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EXHIBIT 4.2
NATIONSCREDIT SECURITIZATION CORPORATION,
Depositor,
NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA,
Servicer.
NationsCredit Grantor Trust 1997-1
Standard Terms and Conditions of Agreement
Dated as of April 30, 1997
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NATIONSCREDIT GRANTOR TRUST 1997-1
STANDARD TERMS AND CONDITIONS OF AGREEMENT
DATED AS OF APRIL 30, 1997
INTRODUCTION
These Standard Terms and Conditions of Agreement shall be applicable
to NationsCredit Grantor Trust 1997-1 formed on the date hereof, with respect to
which a Pooling and Servicing Agreement incorporating by reference these
Standard Terms and Conditions of Agreement shall have been executed.
ARTICLE XI
Definitions
SECTION 11.1. Definitions. Whenever used in the Agreement (including
these Standard Terms and Conditions of Agreement) the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
"Account Property" means all amounts and investments held from time to
time in the Reserve Account, as the case may be (whether in the form of deposit
accounts, Physical Property, book-entry securities, uncertificated securities,
securities entitlements, investment property or otherwise), and all proceeds of
the foregoing.
"Agreement" means the Pooling and Servicing Agreement executed by the
Depositor, the Servicer, the Trustee and the Collateral Agent as of the Cutoff
Date, into which these Standard Terms and Conditions of Agreement shall be
incorporated by reference, and all amendments and supplements thereto.
"Amount Financed" with respect to a Receivable means the original
amount advanced under the Receivable toward the purchase price of the Boat and
any cost to the related Obligor of any dealer installed options, extended
warranty plans and credit life and disability insurance, including any amount
allocable to the premium of collateral protection insurance purchased by
NationsCredit Commercial prior to the Cutoff Date.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of finance charges stated in the Receivable.
"Available Funds" means, for any Distribution Date, the sum of (i) all
Collections received by the Servicer during the related Collection Period, (ii)
all refunds received by the Servicer with respect to any refunded portion of
extended warranty protection plan costs, or of physical damage, credit life or
disability insurance premiums included in the Amount Financed unless such refund
must be paid to the Obligor, (iii) the Purchase Amount of all Receivables
purchased or repurchased under the Agreement on the Business Day prior to the
Distribution
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Date, (iv) Liquidation Proceeds received by the Servicer during the related
Collection Period and (v) all net income and gain realized on funds deposited
into the Collection Account or the Certificate Account and invested in
Permitted Investments during the related Collection Period.
"Boat" means (i) a new or used boat and any accompanying boat trailer
or boat motor or (ii) any boat motor, securing an Obligor's indebtedness under
the respective Receivable.
"Book-Entry Certificates" shall mean beneficial interests in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 15.8.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York shall be authorized or
obligated by law, executive order or governmental decree to be closed.
"Carry-Over Monthly Interest" means, for any Distribution Date, the
aggregate Monthly Interest Payments for prior Distribution Dates which have not
been paid, after giving effect to any payment of the Reserve Account Withdrawal
Amount or any Surety Drawing Amount on such Distribution Date made pursuant to
Section 14.5(a)(ii) and (iii), respectively.
"Carry-Over Monthly Principal" means, for any Distribution Date, the
aggregate Monthly Principal Payments for prior Distribution Dates which have not
been paid, after giving effect to any payment of the Reserve Account Withdrawal
Amount or any Surety Drawing Amount on such Distribution Date made pursuant to
Section 14.5(a)(ii) and (iii), respectively.
"Carry-Over Servicing Fee" means, for any Distribution Date, the
aggregate Servicing Fees for prior Distribution Dates which have not been paid
after giving effect to any Reserve Account Interest Withdrawal or any Surety
Interest Drawing made on such Distribution Date pursuant to Section 14.5(a)(ii)
and (iii), respectively.
"Certificate" means a certificate executed by the Trust and
authenticated by the Trustee substantially in the form of Exhibit B hereto.
"Certificate Account" means the account designated as such,
established and maintained pursuant to Section 14.1(a).
"Certificate Balance" means, as of any date of determination, the
Original Certificate Balance, as specified on the Agreement, reduced by all
amounts previously distributed to Certificateholders and allocable to principal.
"Certificate Factor" means, as of the close of business on a
Distribution Date, a seven-digit decimal figure equal to the Certificate Balance
as of such Distribution Date divided by the Original Certificate Balance.
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"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).
"Certificate Register" and "Certificate Registrar" mean the register
maintained and the registrar appointed pursuant to Section 15.3.
"Certificateholder" or "Holder" means the Person in whose name the
respective Certificate shall be registered in the Certificate Register, except
that, solely for the purposes of giving any consent, waiver, request or demand
pursuant to the Agreement, the interest evidenced by any Certificate registered
in the name of the Depositor or the Servicer, or any Person controlling,
controlled by, or under common control with the Depositor or the Servicer, shall
not be taken into account in determining whether the requisite percentage
necessary to effect any such consent, waiver, request or demand shall have been
obtained.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Collateral Agent" means the Person acting as Collateral Agent under
this Agreement, its successor in interest, and any successor Collateral Agent
appointed pursuant to Section 19.10.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 14.1(a).
"Collection Period" means each calendar month.
"Collections" shall mean, with respect to a Collection Period, all
payments by or on behalf of the Obligors made during such Collection Period
other than Liquidation Proceeds on the Receivables (other than a Purchased
Receivable or a Defaulted Receivable).
"Corporate Trust Office" means the office of the Trustee at which its
corporate trust business shall be administered, which office at the date of the
Agreement shall be specified therein.
"Cutoff Date" means the date specified as such in Section 6.1 of the
Agreement.
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"Dealer" means the dealer who sold a Boat, and who originated and
assigned the respective Receivable to NationsCredit Commercial under an existing
agreement between such dealer and NationsCredit Commercial.
"Defaulted Receivable" means a Receivable as to which either (x) the
Servicer has determined, in accordance with its customary servicing procedures,
that eventual payment in full is unlikely or (y) (1) 90 or more days have
elapsed since the related Boat has been repossessed by the Servicer, in the case
of any Receivable with a Principal Balance of $10,000 or less as of the day such
Boat was repossessed by the Servicer or (2) 180 or more days have elapsed since
the related Boat has been repossessed by the Servicer, in the case of any
Receivable with a Principal Balance of greater than $10,000 as of the day such
Boat was repossessed by the Servicer.
"Definitive Certificates" means the Certificates specified in Section
15.8.
"Delivery" or "Deliver" when used with respect to Account Property
means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i)
of the Relevant UCC and are susceptible to physical delivery,
transfer thereof to the Trustee or its nominee, agent or custodian
by physical delivery to the Trustee or its nominee, agent or
custodian endorsed to, or registered in the name of, the Trustee,
as trustee for the benefit of the Certificateholders, or its
nominee, agent or custodian or endorsed in blank, and, with respect
to a certificated security (as defined in Section 8-102 of the
Relevant UCC) transfer thereof (i) by delivery of such certificated
security endorsed to, or registered in the name of, the Trustee, as
trustee for the benefit of the Certificateholders, or its nominee,
agent or custodian or endorsed in blank to a financial intermediary
(as defined in Section 8-313 of the Relevant UCC) and the making by
such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the
Trustee, as trustee for the benefit of the Certificateholders, or
its nominee, agent or custodian and the sending by such financial
intermediary of a confirmation of the purchase of such certificated
security by the Trustee or its nominee, agent or custodian, or (ii)
by delivery thereof to a "clearing corporation" (as defined in
Section 8-102(3) of the Relevant UCC) and the making by such
clearing corporation of appropriate entries on its books reducing
the appropriate securities account of the transferor and increasing
the appropriate securities account of a financial intermediary by
the amount of such certificated security, the identification by the
clearing corporation of the certificated securities for the sole
and exclusive account of the financial intermediary, the
maintenance of such certificated securities by such clearing
corporation or a "custodian bank" (as defined in Section 8102(4) of
the Relevant UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the sending of a confirmation by
the financial intermediary of the
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purchase by the Trustee, as trustee for the benefit of the
Certificateholders, or its nominee, agent or custodian of such
securities and the making by such financial intermediary of entries
on its books and records identifying such certificated securities
as belonging to the Trustee, as trustee for the benefit of the
Certificateholders, as applicable, or its respective nominee, agent
or custodian (all of the foregoing, "Physical Property"), and, in
any event, any such Physical Property in registered form shall be
in the name of the Trustee, as trustee for the benefit of the
Certificateholders, or its nominee, agent or custodian; and such
additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any
such Account Property (as defined herein) to the Trustee, as
trustee for the benefit of the Certificateholders, or its nominee,
agent or custodian, consistent with changes in applicable law or
regulations or the interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the
Federal National Mortgage Association that is a book-entry security
held through the Federal Reserve System pursuant to Federal
book-entry regulations, the following procedures, all in accordance
with applicable law, including applicable federal regulations and
Articles 8 and 9 of the Relevant UCC: book-entry registration of
such Account Property to an appropriate book-entry account
maintained with a Federal Reserve Bank by a financial intermediary
which is also a "depository" pursuant to applicable federal
regulations and issuance by such financial intermediary of a
deposit advice or other written confirmation of such book-entry
registration to the Trustee or its nominee, agent or custodian of
the purchase by the Trustee, as trustee for the benefit of the
Certificateholders, or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in
its books and records identifying such book-entry security held
through the Federal Reserve System pursuant to federal book-entry
regulations as belonging to the Trustee, as trustee for the benefit
of the Certificateholders, or its nominee, agent or custodian and
indicating that such custodian holds such Account Property solely
as agent for the Trustee, as trustee for the benefit of the
Certificateholders, or its nominee, agent or custodian; and such
additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such
Account Property to the Trustee or its nominee, agent or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof; and
(c) with respect to any item of Account Property that is an
uncertificated security under Article 8 of the Relevant UCC and
that is not governed by clause (b) above, registration on the books
and records of the issuer thereof in the name of the financial
intermediary, the sending of a confirmation by the financial
intermediary of the purchase by the Trustee, as trustee for the
benefit
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of the Certificateholders, or its nominee, agent or custodian of such
uncertificated security, and the making by such financial intermediary
of entries on its books and records identifying such uncertificated
certificates as belonging to the Trustee, as trustee for the benefit
of the Certificateholders, or its nominee, agent or custodian.
"Deposit Date" means the Business Day preceding each Distribution
Date.
"Depositor" means NationsCredit Securitization Corporation, a
corporation organized under the laws of the State of Delaware, as the depositor
of the Depositor Receivables under the Agreement, and each successor to
NationsCredit Securitization Corporation (in the same capacity) pursuant to
Section 16.3.
"Depositor Receivables" means the marine retail installment sales
contracts listed on Schedule A.
"Depositor Receivables Files" means the documents specified in Section
12.3 that relate to Depositor Receivables.
"Depository Agreement" means the agreement among the Depositor, the
Trustee and the initial Clearing Agency, dated May __, 1997, substantially in
the form attached hereto as Exhibit C.
"Determination Date" means the earlier of the eighth Business Day of
each month and the eleventh calendar day of the month.
"Distribution Date" means, for each Collection Period, the 15th of the
following month, or if the 15th is not a Business Day, the next following
Business Day, commencing with the date specified in the Agreement.
"Event of Default" means an event specified in Section 18.1.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics' liens and any liens
which attach to the respective Receivable by operation of law.
"Liquidation Proceeds" means, with respect to any Collection Period,
the monies (including recoveries) collected from whatever source, during such
Collection Period on a Defaulted Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor plus any amounts
required by law to be remitted to the Obligor.
"Monthly Interest Payment" means, as of any Distribution Date,
one-twelfth of the product of the Pass-Through Rate and the Certificate Balance
as of the close of business on
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the prior Distribution Date or, in the case of the first Distribution Date,
one-twelfth of the product of the Pass-Through Rate and the Original
Certificate Balance.
"Monthly Principal Payment" means, (x) as of any Distribution Date
(except for the Final Scheduled Distribution Date), an amount equal to (i) the
portion of all collections received by the Servicer during the related
Collection Period on Receivables allocable to principal (which shall not include
any Liquidation Proceeds received in respect of any Defaulted Receivable in any
Collection Period following the Collection Period in which such Receivable
became a Defaulted Receivable), (ii) Purchase Amounts allocable to principal and
paid by the Depositor to the Servicer or by the Servicer and (iii) the principal
balance of Defaulted Receivables, which became Defaulted Receivables during the
related Collection Period and (y) as of the Final Scheduled Distribution Date,
an amount after giving effect to the distribution of the amounts set forth in
(i) through (iii) of clause (x) necessary to reduce the Certificate Balance to
zero on such Distribution Date.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NationsCredit Commercial" means NationsCredit Commercial Corporation
of America, a corporation organized under the laws of North Carolina, or its
successors.
"NationsCredit Marine" means NationsCredit Marine Funding Corporation,
a Delaware corporation.
"Net Credit Loss Ratio" means, for any Collection Period, an amount
expressed as an annualized percentage equal to (i) the aggregate gross losses
with respect to the Receivables recognized in such Collection Period, as
determined in accordance with the Servicer's normal practices, less any
Liquidation Proceeds for such Collection Period, divided by (ii) the average of
the Pool Balances as of the last day of the Collection Period prior to such
Collection Period and as of the last day of such Collection Period.
"Obligor" on a Receivable means the purchaser or the co-purchasers of
the Boat or any other Person who owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by the chairman of
the board, the president, any vice chairman of the board, any vice president,
the treasurer, any assistant treasurer or the controller of the Depositor, the
Servicer or the Surety Bond Issuer, as appropriate.
"Opinion of Counsel" means a written opinion of counsel who may but
need not be counsel to the Depositor or Servicer, which opinion shall be
acceptable to the Trustee, and provided that any opinion relating to the tax
status of the Trust shall be rendered by Stroock & Stroock & ▇▇▇▇▇ LLP or such
other independent outside counsel acceptable to the Trustee.
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"Optional Purchase Percentage" means the percentage specified as such
in the Agreement.
"Original Certificate Balance" means the Certificate Balance as of the
Closing Date, as specified in the Agreement.
"Original Pool Balance" means the Pool Balance as of the Cutoff Date,
as specified in the Agreement.
"Pass-Through Rate" means the interest rate payable to
Certificateholders, as specified in the Agreement.
"Permitted Investments" means those investments specified in Schedule
C of the Agreement.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means as the last day of any Collection Period, the
aggregate Principal Balance of the Receivables.
"Precomputed Receivable" means any Receivable under which the portion
of a payment allocable to earned interest (which may be referred to in the
Receivable as an add-on finance charge) and the portion allocable to the Amount
Financed is determined according to the sum of periodic balances or the sum of
monthly balances or any equivalent method or are monthly actuarial receivables.
"Principal Balance" of a Receivable, as of the last day of a
Collection Period, means the Amount Financed minus the sum of (a) that portion
of all Collections received on or prior to such day by the Servicer allocable as
a payment of principal pursuant to Section 14.3 hereof, (b) any refunded portion
of extended warranty protection plan costs, or of physical damage, credit life
or disability insurance premiums included in the Amount Financed which is
applied during the related Collection Period unless such refund must be paid to
the Obligor, and (c) the principal portion of all Purchase Amounts paid by the
Depositor or the Servicer, in respect of such Receivable, after the preceding
Distribution Date but prior to the related Distribution Date.
"Purchase Agreement" means the Purchase Agreement executed by the
Depositor and NationsCredit Commercial as of the Cutoff Date.
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"Purchase Amount" means the amount, as of the last day of a Collection
Period, required to prepay in full the Principal Balance of a Receivable plus
accrued interest thereon at one-twelfth the sum of the Pass-Through Rate plus
the Servicing Fee Rate to the last day of the month of purchase.
The "Purchase and Sale Agreement" means the Purchase and Sale
Agreement, dated December 18, 1996 between NationsCredit Commercial and
NationsCredit Marine.
"Purchased Receivable" means a Receivable purchased as of the last day
of a Collection Period by the Servicer pursuant to Section 13.7 or by the
Depositor pursuant to Section 12.2 or 20.2.
"Rating Agency" means S&P, Moody's or any other nationally recognized
rating agency initially contracted by the Depositor to rate the Certificates.
"RCC" means Receivables Capital Corporation, a Delaware corporation.
"RCC Receivable Files" means the documents specified in Section 12.3
that relate to RCC Receivables.
"RCC Receivables" means the marine retail installment sales contracts
listed on Schedule B.
"Receivables" means the Depositor Receivables and the RCC Receivables.
"Receivables Files" means the Depositor Receivable Files and the RCC
Receivable Files.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of December 18, 1996 among NationsCredit Marine, RCC,
NationsCredit Commercial and Bank of America National Trust and Savings
Association, as Administrator.
"Record Date" means for any Distribution Date the close of business on
the Business Day prior to such Distribution Date.
"Reimbursement Agreement" means the agreement relating to the Surety
Bond, which agreement is further defined in Section 6.1 of the Agreement.
"Required Deposit Rating" means the rating specified in Section 6.1 of
the Agreement.
"Reserve Account Initial Deposit" shall equal $______________.
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"Reserve Account Withdrawal Amount" shall have the meaning in Section
14.5(a)(ii).
"Residual Certificate" means the Certificate specified in Section
15.1.
"Scheduled Payment" on a Receivable means that portion of the payment
required to be made by the Obligor during the respective Collection Period
sufficient to amortize at level monthly payments the Principal Balance and to
provide interest at the APR.
"Servicer" means NationsCredit Commercial and each successor to
NationsCredit Commercial (in the same capacity) pursuant to Section 17.3.
"Servicer's Certificate" means a certificate completed and executed by
the Servicer by its chairman of the board, its president, any vice chairman of
the board, any vice president, the treasurer, any assistant treasurer or the
controller of the Servicer pursuant to Section 13.9, substantially in the form
of Exhibit D.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 13.8.
"Servicing Standards" means, at any time, the quality of the
Servicer's (or in the event that a subservicer performs servicing operations on
behalf of the Servicer, such subservicer's) performance with respect to (i)
compliance with the terms and conditions of the Agreement, and (ii) adequacy,
measured in accordance with industry standards and current and historical
standards of the Servicer (or such subservicer) in respect of all receivables
serviced by the Servicer (or such subservicer), regardless of whether such
receivables are owned by the Servicer (or such subservicer), of the Servicer's
(or such subservicer's) servicing of the Receivables.
"Ship Mortgage Act" means the Ship Mortgage Act of 1920, as amended.
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the number of
days elapsed since the preceding payment of interest was made.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Account Requirement" shall be with respect to any
Distribution Date, the Specified Reserve Account Requirement shall equal the
greater of (i)
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$_______________ or (ii) ______% of the Pool Balance as of the last day of the
related Collection Period. The Specified Reserve Account Requirement may be
reduced without the consent of the Certificateholders to a lesser amount,
including to zero, as determined by the Depositor; provided that such reduction
is consented to in writing by the Surety Bond Issuer and does not adversely
affect the rating of the Certificates assigned by any Rating Agency; provided,
however, only upon the occurrence and continuance of the event specified in
Section 18.1(b)(iv), the Specified Reserve Account Requirement shall be
unlimited and all amounts available under Section 14.5(b)(v) shall be deposited
to the Reserve Account.
"S&P" means Standard & Poor's Ratings Services, a Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies.
"State" means any state of the United States of America or the
District of Columbia.
"Statement to Certificateholders" means a certificate completed and
executed by the Servicer by its the chairman of the board, its president, any
vice chairman of the board, any vice president, the treasurer, any assistant
treasurer or the controller of the Servicer pursuant to Section 14.7,
substantially in the form of Exhibit E.
"Surety Bond" means the unconditional, irrevocable surety bond
designated as such in the Agreement.
"Surety Bond Issuer" means the Person specified as such in Section 6.1
of the Agreement.
"Surety Bond Issuer Default" means the failure of the Surety Bond
Issuer to make a payment required under the Surety Bond in accordance with its
terms.
"Surety Drawing Amount" shall have the meaning set forth in Section
14.5(a)(iii).
"Trust" means the trust created by the Agreement, the estate of which
shall consist of the Receivables (other than Purchased Receivables) and all
payments received thereunder, in the case of Simple Interest Receivables and all
payments due thereunder, in the case of Precomputed Receivables, in each case,
after the Cutoff Date; funds deposited in the Collection Account and the
Certificate Account; the interest of the Depositor in the security interests in
the Boats granted by Obligors pursuant to the Receivables; the Purchase
Agreement; the Surety Bond; any property (including the right to receive future
Liquidation Proceeds) that shall have secured a Receivable and that shall have
been acquired by or on behalf of the Trustee; the interest of the Depositor in
any proceeds from claims on any physical damage, credit life or disability
insurance policies covering Boats or Obligors; and the interest of the Depositor
in any proceeds from recourse to Dealers; and any proceeds of any and all of the
foregoing.
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"Trustee" means the Person acting as Trustee under the Agreement, its
successor in interest, and any successor trustee pursuant to Section 19.11.
"Trustee Officer" means any officer assigned to the Corporate Trust
Office, including any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, any trust officer or any other
officer of the Corporate Trust Office of the Trustee customarily performing
functions similar to those performed by persons who at the time shall be such
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Trustee's Certificate" means a certificate completed and executed by
the Trustee by a Trustee Officer pursuant to Section 19.2, substantially in the
form of, in the case of an assignment to the Depositor, Exhibit F-1, and in the
case of an assignment to the Servicer, Exhibit F-2.
"UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.
"Unsold Contract" means any retail installment contract serviced by
NationsCredit Commercial other than the Receivables.
SECTION 11.2. Usage of Terms. With respect to all terms in the
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by the Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 11.3. Cutoff Date and Record Date. All references to the
Record Date prior to the first Record Date in the life of the Trust shall be to
the Cutoff Date.
SECTION 11.4. Section References. All section references shall be to
Sections in these Standard Terms and Conditions of Agreement.
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ARTICLE XII
The Receivables
SECTION 12.1. Representations and Warranties of Depositor. The
Depositor makes the following representations and warranties as to the Depositor
Receivables on which the Trustee relies in accepting the Depositor Receivables
in trust and executing and authenticating the Certificates. Such representations
and warranties speak as of the Closing Date, but shall survive the sale,
transfer and assignment of the Depositor Receivables to the Trustee.
(i) Characteristics of Depositor Receivables. Each Depositor
Receivable (a) shall have been originated in the United States by a
Dealer for the retail sale of a Boat in the ordinary course of such
Dealer's business, shall have been fully and properly executed by the
parties thereto, shall be denominated in U.S. dollars, (b) shall have
created or shall create a valid, subsisting and enforceable first
priority perfected security interest in favor of NationsCredit
Commercial in the related Boat (other than in the case of boat motors
subject to certificate of title statutes that provide for perfection
of the security interests in such boat motors by the filing of a UCC-1
financing statement), which security interest has been assigned to the
Depositor and shall be validly assignable by the Depositor to the
Trustee, (c) shall contain customary and enforceable provisions such
that the rights and remedies of the holder thereof shall be adequate
for realization against the collateral of the benefits of the
security, (d) shall provide for level monthly payments (provided that
the payment in the first or last month in the life of the Receivable
may be minimally different from the level payment) that fully amortize
the Amount Financed by maturity and yield interest at the Annual
Percentage Rate, and (e) shall provide for, in the event that such
contract is prepaid, a prepayment that fully pays the Principal
Balance and includes accrued but unpaid interest due through the date
of prepayment in an amount at least equal to the Annual Percentage
Rate.
(ii) Schedule of Depositor Receivables. The information set
forth in Schedule A to the Agreement shall be true and correct in all
material respects as of the close of business on the Cutoff Date, and
no selection procedures believed to be adverse to the
Certificateholders shall have been utilized in selecting the Depositor
Receivables.
(iii) Compliance with Law. Each Depositor Receivable and the
sale of the related Boat shall have complied at the time it was
originated or made, and at the date of issuance of the Certificates
shall comply, in all material respects with all requirements of
applicable Federal, State, and local laws and regulations thereunder,
including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal
Trade Commission Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the
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Fair Debt Collection Practices Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act,
the Federal Trade Commission Credit Practices Rule, State unfair and
deceptive trade practice laws, and State adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and any other
applicable consumer credit, equal credit opportunity and disclosure
laws.
(iv) Binding Obligation. Each Depositor Receivable shall
represent the genuine, legal, valid and binding payment obligation in
writing of the Obligor, enforceable by the holder thereof in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and similar laws
relating to creditors' rights generally and subject to general
principles of equity.
(v) No Government Obligor. None of the Depositor
Receivables shall be due from the United States of America or any
State or local government or from any agency, department or
instrumentality of the United States of America, any State or local
government.
(vi) Depositor Receivables in Force. No Depositor
Receivable shall have been satisfied, subordinated or rescinded, nor
shall any Boat have been released from the security interests granted
by the related Depositor Receivable in whole or in part.
(vii) No Waiver. No provision of a Depositor Receivable
shall have been waived.
(viii) No Defenses. Except for the security interests in
favor of the Depositor and the Trustee, the Depositor Receivables are
free and clear of all security interests, liens, charges, and
encumbrances and to the best knowledge of the Depositor no right of
rescission, setoff, counterclaim or defense shall have been asserted
or threatened with respect to any Depositor Receivable.
(ix) No Liens. No liens or claims shall have been filed
for work, labor or materials relating to a Boat that shall be liens
prior to, or equal to the security interest in the Boat granted by the
Depositor Receivable.
(x) Insurance. The Obligor has obtained physical damage
insurance covering the Boat and the Obligor is required under the
terms of the Depositor Receivable to maintain such insurance.
(xi) Title. It is the intention of the Depositor that the
sale and assignment herein contemplated constitute a sale of the
Depositor Receivables from the Depositor to the Trust and that the
beneficial interest in and title to the
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Depositor Receivables not be part of the debtor's estate in the event
of the filing of a bankruptcy petition by or against the Depositor
under any bankruptcy law. No Depositor Receivable has been sold,
transferred, assigned or pledged by the Depositor to any Person other
than the Trustee. Immediately prior to the sale and assignment herein
contemplated, the Depositor had good and marketable title to each
Depositor Receivable free and clear of all Liens, and, immediately
upon the sale and assignment contemplated hereby, the Trustee for the
benefit of the Certificateholders and the Surety Bond Issuer shall
have good and marketable title to each Depositor Receivable, free and
clear of all Liens, encumbrances, security interests and rights of
others; and the sale and assignment has been perfected under the UCC.
(xiii) Lawful Assignment. No Depositor Receivable shall
have been originated in, or shall be subject to the laws of any
jurisdiction under which the sale, transfer and assignment of such
Depositor Receivable under the Agreement or pursuant to transfers of
the Certificates shall be unlawful, void or voidable.
(xiv) Security Interest. Upon the Depositor Receivables
being conveyed to the Trust pursuant to Section 2.1 of the Agreement,
the Trust shall have a perfected security interest under the UCC in
the Depositor Receivables.
(xv) One Original. There shall be in existence one, and
only one, original executed copy of each Depositor Receivable.
(xvi) UCC Characterization. Each Depositor Receivable
constitutes "Chattel Paper" under the UCC.
(xvii) Ship Mortgage Act. No Boat related to any Depositor
Receivable meets the requirements for documentation under the Ship
Mortgage Act.
(xviii) No Default. Except for payment defaults continuing
for a period of less than 60 days as of the Cutoff Date, no default,
breach, violation or event permitting acceleration under the terms of
any Depositor Receivable shall have occurred and neither NationsCredit
Commercial nor the Depositor shall have waived any of the foregoing.
SECTION 12.2. Repurchase Upon Breach. The Depositor, the Servicer or
the Trustee, as the case may be, shall inform the other parties promptly, in
writing, upon the discovery of any breach of the Depositor's representations and
warranties pursuant to Section 12.1. Unless the breach shall have been cured by
the second Record Date following the discovery, the Depositor shall repurchase
any Depositor Receivable, which as a result of such breach would materially and
adversely affect the interests of the Certificateholders or the Surety Bond
Issuer, as of such Record Date (or, at the Depositor's option, the first Record
Date
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following the discovery). In consideration of the purchase of the Depositor
Receivable, the Depositor shall remit the Purchase Amount in the manner
specified in Section 14.4(a) on the Deposit Date. The sole remedy of the
Trustee, the Trust or the Certificateholders with respect to a breach of the
Depositor's representations and warranties pursuant to Section 12.1 shall be to
require the Depositor to repurchase Depositor Receivables pursuant to this
Section 12.2.
SECTION 12.3. Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Trustee, on
behalf of the Trust, upon the execution and delivery of the Agreement, hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act as the agent of the Trustee as custodian of the following
documents or instruments which are hereby constructively delivered to the Trust
on behalf of the Trust, with respect to each Receivable:
(i) The original of the Receivable fully executed by the
Obligor.
(ii) The original credit application fully executed by the
Obligor.
(iii) The original certificate of title or such documents
that the Servicer or the Depositor shall keep on file, in accordance
with its customary procedures, evidencing the security interest of
NationsCredit Commercial in the Boat.
(iv) Any and all other documents that the Servicer shall
keep on file, in accordance with its customary procedures, relating to
a Receivable, an Obligor or a Boat.
The Trustee shall have no duty to monitor the performance of the
Servicer and shall have no liability in connection with the Servicer's
performance hereunder.
SECTION 12.4. Duties of Servicer as Custodian. (a) Safekeeping. The
Servicer shall hold the Receivable Files on behalf of the Trust for the use and
benefit of all Certificateholders and the Surety Bond Issuer, and maintain such
accurate and complete accounts, records and computer systems pertaining to each
Receivable File as shall enable the Trustee to comply with these Standard Terms
and Conditions of Agreement. In performing its duties as custodian the Servicer
shall act with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to the receivable files relating to all
comparable receivables that the Servicer services for itself or others. The
Servicer shall conduct, or cause to be conducted, periodic audits of the
Receivable Files held by it under the Agreement, and of the related accounts,
records and computer systems, in such a manner as would enable the Trustee to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Trustee any failure on its part to hold the Receivable
Files and maintain its accounts, records and computer systems as herein provided
and promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Trustee of the Receivable Files.
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(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Section 7.1(iv) of the
Agreement, or at such other office as shall be specified to the Trustee by
written notice not later than 90 days after any change in location. The Servicer
shall make available to the Trustee or its duly authorized representatives,
attorneys or auditors a list of locations of the Receivable Files, and shall
also so make available the Receivable Files themselves, and the related
accounts, records and computer systems maintained by the Servicer, at such times
as the Trustee shall reasonably instruct.
(c) Release of Documents. Upon instruction from the Trustee, the
Servicer shall release any Receivable File to the Trustee, the Trustee's agent
or the Trustee's designee, as the case may be, at such place or places as the
Trustee may designate, as soon as practicable.
SECTION 12.5. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Trustee Officer.
SECTION 12.6. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trustee for any and all liabilities, obligations, losses,
compensatory damages, payments, costs or expenses of any kind whatsoever that
may be imposed on, incurred or asserted against the Trustee as the result of any
improper act or omission in any way relating to the maintenance and custody by
the Servicer as custodian of the Receivable Files; provided, however, that the
Servicer shall not be liable for any portion of any such amount resulting from
the willful misfeasance, bad faith or negligence of the Trustee.
SECTION 12.7. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section
12.7. If NationsCredit Commercial shall resign as Servicer in accordance with
the provisions of the Agreement or if all the rights and obligations of the
Servicer shall have been terminated under Section 18.1, the appointment of the
Servicer as custodian may be terminated by the Surety Bond Issuer, in the same
manner as the Surety Bond Issuer may terminate the rights and obligations of the
Servicer under Section 18.1. The Trustee shall, if required by the Surety Bond
Issuer following the occurrence and during the continuation of a Trigger Event
(as defined in the Reimbursement Agreement) or an Event of Default or the
Trustee, on behalf of the Trust, may terminate the Servicer's appointment as
custodian, with cause or as required by law at any time upon written
notification to the Servicer. As soon as practicable after any termination of
such appointment, the Servicer shall deliver the Receivable Files to the Trustee
or the Trustee's agent at such place or places as the Trustee may reasonably
designate.
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ARTICLE XIII
Administration and Servicing of Receivables
SECTION 13.1. Duties of Servicer. The Servicer as agent for the Trust
(to the extent provided herein) shall manage, service, administer and make
collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable receivables that it services for itself
or others. The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors on such Receivables, investigating
delinquencies, sending payment statements to Obligors, reporting tax information
to Obligors, accounting for collections and furnishing monthly and annual
statements to the Trustee with respect to distributions. The Servicer shall
follow its customary standards, policies and procedures in performing its duties
as Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered by the Trustee to execute and deliver, on behalf of
itself, the Trust, the Certificateholders, or the Trustee or any of them, any
and all instruments of satisfaction or cancellation, or partial or full release
or discharge, and all other comparable instruments, with respect to such
Receivables or to the Boats securing such Receivables. If the Servicer shall
commence a legal proceeding to enforce a Receivable, a Defaulted Receivable, the
Trustee (in the case of a Receivable other than a Purchased Receivable) shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection on behalf of the party retaining an interest in such Receivable, such
Receivable to the Servicer. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Receivable on the ground that
it shall not be a real party in interest or a holder entitled to enforce the
Receivable, the Trustee shall, at the Servicer's expense and direction, take
steps to enforce the Receivable, including bringing suit in its name or the name
of the Certificateholders or the Surety Bond Issuer. To enable the Servicer to
carry out its servicing and administrative duties hereunder, the Trustee hereby
irrevocably appoints the Servicer as its attorney-in-fact, such appointment
being coupled with an interest, to execute on its behalf such documents or
instruments as are necessary to accomplish the foregoing.
SECTION 13.2. Collection of Receivables Payments. The Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
receivables that it services for itself or others. The Servicer may grant
extensions, rebates or adjustments on a Receivable subject to the provisions of
Section 13.6. The Servicer may in its discretion waive any late payment charge
or any other fees that may be collected in the ordinary course of servicing a
Receivable.
SECTION 13.3. Realization Upon Receivables. On behalf of the Trust,
the Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Boat securing
any Receivable as to which the Servicer shall have determined eventual payment
in full is unlikely. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of marine receivables, which may include reasonable efforts to realize
upon any recourse to Dealers and selling the Boat at public or private sale. The
foregoing shall be subject to the provision that, in any case in which the Boat
shall have suffered damage, the Servicer shall
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not expend funds in connection with the repair or the repossession of such Boat
unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses.
SECTION 13.4. Physical Damage Insurance. The Servicer, in accordance
with its customary servicing procedures, shall require that each Obligor shall
have obtained physical damage insurance covering the related Boat as of the date
of execution of the related Receivable.
SECTION 13.5. Maintenance of Security Interests in Boats. The Servicer
shall, in accordance with its customary servicing procedures, take such steps as
are necessary to maintain perfection of NationsCredit Commercial's security
interest created by each Receivable in the related Boat. The Trustee, on behalf
of the Trust, hereby authorizes the Servicer to take such steps as are necessary
to perfect such security interest on behalf of the Trust in the event of the
relocation of a Boat or for any other reason.
SECTION 13.6. Covenants of Servicer. The Servicer shall make within
the required time periods under the UCC all filings necessary in any
jurisdiction to give the Trustee a first priority perfected ownership interest
in the Receivables. The Servicer shall not release the Boat securing each
Receivable from the security interest granted by such Receivable in whole or in
part except in the event of payment in full by the Obligor thereunder. The
Servicer shall not impair the rights of the Certificateholders in any
Receivable. The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable marine receivables that it services for itself
and others. The Servicer shall not sell, pledge, transfer, deliver or otherwise
dispose of any Receivable, except as provided in the Agreement. The Servicer
will not increase or decrease the number or amount of any Scheduled Payment, or
the Principal Balance of a Receivable (except with respect to a prepayment of a
scheduled payment that does not result in a deferral of any other scheduled
payment) or the APR of a Receivable, or extend, rewrite or otherwise modify the
payment terms of a Receivable; provided, however, that the Servicer may extend a
Receivable for credit related reasons that would be acceptable to the Servicer
with respect to comparable marine receivables that it services for itself and
others and in accordance with its customary standards, policies and procedures
if the cumulative extensions with respect to any Receivable shall not cause the
term of such Receivable to extend beyond the last day of the Collection Period
which is related to the Final Schedule Distribution Date; provided, further,
that such extensions will not be made if, in the reasonable opinion of the
Servicer, the extensions would modify the terms of such Receivable in such a
manner as to constitute a cancellation of such Receivable and the creation of a
new receivable for federal income tax purposes. In the event that the Servicer
fails to comply with the provisions of the preceding sentence or with respect to
the second proviso of the preceding sentence, notwithstanding having acted
according to its reasonable opinion, or if there is a final determination that
the Servicer has modified the terms of a Receivable in such a manner as to
constitute a cancellation of such Receivable and the creation of a new
Receivable for federal income tax purposes, the Servicer shall be required to
purchase the Receivable or Receivables
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affected thereby, for the Purchase Amount, in the manner specified in Section
13.7 as of the first day of the Collection Period following the Collection
Period in which such failure occurs.
SECTION 13.7. Purchase of Receivables Upon Breach. The Servicer or the
Trustee shall inform the other party promptly, in writing, upon the discovery of
any breach pursuant to Section 13.6 or Section 13.15. Notice of any breach
pursuant to Section 13.6 or Section 13.15 may be given to the Servicer and the
Trustee by the Surety Bond Issuer. Unless the breach shall have been cured by
the second Record Date following such discovery (or, at the Servicer's election,
the first following Record Date), the Servicer shall purchase any Receivable (or
in the case of any representation and warranty in Section 13.15 stated in terms
of maximum aggregate percentage amounts, purchase Receivables that after giving
effect to such Purchase, the related representation or warranty would be
complied with), which as a result of such breach would materially and adversely
affect the interests of the Certificateholders or the Surety Bond Issuer, as of
such Record Date. In consideration of the purchase of such Receivable, the
Servicer shall remit the Purchase Amount in the manner specified in Section 14.4
on the Deposit Date. The sole remedy of the Trustee, the Trust or the
Certificateholders with respect to a breach pursuant to Section 13.6 or Section
13.15 shall be to require the Servicer to repurchase Receivables pursuant to
this Section 13.7.
SECTION 13.8. Servicing Fee. The Servicing Fee for a Collection Period
shall equal the product of one twelfth times the Servicing Fee Rate times the
Initial Pool Balance, in the case of the initial Collection Period, and
thereafter, the Pool Balance as of the last day of the prior Collection Period
(except that in the case of a successor Servicer, the Servicing Fee shall equal
such amount as is arranged in accordance with Section 18.2). The Servicer shall
also be entitled to all late payment and extension fees, prepayment charges and
other administrative fees or similar charges allowed by applicable law with
respect to Receivables, collected (from whatever source) on the Receivables;
provided, however, such late payment and other fees shall not form a part of the
Servicing Fee and the Servicer shall be entitled to such fees as and when
collected.
SECTION 13.9. Servicer's Certificate. On or before the Determination
Date, the Servicer shall deliver to the Trustee a Servicer's Certificate,
containing all information necessary to make the transfers and distributions
pursuant to Section 14.5 for the Collection Period immediately preceding the
date of such Servicer's Certificate. The Servicer shall also deliver the
Certificate Factor in writing to NationsBanc Capital Markets, Inc. on the same
day as it delivers the Servicer's Certificate to the Trustee. If on any Deposit
Date there is a default by the Depositor or the Servicer in respect of any
Purchase Amounts to be deposited into the Collection Account pursuant to Section
14.4 hereof, the Servicer shall recalculate all of the amounts described in the
Servicer's Certificate to reflect such default and deliver to the Trustee a
revised Servicer's Certificate reflecting such recalculations on such Deposit
Date.
SECTION 13.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Trustee and the Surety Bond Issuer, on or
before March 31
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of each year, beginning March 31, 1998, an Officer's Certificate, dated as of
December 31 of the preceding year, stating that (i) a review of the activities
of the Servicer during the preceding 12-month period (or such shorter period
from the date of initial issuance of the Certificates to December 31 of such
year) and of its performance under the Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based
on such review, the Servicer has fulfilled all its obligations under the
Agreement throughout such year (or such shorter period, as the case may be),
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. A copy of such certificate and the report referred to in Section
13.11 may be obtained by any Certificateholder by a request in writing to the
Trustee addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and the Surety Bond
Issuer promptly after having obtained knowledge thereof, but in no event later
than 5 Business Days thereafter, written notice in an Officer's Certificate of
any event which with the giving of notice or lapse of time, or both, would
become an Event of Default under clause (i) or (ii) of Section 18.1. The
Depositor shall deliver to the Trustee and the Surety Bond Issuer promptly after
having obtained knowledge thereof, but in no event later than 5 Business Days
thereafter, written notice in an Officer's Certificate of any event which with
the giving of notice or lapse of time, or both, would become an Event of Default
under clause (ii) of Section 18.1.
SECTION 13.11. Annual Independent Certified Public Accountant's
Report. The Servicer shall cause a firm of independent certified public
accountants (who may also render other services to the Servicer and the
Depositor) to deliver to the Trustee on or before March 31 of each year
commencing March 31, 1998, a report to the effect that such firm has conducted
an examination, substantially in compliance with attestation standards
established by the American Institute of Certified Public Accountants, of
certain documents and records relating to the servicing procedures under this
Agreement and that, on the basis of such examination, such firm is of the
opinion that such servicing was conducted in compliance with the sections of
this Agreement with which independent public accountants generally possess
adequate professional knowledge and which are reasonably subject to positive
assurance by them, except for such exceptions as they believe to be immaterial
and such other exceptions as shall be set forth in such report.
SECTION 13.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
access to the Receivables Files in such cases where the Certificateholder shall
be required by applicable statutes or regulations to review such documentation.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the respective offices of the Servicer.
Nothing in this Section 13.12 shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section 13.12.
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SECTION 13.13. Servicer Expenses. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to Certificateholders.
SECTION 13.14. Appointment of Sub-servicer. The Servicer may at any
time appoint a sub-servicer to perform all or any portion of its obligations as
Servicer hereunder; provided however, that the Servicer shall remain obligated
and be liable to the Trustee and the Certificateholders for the servicing and
administering of the Receivables in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the appointment
of such sub-servicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Receivables. The fees and expenses of the sub-servicer shall be as agreed
between the Servicer and its sub-servicer from time to time and neither the
Trust, the Trustee nor the Certificateholders shall have any responsibility
therefor.
SECTION 13.15. Representations and Warranties of the Servicer with
respect to the Receivables. The Servicer does hereby make the following
representations and warranties on which the Trustee on behalf of the Trust,
relies in accepting the Receivables pursuant to this Agreement and the
Assignment and executing and authenticating the Certificates. Such
representations and warranties speak as of the Closing Date, but shall survive
the sale, transfer and assignment of the Receivables to the Trustee.
(i) Characteristics of RCC Receivables. Each RCC Receivable
(a) shall be denominated in U.S. dollars, (b) shall have an original
maturity of not more than 180 months, (c) as of the Cutoff Date, shall
have a remaining maturity of not more than 180 months, (d) shall
contain customary and enforceable provisions such that the rights and
remedies of the holder thereof shall be adequate for realization
against the collateral benefits of the security, (e) shall be kept at
the offices of NationsCredit Commercial Corporation at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (f) shall be adequate for
realization against the collateral of the benefits of the security,
(g) shall provide for level monthly payments (provided that the
payment in the first or last month in the life of the Receivable may
be minimally different from the level payment) that fully amortize the
Amount Financed by maturity and yield interest at the Annual
Percentage Rate, and (h) shall provide for, in the event that such
contract is prepaid, a prepayment that fully pays the Principal
Balance and includes accrued but unpaid interest due through the date
of prepayment in an amount at least equal to the Annual Percentage
Rate.
(ii) Schedule of RCC Receivables. The information set forth
in Schedule B to the Agreement shall be true and correct in all
material respects as
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of the close of business on the Cutoff Date, and no selection
procedures believed to be adverse to the Certificateholders shall have
been utilized in selecting the RCC Receivables.
(iii) No Government Obligor. None of the RCC Receivables
shall be due from the United States of America or any State or local
government or from any agency, department or instrumentality of the
United States of America, any State or local government.
(iv) RCC Receivables in Force. No RCC Receivable shall
have been satisfied, subordinated or rescinded, nor shall any Boat
have been released from the security interests granted by the related
RCC Receivable in whole or in part.
(v) No Waiver. No provision of a RCC Receivable shall
have been waived.
(vi) No Defenses. Except for the security interests in
favor of the NationsCredit Marine, RCC and the Depositor and the
Trustee, the RCC Receivables are free and clear of all security
interests, liens, charges, and encumbrances and to the best knowledge
of the Servicer no right of rescission, setoff, counterclaim or
defense shall have been asserted or threatened with respect to any RCC
Receivable.
(vii) No Liens. No liens or claims shall have been filed
for work, labor or materials relating to a Boat that shall be liens
prior to, or equal to the security interest in the Boat granted by the
RCC Receivable.
(viii) Insurance. The Obligor has obtained physical damage
insurance covering the Boat and the Obligor is required under the
terms of the RCC Receivable to maintain such insurance.
(ix) Lawful Assignment. No RCC Receivable shall have been
originated in, or shall be subject to the laws of any jurisdiction
under which the sale, transfer and assignment of such RCC Receivable
under the Agreement or pursuant to transfers of the Certificates shall
be unlawful, void or voidable.
(x) Security Interest. Upon the RCC Receivables being
conveyed to the Trust pursuant to the Assignment, the Trust shall have
a perfected security interest under the UCC in the RCC Receivables.
(xi) Ship Mortgage Act. No Boat related to any RCC
Receivable shall be required to be documented under the Ship Mortgage.
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(xii) Compliance with Law. Each RCC Receivable complies in
all material respects with all requirements of applicable Federal,
State, and local laws and regulations thereunder, including, without
limitation, usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Federal Trade Commission Act, the Fair
Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal
Trade Commission Credit Practices Rule, State unfair and deceptive
trade practice laws, and State adaptations of the National Consumer
Act and of the Uniform Consumer Credit Code, and any other applicable
consumer credit, equal credit opportunity and disclosure laws.
(xiii) Title. Immediately upon the sale and assignment
contemplated by the Assignment, the Trustee for the benefit of the
Certificateholders and the Surety Bond Issuer shall have good and
marketable title to each RCC Receivable, free and clear of all Liens,
encumbrances, security interests and rights of others; and the sale
and assignment has been perfected under the UCC.
(xiv) As of the Cutoff Date, not more than (a) ___% of the
number of Receivables, constituting approximately __% of the Initial
Pool Balance are related to Boats which have been repossessed by the
Servicer, (b) __% of the number of Receivables, constituting
approximately ___% of the Initial Pool Balance are 30 to 59 days
delinquent, (c) __% of the number of Receivables, constituting
approximately __% of the Initial Pool Balance are related to Boats
which are 60 to 89 days delinquent and (d) ___% of the number of
Receivables, constituting approximately __% of the Initial Pool
Balance are related to Boats which are 90 or more days delinquent.
(xv) Each Receivable creates a first priority perfected
security interest in the Boat financed thereby in favor of
NationsCredit Commercial (other than in the case of boat motors
subject to certificate of title statutes that provide for perfection
of the security interests in such boat motors by the filing of a UCC-1
financing statement).
(xvi) To the best of the Servicers knowledge, no such Liens
or claims are pending or threatened with respect to a Boat which may
be or become prior to or equal with the lien of the related
Receivable.
ARTICLE XIV
Distributions; Statements to
Certificateholders
SECTION 14.1. Accounts. (a) The Servicer shall establish and maintain
the Collection Account and the Certificate Account in the name of the Trustee
for the benefit of the
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Certificateholders and, to the extent herein provided, for the benefit of the
Surety Bond Issuer. The Collection Account shall be a segregated,
non-interest-bearing trust account initially established with the Trustee and
maintained with the Trustee so long as (i) the deposits of the Trustee have the
Required Deposit Rating or (ii) the Collection Account is maintained as a fully
segregated trust account. All amounts held in the Collection Account (other
than Purchase Amounts) shall be invested in Permitted Investments by the
Trustee, at the written direction of the Servicer, in each case such
investments maturing not later than the Deposit Date following the Collection
Period in which such amounts are so invested. Purchase Amounts deposited on a
Deposit Date shall not be invested. Such written direction shall certify that
any such investment is authorized by this Section 14.1 and complies with the
requirements of Permitted Investments as set forth in Schedule C. The
Certificate Account shall be a segregated, non-interest-bearing trust account
initially established with the Trustee and maintained with the Trustee for so
long as (x) the deposits of the Trustee have the Required Deposit Rating or (y)
the Certificate Account is maintained as a fully segregated trust account. The
amounts in the Certificate Account shall not be invested. Should the deposits
of the Trustee no longer have the Required Deposit Rating and the Collection
Account or the Certificate Account, as applicable, shall not be maintained as a
fully segregated trust account, then the Servicer shall, with the Trustee's
assistance as necessary, cause the Certificate Account and/or the Collection
Account to be moved, within 60 days after the occurrence of the later of the
loss of the Required Deposit Rating or the cessation of such accounts being
maintained as fully segregated trust accounts, to a bank or trust company
organized under the laws of the United States of any state thereof, the
deposits of which shall have the Required Deposit Rating.
(b) (i) The Depositor shall establish the Reserve Account in the
name of the Collateral Agent for the benefit of the
Certificateholders and the Surety Bond Issuer and shall clearly
indicate that such account has been pledged to the Collateral Agent
for the benefit of the Certificateholders and the Surety Bond
Issuer. The Reserve Account shall be a segregated,
non-interest-bearing trust account initially established and
maintained with the Trustee for so long as (x) the deposits of the
Trustee have the Required Deposit Rating or (y) the Reserve Account
is maintained as a fully segregated trust account. The Reserve
Account shall not be property of the Trust. All amounts held in
the Reserve Account shall be invested in Permitted Investments by
the Collateral Agent, at the written direction of the Depositor, in
each case such investments maturing not later than the Deposit Date
following the Collection Period in which such amounts are so
invested. Such written direction shall certify that any such
investment is authorized by this Section 14.1 and comply with the
requirements of Permitted Investments as set forth in Schedule C.
Should the deposits of the Collateral Agent no longer have the
Required Deposit Rating and the Reserve Account shall not be
maintained as a fully segregated trust account, then the Depositor
shall, with the Collateral Agent's assistance as necessary, cause
the Reserve Account to be moved, within 60 days after the
occurrence of the later of the loss of the Required Deposit Rating
or the cessation of such accounts being maintained as
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fully segregated trust accounts, to a bank or trust company
organized under the laws of the United States or any state thereof,
the deposits of which shall have the Required Deposit Rating.
(ii) On the date of the issuance of the Certificates, the
Depositor shall deposit the Reserve Account Initial Deposit into the
Reserve Account. The Depositor hereby grants to the Collateral Agent
for the benefit of the Certificateholders and the Surety Bond Issuer a
security interest in and to the Reserve Account and any and all
Account Property credited thereto from time to time, including, but
not limited to, Permitted Investments, to secure payment of the
Certificates according to their terms. Amounts held from time to time
in the Reserve Account will continue to be held by the Collateral
Agent for the benefit of the Certificateholders and the Surety Bond
Issuer, but the Reserve Account shall not be an asset of the Trust.
Funds held in the Reserve Account shall be remitted to the Depositor
upon the Depositor's written request upon the termination of the
Trust. By acceptance of their Certificates or interest therein and by
execution and delivery of the Reimbursement Agreement by the Surety
Bond Issuer, the Certificateholders and Certificate Owners and the
Surety Bond Issuer, respectively, shall be deemed to have appointed
Bankers Trust Company as Collateral Agent. Bankers Trust Company
hereby accepts such appointment as Collateral Agent.
(iii) With respect to the Account Property in respect of the
Reserve Account, the Collateral Agent agrees that:
A. any Account Property that is held in deposit accounts
shall be held solely in a bank with the Required Deposit Rating; and
each such bank with the Required Deposit Rating shall be subject to
the exclusive custody and control of the Collateral Agent, and the
Collateral Agent shall have sole signature authority with respect
thereto;
B. any Account Property that constitutes Physical Property
shall be delivered to the Collateral Agent in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Collateral Agent, or a
financial intermediary (as such term is defined in Section 8-313(4) of
the Relevant UCC) acting solely for the benefit of the
Certificateholders;
C. any Account Property that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered to the Collateral Agent in accordance
with paragraph (b) of the definition of "Delivery" and shall be
maintained by the Collateral Agent, pending
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maturity or disposition, through continued book-entry registration of
such Account Property as described in such paragraph; and
D. any Account Property that is an "uncertificated
security" under Article 8 of the Relevant UCC and that is not governed
by clause (C) above shall be delivered to the Collateral Agent in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Collateral Agent, pending maturity or
disposition, through continued registration of the Collateral Agent's
(or its nominee's) ownership of such security.
Effective upon Delivery of any Account Property in the form
of Physical Property, book-entry securities or uncertificated
securities, the Collateral Agent shall be deemed to have purchased
such Account Property for value, in good faith and without notice of
any adverse claim thereto.
(iv) The Depositor and the Servicer agree to take or cause
to be taken such further actions, to execute, deliver and file or
cause to be executed, delivered and filed such further documents and
instruments (including, without limitation, any financing statements
under the Relevant UCC or this Agreement) as may be determined to be
necessary, in order to perfect the interests created by this Section
14.1(b) and otherwise effectuate the purposes, terms and conditions of
this Section 14.1(b).
SECTION 14.2. Collections. The Servicer shall remit to the Collection
Account within two Business Days after receipt thereof all Collections, any
amounts referred to in clauses (ii) and (iv) of the definition of Available
Funds, each as collected during the Collection Period; provided, however, that
so long as NationsCredit Commercial is acting as the Servicer, the Servicer
shall be permitted to make remittances of Collections, any amounts referred to
in clause (ii) of the definition of Available Funds and Liquidation Proceeds to
the Collection Account in next-day funds or immediately available funds by 12:30
p.m. New York City time on the Deposit Date immediately following such
Collection Period if the specific terms and conditions set forth below in this
Section 14.2 are satisfied and only for so long as such terms and conditions are
satisfied:
(i) the Servicer shall be NationsCredit Commercial or any
other Successor Servicer pursuant to Section 17.3;
(ii) there exists no Event of Default (as described below);
(iii) if the Servicer does not have a short term debt rating
or deposit rating, as applicable, of at least A-1 from S&P and P-1
from ▇▇▇▇▇'▇, a guaranty, letter of credit, surety bond or other
similar instrument is issued covering Collections, any amounts
referred to in clause (ii) of the definition of Available
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Funds and Liquidation Proceeds held by NationsCredit Commercial or its
Successor, which is acceptable to the Rating Agencies and the Surety
Bond Issuer and issued by an entity, which has a short-term debt or
deposit rating, as applicable, of at least A-1 from S&P and P-1 from
▇▇▇▇▇'▇; and
(iv) the Servicer, the Trustee, the Depositor and the Surety
Bond Issuer shall not have received any notice from S&P or ▇▇▇▇▇'▇
that failure to deposit such funds more frequently will result in a
reduction or withdrawal of the then current rating on the Certificates
by either S&P or ▇▇▇▇▇'▇.
The Trustee shall not be deemed to have knowledge of any event or
circumstance under clause (ii) above that would require remittance by the
Servicer of Collections and Liquidations Proceeds to the Collection Account two
Business Days after receipt thereof unless the Trustee has received notice of
such event or circumstance from the Depositor, the Servicer or the Surety Bond
Issuer in an Officer's Certificate or from the Holders of Certificates
evidencing not less than 25% of the Certificate Balance.
SECTION 14.3. Application of Collections. As of each Determination
Date, all Collections for the related Collection Period shall be applied as
follows:
With respect to each Receivable (other than a Purchased Receivable or
a Defaulted Receivable), payments by or on behalf of the Obligor shall be
applied first to late payment and extension fees, second to interest accrued on
the Receivable, third to principal due on the Receivable during the related
Collection Period, fourth to insurance premiums or amounts due on loans to the
Obligors to finance the payment of insurance premiums for collateral protection
insurance purchased by the Servicer, and fifth to administrative charges, if
any. Last, any excess shall be applied to prepay the Principal Balance of the
Receivable.
SECTION 14.4. Additional Deposits. (a) The Servicer and/or the
Depositor shall deposit in the Collection Account the aggregate Purchase Amount
with respect to Purchased Receivables and the Servicer shall deposit therein all
amounts to be paid under Section 12.2, 13.7 and 20.2. All such deposits shall be
made in immediately available funds by 12:30 p.m. New York City Time on the
Deposit Date relating to the Collection Period during which such repurchase,
purchase or other obligation arose. The Trustee shall deposit in the Certificate
Account the aggregate of any amounts received from the Surety Bond Issuer
pursuant to Section 14.5(a)(iii) on the date of receipt thereof.
(b) If the Servicer shall be required pursuant to Section 14.2 to
remit Collections to the Collection Account two Business Days after receipt
rather than on a monthly basis, then, if the Servicer is NationsCredit
Commercial or an affiliate thereof is the servicer it may remit payments
collected on Unsold Contracts as well as payments collected on Receivables and
Liquidation Proceeds to the Collection Account. Upon receipt of an Officer's
Certificate of the Servicer identifying the amount of funds in the Collection
Account representing Collections
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attributable to Unsold Contracts, the Trustee shall transfer such funds in
accordance with the instructions contained in such Officer's Certificate.
SECTION 14.5. Distributions. (a) (i) on each Deposit Date, the Trustee
shall transfer all amounts on deposit in the Collection Account to the
Certificate Account, in immediately available funds, less any funds identified
in an Officer's Certificate of the Servicer as proceeds (x) of Unsold Contracts
and (y) of Collections on the Receivables allocable to late payment and
extension fees, administrative charges and the premiums of collateral protection
insurance purchased by the Servicer, provided, however, that in the event that
the Servicer is required to make deposits to the Collection Account two Business
Days after receipt pursuant to Section 14.2, the amount of Available Funds
transferred from the Collection Account to the Certificate Account will include
only those funds that were deposited into the Collection Account in the
Collection Period relating to such Distribution Date. The amount of the transfer
from the Collection Account to the Certificate Account shall be set forth in the
Servicer's Certificate for such Distribution Date.
(ii) on each Deposit Date, the Trustee shall transfer from
the Reserve Account to the Certificate Account an amount equal to the
lesser of (x) the amount on deposit in the Reserve Account and (y) an
amount equal to the shortfall, if any, between, (A) Available Funds
for such Collection Period and (B) the sum of (1) the Monthly Interest
Payment and any Carry-Over Monthly Interest, (2) the Monthly Servicing
Fee and any Carry-Over Servicing Fee to be distributed to the Servicer
pursuant to Section 14.5(b)(ii) and (3) the Monthly Principal Payment
and any Carry-Over Monthly Principal Payment, each for the related
Distribution Date (collectively "Priority Distributions") (the amount
transferred pursuant to this clause (ii) is the "Reserve Account
Withdrawal Amount" for such Deposit Date).
The Reserve Account Withdrawal Amount shall be set forth in the
Servicer's Certificate with respect to each Distribution Date.
(iii) If on any Determination Date the Servicer has reported
to the Trustee in the Servicer's Certificate that the Servicer has
determined that Available Funds for the related Distribution Date
together with any Reserve Account Withdrawal Amount for such
Distribution Date are insufficient to provide for the Priority
Distribution on such Distribution Date (the amount of such
insufficiency is referred to as the "Surety Drawing Amount" for such
Distribution Date, then, after receipt of such Servicer's Certificate,
the Trustee shall promptly (and in any event not later than three
Business Days prior to the Distribution Date) deliver a completed
demand for payment under the Surety Bond to the Surety Bond Issuer
requesting payment in an amount equal to the Surety Drawing Amount for
such Distribution Date. The Surety Bond Issuer shall pay or cause to
be paid the amount of such demand for payment to the Trustee for
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credit to the Certificate Account no later than the later of 11:00
a.m. on the Deposit Date and the [second] Business Day after the
Surety Bond Issuer receives a demand for payment.
(b) on each Distribution Date, as set forth in the Servicer's
Certificate for such Distribution Date, the Trustee will make the following
distributions from the Certificate Account in the following order of priority:
(i) to the Certificateholders of record as of the related
Record Date, the Monthly Interest Payment and any Carry-Over Monthly
Interest;
(ii) if the Servicer is not NationsCredit Commercial or an
affiliate thereof, to the Servicer, the Servicing Fee and any
Carry-Over Servicing Fee;
(iii) to the Certificateholders of record as of the related
Record Date, the Monthly Principal Payment and any Carry-Over Monthly
Principal;
(iv) if NationsCredit Commercial or an affiliate thereof is
the Servicer, to the Servicer, the Servicing Fee and any Carry-Over
Servicing Fee;
(v) to the Surety Bond Issuer, any amounts owing to the
Surety Bond Issuer hereunder and pursuant to the Reimbursement
Agreement and not paid;
(vi) to the Collateral Agent, an amount up to the Specified
Reserve Account Requirement for deposit into the Reserve Account; and
(vii) to the Depositor, any remaining amounts.
Distributions to Certificateholders, except in the case of
distributions under Section 20.1, shall be made by check mailed by the Trustee
to each Certificateholder's respective address of record on the Certificate
Register (or, where a Clearing Agency is the Certificateholder, by delivery of
immediately available funds) and distributions to the Servicer, the Surety Bond
Issuer, the Collateral Agent or the Depositor shall be made by wire transfer of
immediately available funds.
SECTION 14.6. Net Deposits. For so long as the Servicer shall be
entitled pursuant to Section 14.2 to remit Collections on a monthly basis rather
than more frequently, the Servicer may make the remittances pursuant to Sections
14.2 and 14.4 above net of amounts to be distributed to the Servicer pursuant to
Section 14.5(b). Nonetheless, the Servicer shall account for all the above
described remittances and distributions in the Servicer's Certificate as if the
amounts were deposited and/or transferred separately.
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SECTION 14.7. Statements to Certificateholders. (a) On each
Distribution Date, the Servicer shall provide to the Trustee the Statement to
Certificateholders, setting forth for the Collection Period relating to such
Distribution Date the following information (stated in the case of items (i),
(ii) and (iii), on the basis of $1,000 initial principal amount) as of such
Distribution Date a copy of which shall be forwarded by the Trustee to each
Certificateholder on such Distribution Date:
(i) The amount of the Certificateholder's distribution which
constitutes the Monthly Principal Payment (including any Carry-Over
Monthly Principal);
(ii) The amount of the Certificateholder's distribution
which constitutes the Monthly Interest Payment (including any
Carry-Over Monthly Interest);
(iii) The Certificateholder's pro rata portion of the
Servicing Fee (including any Carry-Over Servicing Fee);
(iv) The Certificate Balance and the Certificate Factor as
of the close of business on such Distribution Date.
(b) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of the Agreement, the
Trustee shall mail, to each Person who at any time during such calendar year
shall have been a Certificateholder, a statement containing the sum of the
amounts determined in each of clauses (i) through (iii), for such calendar year
or, in the event such Person shall have been a Certificateholder during a
portion of such calendar year, for the applicable portion of such year.
ARTICLE XIV A
The Surety Bond
SECTION 14A.1. The Surety Bond. The Servicer and the Transferor agree,
simultaneously with the execution and delivery of this Agreement, to cause the
Surety Bond Issuer to issue the Surety Bond to the Trustee for the benefit of
the Trust in accordance with the terms thereof.
SECTION 14A.2. Preference Events. If the payment of a Surety Drawing
Amount pursuant to the Surety Bond is voided (a "Preference Event") under any
applicable bankruptcy, insolvency, receivership or similar law in an Insolvency
Proceeding and, as a result of such a Preference Event, the Trustee is required
to return such voided payment, or any portion of such voided payment, in its
possession made in respect of the Certificates (an "Avoided Payment"), the
Trustee shall furnish to the Surety Bond Issuer (x) a certified copy of a final
order of a court exercising jurisdiction in such Insolvency Proceeding to the
effect that the Trustee is required to
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return any such payment or portion thereof during the term of the Surety Bond
because such payment was voided under applicable law, with respect to which
order the appeal period has expired without an appeal having been filed (the
"Final Order"), (y) an assignment, in form reasonably satisfactory to the
Surety Bond Issuer, irrevocably assigning to the Surety Bond Issuer all rights
and claims of the Trustee relating to or arising under such Avoided Payment and
(z) a Notice for Payment appropriately completed and executed by the Trustee.
Such payment shall be disbursed to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order and not
to the Trustee directly unless the Trustee has previously paid such amounts
pursuant to a court order or otherwise. The Trustee is not permitted to make a
claim on the Trust or on any Certificateholder for payments made to
Certificateholders under the Surety Bond which are characterized as preference
payments by any bankruptcy court having jurisdiction over any bankrupt Obligor
unless ordered to do so by such bankruptcy court.
SECTION 14A.3. Surrender of Surety Bond. The Trustee shall surrender
the Surety Bond to the Surety Bond Issuer for cancellation upon its expiration
in accordance with the terms thereof.
SECTION 14A.4. Replacement Surety Bond. In the event the rating of the
Surety Bond Issuer is downgraded by any Rating Agency such that the rating of
the Certificates is reduced, suspended or withdrawn, the Servicer shall be
permitted, in accordance with the terms of the Reimbursement Agreement, but
shall not be obligated, to substitute a new surety bond for the Surety Bond or
may arrange for any other form of credit enhancement; provided, however, that,
in each case, the rating of the Certificates following any such substitution
shall be the highest rating available for each of the Rating Agencies and
provided further that the Surety Bond Issuer is reimbursed for all amounts due
under this Agreement and the Reimbursement Agreement. It shall be a condition to
substitution of any such new surety bond or other form of credit enhancement
that there be delivered to the Trustee (i) an Officer's Certificate by the
Servicer stating that the conditions to such substitution set forth in this
Section 14A.04 (other than in clause (ii)) have been satisfied and (ii) a legal
opinion, acceptable in form to the Trustee, from counsel to the provider of such
surety bond or other form of credit enhancement with respect to the
enforceability thereof and such other matters as the Trustee may require. Upon
receipt of written notice of any such substitution from the Servicer and the
taking of physical possession of the replacement surety bond or other form of
credit enhancement, the Trustee shall, within five (5) Business Days following
receipt of such notice and such taking of physical possession, deliver the
Surety Bond marked "Cancelled" to the Surety Bond Issuer, and the Surety Bond
Issuer will have no further liability under the Surety Bond.
ARTICLE XV
The Certificates
SECTION 15.1. The Certificates. The Certificates shall be issued in
book-entry form in minimum denominations representing $1,000 of initial
principal balance of the
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Receivables and in integral multiples thereof; provided, however, that one
Certificate may be issued in a denomination that includes any residual amount
and that such Certificate shall be retained by the Depositor (the "Residual
Certificate"). The Certificates shall be executed by the Trustee on behalf of
the Trust solely in its capacity as Trustee by manual or facsimile signature of
a Trustee Officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be valid and binding
obligations of the Trust, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificates.
SECTION 15.2. Authentication of Certificates. The Trustee shall cause
the Certificates to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Depositor, signed by the
Depositor's chairman of the board, the president, any vice chairman of the
board, any vice president, the treasurer, any assistant treasurer or the
controller of the Depositor, without further corporate action by the Depositor,
in authorized denominations, pursuant to the Agreement. No Certificate shall
entitle its holder to any benefit under the Agreement, or shall be valid for any
purpose, unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit B hereto executed
by the Trustee by manual signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
SECTION 15.3. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 15.7, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall be the initial Certificate
Registrar.
(b) Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Trustee shall execute, authenticate and deliver,
in the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Trustee. At the option of a Holder, Certificates
may be exchanged for other Certificates of authorized denominations of a like
aggregate amount upon surrender of the Certificates to be exchanged at the
Corporate Trust Office.
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder or his attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer and exchange shall be canceled and
subsequently disposed of by the Trustee.
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(d) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
SECTION 15.4. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate shall be surrendered to the Certificate Registrar,
or if the Certificate Registrar shall receive evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (b) there shall be
delivered to the Certificate Registrar or the Trustee such security or indemnity
as may be required by them to save each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Trustee on behalf of the Trust shall execute and the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
denomination. In connection with the issuance of any new Certificate under this
Section 15.4, the Trustee and the Certificate Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 15.4 shall Constitute conclusive evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 15.5. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 14.5 and for all other purposes whatsoever, and neither the
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.
SECTION 15.6. Access to List of Certificateholders Names and
Addresses. At such time as the Certificates exist as Definitive Certificates,
the Trustee shall furnish or cause to be furnished to the Servicer and the
Surety Bond Issuer, within 15 days after receipt by the Trustee of a request
therefor from the Servicer or the Surety Bond Issuer in writing, a list, of the
names and addresses of the Certificateholders as of the most recent Record Date.
If three or more Certificateholders, or one or more Holders of Certificates
aggregating not less than 25% of the Certificate Balance, apply in writing to
the Trustee, and such application states that the applicants desire to
communicate with other Certificateholders with respect to their rights under the
Agreement or under the Certificates and such application shall be accompanied by
a copy of the communication that such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Each Holder, by receiving and holding a Certificate,
shall be deemed to have agreed to hold neither the Servicer nor the Trustee
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
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SECTION 15.7. Maintenance of Office or Agency. The Trustee shall
maintain in the Borough of Manhattan, the City of New York, an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and the Agreement may be served. The Trustee
initially designates the Corporate Trust Office as specified in the Agreement as
its office for such purposes. The Trustee shall give prompt written notice to
the Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 15.8. Book-Entry Certificates. The Certificates, upon original
issuance (except for the Residual Certificate), will be issued in the form of
one or more global Certificates registered in the name of the nominee of The
Depository Trust Company, the initial Clearing Agency, by or on behalf of the
Depositor. The Certificates delivered to The Depository Trust Company shall
initially be registered on the Certificate Register in the name of CEDE & CO.,
the nominee of the initial Clearing Agency, and no Certificate Owner will
receive a physical certificate representing such Certificate Owner's interest in
the Certificates, except as provided in Section 15.10. Unless and until
definitive, fully registered Certificates (the "Definitive Certificates") have
been issued to Certificate Owners pursuant to Section 15.10:
(i) the provisions of this Section 15.8 shall be in full
force and effect;
(ii) the Depositor, the Servicer, the Certificate Registrar
and the Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on the Certificates) as the
authorized representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section 15.8
conflict with any other provisions of the Agreement, the provisions of
this Section 15.8 shall control;
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Certificate Owners and
the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Depository Agreement, unless and until Definitive Certificates
are issued pursuant to Section 15.10, the initial Clearing Agency will
make book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest on the
Certificates to such Clearing Agency Participants; and
(v) whenever the Agreement requires or permits actions to be
taken based upon instructions or directions of Holders of Certificates
evidencing a specified percentage of the Pool Balance the Clearing
Agency will take such actions with respect to specified percentages of
the Pool Balance only at the
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direction of and on behalf of Clearing Agency Participants whose
holdings include undivided interests that satisfy such specified
percentages. DTC may take conflicting actions with respect to other
undivided interests to the extent that such actions are taken on
behalf of Clearing Agency Participants whose holdings include such
undivided interests.
SECTION 15.9. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under the Agreement, other
than to the Holder of the Residual Certificate, unless and until Definitive
Certificates shall have been issued to Certificate Owners pursuant to Section
15.10, the Trustee and the Servicer shall give all such notices and
communications specified herein to be given to Holders of the Certificates to
the Clearing Agency.
SECTION 15.10. Definitive Certificates. If (i) the Depositor advises
the Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities as Depository with respect to the
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (ii) the Depositor, at its option, elects to terminate the book-entry
system through the Clearing Agency, or (iii) after the occurrence of an Event of
Default, Certificate owners representing beneficial interests aggregating not
less than 51% of the Certificate Balance advise the Trustee and the Clearing
Agency through the Clearing Agency Participants in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in the best
interests of the Certificate Owners, then the Trustee through the Clearing
Agency shall notify all Certificate Owners of the occurrence of any such event
and of the availability through the Clearing Agency of Definitive Certificates.
Upon surrender by the Clearing Agency of the global Certificates representing
the Certificates and instructions for re-registration, the Trustee shall issue
the Definitive Certificates and deliver such Definitive Certificates in
accordance with the instructions of the Clearing Agency. Neither the Depositor,
the Certificate Registrar nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder. The Trustee shall not be liable if
the Trustee or the Depositor is unable to locate a qualified successor Clearing
Agency.
ARTICLE XVI
The Depositor
SECTION 16.1. Representations of Depositor. The Depositor makes the
following representations on which the Trustee relies in accepting the
Receivables in trust and executing and authenticating the Certificates.
(i) Organization and Good Standing. The Depositor shall have
been duly organized and shall be validly existing as a corporation in
good standing under the laws of the State of Delaware, with power and
authority to own its
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properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and had at
all relevant times, and shall have, power, authority and legal right
to acquire and own the Receivables.
(ii) Due Qualification. The Depositor shall be duly
qualified to do business as a foreign corporation in good standing,
and shall have obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business shall require such qualifications.
(iii) Principal Place of Business. The Depositor's
principal place of business is located in the State of Texas.
(iv) Power and Authority. The Depositor shall have the
power and authority to execute and deliver the Agreement and to carry
out its terms; the Depositor shall have full power and authority to
sell and assign the property to be sold and assigned to and deposited
with the Trustee as part of the Trust and shall have duly authorized
such sale and assignment to the Trustee by all necessary corporate
action; and the execution, delivery and performance of the Agreement
shall have been duly authorized by the Depositor by all necessary
corporate action.
(v) Valid Sale; Binding Obligations. The Agreement shall
evidence (A) a valid sale, transfer and assignment of the Receivables,
enforceable against creditors of and purchasers from the Depositor,
and (B) a legal, valid and binding obligation of the Depositor
enforceable in accordance with its terms.
(vi) No Violation. The consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time
or both) a default under, the articles of incorporation or by-laws of
the Depositor, or any indenture, agreement or other instrument to
which the Depositor is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or
other instrument (other than the Agreement); nor violate any law or,
to the best of the Depositor's knowledge, any order, rule or
regulation applicable to the Depositor of any court or of any Federal
or State regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties.
(vii) No Proceedings. There are no proceedings or
investigations pending, or to the Depositor's best knowledge,
threatened, before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
Depositor or its properties: (A) asserting the
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invalidity of the Agreement or the Certificates; (B) seeking to
prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by the Agreement; (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity
or enforceability of, the Agreement or the Certificates; or (D)
relating to the Depositor and which might adversely affect the Federal
income tax attributes of the Certificates.
(viii) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and
delivery by the Depositor of the Agreement, the Reimbursement
Agreement and the Certificates, the performance by the Depositor of
the transactions contemplated by the Agreement, the Reimbursement
Agreement and the Certificates, and the fulfillment by the Depositor
of the terms hereof, have been obtained; provided, however, that the
Depositor makes no representation or warranty regarding State
securities or "blue sky" laws in connection with the distribution of
the Certificates.
SECTION 16.2. Liability of Depositor; Indemnities. The Depositor shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under the Agreement:
(i) The Depositor shall indemnify, defend and hold harmless
the Trustee (which for purposes of this Section 16.2 shall include its
directors, employees, officers and agents) and the Trust from and
against any taxes that may at any time be asserted against the Trustee
or the Trust with respect to, and as of the date of, the sale of the
Receivables to the Trustee or the issuance and original sale of the
Certificates, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes
(but, in the case of the Trust, not including any taxes asserted with
respect to ownership of the Receivables or Federal or other income
taxes arising out of the transactions contemplated by the Agreement)
and costs and expenses in defending against the same.
(ii) The Depositor shall indemnify, defend and hold harmless
the Trustee (which for purposes of this Section 16.2 shall include its
directors, employees, officers and agents) and the Trust from and
against any loss, liability or expense incurred by reason of (a) the
Depositor's willful misfeasance, bad faith or negligence in the
performance of its duties under the Agreement, or by reason of
reckless disregard of its obligations and duties under the Agreement,
(b) the Depositor's violation of Federal or State securities laws in
connection with the registration of the sale of the Certificates or
(c) any action taken by the Trustee at the direction of the Servicer
pursuant to Section 13.1 or otherwise.
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Indemnification under this Section 16.2 shall survive the termination
of the Agreement and the resignation or removal of the Trustee, and shall
include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Depositor shall have made any indemnity payments
to the Trustee pursuant to this Section 16.2 and the Trustee thereafter shall
collect any of such amounts from others, the Trustee shall repay such amounts to
the Depositor, without interest.
SECTION 16.3. Merger or Consolidation of, or Assumption of the
Obligations of Depositor. Any Person (a) into which the Depositor may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Depositor shall be a party, or (c) which may succeed to the properties and
assets of the Depositor substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Depositor under the Agreement and the Reimbursement Agreement, shall be
the successor to the Depositor hereunder without the execution or filing of any
document or any further act by any of the parties to the Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 12.1 shall have been
breached and no Event of Default, and no event that, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing, (ii) the Depositor shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
16.3 and (iii) the Depositor shall have delivered an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Trustee in the
Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interest. The Depositor shall provide notice of any merger,
consolidation or succession pursuant to this Section 16.3 to each Rating Agency
and the Surety Bond Issuer. Notwithstanding anything herein to the contrary, the
Depositor shall not consummate any transaction of a type referred to in clauses
(a), (b) or (c) above unless at such time or prior thereto the foregoing
agreement of assumption shall have been executed and the conditions described in
clauses (i), (ii) and (iii) shall have been satisfied.
SECTION 16.4. Limitation on Liability of Depositor and Others. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under the Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 16.5. Depositor May Own Certificates. The Depositor and any
Person controlling, controlled by or under common control with, the Depositor
may in its individual or any other capacity become the owner or pledgee of
Certificates with the same rights as it would
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have if it were not the Depositor or an affiliate thereof, except as otherwise
provided in the definition of "Certificateholder" specified in Section 11.1.
Certificates so owned by or pledged to the Depositor or such controlling or
commonly controlled Person shall have an equal and proportionate benefit under
the provisions of the Agreement, without preference, priority or distinction as
among all the Certificates.
SECTION 16.6. Depositor's Interest in Reserve Account; No Transfer.
The Depositor hereby acknowledges that the Reserve Account shall not be a part
of the Trust. The Depositor hereby acknowledges that any amounts on deposit in
the Reserve Account (and any investment earnings thereon) is owned directly by
it, and the Depositor agrees to treat the same as its assets (and earnings) for
federal tax and all other purposes. Funds deposited therein shall be
distributable to the Collection Account, the Surety Bond Issuer and the
Depositor as described in this Agreement and in the Reimbursement Agreement.
ARTICLE XVII
The Servicer
SECTION 17.1. Representations of Servicer. The Servicer makes the
following representations on which the Trustee relies in accepting the
Receivables in trust and executing and authenticating the Certificates. The
representations speak as of the execution and delivery of the Agreement and
shall survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Servicer shall have
been duly organized and shall be validly existing as a corporation in
good standing under the laws of the State of its incorporation, with
power and authority to own its properties and to conduct its business
as such properties shall be currently owned and such business is
presently conducted, and had at all relevant times, and shall have,
power, authority and legal right to acquire, own, sell and service the
Receivables and to hold the Receivable Files as custodian on behalf of
the Trustee.
(ii) Due Qualification. The Servicer shall be duly qualified
to do business as a foreign corporation in good standing, and shall
have obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business (including the servicing of the Receivables as
required by the Agreement) shall require such qualifications.
(iii) Power and Authority. The Servicer shall have the power
and authority to execute and deliver the Agreement and to carry out
its terms; and the executions delivery and performance of the
Agreement shall have been duly authorized by the Servicer by all
necessary corporate action.
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(iv) Valid Sale; Binding Obligations. The sale of the
Receivables by NationsCredit Commercial to the Depositor constitutes a
valid sale, transfer and assignment of the Receivables, enforceable
against creditors of and purchasers from NationsCredit Commercial; and
the Agreement shall constitute a legal, valid and binding obligation
of the Servicer enforceable in accordance with its terms.
(v) No Violation. The consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time
or both) a default under, the articles of incorporation or by-laws of
the Servicer, or any indenture, agreement or other instrument to which
the Servicer is a party or by which it shall be bound; nor result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other
instrument (other than the Agreement); nor violate any law or, any
order, rule or regulation applicable to the Servicer of any court or
of any Federal or State regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the
Servicer or its properties.
(vi) No Proceedings. There are no proceedings or
investigations pending, or, to the Servicer's knowledge, threatened,
before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or
its properties: (A) asserting the invalidity of the Agreement or the
Certificates; (B) seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions contemplated by the
Agreement; (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, the Agreement
or the Certificates; or (D) relating to the Servicer and which might
adversely affect the Federal income tax attributes of the
Certificates.
(vii) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and
delivery by the Servicer of the Agreement and the Reimbursement
Agreement, the performance by the Servicer of the transactions
contemplated by the Agreement, the Reimbursement Agreement and the
Certificates, and the fulfillment by the Servicer of the terms hereof,
have been obtained; provided, however, that the Servicer makes no
representation or warranty regarding State securities or "blue sky"
laws in connection with the distribution of the Certificates.
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SECTION 17.2. Liability of Servicer; Indemnities. The Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under the Agreement:
(i) The Servicer shall defend, indemnify and hold harmless
the Trustee (which for purposes of this Section 17.2 shall include its
directors, officers, employees and agents), the Trust, the Certificate
holders and the Surety Bond Issuer from and against any and all costs,
expenses, losses, damages, claims and liabilities, arising out of or
resulting from the use, ownership or operation by the Servicer or any
affiliate thereof of a Boat.
(ii) The Servicer shall indemnify, defend and hold harmless
the Trustee, (which for purposes of this Section 17.2 shall include
its directors, officers, employees and agents), the Trust and the
Surety Bond Issuer from and against any taxes that may at any time be
asserted against the Trustee, the Trust or the Surety Bond Issuer with
respect to the transactions contemplated herein or in the
Reimbursement Agreement, including, without limitation, any sales,
gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Trust, not
including any taxes asserted with respect to, and as of the date of,
the sale of the Receivables to the Trust or the issuance and original
sale of the Certificates, or asserted with respect to ownership of the
Receivables, or Federal or other income taxes arising out of
distributions on the Certificates) and costs and expenses in defending
against the same.
(iii) The Servicer shall indemnify, defend and hold harmless
the Trustee (which for purposes of this Section 17.2 shall include its
directors, officers, employees and agents), the Trust, and the
Certificateholders from and against any and all costs, expenses,
losses, claims, damages and liabilities to the extent that such cost,
expense, loss, claim, damage or liability arose out of, or was imposed
upon the Trustee, the Trust, the Surety Bond Issuer or the
Certificateholders through, the negligence, willful misfeasance or bad
faith of the Servicer in the performance of its duties under the
Agreement or the Reimbursement Agreement or by reason of reckless
disregard of its obligations and duties under the Agreement or the
Reimbursement Agreement.
(iv) The Servicer shall indemnify, defend and hold harmless
the Trustee (which for purposes of this Section 17.2 shall include its
directors, officers, employees and agents), from and against all
costs, expenses, losses, claims, damages and liabilities arising out
of or incurred in connection with the acceptance or performance of the
trusts and duties, including any action by the Trustee at the
direction of the Servicer taken pursuant to Section 13.1, herein
contained and the trusts and duties contained in the Reimbursement
Agreement, except to the extent that such cost, expense, loss, claim,
damage or liability: (a)
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shall be due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Trustee; (b) relates to any tax
other than the taxes with respect to which either the Depositor or the
Servicer shall be required to indemnify the Trustee; (c) shall arise
from Trustee's breach of any of its representation or warranties set
forth in Section 19.8; (d) shall be one as to which the Depositor is
required to indemnify the Trustee; or (e) shall arise out of or be
incurred in connection with the acceptance or performance by the
Trustee of the duties of successor Servicer hereunder unless such
cost, expense, loss, claim, damage or liability was caused by the act
or omission of the predecessor Servicer.
For purposes of this Section 17.2, in the event of the termination of
the rights and obligations of NationsCredit Commercial (or any successor thereto
pursuant to Section 17.3) as Servicer pursuant to Section 18.1, or a resignation
by such Servicer pursuant to the Agreement, such Servicer shall be deemed to be
the Servicer pending appointment of a successor Servicer (other than the
Trustee) pursuant to Section 18.2.
Indemnification under this Section 17.2 shall survive termination of
the Agreement and the resignation or removal of the Trustee and shall include,
without limitation, reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer shall have made any indemnity payments pursuant to
this Section 17.2 and the recipient thereafter collects any of such amounts from
others, the recipient shall promptly repay such amounts to the Servicer, without
interest.
SECTION 17.3. Merger or Consolidation of, or Assumption of the
Obligations of the Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger or consolidation to
which the Servicer shall be a party, or (c) which may succeed to the properties
and assets of the Servicer substantially as a whole, or any Person, more than
50% of the voting stock of which is, directly or indirectly, owned by
NationsBank Corporation, which Person executed an agreement of assumption to
perform every obligation of the Servicer hereunder and under the Reimbursement
Agreement, shall be the successor to the Servicer under the Agreement without
further act on the part of any of the parties to the Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default shall have happened and be continuing, (ii) the
Servicer shall have delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 17.3, and (iii) the
Servicer shall have delivered to the Trustee an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Trustee in the
Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interest. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section 17.3 to each Rating Agency
and the Surety Bond Issuer.
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Notwithstanding anything herein to the contrary, the Servicer shall not
consummate any transaction of a type referred to in clauses (a), (b) or (c)
above unless at or prior thereto the foregoing agreement of assumption shall
have been executed and the conditions described in clauses (i), (ii) and (iii)
shall have been satisfied.
SECTION 17.4. Limitation on Liability of Servicer and Others. (a)
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Trust or the
Certificateholders, except as provided under the Agreement, for any action taken
or for refraining from the taking of any action pursuant to the Agreement;
provided, however, that this provision shall not protect the Servicer or any
such person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties under the Agreement. The
Servicer and any director or officer or employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under the Agreement.
(b) Except as provided in the Agreement, the Servicer shall not be
under any obligation to appear in, prosecute, or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with the Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of the Agreement and
the rights and duties of the parties to the Agreement and the interests of the
Certificateholders under the Agreement.
ARTICLE XVIII
Default
SECTION 18.1. Events of Default. (a) If any one of the following
events (each an "Event of Default") shall occur and be continuing:
(i) Any failure by the Servicer to deliver to the Trustee
for distribution to Certificateholders any proceeds or payment
required to be so delivered under the terms of the Certificates and
the Agreement that shall continue unremedied for a period of three
Business Days after written notice from the Trustee is received by the
Servicer as specified in the Agreement or after discovery of such
failure by an officer of the Servicer; or
(ii) Failure on the part of the Servicer or the Depositor
duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Depositor (as the case
may be) set forth in the Certificates or in the Agreement, which
failure shall (a) materially adversely affect the rights of
Certificates and (b) continue unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same
to be remedied, shall have
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been given (1) to the Servicer or the Depositor (as the case may be),
by the Trustee, or (2) to the Servicer or the Depositor (as the case
may be) and to the Trustee by either the Holders of Certificates
evidencing in the aggregate not less than 51% of the Certificate
Balance and the Surety Bond Issuer; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator for the Servicer
or the Depositor in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities, or similar proceedings, or for
the winding up or liquidation of their respective affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(iv) The consent by the Servicer or the Depositor to the
appointment of a conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings of or relating to the Servicer or
the Depositor or relating to substantially all their property; or the
Servicer or the Depositor shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(v) Any representation or warranty by the Servicer in the
Agreement shall prove to have been incorrect in any material respect
when made or when delivered, which continues to be incorrect in any
material respect for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by either the Holders of Certificates
evidencing not less than 25% of the Certificate Balance or the Surety
Bond Issuer and as a result of which the interests hereunder of
Certificateholders are materially and adversely affected;
then, and in each and every case, so long as an Event of Default shall not have
been remedied, either the Trustee, or the Holders of Certificates evidencing
not less than 51% of the Certificate Balance, in each case with the consent of
the Surety Bond Issuer (unless a Surety Bond Issuer Default shall have occurred
and be continuing), by notice then given in writing to the Servicer (and to the
Trustee and the Surety Bond Issuer if given by the Certificateholders) may
terminate all the rights and obligations of the Servicer under the Agreement (a
"Servicer Transfer").
(b) In addition to a Servicer Transfer effected pursuant to clause (a)
of this Section 18.1, the Surety Bond Issuer (unless a Surety Bond Issuer
Default shall have occurred and be continuing) with notice in writing to the
Servicer, may effect a Servicer Transfer upon the occurrence of any of the
following events: (i) the Depositor or Servicer, as the case may be, shall
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fail to pay when due any amount payable by it for the benefit of the Surety
Bond Issuer; (ii) an Event of Default occurs under this Agreement, (iii) the
Surety Bond Issuer determines that the performance of the Servicer is not, in
the opinion of the Surety Bond Issuer, in conformity with the Servicing
Standards; (iv) if, with respect to any Distribution Date, the average of the
Net Credit Loss Ratio for the three preceding calendar months exceeds ___%; or
(v) any Trigger Event (as defined in the Reimbursement Agreement).
(c) On or after the receipt by the Servicer of such written notice
which effects a Servicing Transfer, all authority and power of the Servicer
under the Agreement, whether with respect to the Certificates or the Receivables
or otherwise, shall, without further action, pass to and be vested in the
Trustee or such successor Servicer as may be appointed under Section 18.2
pursuant to and under this Section 18.1; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of the Receivables and related
documents, or otherwise. The predecessor Servicer shall cooperate with the
successor Servicer and the Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under the Agreement,
including the transfer to the successor Servicer for administration by it of all
cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received with respect to a Receivable. All
reasonable costs and expenses (including attorneys' fees and disbursements)
incurred in connection with transferring the Receivable Files to the successor
Servicer and amending the Agreement and the Reimbursement Agreement to reflect
such succession as Servicer pursuant to this Section 18.1 shall be paid by the
predecessor Servicer upon presentation of reasonable documentation of such costs
and expenses.
SECTION 18.2. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 18.1 or the Servicer's
resignation in accordance with the terms of the Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under the
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date 45 days from the delivery to the Trustee of written notice of such
resignation (or written confirmation of such notice of resignation) in
accordance with the terms of the Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and an accompanying Opinion of Counsel. In the event of
the Servicer's resignation or termination hereunder, a successor Servicer
appointed by the Trustee and consented to by the Surety Bond Issuer (unless a
Surety Bond Issuer Default shall have occurred and be continuing) in writing
which consent shall not be unreasonably withheld or the Trustee (unless it is
unwilling or legally unable to do so) will succeed to all the responsibilities,
duties and liabilities of the Servicer under the Agreement and will be entitled
to similar compensation arrangements. The successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Trustee and the
Surety Bond Issuer (unless a Surety Bond Issuer Default shall have occurred and
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be continuing). Notwithstanding the above, the Trustee, if it is unwilling or
unable so to act, shall appoint or petition a court of competent jurisdiction
to appoint, an established institution, having a net worth of at least
$50,000,000 and whose regular business shall include the servicing of marine
retail installment sale contracts, as the successor to the Servicer under the
Agreement.
(b) Upon appointment, the successor Servicer shall be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, and shall be entitled to the Servicing Fee
and other fees payable to the Servicer pursuant to Section 13.8 hereof, and all
the rights granted to the predecessor Servicer, by the terms and provisions of
the Agreement. No such appointment shall make the successor Servicer responsible
for any liabilities of the predecessor Servicer incurred prior to such
appointment or for any acts, omissions or misrepresentations of such predecessor
Servicer.
(c) In connection with such appointment, the Trustee may, with the
consent of the Surety Bond Issuer, make such arrangements for the compensation
of such successor Servicer out of payments on Receivables as it and such
successor Servicer shall negotiate on an arms-length basis, but in no event
shall the Servicing Fee Rate be greater than ___%.
SECTION 18.3. Notification to Certificateholders. Upon any termination
of, or appointment of a successor to, the Servicer pursuant to this Article
XVIII, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency.
SECTION 18.4. Waiver of Past Defaults. So long as no Surety Bond
Issuer Default shall have occurred and be continuing, the Surety Bond Issuer
(or, if a Surety Bond Issuer Default shall have occurred and be continuing, the
Holders of Certificates evidencing in the aggregate not less than a majority of
the Certificate Balance as of the most recent Record Date) may, on behalf of all
the Holders of Certificates, waive any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to or payments from the Certificate Account in
accordance with the Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been remedied for every purpose of the Agreement. No such
waiver shall impair such Certificateholders' rights or the Surety Bond Issuer's
rights with respect to subsequent defaults.
ARTICLE XIX
The Trustee
SECTION 19.1. Duties of Trustee. (a) The Trustee, both prior to the
occurrence of an Event of Default and after an Event of Default shall have been
cured or waived, shall undertake to perform only such duties as are specifically
set forth in the Agreement. If an Event of Default shall have occurred and shall
not have been cured or waived and, the Trustee has
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received notice of such Event of Default pursuant to Section 13.10(b), the
Trustee shall exercise such of the rights and powers vested in it by the
Agreement, and shall use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs; provided, however, that if the Trustee shall assume the
duties of the Servicer pursuant to Section 18.2, the Trustee in performing such
duties shall use the degree of skill and attention customarily exercised by a
servicer with respect to comparable receivables that it services for itself or
others. For purposes of this Article XIX, an Event of Default shall be deemed
to have been cured upon the appointment of a successor Servicer (including the
Trustee in such capacity).
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that shall be specifically required to be furnished pursuant to
any provision of the Agreement, shall examine them to determine whether they
conform to the requirements of the Agreement.
(c) The Trustee shall take and maintain custody of the Schedule of
Receivables included as an exhibit to the Agreement and shall retain all
Servicer's Certificates identifying Receivables that become Purchased
Receivables.
(d) No provision of the Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act (other than errors in judgment) or its own bad faith; provided, however,
that:
(i) Prior to the occurrence of an Event of Default (or in
the case of an Event of Default described in clause (i) of Section
18.1, before the Trustee has received notice of such Event of Default
pursuant to Section 13.10(b)), and after the curing or waiving of all
such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express
provisions of the Agreement, the Trustee shall not be liable except
for the performance of such duties and obligations as shall be
specifically set forth in the Agreement, no implied covenants or
obligations shall be read into the Agreement against the Trustee and,
in the absence of bad faith or willful misfeasance on the part of the
Trustee, the Trustee may conclusively rely on the truth of the
statements and the correctness of the opinions expressed in any
certificates or opinions furnished to the Trustee and conforming to
the requirements of the Agreement;
(ii) The Trustee shall not be liable for an error of
judgment made in good faith by a Trustee Officer, unless it shall be
proved that the Trustee shall have been negligent in ascertaining the
pertinent facts;
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken in good faith in
accordance with the Agreement or
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at the direction of the Holders of Certificates evidencing not less
than 25% of the Certificate Balance relating to the time, method and
place of continuing any proceeding for any remedy available to the
Trustee, or relating to the exercise of any trust power conferred upon
the Trustee, under the Agreement;
(iv) The Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer
referred to in clauses (i) or (ii) of Section 18.1, or of any failure
by the Depositor to comply with the obligations of the Depositor
referred to in clause (ii) of Section 18.1, or of any incorrect
representation or warranty referred to in clause (v) of Section 18.1,
unless a Trustee Officer assigned to the Corporate Trust receives
written notice of such failure or incorrectness from the Servicer or
the Depositor, as the case may be, from the Surety Bond Issuer or from
the Holders of Certificates evidencing not less than 25% of the
Certificate Balance, it being understood that knowledge of the
Servicer or the Servicer as custodian, in its capacity as agent for
the Trustee, is not attributable to the Trustee;
(v) Without limiting the generality of this Section 19.1 or
Section 19.4, the Trustee shall have no duty (i) to see to any
recording, filing or depositing of the Agreement or any agreement
referred to therein or any financing statement or continuation
statement evidencing a security interest in the Receivables or the
Boats, or to see to the maintenance if any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any
thereof, (ii) to see to any insurance of the Boats or Obligors or to
effect or maintain any such insurance, (iii) to see to the payment or
discharge of any tax, assessment or other governmental charge or any
Lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Trust, (iv) to confirm or verify the
contents of any reports or certificates of the Servicer delivered to
the Trustee pursuant to the Agreement believed by the Trustee to be
genuine and to have been signed or presented by the proper party or
parties, (v) to inspect the Boats at any time or ascertain or inquire
as to the performance or observance of any of the Depositor's or the
Servicer's representations, warranties or covenants or the Servicer's
duties and obligations as Servicer and as custodian of the Receivable
Files under the Agreement, or (vi) to prepare or make any filings with
the Securities and Exchange Commission with respect to the Trust; and
(vi) The Trustee shall not be deemed to be a fiduciary for
the Surety Bond Issuer in its capacity as such, and the Trustee's sole
responsibility with respect to the Surety Bond Issuer, in its capacity
as such, shall be to perform those duties with respect to the Surety
Bond Issuer as are specifically set forth herein and no implied
covenants shall be read into the Agreement against the Trustee with
respect to the Surety Bond Issuer.
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(e) Neither the Trustee nor the Collateral Agent shall be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, and the Trustee shall have no
liability in connection with losses on Permitted Investments made pursuant to
this Agreement or in the exercise of any of its rights or powers, and none of
the provisions contained in the Agreement shall in any event require the Trustee
to perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under the Agreement except during such time, if any,
as the Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Servicer in accordance with the terms of the
Agreement.
(f) Notwithstanding anything to the contrary contained herein, the
Collateral Agent shall have the same rights and protections afforded the
Trustee.
SECTION 19.2 Trustee's Certificate. On or as soon as practicable after
each Distribution Date on which Receivables shall be assigned to the Depositor
or the Servicer, as applicable, pursuant to Section 19.3, the Trustee shall
execute a Trustee's Certificate, based on the information contained in the
Servicer's Certificate for the related Collection Period, amounts deposited to
the Certificate Account and notices received pursuant to the Agreement,
identifying the Receivables repurchased by the Depositor pursuant to Section
12.2, purchased by the Servicer pursuant to Section 13.7 or 20.2 during such
Collection Period, and shall deliver such Trustee's Certificate, accompanied by
a copy of the Servicer's Certificate for such Collection Period to the Depositor
or the Servicer, as the case may be. The Trustee's Certificate submitted with
respect to such Distribution Date shall operate, as of such Distribution Date,
as an assignment, without recourse, representation or warranty, to the Depositor
or the Servicer, as the case may be, of all the Trustee's right, title and
interest in and to such repurchased Receivable, and all security and documents
relating thereto, such assignment being an assignment outright and not for
security.
SECTION 19.3. Trustee's Assignment of Purchased Receivables. With
respect to all Receivables repurchased by the Depositor pursuant to Section 12.2
or purchased by the Servicer pursuant to Section 13.7 or 20.2, the Trustee shall
by a Trustee's Certificate assign, without recourse, representation or warranty,
to the Depositor or the Servicer (as the case may be) all the Trustee's right,
title and interest in and to such Receivables, and all security interests and
documents relating thereto.
SECTION 19.4. Certain Matters Affecting Trustee. Except as otherwise
provided in Section 19.1:
(i) The Trustee may rely conclusively and shall be protected
in acting or refraining from acting upon any resolution, Officer's
Certificate, Servicer's Certificate, certificate of auditors, or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond, or other paper or
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document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(ii) The Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
under the Agreement in good faith and in accordance with such advice
or Opinion of Counsel.
(iii) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by the Agreement, or to
institute, conduct or defend any litigation under the Agreement or in
relation to the Agreement, at the request, order or direction of any
of the Certificateholders pursuant to the provisions of the Agreement,
unless such Certificateholders shall have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred therein or thereby.
(iv) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by the Agreement.
(v) Prior to the occurrence of an Event of Default (or in
the case of an Event of Default described in clause (i) of Section
18.1, before the Trustee has received notice of such Event of Default
pursuant to Section 13.10(b)), and after the curing or waiving of all
Events of Default that may have occurred, the Trustee shall not be
bound to make any investigation into the facts of matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, or other paper or
document, unless requested in writing so to do by the Surety Bond
Issuer or by Holders of Certificates evidencing not less than 25% of
the Certificate Balance; provided, however, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation shall
be, in the opinion of the Trustee, not assured to the Trustee by the
security afforded to it by the terms of the Agreement, the Trustee may
require indemnity satisfactory to it against such cost, expense or
liability as a condition to so proceeding. The expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee,
shall be reimbursed by the Servicer upon demand. Nothing in this
clause (v) shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Obligors.
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties under the Agreement either directly or
by or through agents or attorneys or a custodian. The Trustee shall
not be responsible for any misconduct
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or negligence of any such agent or custodian appointed with due care
by it hereunder or of the Servicer in its capacity as Servicer or
custodian.
(vii) Subsequent to the sale of the Receivables by the
Depositor to the Trustee, on behalf of the Trust, the Trustee shall
have no duty of independent inquiry, except as may be required by
Section 19.1, and the Trustee may rely upon the representations and
warranties and covenants of the Depositor and the Servicer contained
in the Agreement with respect to the Receivables and the Receivable
Files.
SECTION 19.5. Trustee Not Liable for Certificates or Receivables. (a)
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Depositor or the Servicer, as the case may be, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee shall make no
representations as to the validity or sufficiency of the Agreement or of the
Certificates (other than the certificate of authentication on the Certificates),
or of any Receivable or related document.
(b) The Trustee shall at no time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any security
interest in any Boat or any Receivable, or the perfection and priority of such a
security interest or the maintenance of any such perfection and priority, or for
or with respect to the efficacy of the Trust or its ability to generate the
payments to be distributed to Certificateholders under the Agreement, including,
without limitation: the existence, condition, location and ownership of any
Boat; the review of any Receivable File; the existence and enforceability of any
physical damage insurance thereon; the existence and contents of any Receivable
or Receivable File or any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment; the
completeness of any Receivable or Receivable File; the performance or
enforcement of any Receivable; the compliance by the Depositor or the Servicer
with any warranty or representation made under the Agreement or in any related
document and the accuracy of any such warranty or representation prior to the
Trustee's receipt of notice or other discovery of any noncompliance therewith or
any breach thereof; any investment of monies by the Servicer or any loss
resulting therefrom; the acts or omissions of the Depositor, the Servicer or any
Obligor; any action of the Servicer taken in the name of the Trustee; or any
action by the Trustee taken at the instruction of the Servicer; provided,
however, that the foregoing shall not relieve the Trustee of its obligation to
perform its duties under the Agreement.
(c) Except with respect to a claim based on the failure of the Trustee
to perform its duties under the Agreement or based on the Trustee's negligence
or willful misconduct, no recourse shall be had for any claim based on any
provision of the Agreement, the Certificates or any Receivable or assignment
thereof against the Trustee in its individual capacity, the Trustee shall not
have any personal obligation, liability or duty whatsoever to any
Certificateholder or any other Person with respect to any such claim, and any
such claim shall be
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asserted solely against the Trust or any indemnitor who shall furnish indemnity
as provided in the Agreement.
(d) The Trustee shall not be accountable for the use or application by
the Depositor of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Servicer in
respect of the Receivables.
(e) Any obligation of the Trustee to give any notice or statement to
any rating agency hereunder shall constitute only a best efforts obligation and
such notice or statement shall be so provided only as a matter of courtesy and
accommodation, the Trustee having no liability to any rating agency or any other
Person for any failure to so provide such notice or statement. The Depositor
hereby certifies to the Trustee that each Rating Agency is rating the
Certificates and that each Rating Agency's address is as set forth in Section
21.5. The Trustee may rely on the accuracy of such certification until it
receives from the Depositor an Officer's Certificate superseding such
certification.
SECTION 19 .6. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
and may deal with the Depositor and the Servicer in banking transactions with
the same rights as it would have if it were not Trustee.
SECTION 19.7. Trustee's Fees and Expenses. (a) The Servicer shall pay
to the Trustee, and the Trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
and in the execution of the trusts created by the Agreement, and in the exercise
and performance of any of the Trustee's powers and duties under the Agreement.
The Servicer shall pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) incurred or made by the Trustee in
accordance with any provisions of the Agreement except any such expense,
disbursement or advance as may be attributable to its willful misfeasance,
negligence or bad faith.
(b) The Depositor shall indemnify the Trustee (which for purposes of
this subsection (b) shall include its directors, officers, employees and agents)
for, and shall hold it harmless against, any loss, liability or expense incurred
without willful misfeasance, negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of the Agreement and the
Trust and the trusts created by the Reimbursement Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties under the
Agreement or the Reimbursement Agreement. Additionally, the Depositor, pursuant
to Section 16.2, and the Servicer, pursuant to Section 17 .2, respectively,
shall indemnify the Trustee with respect to certain matters, and
Certificateholders, pursuant to Section 19.4, shall upon the circumstances
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therein set forth, indemnify the Trustee under certain circumstances. In the
event that the Depositor fails to pay the amounts it is obligated to pay to the
Trustee pursuant to this Section 19.7(b), the Trustee shall be entitled to
receive such amounts from the Servicing Fee prior to the payment thereof to the
Servicer. The indemnification provided under this Section 19.7 shall survive
termination of the Agreement and removal or resignation of the Trustee.
SECTION 19.8. Representations and Warranties of Trustee. The Trustee
shall make the following representations and warranties on which the Depositor
and Certificateholders shall rely:
(i) The Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of
New York.
(ii) The Trustee has full corporate power, authority and
legal right to execute, deliver and perform its duties and obligations
under the Agreement, and shall have taken all necessary action to
authorize the execution, delivery and performance by it of the
Agreement.
(iii) The Agreement shall have been duly executed and
delivered by the Trustee.
SECTION 19.9. Eligibility Requirements for Trustee. The Trustee under
the Agreement shall at all times: be a corporation having an office in the same
State as the location of the Corporate Trust Office as specified in the
Agreement; be organized and doing business under the laws of such State or the
United States of America; be authorized under such laws to exercise corporate
trust powers; have a combined capital and surplus of at least $50,000,000; and
be subject to supervision or examination by Federal or State authorities.
If the Trustee shall publish reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 19.9, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section l9.9, the Trustee shall resign immediately in the
manner and with the effect specified in Section 19.10.
SECTION 19.10. Resignation or Removal of Trustee. (a) The Trustee and
the Collateral Agent may at any time resign and be discharged from the trusts
hereby created by giving not less than 60 days' prior written notice thereof to
the Servicer; provided, however, that any such resignation in either capacity
shall be deemed a resignation as both Trustee and Collateral Agent. Upon
receiving such notice of resignation, the Servicer with the consent of the
Surety Bond Issuer (unless a Surety Bond Issuer Default shall have occurred and
be continuing) shall promptly appoint a successor Trustee and Collateral Agent
by written instrument, in
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duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and Collateral Agent and one copy to the successor Trustee and
Collateral Agent. If no successor Trustee and Collateral Agent shall have been
so appointed and have accepted appointment within 60 days after the giving of
such notice of resignation, the resigning Trustee and Collateral Agent may
petition any court of competent jurisdiction for the appointment of a successor
Trustee and Collateral Agent.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 19.9 and shall fail to resign after
written request there for by the Servicer, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Servicer may remove the Trustee and Collateral Agent. If it shall remove the
Trustee and Collateral Agent under the authority of the immediately preceding
sentence, the Servicer shall promptly appoint a successor trustee and collateral
agent acceptable to the Surety Bond Issuer by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Trustee and Collateral
Agent so removed and one copy to the successor Trustee and Collateral Agent.
(c) Any resignation or removal of the Trustee and Collateral Agent and
appointment of a successor Trustee and Collateral Agent pursuant to any of the
provisions of this Section 19.10 shall not become effective until acceptance of
appointment by the successor Trustee pursuant and Collateral Agent pursuant to
Section 19.11 and payment of all fees and expenses owed to the outgoing Trustee
and Collateral Agent. The Servicer shall provide notice of such resignation or
removal of the Trustee to each Rating Agency.
SECTION 19.11. Successor Trustee and Collateral Agent. (a) Any
successor Trustee or Collateral Agent appointed pursuant to Section 19.10 be
approved as both Trustee and Collateral Agent and shall execute, acknowledge and
deliver to the Servicer and to its predecessor Trustee and Collateral Agent an
instrument accepting such appointment under the Agreement, and thereupon the
resignation or removal of the predecessor Trustee and Collateral Agent shall
become effective and such successor Trustee and Collateral Agent, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor under the Agreement, with like
effect as if originally named as Trustee and Collateral Agent. The predecessor
Trustee and Collateral Agent shall deliver to the successor Trustee and
Collateral Agent all documents, statements and monies held by it under the
Agreement; and the Servicer and the predecessor Trustee and Collateral Agent
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor Trustee and Collateral Agent all such rights, powers, duties and
obligations.
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(b) No successor Trustee and Collateral Agent shall accept appointment
as provided in this Section 19.11, unless at the time of such acceptance such
successor Trustee shall be eligible pursuant to Section 19.9.
(c) Upon acceptance of appointment by a successor Trustee and
Collateral Agent pursuant to this Section 19.11, the Servicer shall mail notice
of the successor of such Trustee and Collateral Agent under the Agreement to all
Holders of Certificates at their addresses as shown in the Certificate Register.
If the Servicer shall fail to mail such notice within 10 days after acceptance
of appointment by the successor Trustee and Collateral Agent, the successor
Trustee and Collateral Agent shall cause such notice to be mailed at the expense
of the Servicer.
SECTION 19.12. Merger or Consolidation of Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 19.9, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto; anything herein to the contrary notwithstanding.
SECTION 19.13. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of the Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Boat may at the time be located, the Servicer and the
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust, and to vent in such Person, in such capacity
and for the benefit of the Certificateholders, such title to the Trust, or any
part thereof, and, subject to the other provisions of this Section 19.13, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider necessary or desirable. If the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in the case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee under the Agreement shall be required to meet the terms of
eligibility as a successor trustee pursuant to Section 19.9 and no notice of a
successor trustee pursuant to Section 19.11 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
pursuant to Section 19.11.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co trustee
is not authorized to act separately without the
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Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee under the Agreement or as successor to
the Servicer under the Agreement), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) No trustee under the Agreement shall be personally
liable by reason of any act or omission of any other trustee under the
Agreement; and
(iii) The Servicer and the Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to the Agreement and the conditions
of this Article XIX. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trusts or separately,
as may be provided therein, subject to all the provisions of the Agreement,
specifically including every provision of the Agreement relating to the conduct
of, affecting the liability of, or affording protection to the Trustee. Each
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall become incapable of acting, resign or be removed, all its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Notwithstanding anything to the contrary in the Agreement,
the appointment of any separate trustee or co-trustee shall not relieve the
Trustee of its obligations and duties hereunder.
ARTICLE XX
Termination
SECTION 20.1. Termination of the Trust. (a) The respective obligations
and responsibilities of the Depositor, the Servicer, the Trustee and the Trust
created hereby shall terminate upon (i) the maturity or other liquidation of the
last Receivable and the disposition of any amounts received upon liquidation of
any remaining Receivables, including Defaulted Receivables, (ii) the payment to
the Certificateholders of all amounts required to be paid to them
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pursuant to the Agreement and the payment to the Surety Bond Issuer of all
amounts required to be paid to it pursuant to the Agreement and the
Reimbursement Agreement and disposition of all property held by the Trust or
(iii) the purchase as of the last day of any Collection Period by the Servicer
at its option, pursuant to Section 20.2, of the corpus of the Trust; provided,
however, that in no event shall the trust created by the Agreement continue
beyond the expiration of 21 years from the date hereof. The Servicer shall
promptly notify the Trustee of any prospective termination pursuant to this
Section 20.1.
(b) Notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to Certificateholders mailed not earlier than the 15th day
and not later than the 25th day of the month next preceding the specified
Distribution Date stating (A) the Distribution Date upon which final payment of
the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (B) the amount of
any such final payment, and (C) if applicable, that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trustee
therein specified. The Trustee shall give such notice to the Certificate
Registrar (if other than the Trustee) at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders amounts
distributable on such Distribution Date pursuant to Section 14.5.
(c) In the event that all the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to the Agreement. Any funds remaining in the Trust after exhaustion of
such remedies shall be distributed by the Trustee upon written direction of the
Servicer delivered to the Trustee to the United Way of Metropolitan Dallas.
As soon as practicable after the Distribution Date specified for the
final distribution or upon such other date upon which all amounts to be paid to
Certificateholders pursuant to the Agreement have been paid, the Trustee shall
deliver a letter to the Surety Bond Issuer in substantially the form of Exhibit
C to the Surety Bond.
SECTION 20.2. Optional Purchase of All Receivables. On the last day of
any Collection Period as of which the Pool Balance shall decline to 5% or less
of the Original Pool Balance, the Servicer shall have the option to purchase the
corpus of the Trust. To exercise such
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option, the Servicer shall deposit pursuant to Section 14.4 in the Collection
Account an amount equal to the aggregate Purchase Amount for the Receivables as
of such day, plus the appraised value of any other property held by the Trust;
less the amount of all Collections, any amounts referred to in clause (ii) of
the definition of Available Funds, and Liquidation Proceeds received by the
Servicer during such Collection Period, and shall succeed to all interests in
and to the Trust provided, however, that without the consent of the Surety Bond
Issuer the Servicer may not make any such purchase if, after giving effect to
such purchase and the distributions on the related Distribution Date there
would be outstanding amounts under the Reimbursement Agreement and the
Agreement, which have not been paid to the Surety Bond Issuer.
ARTICLE XXI
Miscellaneous Provisions
SECTION 21.1. Amendment. (a) The Agreement may be amended by the
Depositor, the Servicer and the Trustee, without the consent of the
Certificateholders or the Surety Bond Issuer, to cure any ambiguity, to correct
or supplement any provisions in the Agreement, or to add any other provisions
with respect to matters or questions arising under the Agreement that shall not
be inconsistent with the provisions of the Agreement; provided, however, that
such action will not, in the opinion of counsel satisfactory to the Trustee,
materially and adversely affect the interest of any Certificateholder or the
Surety Bond Issuer.
(b) The Agreement may also be amended by the Depositor, the Servicer
and the Trustee, with the consent of the Surety Bond Issuer and the Holders of
Certificates (which consent of any Holder of a Certificate given pursuant to
this Section 21.1 or pursuant to any other provision of the Agreement shall be
conclusive and binding on such Holder and on all future Holders of such
Certificate and of any Certificate issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of such consent is
made upon the Certificate) evidencing not less than 51% of the Certificate
Balance as of the most recent Record Date, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement, or of modifying in any manner the rights of the
Certificateholders or the Surety Bond Issuer; provided, however, that no such
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, Collections of payments on Receivables or distributions
that are required to be made on any Certificate, or (ii) reduce the aforesaid
percentage required to consent to any such amendment, in each case without the
consent of the holders of all Certificates then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Servicer shall furnish written notification of the substance of such amendment
or consent to each Rating Agency. Promptly after the execution of any such
amendment or consent, the Trustee shall forward such written notification
provided to the Trustee by the Servicer of the substance of such amendment or
consent to each Certificateholder.
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(d) It shall not be necessary for the consent of Certificateholders
pursuant to this Section 21.1 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe, including
the establishment of record dates pursuant to the Depository Agreement.
(e) Prior to the execution of any amendment to the Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by the Agreement
and the Opinion of Counsel referred to in Section 21.2(h)(i)(1). The Trustee
may, but shall not be obligated to, enter into any such amendment which affects
the Trustees own rights, duties or immunities under the Agreement or otherwise.
(f) The provisions combined in clauses (a) and (b) of this Section
21.1 shall not apply to an amendment to the definition of "Specified Reserve
Account Requirement."
SECTION 21.2. Protection of Title to Trust. (a) The Depositor shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Certificateholders and the Trustee in the Receivables and in the proceeds
thereof. The Depositor shall deliver (or cause to be delivered) to the Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed by the Depositor in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Trustee at least 30
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Depositor and the Servicer shall give the Trustee at least 30
days' prior written notice of any relocation of its principal executive office
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement, and shall promptly
file any such amendment. The Servicer shall at all times maintain each office
from which it shall service Receivables, and its principal executive office,
within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature
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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) The Servicer shall maintain its computer systems so that, from and
after the time of sale under the Agreement of the Receivables to the Trustee,
the Servicer's master computer records (including any back-up archives) that
refer to a Receivable shall indicate clearly with reference to the particular
grantor trust that such Receivable is owned by the Trustee. Indication of the
Trustee's ownership of a Receivable, on behalf of the Trust, shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
Receivable shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in marine
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Trustee.
(g) The Servicer shall permit the Trustee and its agents at any time
during normal business hours to inspect, audit and make copies of and abstracts
from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee, within
five Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Trust, together with a reconciliation of such
list to the Schedule of Receivables and to each of the Servicer's Certificates
furnished before such request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Trustee:
(1) promptly after the execution and delivery of the
Agreement and of each amendment thereto, an Opinion of Counsel either
(a) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Trustee in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are
given, or (b) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a
date during such 90-day period, either
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(a) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Trustee, on behalf of the Trust, in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (b) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and
protect such interest.
Each Opinion of Counsel referred to in clause (i)(l) or (i)(2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) The Depositor shall, to the extent required by applicable law,
cause the Certificates to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities Exchange
Act of 1934, as amended, within the time periods specified in such sections, and
shall prepare and make all filings required by such Act with respect to the
Trust.
(k) For the purpose of facilitating the execution of the Agreement and
for other purposes, the Agreement may be executed simultaneously in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and all of which counterparts shall constitute but one and the same instrument.
SECTION 21.3. Limitation on Rights of Certificateholders. (a) The
death or incapacity of any Certificateholder shall not operate to terminate the
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties to
the Agreement or any of them.
(b) No Certificateholder shall have any right to vote (except as
provided in Section 21.1 or 18.4) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties to the
Agreement, nor shall anything in the Agreement set forth or contained in the
terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken pursuant to any provision of the Agreement.
(c) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of the Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to the Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less than 25% of the
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Certificate Balance shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee under the
Agreement and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 30 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding and during such 30-day period no direction
inconsistent with such written request has been given to the Trustee pursuant
to this Section 21.3 or Section 18.4; no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
them selves of any provisions of the Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right, under the Agreement except in the manner provided in the
Agreement and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 21.3, each Certificateholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
SECTION 21.4. GOVERNING LAW. THE AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 21.5. Notices. All demands, notices and communications under
the Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested, or by overnight courier or telecopied (with the
original followed by mail within 24 hours) and shall be deemed to have been duly
given upon receipt (a) in the case of the Depositor, to the agent for service as
specified in the Agreement, at the following address: NationsCredit
Securitization Corporation, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Telecopy (▇▇▇) ▇▇▇-▇▇▇▇, or at such other address as shall be designated by the
Depositor in a written notice to the Trustee, (b) in the case of the Servicer,
to the agent for service as specified in the Agreement, at the following
address: NationsCredit Commercial Corporation of America, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Telecopy (▇▇▇) ▇▇▇-▇▇▇▇, or at such other address
as shall be designated by the Servicer in a written notice to the Trustee, (c)
in the case of the Trustee, at the Corporate Trust Office, Telecopy (212)
250-6439 and (d) in the case of the Surety Bond Issuer, at the following
address: Capital Markets Assurance Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Managing Director-Consumer Structured Finance, Telecopy
(▇▇▇) ▇▇▇-▇▇▇▇. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in the Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder shall
receive such notice. All communications and copies of all notices and reports
from the Trustee or the Servicer shall be mailed to each Rating Agency at the
following addresses:
▇▇▇▇▇'▇ Investors Services, Inc.
-▇▇-
▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇ ▇▇▇▇▇)
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ABS Monitoring Department
Standard & Poor's Ratings Services
▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇)
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Asset-Backed Surveillance Group
SECTION 21.6. Severability of Provisions. If any or more of the
covenants, agreements, provisions or terms of the Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of the Agreement and shall in no way affect the validity or
enforceability of the other provisions of the Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 21.7. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 16.3 and 17.3 and as provided
in the provisions of the Agreement concerning the resignation of the Servicer,
the Agreement may not be assigned by the Depositor or the Servicer without the
prior written consent of the Trustee, the Holders of Certificates evidencing not
less than 66% of the Certificate Balance and the Surety Bond Issuer, provided
that the consent of Surety Bond Issuer shall not be unreasonably withheld.
SECTION 21.8. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and, upon
authentication thereof by the Trustee pursuant to Section 15.2 or 15.3,
Certificates shall be deemed fully paid.
SECTION 21.9. No Petition. Neither the Trustee nor the Servicer will
not institute against, or join any other Person in instituting against, the
Depositor or the Trust any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, until __________________.
SECTION 21.10. Surety Bond Issuer as Controlling Party. Each
Certificateholder by purchase of the Certificates held by it acknowledges that
the Trustee on behalf of the Trust, as partial consideration of the issuance of
the Surety Bond, has agreed that
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the Surety Bond Issuer shall have certain rights hereunder for so long as no
Surety Bond Issuer Default shall have occurred and be continuing. So long as a
Surety Bond Issuer Default has occurred and is continuing, any provision giving
the Surety Bond Issuer the right to direct, appoint or consent to, approve of,
or take any action under this Agreement shall be inoperative during the period
of such Surety Bond Issuer Default and such right shall instead vest in the
Trustee acting at the direction of the Certificateholders. The Surety Bond
Issuer may disclaim any of its rights and powers under this Agreement (but not
its duties and obligations under the Surety Bond or the Reimbursement
Agreement) upon delivery of a written notice to the Trustee. The Surety Bond
Issuer may give or withhold any consent hereunder in its reasonable discretion.
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EXHIBIT A
A-1
68
EXHIBIT B: FORM OF CERTIFICATE
[Front]
NATIONSCREDIT GRANTOR TRUST 1997-1
NATIONSCREDIT GRANTOR TRUST 1997-1 _____% MARINE
RECEIVABLE-BACKED CERTIFICATE
evidencing a fractional undivided interest in
the Trust, as defined below, the property of
which includes a pool of retail installment sale
contracts secured by new and used boats, boat
motors and boat trailers, and sold or caused to
be sold to the Trust by NationsCredit
Securitization Corporation.
(This Certificate does not represent an interest
in or obligation of NationsCredit Commercial
Corporation of America, NationsCredit
Securitization Corporation or any affiliate
thereof, except to the extent described below.)
NUMBER CUSIP
CERTIFICATE MATURITY
DATE: $________________
THIS CERTIFIES THAT _________________is the registered owner of a
$________ dollars nonassessable, fully-paid, fractional undivided interest in
the NationsCredit Grantor Trust 1997-1 (the "Trust") formed by NationsCredit
Securitization Corporation, a Delaware corporation (the "Depositor"). The Trust
was created pursuant to a Pooling and Servicing Agreement, including the
Standard Terms and Conditions of Agreement incorporated by reference therein,
dated as of April 30, 1997 (the "Agreement") among the Depositor, NationsCredit
Commercial Corporation of America, as Servicer, and Bankers Trust Company, as
Trustee (the "Trustee") and as Collateral Agent (the "Collateral Agent"), a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement. This Certificate is one of the
duly authorized Certificates designated as "NationsCredit Grantor Trust 1997-1
___% Marine Receivable-Backed Certificates" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to time,
the holder of this Certificate by virtue of the acceptance hereof assents and by
which such holder is bound. The property of the
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Trust includes a pool of retail installment sale contracts (the "Receivables")
secured by new and used boats, boat motors and any accompanying boat trailers
("Boats"), all payments (other than late fees and certain other amounts)
received thereunder, in the case of Simple Interest Receivables, and due
thereunder, in the case of Precomputed Receivables after April 30, 1997, the
interest of the Depositor in the security interests in the Boats, such amounts
as may be held from time to time in certain trust accounts, the Surety Bond,
any property that shall have secured a Receivable and that shall have been
acquired by the Trustee, the Purchase Agreement, proceeds from claims on
physical damage, credit life and disability insurance policies covering Boats,
or the Obligors as the case may be, the interests of the Depositor in any
proceeds from recourse to Dealers on the Receivables, and the proceeds of all
of the foregoing.
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on June 16, 1997, to the person in whose name
this Certificate is registered at the close of business on the Business Day
prior to such Distribution Date (the "Record Date"), such Certificateholder's
fractional undivided interest in the Monthly Interest Payment, any Carry-Over
Monthly Interest, the Monthly Principal Payment and any Carry-Over Monthly
Principal, all as more specifically set forth in the Agreement. On the
Certificate Maturity Date, each Certificateholder shall be entitled to receive
an amount equal to such Certificateholder's fractional undivided interest in the
aggregate principal balance of the Receivables as of the last day of the related
Collection Period.
Distributions on this Certificate will be made by the Trustee by check
or money order mailed to the Person entitled thereto without the presentation or
surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency maintained for that purpose by the
Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
[Unless this Certificate is presented by an authorized representative
of The Depository Trust Company to the Trustee or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of CEDE & CO. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, CEDE & CO., has an
interest herein.]
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Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Certificate to be duly executed.
DATED: NATIONSCREDIT GRANTOR
TRUST 1997-1
By: BANKERS TRUST COMPANY,
as Trustee
By: ____________________________
Title:
Authenticated:
BANKERS TRUST COMPANY,
as Trustee
By: ______________________
Title:
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[Reverse]
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Servicer, the Trustee or any affiliate of any of them. The
Certificates are limited in right of payment as more specifically set forth in
the Agreement. A copy of the Agreement may be examined during normal business
hours at the principal office of the Depositor, and at such other places, if
any, designated by the Depositor, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement at any
time by the Depositor and the Trustee with the consent of the Surety Bond Issuer
and of the Holders of Certificates evidencing not less than 51% of the Pool
Balance. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and on all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange here for or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee in its capacity as
Certificate Registrar, or by any successor Certificate Registrar, in the Borough
of Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The Certificates are issuable only as registered
Certificates without coupons in denominations of $1,000 and integral multiples
hereof. As provided in the Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charges payable in connection
therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Certificate Registrar, nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the
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Trust. The Servicer may at its option purchase the corpus of the Trust at a
price specified in the Agreement, and such purchase of the Receivables and
other property of the Trust will effect early retirement of the Certificates;
however, such right of purchase is exercisable only as of the last day of a
Collection Period as of which the Pool Balance is equal to or less than 5% of
the Original Pool Balance.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
(Please print or typewrite name and address, including postal zip
code, and taxpayer I.D. or Social Security Number of assignee)
the within certificate, and all rights thereunder, hereby irrevocably
constituting and appointing __________________________ Attorney to transfer
said Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated: *
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
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NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA
MONTHLY SERVICER REPORT
CURRENT DATE:
I. Monthly Principal Payment:
(A) Principal received from Obligors:
(1) Total principal collected
(2) Percent relating to Unsold Contracts
(3) Principal owed to Trust
(B) Purchased Receivables
(C) Liquidation Proceeds:
(D) Collections on Defaulted Receivables
II. Principal to Investors:
(A) Principal Balance at beginning of month
(B) Certificate Factor at beginning of month
(C) Principal Balance at end of month
(D) Monthly principal due investors
(E) Carry-over Monthly Principal
III. Monthly Interest Payment:
(A) Principal Balance at beginning of month
(B) Pass-Through Rate %
(C) Monthly Interest Payment
(D) Carry-over Monthly Interest
IV. Draw on Reserve Account and Surety Bond
(A) Total Available Funds:
(1) Principal received from Obligors (or Dealers and
insurers on non-Defaulted Receivables)
(2) Interest received from Obligors
(3) Cash received from Depositor/Servicer on
Purchased Receivables
(4) Collections on Defaulted Receivables
(5) Liquidation Proceeds
(6) Total Cash received
D-1
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(B) Distributions:
(1) Carry-over Monthly Interest
(2) Carry-over Monthly Principal
(3) Monthly Interest Payment
(4) Monthly Principal Payment
(5) Servicing Fee
(C) Total Surplus/(Deficiency)
(D) Amounts paid to Reserve Account under the Pooling and Servicing
Agreement and the Reimbursement Agreement
(E) Reserve Account balance
(F) Reserve Account withdrawal
(G) Surety Bond demand
V. Reconciliation of Reserve Account:
(A) Beginning Reserve Account balance
(B) Interest on Reserve Account
(C) Interest on Collection Account
(D) Amounts paid to Reserve Account under Reimbursement Agreement:
(1) Available Funds
(2) Less: distributions
(3) Surety Bond demands
(4) Excess funds available
(E) Reserve Account withdrawal
(F) Reserve Account prior to release of excess
(G) Required Reserve Account balance:
(1) As percent of Principal Balance
(2) Minimum Reserve Account balance
(3) Required amount
(H) Release of excess
(I) Ending Reserve Account balance
VI. Delinquency/Charge-off Experience:
(A) Principal Balance at end of month
(B) Number of Units
(C) Delinquency $ #
30-59 Days $0.00 0
60-89 Days $0.00 0
90+ Days $0.00 0
TOTAL $0.00 0
(D) As % of EOM Outstanding
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(E) Receivables charged-off
during month $0.00 0
(F) Recoveries of Receivables previously charged-off
(G) Net loss during month
(H) Annualized monthly net loss rate
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EXHIBIT E
NATIONSCREDIT COMMERCIAL CORPORATION OF AMERICA
CERTIFICATEHOLDER STATEMENT
A-C (Per $1,000 Initial Balance):
(A) The amount of the Certificateholder's
distribution which constitutes the Monthly
Principal Payment (including any Carry-
Over Monthly Principal) ........................ $________
(B) The amount of the Certificateholder's
distribution which constitutes the Monthly
Interest Payment (including any Carry-
Over Monthly Interest) ......................... $________
(C) The Certificateholder's pro rata portion of
the Servicing Fee (including any Carry-
Over Monthly Servicing Fee) .................... $________
(D) Certificate Balance as of Record Date ......... $________
(E) Certificate Factor as of Record Date .......... $________
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EXHIBIT F-1
Trustee's Certificate
pursuant to Section 19.3 of
the Pooling and Servicing Agreement
Bankers Trust Company, as trustee (the "Trustee") of the NationsCredit
Grantor Trust 1997-1 created pursuant to the Pooling and Servicing Agreement
(including the Standard Terms and Conditions of Agreement incorporated by
reference therein, the "Agreement") dated as of April 30, 1997, among
NationsCredit Securitization Corporation, as Depositor (the "Depositor"),
NationsCredit Commercial Corporation of America, as Servicer, and the Trustee,
does hereby sell, transfer, assign and otherwise convey to the Depositor,
without recourse, representation or warranty, all the Trustee's right, title and
interest in and to all the Receivables (as defined in the Agreement) identified
in the attached Servicer's Certificate as "Purchased Receivables," which are to
be repurchased by the Depositor pursuant to Section 12.2 of the Agreement and
all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ________day of
199_.
___________________________________
Title:
F-1-1
80
EXHIBIT F-2
Trustee's Certificate
pursuant to Section 19.3 of
the Pooling and Servicing-Agreement
Bankers Trust Company, as trustee (the "Trustee") of she NationsCredit
Grantor Trust 1996-1 created pursuant to the Pooling and Servicing Agreement
(including the Standard Terms and Conditions of Agreement incorporated by
reference therein, the "Agreement") dated as of April 30, 1997, among
NationsCredit Securitization Corporation, as Depositor, NationsCredit Commercial
Corporation of America, as Servicer (the "Servicer"), and the Trustee, does
hereby sell, transfer, assign and otherwise convey to the Servicer, without
recourse, representation or warranty, all the Trustee's right, title and
interest in and to all the Receivables (as defined in the Agreement) identified
in the attached Servicer's Certificate as "Purchased Receivables," which are to
be purchased by the Servicer pursuant to Section 13.7 or Section 20.2 of the
Agreement, and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this __________day of
19_.
___________________________________
Title:
F-2-1