of such action or
claim reasonably promptly after receipt of written notice thereof. The
Indemnifying Western Entity shall be entitled to participate in the defense of
any such action or claim in reasonable cooperation with, and with the
reasonable cooperation of, the Financial Security Indemnified Party. The
Financial Security Indemnified Party shall have the right to employ its own
counsel in any such action in addition to the counsel of the Indemnifying
Western Entity, but fees and expenses of such counsel will be at the expense of
the Financial Security Indemnified Party unless (1) the employment of counsel
by the Financial Security Indemnified Party has been authorized in writing by
the Indemnifying Western Entity or (2) the Indemnifying Western Entity has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action or (3)
the named parties to any such action or proceeding (including any impleaded
parties) include both the Indemnifying Western Entity on the one hand and the
Financial Security Indemnified Party on the other hand, and the Financial
Security Indemnified Party shall have been advised by counsel that there may be
one or more legal defenses available to
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it that are different from or additional to those available to the Indemnifying
Western Entity (it being understood, however, that the Indemnifying Western
Entity shall not, in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm
of attorneys at any time for the Financial Security Indemnified Party, which
firm shall be designated in writing by the Financial Security Indemnified
Party), in each of which cases the fees and expenses of counsel will be at the
expense of the Indemnifying Western Entity and all such fees and expenses will
be reimbursed promptly as they are incurred. No settlement of any such claim
or action shall be entered into without the consent of Financial Security on
the one hand and the Indemnifying Western Entity who is subject to such claim
or action on the other hand. Any failure by Financial Security to comply with
the provisions of this Section shall relieve the Indemnifying Western Entity of
liability only if substantially prejudicial to the position of the Indemnifying
Western Entity and then only to the extent of such prejudice.
(d) The rights to indemnification provided for in this
Section 3.06 shall survive the termination of this Agreement and shall survive
until the statute of limitations has run on any causes of action that arise
from these provisions and until all suits filed as a result thereof have been
finally concluded.
Section 3.07. Liability Absolute. The obligations of the
Company, WFS, WII and the Trust hereunder shall be absolute, unconditional and
irrevocable and shall be paid and performed strictly in accordance with the
terms of this Agreement under all circumstances whatsoever, including, without
limitation, the following circumstances:
(a) any lack of validity or enforceability of the
Policies or all or any provision of this Agreement or of any of the other
Transaction Agreements;
(b) any amendment or waiver of or any consent to
departure from all or any provision of this Agreement or of any other
Transaction Agreement;
(c) the existence of any claim, setoff, defense,
reduction, abatement or other right which either Western Entity may have at any
time against Financial Security or any other Person;
(d) any statement, instrument of assignment or any other
document presented to Financial Security in connection with the Policies
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(e) payment by Financial Security under the Policies
against presentation of a certificate or other document which does
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not comply with the terms of the Policies, provided that such payment shall not
have been the result of the gross negligence or willful misconduct of Financial
Security;
(f) any nonapplication or misapplication by the Indenture
Trustee, the Owner Trustee, or any paying agent of the proceeds of the demand
for payment under the Policies;
(g) the failure of the Company or, indirectly, WFS, to
receive the proceeds of the sale of the Notes or the Certificates; or
(h) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, provided that such circumstance
or happening shall not have been the result of the gross negligence or willful
misconduct of Financial Security.
Section 3.08. Liability of Financial Security. Neither
Financial Security nor any of its officers, directors or employees shall be
liable or responsible for (a) the unauthorized use which may be made of the
Policies by the Indenture Trustee or the Owner Trustee or any unauthorized acts
or omissions of the Indenture Trustee or the Owner Trustee in connection with
the Policies; or (b) the validity, sufficiency, accuracy or genuineness of
documents, or of any endorsement(s) thereto, even if such documents should in
fact prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (c) any acts or omissions to act of the Indenture Trustee in
connection with the Collateral other than such acts or omissions that are at
the direction of Financial Security. In furtherance and not in limitation of
the foregoing, Financial Security (or its Fiscal Agent) may accept documents
that appear on their face to be in order, without responsibility for further
investigation. Each of the Owner Trustee, the Indenture Trustee and each
Western Entity acknowledges that it has not relied on any information or
materials provided by Financial Security in connection with the issuance of the
Notes and the Certificates except for the information furnished in writing by
Financial Security for inclusion in the Registration Statement. Each of them
also acknowledges that it has not relied on any investigation by Financial
Security of the Collateral or of the financial statements or other financial
statistical data used in connection with the issuance of the Certificates.
Section 3.09. Payment of Costs, Fees and Expenses.
(a) The Company shall pay on demand any and all charges,
fees, costs and expenses which Financial Security may reasonably pay or incur,
including, but not limited to, attorneys' and accountants' fees and expenses,
in connection with (A) the enforcement, defense or preservation of any rights
in respect of any of this Agreement or any other Transaction Agreements,
including defending, monitoring or participating in any litigation or
proceeding (including any bankruptcy proceeding in respect of any transaction
participant or any Affiliate (other than WII or
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Westcorp) thereof) relating to any of the Transaction Agreements and this
Agreement, any party to any of the Transaction Agreements and this Agreement,
or the transaction, (B) any amendment, waiver or other action with respect to,
or related to, any Transaction Agreements and this Agreement whether or not
executed or completed or (C) any review or approval by Financial Security in
connection with the delivery of any additional or substitute collateral under
any of the Transaction Agreements and this Agreement. In addition, the Company
shall reimburse Financial Security for its expenses, including, without
limitation, legal fees and disbursements, incurred in connection with the
preparation of this Agreement and the Transaction Agreements and the
consummation of the initial transactions contemplated hereby and thereby, it
being understood that the Company's obligation to reimburse Financial Security
pursuant to this sentence shall be limited in the aggregate to the dollar
amount set forth in the letter agreement between the Company and Financial
Security referred to in the definition of "Premium" set forth herein, plus
rating agency fees, to the extent paid by Financial Security.
(b) WFS shall pay on demand any and all charges, fees,
costs and expenses not paid by the Company which Financial Security may
reasonably pay or incur, including, but not limited to, attorneys' and
accountants' fees and expenses, in connection with (A) the enforcement, defense
or preservation of any rights in respect of this Agreement or any other
Transaction Agreements, including defending, monitoring or participating in any
litigation or proceeding (including any bankruptcy proceeding in respect of any
transaction participant or any Affiliate (other than Westcorp) thereof)
relating to this Agreement or any other Transaction Agreements, any party to
any of the Transaction Agreements and this Agreement, or the transaction, (B)
any amendment, waiver or other action with respect to, or related to, this
Agreement or any other Transaction Agreements, whether or not executed or
completed or (C) any review or approval by Financial Security in connection
with the delivery of any additional or substitute collateral under any of the
Transaction Agreements and this Agreement.
Section 3.10. Payment Procedure. All payments made
pursuant to this Agreement shall be made to Financial Security in lawful
currency of the United States of America and in one-day clearing-house funds at
Financial Security's Notice Address before 1:00 p.m. (New York City time) on
the date when due.
Section 3.11. Business Days. In any case where the date of
any payment to Financial Security or the expiration of any time period
hereunder occurs on a day which is not a Business Day, then such payment may be
made, or such expiration shall occur, on the next succeeding Business Day with
the same force and effect as if made on the day of maturity or expiration of
such period, except that interest shall continue to accrue for the period after
such date to the next Business Day.
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Section 3.12. Waivers and Consents by the Company and WFS.
The Company, WFS and any and all others who are now or may become liable for
all or part of the obligations of the Company and WFS under this Agreement (all
of the foregoing being referred to collectively in this Section as the
"Obligors") agree to be bound by this Agreement and (a) waive and renounce any
and all redemption and exemption rights and the benefit of all valuation and
appraisement privileges against any amounts to be paid hereunder or any
extension or renewal hereof; (b) waive presentment and demand for payment,
notices of nonpayment and of dishonor, protest of dishonor and notice of
protest; (c) waive all notices in connection with the delivery and acceptance
hereof and all other notices in connection with the performance, default or
enforcement of the payment hereof except as required by this Agreement; (d)
waive any and all lack of diligence and delays in the enforcement of the
payment hereof; (e) agree that the liability of each of the Obligors shall be
unconditional and without regard to the liability of any other person or entity
for the payment hereof and shall not in any manner be affected by any
indulgence or forbearance granted or consented to by Financial Security with
respect hereto; (f) consent to any and all extensions of time, renewals,
waivers or modifications that may be granted by Financial Security with respect
to the payment or other provisions hereof, and to the release of any security
at any time given for the payment hereof, or any part thereof, with or without
substitution, and to the release of any person or entity liable for the payment
hereof; and (g) consent to the addition of any and all other makers, endorsers,
guarantors and other obligors for the payment hereof, and to the acceptance of
any and all other security for the payment hereof or thereof, and agree that
the addition of any such obligors or security shall not affect the liability of
any of the Obligors for the payment hereof.
ARTICLE IV
PLEDGE OF COLLATERAL
Section 4.01. Obligations Secured Hereby. The agreements
contained in this Article IV are made to provide for and secure repayment of
the following indebtedness and liabilities of the Company (such indebtedness
and liabilities being herein called the "Obligations") in the order of priority
indicated:
First, (i) the repayment of all amounts, if any,
advanced or expended by the Collateral Agent, in its capacity as
Collateral Agent, for the account of the Company hereunder, (ii) the
payment of all reasonable costs and expenses at any time and from time
to time incurred by the Collateral Agent, in its capacity as
Collateral Agent, in connection with the administration or enforcement
of this Agreement or any related document (including, without
limitation, the fees and out-of-pocket expenses of counsel employed by
the
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Collateral Agent in connection therewith) and (iii) the payment of all
indemnities at any time and from time to time payable hereunder to the
Collateral Agent, by the Company, and
Second, (i) the repayment of all amounts advanced or
paid by Financial Security under the Policies pursuant to this
Agreement and (ii) the payment of any accrued but unpaid installments
of the Premium and all costs and expenses at any time and from time to
time incurred by Financial Security in connection with the
administration or enforcement of this Agreement or any other
Transaction Agreement or any related document (including, without
limitation, the fees and out-of-pocket expenses of counsel employed by
Financial Security in connection therewith) and under or in connection
with this Agreement and the Policies.
Section 4.02. Granting Clause. In order to secure and to
provide for the repayment of the Obligations, the Company hereby assigns,
conveys, transfers, delivers and sets over unto the Collateral Agent, as
collateral agent for Financial Security, and hereby grants the Collateral
Agent, as collateral agent for Financial Security, a security interest in the
Collateral, to have and to hold said Collateral unto the Collateral Agent, its
successors and assigns, forever in pledge and trust for the benefit and
security of Financial Security, subject to the terms and provisions set forth
in Article V of this Agreement. The assignment and security interest so
granted to the Collateral Agent shall not relieve the Company from the
performance of any term, covenant, condition or agreement on the Company's part
to be performed or observed under or in connection with this Agreement or any
other Transaction Agreement, or impose any obligation on the Collateral Agent
or Financial Security to perform or observe any such term, covenant, condition
or agreement on the Company's part to be so performed or observed or impose any
liability on the Collateral Agent or Financial Security for any act or omission
on the part of the Company relative thereto or for any breach of any
representation or warranty on the part of the Company contained therein, or
made in connection therewith, and the Company hereby agrees to indemnify and
hold harmless the Collateral Agent and Financial Security from and against any
and all losses, liabilities (including liabilities for penalties), claims,
demands, actions, suits, judgments, costs and expenses arising out of or
resulting from the assignment and security interest granted hereby by virtue of
any act or omission on the part of the Company (other than an act or omission
on the part of the Company pursuant to or in accordance with an express
direction from the Collateral Agent or Financial Security), including, without
limitation, the reasonable costs, expenses and disbursements (including
attorneys' fees) incurred by the Collateral Agent or Financial Security in
enforcing this Agreement or any other Transaction Agreement. The assignment
and security interest granted to the Collateral Agent pursuant to this Section
shall become effective prior to the effectiveness of
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the Seller Assignments and the assignment by the Seller to the Trust under
Section 2.01 of the Sale and Servicing Agreement and the assignment by the
Trust to the Indenture Trustee under the Indenture and, upon the effectiveness
of such assignment and security interest, such assignment and security interest
shall be subject to the provisions of Section 5.01(d) hereof.
Section 4.03. Release of Collateral. Financial Security
hereby instructs the Collateral Agent that, at such time as a Contract is
reconveyed by the Trust pursuant to Section 9.01 of the Sale and Servicing
Agreement, the Collateral Agent shall release such Contract from the lien of
the security interest created hereby upon receipt of the Owner Trustee's
assignment delivered pursuant to Section 9.02 of the Sale and Servicing
Agreement.
ARTICLE V
INTERCREDITOR PROVISIONS
Section 5.01. Financial Security's Direction Upon Servicer
Default.
(a) So long as no Financial Security Insolvency has
occurred and no Financial Security Default has occurred and is continuing, if
there exists any Servicer Default pursuant to Section 8.01 of the Sale and
Servicing Agreement, Financial Security shall, notwithstanding the provisions
of Article VIII of the Sale and Servicing Agreement, have the sole right to
direct the Indenture Trustee as to any and all actions to be taken under the
Indenture or the Sale and Servicing Agreement, as applicable, including,
without limitation, all actions with respect to (i) the giving of directions to
the Master Servicer and any Subservicer with respect to the servicing of the
Contracts and any of the respective obligations of the Company under the Sale
and Servicing Agreement, (ii) the exercise of all rights, remedies, powers,
privileges and claims against any obligor under the Sale and Servicing
Agreement and (iii) the giving or withholding of all consents, requests,
notices, directions, approvals, extensions or waivers under or with respect to
the Indenture or the Sale and Servicing Agreement, as applicable, in each case
to the same extent as the Noteholders or the Certificateholders might do but
for the collateral assignment and security interests granted to Financial
Security hereunder, provided, however, that the Indenture Trustee, without
obtaining the consent or direction of Financial Security, may at all times take
any action permitted or required to be taken by it under the terms of the
Indenture or as a fiduciary in order to protect the Indenture Trustee's, the
Noteholders' and the Certificateholders' interest in the Trust Estate or to
preserve any available claims against the Company on behalf of the Noteholders
and the Certificateholders. Financial Security shall indemnify the Indenture
Trustee in full for any costs and expenses incurred (including the reasonable
fees and expenses of the Indenture Trustee's counsel) in connection with the
Indenture Trustee's due
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performance of directions pursuant to this subsection (a) or in connection with
any inaction of the Indenture Trustee as a result of a direction from Financial
Security at any time when Financial Security holds the right to direct the
Indenture Trustee as provided for in this paragraph (a).
(b) Financial Security shall not unreasonably withhold
any consent required of it under the Sale and Servicing Agreement or the
Indenture, as applicable, and shall promptly respond when any approval or
consent is required of it under the Sale or Servicing Agreement and the
Indenture, as applicable.
(c) Notwithstanding any provision of the Sale and
Servicing Agreement or the Indenture, as applicable, to the contrary, so long
as no Financial Security Insolvency has occurred and no Financial Security
Default has occurred and is continuing,
(i) without the prior written consent of
Financial Security, the Owner Trustee shall not (A) terminate the
rights and powers of the Master Servicer pursuant to Section 8.01 of
the Sale and Servicing Agreement or (B) waive any Servicer Default
thereunder;
(ii) without the prior written consent of
Financial Security, (A) neither the Company nor the Trust shall cause
to be appointed any successor Indenture Trustee, and, (B) neither the
Indenture Trustee nor the Administrator shall cause to be appointed
any Co-Trustee under the Indenture;
(iii) without the prior written consent of
Financial Security, neither the Company or WFS nor the Owner Trustee
or the Indenture Trustee shall appoint new Independent Accountants;
(iv) without the prior written consent of
Financial Security, neither the Company or WFS nor the Owner Trustee
or the Indenture Trustee shall consent to the amendment of or
supplement to any of the Transaction Agreements; and
(v) Financial Security shall have the power to
direct the actions to be taken by the Company pursuant to Section 3.02
of the Sale and Servicing Agreement.
(d) Financial Security agrees that, until such time that
all required payments shall have been made with respect to the Notes and the
Certificates, the security interest in the Collateral granted to Financial
Security under this Agreement shall be junior and subordinate to the interest
of the Indenture Trustee and the Securityholders. Financial Security further
agrees that, until such time that all required payments shall have been made
with respect to the Notes and the Certificates, neither Financial Security nor
any Person acting on its behalf may take any action to foreclose or otherwise
pursue remedies with respect to the
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Collateral other than in accordance with the Sale and Servicing Agreement and
the Indenture.
Section 5.02. Financial Security's Direction of Insolvency
Proceedings. Financial Security shall have the rights provided for in Section
8.06 of the Sale and Servicing Agreement.
ARTICLE VI
THE COLLATERAL AGENT; REMEDIES
Section 6.01. Appointment and Powers of Collateral Agent.
Financial Security hereby appoints Bankers Trust Company as the Collateral
Agent, and Bankers Trust Company accepts such appointment hereunder, and
Financial Security hereby authorizes the Collateral Agent to take such action
on its behalf and to exercise such rights, remedies, powers and privileges
hereunder as Financial Security may direct and as are specifically authorized
to be exercised by the Collateral Agent by the terms hereof, together with such
rights, remedies, powers and privileges as are reasonably incidental thereto.
The Collateral Agent may execute any of its duties as agent hereunder by or
through agents or employees and shall be entitled to retain counsel and to act
in reliance upon the advice of such counsel concerning all matters pertaining
to the agencies hereby created and its duties hereunder, and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of counsel selected by it. The Collateral Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement. The duties of the Collateral Agent shall be mechanical and
administrative in nature. The Collateral Agent shall not have by reason of
this Agreement a fiduciary relationship. Nothing in this Agreement, express or
implied, is intended to or shall be so construed as to impose upon the
Collateral Agent any obligations in respect of this Agreement except as
expressly set forth herein. Neither the Collateral Agent nor Financial
Security, nor any of its or their respective directors, officers or employees,
shall be liable for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith, except for its or their own gross
negligence or willful misconduct; nor shall the Collateral Agent or Financial
Security be responsible for the validity, effectiveness, value, sufficiency or
enforceability against the Company of this Agreement or any other document
furnished pursuant hereto or in connection herewith, or of the Collateral (or
any part thereof). The Collateral Agent shall be entitled to rely on any
communication, instrument, paper or other document believed by it to be genuine
and correct and to have been signed or sent by the proper Person or Persons.
Section 6.02. Successor Collateral Agent. The Collateral
Agent acting hereunder at any time may resign by an instrument in writing
addressed and delivered to the Company and Financial Security. If the
Collateral Agent is also the Indenture
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Trustee and, as such, determines that it has a conflicting interest on account
of its acting as Collateral Agent, the Collateral Agent shall eliminate such
conflicting interest by resigning as Collateral Agent hereunder rather than
resigning as Indenture Trustee. Financial Security shall appoint a successor
to the Collateral Agent upon any such resignation by an instrument of
substitution complying with the requirements of applicable law, or, in the
absence of any such requirements, without formality other than appointment and
designation in writing, a copy of which instrument or writing shall be sent to
the Company; provided, however, that the validity of any such appointment shall
not be impaired or affected by any failure to give any such notice to the
Company or by any defect therein. Upon the making and acceptance of such
appointment, the execution and delivery by such successor Collateral Agent of a
ratifying instrument pursuant to which such successor Collateral Agent agrees
to assume the duties and obligations imposed on the Collateral Agent by the
terms of this Agreement, and the delivery to such successor Collateral Agent of
the Collateral and related documents then held by the retiring Collateral
Agent, such successor Collateral Agent shall thereupon succeed to and become
vested with all the estate, rights, powers, remedies, privileges, immunities,
indemnities, duties and obligations hereby granted to or conferred or imposed
upon the Collateral Agent named herein, and one such appointment and
designation shall not exhaust the right to appoint and designate further
successor Collateral Agents hereunder. No Collateral Agent shall be discharged
from its duties or obligations hereunder until the Collateral and related
documents then held by such Collateral Agent shall have been transferred and
delivered to the successor Collateral Agent and such retiring Collateral Agent
shall have executed and delivered to the successor Collateral Agent appropriate
instruments establishing the successor Collateral Agent as the record holder of
all liens and security interests in favor of Financial Security in the
Collateral and transferring to such successor Collateral Agent all power given
to it by the Indenture Trustee to act as attorney-in-fact of the Indenture
Trustee for purposes of this Agreement. Each such successor Collateral Agent
shall provide the Company and Financial Security with its address (which shall
thereupon become such successor Collateral Agent's Notice Address for purposes
of this Agreement), and its telephone, Telex, TWX and telecopier numbers, to be
used for purposes of Section 7.02 hereof, in a notice complying with the terms
of said Section.
Section 6.03. Remedies Available to Collateral Agent.
(a) To the fullest extent permitted by applicable law and
subject to Article V hereof, if the Master Servicer shall have been terminated
upon the occurrence of any Servicer Default pursuant to Section 8.01 of the
Sale and Servicing Agreement, then in every such case, the Collateral Agent
may, to the extent permitted by applicable law and subject to Article V hereof,
exercise the following rights, privileges and remedies:
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(i) Collection of the Collateral. The Collateral
Agent shall have the right to collect all proceeds of the Collateral,
to pay all expenses of such collection, including the reasonable
expenses and compensation of the Collateral Agent, its agents and
attorneys, and to apply the remainder of the moneys so received as
provided herein.
(ii) Sale of Collateral. The Collateral Agent may
sell, or cause to be sold, the Collateral or any part thereof or
interest therein, at public auction to the highest bidder for cash or
at private sale or auction with or without demand, advertisement or
notice of the date, time or place of sale or any adjournment thereof,
upon such terms as Financial Security may approve, and upon such sale
the Collateral Agent shall make and deliver to the purchaser or
purchasers an appropriate instrument or instruments of transfer. The
Collateral Agent is hereby irrevocably appointed the true and lawful
attorney of the Indenture Trustee, in its name and stead, to make all
necessary transfers of property thus sold; and for that purpose it may
execute all necessary instruments of transfer, and may substitute one
or more Persons with like power, the Indenture Trustee hereby
ratifying and confirming all that its said attorney, or such
substitute or substitutes, shall lawfully do by virtue hereof.
Nevertheless, if so requested by the Collateral Agent or any purchaser
of the Collateral or any part thereof, the Indenture Trustee shall
ratify and confirm any such sale or transfer by executing and
delivering to the Collateral Agent or such purchaser all proper
instruments of transfer and releases as may be designated in any such
request. The Collateral Agent may proceed at law or in equity to
foreclose the lien of this Agreement against all or any part of the
Collateral and to have the same sold under the judgment or decree of a
court having jurisdiction or as otherwise may be required or permitted
by law. Upon any such sale, whether made under the power of sale
hereby given or by virtue of judicial proceedings, any Noteholder,
Certificateholder or Financial Security may bid for and purchase the
Collateral or any part thereof and, upon compliance with the terms of
such sale, may hold, retain, possess or dispose of such property in
its or their own absolute right without accountability; and any
purchaser at any such sale may, in paying the purchase money, turn in
any of the Notes or Certificates, as applicable, in lieu of cash up to
the amount which shall, upon distribution of the net proceeds of such
sale, be payable thereon. Said Notes or Certificates, in case the
amounts so payable thereon shall be less than the amount due thereon,
shall be returned to the Holders thereof after being properly stamped
to show partial payment. Upon any sale, whether made under the power
of sale hereby given or by virtue of judicial proceedings, a receipt
of the Collateral Agent, or of the officer making such sale under
judicial proceedings, shall be a sufficient discharge to the purchaser
or purchasers at such sale for its or their purchase money, and such
purchaser or purchasers shall not be
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obliged to see to the application thereof. Any such sale, whether
under the power of sale hereby given or by virtue of judicial
proceedings, shall bind the Collateral Agent, the Company, the
Indenture Trustee, the Noteholders and the Certificateholders, shall
operate to divest all right, title and interest whatsoever, either at
law or in equity, of each of them in and to the property sold, and
shall be a perpetual bar, both at law and in equity, against each of
them and their successors and assigns, and against any and all Persons
claiming through or under them.
(iii) Other Actions. The Collateral Agent shall
have the right to cause any other action permitted at law or in equity
to be initiated and prosecuted to enforce this Agreement and any
rights granted by virtue of the pledge of the Collateral hereunder and
to collect or enforce the Notes and the Certificates.
Section 6.04. Waiver of Stay or Extension Laws; Marshalling
of Assets. Each of the Company, the Owner Trustee, and the Indenture Trustee
(in each case to the extent permitted by applicable law) covenants that it will
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any appraisement, valuation, stay, extension or
redemption law wherever enacted, now or at any time hereafter in force, in
order to prevent or hinder the enforcement of this Agreement or the absolute
sale of the Collateral or any part thereof, or the possession thereof by any
purchaser at any sale under this Article; and each of the Company and the
Indenture Trustee (in each case to the extent permitted by applicable law), for
itself and all who may claim under it, hereby waives the benefit of all such
laws, and covenants that none of them will hinder, delay or impede the
execution of any power herein granted to the Collateral Agent, but will suffer
and permit the execution of every such power as though no such law had been
enacted. Each of the Company, the Owner Trustee and the Indenture Trustee, for
itself and all who may claim under it, waives (in each case to the extent
permitted by applicable law) all right to have the Collateral marshalled upon
any foreclosure hereof, and agrees that any court having jurisdiction to
foreclose this Agreement may order the sale of the Collateral as an entirety
without the marshalling thereof.
Section 6.05. Restoration of Rights and Remedies. If the
Collateral Agent has instituted any proceeding to enforce any right or remedy
under this Agreement, and such proceeding has been discontinued or abandoned
for any reason, or has been determined adversely to the Collateral Agent, then
and in every such case the Company, the Collateral Agent and the Indenture
Trustee shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Collateral Agent shall continue as though no
such proceeding had been instituted.
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Section 6.06. Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Collateral Agent is intended to be
exclusive of any other right or remedy, and every right shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law, in equity or otherwise,
and each and every right, power and remedy, whether specifically herein given
or otherwise existing, may be exercised from time to time and as often and in
such order as may be deemed expedient by the Collateral Agent, and the exercise
or the beginning of the exercise of any power or remedy shall not be construed
to be a waiver of the right to exercise at the same time or thereafter any
other right, power or remedy.
Section 6.07. Control by Financial Security. So long as no
Financial Security Insolvency has occurred and no Financial Security Default
has occurred and is continuing, Financial Security shall, upon the occurrence
and during the continuation of any of the Servicer Default described in Section
8.01 of the Sale and Servicing Agreement, subject to Article V hereof, have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Collateral Agent hereunder or otherwise or exercising
any trust or power conferred upon the Collateral Agent hereunder provided that:
(1) such direction shall not be in conflict with
any rule of law or with this Agreement or the Sale and Servicing
Agreement; and
(2) such Collateral Agent may take any other
action deemed proper by such Collateral Agent that is not inconsistent
with such direction.
Section 6.08. Proceeds Agent as Custodian and Bailee of
Collateral Agent. In order to facilitate the making of payments under the
Contracts, such payments shall be deposited by the Master Servicer in the
Collection Account or the Holding Account, and certain amounts in the
Collection Account shall be deposited in the Spread Account, in accordance with
the Sale and Servicing Agreement. The Proceeds Agent shall retain all proceeds
deposited in the Collection Account, the Spread Account and Holding Account as
custodian and bailee of the Collateral Agent for Financial Security. Financial
Security hereby acknowledges that the Proceeds Agent will also hold all such
proceeds for the benefit of the Noteholders and the Certificateholders. Solely
for purposes of perfection under Section 9-305 of the UCC, Financial Security
and the Proceeds Agent hereby acknowledge that the Proceeds Agent is acting as
agent and bailee of the Collateral Agent for Financial Security in holding such
property in the Collection Account, the Spread Account and the Holding Account,
and any other items constituting a part of the Collateral which from time to
time come into the possession of the Proceeds Agent. It is intended that, by
the Proceeds Agent's acceptance of such custodianship and bailment pursuant to
this Agreement, the Collateral Agent for Financial
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Security, as secured party, will be deemed to have possession of such
Collateral, items, moneys and such other items for purposes of Section 9-305 of
the UCC.
Section 6.09. Indemnification of Collateral Agent.
Financial Security hereby indemnifies and holds the Collateral Agent harmless
from and against any and all judgments, claims, defenses, charges, losses,
liabilities, costs or expenses that the Collateral Agent may incur or that may
be claimed against the Collateral Agent by any Person by reason of any action
taken, or any failure to act, in connection with the duties and
responsibilities of the Collateral Agent under the terms of this Agreement;
provided, however, that Financial Security shall not be required to indemnify
the Collateral Agent pursuant to this Section for any judgments, claims,
defenses, charges, losses, liabilities, costs or expenses to the extent caused
by such Collateral Agent's willful misconduct or gross negligence in any action
taken, or any failure to act, in connection with the duties and
responsibilities of the Collateral Agent under the terms of this Agreement.
The Collateral Agent shall have the right to retain counsel in any action for
which indemnification from Financial Security is provided herein, and the
reasonable fees and expenses of such counsel shall constitute costs and
expenses of such Collateral Agent for which indemnification from Financial
Security is provided herein. The Collateral Agent shall be entitled to submit
a written request, with supporting documentation, for any amounts expended by
it for which indemnification is provided herein, as such amounts are expended
or on a periodic basis, as the Collateral Agent shall choose, and Financial
Security shall reimburse to the Collateral Agent the amount specified in each
such written request promptly. The indemnity agreements contained in this
Section shall remain operative and in full force and effect regardless of the
termination of this Agreement.
Section 6.10. Compensation Payable to Collateral Agent. In
consideration of the Collateral Agent's services to be rendered hereunder, the
Master Servicer agrees to pay to the Collateral Agent, on behalf of Financial
Security, the compensation set forth in a separate letter agreement dated as of
the date hereof between the Master Servicer and the Collateral Agent
incorporated herein by this reference. The Collateral Agent acknowledges,
notwithstanding the fact that, in the event that payments from the Collection
Account are insufficient, it shall look solely to the Master Servicer for
payment of its compensation hereunder, that the Collateral Agent is acting
solely as the agent for Financial Security for purposes of this Agreement.
Failure by the Master Servicer to pay the Collateral Agent's compensation
hereunder shall not cause this Agreement to be cancelled, void or voidable or
otherwise terminated or otherwise affect the Collateral Agent's obligations
hereunder.
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Section 6.11. Protection of Financial Security's Security
Interest.
(a) The Company shall execute and file (or cause to be
executed and filed) such financing statements and execute and file (or cause to
be executed and filed) such continuation statements, against the Company, all
in such manner and in such places as may be required by law (whether in the
event of a change of the Company's name, identity or corporate structure, or
otherwise) fully to preserve, maintain, and protect the interest of Financial
Security in the Collateral. The Company shall deliver (or cause to be
delivered) to Financial Security file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) The Company shall not 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 Company, in
accordance with paragraph (a) above, seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Collateral Agent
and Financial Security at least 60 days' prior written notice thereof.
(c) The Company shall give Financial Security at least 60
days' prior written notice of any relocation of its principal executive offices
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The Company shall at
all times maintain each office from which it shall service the Contracts, and
its principal executive office, within the United States of America.
(d) Upon request, the Company shall furnish to Financial
Security, within seven Business Days, a list of the Contracts then held as part
of the Trust, together with a reconciliation of such list to the Schedule of
Contracts and to each of the Master Servicer's certificates furnished pursuant
to the Sale and Servicing Agreement before such request; provided, however,
that Financial Security shall not make such request more than four times in any
calendar year. Neither the Company nor the Master Servicer shall grant a
security interest in, or lien upon, or in any manner encumber the Collateral,
or release or waive the security interest granted herein, except as
contemplated herein.
(e) In the event that either the Master Servicer or the
Company relocates its principal executive office, the Company shall provide an
Opinion of Counsel to Financial Security, in form and substance satisfactory to
Financial Security, to the effect that upon the filing of any necessary
amendment to any previously filed financing or continuation statement or a new
financing statement, the Collateral Agent's security interest in the Collateral
granted hereunder shall remain valid and effective.
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(f) The Company shall pay all reasonable costs and
disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of Financial Security's right, and
security interest in and to the Collateral.
Section 6.12. Representations and Warranties of Indenture
Trustee. The representations and warranties of the Indenture Trustee, made as
Indenture Trustee, in Section 6.13 of the Indenture are incorporated by
reference herein as if set forth in full herein and Financial Security may rely
upon such representations and warranties.
Section 6.13. Certain Guaranties. Each of the Indenture
Trustee and the Master Servicer agrees that it (i) shall not treat any ledger
account or deposit account as an "Eligible Account" by reason of a guaranty of
the type described in clause (ii)(a) of the definition of "Eligible Account" in
the Sale and Servicing Agreement unless Financial Security shall have
previously approved in writing the form of such guaranty and (ii) shall not
treat any investment as an "Eligible Investment" by reason of a guaranty of the
type described in clause (iii)(b) or clause (vii) of the definition of
"Eligible Investments" in the Sale and Servicing Agreement unless Financial
Security shall have previously approved in writing the form of such guaranty.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. The occurrence of any of
the following events shall constitute an Event of Default hereunder:
(a) any demand for payment shall be made under either of
the Policies;
(b) any representation or warranty made by the Trust, the
Company, WFS, WII under any of the Transaction Agreements, or in any
certificate or report furnished under any of the Transaction Agreements, shall
prove to be untrue or incorrect in any material respect, provided however, a
violation of Section 3.01(b) of the Sale and Servicing Agreement as to which
the Company shall have in a timely manner cured or repurchased the Contract as
to each such Financed Vehicle pursuant to Section 3.02 of the Sale and
Servicing Agreement shall not constitute an Event of Default hereunder;
(c) (i) the Trust, WII, the Company or WFS shall fail to
pay when due any amount payable by the Company or WFS under any of the
Transaction Agreements (other than payments of principal and interest on the
Notes and the Certificates); (ii) the Trust, WII, the Company or WFS shall have
asserted that any of the Transaction Agreements to which it is a party is not
valid and binding on the parties thereto; or (iii) any court, governmental
authority or
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agency having jurisdiction over any of the parties to any of the Transaction
Agreements or property thereof shall find or rule that any material provision
of any of the Transaction Agreements is not valid and binding on the parties
thereto; provided that as a result of such finding or ruling the rights or
remedies of Financial Security under this Agreement shall have been directly or
indirectly impaired in any material respect;
(d) the Trust, WII, the Company or WFS shall fail to
perform or observe any other covenant or agreement contained in any of the
Transaction Agreements (except for the obligations described under clause (b)
or (c) above) and such failure shall continue for a period of 30 days after
written notice given to the Trust, WII, the Company or WFS (as applicable);
provided that, if such failure shall be of a nature that it cannot be cured
within 30 days, such failure shall not constitute an Event of Default hereunder
if within such 30-day period such party shall have given notice to Financial
Security of corrective action it proposes to take, which corrective action is
agreed in writing by Financial Security to be satisfactory and such party shall
thereafter pursue such corrective action diligently until such default is
cured, and provided further as a result of such failure the rights or remedies
of Financial Security under this Agreement shall have been directly or
indirectly impaired in any material respect;
(e) there shall have occurred an "Event of Default" as
specified in Section 5.01 of the Indenture;
(f) the Trust shall adopt a voluntary plan of liquidation
or shall fail to pay its debts generally as they come due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors, or shall institute any proceeding
seeking to adjudicate the Trust insolvent or seeking a liquidation, or shall
take advantage of any insolvency act, or shall commence a case or other
proceeding naming the Trust as debtor under the United States Bankruptcy Code
or similar law, domestic or foreign, or a case or other proceeding shall be
commenced against the Trust under the United States Bankruptcy Code or similar
law, domestic or foreign, or any proceeding shall be instituted against the
Trust seeking liquidation of its assets and the Trust shall fail to take
appropriate action resulting in the withdrawal or dismissal of such proceeding
within 30 days or there shall be appointed or the Trust consent to, or
acquiesce in, the appointment of a receiver, liquidator, conservator, trustee
or similar official in respect of the Trust or the whole or any substantial
part of its properties or assets, or the Trust shall take any corporate action
in furtherance of any of the foregoing or the Trust terminates pursuant to
Section 9.02 of the Trust Agreement;
(g) the Trust becomes taxable as an association (or
publicly traded partnership) taxable as a corporation for federal or state
income tax purposes;
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(h) on any Distribution Date, the sum of Net Collections
with respect to such Distribution Date and the amounts available in the Spread
Account is less than the sum of the amounts payable on such Distribution Date
pursuant to clauses (i) through (ix) of Section 5.05 of the Sale and Servicing
Agreement; and
Section 7.02. Remedies; Waivers.
(a) Upon the occurrence of an Event of Default, Financial
Security may exercise any one or more of the rights and remedies set forth
below:
(i) declare all indebtedness of every type or
description owed by the Trust, the Company, WFS or WII to Financial
Security, including, without limitation, the entire outstanding
balance of further installments of the Premium, to be immediately due
and payable, and shall there upon be immediately due and payable; and
(ii) the Collateral Agent, subject to Article V
hereof, shall have the right to take any action or initiate any
proceeding at law or equity available to it to enforce the terms of
this Agreement.
(b) Financial Security shall have the right, to be
exercised in its complete discretion, to waive any Event of Default hereunder,
by a writing setting forth terms, conditions, and extent of such waiver signed
by Financial Security and delivered to an Authorized Officer of the Company.
Unless such writing expressly provides to the contrary, any waiver so granted
shall extend only to the specific event or occurrence that gave rise to the
Event of Default so waived and not to any other similar event or occurrence
that occurs subsequent to the date of such waiver.
(c) Unless otherwise expressly provided, no remedy herein
conferred upon or reserved is intended to be exclusive of any other available
remedy, but each remedy shall be cumulative and shall be in addition to other
remedies given under the Transaction Agreements or existing at law or in
equity. No delay or failure to exercise any right or power accruing under any
Transaction Agreements upon the occurrence of any Event of Default or otherwise
shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle Financial Security to
exercise any remedy reserved to Financial Security in this Article, it shall
not be necessary to give any notice.
ARTICLE VIII
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MISCELLANEOUS
Section 8.01. Amendments, Changes and Modifications. This
Agreement may be amended, changed, modified, altered or terminated only by
written instrument or written instruments signed by the parties hereto.
Section 8.02. Notices. All notices, certificates or other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, sent by overnight courier, or sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed to the appropriate Notice Address. A duplicate copy of each notice,
certificate or other communication given hereunder to the Company, WFS, WII,
Financial Security, the Trust, the Indenture Trustee or the Collateral Agent
shall also be given to each of the others. Each party hereto may, by telecopy
notice or by such other notice described hereunder, designate any further or
different address to which subsequent notices, certificates or other
communications shall be sent without any requirement of execution of any
amendment to this Agreement.
Section 8.03. Method of Payment. Except as otherwise
expressly provided herein, all payments to be made hereunder shall be made by
wire transfer or by certified or bank check payable to the appropriate party.
Section 8.04. Further Assurances and Corrective
Instruments.
(a) To the fullest extent permitted by law, the parties
hereto agree that they will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such supplements
hereto and such further instruments as Financial Security may reasonably
request and as may be reasonably required in Financial Security's judgment to
effectuate the intention of or facilitate the performance of this Agreement and
to protect the interests of Financial Security and the Collateral Agent,
including, without limitation, the creation and maintenance of Financial
Security's security interest in the Collateral pursuant to this Agreement,
subject to the Intercreditor Agreement. The Company and the Master Servicer
hereby authorize the Collateral Agent to file, at the direction of Financial
Security, financing statements and amendments thereto relating to all or any
part of the Collateral without the signature of an officer of such entity where
permitted by law in order to maintain and perfect the security interests
granted by this Agreement.
(b) In order to facilitate the servicing of the Contracts
by the Master Servicer, the Master Servicer is hereby authorized, in the name
and on behalf of Financial Security, the Trust, the Indenture Trustee and the
Company, to execute instruments of satisfaction or cancellation, or of partial
or full release or discharge, and other comparable instruments with respect
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to the Contracts and with respect to the Financed Vehicles (and the Indenture
Trustee shall execute any such documents on request of the Master Servicer),
subject to the obligations of the Master Servicer under the Sale and Servicing
Agreement.
Section 8.05. Term of Agreement. This Agreement shall
continue in effect until the later of (a) the date on which Financial Security
has no further liability under the Policies or (b) the date on which each
Western Entity shall have paid or caused to be paid to Financial Security all
amounts to be paid by such Western Entity hereunder.
Section 8.06. Assignments; Third-Party Rights; Reinsurance.
(a) This Agreement shall be a continuing obligation of
the parties hereto and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Neither
the Company, WFS, WII, nor the Collateral Agent may assign its rights or
obligations under this Agreement, or delegate any of its duties hereunder,
without the prior written consent of Financial Security. Any assignment made
in violation of this Agreement shall be null and void.
(b) Financial Security shall have the right to give
participations in its rights under this Agreement and to enter into contracts
of reinsurance with respect to the Policies upon such terms and conditions as
Financial Security may in its discretion determine; provided, however, that no
such participation or reinsurance agreement or arrangement shall relieve
Financial Security of any of its obligations hereunder or under the Policies
and provided further that Financial Security shall reimburse the Company, WFS
or WII, as the case may be, for any expense incurred by such Western Entity in
connection with the giving by Financial Security of participations or the
entering into such contracts of reinsurance.
(c) In addition, Financial Security shall be entitled to
assign or pledge to any bank or other lender providing liquidity or credit with
respect to the transactions contemplated by the Transaction Agreements or this
Agreement or the obligations of Financial Security in connection therewith any
rights of Financial Security under the Transaction Agreements or this Agreement
or with respect to any real or personal property or other interests pledged to
Financial Security, or in which Financial Security has a security interest, in
connection with the transactions contemplated by the Transaction Agreements or
this Agreement; provided that Financial Security shall reimburse the Company,
WFS or WII, as the case may be, for any expense incurred by either such Western
Entity in connection with the making by Financial Security of any such
assignment or pledge.
(d) Except as provided herein with respect to
participants and reinsurers, nothing in this Agreement shall confer
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any right, remedy or claim, express or implied, upon any Person, including,
particularly, any Noteholder or Certificateholder, other than Financial
Security, against the Company, WFS or WII, and all the terms, covenants,
conditions, promises and agreements contained herein shall be for the sole and
exclusive benefit of the parties hereto and their successors and permitted
assigns. Neither the Owner Trustee or the Indenture Trustee nor any Noteholder
or Certificateholder shall have any right to payment from any premiums paid or
payable hereunder or from any other amounts paid by the Company, WFS or WII
pursuant to Section 3.03 or 3.04 hereof.
Section 8.07. Consent of Financial Security. In the event
that Financial Security's consent is required under the terms hereof, or under
the terms of any other Transaction Agreement, it is understood and agreed that,
except as otherwise provided expressly herein or in any other Transaction
Agreement, the determination whether to grant or withhold such consent shall be
made solely by Financial Security in its absolute discretion.
Section 8.08. Right to Enforce Sale and Servicing
Agreement. The parties hereto acknowledge that Financial Security is a
beneficiary of the Sale and Servicing Agreement, and without limiting or
restricting any of the provisions thereof or hereof, Financial Security shall
have the right to enforce the provisions of the Sale and Servicing Agreement to
the extent that it could if it were a signatory of such agreement.
Section 8.09. WFS and WII as Parties Only for Certain
Provisions.
(a) Notwithstanding any provision to the contrary
contained in this Agreement, the parties hereto agree that WFS is joined as a
party to this Agreement solely for purposes of Sections 2.08, 2.11, 3.02, 3.06,
3.07, 3.08, 3.09, 3.10, 3.11, 3.12 and 6.13 of this Agreement and the other
Sections contained in Article VII of this Agreement.
(b) Notwithstanding any provisions to the contrary
contained in this Agreement, the parties hereto agree that WII is joined as a
party to this Agreement solely for purposes of Sections 2.04, 2.05, 2.06, 3.02,
3.07 and 3.08, of this Agreement and the other Sections contained in Article
VII of this Agreement.
Section 8.10. Severability. In the event that any
provision of this Agreement shall be held invalid or unenforceable by any court
of competent jurisdiction, the parties hereto agree that such holding shall not
invalidate or render unenforceable any other provision hereof. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by Financial Security hereunder is unavailable or
unenforceable shall not affect in any way the ability of Financial Security to
pursue any other remedy available to it.
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Section 8.11. Reports. Any report, certificate, statement
or notice which the Company, WFS as the Master Servicer, and any successor
Master Servicer, is required to provide to the Owner Trustee, Indenture
Trustee, Noteholders or the Certificateholders under the Sale and Servicing
Agreement shall also be provided to Financial Security within the same time
period specified in the Sale and Servicing Agreement.
Section 8.12. Counterparts. This Agreement may be executed
in counterparts by the parties hereto and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
Section 8.13. Governing Law. This Agreement shall be
construed, and the obligations, rights and remedies of the parties hereunder
shall be determined, in accordance with the laws of the State of New York.
Section 8.14. Headings. The headings of articles and
sections and the table of contents contained in this Agreement are provided for
convenience only. They form no part of this Agreement and shall not affect its
construction or interpretation. Unless otherwise indicated, all references to
articles and sections in this Agreement refer to the corresponding articles and
sections of this Agreement.
Section 8.15. Trial by Jury Waived. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER
OR IN CONNECTION WITH ANY OF THE TRANSACTION AGREEMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREUNDER. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THE TRANSACTION AGREEMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER
THINGS, THIS WAIVER.
Section 8.16. Limited Liability. No recourse under any
Transaction Agreement shall be had against, and no personal liability shall
attach to, any officer, employee, director, affiliate or shareholder of any
party hereto, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise in respect of any
of the Transaction Agreements, the Notes, the Certificates or the Policies, it
being expressly agreed and understood that each Transaction Agreement is solely
a corporate obligation of each party hereto, and that any and all personal
liability, either in common law or in equity, or by statute or constitution, of
every such officer, employee, director, affiliate or shareholder for breaches
by any party hereto of any obligations under any Transaction Agreement is
hereby expressly waived as a condition of
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and in consideration for the execution and delivery of this Agreement.
Section 8.17. Limited Liability of Chase Manhattan Bank
Delaware. It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by Chase Manhattan Bank Delaware not
individually or personally but solely as Owner Trustee on behalf of the Trust,
(b) each of the representations, undertakings and agreements herein made on the
part of the Trust is made and intended not as personal representations,
undertakings and agreements by Chase Manhattan Bank Delaware, but are made and
intended for the purpose of binding only the Trust Estate, (c) nothing herein
contained shall be construed as creating any liability on Chase Manhattan Bank
Delaware, individually or personally, to perform any covenant of the Trust
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any person claiming by, through
or under such parties and (d) under no circumstances shall Chase Manhattan Bank
Delaware be personally liable for the payment of any indebtedness or expenses
of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Agreement.
Section 8.18. Entire Agreement. This Agreement and the
Policies set forth the entire agreement between the parties with respect to the
subject matter thereof, and this Agreement supersedes and replaces any
agreement or understanding that may have existed between the parties prior to
the date hereof in respect of such subject matter.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above mentioned.
WFS FINANCIAL 1997-D OWNER TRUST
By: CHASE MANHATTAN BANK DELAWARE
not in its individual capacity,
but solely in its capacity as
Owner Trustee under the Trust
Agreement
By:
--------------------------------------
Title:
WFS FINANCIAL AUTO LOANS, INC.
By:
--------------------------------------
Title:
WFS FINANCIAL INC
By:
--------------------------------------
Title:
WFS INVESTMENTS, INC.
By:
--------------------------------------
Title:
FINANCIAL SECURITY ASSURANCE INC.
By:
--------------------------------------
Title: Authorized Officer
BANKERS TRUST COMPANY,
as Collateral Agent, Proceeds Agent
and Indenture Trustee
By:
--------------------------------------
Title: