Exhibit 4.2
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SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 2002-1,
as the Trust
MMCA AUTO RECEIVABLES TRUST,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of March 1, 2002
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TABLE OF CONTENTS
Page
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ARTICLE I - DEFINITIONS AND USAGE 1
Section 1.1 Definitions............................................................................1
Section 1.2 Business Day Certificate...............................................................1
ARTICLE II - TRUST PROPERTY 1
Section 2.1 Conveyance of Trust Property...........................................................1
Section 2.2 Representations and Warranties of the Seller as to the Receivables.....................6
Section 2.3 Repurchase upon Breach................................................................12
Section 2.4 Custody of Receivable Files...........................................................12
Section 2.5 Duties of Servicer as Custodian.......................................................13
Section 2.6 Instructions; Authority to Act........................................................14
Section 2.7 Custodian's Indemnification...........................................................14
Section 2.8 Effective Period and Termination......................................................14
ARTICLE III - ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST PROPERTY 15
Section 3.1 Duties of Servicer....................................................................15
Section 3.2 Collection and Allocation of Receivable Payments......................................18
Section 3.3 Realization upon Receivables..........................................................20
Section 3.4 Physical Damage Insurance.............................................................20
Section 3.5 Maintenance of Security Interests in Financed Vehicles................................20
Section 3.6 Covenants of Servicer.................................................................20
Section 3.7 Purchase by Servicer upon Breach......................................................21
Section 3.8 Servicing Compensation................................................................21
Section 3.9 Servicer's Certificate................................................................21
Section 3.10 Annual Statement as to Compliance; Notice of Event of Servicing Termination...........22
Section 3.11 Annual Independent Certified Public Accountants' Reports..............................22
Section 3.12 Access to Certain Documentation and Information Regarding Receivables.................23
Section 3.13 Reports to the Commission.............................................................23
Section 3.14 Reports to Rating Agencies............................................................23
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS 23
Section 4.1 Accounts..............................................................................23
Section 4.2 Collections...........................................................................29
Section 4.3 Application of Collections............................................................30
Section 4.4 Advances..............................................................................30
Section 4.5 Additional Deposits...................................................................31
Section 4.6 Allocation of Total Available Funds...................................................32
Section 4.7 Reserve Account.......................................................................34
Section 4.8 Net Deposits..........................................................................35
Section 4.9 Statements to Noteholders and Certificateholders......................................35
Section 4.10 Control of Securities Accounts........................................................37
Section 4.11 Pre-Funding Account...................................................................37
Section 4.12 Negative Carry Account................................................................38
Section 4.13 Reinvestment Period...................................................................38
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND THE YIELD SUPPLEMENT ACCOUNT 39
Section 5.1 Yield Supplement Letter of Credit and the Yield Supplement Account....................39
ARTICLE VI - THE SELLER 41
Section 6.1 Representations, Warranties and Covenants of Seller...................................41
Section 6.2 Liability of Seller; Indemnities......................................................43
Section 6.3 Merger or Consolidation of, or Assumption of the Obligations of, Seller...............44
Section 6.4 Limitation on Liability of Seller and Others..........................................44
Section 6.5 Seller May Own Notes or Certificates..................................................44
ARTICLE VII - THE SERVICER 44
Section 7.1 Representations and Warranties of Servicer............................................44
Section 7.2 Liability of Servicer; Indemnities....................................................46
Section 7.3 Merger or Consolidation of, or Assumption of the Obligations of, Servicer.............47
Section 7.4 Limitation on Liability of Servicer and Others........................................47
Section 7.5 Servicer Not to Resign................................................................48
Section 7.6 Servicer May Own Notes or Certificates................................................48
ARTICLE VIII - SERVICING TERMINATION 48
Section 8.1 Events of Servicing Termination.......................................................48
Section 8.2 Indenture Trustee to Act; Appointment of Successor Servicer...........................50
Section 8.3 Effect of Servicing Transfer..........................................................50
Section 8.4 Notification to Noteholders and Certificateholders....................................51
Section 8.5 Waiver of Past Events of Servicing Termination........................................51
ARTICLE IX - TERMINATION 51
Section 9.1 Optional Purchase of All Receivables..................................................51
ARTICLE X - MISCELLANEOUS PROVISIONS 52
Section 10.1 Amendment.............................................................................52
Section 10.2 Protection of Title to Trust..........................................................53
Section 10.3 Representations of the Seller and the Purchaser.......................................55
Section 10.4 Governing Law.........................................................................55
Section 10.5 Notices...............................................................................55
Section 10.6 Severability of Provisions............................................................57
Section 10.7 Assignment............................................................................57
Section 10.8 Further Assurances....................................................................57
Section 10.9 No Waiver; Cumulative Remedies........................................................57
Section 10.10 Third-Party Beneficiaries.............................................................58
Section 10.11 Actions by Noteholder or Certificateholders...........................................58
Section 10.12 Counterparts..........................................................................58
Section 10.13 Agent for Service.....................................................................58
Section 10.14 No Bankruptcy Petition; Subordination; Claims Against Seller..........................58
Section 10.15 Limitation of Liability of Owner Trustee and Indenture Trustee........................59
SCHEDULES
Schedule of Initial Receivables..........................................................................Schedule A
Locations of Receivable Files............................................................................Schedule B
EXHIBITS
Form of Servicer's Certificate............................................................................Exhibit A
Form of Statement to Noteholders..........................................................................Exhibit B
Form of Statement to Certificateholders...................................................................Exhibit C
Form of Yield Supplement Agreement....................................................................... Exhibit D
Form of Second-Tier Subsequent Assignment.................................................................Exhibit E
SALE AND SERVICING AGREEMENT, dated as of March 1, 2002 (as
amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement"), by and among MMCA AUTO OWNER TRUST 2002-1, a
Delaware business trust (the "Trust"), MMCA AUTO RECEIVABLES TRUST, a
Delaware business trust (the "Seller"), and MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., a Delaware corporation (the "Servicer").
WHEREAS, the Trust desires to purchase portfolios of
receivables arising in connection with motor vehicle retail installment
sale contracts generated by Mitsubishi Motors Credit of America, Inc. in
the ordinary course of its business and sold to the Seller as of the date
hereof and from time to time hereafter;
WHEREAS, the Seller is willing to sell such receivables to the
Trust as of the date hereof and from time to time hereafter; and
WHEREAS, Mitsubishi Motors Credit of America, Inc. is willing
to service such receivables on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
ARTICLE I - DEFINITIONS AND USAGE
Section 1.1 Definitions. Except as otherwise specified herein
or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A to the Indenture (the
"Indenture"), dated as of March 1, 2002, between MMCA Auto Owner Trust
2002-1, as issuer, and Bank of Tokyo-Mitsubishi Trust Company, as indenture
trustee (the "Indenture Trustee"), which also contains rules as to usage
that shall be applicable herein.
Section 1.2 Business Day Certificate. On the Closing Date (with
respect to the calendar year 2002) and thereafter, within 15 days prior to
the end of each succeeding calendar year while this Agreement remains in
effect, the Servicer shall deliver to the Indenture Trustee and to
Wilmington Trust Company, not in its individual capacity but solely as
owner trustee (the "Owner Trustee"), an Officer's Certificate specifying
the days on which banking institutions or trust companies in New York, New
York, Wilmington, Delaware or Los Angeles, California are authorized or
obligated by law, executive order or governmental decree to remain closed.
ARTICLE II - TRUST PROPERTY
Section 2.1 Conveyance of Trust Property. (a) In consideration
of the Trust's delivery to, or upon the written order of, the Seller of
authenticated Notes and Certificates, in authorized denominations in
aggregate principal amounts equal to the initial principal amount of the
Notes and the Initial Certificate Balance, respectively, the Seller hereby
irrevocably sells, transfers, assigns and otherwise conveys to the Trust,
without recourse (subject to the obligations herein), all right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and
under the following:
(i) the Initial Receivables;
(ii) with respect to Initial Receivables that are Actuarial
Receivables, monies due thereunder after the Initial Cutoff Date
(including Payaheads) and, with respect to Initial Receivables that
are Simple Interest Receivables, monies received thereunder after the
Initial Cutoff Date;
(iii) the security interests in Financed Vehicles granted
by Obligors pursuant to the Initial Receivables and any other interest
of the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to the
Initial Receivables from claims on any physical damage, theft, credit
life or disability insurance policies covering the related Financed
Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to the
Initial Receivables from recourse to Dealers thereon pursuant to
Dealer Agreements;
(vi) all of the Seller's rights to the Receivable Files
that relate to the Initial Receivables;
(vii) the Trust Accounts and all amounts, securities,
investments in financial assets, and other property deposited in or
credited to any of the foregoing and all proceeds thereof;
(viii) all of the Seller's rights under the Yield
Supplement Agreement and the Purchase Agreement, including the right
of the Seller to cause MMCA to repurchase Receivables from the Seller;
(ix) all payments and proceeds with respect to the Initial
Receivables held by MMCA;
(x) all property (including the right to receive
Liquidation Proceeds and Recoveries and Financed Vehicles and the
proceeds thereof acquired by the Seller pursuant to the terms of an
Initial Receivables that is a Final Payment Receivable), guarantees
and other collateral securing an Initial Receivable (other than an
Initial Receivable purchased by the Servicer or repurchased by the
Seller);
(xi) all rebates of premiums and other amounts relating to
insurance policies and other items financed under the Initial
Receivables in effect as of the Initial Cutoff Date; and
(xii) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment
of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing.
(b) Subject to satisfaction of the conditions set forth in
Section 2.1(d), in consideration of the Indenture Trustee's delivery on or
prior to any Subsequent Transfer Date to the Seller of the amount described
in Section 4.11(a) to be delivered to the Seller, the Seller shall,
pursuant to a Second-Tier Subsequent Assignment, irrevocably sell,
transfer, assign and otherwise convey to the Trust, without recourse
(subject to the obligations herein), on each Subsequent Transfer Date, all
right, title and interest of the Seller, whether now owned or hereafter
acquired, in, to and under the following:
(i) the Subsequent Receivables listed on Schedule A to the
related Second-Tier Subsequent Assignment;
(ii) with respect to the Subsequent Receivables that are
Actuarial Receivables, monies due thereunder on or after the related
Subsequent Cutoff Date (including Payaheads) and, with respect to
Subsequent Receivables that are Simple Interest Receivables, monies
received thereunder on or after the related Subsequent Cutoff Date;
(iii) the security interests in Financed Vehicles granted
by Obligors pursuant to the Subsequent Receivables and any other
interest of the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to such
Subsequent Receivables from claims on any physical damage, theft,
credit life or disability insurance policies covering the related
Financed Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to such
Subsequent Receivables from recourse to Dealers thereon pursuant to
Dealer Agreements;
(vi) all of the Seller's rights to the Receivable Files
that relate to such Subsequent Receivables;
(vii) all payments and proceeds with respect to such
Subsequent Receivables held by the Servicer;
(viii) all property (including the right to receive
Liquidation Proceeds and Recoveries and Financed Vehicles and the
proceeds thereof acquired by the Seller pursuant to the terms of a
Subsequent Receivable that is a Final Payment Receivable), guarantees
and other collateral securing a Subsequent Receivable (other than a
Subsequent Receivable purchased by the Servicer or repurchased by the
Seller);
(ix) all of the Seller's rights under the related
First-Tier Subsequent Assignment;
(x) all rebates of premiums and other amounts relating to
insurance policies and other items financed under such Subsequent
Receivables in effect as of the related Subsequent Cutoff Date; and
(xi) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment
of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing.
(c) It is the intention of the Seller and the Trust that the
transfer of the Trust Property contemplated by Section 2.1(a) and any
Second-Tier Subsequent Assignments executed pursuant to Section 2.1(b)
constitute sales of the Trust Property from the Seller to the Trust,
conveying good title to the Trust Property free and clear of any liens and,
in the event of the filing of a bankruptcy petition by or against the
Seller under any bankruptcy or similar law, that the Trust Property shall
not be part of the Seller's estate. However, in the event that such
transfer is deemed to be a pledge, the Seller hereby grants to the Trust a
first priority security interest in all of the Seller's right, title and
interest in, to and under the Trust Property, and all proceeds thereof, to
secure a loan deemed to have been made by the Trust to the Seller in an
amount equal to the sum of the initial principal amount of the Notes plus
accrued interest thereon and the Initial Certificate Balance.
(d) The Seller shall sell, transfer, assign and otherwise
convey to the Trust on any Subsequent Transfer Date the Subsequent
Receivables and the other property and rights related thereto described in
Section 2.1(b) only upon the satisfaction of each of the following
conditions on or prior to such Subsequent Transfer Date:
(i) the Seller shall have provided the Indenture Trustee,
the Owner Trustee and the Rating Agencies (A) written notification of
the addition of such Subsequent Receivables at least five Business
Days prior to the Subsequent Transfer Date and (B) on or prior to the
Subsequent Transfer Date, a statement listing the approximate
aggregate Principal Balance of such Subsequent Receivables as of the
related Subsequent Cutoff Date and any other information reasonably
requested by any of the foregoing;
(ii) the Seller shall have delivered to each of the Owner
Trustee and the Indenture Trustee a duly executed written assignment
in substantially the form of Exhibit E hereto (the "Second-Tier
Subsequent Assignment"), which shall include a Schedule A attached
thereto listing the related Subsequent Receivables;
(iii) the Seller shall, to the extent required by Section
4.2, have deposited in the Collection Account all collections in
respect of the Subsequent Receivables that are property of the Trust;
(iv) as of such Subsequent Transfer Date: (A) the Seller
shall not be insolvent and shall not become insolvent as a result of
the transfer of Subsequent Receivables on such Subsequent Transfer
Date, (B) the Seller shall not intend to incur or believe that it
would incur debts that would be beyond the Seller's ability to pay as
such debts matured, (C) such transfer shall not be made by the Seller
with actual intent to hinder, delay or defraud any Person and (D) the
assets of the Seller shall not constitute unreasonably small capital
to carry out its business as conducted;
(v) the applicable Subsequent Reserve Account Deposit for
such Subsequent Transfer Date shall have been made;
(vi) the applicable Subsequent Payahead Account Deposit for
such Subsequent Transfer Date shall have been made;
(vii) the applicable Subsequent Yield Supplement Account
Deposit for such Subsequent Transfer Date shall have been made;
(viii) the Receivables, including the Subsequent
Receivables to be conveyed to the Trust on the Subsequent Transfer
Date, shall meet the following criteria as of the related Subsequent
Cutoff Date: (A) the weighted average number of payments remaining
until the maturity of the Receivables will not be more than 66
payments; (B) the aggregate principal balance of the Last Scheduled
Payments as a percentage of the Pool Balance will not be greater than
8.74%; (C) if any Receivable is a Deferred Payment Receivable, the
deferral period will not extend for more than 450 days after
origination of that Receivable; (D) the weighted average FICO score of
the obligors on the Receivables will not be less than 674; (E) the
aggregate principal balance of the Receivables relating to new
automobiles and sports utility vehicles will be at least 93.01%,
substantially all of which will be manufactured or distributed by
Mitsubishi Motors; (F) the aggregate principal balance of the limited
credit experience Receivables as a percentage of the aggregate
principal balance of the Receivables will not be more than 5.48%; and
(G) the weighted average annual percentage rate of the Receivables
will be at least 8.88%;
(ix) the Subsequent Receivables to be conveyed to the Trust
on the Subsequent Transfer Date will have a weighted average deferral
period, as of the related Subsequent Cutoff Date, that is less than or
substantially the same as the weighted average deferral period of the
Initial Receivables as of the Initial Cutoff Date; (x) the Pre-Funding
Period shall not have terminated prior to the Subsequent Transfer
Date;
(xi) each of the representations and warranties made by the
Seller pursuant to Sections 2.2 and 6.1 of this Agreement and by MMCA
pursuant to Section 3.2 of the Purchase Agreement, with respect to the
Seller, MMCA or the Subsequent Receivables, as applicable, shall be
true and correct as of the date as of which such representations and
warranties are made;
(xii) the Seller shall, at its own expense, on or prior to
the Subsequent Transfer Date, indicate in its computer files that the
Subsequent Receivables have been sold to the Trust pursuant to this
Agreement and the related Second-Tier Subsequent Assignment and
deliver to the Owner Trustee the related Schedule of Subsequent
Receivables certified by an officer of the Seller to be true, correct
and complete;
(xiii) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Trust in the
Trust Property and the first perfected security interest of the
Indenture Trustee in the Collateral;
(xiv) no selection procedures believed by the Seller to be
adverse to the interests of the Trust, the Noteholders or the
Certificateholders shall have been utilized in selecting the
Subsequent Receivables;
(xv) the addition of the Subsequent Receivables will not
result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(xvi) the Seller shall have delivered to the Owner Trustee,
the Indenture Trustee and the Rating Agencies an Opinion of Counsel
relating to the security interests of the Owner Trustee and the
Indenture Trustee in the Subsequent Receivables in substantially the
form of the Opinion of Counsel delivered the Owner Trustee, the
Indenture Trustee and the Rating Agencies regarding such matters on
the Closing Date;
(xvii) the Seller shall have delivered to the Owner Trustee
and the Indenture Trustee an Officer's Certificate confirming the
satisfaction of each condition specified in this Section 2.1(d)
(substantially in the form attached as Annex A to the form of
Second-Tier Subsequent Assignment attached hereto as Exhibit E);
(xviii) all the conditions to the transfer of the
Subsequent Receivables by MMCA to the Seller specified in Section
4.1(b) of the Purchase Agreement shall be satisfied; and
(xix) the Servicer shall have provided to each of the Trust
and the Indenture Trustee the Officer's Certificate required to be
provided by the Servicer pursuant to Section 2.4.
(e) The sales, transfers, assignments and conveyances of the
Trust Property made under Section 2.1(a) shall not constitute and are not
intended to result in an assumption by the Trust of any obligation of the
Seller to the Obligors, the Dealers or any other Person in connection with
the Receivables and the other Trust Property or any agreement, document or
instrument related thereto.
Section 2.2 Representations and Warranties of the Seller as to
the Receivables. The Seller makes the following representations and
warranties as to the Receivables on which the Trust relies in accepting the
Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement in the case of the Initial Receivable and as
of the applicable Subsequent Transfer Date in the case of the Subsequent
Receivables, except in each case to the extent otherwise provided in the
following representations and warranties, but shall survive the sale,
transfer and assignment of the Receivables to the Trust and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(i) Characteristics of Receivables. Each Receivable (a)
shall have been originated (x) in the United States of America by a
Dealer for the consumer or commercial sale of a Financed Vehicle in
the ordinary course of such Dealer's business or (y) by MMCA in
connection with the refinancing of a motor vehicle retail installment
sale contract of the type described in subclause (x) above, shall have
been fully and properly executed by the parties thereto, shall have
been purchased by the Seller from MMCA, which in turn shall have
purchased such Receivable from such Dealer under an existing Dealer
Agreement with MMCA (unless such Receivable was originated by MMCA in
connection with a refinancing), and shall have been validly assigned
by such Dealer to MMCA in accordance with its terms (unless such
Receivable was originated by MMCA in connection with a refinancing),
which in turn shall have been validly assigned by MMCA to the Seller
in accordance with its terms, (b) shall have created or shall create a
valid, binding, subsisting and enforceable first priority security
interest in favor of MMCA on the related Financed Vehicle, which
security interest has been validly assigned by MMCA to the Seller,
which in turn shall be validly assigned by the Seller to the Trust and
by the Trust to the Indenture 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) in the case of Standard Receivables,
shall provide for monthly payments that fully amortize the Amount
Financed by maturity of the Receivable and yield interest at the APR,
(e) in the case of Balloon Payment Receivables and Final Payment
Receivables, shall provide for a series of fixed level monthly
payments and a larger payment due after such level monthly payments
that fully amortize the Amount Financed by maturity and yield interest
at the APR, (f) shall provide for, in the event that such contract is
prepaid, a prepayment that fully pays the Principal Balance and all
accrued and unpaid interest thereon, (g) is a retail installment sale
contract, (h) is secured by a new or used automobile or sports-utility
vehicle and (i) is an Actuarial Receivable or a Simple Interest
Receivable (and may also be a Balloon Payment Receivable or a Final
Payment Receivable).
(ii) Schedule of Receivables. The information set forth in
the related Schedule of Receivables shall be true and correct in all
material respects as of the opening of business on the related Cutoff
Date and no selection procedures believed to be adverse to the
Noteholders or the Certificateholders shall have been utilized in
selecting the Receivables from those receivables which meet the
criteria contained herein. The compact disk or other listing regarding
the Receivables made available to the Trust and its assigns (which
compact disk or other listing is required to be delivered as specified
herein) is true and correct in all respects.
(iii) Compliance with Law. Each Receivable and the sale of
the related Financed Vehicle shall have complied, at the time it was
originated or made, and shall comply on the Closing Date (with respect
to each Initial Receivable) or the related Subsequent Transfer Date
(with respect to each Subsequent Receivable) 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 Fair Credit Reporting Act, the Fair Credit Billing Act, the Fair
Debt Collection Practices Act, the Federal Trade Commission Act, the
Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's Regulations B
and Z, the Soldiers' and Sailors' Civil Relief Act of 1940, the Texas
Consumer Credit Code, and State adaptations of the Uniform Consumer
Credit Code, and other consumer credit laws and equal credit
opportunity and disclosure laws.
(iv) Binding Obligation. Each 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, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general principles
of equity.
(v) No Government Obligor. None of the Receivables is due
from the United States of America or any state or from any agency,
department or instrumentality of the United States of America or any
state.
(vi) Security Interest in Financed Vehicle. Immediately
prior to the sale, assignment, and transfer thereof pursuant to the
Purchase Agreement, each Receivable shall be secured by a validly
perfected first priority security interest in the related Financed
Vehicle in favor of MMCA as secured party and, at such time as
enforcement of such security interest is sought, there shall exist a
valid, subsisting and enforceable first priority perfected security
interest in such Financed Vehicle for the benefit of the Trust
(subject to any statutory or other lien arising by operation of law
after the Closing Date (with respect to each Initial Receivable) or
the related Subsequent Transfer Date (with respect to each Subsequent
Receivable) which is prior to such security interest), or all
necessary and appropriate action with respect to such Receivables
shall have been taken to perfect a first priority security interest in
such Financed Vehicle for the benefit of the Trust.
(vii) Receivables in Force. No Receivable shall have been
satisfied, subordinated, or rescinded, nor shall any Financed Vehicle
have been released from the Lien granted by the related Receivable in
whole or in part, which security interest shall be assignable by MMCA
to the Seller and by the Seller to the Trust.
(viii) No Waiver. No provision of a Receivable shall have
been waived in such a manner that such Receivable fails to meet all of
the representations and warranties made by the Seller in this Section
2.2 with respect thereto.
(ix) No Defenses. No right of rescission, setoff,
counterclaim, or defense shall have been asserted or threatened with
respect to any Receivable.
(x) No Liens. To the best of the Seller's knowledge, no
liens or claims shall have been filed for work, labor, or materials
relating to a Financed Vehicle that shall be liens prior to, or equal
or coordinate with, the security interest in the Financed Vehicle
granted by the Receivable.
(xi) No Default; Repossession. Except for payment defaults
continuing for a period of not more than 30 days or payment defaults
of 10% or less of a Scheduled Payment, in each case as of the related
Cutoff Date, or the failure of the Obligor to maintain satisfactory
physical damage insurance covering the Financed Vehicle, no default,
breach, violation, or event permitting acceleration under the terms of
any Receivable shall have occurred; no continuing condition that with
notice or the lapse of time or both would constitute a default,
breach, violation, or event permitting acceleration under the terms of
any Receivable shall have arisen; the Seller shall not have waived any
of the foregoing; and no Financed Vehicle shall have been repossessed
as of the related Cutoff Date.
(xii) Insurance. Each Contract shall require the related
Obligor to maintain physical damage insurance (which insurance shall
not be force placed insurance) covering the Financed Vehicle, in the
amount determined by MMCA in accordance with its customary procedures.
(xiii) Title. It is the intention of the Seller that each
transfer and assignment of the Receivables herein contemplated
constitute a sale of such Receivables from the Seller to the Trust and
that the beneficial interest in, and title to, such Receivables not be
part of the Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned, or pledged by the
Seller to any Person other than the Trust. Immediately prior to each
transfer and assignment of the Receivables herein contemplated, the
Seller had good and marketable title to such Receivables free and
clear of all Liens, encumbrances, security interests, and rights of
others and, immediately upon the transfer thereof, the Trust shall
have good and marketable title to such Receivables, free and clear of
all Liens, encumbrances, security interests, and rights of others; and
the transfer has been perfected by all necessary action under the
Relevant UCC.
(xiv) Valid Assignment. No 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 Receivable
under this Agreement or the Indenture or pursuant to transfers of the
Certificates shall be unlawful, void, or voidable. The Seller has not
entered into any agreement with any obligor that prohibits, restricts
or conditions the assignment of any portion of the Receivables.
(xv) All Filings Made. All filings (including, without
limitation, filings under the Relevant UCC) necessary in any
jurisdiction to give the Trust a first priority perfected security
interest in the Receivables, and to give the Indenture Trustee a first
priority perfected security interest therein, shall be made within ten
days of the Closing Date (with respect to the Initial Receivables) or
ten days of the related Subsequent Transfer Date (with respect to the
Subsequent Receivables).
(xvi) Chattel Paper. Each Receivable constitutes "chattel
paper" as defined in the Relevant UCC.
(xvii) One Original. There shall be only one original
executed copy of each Receivable in existence.
(xviii) Principal Balance. Each Receivable had an original
principal balance (net of unearned precomputed finance charges) of not
more than $60,000, and a remaining Principal Balance as of the related
Cutoff Date of not less than $100.
(xix) No Bankrupt Obligors. No Receivable was due from an
Obligor who, as of the related Cutoff Date, was the subject of a
proceeding under the Bankruptcy Code of the United States or was
bankrupt.
(xx) New and Used Vehicles. Approximately 93.01% of the
Initial Pool Balance, constituting approximately 88.26% of the total
number of the Initial Receivables, relate to new automobiles and
sports-utility vehicles, substantially all of which were manufactured
or distributed by Mitsubishi Motors. Approximately 6.76% of the
Initial Pool Balance, constituting approximately 11.23% of the total
number of Initial Receivables, relate to used automobiles and
sports-utility vehicle, substantially all of which were manufactured
or distributed by Mitsubishi Motors. Approximately 0.18% of the
Initial Pool Balance, constituting approximately 0.43% of the total
number of Initial Receivables, relate to program automobiles and
sports-utility vehicles, substantially all of which were manufactured
or distributed by Mitsubishi Motors. Approximately 0.04% of the
Initial Pool Balance, constituting approximately 0.09% of the total
number of Initial Receivables, relate to other used automobiles and
sports-utility vehicles.
(xxi) Origination. Each Receivable shall have an
origination date during or after January 27, 1999.
(xxii) Maturity of Receivables. Each Receivable shall have,
as of the related Cutoff Date, not more than 66 remaining Scheduled
Payments due under the Receivable.
(xxiii) Weighted Average Maturity of Receivables. As of the
Initial Cutoff Date, the weighted average number of Scheduled Payments
remaining until the maturity of the Initial Receivables shall be not
more than 66 Scheduled Payments. As of the related Subsequent Cutoff
Date, the weighted average number of Scheduled Payments remaining
until the maturity of any Subsequent Receivables transferred to the
Trust on the same Subsequent Transfer Date shall be not more than 66
Scheduled Payments.
(xxiv) Weighted Average Deferral Period. With respect to
Subsequent Receivables transferred to the Issuer on the related
Subsequent Transfer Date, the weighted average deferral period will be
less than or substantially the same as the weighted average deferral
period of the Initial Receivables as of the Initial Cutoff Date.
(xxv) Annual Percentage Rate. Each Receivable shall have an
APR of at least 0% and not more than 30%.
(xxvi) Scheduled Payments. No Receivable shall have a
payment of which more than 10% of such payment is more than 30 days
overdue as of the related Cutoff Date.
(xxvii) Location of Receivable Files. The Receivable Files
shall be kept at one or more of the locations listed in Schedule B
hereto.
(xxviii) Capped Receivables and Simple Interest
Receivables. Except to the extent that there has been no material
adverse effect on Noteholders or Certificateholders, each Capped
Receivable has been treated consistently by the Seller and the
Servicer as a Simple Interest Receivable and payments with respect to
each Simple Interest Receivable have been allocated consistently in
accordance with the Simple Interest Method.
(xxix) Agreement. The representations and warranties of the
Seller in Section 6.1 are true and correct.
(xxx) Other Data. The tabular data and the numerical data
relating to the characteristics of the Receivables contained in the
Prospectus (as defined in the Purchase Agreement) are true and correct
in all material respects.
(xxxi) Last Scheduled Payments. The aggregate principal
balance of the Last Scheduled Payments of Balloon Payment Receivables
and Final Payment Receivables that are Initial Receivables, as a
percentage of the Initial Pool Balance as of the Initial Cutoff Date,
shall be not greater than 8.74%. The aggregate principal balance of
the Last Scheduled Payments of Balloon Payment Receivables and Final
Payment Receivables that are Subsequent Receivables sold to the
Purchaser on a Subsequent Transfer Date, as of the related Subsequent
Cutoff Date, as a percentage of the aggregate principal balance of all
of such Subsequent Receivables as of such related Subsequent Cutoff
Date, shall be not greater than 8.74%.
(xxxii) Receivable Yield Supplement Amounts. An amount
equal to the sum of all projected Yield Supplement Amounts for all
future Payment Dates with respect to each Deferred Payment Receivable
and each Deferred Balloon Payment Receivable, assuming that no
prepayments are made on the Deferred Payment Receivable or the
Deferred Balloon Payment Receivable, as the case may be, has been
deposited to the Yield Supplement Account on or prior to the Closing
Date or the related Subsequent Transfer Date, as applicable.
(xxxiii) Prepaid Receivables. No Receivable shall have been
pre-paid by more than six monthly payments as of the related Cutoff
Date.
(xxxiv) Limited Credit Experience. The aggregate principal
balance of the Receivables on which the Obligor has limited credit
experience, as a percentage of the aggregate principal balance of all
Receivables, in each case as of the Cutoff Date, shall be not greater
than 5.48%.
(xxxv) Deferred Payment Receivables. As of the Initial
Cutoff Date $448,142,723.25 total Principal Balance of Deferred
Payment Receivables included in the Initial Receivables had a first
payment that, as of the date of inception of the Receivable, was
deferred for 300 days or greater. As of the Initial Cutoff Date
$199,845,921.79 total Principal Balance of Deferred Payment
Receivables included in the Initial Receivables had a first payment
that, as of the date of inception of the Receivables, was deferred for
a period of between 200 and 299 days. As of the Initial Cutoff Date
$10,742,362.31 total Principal Balance of Deferred Payment Receivables
included in the Initial Receivables had a first payment that, as of
the date of inception of the Receivables, was deferred for a period of
between 100 and 199 days. As of the Initial Cutoff Date $4,763,113.52
total Principal Balance of Deferred Payment Receivables included in
the Initial Receivables had a first payment that, as of the date of
inception of the Receivables, was deferred for a period of 99 days or
less. In no case will the first payment on a Deferred Payment
Receivable be due later than 480 days after the date of inception of
that Receivable.
(xxxvi) Long Deferment Period Receivables. As of the
Initial Cutoff Date $447,193,123.43 total Principal Balance of
Deferred Payment Receivables included in the Initial Receivables were
Long Deferment Period Receivables.
(xxxvii) Reinvested Receivables. With respect to Reinvested
Receivables transferred to the Issuer on the same Subsequent Transfer
Date: (A) the weighted average number of payments remaining until the
maturity of the Receivables will not be more than 66 payments; (B) the
aggregate principal balance of the Last Scheduled Payments as a
percentage of the Pool Balance will not be greater than 8.74%; (C) the
weighted average FICO score of the obligors on the Receivables will
not be less than 674; (D) the aggregate principal balance of the
Receivables relating to new automobiles and sports utility vehicles
will be at least 93.01%, substantially all of which will be
manufactured or distributed by Mitsubishi Motors; (E) the aggregate
principal balance of the limited credit experience Receivables as a
percentage of the aggregate principal balance of the Receivables will
not be more than 5.48%; (F) the weighted average annual percentage
rate of the Receivables will be at least 8.88%; and (G) none of such
Reinvested Receivables shall be Deferred Payment Receivables.
(xxxviii) Deferred Balloon Payment Receivables. As of the
Initial Cutoff Date, $1,429,200.91 total principal balance of Deferred
Balloon Payment Receivables were originated with a deferral period of
90 days, and $10,742,362.30 total principal balance of Deferred
Balloon Payment Receivables were originated with a deferral period of
180 days.
(xxxix) Modified Receivables. The APR of any Modified
Receivable is equal to the APR of the related Deferred Payment
Receivable. The date on which the final Scheduled Payment is due on a
Modified Receivable is not different than the date set forth in the
related Contract as the date on which the final Scheduled Payment
under such Receivable is due. No Deferred Payment Receivable became a
Modified Receivable after 90 days following the date the first
Scheduled Payment on the Receivable was due.
Section 2.3 Repurchase upon Breach. The Seller, the Servicer,
or the Owner Trustee, as the case may be, shall inform the other parties to
this Agreement, the Indenture Trustee and MMCA promptly, in writing, upon
the discovery of any breach or failure to be true of the representations
and warranties made by the Seller pursuant to Section 2.2. If the breach or
failure shall not have been cured by the close of business on the last day
of the Collection Period which includes the 60th day after the date on
which the Seller becomes aware of, or receives written notice from the
Owner Trustee or the Servicer of, such breach or failure, and such breach
or failure materially and adversely affects the interest of the Trust in a
Receivable, the Seller shall repurchase from the Trust such Receivable, on
the Payment Date immediately following such Collection Period. In
consideration of the repurchase of a Receivable hereunder, the Seller shall
remit the Purchase Amount of such Receivable in the manner specified in
Section 4.5(a). The sole remedy of the Trust, the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholders with respect
to a breach or failure to be true of the representations and warranties
made by the Seller pursuant to Section 2.2 shall be to require the Seller
to repurchase Receivables pursuant to this Section 2.3 and to enforce the
obligation of MMCA to the Seller to repurchase such Receivable pursuant to
the Purchase Agreement. Neither the Owner Trustee nor the Indenture Trustee
shall have any duty to conduct an affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section 2.3 or the eligibility of any Receivable for
purposes of this Agreement.
Section 2.4 Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs,
the Trust, upon the execution and delivery of this Agreement, hereby
revocably appoints the Servicer as its agent, and the Servicer hereby
accepts such appointment, to act as custodian on behalf of the Trust and
the Indenture Trustee of the following documents or instruments, which are
hereby constructively delivered to the Indenture Trustee, as pledgee of the
Trust pursuant to the Indenture (or, in the case of the Subsequent
Receivables, will as of the applicable Subsequent Transfer Date be
constructively delivered to the Indenture Trustee, as pledgee of the Trust
pursuant to the Indenture), with respect to each Receivable (collectively,
a "Receivable File"):
(i) the single original of the Receivable;
(ii) the original credit application fully executed by the
Obligor or a photocopy thereof or a record thereof on a computer file
tape, microfiche or other electronic medium;
(iii) the original certificate of title or such other
documents that the Servicer or MMCA shall keep on file, in accordance
with its customary practices and procedures, evidencing the security
interest of MMCA in the Financed Vehicle;
(iv) documents evidencing the existence, at the time of
origination of the Receivable, of any insurance covering the Financed
Vehicle; and
(v) any and all other documents (including any computer
tape, microfiche or other electronic medium) that the Servicer or the
Seller shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor, or a Financed
Vehicle.
On the Closing Date (with respect to the Initial Receivables)
and each Subsequent Transfer Date (with respect to the related Subsequent
Receivables), the Servicer shall provide an Officer's Certificate to the
Trust and the Indenture Trustee confirming that the Servicer has received,
on behalf of the Trust and the Indenture Trustee, all the documents and
instruments necessary for the Servicer to act as the agent of the Trust and
the Indenture Trustee for the purposes set forth in this Section 2.4,
including the documents referred to herein, and the Trust, the Owner
Trustee and the Indenture Trustee are hereby authorized to rely on such
Officer's Certificate.
Section 2.5 Duties of Servicer as Custodian. (a)Safekeeping. The
Servicer, in its capacity as custodian, shall hold the Receivable Files for
the benefit of the Trust and the Indenture Trustee and maintain such
accurate and complete accounts, records, and computer systems pertaining to
each Receivable File as shall enable the Servicer and the Trust to comply
with the terms and provisions of this Agreement, and the Indenture Trustee
to comply with the terms and conditions of the Indenture. 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 motor vehicle
receivables that the Servicer services for itself or others. In accordance
with its customary practices and procedures with respect to its retail
installment sale contracts, the Servicer shall conduct, or cause to be
conducted, periodic audits of the Receivable Files held by it under this
Agreement, and of the related accounts, records, and computer systems, in
such a manner as shall enable the Trust or the Indenture Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the Owner Trustee and the Indenture 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 Trust, the Owner Trustee or
the Indenture Trustee of the Receivable Files and none of the Trust, the
Owner Trustee and the Indenture Trustee shall be liable or responsible for
any action or failure to act by the Servicer in its capacity as custodian
hereunder.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B
to this Agreement, or at such other office as shall be specified to the
Trust and the Indenture Trustee by written notice not later than 90 days
after any change in location. The Servicer shall make available to the
Trust and the Indenture Trustee or its duly authorized representatives,
attorneys, or auditors a list of locations of the Receivable Files, and the
related accounts, records, and computer systems maintained by the Servicer
at such times as the Trust or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon written instructions from the
Indenture Trustee, the Servicer shall release any document in the
Receivable Files to the Indenture Trustee, the Indenture Trustee's agent,
or the Indenture Trustee's designee, as the case may be, at such place or
places as the Indenture Trustee may designate, as soon thereafter as is
practicable. Any document so released shall be handled by the Indenture
Trustee with due care and returned to the Servicer for safekeeping as soon
as the Indenture Trustee or its agent or designee, as the case may be,
shall have no further need therefor.
(d) Title to Receivables. The Servicer agrees that, in respect
of any Receivable held by the Servicer as custodian hereunder, the Servicer
will not at any time have or in any way attempt to assert any interest in
such Receivable or the related Receivable File, other than for collecting
or enforcing the Receivable for the benefit of the Trust and that the
entire equitable interest in such Receivable and the related Receivable
File shall at all times be vested in the Trust.
Section 2.6 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
Responsible Officer of the Indenture Trustee. A certified copy of excerpts
of authorizing resolutions of the Board of Directors of the Indenture
Trustee shall constitute conclusive evidence of the authority of any such
Responsible Officer to act and shall be considered in full force and effect
until receipt by the Servicer of written notice to the contrary given by
the Indenture Trustee.
Section 2.7 Custodian's Indemnification. The Servicer, in its
capacity as custodian, shall indemnify and hold harmless the Trust, the
Owner Trustee and the Indenture Trustee and each of their respective
officers, directors, employees and agents from and against any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses (including legal fees if any) of any kind whatsoever that may be
imposed on, incurred, or asserted against the Trust, the Owner Trustee and
the Indenture Trustee or any of their respective officers, directors,
employees and agents as the result of any act or omission by the Servicer
relating to the maintenance and custody of the Receivable Files; provided,
however, that the Servicer shall not be liable hereunder to the Owner
Trustee to the extent, but only to the extent, that such liabilities,
obligations, losses, compensatory damages, payments, costs or expenses
result from the willful misfeasance, bad faith, or negligence of the Owner
Trustee and shall not be liable hereunder to the Indenture Trustee to the
extent, but only to the extent, that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith, or negligence of the Indenture Trustee.
Section 2.8 Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff
Date and shall continue in full force and effect until terminated pursuant
to this Section 2.8. If the Servicer shall resign as Servicer under Section
7.5, or if all of the rights and obligations of the Servicer shall have
been terminated under Section 8.1, the appointment of the Servicer as
custodian hereunder may be terminated by the Indenture Trustee or by the
Holders of Notes evidencing not less than 25% of the principal amount of
the then Outstanding Notes or, with the consent of Holders of Notes
evidencing not less than 25% of the principal amount of the then
Outstanding Notes, by the Owner Trustee or by Holders of Certificates
evidencing not less than 25% of the Certificate Balance, in the same manner
as the Indenture Trustee or such Holders may terminate the rights and
obligations of the Servicer under Section 8.1. As soon as practicable after
any termination of such appointment, the Servicer shall deliver, or cause
to be delivered, the Receivable Files and the related accounts and records
maintained by the Servicer to the Indenture Trustee, the Indenture
Trustee's agent or the Indenture Trustee's designee at such place or places
as the Indenture Trustee may reasonably designate.
ARTICLE III - ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
Section 3.1 Duties of Servicer. (a) The Servicer, acting alone
and/or through subservicers as provided in this Section 3.1, shall
administer the Receivables with reasonable care. The Servicer's duties
shall include, but not be limited to, the collection and posting of all
payments, responding to inquiries by Obligors on the Receivables, or by
federal, state, or local governmental authorities, investigating
delinquencies, reporting tax information to Obligors, furnishing monthly
and annual statements to the Owner Trustee and the Indenture Trustee with
respect to distributions, providing collection and repossession services in
the event of Obligor default, coordinating or arranging inspection of
Financed Vehicles relating to Final Payment Receivables at the end of the
related Contract term, refinancing or selling Financed Vehicles relating to
Final Payment Receivables at the end of the related Contract term depending
upon the options chosen by the Obligors and making Advances pursuant to
Sections 4.4(a) and (c). The Servicer shall also administer and enforce all
rights and responsibilities of the holder of the Receivables provided for
in the Dealer Agreements, to the extent that such Dealer Agreements relate
to the Receivables, the Financed Vehicles or the Obligors. In performing
its duties as Servicer hereunder, the Servicer will exercise that degree of
skill and attention that the Servicer exercises with respect to all
comparable motor vehicle receivables that it services for itself or others.
Subject to Section 3.2, the Servicer shall follow its customary standards,
policies, practices and procedures in performing its duties hereunder as
Servicer. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered to execute and deliver, on behalf of
itself, the Trust, the Owner Trustee, the Indenture Trustee, the
Certificateholders, the Noteholders or any one or more of them, any and all
instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the
Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided, however, that notwithstanding the foregoing, the
Servicer shall not, except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under
any Receivable or waive the right to collect the unpaid balance (including
accrued interest) of any Receivable from the Obligor, except in connection
with a de minimis deficiency, Excess Wear and Tear, Excess Mileage or
disposition fees which the Servicer would not attempt to collect in
accordance with its customary procedures, in which event the Servicer shall
indemnify the Trust for such deficiency, Excess Wear and Tear, Excess
Mileage or disposition fee. If the Servicer shall commence a legal
proceeding to enforce a Receivable, the Owner Trustee shall thereupon be
deemed to have automatically assigned such Receivable to the Servicer,
which assignment shall be solely for purposes of collection. 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 Owner Trustee
shall, at the Servicer's expense and direction, take steps to enforce the
Receivable, including bringing suit in its name or the names of the
Indenture Trustee, the Certificateholders, the Noteholders or any of them.
The Owner Trustee shall execute and deliver to the Servicer any powers of
attorney and other documents as shall be prepared by the Servicer and
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer, at its
expense, shall obtain on behalf of the Trust or the Owner Trustee all
licenses, if any, required by the laws of any jurisdiction to be held by
the Trust or the Owner Trustee in connection with ownership of the
Receivables, and shall make all filings and pay all fees as may be required
in connection therewith during the term hereof.
The Servicer may enter into subservicing agreements with one or
more subservicers for the servicing and administration of certain of the
Receivables and may perform its duties as Servicer hereunder utilizing the
employees of MMSA. Notwithstanding anything to the contrary herein, the
Servicer shall remain fully liable hereunder for the performance of the
duties of Servicer, including such duties as may be performed by employees
of MMSA or by any subservicer. In addition, any subservicer shall be and
shall remain, for so long as it is acting as subservicer, an Eligible
Servicer, and any fees paid to such subservicer shall be paid by the
Servicer and not out of the proceeds of the Trust, and any such subservicer
shall agree to service the Receivables in a manner consistent with the
terms of this Agreement.
(b) References in this Agreement to actions taken, to be taken,
permitted to be taken, or restrictions on actions permitted to be taken by
the Servicer in servicing the Receivables and other actions taken, to be
taken, permitted to be taken, or restrictions on actions to be taken with
respect to the Trust Property shall include actions taken, to be taken,
permitted to be taken, or restrictions on actions permitted to be taken by
a subservicer on behalf of the Servicer and references herein to payments
received by the Servicer shall include payments received by a subservicer,
irrespective of whether such payments are actually deposited in the
Collection Account by such subservicer. Any such subservicing agreement
will contain terms and provisions substantially identical to the terms and
provisions of this Agreement and such other terms and provisions as are not
inconsistent with this Agreement and as the Servicer and the subservicer
have agreed.
(c) The Servicer shall be entitled to terminate any
subservicing agreement in accordance with the terms and conditions of such
subservicing agreement and without any limitation by virtue of this
Agreement; provided, however, that, in the event of termination of any
subservicing agreement by the Servicer, the Servicer shall either act
directly as Servicer of the related Receivables or enter into a
subservicing agreement with a successor subservicer which will be bound by
the terms of the related subservicing agreement.
(d) As a condition to the appointment of any subservicer, the
Servicer shall notify the Owner Trustee, the Indenture Trustee and the
Rating Agencies in writing before such assignment becomes effective and
such subservicer shall be required to execute and deliver an instrument in
which it agrees that, for so long as it acts as subservicer of the
Receivables and the other Trust Property being serviced by it, the
covenants, conditions, indemnities, duties, obligations and other terms and
provisions of this Agreement applicable to the Servicer hereunder shall be
applicable to it as subservicer, that it shall be required to perform its
obligations as subservicer for the benefit of the Trust as if it were
Servicer hereunder (subject, however, to the right of the Servicer to
direct the performance of such obligations in accordance with this
Agreement) and that, notwithstanding any provision of a subservicing
agreement to the contrary, such subservicer shall be directly liable to the
Owner Trustee and the Trust (notwithstanding any failure by the Servicer to
perform its duties and obligations hereunder) for the failure by such
subservicer to perform its obligations hereunder or under any subservicing
agreement, and that (notwithstanding any failure by the Servicer to perform
its duties and obligations hereunder) the Owner Trustee may enforce the
provisions of this Agreement and any subservicing agreement against the
subservicer for the benefit of the Trust, without diminution of such
obligations or liabilities by virtue of any subservicing agreement, by
virtue of any indemnification provided thereunder or by virtue of the fact
that the Servicer is primarily responsible hereunder for the performance of
such duties and obligations, as if a subservicer alone were servicing and
administering, under this Agreement, the Receivables and the other Trust
Property being serviced by it under the subservicing agreement.
(e) Notwithstanding any subservicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between
the Servicer or a subservicer or reference to actions taken through such
Persons or otherwise, the Servicer shall remain obligated and liable to the
Trust and the Owner Trustee for the servicing and administering of the
Receivables and the other Trust Property in accordance with the provisions
of this Agreement (including for the deposit of payments received by a
subservicer, irrespective of whether such payments are actually remitted to
the Servicer or deposited in the Collection Account by such subservicer;
provided that if such amounts are so deposited, the Servicer shall have no
further obligation to do so) without diminution of such obligation or
liability by virtue of such subservicing agreements or arrangements or by
virtue of indemnification from a subservicer, to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering the Receivables and the other Trust Property. The Servicer
shall be entitled to enter into any agreement with a subservicer for
indemnification of the Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
(f) In the event the Servicer for any reason no longer shall be
acting as such (including by reason of the occurrence of an Event of
Servicing Termination), the successor Servicer may, in its discretion,
thereupon assume all of the rights and obligations of the outgoing Servicer
under a subservicing agreement. In such event, the successor Servicer shall
be deemed to have assumed all of the Servicer's interest therein and to
have replaced the outgoing Servicer as a party to such subservicing
agreement to the same extent as if such subservicing agreement had been
assigned to the successor Servicer, except that the outgoing Servicer shall
not thereby be relieved of any liability or obligation on the part of the
outgoing Servicer to the subservicer under such subservicing agreement. The
outgoing Servicer shall, upon request of the Indenture Trustee, but at the
expense of the outgoing Servicer, deliver to the successor Servicer all
documents and records relating to each such subservicing agreement and the
Receivables and the other Trust Property then being serviced thereunder and
an accounting of amounts collected and held by it and otherwise use its
best efforts to effect the orderly and efficient transfer of the
subservicing agreement to the successor Servicer. In the event that the
successor Servicer elects not to assume a subservicing agreement, such
subservicing agreement shall be immediately cancellable by the successor
Servicer upon written notice to the subservicer and the outgoing Servicer,
at its expense, shall cause the subservicer to deliver to the successor
Servicer all documents and records relating to the Receivables and the
other Trust Property being serviced thereunder and all amounts held (or
thereafter received) by such subservicer (together with an accounting of
such amounts) and shall otherwise use its best efforts to effect the
orderly and efficient transfer of servicing of the Receivables and the
other Trust Property being serviced by such subservicer to the successor
Servicer.
(g) The Servicer shall be required to provide a computer tape
or compact disk each month to Lewtan Technologies, Inc. containing
information relating to the Receivables, including the name, address and
telephone number of each Obligor and the balance on the Receivables. Lewtan
Technologies shall provide a copy of the tape or disk to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee
upon the written request of the Indenture Trustee. Lewtan Technologies,
Inc. shall be paid a fee for such services and shall be reimbursed for any
expenses incurred by it in connection with such services. The Servicer
shall pay these amounts from its monthly Servicing Fee.
Section 3.2 Collection and Allocation of Receivable Payments.
(a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when
the same shall become due and shall follow such collection procedures as it
follows with respect to all comparable motor vehicle receivables that it
services for itself or others. The Servicer shall allocate collections
between principal and interest in accordance with the customary servicing
practices and procedures it follows with respect to all comparable motor
vehicle receivables that it services for itself or others. The Servicer
shall not increase or decrease the number or amount of any Scheduled
Payment, or the Amount Financed under a Receivable or the APR of a
Receivable, or extend, rewrite or otherwise modify the payment terms of a
Receivable; provided, however, that:
(i) in the case of a Deferred Payment Receivable or a
Deferred Balloon Payment Receivable upon which the related Obligor has
made one or more partial pre-payments on or prior to the date on which
the first Scheduled Payment is due under the related Contract, the
Servicer may, at any time on or before 90 days after that first
Scheduled Payment is due, modify the terms of the Receivable including
by reducing the amount of each Scheduled Payment; provided, that the
Servicer may not change (x) the APR of such Receivable, and (y) the
date on which the final Scheduled Payment under the Receivable is due
from the date set forth in the related Contract as the date on which
such final Scheduled Payment shall be due (any such Receivable, a
"Modified Receivable"); and
(ii) the Servicer may extend the due date for one or more
payments due on a Receivable for credit-related reasons that would be
acceptable to the Servicer with respect to comparable motor vehicle
receivables that it services for itself and others and in accordance
with its customary standards, policies, practices and procedures if
the cumulative extensions with respect to any Receivable shall not
cause the term of such Receivable to extend beyond June 2009 and that
such extensions, in the aggregate, do not exceed two months for each
12 months of the original term of the Receivable.
In the event that the Servicer fails to comply with the
provisions of the preceding sentence, the Servicer shall be required to
purchase the Receivable or Receivables affected thereby, for the Purchase
Amount, in the manner specified in Section 3.7, as of the close of the
Collection Period in which such failure occurs. The Servicer may, in its
discretion, (but only in accordance with its customary standards, policies,
practices and procedures), waive any late payment charge or any other fee
that may be collected in the ordinary course of servicing a Receivable.
(b) With respect to each Final Payment Receivable, the
Servicer, in accordance with its customary servicing standards, policies,
practices and procedures, shall contact the Obligor on or before the due
date of the Last Scheduled Payment specified in the related Contract. If,
at such time, the Obligor under the Final Payment Receivable has notified
MMCA on behalf of the Trust that it elects to sell the Financed Vehicle to
MMCA on behalf of the Trust in accordance with the terms of the Receivable,
the Servicer shall, upon delivery of the Financed Vehicle by the Obligor to
MMCA on behalf of the Trust, inspect the Financed Vehicle for Excess Wear
and Tear and Excess Mileage, and determine the necessity of any repairs. If
the Servicer determines that such Financed Vehicle requires repairs as a
result of Excess Wear and Tear, the Servicer shall require the Obligor to
pay the estimated cost of such repairs to the Servicer. If the Obligor
disputes the Servicer's estimate of the cost of such repairs, the Obligor
may obtain, at the Obligor's own expense, a professional appraisal of the
Financed Vehicle's value by an independent third-party appraiser acceptable
to both the Obligor and the Servicer, and the cost of repairs for Excess
Wear and Tear as determined by such appraisal shall be binding on the
Obligor and the Servicer. The Servicer shall, pursuant to the related
Contract, offset (x) the cost of repairs for Excess Wear and Tear as
determined by the appraisal, any charges for Excess Mileage and the
disposition fee payable to the Servicer pursuant to the related Contract,
and the Principal Balance, accrued interest and any other amounts owed by
the Obligor on the Receivable against (y) the purchase price otherwise due
to the Obligor for the Financed Vehicle, and shall collect any excess of
(x) over (y) from the Obligor.
(c) In connection with an Obligor's transfer of a Financed
Vehicle to MMCA on behalf of the Trust in satisfaction of its obligation to
pay the Last Scheduled Payment under a Final Payment Receivable, pursuant
to the terms of the Contract related to such Last Scheduled Payment, the
Servicer shall require the Obligor to pay a disposition fee (which the
Servicer will retain as servicing compensation), whereupon the Servicer
shall take possession of the related Financed Vehicle and shall prepare
such Financed Vehicle for sale at auction or otherwise in accordance with
the Servicer's customary servicing standards, policies, practices and
procedures.
(d) Proceeds received by the Servicer from the payment by an
Obligor of a Financed Vehicle of amounts attributable to Last Scheduled
Payments and other amounts (including Excess Wear and Tear and Excess
Mileage) owed by the Obligor and from the sale of a Financed Vehicle at
auction or otherwise constitute proceeds of Last Scheduled Payments and
collections on the Receivables, and shall be deposited into the Collection
Account. Following the sale of the Financed Vehicle, the Servicer, on
behalf of the Trust, shall deliver the related certificate of title to the
purchaser of such Financed Vehicle. Following the Servicer's receipt of
proceeds from the sale of such Financed Vehicle and amounts to be paid by
the Obligor pursuant to subparagraph (b) above, the Servicer shall record
on its books and records the termination of the Trust's ownership and
security interest in the related Final Payment Receivable (and shall
deliver copies thereof to the Indenture Trustee and the Owner Trustee upon
written request within ten days of receipt of such request).
(e) If the Obligor under any Balloon Payment Receivable or
Final Payment Receivable has notified the Dealer that it desires to
refinance the amount that it owes on termination of the Receivable, MMCA
will, in accordance with its customary servicing standards, policies,
practices and procedures, make a decision to grant or deny credit, except
for Contracts for which the Obligors have the right to refinance without
such an assessment, in which case MMCA shall honor the Obligor's right to
refinance. If credit is denied, the Servicer shall require the Obligor to
satisfy its obligation to pay the remaining amounts owed in accordance with
the terms of the Balloon Payment Receivable or Final Payment Receivable. If
credit is granted, MMCA shall deposit an amount equal to the total amount
owed by the Obligor on the Receivable to the Collection Account. Upon
deposit of such amount into the Collection Account, the Trust's ownership
and security interest in the related Financed Vehicle shall terminate, and
the Trust will assign all interest in, to and under the Receivable and the
related Financed Vehicle to MMCA. The Servicer shall record such
termination on its books and records (and shall deliver copies thereof to
the Indenture Trustee and the Owner Trustee upon written request within ten
days of receipt of such request). If MMCA is no longer the Servicer, the
Trust or any Holder of the Certificates may make arrangements for the
successor Servicer or another party to provide refinancing of Last
Scheduled Payments to Obligors who desire to satisfy the Last Scheduled
Payment through refinancing and who meet such party's credit criteria, and
any reasonable costs and expenses of the successor Servicer or such third
party in determining whether to provide such refinancing shall be payable
from amounts, if any, which would otherwise be released from the Reserve
Account and paid to the Seller.
Section 3.3 Realization upon Receivables. (a) On behalf of the
Trust, the Servicer shall use reasonable efforts, in accordance with the
standard of care required by Section 3.1, to repossess or otherwise convert
the ownership of each Financed Vehicle securing a Defaulted Receivable. In
taking such action, the Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of comparable automotive receivables, and as are otherwise
consistent with the standard of care required under Section 3.1, which
shall include the exercise of any rights of recourse to Dealers under the
Dealer Agreements. The Servicer shall be entitled to recover all reasonable
expenses incurred by it in the course of repossessing and liquidating a
Financed Vehicle into cash proceeds, but only out of the cash proceeds of
such Financed Vehicle and any deficiency obtained from the Obligor. The
foregoing shall be subject to the provision that, in any case in which a
Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds (or Recoveries) of the
related Receivable by an amount equal to or greater than the amount of such
expenses.
(b) If the Servicer elects to commence a legal proceeding to
enforce a Dealer Agreement, the act of commencement shall be deemed to be
an automatic assignment from the Trust to the Servicer of the rights of
recourse under such Dealer Agreement. If, however, in any enforcement suit
or legal proceeding, it is held that the Servicer may not enforce a Dealer
Agreement on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer Agreement, the Owner Trustee, at the
Servicer's expense and direction, shall take such steps as the Servicer
deems necessary to enforce the Dealer Agreement, including bringing suit in
its name or the names of the Indenture Trustee, the Certificateholders, the
Noteholders or any of them.
Section 3.4 Physical Damage Insurance. The Servicer shall
follow its customary servicing procedures to determine whether or not each
Obligor shall have maintained physical damage insurance covering the
related Financed Vehicle.
Section 3.5 Maintenance of Security Interests in Financed
Vehicles. The Servicer, in accordance with the standard of care required
under Section 3.1, shall take such steps as are necessary to maintain
perfection of the security interest created by each Receivable in the
related Financed Vehicle. The Trust hereby authorizes the Servicer, and the
Servicer hereby agrees, to take such steps as are necessary to re-perfect
such security interest on behalf of the Trust and the Indenture Trustee in
the event the Servicer receives notice of, or otherwise has actual
knowledge of, the relocation of a Financed Vehicle or for any other reason.
Section 3.6 Covenants of Servicer. The Servicer hereby makes
the following covenants:
(a) Security Interest to Remain in Force. The Financed Vehicle
securing each Receivable will not be released from the security interest
granted by the Receivable in whole or in part, except as contemplated
herein.
(b) No Impairment. The Servicer will not (nor will it permit
any subservicer to) impair in any material respect the rights of the Trust,
the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders in the Receivables or, subject to clause (c) below, otherwise
amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders or the Noteholders hereunder would be
materially adversely affected.
(c) Amendments. The Servicer will not increase or decrease the
number or amount of Scheduled Payments or the Amount Financed under a
Receivable, or extend, rewrite or otherwise modify the payment terms of a
Receivable, except pursuant to Section 3.2(a).
Section 3.7 Purchase by Servicer upon Breach. The Seller, the
Servicer or the Owner Trustee, as the case may be, shall inform the other
parties to this Agreement promptly, in writing, upon the discovery of any
breach of Section 3.2(a), 3.5 or 3.6. If the breach shall not have been
cured by the last day of the Collection Period which includes the 60th day
after the date on which the Servicer becomes aware of, or receives written
notice of, such breach, and such breach materially and adversely affects
the interests of the Trust in a Receivable, the Servicer shall purchase
such Receivable or Receivables on the immediately succeeding Payment Date;
provided, however, that with respect to a breach of Section 3.2(a), the
Servicer shall repurchase the affected Receivable from the Trust at the end
of the Collection Period in which such breach occurs. In consideration of
the purchase of a Receivable hereunder, the Servicer shall remit the
Purchase Amount of such Receivable in the manner specified in Section
4.5(a). Except as provided in Section 7.2, the sole remedy of the Trust,
the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders against the Servicer with respect to a breach pursuant to
Section 3.2, 3.5 or 3.6 shall be to require the Servicer to repurchase
Receivables pursuant to this Section 3.7. Neither the Owner Trustee nor the
Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 3.7 or the
eligibility of any Receivable for purposes of this Agreement.
Section 3.8 Servicing Compensation. The "Servicing Fee" with
respect to a Collection Period shall be an amount equal to the product of
one-twelfth (1/12) of the sum of (x) 1% of the aggregate Principal Balance
of all Receivables other than Deferred Payment Receivables and Deferred
Balloon Payment Receivables and (y) 0.25% of the aggregate Principal
Balance of Deferred Payment Receivables and Deferred Balloon Payment
Receivables, in each case as of the first day of such Collection Period. As
additional servicing compensation, the Servicer shall also be entitled to
earnings (net of losses and investment expenses) on amounts on deposit in
the Payahead Account, disposition fees paid with respect to Final Payment
Receivables and any administrative fees and charges and all late payment
fees actually collected (from whatever source) on the Receivables other
than fees paid in connection with the extension or deferral of payments on
a Receivable (the "Supplemental Servicing Fee"). The Servicer shall be
required to pay all expenses incurred by it in connection with its
activities hereunder (including fees and expenses of the Owner Trustee and
the Indenture Trustee (and any custodian appointed by the Owner Trustee and
the Indenture Trustee) and independent accountants, any subservicer, taxes
imposed on the Servicer or any subservicer (to the extent not paid by such
subservicer), expenses incurred in connection with distributions and
reports to the Certificateholders and the Noteholders, and any fees and
reimbursements for expenses paid to Lewtan Technologies, Inc.), except
expenses incurred in connection with realizing upon Receivables under
Section 3.3.
Section 3.9 Servicer's Certificate. On or before the
Determination Date immediately preceding each Payment Date, the Servicer
shall deliver to the Owner Trustee, each Paying Agent, the Indenture
Trustee, the Swap Counterparty and the Seller, with a copy to the Rating
Agencies, a certificate of a Servicing Officer substantially in the form of
Exhibit A hereto (a "Servicer's Certificate") and attached to a Servicer's
report containing all information necessary to make the transfers and
distributions pursuant to Sections 4.3, 4.4, 4.5, 4.6 and 4.7, together
with the written statements to be furnished by the Owner Trustee to
Certificateholders pursuant to Section 4.9 and by the Indenture Trustee to
the Noteholders pursuant to Section 4.9 hereof and Section 6.6 of the
Indenture. Upon written request of the Owner Trustee or the Indenture
Trustee, the Servicer also shall separately identify (by account number of
the Receivable as it appears in the related Schedule of Receivables) in a
written notice to the Owner Trustee or the Indenture Trustee, as the case
may be, the Receivables to be repurchased by the Seller or to be purchased
by the Servicer, as the case may be, on the related Payment Date, and, also
upon written request of one of the foregoing parties, each Receivable which
became a Defaulted Receivable during the related Collection Period. The
Servicer shall deliver to the Rating Agencies any information, to the
extent it is available to the Servicer, that the Rating Agencies reasonably
request in order to monitor the Trust.
Section 3.10 Annual Statement as to Compliance; Notice of Event
of Servicing Termination. (a) The Servicer shall deliver to the Owner
Trustee and the Indenture Trustee, on or before March 31 of each year,
commencing March 31, 2003, an Officer's Certificate, stating that (i) a
review of the activities of the Servicer during the preceding calendar year
(or such shorter period, with respect to the first such Officer's
Certificate) and of its performance of its obligations under this Agreement
has been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year (or such shorter
period with respect to the first such Officer's Certificate), or, if there
has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof.
A copy of such certificate shall be delivered by the Indenture Trustee to
each Noteholder, promptly following the Indenture Trustee's receipt of such
certificate, pursuant to Section 7.4 of the Indenture. In addition, a copy
of such certificate may be obtained by any Certificateholder by a request
in writing to the Owner Trustee or by any Person certifying that it is a
Note Owner by a request in writing to the Indenture Trustee, in either case
addressed to the applicable Corporate Trust Office. Upon the telephone
request of the Owner Trustee, the Indenture Trustee shall promptly furnish
the Owner Trustee a list of Noteholders as of the date specified by the
Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and the Rating Agencies, promptly upon having knowledge
thereof, but in no event later than five Business Days thereafter, written
notice in an Officer's Certificate of any event which constitutes or, with
the giving of notice or lapse of time or both, would become, an Event of
Servicing Termination under Section 8.1.
Section 3.11 Annual Independent Certified Public Accountants'
Reports. The Servicer shall cause a firm of independent certified public
accountants (who may also render other services to the Servicer, the Seller
or to MMCA) to deliver to the Owner Trustee and the Indenture Trustee on or
before March 31 of each year, commencing March 31, 2003, a report addressed
to the Board of Directors of the Servicer with respect to the preceding
calendar year (or such shorter period, with respect to the first such
report) to the effect that such firm has audited the financial statements
of the Servicer and issued its report thereon and that such audit (1) was
made in accordance with generally accepted auditing standards, (2) included
tests relating to motor vehicle loans serviced for others in accordance
with the requirements of the Uniform Single Attestation Program for
Mortgage Bankers (the "Program"), to the extent the procedures in such
Program are applicable to the servicing obligations set forth in this
Agreement, and (3) except as described in the report, disclosed no
exceptions or errors in the records relating to automobile and
sports-utility vehicle loans serviced for others that such firm is required
to report under the Program. Such report shall also indicate that the firm
is independent with respect to the Seller and the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants. A copy of such report shall be delivered by
the Indenture Trustee to each Noteholder, promptly following the Indenture
Trustee's receipt of such report, pursuant to Section 7.4 of the Indenture.
In addition, a copy of such report may be obtained by any Certificateholder
by a request in writing to the Owner Trustee, or by any Person certifying
that it is a Note Owner by a request in writing to the Indenture Trustee,
in either case addressed to the applicable Corporate Trust Office.
Section 3.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide the Certificateholders,
the Indenture Trustee and the Noteholders with access to the Receivable
Files in the cases where the Certificateholders, the Indenture Trustee or
the Noteholders shall be required by applicable statutes or regulations to
have access to such documentation. Such access shall be afforded without
charge, but only upon reasonable request and during normal business hours
at the offices of the Servicer. Nothing in this Section 3.12 shall affect
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation
shall not constitute a breach of this Section 3.12. Any Certificateholder
or Noteholder, by its acceptance of a Certificate or Note, as the case may
be, shall be deemed to have agreed to keep any information obtained by it
pursuant to this Section confidential, except as may be required by
applicable law.
Section 3.13 Reports to the Commission. The Servicer shall, on
behalf of the Trust, cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act , and
the rules and regulations of the Commission thereunder. The Seller shall,
at its expense, cooperate in any reasonable request made by the Servicer in
connection with such filings.
Section 3.14 Reports to Rating Agencies. The Servicer shall
deliver to each Rating Agency, at such address as each Rating Agency may
request, a copy of all reports or notices furnished or delivered pursuant
to this Article and a copy of any amendments, supplements or modifications
to this Agreement and any subservicing agreement and any other information
reasonably requested by such Rating Agency to monitor this transaction.
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 4.1 Accounts. (a) The Servicer shall, prior to the
Closing Date, establish and maintain a segregated trust account in the name
of the Indenture Trustee, at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of
Bank of Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Collection Account." The Collection Account shall be held in trust for the
benefit of the Noteholders and the Certificateholders. The Collection
Account shall be under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Collection
Account in accordance with the terms of this Agreement, the Indenture and
the Trust Agreement. All monies deposited from time to time in the
Collection Account shall be held by the Indenture Trustee as part of the
Trust Property and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant to
the first sentence of Section 4.2(a), all amounts held in the Collection
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
bank or trust company then maintaining the Collection Account, in Permitted
Investments that mature not later than the Business Day immediately prior
to the Payment Date for the Collection Period to which such amounts relate
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Collection Account shall be withdrawn from the Collection Account at
the written direction of the Servicer and shall be deposited in the
Certificate Distribution Account. In the event that the Collection Account
is no longer to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Collection
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within ten Business Days (or such longer period not to exceed
30 calendar days as to which each Rating Agency may consent).
(b) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account in the name of the Indenture
Trustee, at a Qualified Institution or Qualified Trust Institution (which
shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Pre-Funding Account." The Pre-Funding Account shall be held in trust for
the benefit of the Noteholders and the Certificateholders. The Pre-Funding
Account shall be under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Pre-Funding
Account in accordance with the terms of this Agreement and the other Basic
Documents. All monies deposited from time to time in the Pre-Funding
Account shall be held by the Indenture Trustee as part of the Trust
Property and all deposits to and withdrawals therefrom shall be made only
upon the terms and conditions of the Basic Documents.
All amounts held in the Pre-Funding Account shall, to the
extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Pre-Funding Account, in Permitted Investments that mature
not later than the Business Day immediately prior to each Payment Date and
such Permitted Investments shall be held until maturity. On the Business
Day preceding each Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account for deposit to the
Collection Account on such date an amount equal to the Pre-Funding Account
Investment Earnings, if any, for the related Collection Period. In the
event that the Pre-Funding Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance
as necessary, cause the Pre-Funding Account to be moved to a Qualified
Institution or a Qualified Trust Institution within ten Business Days (or
such longer period not to exceed thirty calendar days as to which each
Rating Agency may consent).
With respect to any amounts, securities, investments, financial
assets and other property deposited in or credited to the Pre-Funding
Account:
(i) any such property that is a "financial asset" as
defined in Section 8-102(a)(9) of the Relevant UCC shall be physically
delivered to, or credited to an account in the name of, the Qualified
Institution or Qualified Trust Institution maintaining the Pre-Funding
Account, as applicable, in accordance with such institution's
customary procedures such that such institution establishes a
"securities entitlement" in favor of the Indenture Trustee with
respect thereto;
(ii) any such property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one or
more depository institutions having the Required Rating and each such
deposit account shall be subject to the exclusive custody and control
of the Indenture Trustee, and the Indenture Trustee shall have sole
signature authority with respect thereto; and
except for any deposit accounts specified in clause (ii) above,
the Pre-Funding Account shall only be invested in securities or in other
assets which the Qualified Institution or Qualified Trust Institution
maintaining the Pre-Funding Account, as applicable, agrees to treat as
"financial assets" as defined in Section 8-102(a)(9) of the Relevant UCC.
(c) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account in the name of the Indenture
Trustee, at a Qualified Institution or Qualified Trust Institution (which
shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Reinvestment Account." The Reinvestment Account shall be held in trust for
the benefit of the Noteholders and the Certificateholders. The Reinvestment
Account shall be under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Reinvestment
Account in accordance with the terms of this Agreement and the other Basic
Documents. All monies deposited from time to time in the Reinvestment
Account shall be held by the Indenture Trustee as part of the Trust
Property and all deposits to and withdrawals therefrom shall be made only
upon the terms and conditions of the Basic Documents.
All amounts held in the Reinvestment Account shall, to the
extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Reinvestment Account, in Permitted Investments that mature
not later than the Business Day immediately prior to each Payment Date and
such Permitted Investments shall be held until maturity. On the Business
Day preceding each Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reinvestment Account for deposit to the
Collection Account on such date an amount equal to the Reinvestment Account
Investment Earnings, if any, for the related Collection Period. In the
event that the Reinvestment Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance
as necessary, cause the Reinvestment Account to be moved to a Qualified
Institution or a Qualified Trust Institution within ten Business Days (or
such longer period not to exceed thirty calendar days as to which each
Rating Agency may consent).
With respect to any amounts, securities, investments, financial
assets and other property deposited in or credited to the Reinvestment
Account:
(i) any such property that is a "financial asset" as
defined in Section 8-102(a)(9) of the Relevant UCC shall be physically
delivered to, or credited to an account in the name of, the Qualified
Institution or Qualified Trust Institution maintaining the
Reinvestment Account, as applicable, in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any such property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one or
more depository institutions having the Required Rating and each such
deposit account shall be subject to the exclusive custody and control
of the Indenture Trustee, and the Indenture Trustee shall have sole
signature authority with respect thereto; and
(iii) except for any deposit accounts specified in clause
(ii) above, the Reinvestment Account shall only be invested in
securities or in other assets which the Qualified Institution or
Qualified Trust Institution maintaining the Reinvestment Account, as
applicable, agrees to treat as "financial assets" as defined in
Section 8-102(a)(9) of the Relevant UCC.
(d) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account in the name of the Indenture
Trustee, at a Qualified Institution or Qualified Trust Institution (which
shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Negative
Carry Account." The Negative Carry Account shall be held in trust for the
exclusive benefit of the Noteholders. The Negative Carry Account shall be
under the sole dominion and control of the Indenture Trustee; provided,
that the Servicer may make deposits to and direct the Indenture Trustee in
writing to make withdrawals from the Negative Carry Account in accordance
with the terms of this Agreement and the other Basic Documents. All monies
deposited from time to time in the Negative Carry Account shall be held by
the Indenture Trustee as part of the Trust Property and all deposits to and
withdrawals therefrom shall be made only upon the terms and conditions of
the Basic Documents.
All amounts held in the Negative Carry Account shall, to the
extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Negative Carry Account, in Permitted Investments that
mature not later than the Business Day immediately prior to each Payment
Date and such Permitted Investments shall be held until maturity. All
interest and other income (net of losses and investment expenses) on funds
on deposit in the Negative Carry Account shall be withdrawn from the
Negative Carry Account for deposit to the Collection Account or release to
the Seller at the time and in the manner provided in Section 4.12. In the
event that the Negative Carry Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance
as necessary, cause the Negative Carry Account to be moved to a Qualified
Institution or a Qualified Trust Institution within ten Business Days (or
such longer period not to exceed 30 calendar days as to which each Rating
Agency may consent).
With respect to any amounts, securities, investments, financial
assets and other property deposited in or credited to the Negative Carry
Account:
(i) any such property that is a "financial asset" as
defined in Section 8-102(a)(9) of the Relevant UCC shall be physically
delivered to, or credited to an account in the name of, the Qualified
Institution or Qualified Trust Institution maintaining the Negative
Carry Account, as applicable, in accordance with such institution's
customary procedures such that such institution establishes a
"securities entitlement" in favor of the Indenture Trustee with
respect thereto;
(ii) any such property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one or
more depository institutions having the Required Rating and each such
deposit account shall be subject to the exclusive custody and control
of the Indenture Trustee and the Indenture Trustee shall have sole
signature authority with respect thereto; and
except for any deposit accounts specified in clause (ii) above,
the Negative Carry Account shall only be invested in securities or in other
assets which the Qualified Institution or Qualified Trust Institution
maintaining the Negative Carry Account, as applicable, agrees to treat as
"financial assets" as defined in Section 8-102(a)(9) of the Relevant UCC.
(e) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account in the name of the Indenture
Trustee at a Qualified Institution or Qualified Trust Institution (which
shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Note
Payment Account." The Note Payment Account shall be held in trust for the
exclusive benefit of the Noteholders. The Note Payment Account shall be
under the sole dominion and control of the Indenture Trustee. All monies
deposited from time to time in the Note Payment Account pursuant to this
Agreement and the Indenture shall be held by the Indenture Trustee as part
of the Trust Property and shall be applied as provided in this Agreement
and the Indenture. In the event that the Note Payment Account is no longer
to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's assistance as necessary, cause the Note Payment Account to be
moved to a Qualified Institution or a Qualified Trust Institution within
ten Business Days (or such longer period not to exceed 30 calendar days as
to which each Rating Agency may consent).
(f) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account in the name of the Trust at a
Qualified Institution or Qualified Trust Institution (which shall initially
be Wilmington Trust Company), which shall be designated as the "Certificate
Distribution Account." Except as provided in the Trust Agreement, the
Certificate Distribution Account shall be held in trust for the benefit of
the Certificateholders. The Certificate Distribution Account shall be under
the sole dominion and control of the Owner Trustee; provided that the
Indenture Trustee may make deposits to such account in accordance with the
directions of the Servicer pursuant to this Agreement and the Indenture.
All monies deposited from time to time in the Certificate Distribution
Account pursuant to this Agreement and the Indenture shall be held by the
Owner Trustee as part of the Trust Property and shall be applied as
provided in this Agreement and the Trust Agreement. In the event that the
Certificate Distribution Account is no longer to be maintained at
Wilmington Trust Company, the Servicer shall, with the Owner Trustee's
assistance as necessary, cause the Certificate Distribution Account to be
moved to a Qualified Institution or a Qualified Trust Institution within
ten Business Days (or such longer period not to exceed 30 calendar days as
to which each Rating Agency may consent) and shall promptly notify the
Indenture Trustee of the account number and location of such account.
(g) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account in the name of the Indenture
Trustee at a Qualified Institution or Qualified Trust Institution (which
shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Payahead
Account." The Payahead Account shall be held in trust for the benefit of
the Noteholders and the Certificateholders. The Payahead Account shall be
under the sole dominion and control of the Indenture Trustee provided, that
the Servicer may make deposits to and direct the Indenture Trustee in
writing to make withdrawals from the Payahead Account in accordance with
this Agreement and the Indenture. All monies deposited from time to time in
the Payahead Account shall be held by the Indenture Trustee as part of the
Trust Property and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
On the Closing Date, the Seller shall deposit an amount equal
to the Initial Payahead Account Deposit into the Payahead Account from the
net proceeds of the sale of the Notes and the Certificates. On each
Subsequent Transfer Date, the Servicer shall instruct the Indenture Trustee
to withdraw from the Pre-Funding Account and deposit to the Payahead
Account an amount equal to the applicable Subsequent Payahead Account
Deposit.
If the Servicer is required to remit collections pursuant to
the first sentence of Section 4.2(a), all amounts held in the Payahead
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
bank or trust company then maintaining the Payahead Account, in Permitted
Investments that mature not later than the Business Day immediately prior
to the Payment Date for the Collection Period to which such amounts relate
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Payahead Account shall be withdrawn from the Payahead Account at the
direction of the Servicer and shall be paid to the Servicer as additional
servicing compensation. In the event that the Payahead Account is no longer
to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Payahead
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within ten Business Days (or such longer period not to exceed
30 calendar days as to which each Rating Agency may consent).
(h) Notwithstanding the provisions of clause (g) above, for so
long as (i) MMCA is the Servicer, (ii) the rating of MMCA's short-term
unsecured debt is at least "Prime-1" by Xxxxx'x, at least "A-1" by S&P and
at least "F1" by Fitch Ratings and (iii) no Events of Servicing Termination
shall have occurred (each, a "Monthly Remittance Condition"), Payaheads
need not be remitted to and deposited in the Payahead Account but instead
may be remitted to and held by the Servicer. So long as such Monthly
Remittance Conditions are met, the Servicer shall not be required to
segregate or otherwise hold separate any Payaheads remitted to the Servicer
as aforesaid but shall be required to remit Payaheads to the Collection
Account in accordance with Section 4.6(a)(i). At all times as such Monthly
Remittance Conditions are not met, the Servicer shall deposit in the
Payahead Account the amount of any Payaheads then held or received by it.
Notwithstanding the foregoing, if a Monthly Remittance Condition is not
satisfied, the Servicer may utilize, with respect to Payaheads, an
alternative remittance schedule (which may include the remittance schedule
utilized by the Servicer before the Monthly Remittance Condition became
unsatisfied), if the Servicer provides to the Owner Trustee and the
Indenture Trustee written confirmation from the Rating Agencies that such
alternative remittance schedule will not result in the downgrading or
withdrawal by the Rating Agencies of the ratings then assigned to the Notes
and the Certificates. The Owner Trustee and the Indenture Trustee shall not
be deemed to have knowledge of any event or circumstance under clauses (ii)
or (iii) of the first sentence of this Section 4.1(h) that would require
remittance of the Payaheads to the Payahead Account unless the Owner
Trustee or the Indenture Trustee has received written notice of such event
or circumstance from the Seller or the Servicer in an Officer's Certificate
or from the Holders of Notes evidencing not less than 25% of the principal
balance of the then Outstanding Notes or from the Holders of Certificates
evidencing not less than 25% of the Certificate Balance or unless a
Responsible Officer in the Corporate Trust Office with knowledge hereof and
familiarity herewith has actual knowledge of such event or circumstance.
(i) The Servicer shall be permitted to remit to any Obligor,
upon the request of such Obligor, the Payahead Balance with respect to such
Obligor's Receivable or such lesser amount as is requested by such Obligor,
in accordance with the Servicer's customary standards, policies, practices
and procedures, to the extent that such amount is not then due on such
Receivable. Upon any such remittance, the Payahead Balance with respect to
such Receivable shall be reduced by the amount of such remittance.
Section 4.2 Collections. (a) Subject to the provisions of
subsection (b) below, the Servicer shall remit to the Collection Account
(i) all payments by or on behalf of the Obligors (including, subject to the
next two sentences, Payaheads on the Receivables, but excluding payments
with respect to Purchased Receivables and amounts included in the
Supplemental Servicing Fee), including amounts treated as collections on
Balloon Payment Receivables and Final Payment Receivables pursuant to
Section 3.2(d) and (ii) all Liquidation Proceeds and all Recoveries,
received by the Servicer during any Collection Period, as soon as
practicable, but in no event after the close of business on the second
Business Day after receipt thereof. Collections of Payaheads shall be
deposited in the Collection Account, pursuant to the preceding sentence for
purposes of administrative convenience only, pending determination of the
amount to be deposited in the Payahead Account (or in the event that the
Monthly Remittance Conditions are satisfied, remitted to the Servicer
pursuant to Section 4.1(h)), which amount shall be deposited in the
Payahead Account as soon as practicable but in no event later than the
Payment Date immediately following collection, and such amounts shall not
be transferred to the Collection Account until due.
MMCA, for so long as it is acting as the Servicer, may make
remittances of collections on a less frequent basis than that specified in
the immediately preceding paragraph. It is understood that such less
frequent remittances may be made only on the specific terms and conditions
set forth below in this Section 4.2(a) and only for so long as such terms
and conditions are fulfilled. Accordingly, notwithstanding the provisions
of the first sentence of this Section 4.2(a), the Servicer shall remit
collections received during a Collection Period to the Collection Account
in immediately available funds on the Business Day prior to the related
Payment Date but only for so long as each Monthly Remittance Condition is
satisfied. Notwithstanding the foregoing, if a Monthly Remittance Condition
is not satisfied, the Servicer may utilize an alternative remittance
schedule (which may include the remittance schedule utilized by the
Servicer before the Monthly Remittance Condition became unsatisfied), if
the Servicer provides to the Owner Trustee and the Indenture Trustee
written confirmation from the Rating Agencies that such alternative
remittance schedule will not result in the downgrading or withdrawal by the
Rating Agencies of the ratings then assigned to the Notes and the
Certificates. The Owner Trustee or the Indenture Trustee shall not be
deemed to have knowledge of any event or circumstance under clauses (ii) or
(iii) of the definition of Monthly Remittance Condition that would require
daily remittance by the Servicer to the Collection Account unless the Owner
Trustee or the Indenture Trustee has received notice of such event or
circumstance from the Seller or the Servicer in an Officer's Certificate or
written notice from the Holders of Notes evidencing not less than 25% of
the principal balance of the then outstanding Notes or from the Holders of
Certificates evidencing not less than 25% of the Certificate Balance or a
Responsible Officer in the Corporate Trust Office with knowledge hereof or
familiarity herewith has actual knowledge of such event or circumstance.
(b) In those cases where a subservicer is servicing a
Receivable, the Servicer shall cause the subservicer to remit to the
Collection Account, as soon as practicable, but in no event after the close
of business on the second Business Day after receipt thereof by the
subservicer (but subject to the provisions of Section 4.2(a)) the amounts
referred to in Section 4.2(a) in respect of a Receivable being serviced by
the subservicer.
Section 4.3 Application of Collections. (a) For the purposes of
this Agreement, as of the close of business on the last day of each
Collection Period, all collections received pursuant to Section 4.2 for
such Collection Period for each Receivable (excluding the amounts actually
collected with respect to the Supplemental Servicing Fee and amounts
collected with respect to a Purchased Receivable) shall be applied by the
Servicer, in the case of (i) a Simple Interest Receivable that is a
Standard Receivable, to interest and principal on the Receivable in
accordance with the Simple Interest Method, (ii) a Simple Interest
Receivable that is a Balloon Payment Receivable or a Final Payment
Receivable, to interest and principal in accordance with the Simple
Interest Method first, to accrued but unpaid interest, second, to the Level
Pay Balance of such Receivable, third, to the principal portion of the Last
Scheduled Payment to the extent a Last Scheduled Payment Advance has not
been made by the Servicer with respect to such Last Scheduled Payment and
fourth, to the extent of any unreimbursed Last Scheduled Payment Advance
with respect to such Simple Interest Receivable, to reimburse the Servicer
for such Last Scheduled Payment Advance and (iii) an Actuarial Receivable,
first, to the Scheduled Payment of such Actuarial Receivable, second to the
extent of any unreimbursed Actuarial Advances with respect to such
Actuarial Receivable, to reimburse the Servicer for any such Actuarial
Advances, third, to the extent of any unreimbursed Last Scheduled Payment
Advance with respect to such Actuarial Receivable, to reimburse the
Servicer for such Last Scheduled Payment Advance and fourth, to the extent
that any amounts are remaining then due to a prepayment of such Actuarial
Receivable, if the sum of such remaining amount and the previous Payahead
Balance shall be sufficient to prepay the Actuarial Receivable in full, and
otherwise to the Payahead Account (or, if all Monthly Remittance Conditions
are satisfied, to the Servicer) as a Payahead.
(b) All Liquidation Proceeds and any Recoveries, and any
proceeds realized upon the liquidation, sale or dissolution of the Owner
Trust Estate (or any part thereof) upon the occurrence of an Event of
Default under the Indenture shall, with respect to any Balloon Payment
Receivable or Final Payment Receivable be applied first to accrued but
unpaid interest thereon, second, to the Level Pay Balance of such
Receivable and third, to the principal portion of the related Last
Scheduled Payment.
Section 4.4 Advances. (a) As of the close of business on the
last day of each Collection Period, if the payments during such Collection
Period by or on behalf of the Obligor on or in respect of an Actuarial
Receivable (other than a Purchased Receivable) after application under
Section 4.3 shall be less than the Scheduled Payment, the Payahead Balance
of such Receivable shall be applied by the Indenture Trustee to the extent
of the shortfall, and such Payahead Balance shall be reduced accordingly.
Subject to the last sentence of this Section 4.4(a), on each Payment Date
the Servicer shall advance an amount equal to the excess, if any, of the
Scheduled Payment with respect to an Actuarial Receivable over the sum of
the (x) payments received on or in respect of such Actuarial Receivable
during the preceding Collection Period and (y) the Payahead Balance with
respect to such Actuarial Receivable (such advance, an "Actuarial
Advance"); provided that the Servicer shall make Actuarial Advances with
respect to the Last Scheduled Payment on Actuarial Receivables that are
Final Payment Receivables in accordance with Section 4.4(b). All
applications of the Payahead Balance of a Receivable by the Indenture
Trustee and all Actuarial Advances by the Servicer pursuant to this Section
4.4(a) shall be made based on the information set forth in the Servicer's
report attached to the Servicer's Certificate delivered pursuant to Section
3.9. Notwithstanding anything in this Agreement to the contrary, no
successor to Mitsubishi Motors Credit of America, Inc. as Servicer shall be
required to make Actuarial Advances.
(b) As of the last day of the Collection Period in which the
Last Scheduled Payment with respect to a Final Payment Receivable is due,
if the payments during such Collection Period by or on behalf of the
related Obligor on or in respect of such Last Scheduled Payment after
application under Section 4.3(a) and, in the case of an Actuarial
Receivable, the amounts, if any, in the Payahead Account allocable to such
Last Scheduled Payment, shall be less than the amount of such Last
Scheduled Payment, the Servicer shall advance an amount equal to the
shortfall by depositing such amount into the Collection Account on the
related Payment Date (such advance, a "Last Scheduled Payment Advance").
Notwithstanding anything in this Agreement to the contrary, no successor to
Mitsubishi Motors Credit of America, Inc. as Servicer shall be required to
make Last Scheduled Payment Advances.
(c) (i) Upon either the written instructions of the Servicer or
based solely upon the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 3.9, the
Indenture Trustee shall release from amounts available in the Payahead
Account, the amounts required to be released from amounts available in the
Payahead Account pursuant to Sections 4.4(a) and (b) with respect to each
Collection Period and shall deposit such amounts in the Collection Account
on the related Payment Date pursuant to Section 4.5(a).
(ii) On each Payment Date, the Servicer shall deposit into
the Collection Account an amount equal to the aggregate amount of
Actuarial Advances required to be made with respect to related
Collection Period.
(d) On each Payment Date, the Servicer shall instruct the
Indenture Trustee to withdraw from the Collection Account for distribution
to the Servicer, in immediately available funds, an amount equal to the sum
of (i) the aggregate amount of collections on Actuarial Receivables with
respect to which the Servicer has made Actuarial Advances in a prior
Collection Period that are allocable to the reimbursement of such Actuarial
Advances pursuant to Section 4.3(a) and (ii) the aggregate amount of
Actuarial Advances that the Servicer has not been reimbursed for pursuant
to this Section 4.4(d) or Section 4.5(b) with respect to Actuarial
Receivables that became Defaulted Receivables in the related Collection
Period.
(e) On each Payment Date, the Servicer shall instruct the
Indenture Trustee to withdraw from the Collection Account for distribution
to the Servicer, in immediately available funds, an amount equal to the sum
of (i) the aggregate amount of collections on Final Payment Receivables in
the related Collection Period that are allocable to the reimbursement of
Last Scheduled Payment Advances pursuant to Section 4.3(a) and (ii) the
aggregate amount of losses on Last Scheduled Payments that the Servicer has
recorded in its books and records during the related Collection Period to
the extent such losses are allocable to Last Scheduled Payments with
respect to which the Servicer has made Last Scheduled Payment Advances, but
only to the extent such Last Scheduled Payment Advances have not already
been reimbursed pursuant to this Section 4.4(e) or Section 4.5(b).
Section 4.5 Additional Deposits. (a) The Indenture Trustee
shall deposit in the Collection Account amounts required pursuant to
Section 4.4(c). The Servicer shall deposit in the Collection Account
amounts required to be advanced by the Servicer pursuant to Sections 4.4(a)
and (b). The Seller and the Servicer shall deposit or cause to be deposited
in the Collection Account the aggregate Purchase Amount with respect to
Purchased Receivables pursuant to Section 2.3, 3.7 or 9.1. The Indenture
Trustee shall deposit in the Collection Account any amounts received
pursuant to the Yield Supplement Agreement and any amounts received from
the Letter of Credit Bank or the Yield Supplement Account pursuant to
Article V on the date of receipt thereof. All such deposits with respect to
a Collection Period shall be made in immediately available funds no later
than 10:00 a.m., New York City time, on the Payment Date related to such
Collection Period.
(b) The Indenture Trustee shall, on or prior to 10:00 a.m., New
York City time, on the Payment Date relating to each Collection Period make
the following withdrawals from the Reserve Account in the following order
of priority (in each case as set forth in the Servicer's Certificate for
such Payment Date): (i) an amount equal to the Reserve Account Advance Draw
Amount, if any, calculated by the Servicer pursuant to Section 4.6(b), and
shall pay such amount to the Servicer and (ii) an amount equal to the
Reserve Account TRP Draw Amount, if any, calculated by the Servicer
pursuant to Section 4.6(b), and shall deposit to the Collection Account.
Section 4.6 Allocation of Total Available Funds. (a) On each
Payment Date, the Indenture Trustee shall cause to be made the following
transfers and distributions in immediately available funds in the amounts
set forth in the Servicer's Certificate for such Payment Date:
(i) To the Collection Account from the Payahead Account (if
the Monthly Remittance Conditions are not then satisfied) or otherwise
from amounts remitted by the Servicer pursuant to Section 4.1(h) an
amount equal to the sum of:
(1) the aggregate portion of Payaheads constituting
Scheduled Payments with respect to the preceding Collection
Period and prepayments in full received during the preceding
Collection Period, as required by Sections 4.3 and 4.4(a); and
(2) the Payahead Balance, if any, relating to any
Purchased Receivable;
(ii) From the Collection Account to the Payahead Account
or, if the Monthly Remittance Conditions are then satisfied, to the
Servicer, the aggregate Payaheads received during the preceding
Collection Period, as required by Section 4.3.
(b) On each Determination Date, the Servicer shall calculate
the Available Funds, the Total Servicing Fee, the Accrued Note Interest for
each Class of Notes, the Principal Distribution Amount, the Total Yield
Supplement Overcollateralization Amount, the Yield Supplement Amount, the
Last Scheduled Payment Principal Collections and the Negative Carry Amount,
if any, in each case with respect to the following Payment Date. In
addition, on each Determination Date the Servicer shall calculate the
following amounts with respect to such Payment Date:
(i) an amount equal to the lesser of (x) the amount, if
any, by which the aggregate amount payable to the Servicer out of the
Collection Account on such Payment Date as reimbursement for Actuarial
Advances pursuant to Section 4.4(d) and for Last Scheduled Payment
Advances pursuant to Section 4.4(e) exceeds the amount in the
Collection Account available for such purpose (without giving effect
to any deposits thereto from amounts in the Reserve Account but giving
effect to all other deposits to the Collection Account required to be
made on such Payment Date) and (y) the Reserve Account Amount for such
Payment Date (without giving effect to any deposits of Total Available
Funds but giving effect to all other deposits to the Reserve Account
on such Payment Date) (the "Reserve Account Advance Draw Amount");
(ii) an amount equal to the lesser of (x) the amount, if
any, by which the Total Required Payment for such Payment Date exceeds
the Available Funds for such Payment Date and (y) an amount equal to
the Reserve Account Amount (without giving effect to any deposits of
Total Available Funds on such Payment Date) for such Payment Date,
less the Reserve Account Advance Draw Amount for such Payment Date
(the "Reserve Account TRP Draw Amount");
(iii) the Total Available Funds for such Payment Date;
(iv) the Reserve Account Amount with respect to such
Payment Date after giving effect to the Reserve Account Advance Draw
Amount and the Reserve Account TRP Draw Amount for such Payment Date,
and the difference, if any, between the Reserve Account Amount and the
Specified Reserve Balance for such Payment Date; and
(v) any Net Swap Payments, any Net Swap Receipts and any
Swap Termination Payments.
(c) On each Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
3.9) to withdraw the Total Available Funds on deposit in the Collection
Account for the related Collection Period and make the following payments
and deposits for such Payment Date in the following order of priority:
(i) to the Servicer, the Total Servicing Fee;
(ii) to the Swap Counterparty, the amount of any Net Swap
Payments then due under the Interest Rate Swap Agreement (exclusive of
Swap Termination Payments);
(iii) with the same priority and ratably, in accordance
with the outstanding principal balance of the Class A Notes and the
amount of any Swap Termination Payments due and payable by the Issuer
to the Swap Counterparty,
(1) to the Note Payment Account, the Accrued Note
Interest for the Class A Notes; and
(2) to the Swap Counterparty, any Swap Termination
Payments;
provided, that, if any amounts allocable to the Class A Notes are not
needed to pay interest due on such Notes, such amounts shall be applied to
pay the portion, if any, of any Swap Termination Payments remaining unpaid,
pro rata based on the amount of the Swap Termination Payments, and
provided, further, that if there are not sufficient funds available to pay
the entire amount of the Accrued Note Interest for the Class A Notes, the
amounts available shall be applied to the payment of such interest on the
Class A Notes on a pro rata basis;
(iv) to the Note Payment Account, the Accrued Note Interest
for the Class B Notes;
(v) to the Note Payment Account, the Accrued Note Interest
for the Class C Notes;
(vi) to the Note Payment Account, the Principal
Distribution Amount;
(vii) to the Reserve Account, the amount, if any, necessary
to reinstate the balance in the Reserve Account up to the Specified
Reserve Balance; and
(viii) to the Certificate Distribution Account, any
remaining portion of the Total Available Funds.
Notwithstanding the foregoing, following the occurrence and
during the continuation of an Event of Default which has resulted in an
acceleration of the Notes, on each Payment Date the Total Available Funds
shall be deposited in the Note Payment Account and applied in accordance 0
with Section 2.8(f) of the Indenture.
Section 4.7 Reserve Account. (a) The Seller shall, prior to the
Closing Date, establish and maintain a segregated trust account in the name
of the Indenture Trustee at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of
Bank of Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Reserve Account." The Reserve Account shall be under the sole dominion and
control of the Indenture Trustee; provided, that the Servicer may make
deposits to the Reserve Account in accordance with this Agreement and the
Indenture. On the Closing Date, the Seller will deposit the Reserve Account
Initial Deposit into the Reserve Account from the net proceeds of the sale
of the Notes. On each Subsequent Transfer Date, the Seller shall deposit to
the Reserve Account an amount equal to the applicable Subsequent Reserve
Amount Deposit. It shall be a condition to the purchase by the Trust of
Subsequent Receivables from the Seller with funds on deposit in the
Pre-Funding Account that the Seller make such deposit. The Reserve Account
and all amounts, securities, investments, financial assets and other
property deposited in or credited to the Reserve Account (the "Reserve
Account Property") has been conveyed by the Seller to the Trust pursuant to
Section 2.1(a). Pursuant to the Indenture, the Trust will pledge all of its
right, title and interest in, to and under the Reserve Account and the
Reserve Account Property to the Indenture Trustee on behalf of the
Noteholders to secure its obligations under the Notes and the Indenture.
The Reserve Account Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing
by the Servicer, by the bank or trust company then maintaining the Reserve
Account, in Permitted Investments that mature not later than the Business
Day immediately preceding the next Payment Date, and such Permitted
Investments shall be held to maturity. All interest and other income (net
of losses and investment expenses) on funds on deposit in the Reserve
Account shall, upon the written direction of the Servicer, be paid to the
Seller on any Payment Date to the extent that funds on deposit therein, as
certified by the Servicer, exceed the Specified Reserve Balance. In the
event the Reserve Account is no longer to be maintained at the corporate
trust department of Bank of Tokyo-Mitsubishi Trust Company, the Servicer
shall, with the Indenture Trustee's or Owner Trustee's assistance as
necessary, cause the Reserve Account to be moved to a Qualified Institution
or a Qualified Trust Institution within ten Business Days (or such longer
period not to exceed 30 calendar days as to which each Rating Agency may
consent).
(b) With respect to any Reserve Account Property:
(i) any Reserve Account Property that is a "financial
asset" as defined in Section 8-102(a)(9) of the Relevant UCC shall be
physically delivered to, or credited to an account in the name of, the
Qualified Institution or Qualified Trust Institution maintaining the
Reserve Account in accordance with such institution's customary
procedures such that such institution establishes a "securities
entitlement" in favor of the Indenture Trustee with respect thereto;
(ii) any Reserve Account Property that is held in deposit
accounts shall be held solely in the name of the Indenture Trustee at
one or more depository institutions having the Required Rating and
each such deposit account shall be subject to the exclusive custody
and control of the Indenture Trustee and the Indenture Trustee shall
have sole signature authority with respect thereto; and
(iii) except for any deposit accounts specified in clause
(ii) above, the Reserve Account shall only be invested in securities
or in other assets which the Qualified Institution or Qualified Trust
Institution maintaining the Reserve Account agrees to treat as
"financial assets" as defined in Section 8-102(a)(9) of the Relevant
UCC.
(c) If the amount on deposit in the Reserve Account on any
Payment Date (after giving effect to all deposits thereto or withdrawals
therefrom on such Payment Date) is greater than the Specified Reserve
Balance for such Payment Date, the Servicer shall instruct the Indenture
Trustee to distribute the amount of such excess to the Seller; provided
that the Indenture Trustee and the Owner Trustee hereby release, on each
Payment Date, their security interest in, to and under Reserve Account
Property distributed to the Seller.
(d) Following the payment in full of the aggregate principal
balance of the Notes and the Certificate Balance and of all other amounts
owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to Noteholders or Certificateholders and the termination of the
Trust, any remaining Reserve Account Property shall be distributed to the
Seller.
Section 4.8 Net Deposits. As an administrative convenience
only, unless the Servicer is required to remit collections pursuant to the
first sentence of Section 4.2(a), the Seller and the Servicer may make any
remittance pursuant to this Article IV with respect to a Collection Period
net of distributions to be made to the Seller or the Servicer with respect
to such Collection Period. Nonetheless, such obligations shall remain
separate obligations, no party shall have a right of offset, and each such
party shall account for all of the above described remittances and
distributions as if the amounts were deposited and/or transferred
separately.
Section 4.9 Statements to Noteholders and Certificateholders.
On or prior to each Payment Date, the Servicer shall provide to the
Indenture Trustee (with copies to the Rating Agencies, the Swap
Counterparty and each Paying Agent) for the Indenture Trustee to forward to
each Noteholder of record as of the most recent Record Date and to the
Owner Trustee (with copies to the Rating Agencies and to each Paying Agent)
for the Owner Trustee to forward to each Certificateholder of record as of
the most recent Record Date a statement in substantially the forms of
Exhibits B and C, respectively, setting forth at least the following
information as to the Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal
paid to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to interest
paid to each Class of Notes;
(iii) the Yield Supplement Amount;
(iv) the amount of the Total Servicing Fee with respect to
the related Collection Period;
(v) the amount of the Net Swap Payments or Net Swap
Receipts, if any, due on that Payment Date;
(vi) the amount of any Swap Termination Payments due on
that Payment Date;
(vii) the aggregate outstanding principal balance of each
Class of Notes, the applicable Note Pool Factor, the Certificate
Balance and the Certificate Pool Factor as of the close of business on
the last day of the preceding Collection Period, after giving effect
to payments allocated to principal reported under clause (i) above;
(viii) the Pool Balance, the Level Pay Pool Balance and the
Last Scheduled Payment Pool Balance, in each case as of the close of
business on the last day of the related Collection Period;
(ix) the amounts of the Interest Carryover Shortfall, if
any, for the next Payment Date and the portion thereof attributable to
each Class of Notes;
(x) the amount of the aggregate Realized Losses, if any,
with respect to the related Collection Period;
(xi) the balance of the Reserve Account on such Payment
Date, after giving effect to changes therein on such Payment Date;
(xii) the aggregate Purchase Amount of Receivables
repurchased by the Seller or purchased by the Servicer, if any, with
respect to the related Collection Period;
(xiii) the amount of Actuarial Advances and Last Scheduled
Payment Advances, if any, with respect to the related Collection
Period;
(xiv) for each such Payment Date during the Pre-Funding
Period, (A) the amount, if any, withdrawn from the Pre-Funding Account
to purchase Subsequent Receivables during the related Collection
Period, (B) the Remaining Pre-Funded Amount, if any, (C) the Negative
Carry Amount, if any, for the related Collection Period, and (D) the
amount remaining on deposit in the Negative Carry Account, if any,
after all withdrawals, if any, made on such Payment Date;
(xv) for each Payment Date during the Reinvestment Period,
the excess, if any, of the Minimum Adjusted Principal Balance of Long
Deferment Period Receivables, as of the last day of the preceding
Collection Period, over the sum of (x) the aggregate Adjusted
Principal Balance of Long Deferment Period Receivables, as of the last
day of the preceding Collection Period, (y) the aggregate Adjusted
Principal Balance of Reinvested Receivables as of the last day of the
preceding Collection Period, and (z) the Excess Reinvestment Amount as
of the last day of the preceding Collection Period;
(xvi) for each Payment Date during the Reinvestment Period,
the excess, if any, of the Minimum Adjusted Receivables Principal
Balance, over the Adjusted Principal Balance of all Receivables, in
each case, as of the last day of the preceding Collection Period;
(xvii) the Required Reinvestment Amount for the preceding
Collection Period;
(xviii) the Reinvested Amount for the preceding Collection
Period;
(xix) the Excess Reinvestment Amount for the preceding
Collection Period;
(xx) for each Payment Date, the amount remaining in the
Reinvestment Account, if any; and
(xxi) for the first Payment Date on or immediately
following the end of the Pre-Funding Period, the Remaining Pre-Funded
Amount, if any.
Each amount set forth on the Payment Date statement pursuant to
clauses (i), (ii), (iv) and (vii) above shall be expressed as a dollar
amount per $1,000 of original principal balance of a Certificate or Note,
as applicable.
Section 4.10 Control of Securities Accounts. Notwithstanding
anything else contained herein, the Trust agrees that each of the
Collection Account, the Pre-Funding Account, the Reinvestment Account, the
Note Payment Account, the Reserve Account, the Negative Carry Account and
the Yield Supplement Account will only be established at a Qualified
Institution or Qualified Trust Institution that agrees substantially as
follows: (i) it will comply with "entitlement orders" (as defined in
Section 8-102(a)(8) of the Relevant UCC; i.e., orders directing the
transfer or redemption of any financial asset) relating to such accounts
issued by the Indenture Trustee without further consent by the Seller or
the Trust; (ii) until the termination of the Indenture, it will not enter
into any other agreement relating to any such account pursuant to which it
agrees to comply with entitlement orders of any Person other than the
Indenture Trustee; and (iii) all assets delivered or credited to it in
connection with such accounts and all investments thereof will be promptly
credited to such accounts.
Section 4.11 Pre-Funding Account.
(a) On the Closing Date, the Seller shall deposit in the
Pre-Funding Account $437,553,098.17 from the net proceeds of the sale of
the Notes. On or prior to the Business Day immediately preceding each
Subsequent Transfer Date, the Servicer shall calculate the following
amounts: (i) the aggregate Principal Balance of the Subsequent Receivables
transferred to the Trust on such Subsequent Transfer Date, and (ii) the
Subsequent Payahead Account Deposit. The Servicer shall instruct the
Indenture Trustee to distribute the amount in clause (i) to the Seller and
to deposit the amount in clause (ii) to the Payahead Account on behalf of
the Seller on such Subsequent Transfer Date.
(b) If the Pre-Funding Account has not been reduced to zero on
the Payment Date on which the Pre-Funding Period ends (or, if the
Pre-Funding Period does not end on a Payment Date, on the first Payment
Date following the end of the Pre-Funding Period), after giving effect to
any reductions in the Pre-Funding Account on such date pursuant to
paragraph (a), the Servicer shall instruct the Indenture Trustee to
withdraw from the Pre-Funding Account on such Payment Date (or, if the
Pre-Funding Period does not end on a Payment Date, on the first Payment
Date following the end of the Pre-Funding Period), the amount remaining in
the Pre-Funding Account at such time exclusive of the Pre-Funding Account
Investment Earnings, if any, for the related Collection Period (such
remaining amount being the "Remaining Pre-Funded Amount") and deposit such
amount in the Collection Account for inclusion in the Available Funds for
such Payment Date. The Pre-Funding Account Investment Earnings for the
related Collection Period (together with any other interest and other
income (net of losses and expenses) earned on amounts on deposit in the
Pre-Funding Account that are on deposit in the Pre-Funding Account) shall
be deposited to the Collection Account.
Section 4.12 Negative Carry Account. (a) On the Closing Date,
the Seller shall deposit the Negative Carry Account Initial Deposit into
the Negative Carry Account. On each Payment Date, the Servicer shall
instruct the Indenture Trustee to withdraw from the Negative Carry Account
and deposit into the Collection Account an amount equal to the lesser of
(x) the amount, if any, on deposit in the Negative Carry Account on such
Payment Date and (y) the Negative Carry Amount, if any, for such Payment
Date. If the amount on deposit in the Negative Carry Account on any Payment
Date (after giving effect to the withdrawal therefrom of the Negative Carry
Amount, if any, for such Payment Date) is greater than the Required
Negative Carry Account Balance for such Payment Date, the excess shall be
released to the Seller on such Payment Date. On the Payment Date on which
the Pre-Funding Period ends (or, if the Pre-Funding Period does not end on
a Payment Date, on the first Payment Date following the end of the
Pre-Funding Period), the Servicer shall instruct the Indenture Trustee to
release to the Seller on such Payment Date all amounts remaining on deposit
in the Negative Carry Account after giving effect to any withdrawals of the
Negative Carry Amount on such Payment Date.
Section 4.13 Reinvestment Period. (a) On or prior to each
Determination Date during the Reinvestment Period, the Servicer shall
determine the Required Reinvestment Amount for the related Collection
Period. If the Required Reinvestment Amount for any Collection Period is
greater than zero, the Servicer also shall determine, on or prior to such
Determination Date, (i) the aggregate Adjusted Principal Balance of
Eligible Receivables available to be transferred to the Trust on or prior
to the related Payment Date, (ii) the Excess Reinvestment Amount, if any,
for such Collection Period, and (iii) the Required Negative Carry Amount
for such Payment Date after giving effect to any deposit of Excess
Reinvestment Amount to the Reinvestment Account on the related Payment
Date.
(b) If the Required Reinvestment Amount for any Collection
Period is greater than zero, the Servicer shall, or shall direct the
Indenture Trustee to, withdraw from the Collection Account on the Business
Day preceding the following Payment Date an amount equal to the lesser of
(x) the Required Reinvestment Amount for such Collection Period and (y) the
aggregate Adjusted Principal Balance of Eligible Receivables available to
be transferred to the Trust on such date (the "Reinvested Amount") and pay
such amount to the Seller against transfer to the Trust of such Receivables
on such date.
(c) If the Excess Reinvestment Amount for any Collection Period
is greater than zero, the Servicer shall determine whether there is a
Negative Carry Account Shortfall after giving effect to any deposit of such
Excess Reinvestment Amount to the Reinvestment Account. Within two Business
Days of each Determination Date during the Reinvestment Period, the
Servicer shall inform the Seller of the amount of any Negative Carry
Account Shortfall. Pursuant to Section 5.6(c) of the Purchase Agreement,
MMCA shall have the option, but not the obligation, to pay to the Seller
the amount of any such Negative Carry Account Shortfall by depositing such
amount to the Negative Carry Account on or prior to the second Business Day
preceding the Payment Date following such Determination Date. If MMCA makes
such deposit, then the Servicer shall direct the Indenture Trustee to
withdraw from the Collection Account and deposit to the Reinvestment
Account on the Business Day preceding the Payment Date following such
Determination Date an amount equal to the Excess Reinvestment Amount for
the preceding Collection Period. If an amount equal to the Negative Carry
Account Shortfall shall not have been deposited to the Negative Carry
Account on or prior to such date, the Excess Reinvestment Amount shall be
included in the Available Funds for the following Payment Date.
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND
THE YIELD SUPPLEMENT ACCOUNT
Section 5.1 Yield Supplement Letter of Credit and the Yield
Supplement Account. (a) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the
Indenture Trustee at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Yield
Supplement Account" (the Yield Supplement Account, together with the
Payahead Account, the Collection Account, the Pre-Funding Account, the
Reinvestment Account, the Note Payment Account, the Negative Carry Account
and the Reserve Account, the "Trust Accounts"). Amounts on deposit in the
Yield Supplement Account will be used for the payment of any Yield
Supplement Amounts required to be paid on any Payment Date pursuant to the
Yield Supplement Agreement which MMCA has not paid as of such Payment Date.
The Yield Supplement Account shall be under the sole dominion and control
of the Indenture Trustee provided, that the Servicer may make deposits to
and direct the Indenture Trustee to make withdrawals from the Yield
Supplement Account in accordance with this Agreement and the Yield
Supplement Agreement. On the Closing Date, the Seller shall deposit an
amount equal to the Initial Yield Supplement Amount into the Yield
Supplement Account from the net proceeds of the sale of the Notes. On each
Subsequent Transfer Date, the Seller shall deposit to the Yield Supplement
Account an amount equal to the applicable Subsequent Yield Supplement
Account Deposit unless the Yield Supplement Account has been replaced by a
Yield Supplement Letter of Credit on or prior to such Subsequent Transfer
Date, in which case the Servicer shall cause the amount available to be
drawn under the Yield Supplement Letter of Credit as of such Subsequent
Transfer Date to be no less than the Specified Yield Supplement Account
Balance as of such Subsequent Transfer Date after giving effect to the
transfer to the Trust of the related Subsequent Receivables. It shall be a
condition to the sale of Subsequent Receivables that are Deferred Payment
Receivables to the Trust that the Seller make such deposit. To the extent,
on any Payment Date, the amount on deposit in the Yield Supplement Account
(after giving effect to any withdrawals to be made on such Payment Date,
but exclusive of net investment income) is greater than the Specified Yield
Supplement Account Balance for such Payment Date, then, in such event, the
Servicer shall instruct the Indenture Trustee in writing to pay such excess
amount to the Seller.
All amounts held in the Yield Supplement Account shall be
invested, as directed in writing by the Servicer, by the bank or trust
company then maintaining the Yield Supplement Account in Permitted
Investments that mature not later than the Business Day immediately
preceding the next Payment Date and such Permitted Investments shall be
held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Yield Supplement Account
shall be withdrawn from the Yield Supplement Account at the written
direction of the Servicer and shall be paid to the Seller. In the event
that the Yield Supplement Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's assistance as necessary, cause
the Yield Supplement Account to be moved to a Qualified Institution or a
Qualified Trust Institution within ten Business Days (or such longer period
not to exceed 30 calendar days as to which each Rating Agency may consent).
The Seller hereby sells, conveys and transfers to the Trust the
Yield Supplement Account, all funds and investments on deposit therein or
credited thereto and all proceeds thereof, subject, however, to the
limitations set forth below.
Pursuant to the Indenture, the Trust will pledge its rights
under the Yield Supplement Agreement (including its rights to amounts on
deposit in the Yield Supplement Account) to the Indenture Trustee to secure
its obligations under the Notes and the Indenture. Such sale, conveyance
and transfer of the Yield Supplement Account by the Seller to the Trust,
and such pledge by the Trust of its rights to amounts in the Yield
Supplement Account to the Indenture Trustee, shall be subject to the
following limitations:
(i) All or a portion of the Yield Supplement Account may be
invested and reinvested in the manner specified in Section 5.1(a) in
accordance with written instructions from the Servicer. All such
investments shall be made in the name of the Indenture Trustee and all
income and gain realized thereon shall be solely for the benefit of
the Seller and shall be payable by the Indenture Trustee to the Seller
upon written direction of the Servicer as specified in Section 5.1(a);
(ii) If, with respect to any Collection Period, MMCA shall
have failed to make or cause to be made in full the remittance of the
Yield Supplement Amount on the date required by the Yield Supplement
Agreement, the Indenture Trustee not later than 10:00 a.m. (New York
City time) on the Payment Date, shall, upon the written direction of
the Servicer, withdraw from the Yield Supplement Account and deposit
into the Collection Account the amount of the shortfall between the
amount of funds that are required to be remitted by MMCA with respect
to the Yield Supplement Agreement as set forth in the Servicer's
Certificate and the amount of funds actually so remitted and to the
extent of any remaining shortfall, the Indenture Trustee shall
withdraw an amount equal thereto from the Reserve Account, and deposit
such amounts in the Collection Account; and
(iii) Upon termination of this Agreement in accordance with
Section 9.1 or (a) in the event that the Seller obtains a Yield
Supplement Letter of Credit or (b) the Seller otherwise satisfies the
requirements with respect to the Yield Supplement Agreement
established by the Rating Agencies, in either case as evidenced by
satisfaction of the Rating Agency Condition and an Officer's
Certificate of the Seller that all conditions to the liquidation of
the Yield Supplement Account have been satisfied, any amounts on
deposit in the Yield Supplement Account shall, upon written request of
the Seller, be paid to the Seller.
(b) If a Yield Supplement Letter of Credit has been obtained by
MMCA, and if, with respect to any Collection Period, MMCA shall have failed
to make or cause to be made in full the remittance of the Yield Supplement
Amount, upon written notice by the Servicer of such failure (which notice
shall be given no later than 10:00 a.m. (New York City time) on the Payment
Date for such Collection Period), the Indenture Trustee shall draw on the
Yield Supplement Letter of Credit in accordance with the terms thereof, in
the amount of the shortfall between the amount of funds with respect to the
Yield Supplement Amount that are required to be remitted by MMCA with
respect to the Yield Supplement Agreement as set forth in the Servicer's
Certificate and the amount of funds actually so remitted as set forth in
the Servicer's Certificate. Any such draw on the Yield Supplement Letter of
Credit shall be made after receipt of the related Servicer's Certificate on
or before 11:00 a.m. (New York City time) on the Payment Date for such
Collection Period. Upon receipt of a request for a draw by the Indenture
Trustee under the Yield Supplement Letter of Credit, the Letter of Credit
Bank is to promptly make a payment to the Indenture Trustee in an amount
equal to the Yield Supplement Amount (minus payments made on the Yield
Supplement Agreement), and the Indenture Trustee shall deposit into the
Collection Account pursuant to Section 4.5(a) the amount received from the
Letter of Credit Bank in respect of such drawing. The Servicer shall
include in each Servicer's Certificate, or in an Officer's Certificate
provided to the Indenture Trustee with each Servicer's Certificate, the
Stated Amount (as defined in the Yield Supplement Letter of Credit) of the
Yield Supplement Letter of Credit as of the close of business on the last
day of the Collection Period preceding the date of such Servicer's
Certificate. In the event that the rating of the Letter of Credit Bank
declines below the Required Rating, the Servicer shall promptly notify the
Indenture Trustee in writing of such decline, and upon receipt of such
notification, the Indenture Trustee shall, unless a suitable replacement
letter of credit shall have been delivered, promptly draw the full amount
available under the Yield Supplement Letter of Credit and deposit such
amount in the Yield Supplement Account.
ARTICLE VI - THE SELLER
Section 6.1 Representations, Warranties and Covenants of
Seller. The Seller makes the following representations, warranties and
covenants on which the Trust is deemed to have relied in acquiring the
Trust Property. The representations, warranties and covenants speak as of
the Closing Date in the case of the Initial Receivables and the other Trust
Property related thereto, and as of the related Subsequent Transfer Date in
the case of the Subsequent Receivables and the other Trust Property related
thereto, and shall survive the sale of the Trust Property to the Trust and
the pledge thereof by the Trust to the Indenture Trustee pursuant to the
Indenture:
(a) Organization and Good Standing. The Seller has been duly
established and is validly existing as a business trust in good standing
under the laws of the State of Delaware, 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 and own the Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign business trust in good standing, and has 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.
(c) Power and Authority. The Seller has the power and authority
to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their terms. The Seller has full power
and authority to sell and assign the property to be sold and assigned to
and deposited with the Trust and has duly authorized such sale and
assignment to the Trust by all necessary corporate action; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which it is a party have been, and the execution, delivery and
performance of each Second-Tier Subsequent Assignment has been or will be
on or before the related Subsequent Transfer Date, duly authorized by the
Seller by all necessary corporate action.
(d) Valid Sale; Binding Obligation. This Agreement effects a
valid sale, transfer and assignment of the Initial Receivables and the
other Trust Property related thereto conveyed by the Seller to the Trust
hereunder and this Agreement together with each Second-Tier Subsequent
Assignment will effect a valid sale, transfer and assignment of the related
Subsequent Receivables and the other Trust Property related thereto, in
each case enforceable against creditors of and purchasers from the Seller;
and this Agreement and the other Basic Documents to which the Seller is a
party constitute, and each Second-Tier Subsequent Assignment when executed
and delivered by the Seller will constitute, legal, valid, and binding
obligations of the Seller, enforceable against the Seller in accordance
with their terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.
(e) No Violation. The execution, delivery and performance by
the Seller of this Agreement and the other Basic Documents to which the
Seller is a party and the consummation of the transactions contemplated
hereby and thereby and the fulfillment of the terms hereof and thereof will
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
default under, the certificate of trust or amended and restated trust
agreement of the Seller, or conflict with, or breach any of the terms or
provisions of, or constitute (with or without notice or lapse of time or
both) a default under, any indenture, agreement, mortgage, deed of trust or
other instrument to which the Seller is a party or by which the Seller is
bound or any of its properties are subject, or result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other instrument
(other than this Agreement), or violate any law, order, rule, or
regulation, applicable to the Seller or its properties, of any federal or
state regulatory body, any court, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or any of
its properties. (f) No Proceedings. There are no proceedings or
investigations pending, or, to the best knowledge of the Seller,
threatened, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality having jurisdiction over the
Seller or its properties: (i) asserting the invalidity of this Agreement,
the Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes, the
Certificates or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, any of the
other Basic Documents, the Notes or the Certificates, or (iv) that may
adversely affect the Federal or Applicable Tax State income, excise,
franchise or similar tax attributes of the Notes or the Certificates.
(g) Florida Securities and Investor Protection Act. In
connection with the offering of the Notes in the State of Florida, the
Seller hereby certifies that it has complied with all provisions of Section
517.075 of the Florida Securities and Investor Protection Act.
Section 6.2 Liability of Seller; Indemnities. The Seller shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement, and hereby
agrees to the following:
(a) The Seller shall indemnify, defend, and hold harmless the
Trust, the Owner Trustee and the Indenture Trustee from and against any
taxes that may at any time be asserted against any such Person 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 Notes or 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 Applicable Tax State income taxes arising out of the transactions
contemplated by this Agreement and the other Basic Documents) and costs and
expenses in defending against the same.
(b) The Seller shall indemnify, defend, and hold harmless the
Trust, the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred
by reason of (i) the Seller's willful misfeasance, bad faith, or negligence
(other than errors in judgment) in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement and (ii) the Seller's violation of Federal or state
securities laws in connection with the registration or the sale of the
Notes or the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective officers,
directors, 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
contained herein and in the Trust Agreement, in the case of the Owner
Trustee, and in the Indenture, in the case of the Indenture Trustee, except
to the extent that such cost, expense, loss, claim, damage or liability:
(i) shall be due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Owner Trustee or the Indenture
Trustee, as applicable; (ii) in the case of the Owner Trustee shall arise
from the breach by the Owner Trustee of any of its representations or
warranties set forth in Section 7.3 of the Trust Agreement or (iii) in the
case of the Indenture Trustee shall arise from the breach by the Indenture
Trustee of any of its representations and warranties set forth in the
Indenture.
(d) The Seller shall pay any and all taxes levied or assessed
upon all or any part of the Owner Trust Estate.
(e) Indemnification under this Section 6.2 shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee and
the termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Seller shall have
made any indemnity payments pursuant to this Section 6.2 and the Person to
or on behalf of whom such payments are made thereafter shall collect any of
such amounts from others, such Person shall promptly repay such amounts to
the Seller, without interest.
Section 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (i) into which the Seller may be merged
or consolidated, (ii) resulting from any merger, conversion, or
consolidation to which the Seller shall be a party or (iii) that may
succeed by purchase and assumption to all or substantially all of the
business of the Seller, which Person in any of the foregoing cases executes
an agreement of assumption to perform every obligation of the Seller under
this Agreement, will be the successor to the Seller under this Agreement
without the execution or filing of any document or any further act on the
part of any of the parties to this Agreement; provided, however, that (x)
the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such merger, conversion, consolidation or succession and such
agreement of assumption comply with this Section 6.3, and (y) the Seller
shall have delivered to the Owner Trustee and the Indenture Trustee an
Opinion of Counsel either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements and amendments thereto
have been authorized and filed that are necessary to fully preserve and
protect the interest of the Trust and the Indenture Trustee, respectively,
in the Receivables and the other Trust Property, and reciting the details
of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to fully preserve and protect such interest.
The Seller shall provide notice of any merger, conversion, consolidation,
or succession pursuant to this Section 6.3 to the Rating Agencies.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (x) or (y)
above shall be conditions to the consummation of the transactions referred
to in clauses (i), (ii) or (iii) above.
Section 6.4 Limitation on Liability of Seller and Others. The
Seller, and any director or officer or employee or agent of the Seller, may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Seller shall not be under any obligation to
appear in, prosecute, or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability.
Section 6.5 Seller May Own Notes or Certificates. The Seller,
and any Affiliate of the Seller, may in its individual or any other
capacity become the owner or pledgee of Notes not to exceed 20% (calculated
on an aggregate basis of the Seller and any Affiliates which are owners or
pledgees of the Notes) of the Outstanding Notes or Certificates with the
same rights as it would have if it were not the Seller or an Affiliate
thereof, except as otherwise expressly provided herein or in the other
Basic Documents. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to the Seller or
such controlling, controlled or commonly controlled Person shall have an
equal and proportionate benefit under the provisions of this Agreement and
the other Basic Documents, without preference, priority, or distinction as
among all of the Notes and Certificates.
ARTICLE VII - THE SERVICER
Section 7.1 Representations and Warranties of Servicer. The
Servicer makes the following representations and warranties on which the
Trust is deemed to have relied in acquiring the Trust Property, and such
representations and warranties speak as of the Closing Date, in the case of
the Initial Receivables and the other Trust Property related thereto, and
as of the related Subsequent Transfer Date, in the case of the Subsequent
Receivables and the other Trustee Property related thereto, and shall
survive the sale of the Trust Property to the Trust and the pledge thereof
by the Trust pursuant to the Indenture:
(a) Organization and Good Standing. The Servicer has been duly
organized and is 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.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Receivables as required by this Agreement) shall
require such qualifications.
(c) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their terms, and the
execution, delivery and performance of this Agreement and the other Basic
Documents to which it is a party have been duly authorized by the Servicer
by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other Basic
Documents to which it is a party constitute legal, valid, and binding
obligations of the Servicer, enforceable against the Servicer in accordance
with their terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.
(e) No Violation. The execution, delivery and performance by
the Servicer of this Agreement and the other Basic Documents to which it is
a party, the consummation of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof will not
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default
under, the certificate of incorporation or bylaws of the Servicer, or
conflict with, or breach any of the terms or provisions of, or constitute
(with or without notice or lapse of time or both) a default under, any
indenture, agreement, mortgage, deed of trust or other instrument to which
the Servicer is a party or by which the Servicer is bound or to which any
of its properties are subject, or result in the creation or imposition of
any lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument (other
than this Agreement), or violate any law, order, rule, or regulation
applicable to the Servicer or its properties of any Federal or state
regulatory body, any court, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the Servicer's knowledge, threatened, before any court,
regulatory body, administrative agency, or tribunal or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(a) asserting the invalidity of this Agreement, the Indenture, any of the
other Basic Documents, the Notes, or the Certificates, (b) seeking to
prevent the issuance of the Notes or the Certificates or the consummation
of any of the transactions contemplated by this Agreement, the Indenture or
any of the other Basic Documents, (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, this
Agreement, the Indenture, any of the other Basic Documents, the Notes or
the Certificates, or (d) that may adversely affect the Federal or
Applicable Tax State income, excise, franchise or similar tax attributes of
the Notes or the Certificates.
Section 7.2 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 this Agreement,
and hereby agrees to the following:
(a) The Servicer shall defend, indemnify and hold harmless the
Trust, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller 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 Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Trust, the Owner Trustee and the Indenture Trustee from and against any
taxes that may at any time be asserted against any such Person with respect
to the transactions contemplated herein or in the other Basic Documents, if
any, 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 Notes and the Certificates and the
issuance of the Certificates, or asserted with respect to ownership of the
Receivables, or Federal or other Applicable Tax State income taxes arising
out of the transactions contemplated by this Agreement and the other Basic
Documents) and costs and expenses in defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the
Trust, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller 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 any such Person through, the negligence, willful misfeasance
or bad faith of the Servicer in the performance of its duties under this
Agreement or any other Basic Document to which it is a party (except for
errors in judgment), or by reason of reckless disregard of its obligations
and duties under this Agreement or any other Basic Document to which it is
a party.
(d) The Servicer shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee, as applicable, 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 contained herein and in the other Basic Documents, if any,
except to the extent that such cost, expense, loss, claim, damage or
liability: (a) shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Owner Trustee or the
Indenture Trustee, as applicable; (b) relates to any tax other than the
taxes with respect to which either the Seller or the Servicer shall be
required to indemnify the Owner Trustee or the Indenture Trustee, as
applicable; (c) in the case of the Owner Trustee, shall arise from the
Owner Trustee's breach of any of its representations or warranties set
forth in Section 7.3 of the Trust Agreement or, in the case of the
Indenture Trustee, from the Indenture Trustee's breach of any of its
representations or warranties set forth in the Indenture; or (d) in the
case of the Indenture Trustee, shall arise out of or be incurred in
connection with the performance by the Indenture Trustee of the duties of
successor Servicer hereunder.
In addition to the foregoing indemnities, if the Owner Trustee
or the Indenture Trustee is entitled to indemnification by the Seller
pursuant to Section 6.2 and the Seller is unable for any reason to provide
such indemnification to the Owner Trustee or the Indenture Trustee, then
the Servicer shall be liable for any indemnification that the Owner Trustee
or the Indenture Trustee is entitled to under Section 6.2.
For purposes of this Section 7.2, in the event of the
termination of the rights and obligations of MMCA (or any successor thereto
pursuant to Section 8.2) as Servicer pursuant to Section 8.1, or a
resignation by such Servicer pursuant to this Agreement, such Servicer
shall be deemed to be the Servicer pending appointment of a successor
Servicer (other than the Indenture Trustee) pursuant to Section 8.2.
Indemnification under this Section 7.2 by MMCA (or any
successor thereto pursuant to Section 8.2) as Servicer, with respect to the
period such Person was (or was deemed to be) the Servicer, shall survive
the termination of such Person as Servicer or a resignation by such Person
as Servicer as well as the termination of this Agreement or the resignation
or removal of the Owner Trustee or the Indenture Trustee and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section
and the recipient thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts to the Servicer, without
interest. Section 7.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger, conversion, or
consolidation to which the Servicer shall be a party, or (iii) that may
succeed by purchase and assumption to all or substantially all of the
business of the Servicer, which Person in any of the foregoing cases is an
Eligible Servicer and executes an agreement of assumption to perform every
obligation of the Servicer under this Agreement, will be the successor to
the Servicer under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties to this
Agreement; provided, however, that (x) the Servicer shall have delivered to
the Owner Trustee and the Indenture Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such merger, conversion, consolidation
or succession and such agreement of assumption comply with this Section
7.3, and (y) the Servicer shall have delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation
statements and amendments thereto have been authorized and filed that are
necessary to fully preserve and protect the interest of the Trust and the
Indenture Trustee, respectively, in the Receivables, and reciting the
details of such filings, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to fully preserve and protect
such interests. The Servicer shall provide notice of any merger,
conversion, consolidation or succession pursuant to this Section 7.3 to the
Rating Agencies. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement or assumption and compliance with
clauses (x) and (y) above shall be conditions to the consummation of the
transactions referred to in clauses (i), (ii) or (iii) above.
Section 7.4 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, the
Noteholders or the Certificateholders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; 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 or bad faith in the performance of duties or by reason
of reckless disregard of obligations and duties under this Agreement, or by
reason of negligence in the performance of its duties under this Agreement
(except for errors in judgment). The Servicer and any director, 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 in
respect of any matters arising under this Agreement.
(b) Except as provided in this 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 this 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 this Agreement and the rights and duties of the
parties to this Agreement and the interests of the Noteholders and
Certificateholders under this Agreement. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
Section 7.5 Servicer Not to Resign. Subject to the provisions
of Section 7.3, the Servicer shall not resign from its obligations and
duties under this Agreement except upon a determination that the
performance of its duties is no longer permissible under applicable law.
Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Owner
Trustee and the Indenture Trustee. No such resignation shall become
effective until the Indenture Trustee or a successor Servicer shall have
(i) assumed the responsibilities and obligations of the Servicer in
accordance with Section 8.2 and (ii) become the Administrator under the
Administration Agreement pursuant to Section 8 thereof.
Section 7.6 Servicer May Own Notes or Certificates. The
Servicer, and any Affiliate of the Servicer, may, in its individual or any
other capacity, become the owner or pledgee of Notes or Certificates with
the same rights as it would have if it were not the Servicer or an
Affiliate thereof, except as otherwise expressly provided herein or in the
other Basic Documents. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to the Servicer or
such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority or distinction
as among all of the Notes and Certificates.
ARTICLE VIII - SERVICING TERMINATION
Section 8.1 Events of Servicing Termination. (a) The occurrence
of any one of the following events shall constitute an event of servicing
termination hereunder (each, an "Event of Servicing Termination"):
(i) Any failure by the Servicer to deliver to the Owner
Trustee or the Indenture Trustee the Servicer's Certificate for any
Collection Period, which shall continue beyond the earlier of three
Business Days from the date such Servicer's Certificate was due to be
delivered and the related Payment Date, or any failure by the Servicer
to make any required payment or deposit under this Agreement, which
shall continue unremedied for a period of five Business Days following
the due date therefor (or, in the case of a payment or deposit to be
made no later than a Payment Date, the failure to make such payment or
deposit by such Payment Date); or
(ii) Any failure on the part of the Servicer duly to
observe or to perform in any material respect any other covenant or
agreement set forth in the Notes, the Certificates, or in this
Agreement, which failure shall materially and adversely affect the
rights of Noteholders or Certificateholders and continue unremedied
for a period of 30 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 Owner Trustee or the Indenture Trustee or to the
Owner Trustee, the Indenture Trustee, the Seller and the Servicer by
the Holders of Notes or Certificates, as applicable, evidencing not
less than 25% of the principal balance of the then Notes Outstanding,
in the aggregate, or 25% of the Certificate Balance; or
(iii) The entry of a decree or order by a court or agency
or supervisory authority of competent jurisdiction for the appointment
of a conservator, receiver, liquidator or trustee for the Seller or
the Servicer in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings, or for
the winding up or liquidation of its affairs, and any such decree or
order continues unstayed and in effect for a period of 60 consecutive
days; or
(iv) The consent by the Seller or the Servicer to the
appointment of a conservator, receiver, liquidator or trustee in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities, or similar proceedings of or relating to the Seller
or the Servicer or relating to substantially all of its property, the
admission in writing by the Servicer of its inability to pay its debts
generally as they become due, the filing by the Seller or the Servicer
of a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, the making by the Seller or the
Servicer of an assignment for the benefit of its creditors or the
voluntary suspension by the Seller or the Servicer of payment of its
obligations; or
(v) The failure by the Servicer to be an Eligible Servicer;
then, and in each and every case and for so long as an Event of Servicing
Termination shall not have been remedied, either the Indenture Trustee, or
the Holders of Notes evidencing not less than 51% of the aggregate
principal amount of the Notes Outstanding, voting as a group, or if no
Notes are Outstanding, the Owner Trustee pursuant to the Trust Agreement by
notice then given in writing to the Servicer (with a copy to the Indenture
Trustee and the Owner Trustee if given by the Noteholders), may terminate
all of the rights and obligations of the Servicer under this Agreement. On
or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Notes, the Certificates, or the Trust Property or otherwise, shall pass to
and be vested in the Indenture Trustee or a successor Servicer appointed
under Section 8.2; and, without limitation, the Indenture Trustee and the
Owner Trustee shall be authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivable Files, the certificates of title to the Financed Vehicles, or
otherwise. The Servicer shall cooperate with the Indenture Trustee, the
Owner Trustee and such successor Servicer in effecting the termination of
its responsibilities and rights as Servicer under this Agreement, including
the transfer to the Indenture Trustee or such successor Servicer for
administration of all cash amounts that are at the time held by the
Servicer for deposit or thereafter shall be received with respect to a
Receivable, all Receivable Files and all information or documents that the
Indenture Trustee or such successor Servicer may require. In addition, the
Servicer shall transfer its electronic records relating to the Receivables
to the successor Servicer in such electronic form as the successor Servicer
may reasonably request. All reasonable costs and expenses incurred by the
successor Servicer, including allowable compensation of employees and
overhead costs, in connection with the transfer of servicing shall be paid
by the outgoing Servicer (or by the initial Servicer if the outgoing
Servicer is the Indenture Trustee acting on an interim basis) upon
presentation of reasonable documentation of such costs and expenses.
(b) If any of the foregoing Events of Servicing Termination
occur, the Indenture Trustee and the Owner Trustee shall have no obligation
to notify Noteholders, Certificateholders or any other Person of such
occurrence prior to the continuance of such event through the end of any
cure period specified in Section 8.1(a).
Section 8.2 Indenture Trustee to Act; Appointment of Successor
Servicer. Upon the Servicer's resignation pursuant to Section 7.5 or upon
the Servicer's receipt of notice of termination as Servicer pursuant to
Section 8.1(a), the Indenture Trustee (or an Affiliate of the Indenture
Trustee that is an Eligible Servicer appointed by the Indenture Trustee)
shall be the successor in all respects to the Servicer in its capacity as
Servicer under this Agreement (provided that neither the Indenture Trustee
nor any other successor Servicer shall have any obligation, but may elect,
to make available to an Obligor any refinancing of a Last Scheduled Payment
in the manner specified in the last sentence of Section 3.2(e) hereof), and
shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions of this
Agreement. As compensation therefor, the Indenture Trustee shall be
entitled to such compensation (whether payable out of the Collection
Account or otherwise) as the Servicer would have been entitled to under
this Agreement if no such notice of termination or resignation had been
given, except that all collections shall be deposited in the Collection
Account within two Business Days of receipt and shall not be retained by
the Servicer. Notwithstanding the above, the Indenture Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint, or petition a court of competent jurisdiction to appoint, an
Eligible Servicer as the successor to the terminated Servicer under this
Agreement. In connection with such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor Servicer out
of payments on Receivables as it and such successor shall agree, which, in
no event, shall be greater than that payable to MMCA as Servicer hereunder.
The Indenture Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such
succession including, but not limited to, making arrangements in respect of
the last sentence of Section 3.2(e) of this Agreement. The Indenture
Trustee shall not be relieved of its duties as successor Servicer under
this Section 8.2 until a newly appointed Servicer shall have assumed the
responsibilities and obligations of the terminated Servicer under this
Agreement.
Section 8.3 Effect of Servicing Transfer. (a) After the
transfer of servicing hereunder, the Indenture Trustee or successor
Servicer shall notify Obligors to make directly to the successor Servicer
payments that are due under the Receivables after the effective date of
such transfer.
(b) Except as provided in Section 8.2 after the transfer of
servicing hereunder, the outgoing Servicer shall have no further
obligations with respect to the administration, servicing, custody or
collection of the Receivables and the successor Servicer shall have all of
such obligations, except that the outgoing Servicer will transmit or cause
to be transmitted directly to the successor Servicer for its own account,
promptly on receipt and in the same form in which received, any amounts
held by the outgoing Servicer (properly endorsed where required for the
successor Servicer to collect any such items) received as payments upon or
otherwise in connection with the Receivables and the outgoing Servicer
shall continue to cooperate with the successor Servicer by providing
information and in the enforcement of the Dealer Agreements.
(c) Any successor Servicer shall provide the Seller with access
to the Receivable Files and to the successor Servicer's records (whether
written or automated) with respect to the Receivable Files. Such access
shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the successor Servicer.
Nothing in this Section 8.3 shall affect the obligation of the successor
Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 8.3.
Section 8.4 Notification to Noteholders and Certificateholders.
Upon any notice of an Event of Servicing Termination or upon any
termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Indenture Trustee shall give prompt written notice
thereof to Noteholders, and the Owner Trustee shall give prompt written
notice thereof to Certificateholders at their addresses of record and to
the Rating Agencies.
Section 8.5 Waiver of Past Events of Servicing Termination. The
Holders of Notes evidencing not less than 51% of the Notes Outstanding or
the Holders of Certificates evidencing not less than 51% of the Certificate
Balance (in the case of an Event of Servicing Termination which does not
adversely affect the Indenture Trustee or the Noteholders) may, on behalf
of all Noteholders and Certificateholders, waive any Event of Servicing
Termination hereunder and its consequences, except an event resulting from
the failure to make any required deposits to, or payments from, any of the
Trust Accounts and the Certificate Distribution Account in accordance with
this Agreement. Upon any such waiver of a past Event of Servicing
Termination, such event shall cease to exist, and shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other event or impair any right arising
therefrom, except to the extent expressly so waived.
ARTICLE IX - TERMINATION
Section 9.1 Optional Purchase of All Receivables. (a) On each
Payment Date following the last day of a Collection Period as to which the
Pool Balance shall be less than or equal to the Optional Purchase
Percentage (expressed as a seven-digit decimal) multiplied by the Initial
Pool Balance, the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts and the Certificate
Distribution Account. To exercise such option, the Servicer shall notify
the Owner Trustee and the Indenture Trustee no later than the fifteenth day
of the month immediately preceding the month in which such repurchase is to
be effected and shall deposit an amount equal to the aggregate Purchase
Amount for the Receivables, plus the appraised value of any other property
held in the Trust other than in the Trust Accounts and the Certificate
Distribution Account, such value to be determined by an appraiser mutually
agreed upon by the Servicer, the Owner Trustee and the Indenture Trustee,
into the Collection Account on the Payment Date occurring in the month in
which such repurchase is to be effected. Upon such payment, the Servicer
shall succeed to and own all interests in and to the Trust. Notwithstanding
the foregoing, the Servicer shall not be permitted to exercise such option
unless the amount to be deposited in the Collection Account pursuant to the
second preceding sentence is greater than or equal to the sum of the
outstanding principal balance of the Notes and all accrued but unpaid
interest (including any overdue interest) thereon and the Certificate
Balance. The Purchase Amount, any Negative Carry Amounts and any Yield
Supplement Amounts for such Payment Date, plus to the extent necessary all
amounts in the Reserve Account, shall be used to make payments in full to
Noteholders and Certificateholders in the manner set forth in Article IV.
(b) Unless otherwise required by the Rating Agencies as set
forth in writing delivered to the Owner Trustee and the Indenture Trustee,
if at the time the Servicer exercises its purchase option hereunder the
Servicer's long-term unsecured debt has a rating lower than investment
grade by the Rating Agencies, the Servicer shall deliver to the Owner
Trustee and the Indenture Trustee on such Payment Date a letter from an
Independent investment bank or an Independent public accountant to the
effect that the price paid by the Servicer for the Receivables at the time
of transfer pursuant to such purchase option represented a fair market
price for such Receivables.
(c) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder,
and the Indenture Trustee will continue to carry out its obligations
hereunder with respect to the Certificateholders, including without
limitation making distributions from the Payahead Account and the
Collection Account in accordance with Section 4.6 and making withdrawals
from the Reserve Account in accordance with Sections 4.5(b) and 4.7.
ARTICLE X - MISCELLANEOUS PROVISIONS
Section 10.1 Amendment. (a) This Agreement may be amended by
the Seller, the Servicer and the Trust with the consent of the Indenture
Trustee (which consent may not be unreasonably withheld), but without the
consent of any of the Noteholders, the Certificateholders or the Swap
Counterparty to add, change or eliminate any other provisions with respect
to matters or questions arising under this Agreement as may be necessary or
advisable in order to: (i) cure any ambiguity, to revise, correct or
supplement any provisions herein, (ii) enable the Trust to avoid becoming a
member of MMCA's consolidated group under GAAP or (iii) enable the
Transferor or any Affiliate of the Transferor or any of their Affiliates to
otherwise comply with or obtain more favorable treatment under any law or
regulation or any accounting rule or principle; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel delivered to
the Owner Trustee and the Indenture Trustee materially and adversely affect
the interests of any Noteholder or Certificateholder; provided, further,
that no such amendment shall be inconsistent with the derecognition by MMCA
of the Receivables under GAAP or cause the Trust to become a member of
MMCA's consolidated group under GAAP; and provided, further, that (x) such
action shall not materially adversely affect the rights or obligations of
the Swap Counterparty under the Interest Rate Swap Agreement or modify the
obligations of, or impair the ability of, the Issuer to fully perform any
of its obligations under the Interest Rate Swap Agreement or (y) the Swap
Counterparty shall have consented thereto.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Trust with the consent of (i) the Indenture
Trustee, (ii) the Swap Counterparty, to the extent such amendment adversely
affects the rights or obligations of the Swap Counterparty under the
Interest Rate Swap Agreement, or modifies the obligations of, or impairs
the ability of the Issuer to fully perform any of its obligations under,
the Interest Rate Swap Agreement (which consent may not be unreasonably
withheld), (iii) the Holders of Notes evidencing not less than 51% of
Outstanding Amount of all of the Notes, voting as a group, and (iv) the
Holders of Certificates evidencing not less than 51% of the Certificate
Balance for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, or change the allocation or priority of, collections of payments
on Receivables or distributions that shall be required to be made on any
Note or Certificate or change the Note Interest Rate or the Specified
Reserve Balance, without the consent of all adversely affected Noteholders
or Certificateholders, (b) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of the Holders of all
Notes and Certificates affected thereby or (c) adversely affect the rating
of any Class of Notes by the Rating Agencies without the consent, as
applicable, of Noteholders evidencing not less than 66 2/3% of the Notes of
such Class Outstanding.
(c) Prior to the execution of any amendment or consent pursuant
to Section 10.1(b), the Servicer shall provide written notification of the
substance of such amendment or consent to each Rating Agency.
(d) Promptly after the execution of any amendment or consent
pursuant to this Section 10.1, the Owner Trustee shall mail a copy to the
Swap Counterparty and shall furnish written notification of the substance
of such amendment or consent to each Certificateholder, the Indenture
Trustee and each of the Rating Agencies. It shall not be necessary for the
consent of Noteholders or the Certificateholders pursuant to this Section
10.1 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 any other consents of
Noteholders and Certificateholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by Noteholders and
Certificateholders shall be subject to such reasonable requirements as the
Owner Trustee and the Indenture Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement,
the Owner Trustee and the Indenture Trustee shall be entitled to receive
and rely upon (i) an Opinion of Counsel stating that the execution of such
amendment (A) is authorized or permitted by this Agreement, (B) will not
materially adversely affect the Federal or any Applicable Tax State income
or franchise taxation of any Outstanding Note or Certificate or any Holder
thereof, and (C) will not cause the Trust to be taxable as a corporation
for Federal or any Applicable Tax State income or franchise tax purposes
and (ii) an Officer's Certificate of the Servicer that all conditions to
the execution of such amendment have been complied with. The Owner Trustee
or the Indenture Trustee may, but shall not be obligated to, enter into any
such amendment which affects such Owner Trustee's or Indenture Trustee's
own rights, duties or immunities under this Agreement or otherwise.
Section 10.2 Protection of Title to Trust. (a) The Seller or
Servicer, or both, shall authorize and file such financing statements and
cause to be authorized 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 Trust and the Indenture Trustee
for the benefit of the Noteholders in the Receivables and in the proceeds
thereof. The Seller or Servicer, or both, shall deliver (or cause to be
delivered) to the Owner Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might
make any financing statement or continuation statement filed by the Seller
or the Servicer in accordance with paragraph (a) above seriously misleading
within the meaning of ss. 9-506(b) of the Relevant UCC, unless it shall
have given the Owner Trustee and the Indenture Trustee at least 60 days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Seller and the Servicer shall give the Owner Trustee
and the Indenture Trustee at least 60 days' prior written notice of any
change in its jurisdiction of organization if, as a result of such
relocation or change, the applicable provisions of the Relevant UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly
file any such amendment, continuation statement or any new financing
statement. The Servicer shall at all times maintain each office from which
it shall service Receivables and its jurisdiction of organization 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 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, Payahead Account, the Reserve Account and the Yield
Supplement Account.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables to
the Trust, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of
the Trust and the Indenture Trustee in such Receivable and that such
Receivable is owned by the Trust and has been pledged to the Indenture
Trustee pursuant to the Indenture. Indication of the Trust's and the
Indenture Trustee's interest in a Receivable 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 by the Seller or
purchased by the Servicer.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
any automobile or sports-utility vehicle receivables to any prospective
purchaser, lender, or other transferee, the Servicer shall give to such
prospective purchaser, lender, or other transferee computer tapes, compact
disks, 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 Trust and has been pledged to the Indenture Trustee unless
such Receivable has been paid in full or repurchased by the Seller or
purchased by the Servicer.
(g) The Servicer shall permit the Owner Trustee, the Indenture
Trustee and their respective 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 Owner
Trustee and the Indenture Trustee, within ten 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 Schedules 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 Owner Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of
each amendment to any financing statement, an Opinion of Counsel
either (A) stating that, in the opinion of such Counsel, all
financing statements and continuation statements have been
authorized and filed that are necessary fully to preserve and
protect the interest of the Trust and the Indenture Trustee in
the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such Counsel, no
such action shall be necessary to preserve and protect such
interest; and
(2) within 90 days after the beginning of each
calendar year commencing in the year 2003, an Opinion of Counsel,
dated as of a date during such 90-day period, either (A) stating
that, in the opinion of such Counsel, all financing statements
and continuation statements have been authorized and filed that
are necessary fully to preserve and protect the interest of the
Trust and the Indenture Trustee in the Receivables, and reciting
the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating that, in
the opinion of such Counsel, no such action shall be necessary to
preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i)(1) 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 Seller shall, to the extent required by applicable law,
cause the Notes to be registered with the Commission pursuant to Section
12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
Section 10.3 Representations of the Seller and the Purchaser.
The respective agreements, representations, warranties and other statements
by the Seller and the Purchaser set forth in or made pursuant to this
Agreement shall remain in full force and effect and will survive the
Closing.
Section 10.4 Governing Law. This Agreement shall be construed
in accordance with the laws of the State of New York without reference to
its conflict of laws provisions (other than section 5-1401 of the general
obligations law) and the obligations, rights, and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 10.5 Notices. All demands, notices, and communications
under this Agreement shall be in writing, personally delivered, sent via
facsimile, overnight courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt,
(a) in the case of the Seller or the Servicer, to the agent for
service as specified in Section 10.13 hereof, or at such other address as
shall be designated by the Seller or the Servicer in a written notice to
the Owner Trustee and the Indenture Trustee;
(b) in the case of the Owner Trustee, at the Corporate Trust
Office of the Owner Trustee;
(c) in the case of the Indenture Trustee, at the Corporate
Trust Office of the Indenture Trustee;
(d) in the case of Moody's, at the following address:
Xxxxx'x Investors Service, Inc.
ABS Monitoring Department
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(e) in the case of S&P, at the following address:
Standard & Poor's
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(f) in the case of Fitch Ratings, at the following address:
Fitch Ratings
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
Fax: (000) 000-0000
(g) in the case of the initial Swap Counterparty, at the
following address:
Xxxxxx Xxxxxxx Capital Services Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx,
Fixed Income Derivatives - Transaction
Management Manager
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co.
1221 Avenue of the Americas, 00xx Xxxxx
Xxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx (Fixed Income Derivatives)
Fax: (000) 000-0000
and with a copy to:
Xxxxxx Xxxxxxx Capital Services
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Fixed Income Derivatives -
Corporate Derivatives Group Manager
Fax: (000) 000-0000
Any notice required or permitted to be mailed to a Noteholder
or Certificateholder shall be given by first class mail, postage prepaid,
at the address of such Holder as shown in the Note Register or the
Certificate Register, as applicable. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Noteholder or Certificateholder shall
receive such notice.
Section 10.6 Severability of Provisions. If any one or more of
the covenants, agreements, provisions, or terms of this 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 this Agreement and shall in
no way affect the validity or enforceability of the other provisions of
this Agreement or of the Notes, the Certificates, or the rights of the
Holders thereof.
Section 10.7 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 7.3 and 8.2 and
as provided in the provisions of this Agreement concerning the resignation
of the Servicer, this Agreement may not be assigned by the Seller or the
Servicer without the prior written consent of the Owner Trustee, the
Indenture Trustee, the Holders of Notes evidencing not less than 66 2/3% of
the Outstanding Amount of the Notes and the Holders of Certificates
evidencing not less than 66 2/3% of the Certificate Balance and any such
assignment without the required consents shall be null and void.
Section 10.8 Further Assurances. The Seller and the Servicer
agree to do and perform, from time to time, any and all acts and to execute
any and all further instruments required or reasonably requested by the
Owner Trustee or the Indenture Trustee more fully to effect the purposes of
this Agreement, including, without limitation, the execution of any
financing statements or continuation statements relating to the Receivables
for filing under the provisions of the Relevant UCC of any applicable
jurisdiction.
Section 10.9 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges therein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
Section 10.10 Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Noteholders, the Certificateholders, and their respective successors and
permitted assigns. Except as otherwise provided in this Article X, no other
Person will have any right or obligation hereunder. The parties hereto
hereby acknowledge and consent to the pledge of this Agreement by the Trust
to the Indenture Trustee for the benefit of Noteholders pursuant to the
Indenture.
Section 10.11 Actions by Noteholder or Certificateholders.
(a) Wherever in this Agreement a provision is made that an action may be taken
or a notice, demand, or instruction given by Noteholders or
Certificateholders, such action, notice, or instruction may be taken or
given by any Noteholder or Certificateholder, as applicable, unless such
provision requires a specific percentage of Noteholders or
Certificateholders.
(b) Any request, demand, authorization, direction, notice,
consent, waiver, or other act by a Noteholder or Certificateholder shall
bind such Noteholder or Certificateholder and every subsequent Holder of
such Note or Certificate issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything done or
omitted to be done by the Owner Trustee, the Indenture Trustee or the
Servicer in reliance thereon, whether or not notation of such action is
made upon such Note or Certificate.
Section 10.12 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this 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 10.13 Agent for Service. The agent for service of the
Seller and the Servicer in respect of this Agreement shall be Executive
Vice President and Treasurer, Mitsubishi Motors Credit of America, Inc.,
0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, mailing address: X.X.
Xxx 0000, Xxxxxxx, Xxxxxxxxxx 00000-0000.
Section 10.14 No Bankruptcy Petition; Subordination; Claims
Against Seller. The Owner Trustee, the Indenture Trustee, the Trust and the
Servicer each covenants and agrees that:
(a) prior to the date which is one year and one day after the
payment in full of all securities issued by the Seller or by a trust for
which the Seller was the depositor which securities were rated by any
nationally recognized statistical rating organization, it will not
institute against, or join any other Person in instituting against, the
Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law;
(b) any claim that it may have at any time against the Subtrust
Assets of any Subtrust unrelated to the Receivables, and any claim that it
may have at any time against the Seller that it may seek to enforce against
the Subtrust Assets of any Subtrust unrelated to the Receivables, shall be
subordinate to the payment in full, including post-petition interest, in
the event that the Seller becomes a debtor or debtor in possession in a
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect or otherwise subject to any
insolvency, reorganization, liquidation, rehabilitation or other similar
proceedings, of the claims of the holders of any Securities related to such
unrelated Subtrust and the holders of any other notes, bonds, contracts or
other obligations that are related to such unrelated Subtrust; and
(c) it hereby irrevocably makes the election afforded by Title
00 Xxxxxx Xxxxxx Code Section 1111(b)(1)(A)(i) to secured creditors to
receive the treatment afforded by Title 00 Xxxxxx Xxxxxx Code Section
1111(b)(2) with respect to any secured claim that it may have at any time
against the Seller. The obligations of the Seller under this Agreement are
limited to the related Subtrust and the related Subtrust Assets. This
Section 10.13 shall survive the resignation or removal of the Owner Trustee
under the Trust Agreement or the Indenture Trustee under the Indenture or
the termination of such Agreement.
Section 10.15 Limitation of Liability of Owner Trustee and
Indenture Trustee. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Wilmington Trust
Company, not in its individual capacity but solely in its capacity as Owner
Trustee of the Trust and in no event shall Wilmington Trust Company in its
individual capacity or, except as expressly provided in the Trust
Agreement, as Owner Trustee of the Trust, have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Trust hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Trust. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Trust hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by Bank of Tokyo-Mitsubishi Trust Company,
not in its individual capacity but solely as Indenture Trustee, and in no
event shall Bank of Tokyo-Mitsubishi Trust Company have any liability for
the representations, warranties, covenants, agreements or other obligations
of the Trust hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Trust.
IN WITNESS WHEREOF, the parties have caused this Sale and
Servicing Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
MMCA AUTO RECEIVABLES TRUST,
as Seller
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Secretary & Treasurer
MMCA AUTO OWNER TRUST 2002-1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By: /s/ W. Xxxxx Xxxxxxxxxx
------------------------------------
Name: W. Xxxxx Xxxxxxxxxx
Title: Vice President
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By: /s/ C. A. Xxxxxxx
------------------------------------
Name: C. A. Xxxxxxx
Title: Executive Vice President
and General Manager
Accepted and agreed:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By: /s/ X. Xxxxxxxxx
------------------------------
Name: X. Xxxxxxxxx
Title: Trust Officer
SCHEDULE A
----------
SCHEDULE OF INITIAL RECEIVABLES
-------------------------------
Exhibit B to the Purchase Agreement
Incorporated by Reference Herein
SCHEDULE B
----------
LOCATIONS OF RECEIVABLES FILES
------------------------------
Corporate Office
----------------
0000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
National Service Center
-----------------------
10805 Holder Street, Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
EXHIBIT A
---------
FORM OF SERVICER'S CERTIFICATE
The undersigned certifies that he is a _____________________ of
Mitsubishi Motors Credit of America, Inc., a corporation in good standing
under the laws of the state of its incorporation (the "Company"), and that
as such he is duly authorized to execute and deliver this certificate on
behalf of the Company pursuant to Section 3.9 of the Sale and Servicing
Agreement, dated as of __________, _____, by and among the Company, as
Servicer, MMCA Auto Receivables Trust, as Seller, and MMCA Auto Owner Trust
2002-__ (the "Sale and Servicing Agreement") (all capitalized terms used
herein without definition have the respective meanings specified in the
Sale and Servicing Agreement), and further certifies that:
(a) The Servicer's report for the period from __________ to
____________ attached to this certificate is complete and accurate and
contains all information required by Section 3.9 of the Sale and Servicing
Agreement; and
(b) As of the date hereof, no Event of Servicing Termination
or event that with notice or lapse of time or both would become an Event
of Servicing Termination has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature and
the corporate seal of the Company this ___ day of __________, _____.
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
By: ___________________________
Name:
Title:
EXHIBIT B
---------
FORM OF STATEMENT TO NOTEHOLDERS
------------------------------------------------------------------------------------------------------------------------------
| |
| MITSUBISHI MOTORS CREDIT OF AMERICA, INC. |
| Statement to Noteholders |
| MMCA Auto Owner Trust ___-__ |
| July 1, ____ through June 30, _____ |
| Per Original |
| $1,000 Note or |
| Aggregate Certificate |
| --------- ----------- |
| I. A. Distribution of Note Principal |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6,. Class C |
| B. Distribution of Certificate Principal |
| |
| II. Distribution of Note Interest |
| A. Class A-1 |
| B. Class A-2 |
| C. Class A-3 |
| D. Class A-4 |
| E. Class B |
| F. Class C |
| |
| III. Yield Supplement Amount |
| |
| IV. Total Servicing Fee |
| |
| V. Principal Balances and Pool Factors |
| A. Note Principal Balance |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| B. Note Pool Factors |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| C. Certificate Balance |
| D. Certificate Pool Factor |
| |
| VI. A. Pool Balance at End of This Collection Period |
| B. Yield Supplement Overcollateralization Amount |
| C. Adjusted Principal Balance of Receivables Pool |
| |
| VII. A. Level Pay Pool Balance |
| B. Last Scheduled Payment Pool Balance |
| |
| VIII. Principal Balance of Deferred Receivables |
| |
| IX. Interest Carryover Shortfall |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| |
| X. Principal Carryover Shortfall |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| |
| XI. Aggregate Realized Losses for This Collection Period |
| |
| XII. Reserve Account Balance on Payment Date |
| |
| XIII. Amount of Advances for This Collection Period |
| A. Actuarial Advances |
| B. Last Scheduled Payment Advances |
| |
| |XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased |
| by Servicer |
| |
------------------------------------------------------------------------------------------------------------------------------
FORM OF STATEMENT TO CERTIFICATEHOLDERS
-----------------------------------------------------------------------------------------------------------------------------
| |
| MITSUBISHI MOTORS CREDIT OF AMERICA, INC. |
| Statement to Certificateholders |
| MMCA Auto Owner Trust ___-__ |
| July 1, ____ through June 30, _____ |
| Per Original |
| $1,000 Note or |
| Aggregate Certificate |
| --------- -------------- |
| I. A. Distribution of Note Principal |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| B. Distribution of Certificate Principal |
| |
| II. Distribution of Note Interest |
| A. Class A-1 |
| B. Class A-2 |
| C. Class A-3 |
| D. Class A-4 |
| E. Class B |
| F. Class C |
| |
| III. Yield Supplement Amount |
| |
| IV. Total Servicing Fee |
| |
| V. Principal Balances and Pool Factors |
| A. Note Principal Balance |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| B. Note Pool Factors |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| C. Certificate Balance |
| D. Certificate Pool Factor |
| |
| VI. A. Pool Balance at End of This Collection Period |
| B. Yield Supplement Overcollateralization Amount |
| C. Adjusted Principal Balance of Receivables Pool |
| |
| VII. A. Level Pay Pool Balance |
| B. Last Scheduled Payment Pool Balance |
| |
| VIII. Principal Balance of Deferred Receivables |
| |
| IX. Interest Carryover Shortfall |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| |
| X. Principal Carryover Shortfall |
| 1. Class A-1 |
| 2. Class A-2 |
| 3. Class A-3 |
| 4. Class A-4 |
| 5. Class B |
| 6. Class C |
| |
| XI. Aggregate Realized Losses for This Collection Period |
| |
| XII. Reserve Account Balance on Payment Date |
| |
| XIII. Amount of Advances for This Collection Period |
| A. Actuarial Advances |
| B. Last Scheduled Payment Advances |
| |
| XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased |
| by Servicer |
| |
-----------------------------------------------------------------------------------------------------------------------------
EXHIBIT D
---------
FORM OF YIELD SUPPLEMENT AGREEMENT
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re: MMCA Auto Owner Trust 2002-
Ladies and Gentlemen:
We hereby confirm arrangements made as of the date hereof with
you to be effective upon (i) receipt by us of the enclosed copy of this
letter agreement (as amended, supplemented or otherwise modified and in
effect from time to time, the "Yield Supplement Agreement"), executed by
you, and (ii) execution of the Purchase Agreement referred to below and
payment of the purchase price specified thereunder. Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to such
terms in, or incorporated by reference into, the Purchase Agreement, dated
as of __________, _____ (as amended, supplemented or otherwise modified and
in effect from time to time, the "Purchase Agreement"), between Mitsubishi
Motors Credit of America, Inc., as seller (the "Seller"), and MMCA Auto
Receivables Trust, as purchaser (the "Purchaser").
1. On or prior to the Determination Date preceding each Payment
Date, the Servicer shall notify the Purchaser and the Seller of the Yield
Supplement Amount for such Payment Date.
2. In consideration for the Purchaser entering into the
Purchase Agreement and the purchase price paid to the Seller for the
Receivables under the Purchase Agreement, we agree to make a payment of the
Yield Supplement Amount to the Purchaser, or to the pledgee of the assignee
of the Purchaser referred to in Section 5 hereof, on the Business Day prior
to each Payment Date.
3. All payments pursuant hereto shall be made by federal wire
transfer (same day) funds or in immediately available funds, to such
account as the Purchaser or the pledgee of the assignee of the Purchaser
referred to in Section 5 hereof, may designate in writing to the Seller,
prior to the relevant Payment Date.
4. Our agreements set forth in this Yield Supplement Agreement
are our primary obligations and such obligations are irrevocable, absolute
and unconditional, shall not be subject to any counterclaim, setoff or
defense and shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any
circumstances or condition whatsoever.
5. Pursuant to the Sale and Servicing Agreement, the Purchaser
will sell, transfer, assign and convey its interest in this Yield
Supplement Agreement to MMCA Auto Owner Trust 2002-__ (the "Trust"), and
the Seller hereby acknowledges and consents to such sale, transfer,
assignment and conveyance. Concurrent with such sale, transfer, assignment
and conveyance, pursuant to the Indenture, the Trust will pledge its rights
under this Yield Supplement Agreement, along with certain other assets of
the Trust, to Bank of Tokyo-Mitsubishi Trust Company, as Indenture Trustee,
to secure its obligations under the Notes and the Indenture, and the Seller
hereby acknowledges and consents to such pledge. The Seller hereby agrees,
for the benefit of the Trust, that following such sale, transfer,
assignment, conveyance and pledge, this Yield Supplement Agreement shall
not be amended, modified or terminated without the consent of Wilmington
Trust Company, as Owner Trustee on behalf of the Trust, and, prior to the
payment in full of the Notes, the Indenture Trustee.
6. This Yield Supplement Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
7. Except as otherwise provided herein, all notices pursuant to
this Yield Supplement Agreement shall be in writing and shall be effective
upon receipt thereof. All notices shall be directed as set forth below, or
to such other address or to the attention of such other person as the
relevant party shall have designated for such purpose in a written notice.
If to the Purchaser:
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Secretary/Treasurer
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Seller:
Mitsubishi Motors Credit of America, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Executive Vice President and Treasurer
Telephone: (000) 000-0000
Fax: (000) 000-0000
8. This Yield Supplement Agreement may be executed in one or
more counterparts and by the different parties hereto on separate
counterparts, all of which shall be deemed to be one and the same document.
If the foregoing satisfactorily sets forth the terms and
conditions of our agreement, please indicate your acceptance thereof by
signing in the space provided below and returning to us the enclosed
duplicate original of this letter.
Very truly yours,
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.,
as Seller
By: ________________________________
Name:
Title:
Agreed and accepted as of
the date first above written:
MMCA AUTO RECEIVABLES TRUST,
as Purchaser
By: ____________________________
Name:
Title:
EXHIBIT E
---------
FORM OF SECOND-TIER SUBSEQUENT ASSIGNMENT
Dated:__________, _____
For value received, in accordance with and subject to the Sale
and Servicing Agreement, dated as of March 1, 2002 (the "Sale and Servicing
Agreement"), among MMCA Auto Owner Trust 2002-1 (the "Trust"), MMCA Auto
Receivables Trust, as the Seller (the "Seller"), and Mitsubishi Motors
Credit of America, Inc., as the Servicer (the "Servicer"), the Seller
hereby irrevocably sells, transfers, assigns and otherwise conveys to the
Trust, without recourse (subject to the obligations herein), all right,
title and interest of the Seller, whether now owned or hereafter acquired,
in, to and under the following:
(i) the Subsequent Receivables listed on Schedule A hereto;
(ii) with respect to the Subsequent Receivables that are
Actuarial Receivables, monies due thereunder on or after __________,
_____ (the "Subsequent Cutoff Date") (including Payaheads), and, with
respect to Subsequent Receivables that are Simple Interest
Receivables, monies received thereunder on or after the Subsequent
Cutoff Date;
(iii) the security interests in Financed Vehicles granted by
Obligors pursuant to such Subsequent Receivables and any other
interest of the Trust in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to such
Subsequent Receivables from claims on any physical damage, theft,
credit life or disability insurance policies covering the related
Financed Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to such
Subsequent Receivables from recourse to Dealers thereon pursuant to
Dealer Agreements;
(vi) all of the Seller's rights to the Receivable Files that
relate to such Subsequent Receivables;
(vii) all payments and proceeds with respect to such Subsequent
Receivables held by the Servicer;
(viii) all property (including the right to receive Liquidation
Proceeds and Recoveries and Financed Vehicles and the proceeds
thereof acquired by the Seller pursuant to the terms of a Subsequent
Receivable that is a Final Payment Receivable), guarantees and other
collateral securing a Subsequent Receivable (other than a Subsequent
Receivable purchased by the Servicer or repurchased by the Seller);
(ix) all of the Seller's rights under the related First-Tier
Subsequent Assignment;
(x) all rebates of premiums and other amounts relating to
insurance policies and other items financed under such Subsequent
Receivables in effect as of the Subsequent Cutoff Date; and
(xi) all present and future claims, demands, causes of action
and choses in action in respect of any or all of the foregoing and
all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of
the foregoing.
The Seller hereby represents that as of the Subsequent Cutoff
Date, the aggregate Principal Balance of the Subsequent Receivables was
$______________.
The foregoing sale, transfer, assignment and conveyance shall
not constitute and is not intended to result in an assumption by the Trust
of any obligation of the Seller to the Obligors, the Dealers or any other
Person with respect the Subsequent Receivables set forth in Schedule A
attached hereto and the other Trust Property related thereto or any
agreement, document or instrument related thereto.
In the event that the foregoing sale, transfer, assignment and
conveyance is deemed to be a pledge, the Seller hereby grants to the Trust
a first priority security interest in all of the Seller's right to and
interest in the Subsequent Receivables and other property described in
clauses (i) through (xi) above to secure a loan deemed to have been made by
the Trust to the Seller in an amount equal to the sum of the initial
principal amount of the Notes plus accrued interest thereon and the Initial
Certificate Balance.
This Second-Tier Subsequent Assignment shall be construed in
accordance with the laws of the State of New York and the obligations of
the Seller under this Second-Tier Subsequent Assignment shall be determined
in accordance with such laws.
This Second-Tier Subsequent Assignment is made pursuant to and
upon the representations, warranties and agreements on the part of the
Seller contained in the Sale and Servicing Agreement (including the
Officer's Certificate of the Seller accompanying this Second-Tier
Subsequent Assignment) and is to be governed in all respects by the Sale
and Servicing Agreement. Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to them in the Sale and Servicing
Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Second-Tier
Subsequent Assignment to be duly executed as of the day hereinabove set
forth.
MMCA AUTO RECEIVABLES TRUST
By: _________________________________
Name:
Title:
Schedule A (to Exhibit E)
-------------------------
SCHEDULE OF SUBSEQUENT RECEIVABLES PROVIDED TO THE
INDENTURE TRUSTEE ON THE SUBSEQUENT CLOSING DATE, WHICH
MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE
Annex A (to Exhibit E)
----------------------
OFFICER'S CERTIFICATE
The undersigned officer of MMCA Auto Receivables Trust (the
"Company"), does hereby certify, pursuant to Section 2.1(d)(xvii) of the
Sale and Servicing Agreement, dated as of March 1, 2002 among MMCA Auto
Owner Trust 2002-1 (the "Trust"), MMCA Auto Receivables Trust, as the
Seller, and Mitsubishi Motors Credit of America, Inc., as the Servicer (as
amended, supplemented or otherwise modified as of the date hereof, the
"Agreement") that all of the conditions to the transfer to the Trust of the
Subsequent Receivables listed on Schedule A to the Second-Tier Subsequent
Assignment delivered herewith and the other property and rights related to
such Subsequent Receivable, as described in Section 2.1(d) of the
Agreement, have been satisfied on or prior to the related Subsequent
Transfer Date.
Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Agreement.
IN WITNESS WHEREOF, the undersigned have caused this
certificate to be duly executed this ____ day of __________, ____.
By: ____________________________
Name:
Title:
