Exhibit 99.2
RECEIVABLES PURCHASE AGREEMENT
between
USAA FEDERAL SAVINGS BANK
as Seller
and
USAA ACCEPTANCE, LLC
as Depositor
Dated as of November 1, 2004
Table of Contents
Page
----
Article I
Interpretation
Section 1.01. Definitions and Usage.........................................1
Article II
Conveyance of Receivables
Section 2.01. Conveyance of Receivables.....................................2
Section 2.02. The Closing...................................................2
Article III
Representations and Warranties
Section 3.01. Representations and Warranties of the Depositor...............3
Section 3.02. Representations and Warranties of the Seller..................4
Article IV
Conditions
Section 4.01. Conditions to Obligation of the Depositor.....................9
Section 4.02. Conditions to Obligation of the Seller.......................10
Article V
Covenants of the Seller
Section 5.01. Protection of Right, Title and Interest......................11
Section 5.02. Other Liens or Interests.....................................12
Section 5.03. Costs and Expenses...........................................12
Section 5.04. Hold Harmless................................................12
Article VI
Indemnification
Section 6.01. Indemnification..............................................12
Section 6.02. Contribution.................................................14
Article VII
Miscellaneous Provisions
Section 7.01. Obligations of Seller........................................15
Section 7.02. Repurchase Events............................................15
Section 7.03. Depositor Assignment of Repurchased Receivables..............15
i
Section 7.04. Transfer to the Issuer.......................................15
Section 7.05. Amendment....................................................16
Section 7.06. Waivers......................................................16
Section 7.07. Notices......................................................16
Section 7.08. Costs and Expenses...........................................17
Section 7.09. Representations of the Seller and the Depositor..............17
Section 7.10. Confidential Information.....................................17
Section 7.11. Headings and Cross-References................................17
Section 7.12. GOVERNING LAW................................................17
Section 7.13. Counterparts.................................................17
Section 7.14. Third Party Beneficiary......................................17
Section 7.15. No Proceedings...............................................17
Exhibit A Matters Addressed in Opinion of Seller's Counsel
Schedule A Schedule of Receivables
Schedule B Location of Receivable Files
Appendix A Definitions and Usage
ii
RECEIVABLES PURCHASE AGREEMENT dated as of November 1, 2004 (as from
time to time amended, supplemented or otherwise modified and in effect, this
"Agreement"), between USAA FEDERAL SAVINGS BANK, a federally chartered savings
association, as seller (in such capacity, together with its permitted
successors and permitted assigns in such capacity, the "Seller") and USAA
ACCEPTANCE, LLC, a Delaware limited liability company, as depositor (together
with its successors and permitted assigns, the "Depositor").
RECITALS
WHEREAS, the Depositor desires to purchase a portfolio of receivables
and related property consisting of motor vehicle installment loan contracts
originated by the Seller in the ordinary course of its business;
WHEREAS, the Seller and the Depositor wish to set forth the terms
pursuant to which such portfolio of receivables and related property are to be
sold by the Seller to the Depositor; and
WHEREAS, the Depositor intends, concurrently with its purchase
hereunder, to convey all of its right, title and interest in and to all of
such portfolio of receivables and related property to USAA Auto Owner Trust
2004-3, a Delaware statutory trust (the "Issuer") pursuant to a Sale and
Servicing Agreement dated as of November 1, 2004 (the "Sale and Servicing
Agreement"), by and among the Issuer, the Depositor, USAA Federal Savings
Bank, as Seller and Servicer, and the Issuer intends to pledge all of its
right, title and interest in and to such portfolio of receivables and related
property to JPMorgan Chase Bank, National Association, as Indenture Trustee
(the "Indenture Trustee") pursuant to the Indenture dated as of November 17,
2004 (the "Indenture"), by and between the Issuer and the Indenture Trustee.
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein,
the parties hereto agree as follows:
Article I
Interpretation
Section 1.01. Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A hereto, which also contains
rules as to usage that shall be applicable herein.
Article II
Conveyance of Receivables
Section 2.01. Conveyance of Receivables.
(a) In consideration of the Depositor's delivery to or upon the
order of the Seller on the Closing Date of $1,131,610,713.73 (the "Purchase
Price"), the Seller does hereby irrevocably sell, transfer, assign, set over
and otherwise convey to the Depositor, without recourse (subject to the
obligations of the Seller set forth herein) all right, title, and interest of
the Seller, whether now or hereinafter acquired, in and to the Trust Property.
(b) The transfer, assignment and conveyance made hereunder shall
not constitute and is not intended to result in an assumption by the Depositor
of any obligation of the Seller to the Obligors or any other Person in
connection with the Receivables and the other Trust Property or any agreement,
document or instrument related thereto.
(c) The Seller and the Depositor intend that the transfer of
assets by the Seller to the Depositor pursuant to this Agreement be a sale of
the ownership interest in such assets to the Depositor, rather than the mere
granting of a security interest to secure a borrowing. In the event, however,
that such transfer is deemed not to be a sale but to be of a mere security
interest to secure a borrowing, the Seller shall be deemed to have hereby
granted to the Depositor a security interest in all accounts, money, chattel
paper, securities, instruments, documents, deposit accounts, certificates of
deposit, letters of credit, advices of credit, banker's acceptances,
uncertificated securities, general intangibles, contract rights, goods and
other property consisting of, arising from or relating to such Trust Property,
which security interest shall be perfected and of first priority, and this
Agreement shall constitute a security agreement under applicable law. Pursuant
to the Sale and Servicing Agreement and Section 7.04 hereof, the Depositor may
sell, transfer and assign to the Issuer (i) all or any portion of the assets
assigned to the Depositor hereunder, (ii) all or any portion of the
Depositor's rights against the Seller under this Agreement and (iii) all
proceeds thereof. Such assignment may be made by the Depositor with or without
an assignment by the Depositor of its rights under this Agreement, and without
further notice to or acknowledgement from the Seller. The Seller waives, to
the extent permitted under applicable law, all claims, causes of action and
remedies, whether legal or equitable (including any right of setoff), against
the Depositor or any assignee of the Depositor relating to such action by the
Depositor in connection with the transactions contemplated by the Sale and
Servicing Agreement.
Section 2.02. The Closing. The sale and purchase of the Trust Property
shall take place at a closing at the office of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ llp,
New York, New York on the Closing Date, simultaneously with the closing under
(a) the Sale and Servicing Agreement, (b) the Indenture and (c) the Trust
Agreement.
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Article III
Representations and Warranties
Section 3.01. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants as follows to the Seller and the
Indenture Trustee as of the date hereof and the Transfer Date:
(a) Organization and Good Standing. The Depositor is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, with all requisite power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions where the
failure to do so would materially and adversely affect the Depositor's ability
to acquire the Receivables or the other Trust Property or the validity or
enforceability of the Receivables or the other Trust Property.
(c) Power and Authority. The Depositor has all the limited
liability company power and authority to execute, deliver and perform this
Agreement and the other Basic Documents to which it is a party and to carry
out their respective terms; the Depositor has full power and authority to sell
and assign the property to be sold and assigned to and deposited with the
Issuer, and the Depositor shall have duly authorized such sale and assignment
to the Issuer by all necessary limited liability company action; and the
execution, delivery and performance of this Agreement and the other Basic
Documents to which the Depositor is a party have been duly authorized by the
Depositor by all necessary limited liability company action.
(d) Binding Obligation. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and delivered
by the other parties hereto and thereto, shall constitute legal, valid and
binding obligations of the Depositor, enforceable against the Depositor in
accordance with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization or similar laws now
or hereafter in effect relating to or affecting creditors' rights generally
and to general principles of equity (whether applied in a proceeding at law or
in equity).
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the limited liability company agreement of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound, or violate any law, rules or regulation applicable to the Depositor
of any court or federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against the Depositor
before any court, regulatory body,
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administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties (i) asserting the invalidity
of this Agreement or any other Basic Document to which the Depositor is a
party, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any other Basic Document to which the
Depositor is a party or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or any
other Basic Document to which the Depositor is a party.
(g) No Consents. The Depositor is not required to obtain the
consent of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
Section 3.02. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants as follows to the
Depositor and the Indenture Trustee as of the date hereof and as of the
Transfer Date:
(i) Organization and Good Standing. The Seller is a
federally chartered savings association duly organized and validly
existing as a banking institution under the laws of the United States
and continues to hold a valid certificate to do business as such, and
has the power to own its assets and to transact the business in which it
is currently engaged. The Seller is duly authorized to transact business
and has obtained all necessary licenses and approvals, and is in good
standing in each jurisdiction in which the character of the business
transacted by it or any properties owned or leased by it requires such
authorization.
(ii) Power and Authority. The Seller has the power and
authority to make, execute, deliver and perform this Agreement and all
of the transactions contemplated under this Agreement and the other
Basic Documents to which the Seller is a party, and has taken all
necessary action to authorize the execution, delivery and performance of
this Agreement and the other Basic Documents to which the Seller is a
party. When executed and delivered, this Agreement and the other Basic
Documents to which the Seller is a party will constitute legal, valid
and binding obligations of the Seller enforceable in accordance with
their respective terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies and except as enforcement of such terms may be
limited by receivership, conservatorship and supervisory powers of bank
regulatory agencies generally.
(iii) No Violation. The execution, delivery and performance
by the Seller of this Agreement and the other Basic Documents to which
the Seller is a party will not violate any provision of any existing
state, federal or, to the best knowledge of the Seller, local law or
regulation or any order or decree of any court applicable to the Seller
or any provision of the articles of association or incorporation or the
bylaws of the Seller, or constitute a breach of any mortgage, indenture,
contract or other agreement to
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which the Seller is a party or by which the Seller may be bound or
result in the creation or imposition of any lien upon any of the
Seller's properties pursuant to any such mortgage, indenture, contract
or other agreement (other than this Agreement).
(iv) No Proceedings. There are no proceedings or
investigations pending or, to the Seller's knowledge, threatened against
the Seller before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Seller
or its properties (i) asserting the invalidity of this Agreement or any
other Basic Document to which the Seller is a party, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any other Basic Document to which the Seller is a party or
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations under,
or the validity or enforceability of, this Agreement or any other Basic
Document to which the Seller is a party.
(v) Chief Executive Office. The chief executive office of
the Seller is located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
(vi) No Consents. The Seller is not required to obtain the
consent of any other party or any consent, license, approval,
registration, authorization, or declaration of or with any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity, or enforceability of this Agreement or any other
Basic Document to which it is a party that has not already been
obtained.
(vii) No Notice. The Seller represents and warrants that it
acquired title to the Receivables and the other Trust Property in good
faith, without notice of any adverse claim.
(viii) Bulk Transfer. The Seller represents and warrants that
the transfer, assignment and conveyance of the Receivables and the other
Trust Property by the Seller pursuant to this Agreement are not subject
to the bulk transfer laws or any similar statutory provisions in effect
in any applicable jurisdiction.
(ix) Seller Information. No certificate of an officer,
statement or document furnished in writing or report delivered pursuant
to the terms hereof by the Seller contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
certificate, statement, document or report not misleading.
(x) Ordinary Course. The transactions contemplated by this
Agreement and the other Basic Documents to which the Seller is a party
are in the ordinary course of the Seller's business.
(xi) Solvency. The Seller is not insolvent, nor will the
Seller be made insolvent by the transfer of the Trust Property, nor does
the Seller anticipate any pending insolvency.
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(xii) Legal Compliance. The Seller is not in violation of,
and the execution and delivery by the Seller of this Agreement and the
other Basic Documents to which the Seller is a party and its performance
and compliance with the terms of this Agreement and the other Basic
Documents to which the Seller is a party will not constitute a violation
with respect to, any order or decree of any court or any order or
regulation of any federal, state, municipal or governmental agency
having jurisdiction, which violation would materially and adversely
affect the Seller's condition (financial or otherwise) or operations or
any of the Seller's properties or materially and adversely affect the
performance of any of its duties under the Basic Documents.
(xiii) Creditors. The Seller did not sell the Receivables or
the other Trust Property to the Depositor with any intent to hinder,
delay or defraud any of its creditors.
(b) The Seller makes the following representations and warranties
with respect to the Receivables, on which the Depositor relies in accepting
the Receivables and in transferring the Receivables to the Issuer under the
Sale and Servicing Agreement, and on which the Issuer relies in pledging the
same to the Indenture Trustee. Such representations and warranties speak as of
the execution and delivery of this Agreement and as of the Transfer Date, but
shall survive the sale, transfer and assignment of the Receivables to the
Depositor, the subsequent sale, transfer and assignment of the Receivables by
the Depositor to the Issuer pursuant to the Sale and Servicing Agreement and
the pledge of the Receivables by the Issuer to the Indenture Trustee pursuant
to the Indenture.
(i) Schedule of Receivables. The information set forth in
Schedule A to this Agreement with respect to each Receivable is true and
correct in all material respects, and no selection procedures adverse to
the Securityholders have been used in selecting the Receivables from all
receivables owned by the Seller which meet the selection criteria
specified herein.
(ii) No Sale or Transfer. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other than
the Depositor.
(iii) Good Title. Immediately prior to the transfer and
assignment of the Receivables to the Depositor herein contemplated, the
Seller had good and marketable title to each Receivable free and clear
of all Liens and rights of others; and, immediately upon the transfer
thereof, the Depositor, has either (i) good and marketable title to each
Receivable, free and clear of all of all Liens and rights of others, and
the transfer has been perfected under applicable law or (ii) a first
priority perfected security interest in each Receivable.
(iv) Receivable Files. The Receivable Files shall be kept at
one or more of the locations specified in Schedule B hereto.
(v) Characteristics of Receivables. Each Receivable (a) has
been originated for the retail financing of a Financed Vehicle by an
Obligor located in one of the States of the United States or the
District of Columbia; (b) contains customary and
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enforceable provisions such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the
benefits of the security; and (c) provides for fully amortizing level
scheduled monthly payments (provided that the payment in the last month
in the life of the Receivable may be different from the level scheduled
payment) and for accrual of interest at a fixed rate according to the
simple interest method.
(vi) Compliance with Law. Each Receivable and each sale of
the related Financed Vehicle complied at the time it was originated or
made, and complies on and after the Cut-off Date, in all material
respects with all requirements of applicable federal, state, and local
laws, and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Federal Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇
Warranty Act, Federal Reserve Board Regulations B and Z, state
adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and any other consumer credit, equal opportunity, and
disclosure laws applicable to such Receivable and sale.
(vii) Binding Obligation. Each Receivable constitutes the
legal, valid, and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in all material respects in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation and other similar laws and
equitable principles relating to or affecting the enforcement of
creditors' rights.
(viii) No Government Obligor. No Receivable is due from the
United States of America or any state or from any agency, department,
instrumentality or political subdivision of the United States of America
or any state or local municipality and no Receivable is due from a
business except to the extent that such receivable has a personal
guaranty.
(ix) Security Interest in Financed Vehicle. Immediately
prior to the sale and assignment thereof to the Depositor as herein
contemplated, each Receivable was secured by a validly perfected first
priority security interest in the Financed Vehicle in favor of the
Seller as secured party or all necessary and appropriate action with
respect to such Receivable had been taken to perfect a first priority
security interest in the related Financed Vehicle in favor of the Seller
as secured party, which security interest is assignable and has been so
assigned by the Seller to the Depositor.
(x) Receivables in Force. No Receivable has been satisfied,
subordinated, or rescinded, nor has any Financed Vehicle been released
from the Lien granted by the related Receivable in whole or in part.
(xi) No Waiver. No provision of a Receivable has been waived
in such a manner that such Receivable fails either to meet all of the
representations and warranties made by the Seller herein with respect
thereto pursuant to this Section 3.02.
(xii) No Amendments. No Receivable has been amended except
pursuant to instruments included in the Receivable Files and no such
amendment has
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caused such Receivable either to fail to meet all of the representations
and warranties made by the Seller herein with respect thereto pursuant
to this Section 3.02.
(xiii) No Defenses. As of the Cut-off Date, there are no
rights of rescission, setoff, counterclaim, or defense, and the Seller
has no knowledge of the same being asserted or threatened, with respect
to any Receivable.
(xiv) No Liens. As of the Cut-off Date, the Seller has no
knowledge of any Liens or claims that have been filed, including Liens
for work, labor, materials or unpaid taxes relating to a Financed
Vehicle, that would be Liens prior to, or equal or coordinate with, the
Lien granted by the Receivable.
(xv) No Default. Except for payment defaults continuing for
a period of not more than thirty (30) days as of the Cut-off Date, the
Seller has no knowledge that a default, breach, violation, or event
permitting acceleration under the terms of any Receivable exists; the
Seller has no knowledge that a continuing condition that with notice or
lapse of time would constitute a default, breach, violation, or event
permitting acceleration under the terms of any Receivable exists; and
the Seller has not waived any of the foregoing.
(xvi) Insurance. Each Receivable requires that the Obligor
thereunder obtain comprehensive and collision insurance covering the
Financed Vehicle.
(xvii) Lawful Assignment. No Receivable has been originated
in, or is subject to the laws of, any jurisdiction under which the sale,
transfer, and assignment of such Receivable under this Agreement is
unlawful, void or voidable.
(xviii) All Filings Made. No filings (other than UCC filings
which have been made or will be made at the Closing Date) or other
actions are necessary in any jurisdiction to give the Issuer a first
priority perfected security interest in the Receivables and to give the
Indenture Trustee a first priority perfected security interest in the
Receivables.
(xix) One Original. With respect to any Receivable for which
an original executed copy exists, there is no more than one original
executed copy of such Receivable which, immediately prior to the
delivery thereof to the Servicer, as custodian for the Indenture
Trustee, was in the possession of the Seller.
(xx) Security. Each Receivable is secured by a new or used
automobile or light-duty truck.
(xxi) Maturity of Receivables. Each Receivable has a
remaining maturity, as of the Cut-off Date, of not less than 6 months
and not more than 72 months and an original maturity of at not less than
9 months and not more than 72 months. No Receivable has a scheduled
maturity later than November 28, 2010.
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(xxii) Annual Percentage Rate. Each Receivable is a
fully-amortizing fixed rate simple interest contract that provides for
level scheduled monthly payments (except for the last payment, which may
be minimally different from the level payments) over its respective
remaining term, and is not secured by any interest in real estate, and
has not been identified on the computer files of the Seller as relating
to Obligors who have requested a reduction in the periodic finance
charges, as of the Cut-off Date, by application of the Servicemembers
Civil Relief Act.
(xxiii) No Repossessions. Each Receivable is secured by a
Financed Vehicle that, as of the Cut-off Date, has not been repossessed
without reinstatement of such Receivable.
(xxiv) Obligor Not Subject to Bankruptcy Proceedings. Each
Receivable has been entered into by an Obligor who has not been
identified on the computer files of the Seller as being a debtor in any
bankruptcy proceeding as of the Cut-off Date.
(xxv) No Overdue Payments. No Receivable has any payment
that is more than 30 days past due as of the Cut-off Date.
(xxvi) Tangible Chattel Paper. The Receivables constitute
"tangible chattel paper" within the meaning of UCC Section 9-102.
(xxvii) Remaining Principal Balance. Each Receivable had a
remaining principal balance, as of the Cut-off Date, of at least
$800.00.
Article IV
Conditions
Section 4.01. Conditions to Obligation of the Depositor. The obligation
of the Depositor to purchase the Receivables is subject to the satisfaction of
the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct in all material
respects on the Transfer Date with the same effect as if then made, and the
Seller shall have performed all obligations to be performed by it hereunder on
or prior to the Transfer Date.
(b) Computer Files Marked. The Seller shall, at its own expense,
on or prior to the Transfer Date, indicate in its computer files that the
Receivables have been sold to the Depositor pursuant to this Agreement and
deliver to the Depositor the Schedule of Receivables, certified by the
Seller's President, Vice President or Treasurer to be true, correct and
complete.
(c) Documents to be Delivered by the Seller on the Transfer Date:
(i) Evidence of UCC Filing. On or prior to the Closing Date,
the Seller shall record and file, at its own expense, a UCC-1 financing
statement in the State of Texas, naming the Seller as seller, and naming
the Depositor as
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secured party, describing the Receivables and the other assets assigned
to the Depositor pursuant to Section 2.01, meeting the requirements of
the laws of each such jurisdiction and in such manner as is necessary to
perfect the sale, transfer, assignment and conveyance of the Receivables
and such other assets to the Depositor. The Seller shall deliver to the
Depositor a file-stamped copy or other evidence satisfactory to the
Depositor of such filing on or prior to the Transfer Date.
(ii) Opinions of Seller's Counsel. On or prior to the
Closing Date, the Depositor shall have received the opinions of counsel
to the Seller, in form and substance satisfactory to the Depositor, as
to the matters set forth in Exhibit A hereto and such other matters as
the Depositor has heretofore requested or may reasonably request.
(iii) Other Documents. Such other documents as the Depositor
may reasonably request.
(d) Other Transactions. The transactions contemplated by the Sale
and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
Section 4.02. Conditions to Obligation of the Seller. The obligation of
the Seller to sell the Receivables to the Depositor is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Depositor hereunder shall be true and correct on the
Transfer Date with the same effect as if then made, and the Depositor shall
have performed all obligations to be performed by it hereunder on or prior to
the Transfer Date.
(b) Receivables Purchase Price. On the Transfer Date, the
Depositor shall have delivered to the Seller the purchase price specified in
Section 2.01 hereof.
(c) Opinion of Counsel. The Depositor shall have furnished to the
Seller an Opinion of Counsel, dated the Closing Date, to the effect that:
(i) the Depositor has been duly formed and is validly
existing in good standing as a limited liability company under the laws
of the State of Delaware and has all necessary limited liability company
power and authority to execute, deliver and perform its obligations
under the Underwriting Agreement, the Trust Agreement, the Sale and
Servicing Agreement and this Agreement (the "Transaction Documents");
(ii) each of the Transaction Documents have been duly
authorized, executed and delivered by the Depositor;
(iii) Neither the execution, delivery and performance by the
Depositor of the Transaction Documents, nor the consummation by the
Depositor of any of the transactions contemplated thereby, requires the
consent or approval of, the withholding of
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objection on the part of, the giving of notice to, the filing,
registration or qualification with, or the taking of any other action in
respect of, any governmental authority or agency of the State of
Delaware, other than the filing of UCC-1 financing statements relating
to the grant of the security interest in the Receivables and the other
Trust Property by USAA Federal Savings Bank as the sole equity member of
the Depositor, to the Depositor and by the Depositor to the Trust with
the Secretary of State, and the filing of the LLC Certificate and the
Certificate of Trust of the Trust with the Secretary of State; and
(iv) Neither the execution, delivery and performance by the
Depositor of the Transaction Documents, nor the consummation by the
Depositor of the transactions contemplated thereby, violates the amended
and restated limited liability company agreement of the Depositor, dated
as of July 8, 2004 and amended by an amendment dated as of November 12,
2004, or any law, rule or regulation of the State of Delaware applicable
to the Depositor.
(d) Other Transactions. The transactions contemplated by the Sale
and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
Article V
Covenants of the Seller
The Seller agrees with the Depositor and the Indenture Trustee as
follows:
Section 5.01. Protection of Right, Title and Interest.
(a) Filings. The Seller shall cause at its own expense all
financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Seller, the Depositor,
the Trust and the Indenture Trustee, respectively, in and to the Receivables
and the other property included in the Trust Estate to be promptly filed and
at all times to be kept recorded, registered and filed, all in such manner and
in such places as may be required by law fully to preserve and protect the
right, title and interest of the Depositor hereunder, the Trust under the Sale
and Servicing Agreement and the Indenture Trustee under the Indenture in and
to the Receivables and the other property included in the Trust Property. The
Seller shall deliver to the Depositor and the Indenture Trustee file stamped
copies of, or filing receipts for, any document recorded, registered or filed
as provided above, as soon as available following such recordation,
registration or filing. The Depositor shall cooperate fully with the Seller in
connection with the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this paragraph.
(b) Name Change. If the Seller makes any change in its name,
identity or corporate structure that would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the applicable provisions of the UCC or any title statute or
if the Seller changes the jurisdiction under whose laws it is formed,
11
the Seller shall give the Depositor, the Indenture Trustee and the Owner
Trustee written notice thereof at least 45 days prior to such change and shall
promptly file such financing statements or amendments as may be necessary to
continue the perfection of the Depositor's interest in the property conveyed
pursuant to Section 2.01.
Section 5.02. Other Liens or Interests. Except for the conveyances
hereunder and pursuant to the Basic Documents, the Seller shall not sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume, or
suffer to exist any Lien on, or any interest in, to or under the Receivables,
and the Seller shall defend the right, title and interest of the Depositor,
the Trust and the Indenture Trustee in, to and under the Receivables against
all claims of third parties claiming through or under the Seller.
Section 5.03. Costs and Expenses. The Seller agrees to pay all
reasonable costs and disbursements in connection with the perfection, as
against all third parties claiming through or under the Seller, of the
Depositor's, the Issuer's and the Indenture Trustee's right, title and
interest in and to the Receivables and the other property included in the
Trust Property.
Section 5.04. Hold Harmless. The Seller shall protect, defend, indemnify
and hold the Depositor, the Issuer and their respective assigns and their
employees, officers, directors and agents harmless from and against all
losses, liabilities, claims and damages of every kind and character, including
any legal or other expenses reasonably incurred, as incurred, resulting from
or relating to or arising out of (i) the inaccuracy, nonfulfillment or breach
of any representation, warranty, covenant or agreement made by the Seller in
this Agreement, (ii) any legal action, including, without limitation, any
counterclaim, that has either been settled by the litigants or has proceeded
to judgment by a court of competent jurisdiction, in either case to the extent
it is based upon alleged facts that, if true, would constitute a breach of any
representation, warranty, covenant or agreement made by the Seller in this
Agreement, (iii) any actions or omissions of the Seller occurring prior to the
Transfer Date with respect to any of the Receivables or Financed Vehicles or
(iv) any failure of a Receivable to be originated in compliance with all
applicable requirements of law. These indemnity obligations shall be in
addition to any obligation that the Seller may otherwise have.
Article VI
Indemnification
Section 6.01. Indemnification.
(a) The Seller agrees to indemnify and hold harmless the
Depositor, each of its respective directors, each officer of the Depositor who
signed the Registration Statement, and each person or entity who controls the
Depositor or any such person, within the meaning of Section 15 of the
Securities Act, against any and all losses, claims, damages or liabilities,
joint and several, to which the Depositor, or any such person or entity may
become subject, under the Securities Act or otherwise, and will reimburse the
Depositor, and each such controlling person for any legal or other expenses
reasonably incurred by the Depositor or such controlling person in connection
with investigating or defending any such loss, claims, damages or liabilities
insofar
12
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact made by the Seller contained in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement or the
omission or the alleged omission to state therein a material fact necessary in
order to make the statements in the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement, in the light of the circumstance
under which they were made, not misleading, but, in each case, only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the information contained in the Prospectus
Supplement under the captions: "Summary of Terms of the
Securities--Composition of the Receivables"; "Risk Factors"; and "The
Receivables Pool"; and in the Base Prospectus under the caption "The Bank's
Portfolio of Motor Vehicle Loans" (such information, the "Seller
Information"). This indemnity agreement will be in addition to any liability
which the Seller may otherwise have to the Depositor or any Affiliate thereof
pursuant to Section 5.04 of this Agreement or otherwise.
(b) The Depositor agrees to indemnify and hold harmless the Seller
and each Person who controls the Seller within the meaning of Section 15 of
the Securities Act against any and all losses, claims, damages or liabilities,
joint and several, to which the Seller, or any such person or entity may
become subject, under the Securities Act or otherwise, and will reimburse the
Seller and each such controlling Person for any legal or other expenses
reasonably incurred by the Seller or such controlling Person in connection
with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of material fact contained in the Registration
Statement or any amendment or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of any material fact contained in the
Prospectus Supplement or the Prospectus or any amendment or supplement to the
Prospectus Supplement or the Prospectus or the omission or the alleged
omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or the Prospectus or any amendment or
supplement to the Prospectus Supplement, in the light of the circumstances
under which they were made, not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to the information contained in the Prospectus Supplement or the
Prospectus other than the Seller Information. This indemnity agreement will be
in addition to any liability which the Depositor may otherwise have.
(c) Promptly after receipt by any indemnified party under this
Article VI of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Article VI, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article VI except to the extent it has
been materially prejudiced by such failure; provided, further, that the
failure to notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Article VI.
13
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article VI for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by
the indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
appropriate for such indemnified party to employ separate counsel; or (iii)
the indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being understood,
however, the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions 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 (in addition to local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing by the Depositor, if the
indemnified parties under this Article VI consist of the Depositor, or by the
Seller, if the indemnified parties under this Article VI consist of the
Seller.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 6.01(a) and (b), shall use its commercially reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from
all liability arising out of such claim, action, suit or proceeding.
Section 6.02. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Article VI is for any reason held to be unenforceable although applicable
in accordance with its terms, the Seller, on the one hand, and the Depositor,
on the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller and the Depositor in such proportions as shall be
appropriate to reflect the relative benefits
14
received by the Seller on the one hand and the Depositor on the other from the
sale of the Receivables such that the Depositor is responsible for that
portion represented by the underwriting discount set forth on the cover page
of the Prospectus Supplement, and the Seller shall be responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6.02, each Person,
if any, who controls the Depositor within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the Depositor and
each Person, if any, who controls the Seller within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the
Seller. Notwithstanding anything in this Section 6.02 to the contrary, the
Depositor shall not be required to contribute an amount in excess of the
amount of the underwriting discount appearing on the cover page of the
Prospectus Supplement.
Article VII
Miscellaneous Provisions
Section 7.01. Obligations of Seller. The obligations of the Seller under
this Agreement shall not be affected by reason of any invalidity, illegality
or irregularity of any Receivable.
Section 7.02. Repurchase Events. The Seller hereby covenants and agrees
with the Depositor for the benefit of the Depositor, the Indenture Trustee,
the Issuer, the Owner Trustee, the Certificateholders and the Noteholders that
the occurrence of a breach of any of the Seller's representations and
warranties contained in Section 3.02(b) that materially and adversely affects
the interests of the Issuer, the Indenture Trustee, the Owner Trustee, the
Certificateholders or the Noteholders in any Receivable, without regard to any
limitation set forth in such representation or warranty concerning the
knowledge of the Seller as to the facts stated therein, shall constitute an
event obligating the Seller to repurchase the Receivables to which such
failure or breach is applicable (each, a "Repurchase Event"), at the Purchase
Amount, from the Depositor, unless any such failure or breach shall have been
cured by the last day of the first Collection Period commencing after the
discovery or notice thereof by or to the Seller or the Servicer.
Section 7.03. Depositor Assignment of Repurchased Receivables. With
respect to all Receivables repurchased by the Seller pursuant to this
Agreement, the Depositor shall assign, without recourse, representation or
warranty, to the Seller all of the Depositor's right, title and interest in
and to such Receivables and all security and documents relating thereto.
Section 7.04. Transfer to the Issuer. The Seller acknowledges and agrees
that (1) the Depositor will, pursuant to the Sale and Servicing Agreement,
transfer and assign the Receivables and assign its rights under this Agreement
with respect thereto to the Issuer and, pursuant to the Indenture, the Issuer
will pledge the Receivables to the Indenture Trustee, and (2) the
representations and warranties contained in this Agreement and the rights of
the Depositor under this Agreement, including under Section 7.02, are intended
to benefit the Issuer, the Indenture Trustee, the Noteholders and the
Certificateholder. The Seller hereby consents to such transfers and
assignments and agrees that enforcement of a right or remedy hereunder by
15
the Indenture Trustee, the Owner Trustee or the Issuer shall have the same
force and effect as if the right or remedy had been enforced or executed by
the Depositor.
Section 7.05. Amendment. This Agreement may be amended from time to
time, with prior written notice to the Rating Agencies, but without the
consent of the Noteholders or the Certificateholders, by a written amendment
duly executed and delivered by the Seller and the Depositor, for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement or of modifying in any manner the rights of
Noteholders or Certificateholders; provided that (i) such amendment shall not,
as evidenced by an Opinion of Counsel or an Officer's Certificate, materially
and adversely affect the interest of any Noteholder or Certificateholder and
(ii) the person requesting the amendment obtains a letter from the Rating
Agencies stating that the amendment would not result in the downgrading or
withdrawal of the ratings then assigned to the Notes and the Certificates.
This Agreement may also be amended by the Seller and the Depositor, with the
prior written notice to the Rating Agencies and the prior written consent of
(a) the Holders of Notes evidencing at least a majority of (i) the Outstanding
principal amount of the Class A-1 Notes, (ii) the Outstanding principal amount
of the Class A-2 Notes, (iii) the Outstanding principal amount of the Class
A-3 Notes, (iv) the Outstanding principal amount of the Class A-4 Notes and
(b) the Certificateholders of Certificates evidencing at least a majority of
the Certificate Balance (excluding, for purposes of this Section 7.05,
Certificates held by the Seller, the Depositor or any of their respective
Affiliates) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying
in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of any Noteholders or Certificateholders or (ii) reduce the
aforesaid majority requirement that is required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
Certificates.
Section 7.06. Waivers. No failure or delay on the part of the Depositor,
the Issuer or the Indenture Trustee in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy.
Section 7.07. Notices. All demands, notices and communications under
this Agreement shall be in writing, personally delivered, faxed and followed
by first class mail, or mailed by certified mail, return receipt requested,
and shall be deemed to have been duly given upon receipt (a) in the case of
the Depositor, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: Vice President, Legal Counsel; (b) in the case of the Servicer,
Administrator and Custodian, to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ Broker, Vice President, (c) in the case of the Seller,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ Broker,
Vice President; (d) in the case of the Issuer or the Owner Trustee, at the
Corporate Trust Office (as defined in the Trust Agreement); (e) in the case of
▇▇▇▇▇'▇ Investors Service, Inc., at the following address: ▇▇▇▇▇'▇ Investors
Service, Inc., ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, and (f) in the case of Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., at the
16
following address: Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Asset Backed Surveillance Department; or, as to each of the
foregoing, at such other address as shall be designated by written notice to
the other parties.
Section 7.08. Costs and Expenses. The Seller shall pay all expenses
incident to the performance of its obligations under this Agreement and the
Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Depositor, in connection with the perfection of the Depositor's, the Issuer's
and the Indenture Trustee's right, title and interest in and to the
Receivables and the enforcement of any obligation of the Seller hereunder as
contemplated by the Basic Documents.
Section 7.09. Representations of the Seller and the Depositor. The
respective agreements, representations, warranties and other statements by the
Seller and the Depositor set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the closing under Section
2.02 and the transfers and assignments referred to in Section 7.04.
Section 7.10. Confidential Information. The Depositor agrees that it
will neither use nor disclose to any Person the names and addresses of the
Obligors or any other personally identifiable information of an Obligor,
except in connection with the enforcement of the Depositor's rights hereunder,
under the Receivables, under the Sale and Servicing Agreement or any other
Basic Document, or as required by any of the foregoing or by law.
Section 7.11. Headings and Cross-References. The various headings in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in
this Agreement to section names or numbers are to such Sections of this
Agreement.
Section 7.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.13. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 7.14. Third Party Beneficiary. The Indenture Trustee is an
express third party beneficiary of this Agreement and shall be entitled to
enforce the provisions of this Agreement as if it were a party hereto.
Section 7.15. No Proceedings. So long as this Agreement is in effect,
and for one year plus one day following its termination, (i) each of the
Seller and the Depositor agrees that it will not file any involuntary petition
or otherwise institute any bankruptcy, reorganization arrangement, insolvency
or liquidation proceeding or other proceedings under any federal or state
bankruptcy law or similar law against the Trust and (ii) the Seller agrees
that it will not file
17
any involuntary petition or otherwise institute any bankruptcy, reorganization
arrangement, insolvency or liquidation proceeding or other proceedings under
any federal or state bankruptcy law or similar law against the Depositor.
18
IN WITNESS WHEREOF, the parties hereto have caused this Receivables
Purchase Agreement to be executed by their respective duly authorized officers
as of the date and year first above written.
USAA FEDERAL SAVINGS BANK, as Seller
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
USAA ACCEPTANCE, LLC, as Depositor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
MATTERS ADDRESSED IN OPINION OF SELLER'S COUNSEL
(a) the enforceability of the Basic Documents (other than the Trust
Agreement and the Note Depository Agreement);
(b) the validity of the security interests created thereby;
(c) the due issuance and enforceability of the Notes;
(d) the qualification of the Indenture under the Trust Indenture Act;
(e) no violations of law;
(f) compliance with applicable federal securities laws;
(g) exemption of the Bank, the Depositor and the Issuer from registration as
an investment company under the Investment Company Act of 1940;
(h) the conformity in all material respects of each of the Basic Documents
to the description thereof contained in the Registration Statement and the
Prospectus;
(i) negative assurances concerning the Prospectus, in each case in form and
substance reasonably satisfactory to the Representatives and their counsel;
(j) certain matters relating to the transfer of the Receivables by the
Seller to the Depositor, in form and substance reasonably satisfactory to the
Representatives and their counsel;
(k) the Issuer will not be an association (or a publicly traded partnership)
taxable as a corporation for federal income tax purposes; and
(l) the Notes will be characterized as indebtedness for federal income tax
purposes and (iii) the statements set forth in the Prospectus under the
heading "Certain Federal Income Tax Consequences", to the extent that they are
statements of law are true and correct in all material respects, in form and
substance reasonably satisfactory to the Representatives and their counsel.
A-1
SCHEDULE A
Schedule of Receivables
-----------------------
[On file with the Indenture Trustee]
S-A-1
SCHEDULE B
Location of Receivable Files
----------------------------
c/o USAA Federal Savings Bank
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-B-1
Appendix A
DEFINITIONS AND USAGE
The following rules of construction and usage shall be applicable to any
agreement or instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any agreement or instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto unless
otherwise defined therein.
(b) As used herein, in any agreement or instrument governed hereby and
in any certificate or other document made or delivered pursuant thereto,
accounting terms not defined in this Appendix or in any such agreement,
instrument, certificate or other document, and accounting terms partly defined
in this Appendix or in any such agreement, instrument, certificate or other
document, to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles as in effect on the
date of such agreement or instrument. To the extent that the definitions of
accounting terms in this Appendix or in any such agreement, instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
The words "hereof," "herein," "hereunder" and words of similar import
when used in an agreement or instrument refer to such agreement or instrument
as a whole and not to any particular provision or subdivision thereof;
references in an agreement or instrument to "Article," "Section" or another
subdivision or to an attachment are, unless the context otherwise requires, to
an article, section or subdivision of or an attachment to such agreement or
instrument; and the term "including" and its variations shall be deemed to be
followed by "without limitation."
The definitions contained in this Appendix are equally applicable to
both the singular and plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
Any agreement, instrument or statute defined or referred to below or in
any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
Definitions
"Accrued Class A Note Interest" shall mean, with respect to any Payment
Date, the sum of the Class A Noteholders' Monthly Accrued Interest for such
Payment Date and the Class A Noteholders' Interest Carryover Shortfall for
such Payment Date.
Appendix A-1
"Accrued Class B Certificate Interest" shall mean, with respect to any
Payment Date, the sum of the Class B Certificateholders' Monthly Accrued
Interest for such Payment Date and the Class B Certificateholders' Interest
Carryover Shortfall for such Payment Date.
"Act" shall have the meaning specified in Section 11.3(a) of the
Indenture.
"Administration Agreement" shall mean the Administration Agreement,
dated as of November 17, 2004, by and among the Administrator, the Issuer and
the Indenture Trustee.
"Administrator" shall mean the Bank, in its capacity as administrator
under the Administration Agreement, or any successor Administrator thereunder.
"Advance" shall mean the amount of interest, as of a Determination Date,
which the Servicer is required to advance on the Receivables pursuant to
Section 4.4(a) of the Sale and Servicing Agreement.
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any Person shall mean the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" shall have meanings correlative to the foregoing.
"Amount Financed" shall mean, with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed
Vehicle and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable shall mean the annual
rate of finance charges stated in the Receivable.
"Applicable Tax State" shall mean, as of any date of determination, each
State as to which any of the following is then applicable: (a) a State in
which the Owner Trustee maintains its Corporate Trust Office and (b) the State
of Texas.
"Authenticating Agent" shall have the meaning specified in Section 2.14
of the Indenture or 3.14 of the Trust Agreement, as applicable.
"Authorized Officer" shall mean, (i) with respect to the Issuer, any
officer within the Corporate Trust Office of the Owner Trustee, including any
vice president, assistant vice president, secretary, assistant secretary or
any other officer of the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers and, for so
long as the Administration Agreement is in full force and effect, any officer
of the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to
the Administration Agreement; and (ii) with respect to the Indenture Trustee
or the Owner Trustee, any officer within the Corporate Trust Office of the
Indenture Trustee or the Owner Trustee, as the case may be, including any vice
president, assistant vice president, secretary, assistant secretary or any
other officer of the Indenture Trustee or the Owner Trustee, as the case may
be, customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a
Appendix A-2
particular matter, any other officer to whom such matter is referred because
of such officer's knowledge of and familiarity with the particular subject, in
each case having direct responsibility for the administration of the Indenture
or the Trust Agreement, as applicable, and shall also mean, with respect to
the Owner Trustee, any officer of the Administrator.
"Available Collections" shall mean, for any Payment Date, the sum of the
following amounts with respect to the Collection Period preceding such Payment
Date: (i) all payments collected with respect to Receivables; (ii) all
Liquidation Proceeds attributable to Receivables which were designated as
Defaulted Receivables in prior Collection Periods in accordance with the
Servicer's customary servicing procedures; (iii) all Advances made by the
Servicer of interest due on the Receivables; (iv) the Purchase Amount received
with respect to each Receivable that became a Purchased Receivable during such
Collection Period; and (v) partial prepayments of any refunded item included
in the principal balance of a Receivable, such as extended warranty protection
plan costs, or physical damage, credit life, disability insurance premiums, or
any partial prepayment which causes a reduction in the Obligor's periodic
payment to an amount below the Scheduled Payment as of the Cut-off Date;
provided however, that in calculating the Available Collections the following
will be excluded: (i) amounts received on any Receivable to the extent that
the Servicer has previously made an unreimbursed Advance on such Receivable
and the amount received exceeds the accrued and unpaid interest on such
Receivable; (ii) amounts received on any of the Receivables to the extent that
the Servicer has previously made an unreimbursed Advance on a Receivable which
is not recoverable from collections on the particular Receivable; (iii) all
payments and proceeds (including Liquidation Proceeds) of any Receivables the
Purchase Amount of which has been included in Available Funds in a prior
Collection Period; (iv) Liquidation Proceeds with respect to a Receivable
attributable to accrued and unpaid interest thereon (but not including
interest for the then current Collection Period) but only to the extent of any
unreimbursed Advances; and (v) amounts constituting the Supplemental Servicing
Fee.
"Available Funds" shall mean, for any Payment Date, the sum of the
Available Collections for such Payment Date and the Reserve Account Excess
Amount for such Payment Date.
"Average Delinquency Ratio" shall mean, for any Payment Date, the
average of the Delinquency Ratios for the preceding three Collection Periods.
"Average Delinquency Trigger Percentage" shall mean 1.25%.
"Average Net Loss Ratio" shall mean, for any Payment Date, the average
of the Net Loss Ratios for the preceding three Collection Periods.
"Average Net Loss Trigger Percentage" shall mean 1.25%.
"Bank" shall mean USAA Federal Savings Bank, a federally chartered
savings association.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, 11
U.S.C. 101 et seq., as amended.
Appendix A-3
"Basic Documents" shall mean the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement, the Receivables Purchase
Agreement, the Indenture, the Administration Agreement, the Underwriting
Agreement, the Note Depository Agreement and the other documents and
certificates delivered in connection therewith.
"Book-Entry Certificate" shall mean, a beneficial interest in any of the
Class B Certificates issued in book-entry form as described in Section 3.2 of
the Trust Agreement.
"Book-Entry Note" shall mean a beneficial interest in any of the Class
A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes,
in each case issued in book-entry form.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions or trust companies in the State of New York,
the State of Delaware or the State of Texas are authorized by law, regulation
or executive order to be closed.
"Certificate Balance" shall mean, as the context so requires, (i) with
respect to all the Class B Certificates, an amount equal to, initially, the
Initial Certificate Balance of the Class B Certificates and, thereafter, an
amount equal to the Initial Certificate Balance of the Class B Certificates,
reduced by all amounts distributed to Class B Certificateholders and allocable
to principal or (ii) with respect to any Class B Certificate, an amount equal
to, initially, the initial denomination of such Class B Certificate and,
thereafter, an amount equal to such initial denomination, reduced by all
amounts distributed in respect of such Class B Certificate and allocable to
principal; provided, that, unless all of the Certificates are owned by the
Depositor or an Affiliate of the Depositor, in determining whether the holders
of Class B Certificates evidencing the requisite portion or percentage of the
Certificate Balance have given any request, demand, authorization, direction,
notice, consent, or waiver hereunder or under any Basic Document, Class B
Certificates owned by the Issuer, any other obligor upon the Class B
Certificates, the Depositor, the Seller, the Servicer or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed to be excluded from
the Certificate Balance except that, in determining whether the Indenture
Trustee and Owner Trustee shall be protected in relying on any such request,
demand, authorization, direction, notice, consent, or waiver, only Class B
Certificates that a Trustee Officer of the Indenture Trustee, if applicable,
and an Authorized Officer of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement, if applicable, knows to be so owned
shall be so disregarded. Class B Certificates so owned that have been pledged
in good faith may be regarded as included in the Certificate Balance if the
pledgee establishes to the satisfaction of the Indenture Trustee or the Owner
Trustee, as applicable, the pledgee's right so to act with respect to such
Class B Certificates and that the pledgee is not the Issuer, any other obligor
upon the Certificates, the Depositor, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons.
"Certificate Distribution Account" shall mean the account established
and maintained as such pursuant to Section 4.1(c) of the Sale and Servicing
Agreement.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to the Trust Agreement filed for the Trust pursuant to Section
3810(a) of the Statutory Trust Statute.
Appendix A-4
"Certificate Owner" shall mean, with respect to any Book-Entry
Certificate, the Person who is the beneficial owner of the Book-Entry
Certificate, as reflected on the books of the Clearing Agency or on the books
of a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.10 of the Trust Agreement and shall
initially be the Owner Trustee.
"Certificate Pool Factor" shall mean, as of the close of business on the
last day of a Collection Period, a seven-digit decimal figure calculated by
the Servicer and equal to the Certificate Balance of the Class B Certificates
(after giving effect to any reductions therein to be made on the immediately
following Payment Date) divided by the Initial Certificate Balance of the
Class B Certificates. Each Certificate Pool Factor will be 1.0000000 as of the
Closing Date; thereafter, each Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance of the Class B Certificates.
"Certificate Register" and "Certificate Registrar" shall have the
respective meanings specified in Section 3.5 of the Trust Agreement.
"Certificateholder" or "holder of a Certificate" shall mean a Person in
whose name a Certificate is registered in the Certificate Register.
"Certificates" shall mean the Class B Certificates.
"Class" shall mean (i) a class of Notes, which may be the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes or the Class A-4 Notes or (ii)
the Class B Certificates.
"Class A Notes" shall mean, collectively, the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A Noteholder" shall mean a Noteholder.
"Class A Noteholders' Interest Carryover Shortfall" shall mean, for any
Payment Date, the excess of the Accrued Class A Note Interest for the
preceding Payment Date over the amount in respect of interest that is actually
paid to Noteholders of Class A Notes on such preceding Payment Date, plus
interest on the amount of interest due but not paid to Noteholders of Class A
Notes on the preceding Payment Date, to the extent permitted by law, at the
respective Note Interest Rates borne by such Class A Notes for the related
Interest Period.
"Class A Noteholders' Monthly Accrued Interest" shall mean, with respect
to any Payment Date, the aggregate interest accrued for the related Interest
Period on the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes at the respective Note Interest Rate for such Class in
accordance with its terms on the outstanding principal amount of the Notes of
each such Class on the immediately preceding Payment Date or the Closing Date,
as the case may be, after giving effect to all payments of principal to the
holders of the Notes of such Class on or prior to such preceding Payment Date.
Appendix A-5
"Class A-1 Final Scheduled Payment Date" shall mean the November 2005
Payment Date.
"Class A-1 Noteholder" shall mean the Person in whose name a Class A-1
Note is registered on the Note Register.
"Class A-1 Notes" shall mean the $256,000,000 aggregate initial
principal amount Class A-1 2.3365% Asset Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-1 to the
Indenture.
"Class A-1 Rate" shall mean 2.3365% per annum. Interest with respect to
the Class A-1 Notes shall be computed on the basis of actual days elapsed in
the applicable Interest Period divided by 360 for all purposes of the Basic
Documents.
"Class A-2 Final Scheduled Payment Date" shall mean the June 2007
Payment Date.
"Class A-2 Noteholder" shall mean the Person in whose name a Class A-2
Note is registered on the Note Register.
"Class A-2 Notes" shall mean the $247,000,000 aggregate initial
principal amount Class A-2 2.79% Asset Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-2 to the
Indenture.
"Class A-2 Rate" shall mean 2.79% per annum. Interest with respect to
the Class A-2 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Class A-3 Final Scheduled Payment Date" shall mean the February 2009
Payment Date.
"Class A-3 Noteholder" shall mean the Person in whose name a Class A-3
Note is registered on the Note Register.
"Class A-3 Notes" shall mean the $385,000,000 aggregate initial
principal amount Class A-3 3.16% Asset Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-3 to the
Indenture.
"Class A-3 Rate" shall mean 3.16% per annum. Interest with respect to
the Class A-3 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Class A-4 Final Scheduled Payment Date" shall mean the June 2011
Payment Date.
"Class A-4 Noteholder" shall mean the Person in whose name a Class A-4
Note is registered on the Note Register.
"Class A-4 Notes" shall mean the $220,170,000 aggregate initial
principal amount Class A-4 3.53% Asset Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-4 to the
Indenture.
Appendix A-6
"Class A-4 Rate" shall mean 3.53% per annum. Interest with respect to
the Class A-4 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Class B Certificateholder" shall mean the Person in whose name a Class
B Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest Carryover Shortfall" shall mean,
with respect to any Payment Date, the excess of the Accrued Class B
Certificate Interest for the preceding Payment Date over the amount in respect
of interest that is actually paid to Class B Certificateholders on such
preceding Payment Date, plus thirty (30) days of interest on such excess, to
the extent permitted by law, at the Class B Rate.
"Class B Certificateholders' Monthly Accrued Interest" shall mean, with
respect to any Payment Date, thirty (30) days of interest (or, in the case of
the first Payment Date, interest accrued from and including the Closing Date
to but excluding such Payment Date) at the Class B Rate on the Certificate
Balance on the immediately preceding Payment Date or the Closing Date, as the
case may be, after giving effect to all distributions allocable to the
reduction of the Certificate Balance made on or prior to such preceding
Payment Date.
"Class B Certificates" shall mean the $31,346,511 aggregate initial
principal balance Class B 4.48% Asset Backed Certificates evidencing the
beneficial interest of a Class B Certificateholder in the property of the
Trust, substantially in the form of Exhibit A to the Trust Agreement;
provided, however, that the Owner Trust Estate has been pledged to the
Indenture Trustee to secure payment of the Notes and that the rights of the
Class B Certificateholders to receive distributions on the Class B
Certificates are subordinated to the rights of the Noteholders as described in
the Sale and Servicing Agreement, the Indenture and the Trust Agreement.
"Class B Final Scheduled Payment Date" shall mean the June 2011 Payment
Date.
"Class B Rate" shall mean 4.48% per annum. Interest with respect to the
Class B Certificates shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" shall mean November 17, 2004.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
"Collateral" shall have the meaning specified in the Granting Clause of
the Indenture.
Appendix A-7
"Collection Account" shall mean the account or accounts established and
maintained as such pursuant to Section 4.1(a) of the Sale and Servicing
Agreement.
"Collection Period" shall mean, with respect to the first Payment Date,
the period from and including the Cut-off Date to and including November 30,
2004 and, with respect to each subsequent Payment Date, the calendar month
preceding the calendar month in which the Payment Date occurs.
"Collections" shall mean all amounts collected by the Servicer (from
whatever source) on or with respect to the Receivables.
"Commission" shall mean the Securities and Exchange Commission.
"Computer Tape" shall mean the computer tape generated by the Seller
which provides information relating to the Receivables and which was used by
the Seller in selecting the Receivables conveyed to the Trust hereunder.
"Corporate Trust Office" shall mean, (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
One ▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or
at such other address as the Owner Trustee may designate from time to time by
notice to the Certificateholders and the Depositor, or the principal corporate
trust office of any successor Owner Trustee (the address of which the
successor Owner Trustee will notify the Certificateholders and the Depositor);
and (ii) with respect to the Indenture Trustee, the principal corporate trust
office of the Indenture Trustee located at ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Institutional Trust Services/Global
Debt--USAA 2004-3 or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders and the Issuer, or
the principal corporate trust office of any successor Indenture Trustee (the
address of which the successor Indenture Trustee will notify the Noteholders
and the Issuer).
"Covered Plan" shall mean any "employee benefit plan" within the meaning
of Section 3(3) of ERISA, whether or not subject to Title I of ERISA,
including any U.S. governmental or non-U.S. pension plan, or any "plan"
subject to Section 4975 of the Code
"Cut-off Date" shall mean November 1, 2004.
"Default" shall mean any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.
"Defaulted Receivable" shall mean a Receivable (i) that the Servicer
determines is unlikely to be paid in full or (ii) with respect to which at
least 5% of a Scheduled Payment is 120 or more days delinquent as of the end
of a calendar month.
"Definitive Certificates" shall have the meaning specified in Section
3.13 of the Trust Agreement.
"Definitive Notes" shall have the meaning specified in Section 2.11 of
the Indenture.
Appendix A-8
"Delinquency Ratio" shall mean, for any Collection Period, the ratio,
expressed as a percentage, of (a) the Principal Balance of all outstanding
Receivables (other than Purchased Receivables and Defaulted Receivables) that
are 60 or more days delinquent as of the end of such Collection Period,
determined in accordance with the Servicer's customary practices, plus
Receivables as to which the related Financial Vehicle has been repossessed but
not sold, to (b) the Pool Balance as of the last day of such Collection
Period.
"Depositor" shall mean USAA Acceptance, LLC, a Delaware limited
liability company.
"Determination Date" shall mean, with respect to any Collection Period,
the second Business Day immediately preceding the Payment Date following such
Collection Period.
"Eligible Deposit Account" shall mean either (i) a segregated account
with an Eligible Institution or (ii) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the U.S. or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution have a credit rating from each
Rating Agency in one of its generic rating categories which signifies
investment grade.
"Eligible Institution" shall mean either (i) the corporate trust
department of the Indenture Trustee or the Owner Trustee, as applicable; or
(ii) a depository institution organized under the laws of the U.S. or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), (1) which has either (A) a long-term unsecured debt rating of
at least "AA-" by Standard & Poor's and "Baa3" by ▇▇▇▇▇'▇ or (B) a short-term
unsecured debt rating or certificate of deposit rating of "A-1+" by Standard &
Poor' and "Prime-1" by ▇▇▇▇▇'▇ and (2) whose deposits are insured by the FDIC.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Default" shall have the meaning specified in Section 5.1 of
the Indenture.
"Event of Servicing Termination" shall mean an event specified in
Section 7.1 of the Sale and Servicing Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive Officer" shall mean, with respect to any corporation or
depository institution, the Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, President, Executive Vice President, any Vice
President, the Secretary or the Treasurer of such corporation and, with
respect to any partnership, any general partner thereof.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Final Scheduled Payment Date" shall mean, with respect to (i) the Class
A-1 Notes, the Class A-1 Final Scheduled Payment Date, (ii) the Class A-2
Notes, the Class A-2 Final Scheduled Payment Date, (iii) the Class A-3 Notes,
the Class A-3 Final Scheduled Payment
Appendix A-9
Date, (iv) the Class A-4 Notes, the Class A-4 Final Scheduled Payment Date,
and (v) the Class B Certificates, the Class B Final Scheduled Payment Date.
"Financed Vehicle" shall mean a new or used automobile or light-duty
truck, together with all accessions thereto, securing an Obligor's
indebtedness under the respective Receivable.
"Grant" shall mean to mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and to ▇▇▇▇▇ ▇
▇▇▇▇ upon and a security interest in and right of set-off against, and to
deposit, set over and confirm pursuant to the Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all rights,
powers and options (but none of the obligations) of the granting party
thereunder, including the immediate and continuing right to claim for,
collect, receive and give receipt for principal and interest payments in
respect of the Collateral and all other monies payable thereunder, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, to bring Proceedings in the name of the
granting party or otherwise, and generally to do and receive anything that the
granting party is or may be entitled to do or receive thereunder or with
respect thereto.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 7.2 of the Trust Agreement.
"Indenture" shall mean the Indenture, dated as of November 17, 2004, by
and between the Trust and the Indenture Trustee.
"Indenture Trust Estate" shall mean all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of Indenture for the benefit of the Noteholders (including,
without limitation, all property and interests Granted to the Indenture
Trustee), including all proceeds thereof.
"Indenture Trustee" shall mean JPMorgan Chase Bank, National
Association, a banking association organized under the laws of the United
States, not in its individual capacity but solely as Indenture Trustee under
the Indenture, or any successor Indenture Trustee under the Indenture.
"Independent" shall mean, when used with respect to any specified
Person, that such Person (a) is in fact independent of the Issuer, any other
obligor on the Notes, the Seller and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller
or any Affiliate of any of the foregoing Persons and (c) is not connected with
the Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser, firm of certified public
accountants or other expert appointed by an Issuer Order and approved by the
Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state
Appendix A-10
that the signer has read the definition of "Independent" in the Indenture and
that the signer is Independent within the meaning thereof.
"Initial Certificate Balance" shall mean $31,346,511.
"Initial Pool Balance" shall mean $1,139,516,511.60.
"Insolvency Event" shall mean, with respect to any Person, (i) the
making of a general assignment for the benefit of creditors, (ii) the filing
of a voluntary petition in bankruptcy, (iii) being adjudged a bankrupt or
insolvent, or having had entered against such Person an order for relief in
any bankruptcy or insolvency proceeding, (iv) the filing by such Person of a
petition or answer seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute,
law or regulation, (v) the filing by such Person of an answer or other
pleading admitting or failing to contest the material allegations of a
petition filed against such Person in any proceeding specified in (vii) below,
(vi) seeking, consent to or acquiescing in the appointment of a trustee,
receiver or liquidator of such Person or of all or any substantial part of the
assets of such Person or (vii) the failure to obtain dismissal within 60 days
of the commencement of any proceeding against such Person seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation, or the
entry of any order appointing a trustee, liquidator or receiver of such Person
or of such Person's assets or any substantial portion thereof.
"Interest Period" shall mean, with respect to any Payment Date (i) with
respect to the Class A-1 Notes, from and including the Closing Date (in the
case of the first Payment Date) or from and including the most recent Payment
Date on which interest has been paid to but excluding the following Payment
Date and (ii) with respect to each Class of Notes (other than the Class A-1
Notes) and the Certificates, from and including the Closing Date (in the case
of the first Payment Date) or from and including the 15th day of the calendar
month preceding each Payment Date to but excluding the 15th day of the
calendar month of such Payment Date.
"IRS" shall mean the Internal Revenue Service.
"Issuer" shall mean the Trust unless a successor replaces it and,
thereafter, shall mean the successor.
"Issuer Order" and "Issuer Request" shall mean a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"Lien" shall mean a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than, in respect of a Receivable, tax liens,
mechanics' liens, and any liens which attach to the respective Receivable by
operation of law.
"Liquidation Proceeds" shall mean with respect to any Receivable (a)
insurance proceeds received by the Servicer and (b) monies collected by the
Servicer on a Defaulted Receivable from whatever source, including but not
limited to proceeds of Financed Vehicles after repossession, net of any
payments required by law to be remitted to the Obligor.
Appendix A-11
"Monthly Remittance Condition" shall mean either (a) the Servicer
obtains a short-term certificate of deposit rating of the Servicer from
Standard & Poor's and Moody's of "A-1+" and "Prime-1," respectively, or (b)
the Servicer provides the Indenture Trustee with a letter from each Rating
Agency to the effect that the current ratings assigned to the Securities by
such Rating Agency will not be adversely affected by the remittance of
Collections on a monthly, rather than a daily, basis.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Loss Ratio" shall mean, for any Collection Period, the ratio,
expressed as an annualized percentage, of (a) Realized Losses minus Recoveries
for such Collection Period, to (b) the average of the Pool Balances on the
first day of such Collection Period and the last day of such Collection
Period.
"Note Depository Agreement" shall mean collectively (i) the Letter of
Representations, dated as of November 17, 2004 by and among the Issuer,
JPMorgan Chase Bank, National Association, as agent and The Depository Trust
Company regarding the Notes and (ii) the Letter of Representations, dated as
of November 17, 2004 by and among the Issuer, JPMorgan Chase Bank, National
Association, as agent and The Depository Trust Company regarding the
Certificates.
"Note Interest Rate" shall mean the Class A-1 Rate, the Class A-2 Rate,
the Class A-3 Rate or the Class A-4 Rate, as applicable.
"Note Owner" shall mean, with respect to any Book-Entry Note, the Person
who is the beneficial owner of such Book-Entry Note, as reflected on the books
of the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Note Paying Agent" shall mean the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make payments
to and distributions from the Collection Account (including the Principal
Distribution Account), including payment of principal of or interest on the
Notes on behalf of the Issuer.
"Note Pool Factor" shall mean, with respect to each Class of Notes as of
the close of business on the last day of a Collection Period, a seven-digit
decimal figure calculated by the Servicer and equal to the outstanding
principal balance of such Class of Notes (after giving effect to any
reductions thereof to be made on the immediately following Payment Date)
divided by the original outstanding principal balance of such Class of Notes.
The Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the
Note Pool Factor will decline to reflect reductions in the outstanding
principal amount of such Class of Notes.
"Note Register" and "Note Registrar" shall have the respective meanings
specified in Section 2.5 of the Indenture.
Appendix A-12
"Noteholder" or "holder of a Note" shall mean the Person in whose name a
Note is registered on the Note Register.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes, collectively.
"Obligor" on a Receivable shall mean the purchaser or co-purchasers of
the Financed Vehicle or any other Person who owes payments under the
Receivable.
"Officer's Certificate" shall mean (i) with respect to the Trust, a
certificate signed by any Authorized Officer of the Trust and (ii) with
respect to the Depositor, the Seller or the Servicer, a certificate signed by
the chairman of the board, the president, any executive or senior vice
president, any vice president, the treasurer or the controller of the
Depositor or the Servicer, as applicable.
"Opinion of Counsel" shall mean a written opinion of counsel which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or the
Rating Agencies, as applicable.
"Optional Purchase Percentage" shall mean 10%.
"Outstanding" shall mean with respect to the Securities, as of the date
of determination, all Securities theretofore authenticated and delivered under
the Indenture or the Trust Agreement, as applicable, except:
(a) Securities theretofore (i) cancelled by the Note
Registrar or the Certificate Registrar, as applicable, or (ii)
delivered to the Note Registrar or the Certificate Registrar, as
applicable, for cancellation;
(b) Securities or portions thereof the payment for which
money in the necessary amount has been theretofore deposited with
(i)in the case of the Notes, the Indenture Trustee or any Note
Paying Agent in trust for the Noteholders of such Notes (provided,
however, that if such Notes are to be prepaid, notice of such
prepayment has been duly given pursuant to the Indenture or
provision for such notice has been made, satisfactory to the
Indenture Trustee) or (ii) in the case of the Certificates, the
Owner Trustee or any Certificate Paying Agent in trust for the
Certificateholders of such Certificates (provided, however, that
if such Certificates are to be prepaid, notice of such prepayment
has been duly given pursuant to the Trust Agreement or provision
for such notice has been made, satisfactory to the Owner Trustee);
and
(c) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to the
Indenture or the Trust Agreement, as applicable, unless proof
satisfactory to the Indenture Trustee or the Owner Trustee, as
applicable, is presented that any such Securities are held by a
protected purchaser;
provided, that in determining whether the holders of Notes or Certificates
evidencing the requisite principal amount of the Notes Outstanding or
Certificates Outstanding have given any
Appendix A-13
request, demand, authorization, direction, notice, consent, or waiver under
any Basic Document, Securities owned by the Issuer, any other obligor upon the
Securities, the Depositor, the Seller, the Servicer or any Affiliate of any of
the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee or Owner Trustee, as
applicable, shall be protected in relying on any such request, demand,
authorization, direction, notice, consent, or waiver, only (i) Notes that a
Responsible Officer of the Indenture Trustee knows to be so owned and (ii)
Certificates that a Responsible Officer of the Owner Trustee knows to be so
owned, shall be so disregarded; provided, however, if the Issuer, any other
obligor upon the Securities, the Depositor, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons owns an entire Class of Securities,
such Securities shall be deemed to be Outstanding. Notes owned by the Issuer,
any other obligor upon the Notes, the Depositor, the Seller, the Servicer or
any Affiliate of any of the foregoing Persons that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other
obligor upon the Notes, the Depositor, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons. Certificates owned by the Issuer,
any other obligor upon the Certificates, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Owner Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Issuer, any other obligor upon
the Certificates, the Depositor, the Seller, the Servicer or any Affiliate of
any of the foregoing Persons.
"Outstanding Advances" on the Receivables shall mean the sum, as of the
close of business on the last day of a Collection Period, of all Advances as
reduced as provided in Section 4.4(a) of the Sale and Servicing Agreement.
"Owner Trustee" shall mean Wachovia Bank of Delaware, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement, or any successor Owner
Trustee under the Trust Agreement.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in, to and under the property and rights assigned to the Trust pursuant
to Article II of the Sale and Servicing Agreement.
"Payment Date" shall mean the fifteenth (15th) day of each calendar
month or, if such day is not a Business Day, the next succeeding Business Day.
"Permitted Investments" shall mean, on any date of determination,
book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form with maturities not exceeding the
Business Day preceding the next Payment Date which evidence:
(a) direct non-callable obligations of, and obligations
fully guaranteed as to timely payment by, the United States of
America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (or any domestic branch of a foreign bank)
Appendix A-14
and subject to supervision and examination by federal or State
banking or depository institution authorities; provided, however,
that at the time of the investment or contractual commitment to
invest therein, the commercial paper or other short-term unsecured
debt obligations (other than such obligations the rating of which
is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest investment
category granted thereby;
(c) commercial paper having, at the time of the investment
or contractual commitment to invest therein, a rating from each of
the Rating Agencies in the highest investment category granted
thereby;
(d) investments in money market funds having a rating from
each of the Rating Agencies in the highest investment category
granted thereby (including funds for which the Indenture Trustee
or the Owner Trustee or any of their respective Affiliates is
investment manager or advisor);
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct non-callable obligation of, or fully guaranteed by,
the United States of America or any agency or instrumentality
thereof the obligations of which are backed by the full faith and
credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as
principal) described in clause (b); and
(g) any other investment with respect to which the Issuer or
the Servicer has received written notification from the Rating
Agencies that the acquisition of such investment as a Permitted
Investment will not result in a withdrawal or downgrading of the
ratings on the Notes or the Certificates.
"Person" shall mean any individual, corporation, limited liability
company, estate, partnership, joint venture, association, joint stock company,
trust, unincorporated organization, or government or any agency or political
subdivision thereof.
"Plan" means an employee benefit plan (as defined in section 3(3) of
ERISA) that is subject to Title I of ERISA, a plan (as defined in section
4975(e)(1) of the Code) and any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity or otherwise.
"Pool Balance" shall mean on any date of determination, the aggregate
outstanding Principal Balance of the Receivables (exclusive of Purchased
Receivables and Defaulted Receivables) as of such date of determination.
"Pool Factor" as of the last day of a Collection Period shall mean a
seven-digit decimal figure equal to the Pool Balance at that time divided by
the Initial Pool Balance.
Appendix A-15
"Predecessor Note" shall mean, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note and, for purposes of this definition, any
Note authenticated and delivered under Section 2.6 of the Indenture in lieu of
a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Note.
"Prepayment Date" shall mean (i) with respect to a prepayment of the
Certificates pursuant to Section 8.2(a) of the Trust Agreement or a
distribution to Certificateholders pursuant to Section 8.1(c) of the Trust
Agreement, the Payment Date specified by the Owner Trustee pursuant to said
Section 8.2(a) or 8.1(c), as applicable, and (ii) with respect to a prepayment
of the Notes pursuant to Section 10.1(a) of the Indenture, the Payment Date
specified by the Servicer pursuant to Section 10.1(a) or (b) of the Indenture,
as applicable.
"Prepayment Price" shall mean (i) in the case of the Certificates, an
amount equal to the Certificate Balance plus accrued and unpaid interest
thereon at the applicable Class B Rate plus interest on any overdue interest
at the applicable Class B Rate (to the extent lawful) to but excluding the
Prepayment Date and (ii) in the case of a Class of Notes to be prepaid, an
amount equal to the unpaid principal amount of such Class of Notes plus
accrued and unpaid interest thereon at the applicable Note Interest Rate plus
interest on any overdue interest at the applicable Note Interest Rate (to the
extent lawful) to but excluding the Prepayment Date.
"Priority Note Principal Payment" shall mean, for each Payment Date, a
payment of principal equal to the excess, if any, of the aggregate principal
amount of the Class A Notes (before giving effect to any payments on that
Payment Date) over the Pool Balance at the end of the related Collection
Period.
"Principal Balance" of a Receivable, as of any date of determination,
shall mean the Amount Financed minus that portion of all payments actually
received on or prior to such date allocable to principal.
"Principal Distribution Account" shall mean the administrative
sub-account of the Collection Account established and maintained as such
pursuant to Section 4.1(b) of the Sale and Servicing Agreement.
"Proceeding" shall mean any suit in equity, action at law or other
judicial or administrative proceeding.
"Projected Weighted Average Life" shall mean, with respect to (a) the
Class A-1 Notes, 0.34, (b) the Class A-2 Notes, 1.05, (c) the Class A-3 Notes,
2.00, (d) the Class A-4 Notes, 3.13 and (e) the Class B Certificates, 3.40.
"Prospectus" shall have the meaning specified in the Underwriting
Agreement.
"Prospectus Supplement" shall have the meaning specified in the
Underwriting Agreement.
"Purchase Amount" with respect to a Purchased Receivable shall mean the
sum, as of the last day of the related Collection Period, of the Principal
Balance thereof plus the accrued
Appendix A-16
interest thereon at the weighted average of the Note Interest Rates and the
Class B Rate through the end of the related Collection Period.
"Purchased Receivable" shall mean a Receivable purchased as of the close
of business on the last day of the respective Collection Period by the
Servicer pursuant to Section 3.7 of the Sale and Servicing Agreement, by the
Seller pursuant to Section 2.3 of the Sale and Servicing Agreement or by the
Servicer pursuant to Section 8.1 of the Sale and Servicing Agreement.
"Rating Agency" shall mean each of the nationally recognized statistical
rating organizations designated by the Depositor to provide a rating on the
Notes or the Certificates which is then rating such Notes or Certificates. If
no such organization or successor is any longer in existence, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable Person designated by the Depositor, notice of which designation
shall be given to the Indenture Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any action, that
each of the Rating Agencies shall have notified the Servicer, the Depositor,
the Owner Trustee and the Indenture Trustee in writing that such action will
not result in a reduction or withdrawal of the then current ratings of the
Notes or the Certificates.
"Realized Losses" shall mean, for any Collection Period and for each
Receivable that became a Defaulted Receivable during such Collection Period,
the excess, for each such Receivable, of (i) the Principal Balance of such
Receivable over (ii) Liquidation Proceeds received with respect to such
Receivable during such Collection Period, to the extent allocable to
principal.
"Receivable" shall mean a motor vehicle installment loan contract listed
on Schedule A to the Receivables Purchase Agreement and all proceeds thereof
and payments thereunder, which Receivable shall not have been released by the
Indenture Trustee and the Owner Trustee from the Trust.
"Receivable Files" shall mean the documents specified in Section 2.4 of
the Sale and Servicing Agreement.
"Receivables Purchase Agreement" shall mean the Receivables Purchase
Agreement, dated as of November 1, 2004, by and between the Bank, as seller,
and the Depositor, as purchaser.
"Record Date" shall mean, with respect to any Payment Date or Prepayment
Date and any Book-Entry Security, the close of business on the day prior to
such Payment Date or Prepayment Date or, with respect to any Definitive Note
or Definitive Certificate, the last day of the month preceding the month in
which such Payment Date or Prepayment Date occurs.
"Recoveries" shall mean, with respect to any Collection Period, all
amounts received by the Servicer with respect to any Defaulted Receivable
during any Collection Period following the Collection Period in which such
Receivable became a Defaulted Receivable, net of any fees, costs and expenses
incurred by the Servicer in connection with the collection of such Receivable
and any payments required by law to be remitted to the Obligor.
Appendix A-17
"Registered Noteholder" shall mean the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Registration Statement" shall mean Registration Statement No.
333-112241 filed by the Depositor with the Securities and Exchange Commission
in the form in which it became effective on February 9, 2004.
"Regular Principal Distribution Amount" shall mean, with respect to any
Payment Date, an amount equal to the sum of (i) the Collections on the
Receivables received during the related Collection Period and allocable to
principal and (ii) the aggregate Principal Balance (net of Liquidation
Proceeds received during the related Collection Period applied to principal)
of all Receivables that became designated as Defaulted Receivables in such
Collection Period; provided, however, that the Regular Principal Distribution
Amount shall not exceed the sum of the aggregate outstanding principal amount
of all of the Notes and the Certificate Balance on such Payment Date.
"Related Agreements" shall have the meaning specified in the recitals to
the Administration Agreement.
"Representatives" shall mean Deutsche Bank Securities Inc. and Wachovia
Capital Markets, LLC, as representatives of the several Underwriters.
"Repurchase Event" shall have the meaning specified in Section 7.02 of
the Receivables Purchase Agreement.
"Required Rating" shall mean a rating on (i) short-term unsecured debt
obligations of "Prime-1" by Moody's and (ii) short-term unsecured debt
obligations of "A-1+" by Standard & Poor's; and any requirement that
short-term unsecured debt obligations have the "Required Rating" shall mean
that such short-term unsecured debt obligations have the foregoing required
ratings from each of such Rating Agencies.
"Reserve Account" shall mean the account established and maintained as
such pursuant to Section 4.7(a) of the Sale and Servicing Agreement.
"Reserve Account Property" shall have the meaning specified in Section
4.7(a) of the Sale and Servicing Agreement.
"Reserve Account Excess Amount" shall mean, with respect to any Payment
Date, an amount equal to the excess, if any, of (i) the amount of cash or
other immediately available funds in the Reserve Account on such Payment Date
(prior to giving effect to any withdrawals therefrom relating to such Payment
Date) over (ii) the Specified Reserve Balance with respect to such Payment
Date.
"Reserve Initial Deposit" shall mean, $5,697,582.56.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of November 1, 2004, by and between the Trust, as issuer,
the Depositor, and the Bank, as seller and servicer.
Appendix A-18
"Schedule of Receivables" shall mean the list of Receivables attached as
Schedule A to the Receivables Purchase Agreement, the Sale and Servicing
Agreement and the Indenture (which Schedules may be in the form of microfiche,
disk or other means acceptable to the Indenture Trustee).
"Scheduled Payment" shall mean, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid by
the Obligor in such Collection Period (without giving effect to deferments of
payments pursuant to Section 3.2 of the Sale and Servicing Agreement or any
rescheduling in any insolvency or similar proceedings).
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities" shall mean the Notes and the Certificates, collectively.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholders" shall mean the Noteholders and the Certificateholders,
collectively.
"Seller" shall mean the Bank as the seller of the Receivables under the
Receivables Purchase Agreement and each successor to the Bank.
"Servicer" shall mean the Bank as the servicer of the Receivables under
the Sale and Servicing Agreement, and each successor to the Bank (in the same
capacity) pursuant to Section 6.3 of the Sale and Servicing Agreement.
"Servicer's Certificate" shall mean a certificate completed and executed
by the Servicer by the chairman of the board, the president, any executive
vice president, any vice president, the treasurer, any assistant treasurer,
the controller, or any assistant controller of the Servicer pursuant to
Section 3.9 of the Sale and Servicing Agreement.
"Servicing Fee" shall mean, with respect to a Collection Period, the fee
payable to the Servicer for services rendered during such Collection Period,
which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by
the Pool Balance as of the first day of the Collection Period.
"Servicing Fee Rate" shall mean 0.50% per annum.
"Similar Laws" shall mean federal, state or local laws that impose
requirements similar to ERISA or the Code.
"Simple Interest Method" shall mean the method of allocating a fixed
level payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the amount accrued from the
date of the preceding payment to the date of the current payment.
"Specified Reserve Balance" shall mean for a Payment Date the lesser of
(a) $5,697,582.56 (0.50% of the principal balance of the Receivables as of the
Cut-off Date) and (b) the sum of the aggregate principal balance of the
Outstanding Notes and the principal balance
Appendix A-19
of the Certificates as of the current Payment Date. However, the Specified
Reserve Balance will be calculated using a percentage of 0.75% in (a) above
for any Payment Date for which the Average Net Loss Ratio exceeds 1.25% or the
Average Delinquency Ratio exceeds 1.25% (the "specified trigger level"). Also,
that higher percentage will remain in effect until each of the Average Net
Loss Ratio and the Average Delinquency Ratio is equal to or less than 1.25%
for at least six consecutive Payment Dates. In no event will the Specified
Reserve Balance for any Payment Date exceed the aggregate Outstanding
principal balance of the Receivables at the end of the related Collection
Period. The Specified Reserve Balance may be reduced to a lesser amount as
determined by the Depositor, if each of Moody's and Standard & Poor's shall
have confirmed in writing to the Indenture Trustee that such action will not
result in a withdrawal or reduction in any of its ratings of the Securities.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"State" shall mean any state or commonwealth of the United States of
America, or the District of Columbia.
"Statutory Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Delaware Code ss. 3801 et seq., as amended.
"Successor Servicer" shall mean an institution appointed as successor
Servicer pursuant to Section 7.2 of the Sale and Servicing Agreement.
"Supplemental Servicing Fee" shall mean the fee payable to the Servicer
for certain services rendered during the respective Collection Period,
determined pursuant to and defined in Section 3.8 of the Sale and Servicing
Agreement.
"Total Required Payment" shall mean, with respect to any Payment Date,
the sum of the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods, the Accrued Class A Note Interest, the Accrued Class B
Certificate Interest and the Regular Principal Distribution Amount; provided,
however, that on any Final Scheduled Payment Date the amount required to be
paid pursuant to Section 4.6(c)(vi) of the Sale and Servicing Agreement shall
be included in the Total Required Payment; provided, further, that following
the occurrence and during the continuation of an Event of Default, on any
Payment Date until the Payment Date on which the outstanding principal amount
of all the Securities has been paid in full, the Total Required Payment shall
mean the sum of the fees, expenses and indemnification of the Indenture
Trustee and the Owner Trustee, the Servicing Fee and all unpaid Servicing Fees
from prior Collection Periods, the Accrued Class A Note Interest, the Accrued
Class B Certificate Interest and the amount necessary to reduce the
outstanding principal amount of all the Securities to zero.
"Transfer Date" shall mean the Closing Date.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Appendix A-20
"Trust" shall mean USAA Auto Owner Trust 2004-3, a Delaware statutory
trust governed by the Trust Agreement.
"Trust Accounts" shall have the meaning specified in Section 4.7(a) of
the Sale and Servicing Agreement.
"Trust Agreement" shall mean the Amended and Restated Trust Agreement of
the Trust dated as of November 17, 2004, by and between the Depositor and the
Owner Trustee, as amended and/or restated from time to time.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939, as amended, unless otherwise specifically provided.
"Trust Property" shall mean, collectively, (i) the Receivables; (ii)
monies received thereunder on or after the Cut-off Date; (iii) the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Issuer in the Financed Vehicles;
(iv) rights to receive proceeds with respect to the Receivables from claims on
any theft, physical damage, credit life, credit disability, or other insurance
policies covering Financed Vehicles or Obligors; (v) all of the Seller's
rights to the Receivable Files; (vi) the Trust Accounts and all amounts,
securities, investments, investment property and other property deposited in
or credited to any of the foregoing, all security entitlements relating to the
foregoing and all proceeds thereof; (vii) the Receivables Purchase Agreement;
(viii) payments and proceeds with respect to the Receivables held by the
Servicer; (ix) all property (including the right to receive Liquidation
Proceeds) securing a Receivable (other than a Receivable repurchased by the
Servicer or purchased by the Seller); (x) rebates of premiums and other
amounts relating to insurance policies and other items financed under the
Receivables in effect as of the Cut-off Date; and (xi) all present and future
claims, demands, causes of action and choses in action in respect of any or
all of the foregoing and all payments on or under and all proceeds of every
kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any
and every kind and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing.
"Trustee Officer" shall mean, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject, in each case having direct responsibility for the
administration of the Indenture and the other Basic Documents on behalf of the
Indenture Trustee and, with respect to the Owner Trustee, any officer within
the Corporate Trust Office of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement and the other Basic Documents on
behalf of the Owner Trustee.
"UCC" shall mean the Uniform Commercial Code as in effect in any
relevant jurisdiction.
Appendix A-21
"Underwriters" shall mean the underwriters named in Schedule I to the
Underwriting Agreement.
"Underwriting Agreement" shall mean the Underwriting Agreement, dated
November 9, 2004 among the Seller, the Depositor and the Representatives.
"Underwritten Securities" shall mean the Notes.
Appendix A-22