EXHIBIT 99.1
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SALE AND SERVICING
AGREEMENT
between
NORWEST AUTO TRUST 1996-A
as
Issuer
NORWEST AUTO RECEIVABLES CORPORATION,
as
Seller
NORWEST BANK MINNESOTA, N.A.,
as Servicer
THE CHASE MANHATTAN BANK
as Indenture Trustee
Dated as of November 13, 1996
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TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS.............................................. 1
SECTION 1.1. Definitions...................................... 1
SECTION 1.2. Other Interpretive Provisions.................... 1
ARTICLE II. CONVEYANCE OF RECEIVABLES............................... 2
SECTION 2.1. Conveyance of Receivables........................ 2
ARTICLE III. THE RECEIVABLES........................................ 3
SECTION 3.1. Representations and Warranties as to Each
Receivable..................................... 3
SECTION 3.2. Representations and Warranties as to the
Receivables in the Aggregate and Actions
of Seller...................................... 7
SECTION 3.3. Repurchase upon Breach........................... 8
SECTION 3.4. Custodian of Receivable Files.................... 8
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES............. 11
SECTION 4.1. Duties of Servicer............................... 11
SECTION 4.2. Collection of Receivable Payments................ 13
SECTION 4.3. Realization upon Receivables..................... 13
SECTION 4.4. Physical Damage Insurance........................ 14
SECTION 4.5. Maintenance of Security Interests in Financed
Vehicles....................................... 16
SECTION 4.6. Covenants of Servicer............................ 16
SECTION 4.7. Purchase by Servicer upon Breach................. 17
SECTION 4.8. Servicing Fee.................................... 17
SECTION 4.9. Servicer's Report................................ 18
SECTION 4.10. Annual Statement as to Compliance; Notice of
Default....................................... 18
SECTION 4.11. Annual Independent Certified Public Accountants'
Report....................................... 19
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables.......................... 19
SECTION 4.13. Servicer Expenses............................... 19
ARTICLE V. DISTRIBUTION; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS................. 20
SECTION 5.1. Establishment of Trust Accounts.................. 20
SECTION 5.2. Collections...................................... 22
SECTION 5.3. Advances......................................... 23
SECTION 5.4. Additional Deposits.............................. 24
SECTION 5.5. Distributions.................................... 24
SECTION 5.6. Statements to Certificateholders and Noteholders. 25
SECTION 5.7. Net Deposits..................................... 27
SECTION 5.8. Reserve Account.................................. 27
ARTICLE VI. SELLER.................................................. 31
SECTION 6.1. Representations of Seller........................ 31
SECTION 6.2. Continued Existence.............................. 33
SECTION 6.3. Liability of Seller; Indemnities................. 33
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller......................... 34
SECTION 6.5. Limitation on Liability of Seller and Others..... 35
ARTICLE VII. SERVICER............................................... 36
SECTION 7.1. Representations of Servicer...................... 36
SECTION 7.2. Indemnities of Servicer.......................... 38
SECTION 7.3. Merger or Consolidation of, or Assumption of
the Obligations of, Servicer................... 39
SECTION 7.4. Limitation on Liability of Servicer and Others... 40
SECTION 7.5. Norwest Bank Not To Resign as Servicer........... 40
SECTION 7.6. Existence........................................ 41
SECTION 7.7. Servicer May Own Notes or Certificates........... 41
ARTICLE VIII. DEFAULT............................................... 41
SECTION 8.1. Servicer Termination Event....................... 41
SECTION 8.2. Appointment of Successor......................... 43
SECTION 8.3. Payment of Servicing Fee......................... 44
SECTION 8.4. Notification to Noteholders and
Certificateholders............................. 44
SECTION 8.5. Waiver of Past Defaults.......................... 44
ARTICLE IX. TERMINATION............................................. 45
SECTION 9.1. Optional Purchase of All Receivables............. 45
ARTICLE X. MISCELLANEOUS PROVISIONS................................. 46
SECTION 10.1. Amendment....................................... 46
SECTION 10.2. Protection of Title to Trust Property........... 48
SECTION 10.3. Litigation and Indemnities...................... 51
SECTION 10.4. Notices......................................... 51
SECTION 10.5. Assignment...................................... 52
SECTION 10.6. Limitations on Rights of Others................. 52
SECTION 10.7. Severability.................................... 52
SECTION 10.8. Separate Counterparts........................... 52
SECTION 10.9. Headings........................................ 52
SECTION 10.10. Governing Law.................................. 52
SECTION 10.11. Assignment to Indenture Trustee................ 53
SECTION 10.12. Nonpetition Covenant........................... 53
SECTION 10.13. Limitation of Liability of Owner Trustee and
Indenture Trustee............................ 53
SECTION 10.14. Further Assurances.............................. 54
SECTION 10.15. No Waiver; Cumulative Remedies................. 54
SCHEDULES
Schedule A - Location of Receivables
EXHIBITS
Exhibit A - Form of Servicer's Report
APPENDIX
Appendix X - Definitions
SALE AND SERVICING AGREEMENT dated as of November, 13, 1996 (this
"Agreement") among NORWEST AUTO TRUST 1996-A, a Delaware business trust
("Issuer"), NORWEST AUTO RECEIVABLES CORPORATION, a Delaware corporation
(in its capacity as seller, "Seller"), NORWEST BANK MINNESOTA, N.A., (in
its capacity as servicer, "Servicer") and THE CHASE MANHATTAN BANK, a New
York banking corporation (in its capacity as indenture trustee, "Indenture
Trustee").
WHEREAS, Issuer desires to purchase from Seller a portfolio of
receivables arising in connection with Motor Vehicle Loans purchased or
originated by the Seller Affiliates and sold to Seller under the Purchase
Agreements;
WHEREAS, Seller is willing to sell such receivables to Issuer; and
WHEREAS, Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
SECTION 1.1. Definitions. Capitalized terms are used in this
Agreement as defined in Appendix X.
SECTION 1.2. Other Interpretive Provisions. For purposes of this
Agreement, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in
this Agreement to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles; (b)
terms defined in Article 9 of the UCC and not otherwise defined in this
Agreement are used as defined in that Article; (c) the words "hereof,"
"herein" and "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement;
(d) references to any Article, Section, Schedule or Exhibit are references
to Articles, Sections, Schedules and Exhibits in or to this Agreement and
references to any paragraph, subsection, clause or other subdivision within
any Section or definition refer to such paragraph, subsection, clause or
other subdivision of such Section or definition; (e) the term "including"
means "including without limitation"; (f) except as otherwise expressly
provided herein, references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (g) references to any Person include that Person's successors
and assigns; and (h) headings are for purposes of reference only and shall
not otherwise affect the meaning or interpretation of any provision hereof.
ARTICLE II. CONVEYANCE OF RECEIVABLES.
SECTION 2.1. Conveyance of Receivables. In consideration of Issuer's
delivery to, or upon the order of, Seller of Notes and Certificates, in
aggregate principal amounts equal to the initial principal amount of the
Notes and the initial Certificate Balance, respectively, Seller does hereby
sell, transfer, assign, set over and otherwise convey to Issuer, without
recourse, subject to the obligations herein (collectively the "Trust
Property"):
(a) all right, title and interest of Seller in and to the
Receivables, and all moneys received thereon after the Cutoff Date;
(b) all right, title and interest of Seller in the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of Seller in the Financed Vehicles
and any other property that shall secure the Receivables;
(c) the interest of Seller in any proceeds with respect to the
Receivables from claims on any Insurance Policies covering Financed
Vehicles or the Obligors or from claims under any lender's single
interest insurance policy naming any Seller Affiliate as an insured;
(d) rebates of premiums and other amounts relating to Insurance
Policies (including any force placed Physical Damage Insurance Policy)
and other items financed under the Receivables, in each case, to the
extent the Servicer would, in accordance with its customary practices,
apply such amounts to the Principal Balance of the related Receivable;
(e) the interest of Seller in any proceeds from (i) any
Receivable repurchased by a Dealer pursuant to a Dealer Agreement, as
a result of a breach of representation or warranty in the related
Dealer Agreement, (ii) a default by an Obligor resulting in the
repossession of the Financed Vehicle under the applicable Motor
Vehicle Loan or (iii) any Dealer Recourse or other rights of Seller
Affiliates under Dealer Agreements (other than rights to rebates of
unamortized premiums paid or payable to Dealers) relating to the
Receivables;
(f) all right, title and interest in all funds on deposit from
time to time in the Certificate Distribution Account and the Trust
Accounts, and in all investments and proceeds thereof (but excluding
all investment income thereon);
(g) all right, title and interest of Seller under each Purchase
Agreement, including the right of Seller to cause a Seller Affiliate
to repurchase Receivables from Seller;
(h) all right, title and interest of Seller in any instrument
or document relating to the Receivables; and
(i) the proceeds of any and all of the foregoing.
The sale, transfer, assignment, setting over and conveyance made
hereunder shall not constitute and is not intended to result in an
assumption by Issuer of any obligation of any Seller Affiliates to the
Obligors, the Dealers or any other Person in connection with the
Receivables and the other assets and properties conveyed hereunder or any
agreement, document or instrument related thereto.
ARTICLE III. THE RECEIVABLES.
SECTION 3.1. Representations and Warranties as to Each Receivable.
Seller hereby makes the following representations and warranties as to each
Receivable conveyed by it to Issuer hereunder on which Issuer shall rely in
acquiring the Receivables. Unless otherwise indicated, such representations
and warranties shall speak as of the Closing Date, but shall survive the
sale, transfer and assignment of the Receivables to Issuer and the pledge
thereof to Indenture Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. The Receivable has been
fully and properly executed by the parties thereto and (i) has been
originated by a Dealer in the ordinary course of such Dealer's
business, (ii) such Receivable requires physical damage insurance to
be maintained on the related Financed Vehicle, (iii) is secured by a
valid, subsisting, binding and enforceable first priority security
interest in favor of a Seller Affiliate in the Financed Vehicle
(subject to administrative delays and clerical errors on the part of
the applicable government agency and to any statutory or other lien
arising by operation of law after the Closing Date which is prior to
such security interest), which security interest is assignable
together with such Receivable, and has been so assigned to Seller, and
subsequently assigned by Seller to Indenture Trustee, (iv) contains
customary and 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, (v) provides for interest
at the Contract Rate specified in the Schedule of Receivables, (vi)
was originated in the United States and (vii) constitutes "chattel
paper" as defined in the UCC.
(b) Individual Characteristics. The Receivables have the
following individual characteristics as of the Cutoff Date: (i) each
Receivable is secured by either a new or used automobile or light duty
truck; (ii) each Receivable has a Contract Rate of at least 7.00% and
not more than 22.00%; (iii) each Receivable had a remaining number of
scheduled payments, as of the Cutoff Date, of not less than 13 and not
more than 72; (iv) each Receivable had a Principal Balance at
origination of not less than $500.00 and not more than $71,376.00 and
an Initial Principal Balance of not less than $508.79 nor more than
$57,051.06; (v) no Receivable was more than 30 days past due as of the
Cutoff Date; (vi) no Financed Vehicle had been repossessed as of the
Cutoff Date; (vii) no Receivable is subject to a force-placed physical
damage insurance policy on the related Financed Vehicle; (viii) each
Receivable is a Simple Interest Receivable; and (ix) the Dealer of the
Financed Vehicle has no participation in, or other right to receive,
any proceeds of the Receivable. The Receivables were selected using
selection procedures that were not intended by any Seller Affiliate or
Seller to be adverse to the Holders.
(c) Schedule of Receivables. The information set forth in the
Schedule of Receivables, including (without limitation) the account
number, the Initial Principal Balance, the maturity date and the
Contract Rate, was true and correct as of the close of business on the
Cutoff Date.
(d) Compliance with Law. The Receivable complied at the time
it was originated or made, and will comply as of the Closing Date, in
all material respects with all requirements of applicable federal,
state and local laws, and regulations thereunder, including, to the
extent applicable, usury laws, the Federal Truth in Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Federal Trade Commission Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Fair Debt Collection Practices Act,
Federal Reserve Board Regulations B and Z and any other consumer
credit, consumer protection, equal opportunity and disclosure laws.
(e) Binding Obligation. The Receivable constitutes the
genuine, legal, valid and binding payment obligation in writing of the
Obligor, enforceable in all material respects by the holder thereof in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally, and the Receivable is not
subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury.
(f) Lien in Force. Neither Seller nor any Seller Affiliate
has taken any action which would have the effect of releasing the
related Financed Vehicle from the Lien granted by the Receivable in
whole or in part.
(g) No Amendment or Waiver. No material provision of the
Receivable has been amended, waived, altered or modified in any
respect, except such waivers as would be permitted under this
Agreement, and no amendment, waiver, alteration or modification causes
such Receivable not to conform to the other representations or
warranties contained in this Section.
(h) No Liens. There are no Liens or claims, including Liens
for work, labor, materials or unpaid state or federal taxes, relating
to the Financed Vehicle securing the Receivable, that are or may be
prior to or equal to the Lien granted by the Receivable.
(i) No Default. Except for payment delinquencies continuing
for a period of not more than 30 days as of the Cutoff Date, to the
knowledge of Seller, no default, breach, violation or event permitting
acceleration under the terms of the Receivable exists and no
continuing condition that with notice or lapse of time, or both, would
constitute a default, breach, violation or event permitting
acceleration under the terms of the Receivable has arisen.
(j) Insurance. The Receivable requires the Obligor to insure
the Financed Vehicle under a Physical Damage Insurance Policy, pay the
premiums for such insurance and keep such insurance in full force and
effect.
(k) Good Title. It is the intention of Seller that the
transfer and assignment herein contemplated constitute a sale of the
Receivables from Seller to Issuer and that the beneficial interest in
and title to the Receivables not be part of Seller's estate in the
event of the filing of a bankruptcy petition by or against Seller
under any bankruptcy law. No Receivable has been sold, transferred,
assigned, or pledged by Seller to any Person other than Issuer.
Immediately prior to the transfer and assignment herein contemplated,
Seller had good and marketable title to the Receivable free and clear
of any Lien and had full right and power to transfer and assign the
Receivable to Issuer and immediately upon the transfer and assignment
of the Receivable to Issuer, Issuer shall have good and marketable
title to the Receivable, free and clear of any Lien; and Issuer's
interest in the Receivable resulting from the transfer has been
perfected under the UCC.
(l) Obligations. Each Seller Affiliate has duly fulfilled all
obligations on its part to be fulfilled under, or in connection with,
the Receivable.
(m) Possession. There is only one original executed
Receivable, and immediately prior to the Closing Date, the applicable
Seller Affiliate will have possession of such original executed
Receivable.
(n) No Government Obligor. The Obligor on the Receivable is
not the United States of America or any state thereof or any local
government, or any agency, department, political subdivision or
instrumentality of the United States of America or any state thereof
or any local government.
(o) Marking Records. By the Closing Date, Seller shall have
caused the portions of Seller's and each Seller Affiliate's electronic
master record of Motor Vehicle Loans relating to the Receivables to be
clearly and unambiguously marked to show that the Receivable is owned
by Issuer in accordance with the terms of this Agreement.
(p) No Assignment. As of the Closing Date, Seller shall not
have taken any action to convey any right to any Person that would
result in such Person having a right to payments received under the
Insurance Policies or Dealer Agreements, or payments due under
Receivable, that is senior to, or equal with, that of Issuer.
(q) Lawful Assignment. The Receivable has not been originated
in, and is not subject to the laws of, any jurisdiction under which
the sale, transfer or assignment of such Receivable hereunder or
pursuant to transfers of the Notes or Certificates are unlawful, void
or voidable. Neither Seller nor any Seller Affiliate has entered into
any agreement with any Obligor that prohibits, restricts or conditions
the assignment of any portion of the Receivables.
(r) Dealer Agreements. A Dealer Agreement for each Receivable
is in effect whereby the Dealer warrants title to the Motor Vehicle
and indemnifies the Seller Affiliate that is a party to said Dealer
Agreement against the unenforceability of each Receivable sold
thereunder, and the rights of such Seller Affiliate thereunder, with
regard to the Receivable sold hereunder, have been validly assigned to
and are enforceable against the Dealer by the Seller and then to the
Trust, along with any Dealer Recourse.
(s) Composition of Receivable. No Receivable has a Principal
Balance which includes capitalized interest or late charges.
(t) Database File. The information included in the database
file delivered pursuant to Section 4.9(b) is accurate and complete in
all material respects.
SECTION 3.2. Representations and Warranties as to the Receivables in
the Aggregate and Actions of Seller. Seller hereby makes the following
representations and warranties as to the Receivables conveyed by it to
Issuer hereunder on which Issuer shall rely in acquiring the Receivables.
Unless otherwise indicated, such representations and warranties shall speak
as of the Closing Date, but shall survive the sale, transfer and assignment
of the Receivables to Issuer and the pledge thereof to Indenture Trustee
pursuant to the Indenture.
(a) Amounts. The Initial Pool Balance was $1,064,746,052.70
(b) Aggregate Characteristics. The Receivables had the
following characteristics in the aggregate as of the Cutoff Date: (i)
approximately 47.08% of the Initial Pool Balance was attributable to
purchases of new Financed Vehicles, and approximately 52.92% of the
Initial Pool Balance was attributable to purchases of used Financed
Vehicles; (ii) approximately 44.32% of the Initial Pool Balance was
attributable to Receivables the mailing addresses of the Obligors on
which were at the time of origination located in the State of
Minnesota, 8.59% in the State of Iowa, 13.95% in the State of
Nebraska, 7.89% in the State of Wisconsin, 7.21% in the State of
Indiana, 6.65% in the State of North Dakota, and 6.07% in the State of
South Dakota, and no other state accounts for more than 5.0% of the
Initial Pool Balance; (iii) the weighted average Contract Rate of the
Receivables was 9.79%; (iv) there are 118,295 Receivables being
conveyed by Seller to Issuer; (v) the average Initial Principal
Balance of the Receivables was $9.000.77; and (vi) the weighted
average original number of scheduled payments and weighted average
remaining number of scheduled payments of the Receivables were 56.24
and 42.77, respectively.
SECTION 3.3. Repurchase upon Breach. Seller, Servicer or Owner
Trustee, as the case may be, shall inform the other parties to this
Agreement and Indenture Trustee promptly, in writing, upon the discovery of
any breach or failure to be true of the representations or warranties made
by Seller in Section 3.1, provided that the failure to give such notice
shall not affect any obligation of Seller. If the breach or failure shall
not have been cured by the last day of the Collection Period which includes
the 60th day (or if Seller elects, the 30th day) after the date on which
Seller becomes aware of, or receives written notice from Owner Trustee,
Indenture Trustee or Servicer of, such breach or failure, and such breach
or failure materially and adversely affects the interests of Issuer and the
Holders in any Receivable, Seller shall repurchase each such Receivable
from Issuer as of such last day of such Collection Period at a purchase
price equal to the Purchase Amount for such Receivable as of such last day
of such Collection Period. Notwithstanding the foregoing, any such breach
or failure with respect to the representations and warranties contained in
Section 3.1 will not be deemed to have such a material and adverse effect
with respect to a Receivable if the facts resulting in such breach or
failure do not affect the ability of Issuer to receive and retain payment
in full on such Receivable. In consideration of the purchase of a
Receivable hereunder, Seller shall remit the Purchase Amount of such
Receivable, no later than the close of business on the next Deposit Date,
in the manner specified in Section 5.4. The sole remedy of Issuer, the
Owner Trustee, the Indenture Trustee or the Holders with respect to a
breach or failure to be true of the warranties made by Seller pursuant to
Section 3.1 shall be to require Seller to repurchase Receivables pursuant
to this Section. If Seller fails to timely remit the Purchase Amount of any
Receivable that the Seller is required to repurchase pursuant to this
Section, upon receipt of notice by Norwest Corporation from Servicer, Owner
Trustee or Indenture Trustee, or after discovery of such failure, Norwest
Corporation shall remit or cause to be remitted such Purchase Amount, no
later than the close of business on the next Deposit Date, in the manner
specified in Section 5.4.
SECTION 3.4. Custodian of Receivable Files. (a) Custody. To assure
uniform quality in servicing the Receivables and to reduce administrative
costs, Issuer, upon the execution and delivery of this Agreement, revocably
appoints Custodian, as agent, and Custodian accepts such appointment, to
act as agent on behalf of Issuer to maintain custody of the following
documents or instruments, which are hereby constructively delivered to
Issuer with respect to each Receivable (collectively, a "Receivable File"):
(i) the fully executed original of the Receivable;
(ii) the original credit application, fully executed by the
Obligor;
(iii) the original certificate of title, or such other
documents as the applicable Seller Affiliate, as appropriate, keeps on
file, in accordance with its customary procedures, evidencing the
security interest of such Seller Affiliate in the Financed Vehicle;
and
(iv) any and all other documents or electronic records that
Seller, any Seller Affiliate or Servicer, as the case may be, keeps on
file, in accordance with its customary procedures, relating to the
Receivable, any Insurance Policies, the Obligor or the Financed
Vehicle.
(b) Safekeeping. Servicer, in its capacity as Custodian, shall hold
the Receivable Files as agent on behalf of Issuer and maintain such
accurate and complete accounts, records and computer systems pertaining to
each Receivable as shall enable Servicer and Issuer to comply with the
terms and provisions of this Agreement applicable to them. In performing
its duties as Custodian hereunder, Custodian shall act with reasonable
care, exercising the degree of skill, attention and care that Servicer
exercises with respect to receivable files relating to other similar motor
vehicle loans owned and/or serviced by Custodian and that is consistent
with industry standards. Custodian shall maintain the Receivable Files in
such a manner and in accordance with its customary business practices as
shall enable Owner Trustee to reasonably verify, if Owner Trustee so
elects, the accuracy of the record keeping of Servicer. Servicer shall
promptly report to Owner Trustee any failure on its part to hold the
Receivable Files and maintain its accounts, records and computer systems as
herein provided, and promptly take appropriate action to remedy any such
failure. Custodian hereby acknowledges receipt of the Receivable File for
each Receivable listed on the Schedule of Receivables. Nothing herein shall
be deemed to require Issuer, Owner Trustee or Indenture Trustee to verify
the accuracy of the record keeping of the Servicer.
(c) Maintenance of and Access to Records. Custodian shall maintain
each Receivable File at the location specified in Schedule A to this
Agreement, or at such other office of Custodian within the United States
(or, in the case of any successor Custodian, within the State in which its
principal place of business is located) as shall be specified to Issuer by
30 days' prior written notice. At the reasonable direction of the Owner
Trustee, Custodian shall make available to Owner Trustee, Indenture Trustee
and their respective agents (or, when requested in writing by Owner Trustee
or Indenture Trustee, their respective attorneys or auditors) the
Receivable Files and the related accounts, records and computer systems
maintained by Custodian at such times during the normal business hours of
Custodian for purposes of inspecting, auditing or making copies of
abstracts of the same.
(d) Release of Documents. Upon written instructions from Indenture
Trustee (or, if no Notes are then Outstanding, Owner Trustee), Custodian
shall release any document in the Receivable Files to Indenture Trustee or
Owner Trustee or its respective agent or designee, as the case may be, at
such place or places as Indenture Trustee or Owner Trustee may designate,
as soon thereafter as is practicable. Any document so released shall be
handled by Indenture Trustee or Owner Trustee with due care and returned to
Custodian for safekeeping as soon as Indenture Trustee or Owner Trustee or
its respective agent or designee, as the case may be, shall have no further
need therefor.
(e) Title to Receivables. Custodian agrees that, in respect of any
Receivable File held by Custodian hereunder, Custodian will not at any time
have or in any way attempt to assert any interest in such Receivable File
or the related Receivable, other than solely for the purpose of collecting
or enforcing the Receivable for the benefit of Issuer and that the entire
equitable interest in such Receivable and the related Receivable File shall
at all times be vested in Issuer.
(f) Instructions; Authority to Act. Custodian shall be deemed to
have received proper instructions with respect to the Receivable Files upon
its receipt of written instructions signed by an Authorized Officer of
Indenture Trustee or Owner Trustee, as applicable. A certified copy of
excerpts of certain resolutions of the Board of Directors of Indenture
Trustee or Owner Trustee, as applicable, shall constitute conclusive
evidence of the authority of any such Authorized Officer to act and shall
be considered in full force and effect until receipt by Custodian of
written notice to the contrary given by Indenture Trustee or Owner Trustee,
as applicable.
(g) Custodian's Indemnification. Subject to Section 10.3, Custodian
shall indemnify and hold harmless Issuer, Owner Trustee and Indenture
Trustee, and each of their officers, directors, employees and agents and
the Holders from and against any and all liabilities, obligations, losses,
compensatory damages, payments, costs or expenses (including legal fees if
any) of any kind whatsoever that may be imposed on, incurred or asserted
against Issuer, Owner Trustee, Indenture Trustee or the Holders as the
result of the gross negligence or willful misconduct of Custodian relating
to the maintenance and custody of the Receivable Files; provided that
Custodian shall not be liable hereunder to the extent that such
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses result from the willful misfeasance, bad faith or negligence of
Owner Trustee or Indenture Trustee.
(h) Effective Period and Termination. Servicer's appointment as
Custodian shall become effective as of the Cutoff Date and shall continue
in full force and effect until terminated pursuant to this subsection (h).
If Servicer shall resign as Servicer in accordance with Section 7.5 or if
all of the rights and obligations of Servicer shall have been terminated
under Section 8.1, the appointment of Servicer as Custodian hereunder may
be terminated by Indenture Trustee or by the Holders of Notes evidencing
more than 50% of the aggregate Outstanding Amount of the Notes (or if no
Notes are then Outstanding, the Holders of Certificates representing more
than 50% of the Certificate Balance), in the same manner as Indenture
Trustee or such Holders may terminate the rights and obligations of
Servicer under Section 8.1. The Indenture Trustee, at the direction of
Holders of Notes evidencing more than 50% of the aggregate Outstanding
Amount of the Notes, or, if no Notes are then Outstanding, the Owner
Trustee at the direction of Holders of Certificates more than 50% of the
Certificate Balance, may terminate Servicer's appointment as Custodian
hereunder at any time with cause, or with 30 days' prior notice without
cause, upon written notification to Servicer. As soon as practicable after
any termination of such appointment Servicer shall deliver, or cause to be
delivered, the Receivable Files to Indenture Trustee or Owner Trustee, as
applicable, or its respective agent or designee at such place or places as
Indenture Trustee or Owner Trustee, as applicable, may reasonably
designate. Notwithstanding any termination of Servicer as Custodian
hereunder (other than in connection with a termination resulting from the
termination of Servicer, as such, pursuant to Section 8.1), from and after
the date of such termination, and for so long as Servicer is acting as such
pursuant to this Agreement, Owner Trustee shall provide, or cause the
successor Custodian to provide, access to the Receivable Files to Servicer,
at such times as Servicer shall reasonably request, for the purpose of
carrying out its duties and responsibilities with respect to the servicing
of the Receivables hereunder.
(i) Delegation. Custodian may, at any time without notice or consent,
delegate any or all of its duties to any Seller Affiliate; provided that no
such delegation shall relieve Custodian of its responsibility with respect
to such duties and Custodian shall remain obligated and liable to Issuer
and the Holders for its duties hereunder as if Custodian alone were
performing such duties.
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES.
SECTION 4.1. Duties of Servicer. (a) Servicer is hereby authorized
to act as agent for Issuer and in such capacity shall manage, service,
administer and make collections on the Receivables (other than Purchased
Receivables), and perform the other actions required by Servicer under this
Agreement, with reasonable care. Without limiting the standard set forth in
the preceding sentence, Servicer shall use a degree of skill, attention and
care that is not less than Servicer exercises with respect to comparable
Motor Vehicle Loans that it services for itself or others and that is
consistent with prudent industry standards. Servicer's duties shall
include the collection and posting of all payments, responding to inquiries
by Obligors on the Receivables, or by federal, state or local governmental
authorities, investigating delinquencies, sending payment coupons to
Obligors, reporting required tax information to Obligors, accounting for
Collections, monitoring the status of Physical Damage Insurance Policies
with respect to the Financed Vehicles as provided in Section 4.4(a),
furnishing monthly and annual statements to Owner Trustee and Indenture
Trustee with respect to distributions, providing collection and
repossession services in the event of Obligor default and performing the
other duties specified herein.
Servicer shall also administer and enforce all rights and
responsibilities of the holder of the Receivables provided for in the
Physical Damage Insurance Policies and the Dealer Agreements. Without
limiting the generality of the foregoing, Servicer is hereby authorized and
empowered by Issuer to execute and deliver, on behalf of itself, Indenture
Trustee, Issuer, Owner Trustee and the Holders, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge,
and all other comparable instruments, with respect to the Receivables or to
the Financed Vehicles, all in accordance with this Agreement; provided that
notwithstanding the foregoing, Servicer shall not, except pursuant to an
order from a court of competent jurisdiction, release an Obligor from
payment of any unpaid amount under any Receivable or waive the right to
collect the unpaid balance of any Receivable from the Obligor, except in
connection with a de minimis deficiency claim which Servicer would not
attempt to collect in accordance with its customary procedures. If Servicer
shall commence a legal proceeding to enforce a Receivable, Issuer shall
thereupon be deemed to have automatically assigned such Receivable to
Servicer, which assignment shall be solely for purposes of collection.
Nothing contained in this Agreement shall prevent the Servicer from
providing, or require Servicer to purchase any Receivable if Servicer
provides, to any Obligor any one-month extensions in accordance with its
customary servicing practices.
Owner Trustee shall furnish Servicer with any powers of attorney and
other documents or instruments necessary or appropriate to enable Servicer
to carry out its servicing and administrative duties hereunder.
(b) Servicer may, at any time without notice (except that Servicer
shall give written notice to each Rating Agency of any delegation of the
substantial portion of its servicing business) or consent, delegate (i) any
or all duties under this Agreement to any Person more than 50% of the
voting securities of which are owned, directly or indirectly, by Norwest
Corporation, a Delaware corporation, so long as Norwest Bank acts as
Servicer, or (ii) specific duties to sub-contractors who are in the
business of performing such duties; provided that no such delegation shall
relieve Servicer of its responsibility with respect to such duties and
Servicer shall remain obligated and liable to Issuer and the Holders for
servicing and administering the Receivables in accordance with this
Agreement as if Servicer alone were performing such duties.
SECTION 4.2. Collection of Receivable Payments. (a) Servicer shall
make reasonable efforts to collect all payments called for under the terms
and provisions of the Receivables as and when the same shall become due,
and otherwise act with respect to the Receivables, the Physical Damage
Insurance Policies, the Dealer Agreements and related property in such
manner as will, in the reasonable judgment of Servicer, maximize the amount
to be received by Issuer with respect thereto, in accordance with the
standard of care required by Section 4.1. Servicer shall be entitled to
amend or modify any Receivable in accordance with its customary procedures
if Servicer believes in good faith that such amendment or modification is
in Issuer's best interests; provided that Servicer may not, unless ordered
by a court of competent jurisdiction or otherwise required by applicable
law, (i) extend a Receivable beyond the Final Scheduled Maturity Date or
(ii) amend or modify the Principal Balance or Contract Rate of any
Receivable (except any increase in the Principal Balance made as a result
of any Force Placed Insurance Advance made with respect to such
Receivable). If Servicer fails to comply with the provisions of the
preceding sentence, Servicer shall be required to purchase the Receivable
or Receivables affected thereby, for the Purchase Amount, in the manner
specified in Section 4.7 as of the close of the Collection Period in which
such failure occurs. Servicer may, in its discretion (in accordance with
its customary standards, policies and procedures), waive any prepayment
charge, late payment charge or any other fee that may be collected in the
ordinary course of servicing a Receivable. Nothing contained in this
Agreement shall prevent the Servicer from providing, or require Servicer to
purchase any Receivable if Servicer provides, to any Obligor any one-month
extensions in accordance with its customary servicing practices.
(b) If in the course of collecting payments under the Receivables,
Servicer determines to set off any obligation of Servicer to an Obligor
against an amount payable by the Obligor with respect to such Receivable,
Servicer shall deposit the amount so set off in the Collection Account, no
later than the close of business on the Deposit Date for the Collection
Period in which the set-off occurs. All references herein to payments or
Liquidation Proceeds collected by Servicer shall include amounts set-off by
Servicer.
SECTION 4.3. Realization upon Receivables. On behalf of Issuer,
Servicer shall charge off a Receivable as a Defaulted Receivable in
accordance with its customary standards (and, in no event later than 180
days after a Receivable shall have become delinquent) and shall use
reasonable efforts to repossess and liquidate the Financed Vehicle securing
any Receivable as soon as feasible after default, in accordance with the
standard of care required by Section 4.1. In taking such action, Servicer
shall follow such customary and usual practices and procedures as it shall
deem necessary or advisable in its servicing of Motor Vehicle Loans, and as
are otherwise consistent with the standard of care required under Section
4.1, which shall include exercising any rights under the Dealer Agreements
and selling the Financed Vehicle at public or private sale. Servicer shall
be entitled to recover all reasonable expenses incurred by it in the course
of repossessing and liquidating a Financed Vehicle into cash proceeds or
pursuing any deficiency claim against the related Obligor, but only out of
the cash proceeds of such Financed Vehicle or any deficiency obtained from
the Obligor. The foregoing shall be subject to the provision that, in any
case in which a Financed Vehicle shall have suffered damage, Servicer shall
not expend funds in connection with the repair or the repossession of such
Financed Vehicle unless it shall determine in its discretion that such
repair and/or repossession will increase the Liquidation Proceeds of the
related Receivable by an amount equal to or greater than the amount of such
expenses.
If Servicer elects to commence a legal proceeding to enforce a Dealer
Agreement, the act of commencement shall be deemed to be an automatic
assignment from Issuer to Servicer of the rights under such Dealer
Agreement. If, however, in any enforcement suit or legal proceeding, it is
held that Servicer may not enforce a Dealer Agreement on the grounds that
it is not a real party in interest or a Person entitled to enforce the
Dealer Agreement, Owner Trustee, on behalf of Issuer, at Servicer's
expense, or Seller, at Servicer's expense, shall take such steps as
Servicer deems necessary to enforce the Dealer Agreement, including
bringing suit in Issuer's name or the name of Owner Trustee or Indenture
Trustee.
SECTION 4.4. Physical Damage Insurance. (a) The Receivables require
that each Financed Vehicle be insured under a Physical Damage Insurance
Policy. Servicer shall monitor or cause to be monitored the status of such
physical damage insurance coverage to the extent consistent with its
customary servicing procedures. If Servicer shall determine that an Obligor
has failed to obtain or maintain a Physical Damage Insurance Policy
covering the related Financed Vehicle, Servicer shall use its best efforts
to enforce the rights of the holder of the Receivable under the Receivable
to require the Obligor to obtain such physical damage insurance, provided
that Servicer shall not be required to take such actions if there is in
place a lender's single interest policy with respect to the related
Financed Vehicle that complies with Servicer's customary requirements.
(b) Servicer may ▇▇▇ to enforce or collect upon the Physical Damage
Insurance Policies, in its own name, if possible, or as agent for Issuer.
If Servicer elects to commence a legal proceeding to enforce a Physical
Damage Insurance Policy, the act of commencement shall be deemed to be an
automatic assignment of the rights of Issuer under such Physical Damage
Insurance Policy to Servicer for purposes of collection only. If, however,
in any enforcement suit or legal proceeding it is held that Servicer may
not enforce a Physical Damage Insurance Policy on the grounds that it is
not a real party in interest or a holder entitled to enforce the Physical
Damage Insurance Policy, Owner Trustee, on behalf of Issuer, at Servicer's
expense, or Seller, at Servicer's expense, shall take such steps as
Servicer deems necessary to enforce such Physical Damage Insurance Policy,
including bringing suit in Issuer's name or the name of Owner Trustee or
Indenture Trustee. Servicer shall make all claims and enforce its rights
under any lender's single interest insurance policy (to the extent such
claims or rights relate to Receivables) for the benefit of the Issuer and
shall treat as Collections all related proceeds of such policies.
(c) On behalf of Issuer, Servicer may, in its discretion, in
accordance with its customary servicing practices, force-place a Physical
Damage Insurance Policy on any Financed Vehicle for which Servicer
determines that an Obligor has failed to obtain or maintain a Physical
Damage Insurance Policy. In connection therewith, on behalf of Issuer,
Servicer shall advance from its own funds, the amount of any premium
payable in respect of such Physical Damage Insurance Policy (each, a "Force
Placed Insurance Advance") and cause such policy to name the Issuer as
"loss payee," "additional insured" or otherwise require the insurer to pay
any proceeds of such policy (and, in the event of a cancellation of such
policy, any rebates or refunds of premiums) directly to Issuer. The
Principal Balance of the Receivable secured by the Financed Vehicle to
which such premium relates shall be deemed to be increased by the amount of
such premium as provided under the terms of such Receivable in accordance
with the Servicer's customary practices, and any payments made by the
Obligor thereon in respect of such increased Principal Balance (including
any interest thereon) shall be treated as Collections on the related
Receivable. The Servicer shall promptly send to the Obligor new payment
coupons reflecting the revised Principal Balance and scheduled payments for
such Receivable. In the event Servicer receives notice or otherwise
discovers that the Obligor on such Receivable has obtained the required
Physical Damage Insurance Policy, and Servicer cancels the related force
placed policy obtained by it, the Servicer shall treat any rebates of
premium or other amounts received by it from the insurer as Collections on
the Receivable of such Obligor. On each Transfer Date, prior to the making
of any of the distributions set forth in Section 5.5, Servicer shall be
reimbursed for all Force-Placed Insurance Advances made through the related
Collection Period and not previously reimbursed to the extent of
Collections allocable to principal in accordance with the Servicer's
customary practices.
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.
Servicer, in accordance with the standard of care required under Section
4.1, shall take such steps as are necessary and as are consistent with its
customary business practices, to maintain perfection of the security
interest created by each Receivable in the related Financed Vehicle for the
benefit of Issuer. Owner Trustee, on behalf of Issuer, hereby authorizes
Servicer, and Servicer hereby agrees, to take such steps as are necessary
and as are consistent with its customary business practices to re-perfect
such security interest on behalf of Issuer in the event Servicer receives
notice of the relocation of a Financed Vehicle. If there has been a
Servicer Termination Event, upon the request of Owner Trustee, Seller and
Servicer, at their expense, shall promptly and duly execute and deliver
such documents and instruments, and take such other actions as may be
necessary, as evidenced by an Opinion of Counsel delivered to Issuer, Owner
Trustee and Indenture Trustee and as are consistent with its customary
business practices, to perfect Owner Trustee's and Indenture Trustee's
interest in the Collateral against all other Persons, including the
delivery of the Receivables and the Receivable Files to Indenture Trustee
(or Owner Trustee, if no Notes are then Outstanding), its agent or
designee, the endorsement and delivery of the Physical Damage Insurance
Policies or the notification of the insurers thereunder, the execution of
transfer instruments, and the endorsement to Indenture Trustee (or Owner
Trustee if no Notes are then Outstanding) and the delivery of the
certificates of title to the Financed Vehicles to the appropriate
department or departments of motor vehicles (or other appropriate
governmental agency).
SECTION 4.6. Covenants of Servicer. Servicer makes the following
covenants on which Issuer relies in acquiring the Receivables:
(a) Security Interest to Remain in Force. Servicer shall not
release any Financed Vehicle from the security interest granted by the
related Receivable in whole or in part, except upon payment in full of
the Receivable or as otherwise contemplated herein.
(b) No Impairment. Servicer shall not impair in any material
respect the rights of the Holders in the Receivables, the Dealer
Agreements or the Physical Damage Insurance Policies or, subject to
clause (c), otherwise amend or alter the terms thereof if, as a result
of such amendment or alteration, the interests of Issuer and the
Holders hereunder would be materially adversely affected.
(c) Amendments. Servicer shall not amend or otherwise modify
any Receivable (including the grant of any extension thereunder),
except in accordance with Section 4.2 and 4.4(c).
SECTION 4.7. Purchase by Servicer upon Breach. Seller, Servicer or
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and Indenture Trustee promptly, in writing, upon the discovery of
any breach by Servicer of its covenants under Section 4.5 or 4.6; provided
that the failure to give such notice shall not affect any obligation of
Servicer. If the breach shall not have been cured by the last day of the
Collection Period which includes the 60th day (or the 30th day, if Servicer
so elects) after the date on which Servicer becomes aware of, or receives
written notice from Owner Trustee, Indenture Trustee or Seller of, such
breach, and such breach or failure materially and adversely affects the
interests of Issuer and the Holders in any Receivable, Servicer shall
purchase such Receivable from Issuer as of the last day of the Collection
Period at a purchase price equal to the Purchase Amount for such Receivable
as of the last day of such Collection Period provided that in the case of a
breach of the covenant contained in Section 4.6(c), Servicer shall be
obligated to purchase the affected Receivable or Receivables on the Deposit
Date immediately succeeding the Collection Period during which Servicer
becomes aware of, or receives written notice of, such breach. In
consideration of the purchase of a Receivable hereunder, Servicer shall
remit the Purchase Amount of such Receivable in the manner specified in
Section 5.4. The sole remedy of Issuer, Owner Trustee, Indenture Trustee or
the Holders against Servicer with respect to a breach pursuant to Section
4.5 or 4.6 shall be to require Servicer to repurchase Receivables pursuant
to this Section.
SECTION 4.8. Servicing Fee. The servicing fee for (a) the initial
Transfer Date shall be equal to the product of (i) the actual number of
days in the initial Collection Period divided by 360, (ii) the Servicing
Fee Rate, and (iii) the Pool Balance as of the close of business on the
Cutoff Date and (b) for each Transfer Date thereafter shall equal the
product of (i) one-twelfth, (ii) the Servicing Fee Rate and (iii) the Pool
Balance as of the opening of business on the first day of the related
Collection Period (the "Servicing Fee"). Servicer shall also be entitled to
retain any late fees, extension fees, prepayment charges and certain
non-sufficient funds charges and other administrative fees or similar
charges allowed by applicable law with respect to Receivables collected
(from whatever source) on the Receivables and shall be paid any interest
earned on deposits in the Trust Accounts and the Certificate Distribution
Account (the "Supplemental Servicing Fee"). It is understood and agreed
that Interest Collections or Available Principal shall not include any
amounts retained by Servicer which constitute Supplemental Servicing Fees.
The Servicing Fee in respect of a Collection Period (together with any
portion of the Servicing Fee that remains unpaid from prior Transfer
Dates), if the Rating Agency Condition is satisfied, may be paid at the
beginning of such Collection Period out of Collections for such Collection
Period.
SECTION 4.9. Servicer's Report. (a) On each Determination Date,
Servicer shall deliver to Owner Trustee, Indenture Trustee, each Paying
Agent and Seller, with a copy to the Rating Agencies, a Servicer's Report
substantially in the form of Exhibit A, containing all information
necessary to make the transfers and distributions pursuant to Sections 5.3,
5.4, 5.5, and 5.8 for the Collection Period preceding the date of such
Servicer's Report together with all information necessary for the Owner
Trustee to send statements to the Certificateholders pursuant to Section
5.5 and Indenture Trustee to send statements to Noteholders pursuant to
Section 5.5 and Section 6.6 of the Indenture. Receivables to be purchased
by Servicer or to be repurchased by Seller shall be identified by Servicer
by account number with respect to such Receivable as specified in the
Schedule of Receivables.
(b) Servicer shall provide Indenture Trustee with a database file for
each Receivable at or prior to closing (but with information as of the
Cutoff Date).
(c) Neither Owner Trustee nor Indenture Trustee shall be responsible
for delays attributable to Servicer's failure to deliver information,
defects in the information supplied by Servicer or other circumstances
beyond Owner Trustee's or Indenture Trustee's control.
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a)Servicer shall deliver to Owner Trustee and Indenture Trustee, on or
before April 30 of each year beginning April 30, 1998, an Officers'
Certificate, dated as of December 31 of the preceding year, stating that
(i) a review of the activities of Servicer during the preceding 12-month
period (or, in the case of the first such report, during the period from
the Closing Date to December 31, 1997) and of its performance under this
Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, Servicer has
fulfilled all its obligations under this Agreement throughout such year or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officers and the nature and
status thereof. Indenture Trustee shall send a copy of such certificate and
the report referred to in Section 4.11 to the Rating Agencies. A copy of
such certificate and the report referred to in Section 4.11 may be obtained
by any Certificateholder by a request in writing to Owner Trustee addressed
to the Corporate Trust Office or by any Noteholder by a request in writing
to Indenture Trustee addressed to the Corporate Trust Office.
(b) Servicer shall deliver to Owner Trustee, Indenture Trustee and
the Rating Agencies, promptly after having obtained knowledge thereof, but
in no event later than five (5) Business Days thereafter, written notice in
an Officers' Certificate of any event which with the giving of notice or
lapse of time, or both, would become a Servicer Termination Event under
Section 8.1.
SECTION 4.11. Annual Independent Certified Public Accountants'
Report. Servicer shall cause a firm of independent certified public
accountants, which may also render other services to Servicer or Seller, to
deliver to Seller, Owner Trustee and Indenture Trustee on or before April
30 of each year beginning April 30, 1998, an agreed-upon procedures report
addressed to Servicer, Seller, Owner Trustee and Indenture Trustee and each
Rating Agency, expressing a summary of findings, (based on certain
procedures performed on the documents, records and accounting records that
such accountants considered appropriate under the circumstances) relating
to the servicing of the Receivables, or the administration of the
Receivables and of Issuer, as the case may be, during the preceding
calendar year (or, in the case of the first such report, during the period
from the Closing Date to December 31, 1997) and that, on the basis of the
accounting and auditing procedures considered appropriate under the
circumstances, such firm is of the opinion that such servicing or
administration was conducted in compliance with the terms of this
Agreement, except for (a) such exceptions as such firm shall believe to be
immaterial and (b) such other exceptions as shall be set forth in such
report.
Such report will also indicate that the firm is independent of
Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables. Servicer shall provide to the Indenture Trustee and
Owner Trustee reasonable access to the Receivable Files. Such access shall
be afforded without charge, but only upon reasonable request and during the
normal business hours at the respective offices of Servicer. Nothing in
this Section shall affect the obligation of Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors
and the failure of Servicer to provide access to information as a result of
such obligation shall not constitute a breach of this Section.
SECTION 4.13. Servicer Expenses. Except as provided in Section 4.3,
Servicer shall be required to pay all expenses incurred by it in connection
with its activities hereunder, including fees and disbursements of the
Owner Trustee, Indenture Trustee, independent accountants, taxes imposed on
Servicer and expenses incurred in connection with distributions and reports
to Certificateholders and Noteholders.
ARTICLE V. DISTRIBUTION; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS.
SECTION 5.1. Establishment of Trust Accounts. (a) Servicer shall
cause to be established:
(i) For the benefit of the Noteholders and the
Certificateholders, in the name of Indenture Trustee, an Eligible
Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(ii) For the benefit of the Noteholders, in the name of
Indenture Trustee, an Eligible Deposit Account (the "Note Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders.
(b) Funds on deposit in the Collection Account and the Note
Distribution Account (collectively the "Trust Accounts") and the
Certificate Distribution Account shall be invested by Indenture Trustee
with respect to the Trust Accounts and by Owner Trustee with respect to the
Certificate Distribution Account (or any custodian with respect to funds on
deposit in any such account) in Eligible Investments selected in writing by
Servicer (pursuant to standing instructions or otherwise); provided that it
is understood and agreed that neither Indenture Trustee nor Owner Trustee
shall be liable for any loss arising from such investment in Eligible
Investments. All such Eligible Investments shall be held by or on behalf of
Indenture Trustee or Owner Trustee, as applicable, for the benefit of the
Noteholders and the Certificateholders or the Noteholders or the
Certificateholders, as applicable; provided that on each Distribution Date
all interest and other investment income (net of losses and investment
expenses) on funds on deposit in the Trust Accounts or Certificate
Distribution Account shall be distributed to Seller and shall not be
available to pay the distributions provided for in Section 5.5 and shall
not otherwise be subject to any claims or rights of Holders. Other than as
permitted by the Rating Agencies, funds on deposit in the Trust Accounts
and the Certificate Distribution Account shall be invested in Eligible
Investments that will mature (A) not later than the next Deposit Date or
(B) in the case of deposits in the Collection Account on the next Transfer
Date if such investment is held in the trust department of the institution
with which the applicable Trust Account or the Certificate Distribution
Account is then maintained and is invested in a time deposit of the
Indenture Trustee. No Eligible Investment shall be sold or otherwise
disposed of prior to its scheduled maturity. Funds deposited in a Trust
Account or the Certificate Distribution Account on a Deposit Date which
immediately precedes a Transfer Date or Distribution Date upon the maturity
of any Eligible Investments are not required to be (but are permitted to
be) invested overnight.
(c) Indenture Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (excluding investment income thereon) and all such funds,
investments and proceeds shall be part of the Owner Trust Estate. Except as
otherwise provided herein, the Trust Accounts shall be under the sole
dominion and control of Indenture Trustee for the benefit of the
Noteholders and the Certificateholders; provided, however, the Indenture
Trustee shall not be charged with any obligation for the benefit of the
Certificateholders except as provided by the terms of this Agreement. If,
at any time, any of the Trust Accounts or the Certificate Distribution
Account ceases to be an Eligible Deposit Account, Indenture Trustee (or
Servicer on its behalf) or Owner Trustee, as applicable, shall within 10
Business Days (or such longer period as to which each Rating Agency may
consent) establish a new Trust Account or Certificate Distribution Account,
as applicable, as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Trust Account or new Certificate
Distribution Account, as applicable. In connection with the foregoing,
Servicer agrees that, in the event that any of the Trust Accounts are not
accounts with Indenture Trustee, Servicer shall notify Indenture Trustee in
writing promptly upon any of such Trust Accounts ceasing to be an Eligible
Deposit Account.
(d) With respect to the Trust Account Property and the Certificate
Distribution Account, each of Indenture Trustee and Owner Trustee agrees,
by its respective acceptance hereof, that
(i) any Trust Account Property or any property in the
Certificate Distribution Account that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts and, except as
otherwise provided herein, each such Eligible Deposit Account shall be
subject to the exclusive custody and control of Indenture Trustee with
respect to the Trust Accounts and the Owner Trustee with respect to
the Certificate Distribution Account, and Indenture Trustee or Owner
Trustee, as applicable, shall have sole signature authority with
respect thereto;
(ii) any Trust Account Property or Certificate Account Property
that constitutes Physical Property shall be delivered to Indenture
Trustee or Owner Trustee, respectively, in accordance with paragraph
(a) of the definition of "Delivery" and shall be held, pending
maturity or disposition, solely by Indenture Trustee or Owner Trustee,
as applicable, or a financial intermediary (as such term is defined in
Section 8-313(4) of the UCC) acting solely for Indenture Trustee or
Owner Trustee, as applicable;
(iii) any Trust Account Property or Certificate Account
Property that is a book-entry security held through the Federal
Reserve System pursuant to Federal book-entry regulations shall be
delivered in accordance with paragraph (b) of the definition of
"Delivery" and shall be maintained by Indenture Trustee or Owner
Trustee, as applicable, pending maturity or disposition, through
continued book-entry registration of such Trust Account Property or
Certificate Account Property as described in such paragraph; and
(iv) any Trust Account Property or Certificate Account Property
that is an "uncertificated security" under Article 8 of the UCC and
that is not governed by clause (iii) above shall be delivered to
Indenture Trustee or Owner Trustee, as applicable, in accordance with
paragraph (c) of the definition of "Delivery" and shall be maintained
by Indenture Trustee or Owner Trustee, as applicable, pending maturity
or disposition, through continued registration of Indenture Trustee's
(or its nominee's) or Owner Trustee's (or its nominee's) ownership of
such security.
Effective upon Delivery of any Trust Account Property or Certificate
Account Property, Indenture Trustee, or Owner Trustee, as applicable, shall
be deemed to have represented that it has purchased such Trust Account
Property or Certificate Account Property, as applicable, for value, in good
faith and without notice of any adverse claim thereto.
(e) Servicer shall have the power, revocable by Indenture Trustee or
by Owner Trustee with the consent of Indenture Trustee, to instruct
Indenture Trustee to make withdrawals and payments from the Trust Accounts
for the purpose of permitting Servicer or Owner Trustee to carry out its
respective duties hereunder or permitting Indenture Trustee to carry out
its duties under the Indenture.
SECTION 5.2. Collections. (a) Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by
or on behalf of the Obligors with respect to the Receivables (other than
any late fees, prepayment charges and certain nonsufficient funds charges
and other administrative fees or similar charges that may be retained by
Servicer as part of its servicing compensation in accordance with Section
4.8), and all Liquidation Proceeds. Notwithstanding the foregoing, if
Norwest Bank is the Servicer and (i) shall have the Required Rating or (ii)
Indenture Trustee otherwise shall have received written notice from each of
the Rating Agencies that the then outstanding rating on the Notes or the
Certificates would not be lowered or withdrawn as a result, Servicer may
deposit all amounts referred to above for any Collection Period into the
Collection Account not later than the close of business on the Deposit Date
with respect to such Collection Period; provided that (i) if a Servicer
Termination Event has occurred and is continuing, (ii) Servicer has been
terminated as such pursuant to Section 8.1 or (iii) Servicer ceases to have
the Required Rating, Servicer shall deposit such amounts (including any
amounts then being held by Servicer) into the Collection Account as
provided above. For purposes of this Article V the phrase "payments by or
on behalf of Obligors" shall mean payments made with respect to the
Receivables by Persons other than Servicer, Seller or any Seller Affiliate.
(b) With respect to each Receivable (other than a Purchased
Receivable), collections and payments by or on behalf of the Obligor for
each Collection Period shall be applied to interest and principal in
accordance with the Simple Interest Method, as applied by Servicer. Any
excess shall be applied to prepay the Receivable.
SECTION 5.3. Advances. (a) On or prior to each Deposit Date,
Servicer shall advance any Interest Shortfall with respect to the related
Transfer Date by depositing the amount of such Interest Shortfall into the
Collection Account. Servicer shall be obligated to make such an Advance
except to the extent that Servicer shall reasonably determine that the
Advance is unlikely to be recoverable pursuant to subsection (b).
(b) On each Transfer Date, prior to making any of the distributions
set forth in Section 5.5, Servicer shall be reimbursed for all Outstanding
Advances with respect to prior Transfer Dates, to the extent of the
Interest Collections for such Transfer Date and, to the extent such
Interest Collections are insufficient, to the extent of the funds in the
Reserve Account (other than the Certificate Interest Reserve Amount). If it
is acceptable to each Rating Agency without a reduction in the rating of
the Certificates, the Outstanding Advances at the option of Servicer may be
paid at or as soon as possible after the beginning of the related
Collection Period out of the first collections of interest received on the
Receivables for such Collection Period.
(c) On each Transfer Date, prior to the making of any of the
distributions set forth in Section 5.5, Servicer shall be reimbursed for
all Force Placed Insurance Advances not previously reimbursed to the extent
of Collections allocable to principal in accordance with the Servicer's
customary practices. If it is acceptable to each Rating Agency without a
reduction in the rating of the Notes or Certificates, all Forced Placed
Insurance Advances at the option of Servicer may be paid at or as soon as
possible after the beginning of the related Collection Period out of the
first collections of principal received on the Receivables for such
Collection Period.
SECTION 5.4. Additional Deposits. Servicer and Seller shall deposit
or cause to be deposited in the Collection Account the aggregate Purchase
Amounts with respect to Purchased Receivables and Seller or Servicer shall
deposit therein all amounts to be paid under Section 9.1. All such deposits
shall be made not later than the Deposit Date following the end of the
related Collection Period.
SECTION 5.5. Distributions. (a) On each Determination Date, Servicer
shall calculate all amounts required to determine the amounts to be
deposited on the related Transfer Date from the Reserve Account into the
Collection Account and from the Collection Account into the Note
Distribution Account and the Certificate Distribution Account.
(b) On or before each Transfer Date, Servicer shall instruct
Indenture Trustee in writing (based on the information contained in the
Servicer's Report delivered on the related Determination Date pursuant to
Section 4.9) to withdraw from the Reserve Account and deposit in the
Collection Account and Indenture Trustee shall so withdraw and deposit the
Reserve Account Transfer Amount for such Transfer Date.
(c) Subject to the last paragraph of this Section 5.5(c), on each
Transfer Date, after making the reimbursements to Servicer of Outstanding
Advances and Force Placed Insurance Advances pursuant to Section 5.3,
Indenture Trustee shall (based on the information contained in Servicer's
Report delivered on the related Determination Date pursuant to Section 4.9)
make the following deposits and distributions from the Collection Account
for deposit in the applicable account by 11:00 a.m. (New York time), to the
extent of the Total Distribution Amount, in the following order of
priority:
(i) to Servicer, from the Total Distribution Amount, the
Servicing Fee for the related Collection Period and all accrued and
unpaid Servicing Fees for prior Collection Periods;
(ii) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i), the
Noteholders' Interest Distributable Amount;
(iii) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i) and
clause (ii), the Noteholders' Principal Distributable Amount;
(iv) to Owner Trustee for deposit in the Certificate
Distribution Account, from the Total Distribution Amount remaining
after the application of clause (i) through clause (iii), the
Certificateholders' Interest Distributable Amount;
(v) to Owner Trustee for deposit in the Certificate
Distribution Account, from the Total Distribution Amount remaining
after the application of clauses (i) through (iv), the
Certificateholders' Principal Distributable Amount;
(vi) to the Reserve Account until the amount on deposit in the
Reserve Account equals the Specified Reserve Account Balance; and
(vii) to Seller, any amounts remaining.
If funds applied in accordance with the preceding sentence are (based
upon the information contained in the Servicer's Report delivered on the
related Determination Date) insufficient to distribute the
Certificateholders' Interest Distributable Amount in full for such Transfer
Date, the Indenture Trustee shall (based upon the information provided in
the Servicer's Report), to the extent of the Certificate Interest Reserve
Amount, withdraw the Certificate Interest Shortfall Amount from the Reserve
Account and transfer such amount to Owner Trustee for deposit in the
Certificate Distribution Account. Notwithstanding the foregoing, following
the occurrence and during the continuation of an Event of Default which has
resulted in an acceleration of the Notes, the Total Distribution Amount
remaining after the application of clauses (i) and (ii) above will be
deposited in the Note Distribution Account to the extent necessary to
reduce the principal amount of all the Notes to zero, and the
Certificateholders will not receive any distributions until the principal
amount and accrued interest on the Notes have been paid in full. In the
event that the Collection Account is maintained with an institution other
than Indenture Trustee, Indenture Trustee shall instruct and cause such
institution to make all deposits and distributions pursuant to this Section
5.5(c) on the related Deposit Date.
(d) Indenture Trustee shall continue to perform its duties under this
Agreement after the Outstanding Amount of the Notes has been reduced to
zero and the Indenture has been discharged in accordance with its terms.
The protections, immunities and standard of care afforded the Indenture
Trustee under the Indenture shall apply to the performance of its duties
hereunder.
SECTION 5.6. Statements to Certificateholders and Noteholders. On
each Determination Date, Servicer shall provide to Indenture Trustee (with
a copy to each Rating Agency) with written instructions for Indenture
Trustee to forward to each Noteholder of record, to each Paying Agent, if
any, and to Owner Trustee for Owner Trustee to forward to each
Certificateholder of record, a statement substantially in the form of
Exhibit A, setting forth at least the following information as to the Notes
and the Certificates to the extent applicable:
(a) the amount of such distribution allocable to principal of
each class of Notes and to the Certificate Balance of the
Certificates;
(b) the amount of such distribution allocable to interest on or
with respect to each class of Notes and to the Certificates;
(c) the Pool Balance as of the close of business on the last
day of the related Collection Period, after giving effect to payments
allocated to principal reported under clause (a) above;
(d) the aggregate outstanding principal balance of each class
of the Notes, the Note Pool Factor for each such class, the
Certificate Balance and the Certificate Pool Factor after giving
effect to payments allocated to principal reported under clause (a)
above;
(e) the amount of the Servicing Fee paid to Servicer with
respect to the related Collection Period and with respect to
previously accrued and unpaid Servicing Fees;
(f) the amount of the aggregate Charged Off Balance, if any,
for such Collection Period;
(g) the Reserve Account Transfer Amount, if any, for such
Distribution Date, Average Net Loss Ratio and the Average Delinquency
Ratio, the Specified Reserve Account Balance for such Transfer Date,
the amount distributed to Seller from the Reserve Account on such
Transfer Date, and the balance of the Reserve Account (if any) and the
Certificate Interest Reserve Amount (if any), in each case, on such
Transfer Date, after giving effect to changes therein on such Transfer
Date;
(h) the Noteholders' Interest Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall, the Noteholders'
Principal Carryover Shortfall, and the Certificateholders' Principal
Carryover Shortfall and the change in such amounts from the statement
delivered with respect to the preceding Collection Period;
(i) the amount of Advances made with respect to the related
Collection Period and the amount of the Outstanding Advances; and
(j) the aggregate Purchase Amount paid by Seller or Servicer
with respect to the related Collection Period.
Each amount set forth pursuant to paragraph (a), (b), (e) or (h) above
shall be expressed as a dollar amount per $1,000 of the initial principal
balance of the Notes (or class thereof) or the initial Certificate Balance,
as applicable.
SECTION 5.7. Net Deposits. As an administrative convenience, unless
Servicer is required to remit collections within two Business Days of
receipt thereof, Servicer will be permitted to make the deposit of
Collections and Purchase Amounts for or with respect to the Collection
Period net of distributions to be made to Servicer with respect to the
Collection Period. Servicer, however, will account to Owner Trustee,
Indenture Trustee, the Noteholders and the Certificateholders as if all
deposits, distributions and transfers were made individually.
SECTION 5.8. Reserve Account. (a) Seller shall establish and
maintain in the name of the Indenture Trustee, as agent for the Issuer, the
Noteholders and Certificateholders an Eligible Deposit Account (the
"Reserve Account"). The Reserve Account and any amounts therein shall not
be property of Issuer, but shall be pledged to the Indenture Trustee and
held for the benefit of the Noteholders and Certificateholders. The Reserve
Account shall be initially established and maintained with The Chase
Manhattan Bank (the "Securities Intermediary"). On the Closing Date, Seller
shall deposit or cause to be deposited in the Reserve Account an amount
equal to the Reserve Account Deposit.
(b) In order to provide for the prompt payment to the Holders and to
assure availability of the amounts maintained in the Reserve Account:
(i) Seller, on behalf of itself and its successors and assigns,
and solely for the purpose of providing for payment of the
distributions provided for in Section 5.5, hereby grants a security
interest in and pledges to Indenture Trustee and its successors and
assigns, as agent for the benefit of the Issuer, the Noteholders and
the Certificateholders, all of its right, title and interest in and to
the Reserve Account, subject, however, to the limitations set forth in
this Agreement, and all proceeds of the foregoing, including all
securities, investments, general intangibles, financial assets and
investment property from time to time credited to and any security
entitlement to the Reserve Account; and
(ii) Seller hereby grants a security interest and pledges to
Indenture Trustee and its successors and assigns as agent for the
benefit of the Issuer, the Noteholders and the Certificateholders, the
Reserve Account Deposit and all proceeds thereof, and solely for the
purpose of providing for payment of the distributions provided for in
Section 5.5, (all of the foregoing, subject to the limitations set
forth in this Section, the "Reserve Account Property"),
to have and to hold all the aforesaid property, rights and privileges unto
Indenture Trustee, its successors and assigns, in trust for the uses and
purposes, and subject to the terms and provisions, set forth in this
Section. Indenture Trustee hereby acknowledges such transfer and accepts
the trust hereunder and shall hold and distribute the Reserve Account
Property in accordance with the terms and provisions of this Section.
(c) Indenture Trustee shall, at the written direction of Seller,
direct the Securities Intermediary to invest funds on deposit in the
Reserve Account in Eligible Investments selected by Seller and confirmed in
writing by Seller to Indenture Trustee; provided that it is understood and
agreed that Indenture Trustee shall not be liable for any loss arising from
such investment in Eligible Investments. Funds on deposit in the Reserve
Account shall be invested in Eligible Investments that will mature so that
all such funds will be available at the close of business on each Deposit
Date; provided that to the extent permitted by the Rating Agencies
following written request by Servicer, funds on deposit in the Reserve
Account may be invested in Eligible Investments that mature later than the
next Deposit Date. Funds deposited in the Reserve Account on a Deposit Date
upon the maturity of any Eligible Investments are not required to be (but
may be) invested overnight. Seller will treat the funds, Eligible
Investments and other assets in the Reserve Account as its own for Federal,
state and local income tax and franchise tax purposes and will report on
its tax returns all income, gain and loss from the Reserve Account.
(d) The Securities Intermediary hereby expressly agrees with the
Indenture Trustee that: (i) all matters relating to the Reserve Account
shall be governed by the laws of the State of Minnesota; (ii) all Eligible
Investments held by the Securities Intermediary on behalf of the Indenture
Trustee in the Reserve Account shall be treated as "financial assets" (as
defined in Article 8 of the Minnesota Uniform Commercial Code; (iii) the
Securities Intermediary will treat the Indenture Trustee as entitled to
exercise the rights comprising the financial assets credited to the Reserve
Account; (iv) the financial assets credited to the Reserve Account shall
not be registered in the name of, payable to the order of, or specially
indorsed to the Indenture Trustee; and (v) the Securities Intermediary will
not agree to comply with entitlement orders originated by any person with
respect to the financial assets held in the Reserve Account other than the
Indenture Trustee.
(e) On each Transfer Date, any amounts on deposit in the Collection
Account with respect to the preceding Collection Period after payments to
Servicer, the Note Distribution Account and the Certificate Distribution
Account have been made will be deposited into the Reserve Account until the
amount of the Reserve Account is equal to the Specified Reserve Account
Balance.
(f) The Reserve Account shall be under the sole custody and control
of Indenture Trustee. If, at any time, the Reserve Account ceases to be an
Eligible Deposit Account, Indenture Trustee shall within 10 Business Days
(or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Reserve Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments that are
in the existing Account which is no longer an Eligible Deposit Account to
such new Reserve Account.
(g) Amounts on deposit in the Reserve Account will be released to
Seller on each Transfer Date to the extent that the amount credited to the
Reserve Account would exceed the Specified Reserve Account Balance. Upon
any distribution to Seller of amounts from the Reserve Account, the Holders
will not have any rights in, or claims to, such amounts. Amounts
distributed to Seller from the Reserve Account in accordance with this
Section shall not be available under any circumstances to Issuer, Owner
Trustee, Indenture Trustee or the Holders and Seller shall in no event
thereafter be required to refund any such distributed amounts.
(h) With respect to the Reserve Account Property, Seller, Indenture
Trustee and Owner Trustee agree that the Reserve Account Deposit and all
other funds and Reserve Account Property shall be delivered to Indenture
Trustee for credit to the Reserve Account. In addition:
(i) any Reserve Account Property that constitutes Physical
Property shall be delivered to Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by Indenture Trustee or a
financial intermediary (as such term is defined in Section 8-313(4) of
the UCC) acting solely for Indenture Trustee or Owner Trustee, as
applicable;
(ii) any Reserve Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by Indenture Trustee
pending maturity or disposition, through continued book-entry
registration of such Reserve Account Property as described in such
paragraph; and
(iii) any Reserve Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by
clause (ii) above shall be delivered to Indenture Trustee in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by Indenture Trustee pending maturity or
disposition, through continued registration of Indenture Trustee's (or
its nominee's) ownership of such security.
Effective upon the crediting of any Reserve Account Property to the Reserve
Account, Indenture Trustee shall be deemed to have represented that it has
purchased such Reserve Account Property for value, in good faith and
without notice of any adverse claim thereto.
(i) Seller (and any successor to Seller in accordance with Section
6.4) and Servicer agree to take or cause to be taken such further actions,
to execute, deliver and file or cause to be executed, delivered and filed
such further documents and instruments (including any UCC financing
statements or this Agreement) as may be determined to be necessary, in an
Opinion of Counsel to Seller delivered to Owner Trustee and Indenture
Trustee in order to perfect the interests created by this Section 5.8 and
otherwise fully to effectuate the purposes, terms and conditions of this
Section 5.8. Seller (and any successor to Seller in accordance with Section
6.4) and Servicer shall:
(1) promptly execute, deliver and file any financing
statements, amendments, continuation statements, assignments,
certificates and other documents with respect to such interests and
perform all such other acts as may be necessary in order to perfect or
to maintain the perfection of Indenture Trustee's security interest;
and
(2) make the necessary filings of financing statements or
amendments thereto within five days after the occurrence of any of the
following: (1) any change in their respective names or any trade
names, (2) any change in the location of their respective chief
executive offices or principal places of business and (3) any merger
or consolidation or other change in their respective identities or
corporate structures; and shall promptly notify Owner Trustee and
Indenture Trustee of any such filings.
(j) Investment earnings attributable to the Reserve Account Property
and proceeds therefrom shall be held by Indenture Trustee for the benefit
of Seller. Investment earnings attributable to the Reserve Account
Property shall not be available to pay the distributions provided for in
Section 5.5 and shall not otherwise be subject to any claims or rights of
the Holders or Servicer. Indenture Trustee shall cause all investment
earnings attributable to the Reserve Account to be distributed on each
Distribution Date to Seller.
(k) Seller may at any time, without consent of Holders, sell,
transfer, convey or assign in any manner its rights to and interests in
distributions from the Reserve Account provided that (i) the Rating
Agencies confirm in writing that such action will not result in a reduction
or withdrawal of the rating of any class of Notes or Certificates, (ii)
Seller provides to Owner Trustee and Indenture Trustee an Opinion of
Counsel from independent counsel that such action will not cause Issuer to
be classified as an association (or publicly traded partnership) taxable as
a corporation for federal income tax purposes and (iii) such transferee or
assignee agrees in writing to take positions for federal income tax
purposes consistent with the federal income tax positions agreed to be
taken by Seller.
ARTICLE VI. SELLER.
SECTION 6.1. Representations of Seller. Seller makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate. The representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to Issuer and the
pledge thereof to Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Seller has been duly
organized and is validly existing as a Delaware corporation in good
standing under the laws of the State of Delaware, with the power and
authority to own its properties and to conduct its business as such
properties are presently owned and such business is presently
conducted and had at all relevant times, and has, full power,
authority and legal right to acquire, own and sell the Receivables and
the other properties and rights included in the Owner Trust Estate
assigned to Issuer pursuant to Article II.
(b) Power and Authority. Seller has the power, authority and
legal right to execute and deliver this Agreement and the Basic
Documents and to carry out their respective terms and to sell and
assign the property to be sold and assigned to and deposited with
Issuer as the Owner Trust Estate; and the execution, delivery and
performance of this Agreement and the Basic Documents have been duly
authorized by Seller by all necessary corporate action.
(c) No Consent Required. No approval, authorization, consent,
license or other order or action of, or filing or registration with,
any governmental authority, bureau or agency is required in connection
with the execution, delivery or performance of this Agreement or the
Basic Documents or the consummation of the transactions contemplated
hereby or thereby, other than (i) as may be required under the blue
sky or securities laws of any State or the Securities Act of 1933, as
amended, and (ii) the filing of UCC financing statements.
(d) Valid Sale; Binding Obligation. Seller intends this
Agreement to effect a valid sale, transfer, and assignment of the
Receivables and the other properties and rights included in the Owner
Trust Estate conveyed by Seller to Issuer hereunder, enforceable
against creditors of and purchasers from Seller; and each of this
Agreement and each of the Basic Documents constitutes a legal, valid
and binding obligation of Seller, enforceable against Seller in
accordance with its respective terms, subject, as to enforceability,
to applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws affecting enforcement
of the rights of creditors generally and to equitable limitations on
the availability of specific remedies.
(e) No Violation. The execution, delivery and performance by
Seller of this Agreement and the Basic Documents and the consummation
of the transactions contemplated hereby and thereby will not conflict
with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material
default under or result in the creation or imposition of any Lien upon
any of its material properties pursuant to the terms of, (i) the
certificate of incorporation or bylaws of Seller, (ii) any material
indenture, contract, lease, mortgage, deed of trust or other
instrument or agreement to which Seller is a party or by which Seller
is bound, or (iii) any law, order, rule or regulation applicable to
Seller of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having
jurisdiction over Seller.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of Seller, threatened, before any court,
regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over Seller or its
properties: (i) asserting the invalidity of this Agreement, any other
Basic Document, the Notes or the Certificates, (ii) seeking to prevent
the issuance of the Notes or the Certificates or the consummation of
any of the transactions contemplated by this Agreement or any other
Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Seller of its
obligations under, or the validity or enforceability of, this
Agreement, any other Basic Document, the Notes or the Certificates, to
the extent applicable, or (iv) that may materially and adversely
affect the federal or state income, excise franchise or similar tax
attributes of the Certificates.
(g) Chief Executive Office. The chief executive office of
Seller is
located ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 6.2. Continued Existence. During the term of this Agreement,
subject to Section 6.4, Seller will keep in full force and effect its
existence, rights and franchises as a corporation organized under the laws
of the State of Delaware and will obtain and preserve its qualification to
do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or
appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
SECTION 6.3. Liability of Seller; Indemnities. Seller shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by Seller under this Agreement.
(a) Subject to Section 10.3, Seller shall indemnify, defend and
hold harmless Issuer, Owner Trustee and Indenture Trustee and their
respective officers, directors, employees and agents from and against
any taxes that may at any time be asserted against any such Person
with respect to, and on the date of, the sale of the Receivables to
Issuer or the issuance and original sale of the Notes and
Certificates, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes
and costs and expenses in defending against the same.
(b) Subject to Section 10.3, Seller shall indemnify, defend and
hold harmless Issuer, Owner Trustee, Indenture Trustee, the
Certificateholders and the Noteholders and the officers, directors,
employees and agents of Issuer, Owner Trustee and Indenture Trustee
from and against any and all costs, expenses, losses, claims, damages
and liabilities to the extent arising out of, or imposed upon such
Person through or as a result of (i) Seller's willful misfeasance, bad
faith or gross negligence in the performance of its duties under this
Agreement, (ii) Seller's or Issuer's violation of Federal or state
securities laws in connection with the offering and sale of the Notes
and the Certificates or in connection with any application relating to
the Notes or Certificates under any state securities laws and (iii)
the failure of any Receivable conveyed by it to the Trust hereunder,
or the sale of the related Financed Vehicle, to comply with all
requirements of applicable law.
(c) Subject to Section 10.3, Seller shall be liable as primary
obligor for, and shall indemnify, defend and hold harmless Owner
Trustee, Indenture Trustee and their respective officers, directors,
employees and agents from and against any and all costs, expenses,
losses, claims, damages and liabilities arising out of, or incurred in
connection with, the acceptance or performance of the trusts and
duties set forth herein and in the Trust Agreement in the case of
Owner Trustee, and herein and in the Indenture, in the case of
Indenture Trustee, except to the extent that such cost, expense, loss,
claim, damage or liability: (i) in the case of Owner Trustee, shall be
due to the willful misfeasance, bad faith or negligence (except for
errors in judgment) of Owner Trustee, or in the case of Indenture
Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of Indenture Trustee; (ii)
in the case of Owner Trustee, shall arise from the breach by Owner
Trustee of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement; or (iii) in the case of Indenture
Trustee, shall arise from the breach by Indenture Trustee of any of
its representations and warranties set forth in the Indenture. Such
liability shall survive the termination of Issuer, the discharge of
the Notes and Certificates and removal or resignation of such Trustee.
(d) Subject to Section 10.3, Seller shall pay any and all taxes
levied or assessed upon the Issuer or upon all or any part of the
Owner Trust Estate.
Indemnification under this Section shall survive the resignation or removal
of Owner Trustee or Indenture Trustee and the termination of this Agreement
or the Indenture or the Trust Agreement, as applicable, and shall include
reasonable fees and expenses of counsel and other expenses of litigation.
If Seller shall have made any indemnity payments pursuant to this Section
and the Person to or on behalf of whom such payments are made thereafter
shall collect any of such amounts from others, such Person shall promptly
repay such amounts to Seller, without interest.
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to
which Seller shall be a party or (c) which may succeed to the properties
and assets of Seller substantially as a whole, shall be the successor to
Seller without the execution or filing of any document or any further act
by any of the parties to this Agreement; provided that Seller hereby
covenants that it will not consummate any of the foregoing transactions
except upon satisfaction of the following: (i) the surviving Seller if
other than Norwest Auto Receivables Corporation, executes an agreement of
assumption to perform every obligation of Seller under this Agreement, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.1 or 6.1 shall have been breached,
(iii) Seller shall have delivered to Owner Trustee and Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with, and
that the Rating Agency Condition shall have been satisfied with respect to
such transaction, (iv) the surviving Seller shall have a consolidated net
worth at least equal to that of the predecessor Seller, (v) such
transaction will not result in a material adverse federal or state tax
consequence to Issuer, the Noteholders or the Certificateholders and (vi)
unless Norwest Auto Receivables Corporation is the surviving entity, Seller
shall have delivered to Owner Trustee and Indenture Trustee an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary fully to preserve and
protect the interest of Owner Trustee and Indenture Trustee, respectively,
in the Receivables and reciting the details of such filings, or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interests.
SECTION 6.5. Limitation on Liability of Seller and Others. Seller
and any director or officer or employee or agent of Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters
arising under any Basic Document (provided that such reliance shall not
limit in any way Seller's obligations under Section 3.2). Seller shall not
be under any obligation to appear in, prosecute or defend any legal action
that shall not be incidental to its obligations under this Agreement, and
that in its opinion may involve it in any expense or liability.
SECTION 6.6. Seller May Own Certificates or Notes. Seller and any
Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would
have if it were not Seller or an Affiliate thereof, except as expressly
provided herein or in any Basic Document. Except as set forth herein or in
the other Basic Documents, Notes and Certificates so owned by or pledged to
Seller or any such Affiliate shall have an equal and proportionate benefit
under the provisions of this Agreement and the other Basic Documents,
without preference, priority, or distinction as among all of the Notes and
Certificates.
ARTICLE VII. SERVICER.
SECTION 7.1. Representations of Servicer. Servicer makes the
following representations on which Issuer is deemed to have relied in
acquiring the Receivables and the other properties and rights included in
the Owner Trust Estate. The representations speak as of the execution and
delivery of the Agreement and shall survive the sale of the Receivables to
Issuer and the pledge thereof to Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. Servicer has been duly
organized and is validly existing as a national banking association in
good standing under the laws of the United States, with the power and
authority to own its properties and to conduct its business as such
properties are presently owned and such business is presently
conducted, and had at all relevant times, and shall have, the power,
authority and legal right to service the Receivables and the other
properties and rights included in the Owner Trust Estate.
(b) Due Qualification. Servicer shall be duly qualified to do
business as a foreign corporation in good standing, and shall have
obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its
business (including the servicing of the Receivables as required by
this Agreement) shall require such qualifications.
(c) Power and Authority. Servicer has the power, authority and
legal right to execute and deliver this Agreement and the Basic
Documents and to carry out their respective terms; and the execution,
delivery and performance of this Agreement and the Basic Documents has
been duly authorized by Servicer by all necessary corporate action.
(d) No Consent Required. No approval, authorization, consent,
license or other order or action of, or filing or registration with,
any governmental authority, bureau or agency is required in connection
with the execution, delivery or performance of this Agreement, the
Basic Documents or the consummation of the transactions contemplated
hereby or thereby.
(e) Binding Obligation. Each of this Agreement and the Basic
Documents constitutes a legal, valid and binding obligation of
Servicer, enforceable against Servicer in accordance with its
respective terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws affecting enforcement of the rights
of creditors of banks generally and to equitable limitations on the
availability of specific remedies.
(f) No Violation. The execution, delivery and performance by
Servicer of this Agreement and the Basic Documents and the
consummation of the transactions contemplated hereby and thereby will
not conflict with, result in any material breach of any of the terms
and provisions of, constitute (with or without notice or lapse of
time) a material default under, or result in the creation or
disposition of any Lien upon any of its material properties pursuant
to the terms of, (i) the articles of association or bylaws of
Servicer, (ii) any material indenture, contract, lease, mortgage, deed
of trust or other instrument or agreement to which Servicer is a party
or by which Servicer is bound, or (iii) any law, order, rule or
regulation applicable to Servicer of any federal or state regulatory
body, any court, administrative agency, or other governmental
instrumentality having jurisdiction over Servicer.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to Servicer's knowledge, threatened, before any court,
regulatory body, administrative agency, or tribunal or other
governmental instrumentality having jurisdiction over Servicer or its
properties: (i) asserting the invalidity of this Agreement, any other
Basic Document, the Notes or the Certificates, (ii) seeking to prevent
the issuance of the Certificates or the Notes or the consummation of
any of the transactions contemplated by this Agreement or any other
Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Servicer of its
obligations under, or the validity or enforceability of, this
Agreement, any other Basic Document, the Notes or the Certificates, to
the extent applicable, or (iv) that may materially and adversely
affect the federal or state income, excise, franchise or similar tax
attributes of the Certificates.
(h) Licenses. Servicer has obtained all licenses, permits and
approvals in each jurisdiction as necessary to perform its obligations
under the Basic Documents.
SECTION 7.2. Indemnities of Servicer. (a) Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by Servicer under this Agreement.
(b) Subject to Section 10.3, Servicer shall indemnify, defend and hold
harmless Issuer, Owner Trustee, Indenture Trustee, the Certificateholders
and the Noteholders and any of the officers, directors, employees and
agents of Issuer, Owner Trustee or Indenture Trustee from any and all
costs, expenses, losses, claims, damages and liabilities (including
reasonable attorneys' fees and expenses) to the extent arising out of, or
imposed upon any such Person through, the gross negligence, willful
misfeasance or bad faith of Servicer in the performance of its obligations
and duties under this Agreement or in the performance of the obligations
and duties of any subservicer under any subservicing agreement, where the
final determination that any such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon any such Person through, any
such gross negligence, willful misfeasance, or bad faith on the part of
Servicer or any subservicer, is established by a court of law, by an
arbitrator or by way of settlement agreed to by Servicer. Notwithstanding
the foregoing, if Servicer is rendered unable, in whole or in part, by
virtue of an act of God, act of war, fires, earthquake or other natural
disasters, to satisfy its obligations under this Agreement, Servicer shall
not be deemed to have breached any such obligation upon the sending of
written notice of such event to the other parties hereto, for so long as
Servicer remains unable to perform such obligation as a result of such
event. This provision shall not be construed to limit Servicer's or any
other party's rights, obligations, liabilities, claims or defenses which
arise as a matter of law or pursuant to any other provision of this
Agreement.
(c) Subject to Section 10.3,Servicer shall indemnify, defend and hold
harmless Issuer, Owner Trustee, and Indenture Trustee and their respective
officers, directors, employees and agents from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated in this Agreement or in the other Basic
Documents, including any sales, gross receipts, general corporation,
tangible or intangible personal property, privilege, or license taxes, or
any taxes of any kind which may be asserted against the Issuer, and costs
and expenses in defending against the same.
(d) Subject to Section 10.3, Servicer shall indemnify, defend and hold
harmless Issuer, Owner Trustee, Indenture Trustee, Certificateholders and
the Noteholders or any of the officers, directors, employees and agents of
Issuer, Owner Trustee or Indenture Trustee from any and all costs,
expenses, losses, claims, damages and liabilities (including reasonable
attorneys' fees and expenses) to the extent arising out of or imposed upon
any such Person as a result of any compensation payable to any subcustodian
or subservicer (including any fees payable in connection with the release
of any Receivable File from the custody of such subservicer or in
connection with the termination of the servicing activities of such
subservicer with respect to any Receivable) whether pursuant to the terms
of any subservicing agreement or otherwise.
(e) Subject to Section 10.3, Servicer shall indemnify, defend and
hold harmless Issuer, Owner Trustee, Indenture Trustee, the
Certificateholders and the Noteholders or any of the directors, officers,
employees and agents of Issuer, Owner Trustee, and Indenture Trustee from
and against any and all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel and expenses
of litigation, arising out of or resulting from (i) the making of a Force
Placed Insurance Advance or force placing any insurance policy or (ii) the
use, ownership, or operation by Servicer or any Affiliate thereof of any
Financed Vehicle.
Indemnification under this Section shall survive the resignation or removal
of Owner Trustee or Indenture Trustee and the termination of this Agreement
or the Indenture or the Trust Agreement, as applicable, and shall include
reasonable fees and expenses of counsel and other expenses of litigation.
If Servicer shall have made any indemnity payments pursuant to this Section
and the Person to or on behalf of whom such payments are made thereafter
shall collect any of such amounts from others, such Person shall promptly
repay such amounts to Servicer, without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to
which Servicer shall be a party, (c) which may succeed to the properties
and assets of Servicer, substantially as a whole, or (d) 50% of the voting
stock of which is owned directly or indirectly by Norwest Corporation,
shall be the successor to Servicer without the execution or filing of any
document or any further act by any of the parties to this Agreement;
provided that Servicer hereby covenants that it will not consummate any of
the foregoing transactions except upon satisfaction of the following: (i)
the surviving Servicer if other than Norwest Bank, executes an agreement of
assumption to perform every obligation of Servicer under this Agreement,
(ii) immediately after giving effect to such transaction, no representation
or warranty made pursuant to Section 7.1 shall have been breached and no
Servicer Termination Event, and no event that, after notice or lapse of
time, or both, would become a Servicer Termination Event shall have
occurred and be continuing, (iii) Servicer shall have delivered to Owner
Trustee and Indenture Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and that the Rating Agency Condition
shall have been satisfied with respect to such transaction, (iv) the
surviving Servicer shall have a consolidated net worth at least equal to
that of the predecessor Servicer, and (v) such transaction will not result
in a material adverse Federal or state tax consequence to Issuer, the
Noteholders or the Certificateholders.
SECTION 7.4. Limitation on Liability of Servicer and Others. Neither
Servicer nor any of its directors, officers, employees or agents shall be
under any liability to Issuer, the Noteholders or the Certificateholders,
except as provided under this Agreement, for any action taken or for
refraining from the taking of any action by Servicer or any subservicer
pursuant to this Agreement or for errors in judgment; provided that this
provision shall not protect Servicer or any such person against any
liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties under this
Agreement. Servicer or any subservicer and any of their respective
directors, officers, employees or agents may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or
liability; provided that Servicer, may (but shall not be required to)
undertake any reasonable action that it may deem necessary or desirable in
respect of the Basic Documents to protect the interests of the
Certificateholders under this Agreement and the Noteholders under the
Indenture.
SECTION 7.5. Norwest Bank Not To Resign as Servicer. Subject to the
provisions of Section 7.3, Norwest Bank hereby agrees not to resign from
the obligations and duties hereby imposed on it as Servicer under this
Agreement except upon determination that the performance of its duties
hereunder shall no longer be permissible under applicable law or if such
resignation is required by regulatory authorities. Notice of any such
determination permitting the resignation of Norwest Bank, as Servicer shall
be communicated to Owner Trustee and Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to Owner Trustee and Indenture Trustee concurrently with or
promptly after such notice. No such resignation shall become effective
until the earlier of Indenture Trustee or a Successor Servicer having
assumed the responsibilities and obligations of the resigning Servicer in
accordance with Section 8.2 or the date upon which any regulatory authority
requires such resignation.
SECTION 7.6. Existence. Subject to the provisions of Section 7.3,
during the term of this Agreement, Norwest Bank, will keep in full force
and effect its existence, rights and franchises as a national banking
association under the laws of the jurisdiction of its organization.
SECTION 7.7. Servicer May Own Notes or Certificates. The Servicer,
and any Affiliate of the Servicer, may, in its individual or any other
capacity, become the owner or pledgee of Notes or Certificates with the
same rights as it would have if it were not the Servicer or an Affiliate
thereof, except as expressly provided herein or in any Basic Document.
Except as set forth herein or in the other Basic Documents, Notes and
Certificates so owned by or pledged to Servicer or any such Affiliate shall
have an equal and proportionate benefit under the provisions of this
Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates.
ARTICLE VIII. DEFAULT.
SECTION 8.1. Servicer Termination Event. If any one of the following
events (a "Servicer Termination Event") shall occur and be continuing:
(a) any failure by the Servicer to deliver to Indenture Trustee
and Owner Trustee the Servicer's Report in accordance with Section
4.9, or any failure by Servicer or Seller to deliver to Indenture
Trustee or Owner Trustee for deposit in any of the Trust Accounts or
the Certificate Distribution Account any required payment or to direct
Indenture Trustee or Owner Trustee to make any required distributions
therefrom that shall continue unremedied for a period of five Business
Days after written notice of such failure is received by Servicer from
Owner Trustee or Indenture Trustee or after discovery of such failure
by an Authorized Officer of Servicer; or
(b) failure on the part of Servicer or Seller duly to observe
or to perform in any material respect any other covenants or
agreements of Servicer or Seller, as applicable, set forth in this
Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of either the
Certificateholders or Noteholders and (ii) continue unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A)
to Servicer by Owner Trustee or Indenture Trustee or (B) to Servicer
and to Owner Trustee and Indenture Trustee by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes or
Holders of Certificates evidencing not less than 25% of the
outstanding Certificate Balance, as applicable (or for such longer
period, not in excess of 120 days, as may be reasonably necessary to
remedy such default; provided that such default is capable of remedy
within 120 days and Servicer delivers an Officers' Certificate to
Owner Trustee and Indenture Trustee to such effect and to the effect
that Servicer or Seller, as applicable, has commenced or will promptly
commence, and will diligently pursue, all reasonable efforts to remedy
such default); or
(c) an Insolvency Event occurs with respect to Servicer,
Seller, any Seller Affiliate or any of their respective successors;
then, and in each and every case, so long as any Servicer Termination Event
shall not have been remedied, either Indenture Trustee, or the Holders of
Notes evidencing greater than 50% of the Outstanding Amount of the Notes
(or, if no Notes are then Outstanding, either the Owner Trustee or the
Holders of Certificates evidencing greater than 50% of the Certificate
Balance), by notice then given in writing to Servicer (and to Owner Trustee
or Indenture Trustee, as applicable, if given by the Holders) may terminate
all the rights and obligations (other than the obligations set forth in
Section 7.2) of Servicer under this Agreement. On or after the receipt by
Servicer of such written notice, all authority and power of Servicer under
this Agreement, whether with respect to the Notes, the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be
vested in Indenture Trustee or such successor Servicer as may be appointed
under Section 8.2; and, without limitation, Indenture Trustee and Owner
Trustee are hereby authorized and empowered to execute and deliver, on
behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of
the Receivables and related documents, or otherwise. The predecessor
Servicer shall cooperate with the successor Servicer, Indenture Trustee and
Owner Trustee in effecting the termination of the responsibilities and
rights of the predecessor Servicer under this Agreement, including the
transfer to the successor Servicer for administration by it of all cash
amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received by it with respect to a
Receivable. Servicer shall promptly transfer its electronic records
relating to the Receivables to the Successor Servicer in such electronic
form as the Successor Servicer may reasonably request and shall promptly
transfer to the Successor Servicer all other records, correspondence and
documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably
request. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the Receivable Files to the
successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section shall be paid by the predecessor
Servicer upon presentation of reasonable documentation of such costs and
expenses. Upon receipt of notice of the occurrence of a Servicer
Termination Event, Indenture Trustee shall give notice thereof to the
Rating Agencies.
SECTION 8.2. Appointment of Successor. (a) Upon Servicer's receipt
of notice of termination, pursuant to Section 8.1 in accordance with the
terms of this Agreement, the predecessor Servicer shall continue to perform
its functions as Servicer under this Agreement, in the case of termination,
only until the date specified in such termination notice or, if no such
date is specified in a notice of termination, until receipt of such notice
and, in the case of resignation, until the earlier of (i) the date 45 days
from the delivery to Owner Trustee and Indenture Trustee of written notice
of such resignation (or written confirmation of such notice) in accordance
with the terms of this Agreement and (ii) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified
in the notice of resignation and accompanying Opinion of Counsel. In the
event of Servicer's termination hereunder, Issuer shall appoint a successor
Servicer, and the successor Servicer shall accept its appointment by an
appropriate instrument of assumption. In the event that a successor
Servicer has not been appointed at the time when the predecessor Servicer
has ceased to act as Servicer in accordance with this Section, Indenture
Trustee without further action shall automatically be appointed the
successor Servicer and Indenture Trustee shall be entitled to the Servicing
Fee. Notwithstanding the above, Indenture Trustee shall, if it shall be
unwilling or unable so to act, appoint or petition a court of competent
jurisdiction to appoint, any established institution, having a net worth of
not less than $50,000,000 and whose regular business shall include the
servicing of automotive receivables, as the successor to Servicer under
this Agreement; provided, that the appointment of any such successor
Servicer will not result in the withdrawal or reduction of the outstanding
rating assigned to the Certificates or Notes by any Rating Agency.
(b) Upon appointment, the successor Servicer (including Indenture
Trustee acting as successor servicer) shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating
thereto placed on the predecessor Servicer and shall be entitled to the
Servicing Fee and all the rights granted to the predecessor Servicer by the
terms and provisions of this Agreement. No successor Servicer shall be
liable for any acts or omissions of any predecessor Servicer.
(c) Norwest Bank Minnesota, N.A. may not resign as Servicer unless it
is prohibited from serving as such by law or by requirement of any
regulatory authority.
(d) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities
of Seller pursuant to Sections 3.3, 4.3, 6.1 and 6.3 or, with respect to
obligations and indemnities arising prior to, or concurrently with, a
transfer of servicing hereunder, the outgoing Servicer pursuant to Section
4.8, 7.1 or 7.2) other than those relating to the management,
administration, servicing, custody or collection of the Receivables and the
other rights and properties included in the Owner Trust Estate. The
successor Servicer shall, upon its appointment pursuant to Section 8.2 and
as part of its duties and responsibilities under this Agreement, promptly
take all action it deems necessary or appropriate so that the outgoing
Servicer (in whatever capacity) is paid or reimbursed all amounts it is
entitled to receive under this Agreement on each Transfer Date subsequent
to the date on which it is terminated as Servicer hereunder. Without
limiting the generality of the foregoing, the outgoing Servicer will be
entitled to receive all accrued and unpaid Servicing Fees through and
including, and to be reimbursed for all Outstanding Advances as of, the
effective date of the termination of the outgoing Servicer.
SECTION 8.3. Payment of Servicing Fee. If Servicer shall be
replaced, the predecessor Servicer shall be entitled to receive any accrued
and unpaid Servicing Fees through the date of the successor Servicer's
acceptance hereunder in accordance with Section 4.8.
SECTION 8.4. Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, Servicer
pursuant to this Article VIII, Owner Trustee shall give prompt written
notice thereof to Certificateholders and Indenture Trustee shall give
prompt written notice thereof to Noteholders subject to the Rating Agency
Condition.
SECTION 8.5. Waiver of Past Defaults. The Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes
(or the Holders of Certificates evidencing not less than a majority of the
outstanding Certificate Balance, as applicable, in the case of any default
which does not adversely affect Indenture Trustee or the Noteholders) may,
on behalf of all Noteholders and Certificateholders, waive in writing any
default by Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or
payments from any of the Trust Accounts in accordance with this Agreement.
Upon any such waiver of a past default, such default shall cease to exist,
and any Servicer Termination Event arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE IX. TERMINATION.
SECTION 9.1. Optional Purchase of All Receivables. (a) On the last
day of any Collection Period as of which the then outstanding Pool Balance
is 5% or less of the Initial Pool Balance, Seller and Servicer shall each
have the option to purchase the Owner Trust Estate, other than the Trust
Accounts, the Certificate Distribution Account and any funds or investments
therein. To exercise such option, Seller or Servicer, as applicable, shall
deposit pursuant to Section 5.4 in the Collection Account an amount which,
when added to the amounts on deposit in the Collection Account for such
Transfer Date, equals the sum of (a) the unpaid principal amount of the
then outstanding Class A-4 Notes, plus accrued and unpaid interest thereon,
plus (b) the Certificate Balance plus accrued and unpaid interest thereon.
The Class A-4 Notes and the Certificates will be redeemed concurrently
therewith.
(b) Upon any sale of the assets of Issuer pursuant to Section 9.2 of
the Trust Agreement, Servicer shall instruct Indenture Trustee in writing
to deposit the proceeds from such sale after all payments and reserves
therefrom (including the expenses of such sale) have been made or provided
for (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a
Distribution Date, on the Distribution Date immediately following such
deposit), Servicer shall instruct Indenture Trustee in writing to make, and
Indenture Trustee shall make, the following deposits and distributions
(after the application on such Distribution Date of the Total Distribution
Amount pursuant to Section 5.5) from the Insolvency Proceeds and any funds
remaining on deposit in the Reserve Account (including the proceeds of any
sale of investments therein):
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited
into the Note Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the outstanding principal
balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the deposits
made in the Note Distribution Account on such Distribution Date);
(iii) to Owner Trustee for deposit in the Certificate
Distribution Account, any portion of the Certificateholders' Interest
Distributable Amount not otherwise deposited into the Certificate
Distribution Account on such Distribution Date; and
(iv) to Owner Trustee for deposit in the Certificate
Distribution Account, the Certificate Balance and any
Certificateholders' Principal Carryover Shortfall (after giving effect
to the reduction in the Certificate Balance to result from the
deposits made in the Certificate Distribution Account on such
Distribution Date).
Any Insolvency Proceeds remaining after the deposits described above and
payment of any amounts then due and payable to the Indenture Trustee and
the Owner Trustee shall be paid to Seller.
(c) Notice of any termination of Issuer shall be given by Servicer to
Owner Trustee, Indenture Trustee and the Rating Agencies as soon as
practicable after Servicer has received notice thereof.
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder
and Owner Trustee will succeed to the rights of, and assume the obligations
of, Indenture Trustee pursuant to this Agreement.
ARTICLE X. MISCELLANEOUS PROVISIONS.
SECTION 10.1. Amendment. (a) This Agreement may be amended by
Seller, Servicer and Owner Trustee, with the consent of Indenture Trustee
(which consent may not be unreasonably withheld), but without the consent
of any of the Noteholders or the Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided that such action shall not, as evidenced
by an Opinion of Counsel delivered to Owner Trustee and Indenture Trustee,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder;
(ii) to enable all or a portion of Issuer to qualify as a partnership
for federal income tax purposes under applicable regulations on the
classification of entities as partnerships or corporations under the Code
adopted as final regulations, and to the extent such regulations eliminate
or modify the need therefor, to modify or eliminate such provisions
relating to the intended availability of partnership treatment of Issuer
for federal income tax purposes; it being a condition to any such amendment
that each Rating Agency shall have notified the Seller, the Servicer and
the Owner Trustee in writing that the amendment will not result in a
reduction or withdrawal of the rating of any outstanding Notes or
Certificates with respect to which it is a Rating Agency;
(iii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of Issuer to
qualify as, and to permit an election to be made to cause all or a portion
of Issuer to be treated as, a "financial asset securitization investment
trust" as described in the provisions of the "Small Business Job Protection
Act of 1996," or to enable all or a portion of the Trust to qualify and an
election to be made for similar treatment under such comparable subsequent
federal income tax provisions as may ultimately be enacted into law, and
(B) in connection with any such election, to modify or eliminate existing
provisions set forth in this Agreement relating to the intended federal
income tax treatment of the Notes or Certificates and Issuer in the absence
of the election; it being a condition to any such amendment that each
Rating Agency shall have notified the Seller, the Servicer and the Owner
Trustee in writing that the amendment will not result in a reduction or
withdrawal of the rating of any outstanding Notes or Certificates with
respect to which it is a Rating Agency; and
(iv) to add, modify or eliminate such provisions as may be necessary
or advisable in order to enable (a) the transfer to Issuer of all or any
portion of the Receivables to be derecognized under GAAP by Seller to
Issuer, (b) Issuer to avoid becoming a member of Seller's consolidated
group under GAAP or (c) the Seller, any Seller Affiliate or any of their
Affiliates to otherwise comply with or obtain more favorable treatment
under any law or regulation or any accounting rule or principle; it being a
condition to any such amendment that each Rating Agency shall have notified
the Seller, the Servicer and the Owner Trustee in writing that the
amendment will not result in a reduction or withdrawal of the rating of any
outstanding Notes or Certificates with respect to which it is a Rating
Agency.
(b) This Agreement may also be amended from time to time by Seller,
Servicer and Owner Trustee, with the consent of Indenture Trustee, the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the consent of the Holders of
Certificates evidencing not less than a majority of the Certificate Balance
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
that no such amendment shall (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 the Noteholders or the Certificateholders or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance, the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all the outstanding
Notes and the Holders of all the outstanding Certificates of each class
affected thereby.
(c) Prior to the execution of any such amendment or consent,
Servicer shall furnish written notification of the substance of such
amendment or consent to each Rating Agency. Promptly after the execution of
any such amendment or consent, Servicer shall furnish written notification
the substance of such amendment or consent to each Certificateholder and
Indenture Trustee.
(d) It shall not be necessary for the consent of Certificateholders
or Noteholders pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof.
(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent
to the execution and delivery of such amendment have been satisfied and the
Opinion of Counsel referred to in Section 10.2(i)(1) has been delivered.
Owner Trustee and Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which affects Owner Trustee's or Indenture
Trustee's, as applicable, own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.2. Protection of Title to Trust Property. (a) Seller
shall execute and file such financing statements and cause to be executed
and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve, maintain and protect
the interest of Issuer and the interests of Indenture Trustee in the
Receivables and the proceeds thereof. Seller shall deliver (or cause to be
delivered) to Owner Trustee and Indenture Trustee file-stamped copies of,
or filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) Neither Seller nor Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any
financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of 9-402(7)
of the UCC, unless it shall have given Owner Trustee and Indenture Trustee
at least five days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements
or continuation statements.
(c) Each of Seller and Servicer shall have an obligation to give
Owner Trustee and Indenture Trustee at least 60 days' prior written notice
of any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any
such amendment or new financing statement. Servicer shall at all times
maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
(d) Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of each)
and (ii) reconciliation between payments or recoveries on (or with respect
to) each Receivable and the amounts from time to time deposited in the
Collection Account in respect of such Receivable.
(e) Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, Servicer's
master computer records (including any backup archives) that refer to a
Receivable shall indicate clearly the interest of Issuer and Indenture
Trustee in such Receivable and that such Receivable is owned by Issuer and
has been pledged to Indenture Trustee pursuant to the Indenture. Indication
of Issuer's and Indenture Trustee's interest in a Receivable shall be
deleted from or modified on Servicer's computer systems when, and only
when, the related Receivable shall have been paid in full or repurchased by
Seller or purchased by Servicer.
(f) If at any ▇▇▇▇ ▇▇▇▇▇▇ or Servicer shall propose to sell, grant a
security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee,
Servicer shall give to such prospective purchaser, lender or other
transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to
any Receivable, shall indicate clearly that such Receivable has been sold
and is owned by Issuer and has been pledged to Indenture Trustee.
(g) Servicer shall permit Indenture Trustee and its agents at any
time during normal business hours to inspect, audit and make copies of and
abstracts from Servicer's records regarding any Receivable.
(h) Upon request at any time Owner Trustee or Indenture Trustee shall
have reasonable grounds to believe that such request is necessary in
connection with the performance of its duties under this Agreement or any
of the Basic Documents, Servicer shall furnish to Owner Trustee or to
Indenture Trustee, within five Business Days, a list of all Receivables (by
contract number and name of Obligor) then owned by Issuer, together with a
reconciliation of such list to the Schedule of Receivables and to each of
Servicer's Reports furnished before such request indicating removal of
Receivables from Issuer.
(i) Servicer shall deliver to Owner Trustee and Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment thereto, an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements
and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of Owner Trustee
and Indenture Trustee in the Receivables, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such
details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect
such interest; and
(2) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a
date during such 120-day period, either (A) stating that, in the
opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of Owner Trustee and Indenture
Trustee in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) Seller shall, to the extent required by applicable law, cause the
Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 10.3. Litigation and Indemnities. If any suit, action,
proceeding (including any governmental or regulatory investigation), claim
or demand shall be brought or asserted against any Person in respect of
which indemnity may be sought pursuant to Sections 6.3 or 7.2, such Person
(the "Indemnified Person") shall promptly notify the person against whom
such indemnity may be sought (the "Indemnifying Person") in writing, and
the Indemnifying Person, upon request of the Indemnified Person, shall
retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the reasonable fees and expenses
of such counsel related to such proceeding. The Indemnifying Person shall
not be liable for any settlement of any claim or proceeding effected
without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall,
without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Person, unless such settlement
includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
SECTION 10.4. Notices. All demands, notices and communications upon
or to Seller, Servicer, Owner Trustee, Indenture Trustee or the Rating
Agencies under this Agreement shall be in writing, personally delivered,
sent by overnight courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in
the case of Seller, to Norwest Auto Receivables Corporation, Norwest
Center, Sixth and Marquette, Minneapolis, Minnesota, 55479-1026, Attention:
Corporate Secretary, (b) in the case of Servicer, to Norwest Bank
Minnesota, N.A., Norwest Center, Sixth and Marquette, Minneapolis,
Minnesota, 55479-0070, Attention: Manager, Corporate Trust Services
Asset-Backed Securities Division, (c) in the case of Issuer or Owner
Trustee, at the Corporate Trust Office, (d) in the case of Indenture
Trustee, at the Corporate Trust Office, (e) in the case of Moody's, to
▇▇▇▇▇'▇ Investors Service, Inc., to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of Asset Backed Securities Group, and (f) in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of Asset Backed Surveillance Department.
SECTION 10.5. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 3.4, 4.1, 6.4 and 7.3 and
as provided in the provisions of this Agreement concerning the resignation
of Servicer, this Agreement may not be assigned by Seller or Servicer
without the prior written consent of the Owner Trustee, the Noteholders of
Notes evidencing not less than 66 2/3% of Outstanding Amount of the Notes
and the Certificateholders evidencing not less than 66 2/3% of the
outstanding Certificate Balance.
SECTION 10.6. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of Seller, Servicer, Issuer,
Owner Trustee and for the benefit of the Certificateholders (including
Seller), Indenture Trustee and the Noteholders, as third-party
beneficiaries, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of
this Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.7. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
create or render unenforceable such provision in any other jurisdiction.
SECTION 10.8. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 10.9. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 10.10. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS; EXCEPT
THAT THE GRANT OF A SECURITY INTEREST IN THE RESERVE ACCOUNT PROPERTY AND
THE PERFECTION, EFFECT OF PERFECTION, AND PRIORITY OF SUCH SECURITY
INTEREST SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA.
SECTION 10.11. Assignment to Indenture Trustee. Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of
a security interest by Issuer to Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and
interest of Issuer in, to and under the Receivables and/or the assignment
of any or all of Issuer's rights and obligations hereunder to Indenture
Trustee.
SECTION 10.12. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, Servicer and Seller shall not, prior to the
date which is one year and one day after the termination of this Agreement
with respect to Issuer, acquiesce, petition or otherwise invoke or cause
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against Issuer under any Federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of Issuer or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of Issuer.
SECTION 10.13. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Wilmington Trust Company not in
its individual capacity but solely in its capacity as Owner Trustee of
Issuer and in no event shall Wilmington Trust Company in its individual
capacity or, except as expressly provided in the Trust Agreement, as Owner
Trustee have any liability for the representations, warranties, covenants,
agreements or other obligations of Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of Issuer. For all
purposes of this Agreement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of Issuer
hereunder, Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank not in its
individual capacity but solely as Indenture Trustee and in no event shall
The Chase Manhattan Bank have any liability for the representations,
warranties, covenants, agreements or other obligations of Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of
Issuer.
SECTION 10.14. Further Assurances. Seller and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by Owner Trustee
or Indenture Trustee more fully to effect the purposes of this Agreement
including, without imitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 10.15. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Owner Trustee,
Indenture Trustee, the Noteholders or the Certificateholders, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges therein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers
as of the day and year first above written.
NORWEST AUTO TRUST 1996-A
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as Owner Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
NORWEST AUTO RECEIVABLES CORPORATION,
Seller,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
NORWEST BANK MINNESOTA, N.A.,
Servicer,
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Corporate Trust Officer
THE CHASE MANHATTAN BANK, not in its individual
capacity but solely as Indenture Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Second Vice President
Acknowledged and Agreed solely as
to the last sentence of Section 3.3
hereof:
NORWEST CORPORATION, a Delaware
corporation
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief Financial Officer
SCHEDULE A
The Receivables sold by each Seller Affiliate to Seller and sold by Seller
to Issuer are located at the offices of such Seller Affiliate listed
opposite its name below:
Norwest Bank Illinois, N.A.
Norwest Bank Indiana, N.A.
Norwest Bank Iowa, N.A.
Norwest Bank LaCrosse, N.A.
Norwest Bank Minnesota North, N.A.
Norwest Bank Minnesota South, N.A.
Norwest Bank Minnesota West, N.A.
Norwest Bank Minnesota, N.A.
Norwest Bank Nebraska, N.A.
Norwest Bank North Dakota, N.A.
Norwest Bank Ohio, N.A.
Norwest Bank Red Wing, N.A.
Norwest Bank South Dakota, N.A.
Norwest Bank Wisconsin, N.A.
APPENDIX X
DEFINITIONS
"Act" is defined in Section 11.3(a) of the Indenture.
"Administrative Agent" means Norwest Auto Receivables Corporation.
"Administrative Agent Agreement" means the Administrative Agent
Agreement among the Administrative Agent, the Issuer and the Indenture
Trustee, as the same may be amended and supplemented from time to time.
"Administrator" means Wilmington Trust Company and each successor
Administrator.
"Administration Agreement" means the Administration Agreement among
Wilmington Trust Company, as Administrator, Norwest Auto Trust 1996-A, as
Issuer, and The Chase Manhattan Bank, as Indenture Trustee, as the same may
be amended and supplemented from time to time.
"Advances" means, with respect to any Transfer Date, the amount
advanced or required to be advanced by Servicer on the related Deposit Date
pursuant to Section 5.3 of the Sale and Servicing Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling, controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing. A Person shall not be deemed to be an Affiliate of any specified
Person solely because such other Person has the contractual right or
obligation to manage such specified Person or act as servicer with respect
to the financial assets of such specified Person unless such other Person
controls the specified Person through equity ownership or otherwise.
"Affiliate Security Agreement" means the agreement dated as of
November 13, 1996 between each Seller Affiliate and Issuer under which each
such Seller Affiliate grants a security interest in its Receivables and
certain other property described therein to Issuer.
"Aggregate Net Losses" means, for any Collection Period, the aggregate
amount allocable to principal of all Receivables newly designated during
such Collection Period as Defaulted Receivables minus all Recoveries
collected during such Collection Period with respect to all Defaulted
Receivables (whether or not newly designated as such).
"Authenticating Agent" is defined in Section 2.13 of the Indenture.
"Authorized Officer" means, with respect to Issuer and Servicer, any
officer of Owner Trustee or Servicer, as applicable, who is authorized to
act for Owner Trustee or Servicer, as applicable, in matters relating to
Issuer and who is identified on the list of Authorized Officers delivered
by each of Owner Trustee and Servicer to Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).
"Available Interest" means, with respect to any Transfer Date, the
excess of (a) the sum of (i) Interest Collections for such Transfer Date
and (ii) all Advances made by Servicer with respect to such Transfer Date,
over (b) the amount of Outstanding Advances to be reimbursed on or with
respect to such Transfer Date.
"Available Principal" for a Transfer Date means the excess of (a) the
sum of the following amounts with respect to the preceding Collection
Period: (i) that portion of all Collections received during such Collection
Period and allocable to principal in accordance with Servicer's customary
servicing procedures (but only including the portion of Liquidation
Proceeds allocable to principal in accordance with the Servicer's customary
practices and received on or prior to the date the related Defaulted
Receivable was charged off) and (ii) to the extent attributable to
principal, the Purchase Amount received with respect to each Receivable
repurchased by Seller or purchased by Servicer as of the last day of the
related Collection Period over (b) all Forced Placed Insurance Advances
unreimbursed as of the end of the related Collection Period. "Available
Principal" on any Transfer Date shall exclude all payments and proceeds of
any Receivables the Purchase Amount of which has been deposited to the
Collection Account on a prior Deposit Date.
"Average Delinquency Ratio" means, as of any Transfer Date, the
average of the Delinquency Ratios for the preceding three Collection
Periods.
"Average Net Loss Ratio" means, as of any Transfer Date, the average
of the Net Loss Ratios for the preceding three Collection Periods.
"Bank Regulatory Authorities" means the Federal Reserve Board, the
Federal Deposit Insurance Corporation and Office of the Comptroller of
Currency.
"Basic Documents" means the Certificate of Trust, each Purchase
Agreement, each Affiliate Security Agreement, the Indenture, the Depository
Agreements, the Sale and Servicing Agreement, the Trust Agreement, the
Administration Agreement, the Notes, the Certificates and other documents
and certificates delivered in connection therewith.
"Benefit Plan" is defined in Section 11.12 of the Trust Agreement.
"Book Entry Certificate" means a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.11 of the Trust
Agreement.
"Book Entry Note" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing
Agency as described in Section 2.10 of the Indenture.
"Business Day" means a day that is not a Saturday or a Sunday or any
day that in the States of New York, Minnesota or Delaware is either a legal
holiday or a day on which banking institutions are authorized by law,
regulation or executive order to be closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code 3801 et seq.
"Certificate" means a certificate evidencing a fractional undivided
beneficial interest in Issuer, substantially in the form of Exhibit A to
the Trust Agreement.
"Certificate Account Property" means the Certificate Distribution
Account, all amounts and investments held from time to time therein
(whether in the form of deposit accounts, Physical Property, book-entry
securities, uncertificated securities or otherwise), and all proceeds of
the foregoing.
"Certificate Balance" equals, initially, $34,606,052.70 and,
thereafter, equals the initial Certificate Balance, reduced by all amounts
allocable to principal previously distributed to Certificateholders.
"Certificate Depository Agreement" means the agreement among the
Trust, Owner Trustee, Servicer and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, relating to the
Certificates, substantially in the form attached as Exhibit C to the Trust
Agreement, as the same may be amended and supplemented from time to time.
"Certificate Distribution Account" is defined in Section 5.1 of the
Trust Agreement.
"Certificate Interest Shortfall Amount" means, with respect to any
Transfer Date, the amount, if any, by which (i) the sum of the Servicing
Fee for the related Collection Period and all accrued and unpaid Servicing
Fees for prior Collection Periods, the Noteholders' Interest Distributable
Amount, the Noteholders' Principal Distributable Amount and the
Certificateholders' Interest Distributable Amount, for such Transfer Date
exceeds (ii) the sum of the Available Interest plus the Available Principal
plus the Reserve Account Transfer Amount for such Transfer Date.
"Certificate Interest Reserve Amount" means, with respect to any
Transfer Date, the lesser of (a) $545,045.33 less the amount of any
application of the Certificate Interest Reserve Amount to pay interest on
the Certificates on any prior Distribution Date and (b) 1.575% of the
Certificate Balance on such Transfer Date (before giving effect to any
reduction thereof on the related Distribution Date); provided, however,
that the Certificate Interest Reserve Amount shall be zero for such
Transfer Date if, as of such Transfer Date, the rating of any class of
Notes by any Rating Agency shall be less than "A-" or its equivalent or
shall have been withdrawn.
"Certificate of Trust" means the Certificate of Trust in the form of
Exhibit B to the Trust Agreement to be filed for Issuer pursuant to the
Business Trust Statute.
"Certificate Pool Factor" as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to distributions made on such
date) divided by the initial Certificate Balance. The Certificate Pool
Factor will be 1.0000000 as of the Cutoff Date; thereafter, the Certificate
Pool Factor will decline to reflect reductions in the Certificate Balance.
"Certificate Rate" means 6.300% per annum.
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Certificateholders' Interest Carryover Shortfall" means, for any
Transfer Date, the excess of the Certificateholders' Monthly Interest
Distributable Amount for the preceding Transfer Date and any outstanding
Certificateholders' Interest Carryover Shortfall on such preceding Transfer
Date, over the amount in respect of interest at the Certificate Rate that
is actually deposited in the Certificate Distribution Account on such
preceding Transfer Date, plus interest on such excess, to the extent
permitted by law, in an amount equal to the product of one-twelfth
multiplied by the Certificate Rate multiplied by the amount of such excess.
"Certificateholders' Interest Distributable Amount" means, for any
Transfer Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Transfer Date and the Certificateholders'
Interest Carryover Shortfall for such Transfer Date.
"Certificateholders' Monthly Interest Distributable Amount" means, for
any Transfer Date, an amount equal to one-twelfth (or the actual number of
days from and including the Closing Date to but excluding December 15, 1996
divided by 360, for the initial Distribution Date) of the Certificate Rate
multiplied by the Certificate Balance as of the close of business on the
preceding Distribution Date (or, for the initial Transfer Date, the Closing
Date).
"Certificateholders' Monthly Principal Distributable Amount" means,
for any Transfer Date, the Certificateholders' Percentage of the Principal
Distribution Amount or, for any Transfer Date on or after the Distribution
Date on which the outstanding principal balance of the Class A-4 Notes is
reduced to zero, 100% of the Principal Distribution Amount (less any amount
required on the first such Distribution Date to reduce the outstanding
principal balance of the Class A-4 Notes to zero, which shall be deposited
into the Note Distribution Account).
"Certificateholders' Percentage" means 100% minus the Noteholders'
Percentage.
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of business on any Transfer Date, the excess of the
Certificateholders' Monthly Principal Distributable Amount and any
outstanding Certificateholders' Principal Carryover Shortfall from the
preceding Transfer Date, over the amount in respect of principal that is
actually deposited in the Certificate Distribution Account on such current
Transfer Date.
"Certificateholders' Principal Distributable Amount" means, for any
Transfer Date, the sum of the Certificateholders' Monthly Principal
Distributable Amount for such Transfer Date and the Certificateholders'
Principal Carryover Shortfall as of the close of business on the preceding
Transfer Date; provided that the Certificateholders' Principal
Distributable Amount shall not exceed the Certificate Balance. In addition,
on the Transfer Date that is the Final Scheduled Distribution Date for the
Certificates, the Certificateholders Principal Distributable Amount will
include, to the extent not included under the preceding sentence, the
amount that is necessary (after giving effect to the other amounts to be
deposited in the Certificate Distribution Account on such Distribution Date
and allocable to principal) to reduce the Certificate Balance to zero.
"Charged Off Balances" means, for any Collection Period, the aggregate
Principal Balances as of the end of such Collection Period of all
Receivables which became Defaulted Receivables during such Collection
Period in accordance with the Servicer's customary practices.
"Class A-1 Final Payment Date" means December 5, 1997.
"Class A-1 Interest Rate" means 5.465% per annum.
"Class A-1 Noteholders' Interest Carryover Shortfall" means, for any
Transfer Date, the excess of the Class A-1 Noteholders' Monthly Interest
Distributable Amount for the preceding Transfer Date and any outstanding
Class A-1 Noteholders' Interest Carryover Shortfall on such preceding
Transfer Date, over the amount in respect of interest on the Class A-1
Notes that was actually paid to holders of the Class A-1 Notes on the
preceding Distribution Date, plus interest on the amount of interest due
but not paid to Holders of the Class A-1 Notes on the preceding
Distribution Date, to the extent permitted by law, in an amount equal to
the product of (i) the quotient of the number of days elapsed in the
related Interest Period divided by 360 multiplied by (ii) the Class A-1
Interest Rate multiplied by (iii) the amount of such interest due in
respect of the Class A-1 Notes.
"Class A-1 Noteholders' Interest Distributable Amount" means, for any
Transfer Date, the sum of (a) the Class A-1 Noteholders' Monthly Interest
Distributable Amount and (b) the Class A-1 Noteholders' Interest Carryover
Shortfall, in each case for such Transfer Date.
"Class A-1 Noteholders' Monthly Interest Distributable Amount" means,
for any Transfer Date, the product of (i) the quotient of the number of
days elapsed during the related Interest Period divided by 360 multiplied
by (ii) the Class A-1 Interest Rate multiplied by (iii) the Outstanding
Amount of the Class A-1 Notes on the immediately preceding Distribution
Date after giving effect to all payments of principal to the Holders of the
Class A-1 Notes on or prior to such Distribution Date (or, in the case of
the first Transfer Date, the Outstanding Amount of the Class A-1 Notes on
the Closing Date).
"Class A-1 Notes" means the Class A-1 5.465% Asset Backed Notes,
substantially in the form of Exhibit A to the Indenture.
"Class A-2 Interest Rate" means 5.800% per annum.
"Class A-2 Noteholders' Interest Carryover Shortfall" means, for any
Transfer Date, the excess of the Class A-2 Noteholders' Monthly Interest
Distributable Amount for the preceding Transfer Date and any outstanding
Class A-2 Noteholders' Interest Carryover Shortfall on such preceding
Transfer Date, over the amount in respect of interest on the Class A-2
Notes that was actually paid to holders of the Class A-2 Notes on the
preceding Distribution Date, plus interest on the amount of interest due
but not paid to Holders of the Class A-2 Notes on the preceding
Distribution Date, to the extent permitted by law, in an amount equal to
the product of one-twelfth multiplied by the Class A-2 Interest Rate
multiplied by the amount of such interest due in respect of the Class A-2
Notes.
"Class A-2 Noteholders' Interest Distributable Amount" means, for any
Transfer Date, the sum of (a) the Class A-2 Noteholders' Monthly Interest
Distributable Amount and (b) the Class A-2 Noteholders' Interest Carryover
Shortfall, in each case for such Transfer Date.
"Class A-2 Noteholders' Monthly Interest Distributable Amount" means,
for any Transfer Date, the product of one-twelfth (or, in the case of the
first Transfer Date the actual number of days elapsed from and including
the Closing Date to but excluding December 15, 1996 divided by 360)
multiplied by the Class A-2 Interest Rate multiplied by the Outstanding
Amount of the Class A-2 Notes on the immediately preceding Distribution
Date after giving effect to all payments of principal to the Holders of the
Class A-2 Notes on or prior to such immediately preceding Distribution Date
(or, in the case of the first Transfer Date, the Outstanding Amount of the
Class A-2 Notes on the Closing Date).
"Class A-2 Notes" means the Class A-2 5.800% Asset Backed Notes,
substantially in the form of Exhibit B to the Indenture.
"Class A-3 Interest Rate" means 5.900% per annum.
"Class A-3 Noteholders' Interest Carryover Shortfall" means, for any
Transfer Date, the excess of the Class A-3 Noteholders' Monthly Interest
Distributable Amount for the preceding Transfer Date and any outstanding
Class A-3 Noteholders' Interest Carryover Shortfall on such preceding
Transfer Date, over the amount in respect of interest on the Class A-3
Notes that was actually paid to holders of the Class A-3 Notes on the
preceding Distribution Date, plus interest on the amount of interest due
but not paid to Holders of the Class A-3 Notes on the preceding
Distribution Date, to the extent permitted by law, in an amount equal to
the product of one-twelfth multiplied by the Class A-3 Interest Rate
multiplied by the amount of such interest due in respect of the Class A-3
Notes.
"Class A-3 Noteholders' Interest Distributable Amount" means, for any
Transfer Date, the sum of (a) the Class A-3 Noteholders' Monthly Interest
Distributable Amount and (b) the Class A-3 Noteholders' Interest Carryover
Shortfall, in each case for such Transfer Date.
"Class A-3 Noteholders' Monthly Interest Distributable Amount" means,
for any Transfer Date, the product of one-twelfth (or, in the case of the
first Transfer Date the actual number of days elapsed from and including
the Closing Date to but excluding December 15, 1996 divided by 360)
multiplied by the Class A-3 Interest Rate multiplied by the Outstanding
Amount of the Class A-3 Notes on the immediately preceding Distribution
Date after giving effect to all payments of principal to the Holders of the
Class A-3 Notes on or prior to such immediately preceding Distribution Date
(or, in the case of the first Transfer Date, the Outstanding Amount of the
Class A-3 Notes on the Closing Date).
"Class A-3 Notes" means the Class A-3 5.900% Asset Backed Notes,
substantially in the form of Exhibit C to the Indenture.
"Class A-4 Interest Rate" means 6.100% per annum.
"Class A-4 Noteholders' Interest Carryover Shortfall" means, for any
Transfer Date, the excess of the Class A-4 Noteholders' Monthly Interest
Distributable Amount for the preceding Transfer Date and any outstanding
Class A-4 Noteholders' Interest Carryover Shortfall on such preceding
Transfer Date, over the amount in respect of interest on the Class A-4
Notes that was actually paid to holders of the Class A-4 Notes on the
preceding Distribution Date, plus interest on the amount of interest due
but not paid to Holders of the Class A-4 Notes on the preceding
Distribution Date, to the extent permitted by law, in an amount equal to
the product of one-twelfth multiplied by the Class A-4 Interest Rate
multiplied by the amount of such interest due in respect of the Class A-4
Notes.
"Class A-4 Noteholders' Interest Distributable Amount" means, for any
Transfer Date, the sum of (a) the Class A-4 Noteholders' Monthly Interest
Distributable Amount and (b) the Class A-4 Noteholders' Interest Carryover
Shortfall, in each case for such Transfer Date.
"Class A-4 Noteholders' Monthly Interest Distributable Amount" means,
for any Transfer Date, the product of one-twelfth (or, in the case of the
first Transfer Date the actual number of days elapsed from and including
the Closing Date to but excluding December 15, 1996 divided by 360)
multiplied by the Class A-4 Interest Rate multiplied by the Outstanding
Amount of the Class A-4 Notes on the immediately preceding Distribution
Date after giving effect to all payments of principal to the Holders of the
Class A-4 Notes on or prior to such immediately preceding Distribution Date
(or, in the case of the first Transfer Date, the Outstanding Amount of the
Class A-4 Notes on the Closing Date).
"Class A-4 Notes" means the Class A-4 6.100% Asset Backed Notes,
substantially in the form of Exhibit D to the Indenture.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means November 13, 1996.
"Code" means the Internal Revenue Code of 1986 and Treasury
Regulations promulgated thereunder.
"Collateral" is defined in the Granting Clause of the Indenture.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.
"Collection Period" means, (a) in the case of the initial Collection
Period, the period from (but not including) the Cutoff Date to and
including November 30, 1996 and (b) thereafter, each calendar month during
the term of the Sale and Servicing Agreement. With respect to any
Determination Date, Deposit Date, Transfer Date, Distribution Date, or
Final Scheduled Distribution Date, the "related Collection Period" means
the Collection Period preceding the month in which such Determination Date,
Deposit Date, Transfer Date, Distribution Date or Final Scheduled
Distribution Date occurs.
"Collections" means all collections on the Receivables from whatever
source (including Liquidation Proceeds, Recoveries or proceeds from any
exercise of any rights against a Dealer, other than rights to rebates of
unamortized premiums paid or payable to Dealers) and any proceeds from
Insurance Policies (including any rebates of premiums or other amounts
received in respect of a force placed Physical Damage Insurance Policy) and
lender's single interest insurance policies on a Financed Vehicle securing
a Receivable.
"Commission" means the Securities and Exchange Commission.
"Contract Rate" means, with respect to a Receivable, the rate per
annum of interest charged on the outstanding principal balance of such
Receivable.
"Corporate Trust Office" means:
(a) as used in the Indenture, or otherwise with respect to
Indenture Trustee, the principal office of Indenture Trustee at which
at any particular time its corporate trust business shall be
administered which office at date of the execution of the Indenture is
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ Telephone: ▇▇▇-▇▇▇-▇▇▇▇; Facsimile:
▇▇▇-▇▇▇-▇▇▇▇/8302 or at such other address as Indenture Trustee may
designate from time to time by notice to the Noteholders, Servicer and
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 Issuer); and
(b) as used in the Trust Agreement, or otherwise with respect to
Owner Trustee, the principal corporate trust office of Owner Trustee
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration; or at such other address as
Owner Trustee may designate by notice to the Certificateholders and
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 Depositor).
"Custodian" means Servicer in its capacity as agent of Issuer, as
custodian of the Receivable Files and any Seller Affiliate acting as agent
for Servicer for the purpose of maintaining custody of the Receivables
Files.
"Cutoff Date" means October 25, 1996.
"Dealer" means, with respect to any Receivable purchased from a Person
engaged in the business of selling Motor Vehicles, the seller of the
related Financed Vehicle.
"Dealer Agreement" means an agreement between a Seller Affiliate and a
Dealer pursuant to which such Seller Affiliate acquires Motor Vehicle Loans
from the Dealer.
"Dealer Recourse" means, with respect to any Dealer, any rights and
remedies against such Dealer under the related Dealer Agreement (other than
with respect to any breach of representation or warranty thereunder) with
respect to credit losses on a Receivable secured by a Financed Vehicle sold
by such Dealer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Receivable" means, with respect to any Collection Period, a
Receivable (other than a Purchased Receivable) which Servicer has
determined to charge off during such Collection Period in accordance with
its customary servicing practices; provided that any Receivable which
Seller or Servicer is obligated to repurchase or purchase shall be deemed
to have become a Defaulted Receivable during a Collection Period if Seller
or Servicer fails to deposit the related Purchase Amount on the related
Deposit Date when due.
"Definitive Notes" is defined in Section 2.10 of the Indenture.
"Definitive Certificates" means either or both (as the context
requires) of (a) Certificates issued in certificated, fully registered form
as provided in Section 3.11 of the Trust Agreement and (b) Certificates
issued in certificated, fully registered form as provided in Section 3.13
of the Trust Agreement.
"Delaware Trustee" is defined in Section 10.1 of the Trust Agreement.
"Delinquency Ratio" means, for any Collection Period, the ratio,
expressed as a percentage, of (a) the principal amount of all outstanding
Receivables (other than Purchased Receivables and Defaulted Receivables)
which are 60 or more days delinquent as of the end of such Collection
Period, determined in accordance with Servicer's customary practices,
divided by (b) the Pool Balance as of the last day of such Collection
Period.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(l)(i) of
the UCC and are susceptible of physical delivery, transfer thereof to
Indenture Trustee or its nominee or custodian by physical delivery to
Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC) transfer thereof (i)
by delivery of such certificated security endorsed to, or registered
in the name of, Indenture Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in Section
8-313 of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated
securities as belonging to Indenture Trustee or its nominee or
custodian and the sending by such financial intermediary of a
confirmation of the purchase of such certificated security by
Indenture Trustee or its nominee or custodian, or (ii) by delivery
thereof to a "clearing corporation" (as defined in Section 8-102(3) of
the UCC) and the making by such clearing corporation of appropriate
entries on its books reducing the appropriate securities account of
the transferor and increasing the appropriate securities account of a
financial intermediary by the amount of such certificated security,
the identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such
clearing corporation or a "custodian bank" (as defined in Section
8-102(4) of the UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the sending of a confirmation by the
financial intermediary of the purchase by Indenture Trustee or its
nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying
such certificated securities as belonging to Indenture Trustee or its
nominee or custodian (all of the foregoing, "Physical Property"), and,
in any event, any such Physical Property in registered form shall be
in the name of Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property to Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof;
(b) with respect to any securities issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National
Mortgage Association that is a book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations, the
following procedures, all in accordance with applicable law, including
applicable Federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such Trust Account Property to an
appropriate book-entry account maintained with a Federal Reserve Bank
by a financial intermediary which is also a "depository" pursuant to
applicable Federal regulations and issuance by such financial
intermediary of a deposit advice or other written confirmation of such
book-entry registration to Indenture Trustee or its nominee or
custodian of the purchase by Indenture Trustee or its nominee or
custodian of such book-entry securities; the making by such financial
intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant
to Federal book-entry regulations as belonging to Indenture Trustee or
its nominee or custodian and indicating that such custodian holds such
Trust Account Property solely as agent for Indenture Trustee or its
nominee or custodian; and such additional or alternative procedures as
may hereafter become appropriate to effect complete transfer of
ownership of any such Trust Account Property to Indenture Trustee or
its nominee or custodian, consistent with changes in applicable law or
regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the
purchase by Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to Indenture Trustee or its nominee or
custodian.
"Deposit Date" means, with respect to any Collection Period, the
Business Day preceding the related Transfer Date or, if acceptable to each
Rating Agency, the related Distribution Date; provided, however, that if
the Outstanding Amount of the Class A-1 Notes has not been paid in full on
or before the November 1997 Distribution Date, the December 1997 Deposit
Date shall be December 5, 1997.
"Depositor" means Seller in its capacity as Depositor under the Trust
Agreement.
"Depository Agreements" mean the Certificate Depository Agreement and
the Note Depository Agreement.
"Determination Date" means, with respect to any Collection Period, the
Business Day immediately preceding the Deposit Date for such Collection
Period; provided, however, that if the Outstanding Amount of the Class A-1
Notes has not been paid in full on or before the November 1997 Distribution
Date, the December 1997 Determination Date shall be December 5, 1997.
"Distribution Date" means the 15th day of each month (or, if the 15th
day is not a Business Day, the next succeeding Business Day), commencing
December 16, 1996.
"Dollar" and the sign "$" mean lawful money of the United States.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States of America or any one of the states thereof or
the District of Columbia (or any domestic branch of a foreign bank), having
corporate trust powers and acting as trustee for funds deposited in such
account, so long as the long-term unsecured debt of such depository
institution shall have a credit rating from each Rating Agency in one of
its generic rating categories which signifies investment grade. Any such
accounts (other than the Reserve Account) may be maintained with Norwest
Bank, or any of its Affiliates, if such accounts meet the requirements
described in clause (a) of the preceding sentence.
"Eligible Institution" means a depository institution (which may be
Servicer or Indenture Trustee) organized under the laws of the United
States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), which (a) has (i)
either a long-term senior unsecured debt rating of AAA or a short-term
senior unsecured debt or certificate of deposit rating of A-1+ or better by
Standard & Poor's and (ii)(A) a long-term senior unsecured debt rating of
A-l+ or better by Standard & Poor's and (B) a short-term senior unsecured
debt rating of P-1 or better by Moody's, or any other long-term, short-term
or certificate of deposit rating acceptable to the Rating Agencies and (b)
whose deposits are insured by the Federal Deposit Insurance Corporation. If
so qualified, Norwest Bank, any of its Affiliates, Owner Trustee or
Indenture Trustee may be considered an Eligible Institution.
"Eligible Investments" shall mean any one or more of the following
types of investments:
(a) direct obligations of, and obligations fully guaranteed as
to the full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution (including any Affiliate of Seller,
Indenture Trustee, Owner Trustee or any Affiliate of Indenture Trustee
or Owner Trustee) or trust company incorporated under the laws of the
United States of America or any state thereof or the District of
Columbia (or any domestic branch of a foreign bank) and subject to
supervision and examination by Federal or state banking of depository
institution authorities (including depository receipts issued by any
such institution or trust company as custodian with respect to any
obligation referred to in clause (a) above or portion of such
obligation for the benefit of the holders of such depository
receipts); provided that at the time of the investment or contractual
commitment to invest therein (which shall be deemed to be made again
each time funds are reinvested following each Deposit Date), the
commercial paper or other short-term senior 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) of such depository institution or trust company shall have a
credit rating from Standard & Poor's of A-1+ and from Moody's of P-1;
(c) commercial paper (including commercial paper of any
Affiliate of Seller) having, at the time of the investment or
contractual commitment to invest therein, a rating from Standard &
Poor's of A-1+ and from Moody's of P-1;
(d) investments in money market funds (including funds for
which Indenture Trustee or Owner Trustee or any of their respective
Affiliates or any of Seller's Affiliates is investment manager or
advisor) having a rating from Standard & Poor's of AAA-m or AAAm-G and
from Moody's of Aaa;
(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 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) referred to in clause (b) above;
and
(g) any other investment with respect to which each Rating
Agency has provided written notice that such investment would not
cause such Rating Agency to downgrade or withdraw its then current
rating of any class of Notes or the Certificates.
"ERISA" is defined in Section 11.12 of the Trust Agreement.
"Event of Default" is defined in Section 5.1 of the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, 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.
"Expected Interest" means, with respect to any Transfer Date, an
amount equal to the product of (a) one-twelfth of the Weighted Average
Contract Rate for the Receivables for the related Collection Period
multiplied by (ii) an amount equal to the aggregate Principal Balance of
the Receivables as of the beginning of the first day of the related
Collection Period minus the sum of the Principal Balances of the
Non-Advance Receivables for such Transfer Date.
"Expenses" is defined in Section 8.2 of the Trust Agreement.
"Final Scheduled Distribution Date" means for (a) the Class A-1 Notes,
December 5, 1997 (b) the Class A-2 Notes, the March 1999 Distribution Date,
(c) the Class A-3 Notes, the March 2000 Distribution Date, (d) the Class
A-4 Notes, the March 2001 Distribution Date and (e) the Certificates, the
May 2003 Distribution Date.
"Final Scheduled Maturity Date" means the last day of the Collection
Period immediately preceding the Final Scheduled Distribution Date for the
Certificates.
"Financed Vehicle" means a new or used automobile or light duty truck,
together with all accessions thereto, securing an Obligor's indebtedness
under a Receivable.
"Fitch" means Fitch Investors Service, L.P., or its successor.
"Force-Placed Insurance Advance" is defined in Section 4.4(c) of the
Sale and Servicing Agreement.
"GAAP" is generally accepted accounting principles in the U.S.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a
security interest in and right of set-off against, 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 moneys 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. Other forms of the verb "to Grant" shall have correlative
meanings.
"Holder" means, as the context may require, a Certificateholder or a
Noteholder or both.
"Indemnified Parties" is defined in Section 8.2 of the Trust
Agreement.
"Indemnified Person" is defined in Section 10.3 of the Sale and
Servicing Agreement.
"Indemnifying Person" is defined in Section 10.3 of the Sale and
Servicing Agreement.
"Indenture" means the Indenture dated as of November 13, 1996, between
Issuer and Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Indenture Trustee" means The Chase Manhattan Bank, not in its
individual capacity but as trustee under the Indenture, or any successor
trustee under the Indenture.
"Independent" means, when used with respect to any specified Person,
that the person (a) is in fact independent of Issuer, any other obligor
upon the Notes, Seller and any Affiliate of any of the foregoing persons,
(b) does not have any direct financial interest or any material indirect
financial interest (other than less than 5% of the outstanding amount of
any publicly traded security) in Issuer, any such other obligor, Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with
Issuer, any such other obligor, 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" means a certificate or opinion to be
delivered to 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 or other expert appointed
by an Issuer Order, and such opinion or certificate shall state that the
signer has read the definition of "Independent" in the Indenture and that
the signer is Independent within the meaning thereof.
"Initial Pool Balance" means the sum of the Initial Principal Balances
of all of the Receivables.
"Initial Principal Balance" means, in respect of a Receivable, the
excess of (a) the amount advanced under the Receivable toward the purchase
price of the Financed Vehicle and related costs, including accessories,
service and warranty contracts, insurance premiums, other items customarily
financed as part of retail motor vehicle loans and/or retail installment
sales contracts and other fees charged by a Seller Affiliate or the
applicable Dealer and included in the amount to be financed, the total of
which is shown as the initial principal balance in the Motor Vehicle Loan
evidencing such Receivable, over (b) the sum of the portion of all payments
received under such Receivable from or on behalf of the related Obligor on
or prior to the Cutoff Date and allocable to principal under the terms of
the Receivable in accordance with the Servicer's customary practices.
"Insolvency Event" means, for a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises
in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver (including any receiver appointed under the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended), liquidator,
assignee, custodian, trustee, sequestrator or similar official for such
Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or the making
by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become
due, or the taking of action by such Person in furtherance of any of the
foregoing.
"Insolvency Proceeds" is defined in Section 9.1(b) of the Sale and
Servicing Agreement.
"Insurance Policies" means, all credit life and disability insurance
policies maintained by the Obligors and all Physical Damage Insurance
Policies.
"Interest Collections" means, for any Transfer Date, the sum of the
following amounts for the related Collection Period (without duplication):
(a) that portion of the Collections on the Receivables received during the
related Collection Period that is allocable to interest in accordance with
Servicer's customary procedures (including the portion of Liquidation
Proceeds allocable to interest in accordance with the Servicer's customary
practices and received on or prior to the date the related Defaulted
Receivable was charged off), (b) all Recoveries received during the related
Collection Period and (c) all Purchase Amounts, to the extent allocable to
accrued interest, of all Receivables that are purchased by Seller or
Servicer as of the last day of the related Collection Period. "Interest
Collections" for any Transfer Date shall exclude all payments and proceeds
of any Receivables the Purchase Amount of which has been deposited into the
Collection Account on a prior Deposit Date.
"Interest Period" means, with respect to any specified Distribution
Date, the period from and including the Closing Date (in the case of the
first Distribution Date) and thereafter from and including the preceding
Distribution Date to but excluding such specified Distribution Date.
"Interest Rate" means, with respect to the (a) Class A-1 Notes, the
Class A-1 Interest Rate, (b) Class A-2 Notes, the Class A-2 Interest Rate,
(c) Class A-3 Notes, the Class A-3 Interest Rate, and (d) Class A-4 Notes,
the Class A-4 Interest Rate.
"Interest Shortfall" means, with respect to any Transfer Date, the
lesser of (a) the amount by which the Expected Interest for such Transfer
Date exceeds the Net Interest Collections for such Transfer Date and (b)
the amount (if any) by which the sum of the Servicing Fee for the related
Collection Period and all accrued and unpaid Servicing Fees for prior
Collection Periods, the Noteholders' Interest Distributable Amount and the
Certificateholders' Interest Distributable Amount for such Transfer Date
exceeds the Net Interest Collections for such Transfer Date.
"Issuer" means Norwest Auto Trust 1996-A.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of Issuer by any one of its Authorized Officers and
delivered to Indenture Trustee.
"Lien" means a security interest, lien, charge, pledge, preference,
participation interest or encumbrance of any kind (other than mechanics' or
materialmen's liens, other liens for work, labor or materials, and any
other liens that may attach by operation of law).
"Liquidation Proceeds" means, with respect to any Receivable (a) all
proceeds from the repossession and sale of any Financed Vehicle securing
such Receivable (whether received before or after such Receivable has
become a Defaulted Receivable), (b) all proceeds from any deficiency claim
made with respect to such Receivable and (c) all other amounts, from
whatever source, received in respect of such Receivable after it has become
a Defaulted Receivable, in each case, net of the related out of pocket
expenses paid by or on behalf of the Servicer to third parties in
connection therewith.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Motor Vehicle" means a new or used automobile or light duty truck.
"Motor Vehicle Loan" means a retail installment sales contract secured
by a Motor Vehicle acquired by a Seller Affiliate from a Dealer or other
Person, including all rights against the borrower or co-borrowers under
such retail installment sales contract and any co-signer or guarantor of
such retail installment sales contract or other Person who owes or may be
primarily or secondarily liable for payments under such retail installment
sales contract.
"Net Interest Collections" means, with respect to any Transfer Date,
the greater of (a) zero and (b) Interest Collections for such Transfer Date
minus the Outstanding Advances.
"Net Loss Ratio" means, for any Collection Period, an amount,
expressed as a percentage, equal to (a) the Aggregate Net Losses for such
Collection Period, divided by (b) the average of the Pool Balances at the
close of business on the last day of the preceding Collection Period and
the close of business on the last day of such Collection Period.
"Non-Advance Receivables" means, with respect to any Transfer Date,
any Receivables which became Defaulted Receivables or which Servicer, in
its sole discretion, believes are likely to become Defaulted Receivables.
"Norwest Bank" means, Norwest Bank Minnesota, N.A., a national banking
association.
"Note" means a Class A-1 Note, Class A-2 Note, Class A-3 Note or Class
A-4 Note.
"Note Depository Agreement" means the agreement among Issuer, Servicer
and The Depository Trust Company, as the initial Clearing Agency, dated as
of the Closing Date, relating to the Notes, as the same may be amended or
supplemented from time to time.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Sale and
Servicing Agreement.
"Noteholder" means the Person in whose name a Note is registered on
the Note Register.
"Note Owner" means, with respect to a Book-Entry Note, the person who
is the 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 Pool Factor" for each class of Notes as of the close of business
on a Distribution Date means a seven-digit decimal figure equal to the
outstanding principal balance of such class of Notes divided by the
original outstanding principal balance of such class of Notes. The Note
Pool Factor for each class of Notes will be 1.0000000 as of the Cutoff
Date; thereafter, the Note Pool Factor for each class of Notes will decline
to reflect reductions in the outstanding principal balance of such class of
Notes.
"Noteholders' Distributable Amount" means, for any Transfer Date, the
sum of the Noteholders' Principal Distributable Amount and the Noteholders'
Interest Distributable Amount.
"Noteholders' Interest Distributable Amount" means, for any Transfer
Date, the sum of (a) the Class A-1 Noteholders' Interest Distributable
Amount, (b) the Class A-2 Noteholders' Interest Distributable Amount, (c)
the Class A-3 Noteholders' Interest Distributable Amount, and (d) the Class
A-4 Noteholders' Interest Distributable Amount, in each case, for such
Transfer Date.
"Noteholders' Monthly Principal Distributable Amount" means, for any
Transfer Date, the Noteholders' Percentage of the Principal Distribution
Amount.
"Noteholders' Percentage" means 100% until the point in time at which
all Notes of all classes have been paid in full, and zero thereafter.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
business on any specified Transfer Date, the excess of the Noteholders'
Monthly Principal Distributable Amount for such Transfer Date and any
outstanding Noteholders' Principal Carryover Shortfall from the Transfer
Date preceding the specified Transfer Date over the amount in respect of
principal that is actually deposited in the Note Distribution Account on
the specified Transfer Date.
"Noteholders' Principal Distributable Amount" means, for any Transfer
Date, the sum of the Noteholder's Monthly Principal Distributable Amount
for such Transfer Date and the Noteholders' Principal Carryover Shortfall
as of the close of business on the preceding Transfer Date; provided that
the Noteholders' Principal Distributable Amount shall not exceed the
aggregate outstanding principal balance of the Notes. In addition, on the
Transfer Date relating to the Final Scheduled Distribution Date of each
class of Notes, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect
to the other amounts to be deposited in the Note Distribution Account on
such Transfer Date and allocable to principal) to be paid to Noteholders of
such class to reduce the Outstanding Amount of such class of Notes to zero.
"Note Register" and "Note Registrar" are defined in Section 2.4 of the
Indenture.
"Obligor" means, with respect to a Receivable, the borrower or
co-borrowers under the related Receivable and any co-signer of the
Receivable or other Person who owes or may be primarily or secondarily
liable for payments under such Receivable.
"Officer's Certificate" means: (a) for purposes of the Indenture, a
certificate signed by any Authorized Officer of Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1 and TIA 314, and delivered to Indenture
Trustee; and (b) otherwise, a certificate signed by the chairman, the
president, any vice president or the treasurer of Seller or Servicer, as
the case may be, and delivered to Indenture Trustee. Unless otherwise
specified, any reference in the Indenture to an Officer's Certificate shall
be to an Officer's Certificate of any Authorized Officer of Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Indenture, be employees
of or counsel to Issuer and who shall be satisfactory to Issuer, Owner
Trustee or Indenture Trustee, as applicable, and which opinion or opinions
shall be addressed to Issuer, Owner Trustee, or Indenture Trustee, as
applicable, and shall be in form and substance satisfactory to the Issuer,
Owner Trustee, and Indenture Trustee, as applicable.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(a) Notes theretofore canceled by Note Registrar or delivered
to Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture or provision
therefor, satisfactory to Indenture Trustee); and
(c) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to the Indenture unless
proof satisfactory to Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
Basic Document, Notes owned by Issuer, any other obligor upon the Notes,
Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of Indenture Trustee either actually knows
to be so owned or has received written notice thereof shall be so
disregarded. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee certifies to the Indenture Trustee
the pledgee's right so to act with respect to such Notes and that the
pledgee is not Issuer, any other obligor upon the Notes, Seller or any
Affiliate of any of the foregoing Persons.
"Outstanding Advances" means, as of any date, all Advances made by
Servicer with respect to prior Deposit Dates which have not been reimbursed
pursuant to Section 5.3 of the Sale and Servicing Agreement.
"Outstanding Amount" means the aggregate principal amount of all
Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"Owner" means each Person who is the beneficial owner of a Book Entry
Certificate as reflected in the records of the Clearing Agency or if a
Clearing Agency Participant is not the Owner, then as reflected in records
of a Person maintaining an account with such Clearing Agency (directly or
indirectly, in accordance with the rules of such Clearing Agency).
"Owner Trust Estate" means all right, title and interest of Issuer in
and to the property and rights assigned to Issuer pursuant to Article II of
the Sale and Servicing Agreement, all funds on deposit from time to time in
the Trust Accounts and the Certificate Distribution Account and all other
property of Issuer from time to time, including any rights of Owner Trustee
and Issuer pursuant to the Sale and Servicing Agreement.
"Owner Trustee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee
under the Trust Agreement, and any successor Owner Trustee under the Trust
Agreement.
"Paying Agent" means: (a) when used in the Indenture or otherwise with
respect to the Notes, Indenture Trustee or any other Person that meets the
eligibility standards for Indenture Trustee specified in Section 6.11 of
the Indenture and is authorized by Issuer to make the payments to and
distributions from the Collection Account and the Note Distribution
Account, including payment of principal of or interest on the Notes on
behalf of Issuer; and (b) when used in the Trust Agreement or otherwise
with respect to the Certificates, Owner Trustee or any other paying agent
or co-paying agent appointed pursuant to Section 3.9 of the Trust
Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization, or government or
any agency or political subdivision thereof, or any other entity of
whatever nature.
"Physical Damage Insurance Policy" means a theft and physical damage
insurance policy maintained by the Obligor or force-placed under a
Receivable, providing coverage against loss or damage to or theft of the
related Financed Vehicle.
"Physical Property" is defined in the definition of "Delivery" above.
"Pool Balance" means, at any time, the aggregate Principal Balance of
the Receivables (excluding Purchased Receivables and Defaulted Receivables)
at such time.
"Predecessor Note" means, 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 the purpose of this definition,
any Note authenticated and delivered under Section 2.5 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.
"Principal Balance" means, as of any time, for any Receivable, the
principal balance of such Receivable under the terms of the Receivable
determined in accordance with the Servicer's customary practices.
"Principal Distribution Amount" means, for any Transfer Date, the sum
of (a) the Available Principal for such Transfer Date, and (b) the
aggregate amount of Charged Off Balances for the related Collection Period.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Agreement" means each agreement dated as of November 13,
1996 between a Seller Affiliate and Seller under which such Seller
Affiliate sells Receivables to Seller.
"Purchase Amount" means, with respect to any Receivable, the amount,
as of the close of business on the last day of a Collection Period,
required to prepay in full such Receivable under the terms thereof
including accrued and unpaid interest at the Contract Rate for such
Collection Period.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by Servicer pursuant to
Section 4.7 of the Sale and Servicing Agreement or repurchased by Seller
pursuant to Section 3.3 of the Sale and Servicing Agreement.
"Rating Agencies" means ▇▇▇▇▇'▇, Standard & Poor's and Fitch.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that
neither of the Rating Agencies shall have notified Seller, Servicer, Owner
Trustee or Indenture Trustee in writing that such action will, in and of
itself, result in a downgrade reduction or withdrawal of the then current
rating of any class of Notes, or the Certificates.
"Receivable" means each Motor Vehicle Loan described in the Schedule
of Receivables, but excluding (i) Defaulted Receivables to the extent the
Principal Balances thereof have been deposited in the Collection Account
and (ii) any Purchased Receivables.
"Receivable Files" is defined in Section 3.4 of the Sale and Servicing
Agreement.
"Record Date" means, with respect to any Distribution Date or
Redemption Date, the close of business on the day immediately preceding
such Distribution Date or Redemption Date; or, if Definitive Notes or
Definitive Certificates have been issued, the last day of the month
preceding such Distribution Date.
"Recoveries" means, for any Defaulted Receivable, any Liquidation
Proceeds received after the date such Defaulted Receivable was charged off
in accordance with the Servicer's customary servicing practices.
"Redemption Date" means in the case of a redemption of the Notes
pursuant to Section 10.1(a) of the Indenture or a payment to Noteholders
pursuant to Section 10.1(b) of the Indenture, the Distribution Date
specified by Servicer or Issuer pursuant to such Section 10.1(a).
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.1(a) of the Indenture, an amount equal to the unpaid
principal amount of the then outstanding Class A-4 Notes plus accrued and
unpaid interest thereon to but excluding the Redemption Date, or (b) in the
case of a payment made to Noteholders pursuant to Section 10.1(b) of the
Indenture, the amount on deposit in the Note Distribution Account, but not
in excess of the amount specified in clause (a) or (c) in the case of a
redemption of the Certificates pursuant to Section 9.3(a) of the Trust
Agreement, an amount equal to the Certificate Balance of the Certificates
plus accrued interest thereon but excluding such Redemption Date.
"Required Rating" means a rating with respect to short term deposit
obligations of at least P-1 by Moody's and at least A-1+ by Standard &
Poor's.
"Reserve Account" means the account designated as such, established
and maintained pursuant to Section 5.8 of the Sale and Servicing Agreement.
"Reserve Account Deposit" means an amount equal to $18,633,055.92.
"Reserve Account Property" is defined in Section 5.8(b) of the Sale
and Servicing Agreement.
"Reserve Account Transfer Amount" means, with respect to any Transfer
Date, an amount equal to the lesser of (a) the excess of (i) the amount of
cash or other immediately available funds on deposit in the Reserve Account
on such Transfer Date (before giving effect to any withdrawals therefrom
relating to such Transfer Date other than amounts necessary to reimburse
Outstanding Advances) over (ii) the Certificate Interest Reserve Amount on
such Transfer Date, and (b) the amount, if any, by which (i) the sum of the
Servicing Fee for the related Collection Period and all accrued and unpaid
Servicing Fees for prior Collection Periods, the Noteholders' Interest
Distributable Amount, the Certificateholders' Interest Distributable
Amount, the Noteholders' Principal Distributable Amount and the
Certificateholders' Principal Distributable Amount for such Transfer Date
exceeds (ii) the sum of the Available Interest and the Available Principal
for such Transfer Date.
"Responsible Officer" means, with respect to Indenture Trustee, any
officer within the Corporate Trust Office of Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary, or any other officer of Indenture Trustee customarily
performing functions similar to those performed by any of the above
designated officers 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.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
among Issuer, Norwest Bank Minnesota, N.A., as Servicer, and Norwest Auto
Receivables Corporation, as Seller, dated as of November 13, 1996, as the
same may be amended and supplemented from time to time.
"Schedule of Receivables" means, with respect to the Motor Vehicle
Loans to be conveyed to Seller by each Seller Affiliate and to Issuer by
Seller, the schedule contained in the diskette delivered to the Indenture
Trustee.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Securities Intermediary" is defined in Section 5.8 of the Sale and
Servicing Agreement.
"Seller" means Norwest Auto Receivables Corporation, a Delaware
corporation, and any of its successors permitted by Section 6.4 of the Sale
and Servicing Agreement.
"Servicer" means Norwest Bank and each Successor Servicer.
"Servicer Termination Event" means an event specified in Section 8.1
of the Sale and Servicing Agreement.
"Servicer's Report" means a report of Servicer delivered pursuant to
Section 4.9 of the Sale and Servicing Agreement, substantially in the form
of Exhibit C to that agreement.
"Servicing Fee" is defined in Section 4.8 of the Sale and Servicing
Agreement.
"Servicing Fee Rate" means 1.00% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment monthly installments between principal and interest, pursuant to
which such payment is allocated first to accrued and unpaid interest at the
Contract Rate on the unpaid principal balance and the remainder of such
payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means, for any Transfer Date, the
greater of (a) 3.25% of the sum of the aggregate outstanding principal
amount of each class of Notes plus the outstanding Certificate Balance on
the related Distribution Date (after giving effect to all payments on the
Notes and distributions with respect to the Certificates to be made on or
prior to such Distribution Date) and (b) 1.0% of the sum of the aggregate
initial principal of the Notes plus the initial Certificate Balance; except
that, if on such Transfer Date (x) the Average Net Loss Ratio exceeds 2.0%
or (y) the Average Delinquency Ratio exceeds 2.0%, then the Specified
Reserve Account Balance for such Transfer Date shall be an amount equal to
6.0% of the sum of the aggregate outstanding principal amount of each class
of Notes and the aggregate outstanding Certificate Balance on the related
Distribution Date (after giving effect to all payments on the Notes and
distributions with respect to the Certificates to be made on or prior to
such Distribution Date). In any event, on any Transfer Date, the Specified
Reserve Account Balance will not exceed the aggregate Outstanding Amount of
the Notes plus the aggregate outstanding Certificate Balance on the related
Distribution Date (after giving effect to all payments on the Notes and
distributions on the Certificates to be made on or prior to such
Distribution Date) and may be reduced to a lesser amount, as determined by
Seller, so long as such reduction does not cause any Rating Agency to
withdraw or downgrade its rating of the Notes or the Certificates.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Successor Servicer" shall mean any successor servicer from time to
time appointed pursuant to the Indenture.
"Supplemental Servicing Fee" is defined in Section 4.8 of the Sale and
Servicing Agreement.
"Total Distribution Amount" means, for each Transfer Date, the sum of
(a) the Available Interest, (b) the Available Principal, and (c) the
Reserve Account Transfer Amount, in each case in respect of such Transfer
Date.
"Transfer Date" means, with respect to any Collection Period, the
related Distribution Date; provided, however, that if the outstanding
principal amount of the Class A-1 Note has not been paid in full on or
before the November 1997 Distribution Date, the December 1997 Transfer Date
shall be the Final Scheduled Distribution Date for the Class A-1 Notes.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code.
"Trust Property" shall have the meaning set forth in Section 2.1 of
the Sale and Servicing Agreement.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the
form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" is defined in Section 5.1 of the Sale and Servicing
Agreement.
"Trust Agreement" means the Trust Agreement dated as of November 13,
1996, between Seller and Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security
interest of the Indenture for the benefit of the Noteholders (including all
property and interests Granted to Indenture Trustee), including all
proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"Trust Property" shall have the meaning set forth in Section 2.1 of
the Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"Weighted Average Contract Rate" means, with respect to any Collection
Period, the weighted average of the Contract Rates of the Receivables (but
excluding any Non-Advance Receivable, as determined on the related Deposit
Date), weighted based on the Principal Balance of each such Receivable as
of the first day of such Collection Period.
EXHIBIT A
NORWEST AUTO TRUST
96-A
Servicer Certificate
Distribution Date:
Collection Period:
Deposit Date:
Determination Date:
Transfer Date:
This Certificate is delivered pursuant to Section 4.9 of the Sale and
Servicing Agreement, dated as of November 13, 1996, among Norwest Auto
Trust 1996-A as Issuer, Norwest Auto Receivables Corporation, as Seller,
and Norwest Bank Minnesota, N.A. as Servicer.
Norwest Bank Minnesota, N.A. as Servicer under the Sale and Servicing
Agreement, hereby certifies that the following information is true and
correct for the Distribution Date and the Collection Period set forth
above.
I. Collection Account Summary
-----------------------------
A. Available Funds:
Available Interest
Available Principal
Reserve Account Transfer Account
Certificate Interest Shortfall Amount
Total Available Funds ============
B. Amounts Payable on Distribution Date:
Reimbursement of prior Servicer Advances
Basic Servicing Fee
Noteholders' Interest Distributable Amount
Noteholders' Principal Distributable Amount
Certificateholders' Interest Distributable Amount
Certificateholders' Principal Distributable Amount
Deposits to Reserve Fund
Total Amounts Payable on Distribution Date ============
II. Collected Funds
-------------------
Available Interest
Interest Collections
Advances made by Servicer less outstanding
advances reimbursed ____________
Available Principal
Scheduled Principal
Prepaid Principal
Net Liquidation Proceeds
Repurchase Amount allocable to principal
Forced Placed Insurance Advances ____________
____________
Total Collected Funds ============
III. Liquidation Proceeds
-------------------------
Gross amount received with respect to liquidated
Receivables before becoming Defaulted Receivable
less: the related out of pocket expenses paid
by or on behalf of the Servicer to third
parties in connection with liquidation ____________
Net Liquidation Proceeds ============
IV. Calculation of Advances
----------------------------
Current Month Servicer Advance
Prior Month's Servicer Advance ____________
Net Servicer Advance ============
V. Calculation of Principal Distribution Amount
-----------------------------------------------
Available Principal
Charged Off Balances
Total Principal Distribution Amount ============
VI. Calculation of Servicing Fees
--------------------------------
Pool Balance as of the first day of the
Collection Period
Servicing Fee Rate
Servicing Fee ============
VII. Purchases
-------------
Receivables purchased during Collection Period
Loan Number Receivable Balance
(individual listing)
VIII. Additional Receivables Information
---------------------------------------
Beginning Pool Balance
Ending Pool Balance
Beginning Number of Receivables
Number of Receivable Payoffs/Defaulted Receivables/Repurchases
Ending Number of Receivables
Initial Weighted Average Maturity
Current Weighted Average Maturity
Initial Weighted Average Contract Rate
Current Weighted Average Contract Rate
PERFORMANCE INFORMATION
IX. Delinquency Ratio
-----------------------
Principal Balance of Receivables 60 or more
days delinquent
Pool Balance as of the end of the
Collection Period
Delinquency Ratio ============
X. Average Delinquency Ratio
-----------------------------
Delinquency Ratio - Current Collection Period
Delinquency Ratio - preceding Collection Period
Delinquency Ratio - second preceding Collection Period
Average Delinquency Ratio ============
XI. Aggregate Net Loss
---------------------
Principal charged off during Collection Period
less: Recoveries of previously Defaulted Receivables
received during Collection Period ____________
Net Loss for Collection Period
============
XII. Net Loss Ratio
------------------
Aggregate Net Losses for Collection Period
Average Pool Balance for Collection Period
Net Loss Ratio
============
XIII. Average Net Loss Ratio
---------------------------
Net Loss Ratio - current Collection Period
Net Loss Ratio - preceding Collection Period
Net Loss Ratio - second preceding Collection Period
Average Net Loss Ratio
============
CREDIT ENHANCEMENT INFORMATION
XIV. Reserve Fund Information
------------------------------
Beginning Balance
Deposit to the Reserve Fund
less: Transfer to Collection Account
Release to Seller
Ending Balance ============
Required Balance ============
Certificate Interest Reserve Amount ============
IN WITNESS WHEREOF, the undersigned has caused this report to be executed
by its duly authorized officer as of the _______ day of ____________ 199_.
NORWEST BANK MINNESOTA, N.A.
as Servicer
By:_____________________________
Name:
Title:
_____________________________________________________________________________
PAYMENTS PER SECURITY DENOMINATION
Norwest Auto Trust 96-A
Distribution Date:
Collection Period:
Remaining
Original % of Interest Interest Interest Principal Principal Ending Principal Servicing
Class Balance Pool Accrual Distribution Shortfall Distribution Shortfall Balance Factor Fee
------------------------------------------------------------------------------------------------------------------------------
▇-▇
▇-▇
▇-▇
▇-▇
B
Totals
------------------------------------------------------------------------------
DISTRIBUTION STATEMENT
Norwest Auto Trust 96-A
Distribution Date:
Collection Period:
Interest Beginning Interest Interest Interest Principal Principal Ending Total
Class Rate Balance Accrual Distribution Shortfall Distribution Shortfall Balance Distribution
----------------------------------------------------------------------------------------------------------------------------------
▇-▇
▇-▇
▇-▇
▇-▇
NOTEHOLDER TOTALS
B
CERTIFICATEHOLDER TOTALS
TOTAL
DISTRIBUTION 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00