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SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 2000-2,
as the Trust
MMCA AUTO RECEIVABLES TRUST,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of November [ ], 2000
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.......................................................1
SECTION 1.2 Other Definitional Provisions....................................23
SECTION 1.3 Business Day Certificate.........................................24
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property.....................................24
SECTION 2.2 Representations and Warranties of the Seller as to the
Receivables....................................................29
SECTION 2.3 Repurchase upon Breach...........................................35
SECTION 2.4 Custody of Receivable Files......................................35
SECTION 2.5 Duties of Servicer as Custodian..................................36
SECTION 2.6 Instructions; Authority to Act...................................37
SECTION 2.7 Custodian's Indemnification......................................38
SECTION 2.8 Effective Period and Termination.................................38
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer...............................................38
SECTION 3.2 Collection and Allocation of Receivable Payments.................42
SECTION 3.3 Realization upon Receivables.....................................44
SECTION 3.4 Physical Damage Insurance........................................45
SECTION 3.5 Maintenance of Security Interests in Financed Vehicles...........45
SECTION 3.6 Covenants of Servicer............................................45
SECTION 3.7 Purchase by Servicer upon Breach.................................45
SECTION 3.8 Servicing Compensation...........................................46
SECTION 3.9 Servicer's Certificate...........................................46
SECTION 3.10 Annual Statement as to Compliance; Notice of Event of
Servicing Termination.........................................47
SECTION 3.11 Annual Independent Certified Public Accountants' Reports........47
SECTION 3.12 Access to Certain Documentation and Information Regarding
Receivables...................................................48
SECTION 3.13 Reports to the Commission.......................................48
Page
SECTION 3.14 Reports to Rating Agencies......................................48
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1 Accounts.........................................................48
SECTION 4.2 Collections......................................................54
SECTION 4.3 Application of Collections.......................................55
SECTION 4.4 Advances.........................................................55
SECTION 4.5 Additional Deposits..............................................57
SECTION 4.6 Allocation of Total Available Funds..............................57
SECTION 4.7 Reserve Account..................................................59
SECTION 4.8 Pre-Funding Account..............................................61
SECTION 4.9 Negative Carry Account...........................................61
SECTION 4.10 Net Deposits....................................................62
SECTION 4.11 Statements to Noteholders and Certificateholders................62
SECTION 4.12 Control of Securities Accounts..................................63
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.............................................64
ARTICLE VI
THE SELLER
SECTION 6.1 Representations, Warranties and Covenants of Seller..............66
SECTION 6.2 Liability of Seller; Indemnities.................................68
SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller.........................................69
SECTION 6.4 Limitation on Liability of Seller and Others.....................70
SECTION 6.5 Seller May Own Notes or Certificates.............................70
ARTICLE VII
THE SERVICER
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Page
SECTION 7.1 Representations and Warranties of Servicer.......................70
SECTION 7.2 Liability of Servicer; Indemnities...............................72
SECTION 7.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer.......................................73
SECTION 7.4 Limitation on Liability of Servicer and Others...................74
SECTION 7.5 Servicer Not to Resign...........................................74
SECTION 7.6 Servicer May Own Notes or Certificates...........................74
ARTICLE VIII
SERVICING TERMINATION
SECTION 8.1 Events of Servicing Termination..................................75
SECTION 8.2 Indenture Trustee to Act; Appointment of Successor Servicer......76
SECTION 8.3 Effect of Servicing Transfer.....................................77
SECTION 8.4 Notification to Noteholders and Certificateholders...............78
SECTION 8.5 Waiver of Past Events of Servicing Termination...................78
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables.............................78
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment.......................................................79
SECTION 10.2 Protection of Title to Trust....................................80
SECTION 10.3 Governing Law...................................................83
SECTION 10.4 Notices.........................................................83
SECTION 10.5 Severability of Provisions......................................83
SECTION 10.6 Assignment......................................................83
SECTION 10.7 Further Assurances..............................................83
SECTION 10.8 No Waiver; Cumulative Remedies..................................84
SECTION 10.9 Third-Party Beneficiaries.......................................84
SECTION 10.10 Actions by Noteholder or Certificateholders....................84
SECTION 10.11 Counterparts...................................................84
SECTION 10.12 Agent for Service..............................................84
SECTION 10.13 No Bankruptcy Petition; Subordination; Claims Against Seller...84
SECTION 10.14 Limitation of Liability of Owner Trustee and Indenture Trustee.85
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Page
SCHEDULES
SCHEDULE A Schedule of Initial Receivables...............................SA-1
SCHEDULE B Location of Receivable Files..................................SB-1
EXHIBITS
EXHIBIT A Form of Servicer's Certificate.................................A-1
EXHIBIT B Form of Statement to Noteholders...............................B-1
EXHIBIT C Form of Statement to Certificateholders........................C-1
EXHIBIT D Form of Yield Supplement Agreement.............................D-1
EXHIBIT E Form of Second-Tier Subsequent Assignment......................E-1
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SALE AND SERVICING AGREEMENT, dated as of November [ ] (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement"), by and among MMCA AUTO OWNER TRUST 2000-2, 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
SECTION 1.1 Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, whenever capitalized
shall have the following meanings:
"Accrued Note Interest" shall mean, with respect to any Payment Date
and each Class of Notes, the sum of the Monthly Accrued Note Interest and the
Interest Carryover Shortfall for such Class for such Payment Date.
"Actuarial Advance" shall mean, with respect to an Actuarial
Receivable, the amount, as of the last day of a Collection Period, which is
required to be advanced with respect to such Actuarial Receivable by the
Servicer pursuant to Section 4.4(a).
"Actuarial Method" shall mean the method of allocating a fixed level
payment on a Receivable between principal and interest, pursuant to which the
portion of such payment that is allocated to interest is the product of
one-twelfth (1/12) of the APR on the Receivable multiplied by the scheduled
principal balance of the Receivable.
"Actuarial Receivable" shall mean any Receivable under which the
portion of a payment with respect thereto allocable to interest and the portion
of a payment with respect thereto allocable to principal is determined in
accordance with the Actuarial Method.
"Adjusted Original Pool Balance" shall mean, as of any date of
determination, an amount equal to the sum of (i) the aggregate Adjusted
Principal Balance (including the aggregate principal balance of Last Scheduled
Payments) of the Initial Receivables as of the Initial Cutoff Date, plus (ii)
the aggregate Adjusted Principal Balance (including the aggregate principal
balance of Last Scheduled Payments) of all Subsequent Receivables conveyed to
the Trust on or prior to such date, in each case as of their respective
Subsequent Cutoff Dates.
"Adjusted Principal Balance" shall mean, with respect to any Receivable
as of any date of determination, the Principal Balance of such Receivable, minus
the Receivable Yield Supplement Overcollateralization Amount for such
Receivable, as of such date.
"Advance" shall mean an Actuarial Advance or a Last Scheduled Payment
Advance, as the context may require.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" when used with respect to any specified Person shall mean the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" shall have the meaning specified in the recitals hereto.
"Amount Financed" shall mean, with respect to a Receivable, the
aggregate amount advanced under such Receivable toward the purchase price of the
Financed Vehicle and any related costs.
"Applicable Tax State" shall mean, as of any date of determination,
each state as to which any of the following is then applicable: (a) a state in
which the Owner Trustee maintains the Corporate Trust Office, (b) a state in
which the Owner Trustee maintains its principal executive offices, and (c) a
state in which the Servicer regularly conducts servicing and collection
operations other than purely ministerial activities and which relate to a
material portion of the Receivables.
"APR" of a Receivable shall mean the annual percentage rate of interest
stated in the Contract related to such Receivable.
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"Available Funds" shall mean, for any Payment Date, an amount equal to
(a) the sum of the following amounts with respect to the related Collection
Period: (i) all collections on Receivables, including Payaheads withdrawn from
the Payahead Account (but excluding Payaheads deposited into the Payahead
Account), the proceeds of sale by the Trust of any Financed Vehicle sold to the
Trust upon termination, including a prepayment, of a Final Payment Receivable,
(ii) all Liquidation Proceeds on Defaulted Receivables and any Recoveries; (iii)
all extension and deferral fees paid with respect to the Receivables; (iv) the
Purchase Amount of each Receivable that became a Purchased Receivable during the
related Collection Period (net of applicable expenses); (v) all Actuarial
Advances and Last Scheduled Payment Advances deposited to the Collection Account
on such Payment Date by the Servicer; (vi) amounts paid pursuant to the Yield
Supplement Agreement (including amounts, if any, withdrawn from the Yield
Supplement Account or the Reserve Account pursuant to Section 5.1(a)(ii)) with
respect to the related Collection Period; (vii) the Negative Carry Amount for
such Payment Date; (viii) partial prepayments attributable to any refunded item
included in the Amount Financed, such as extended warranty protection plan costs
or physical damage, credit life or disability insurance premiums, or any partial
prepayment which causes a reduction in the Obligor's periodic payment to be
below the Scheduled Payment as of the related Cutoff Date; (ix) the Pre-Funding
Account Investment Earnings, if any, for the related Collection Period; and (x)
with respect to the Payment Date on or immediately following the last day of the
Pre-Funding Period, the Remaining Pre-Funded Amount; provided, however, that in
calculating the Available Funds, all payments and proceeds (including
Liquidation Proceeds) of any Purchased Receivables the Purchase Amount of which
has been included in the Available Funds in a prior Collection Period (which
shall be paid to the Seller or the Servicer, as applicable) will be excluded,
minus (b) the aggregate amount of funds described in clause (a) above that are
used in the related Collection Period to reimburse the Servicer for the
aggregate amount of Advances previously made by the Servicer that are due and
payable to the Servicer on such Payment Date.
"Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions or trust companies in New York, New York,
Wilmington, Delaware or Los Angeles, California shall be authorized or obligated
by law, regulation or executive order to be closed.
"Capped Receivable" shall mean a Simple Interest Receivable that is
subject to a cap on the aggregate amount of interest to be paid by the related
Obligor during the term of such Receivable.
"Certificate" shall have the meaning assigned thereto in the Trust
Agreement.
"Certificate Balance" shall mean, as the context may require, (i) with
respect to all of the Certificates, an amount equal to, initially, the Initial
Certificate Balance and, thereafter, an amount equal to the Initial Certificate
Balance, as reduced from time to time by all amounts allocable to principal
previously distributed to Certificateholders or (ii) with respect to any
Certificate, an amount equal to, initially, the initial denomination of such
Certificate and,
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thereafter, an amount equal to such initial denomination, as reduced from time
to time by all amounts allocable to principal previously distributed in respect
of such Certificate; provided, that in determining whether the Holders of the
requisite portion or percentage of the Certificate Balance of all of the
Certificates have given any request, demand, authorization, direction, notice,
consent, or waiver hereunder or under any other Basic Document, Certificates
owned by the Trust, any other obligor upon the Certificates, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons shall be disregarded
and deemed to be excluded from the Certificate Balance (unless such Persons own
100% of the Certificate Balance of the Certificates), except that, in
determining whether the Indenture Trustee and Owner Trustee shall be protected
in relying on any such request, demand, authorization, direction, notice,
consent, or waiver, only Certificates that a Responsible Officer of the
Indenture Trustee, if applicable, and a Responsible Officer of the Owner Trustee
with direct responsibility for the administration of the Trust Agreement, if
applicable, knows to be so owned shall be so disregarded. Certificates so owned
that have been pledged in good faith may be regarded as included in the
Certificate Balance if the pledgee establishes to the satisfaction of the
Indenture Trustee or the Owner Trustee, as applicable, the pledgee's right so to
act with respect to such Certificates and that the pledgee is not the Trust, any
other obligor upon the Certificates, the Seller, the Servicer or any Affiliate
of any of the foregoing Persons.
"Certificate Distribution Account" shall mean the account established
and maintained as such pursuant to Section 4.1(e).
"Certificate Pool Factor" shall mean, as of the close of business on
the last day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made on
the immediately following Payment Date) divided by the Initial Certificate
Balance. The Certificate Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Certificate Pool Factor will decline to reflect reductions in
the Certificate Balance.
"Certificateholder" shall have the meaning assigned thereto in the
Trust Agreement.
"Closing Date" shall mean November [ ], 2000.
"Collection Account" shall mean the account or accounts established and
maintained as such pursuant to Section 4.1(a).
"Collection Period" shall mean each calendar month during the term of
this Agreement or, in the case of the initial Collection Period, the period from
the Initial Cutoff Date to and including the last day of the month in which the
Initial Cutoff Date occurred. As used herein, the Collection Period "related to"
a Payment Date or "preceding" a Payment Date refers to the Collection Period
that ends on the last day of the calendar month preceding the calendar month in
which such Payment Date occurs.
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"Commission" shall mean the Securities and Exchange Commission.
"Computer Tape" shall mean each computer tape or compact disk generated
by the Seller which provides information relating to the Receivables and which
was used by the Seller in selecting the Receivables conveyed to the Trust
hereunder on the Closing Date or any Subsequent Transfer Date.
"Contract" shall mean a motor vehicle retail installment sale contract,
including a retail installment contract relating to the sale of an automobile or
a sports-utility vehicle for commercial use.
"Corporate Trust Office" shall mean, as applicable, (i) the principal
office of the Indenture Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of the execution
of this Agreement is located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Corporate Trust Department, or at such other address as
the Indenture Trustee may designate from time to time by notice to the
Noteholders, the Owner Trustee and the Seller, or the principal corporate trust
office of any successor Indenture Trustee (of which address such successor
Indenture Trustee will notify the Noteholders, the Owner Trustee and the Seller)
or (ii) the principal office of the Owner Trustee at which at any particular
time its corporate trust business shall be administered, which office at the
date of the execution of this Agreement is located at Xxxxxx Square North, 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000-0000, Attention: Corporate
Trust Administration or at such other address as the Owner Trustee may designate
from time to time by notice to the Certificateholders, the Indenture Trustee and
the Seller, or the principal corporate trust office of any successor Owner
Trustee (of which address such successor Owner Trustee will notify the
Certificateholders, the Indenture Trustee and the Seller).
"Cutoff Date" shall mean the Initial Cutoff Date or any Subsequent
Cutoff Date, as the context may require.
"Dealer" shall mean, with respect to any Receivable, the seller of the
related Financed Vehicle who originated and assigned the Receivable relating to
such Financed Vehicle to MMCA under a Dealer Agreement.
"Dealer Agreement" shall mean an agreement between MMCA and a Dealer
relating to the assignment of Receivables to MMCA and all documents and
instruments relating thereto, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"Defaulted Receivable" shall mean a Receivable (other than a Purchased
Receivable) as to which (i) the related Financed Vehicle has been repossessed
and liquidated, (ii) more than 10% of a Scheduled Payment (including, in the
case of a Final Payment Receivable, the amount owed by an Obligor with respect
to a Last Scheduled Payment but excluding in each
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case any Excess Wear and Tear or Excess Mileage) is 120 or more days past due
and the Servicer has not repossessed the related Financed Vehicle or (iii) the
Servicer has determined, in accordance with its customary servicing standards,
policies and procedures, that eventual payment in full (including, in the case
of a Final Payment Receivable, the amount owed by an Obligor with respect to a
Last Scheduled Payment but excluding in each case any Excess Wear and Tear or
Excess Mileage) on the Receivable is unlikely and the Servicer has either (x)
repossessed and liquidated the related Financed Vehicle or (y) repossessed and
held the related Financed Vehicle in its repossession inventory for 90 days,
which 90 days shall not be more than 180 days after the date on which a
Scheduled Payment was due but not paid.
"Deferred Payment Receivable" shall mean, any Receivable for which the
related Contract specifies that no Scheduled Payment under such Contract shall
be due until a date more than 50 days from the date of inception of the such
Contract. A Receivable shall cease to be a Deferred Payment Receivable
commencing on the last day of the Collection Period preceding the Collection
Period in which the first Scheduled Payment is due under the related Contract.
"Depositor" shall mean the Seller, in its capacity as Depositor under
the Trust Agreement.
"Determination Date" shall mean, with respect to any Collection Period,
the seventh Business Day of the next succeeding calendar month (but not later
than the tenth calendar day of such month).
"Eligible Receivable" shall mean, each Initial Receivable as to which
the representations and warranties of the Seller in Section 2.2 shall be true
and correct in all material respects as of the Initial Cutoff Date, and (ii)
each Subsequent Receivable as to which the representations and warranties of the
Seller in Section 2.2 shall be true and correct in all material respects as of
the applicable Subsequent Cutoff Date.
"Eligible Servicer" shall mean a Person which, at the time of its
appointment as Servicer or as a subservicer, (i) has a net worth of not less
than $50,000,000, (ii) is servicing a portfolio of motor vehicle retail
installment sale contracts and/or motor vehicle loans, (iii) is legally
qualified, and has the capacity, to service the Receivables, (iv) has
demonstrated the ability professionally and competently to service a portfolio
of motor vehicle retail installment sale contracts and/or motor vehicle loans
similar to the Receivables in accordance with standards of skill and care that
are consistent with prudent industry standards, and (v) is qualified and
entitled to use pursuant to a license or other written agreement, and agrees to
maintain the confidentiality of, the software which the Servicer or any
subservicer uses in connection with performing its duties and responsibilities
under this Agreement or the related subservicing agreement or obtains rights to
use, or develops at its own expense, software which is adequate to perform its
duties and responsibilities under this Agreement or the related subservicing
agreement.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Servicing Termination" shall mean an event specified in
Section 8.1.
"Excess Mileage" shall mean, with respect to any Financed Vehicle
securing a Final Payment Receivable, the amounts payable by the related Obligor
relating to the excess of the number of miles by which such Financed Vehicle has
been driven over the number of miles such Financed Vehicle may be driven during
the term of the related Final Payment Receivable (as specified in the Contract
related to such Final Payment Receivable) without incurring an excess mileage
charge pursuant to the related Contract, net of the amount, if any, payable to a
third party collection agency as payment of its fees and expenses in connection
with collecting such amounts from the related Obligor.
"Excess Wear and Tear" shall mean, with respect to any Financed Vehicle
securing a Final Payment Receivable, all amounts payable by the related Obligor
relating to damages to such Financed Vehicle that are not the result of normal
wear and tear, as more specifically described in the Contract related to such
Final Payment Receivable, net of the amount, if any, payable to a third party
collection agency as payment of its fees and expenses in connection with
collecting such amounts from the related Obligor.
"Final Payment Receivable" shall mean all rights and obligations
arising under a Contract listed on a Schedule of Receivables which provides for
a series of scheduled payments which, if each is made on its scheduled due date,
will amortize the initial Level Pay Balance by the due date immediately
preceding the maturity date of the Receivable. At maturity of the Final Payment
Receivable, the Obligor thereunder will owe (assuming that all payments have
been made on their scheduled due dates) an amount consisting of interest for the
period from the preceding due date through the maturity date and the remaining
Principal Balance of the Receivable. At maturity of the Final Payment
Receivable, the Obligor may either (i) pay the remaining Principal Balance of
the Receivable, all accrued and unpaid interest, plus any fees, charges, and
other amounts then owing, (ii) refinance the amount then due, subject to certain
conditions or (iii) sell the Financed Vehicle to MMCA on behalf of the Trust for
an amount equal to the Sale Price, and pay any excess of the total amount owed
by the Obligor (calculated as in clause (i)) over the Sale Price, and satisfy
all other conditions stated under the terms of the Contract.
"Final Scheduled Maturity Date" shall mean with respect to any
Receivable, [________1, 200__].
"Financed Vehicle" shall mean a new or used automobile or sport-utility
vehicle, together with all accessions thereto, securing an Obligor's
indebtedness under the respective Receivable.
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"Holder" shall mean a Noteholder or a Certificateholder, as the case
may be.
"Indenture" shall mean the Indenture, dated as of November [ ], 2000,
between the Trust and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Indenture Trustee" shall mean Bank of Tokyo - Mitsubishi Trust
Company, a New York banking corporation, as Indenture Trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Certificate Balance" shall mean, as the context may require,
(i) with respect to all of the Certificates, $[ ], or (ii) with respect to any
Certificate, an amount equal to the initial denomination of such Certificate.
"Initial Cutoff Date" shall mean November [ ], 2000.
"Initial Payahead Account Deposit" shall mean $[ ].
"Initial Pool Balance" shall mean the aggregate Principal Balance
(including the aggregate principal balance of Last Scheduled Payments) of the
Initial Receivables as of the close of business on the Initial Cutoff Date,
which is $[ ].
"Initial Receivable" shall mean any Standard Receivable or Final
Payment Receivable conveyed by the Seller to the Trust on the Closing Date, as
described in the Schedule of Initial Receivables.
"Initial Weighted Average Rate" shall mean [ ]%.
"Initial Yield Supplement Amount" shall mean $[ ].
"Insolvency Event" shall mean, with respect to any Person, (i) the
making of a general assignment for the benefit of creditors, (ii) the filing of
a voluntary petition in bankruptcy, (iii) being adjudged a bankrupt or
insolvent, or having had entered against such Person an order for relief in any
bankruptcy or insolvency proceeding, (iv) the filing by such Person of a
petition or answer seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation, (v) the filing by such Person of an answer or other pleading
admitting or failing to contest the material allegations of a petition filed
against such Person in any proceeding specified in (vii) below, (vi) seeking,
consenting to or acquiescing in the appointment of a trustee, receiver or
liquidator of such Person or of all or any substantial part of the assets of
such Person or (vii) the failure to obtain dismissal within 60 days of the
commencement of any proceeding against such Person seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief
8
under any statute, law or regulation, or the entry of any order appointing a
trustee, liquidator or receiver of such Person or of such Person's assets or any
substantial portion thereof.
"Interest Accrual Period" shall mean, with respect to any Payment Date,
and with respect to each Class of the Notes, the period from and including the
15th day of the calendar month immediately preceding such Payment Date (or, in
the case of the first Payment Date, the Closing Date), to but excluding the 15th
day of the calendar month in which such Payment Date occurs.
"Interest Carryover Shortfall" shall mean, with respect to any Payment
Date and any Class of Notes, the excess of the sum of the Monthly Accrued Note
Interest for the preceding Payment Date and any outstanding Interest Carryover
Shortfall from the close of business on such preceding Payment Date, over the
amount in respect of interest that is actually deposited in the Note Payment
Account on such preceding Payment Date with respect to such Class, plus interest
on such excess to the extent permitted by law, at the applicable Note Interest
Rate for the related Interest Accrual Period.
"Last Scheduled Payment" shall mean, with respect to each Final Payment
Receivable, the amount referred to in the Contract related to such Final Payment
Receivable as the "last scheduled payment."
"Last Scheduled Payment Advance" shall mean, with respect to a Final
Payment Receivable, the amount, as of the close of business on the last day of a
Collection Period, which is required to be advanced by the Servicer with respect
to such Final Payment Receivable pursuant to Section 4.4(b).
"Last Scheduled Payment Pool Balance" shall mean, for any Payment Date,
the aggregate principal balance of Last Scheduled Payments of Final Payment
Receivables as of the close of business on the last day of the preceding
Collection Period.
"Last Scheduled Payment Principal Collections" shall mean (a)
collections of principal on a Final Payment Receivable that are attributable to
Last Scheduled Payments, which includes any collection attributable to principal
on a Final Payment Receivable in excess of the initial Level Pay Balance of that
Receivable, whether or not such payment is made on the due date of the related
Last Scheduled Payment, and including the proceeds of sale (net of expenses) of
any Financed Vehicle purchased by MMCA on behalf of the Trust pursuant to the
terms of the Receivable and subsequently sold on behalf of the Trust, minus (b)
with respect to any Final Payment Receivable with respect to which the Obligor
exercises its right to have MMCA, on behalf of the Trust, purchase the related
Financed Vehicle, the excess of the purchase price from the Obligor of such
Financed Vehicle over the remaining amount owed by the Obligor.
"Letter of Credit Bank" shall mean any Person having the Required
Rating that has provided a Yield Supplement Letter of Credit in accordance with
Section 5.1.
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"Level Pay Balance" shall mean, with respect to each Final Payment
Receivable, (i) initially the Amount Financed under such Final Payment
Receivable minus the principal portion of the Last Scheduled Payment thereon and
(ii) thereafter, shall be the amount set forth in clause (i) minus all
collections on or with respect to principal on such Receivable other than
amounts on deposit in the Payahead Account with respect to future due dates;
provided that such Level Pay Balance for any Final Payment Receivable shall not
be less than zero.
"Level Pay Pool Balance" shall mean, for any Payment Date, the sum of
(i) the aggregate Level Pay Balance of Final Payment Receivables and (ii) the
aggregate Principal Balance of the Receivables other than Final Payment
Receivables, as of the close of business on the last day of the preceding
Collection Period.
"Lien" shall mean a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' or materialmen's
liens, judicial liens and any liens that may attach to a Financed Vehicle by
operation of law.
"Liquidation Proceeds" shall mean, with respect to a Defaulted
Receivable, the monies collected from whatever source during the Collection
Period in which such Receivable became a Defaulted Receivable, net of the sum of
(i) any expenses incurred by the Servicer in connection with collection of such
Receivable and the disposition of the Financed Vehicle and (ii) any amounts
required by law to be remitted to the Obligor.
"Maximum Negative Carry Amount" shall mean, as of any Payment Date, an
amount equal to the product of (a) the Weighted Average Rate as of such Payment
Date minus 2.5%, multiplied by (b) the product of the Note Percentage as of each
Payment Date and the Pre-Funded Amount as of such Payment Date, multiplied by
(c) the percentage equivalent of a fraction, the numerator of which is the
actual number of days until the expected end of the Pre-Funding Period and the
denominator of which is 360. The Maximum Negative Carry Amount as of any Payment
Date shall be calculated in the manner described in the preceding sentence as an
approximation of the maximum aggregate amount of the Negative Carry Amounts for
all subsequent Payment Dates.
"Mitsubishi Motors" means, Mitsubishi Motors Corporation, a Japanese
corporation, and its successors and assigns, and any Affiliates thereof.
"MMCA" shall mean Mitsubishi Motors Credit of America, Inc., a Delaware
corporation, and its successors and assigns.
"MMSA" shall mean Mitsubishi Motors Sales of America, Inc., a Delaware
corporation, and its successors and assigns.
"Modified Receivable" shall have the meaning assigned thereto in
Section 3.2(a).
10
"Monthly Accrued Note Interest" shall mean, with respect to any Payment
Date and (i) any Class of Notes, interest accrued for the related Interest
Accrual Period at the applicable Note Interest Rate for such Class on the
aggregate principal balance of the Notes of such Class as of the immediately
preceding Payment Date, after giving effect to all payments of principal to
Noteholders on or prior to such preceding Payment Date (or, in the case of the
first Payment Date, the initial principal amount of the Notes); and (ii) with
respect to the Notes collectively, the sum of Monthly Accrued Note Interest for
each Class.
"Monthly Remittance Condition" shall have the meaning assigned thereto
in Section 4.1(g).
"Moody's" shall mean Xxxxx'x Investors Service, Inc., or its successors
and assigns.
"Negative Carry Account" shall mean the account established and
maintained as such pursuant to Section 4.1(c).
"Negative Carry Account Initial Deposit" shall mean $[ ].
"Negative Carry Amount" shall mean, with respect to any Payment Date,
the difference (if positive) between (1) the product of (a) the Monthly Accrued
Note Interest for such Payment Date, multiplied by (b) the Pre-Funded Percentage
as of the immediately preceding Payment Date or, in the case of the first
Payment Date, the Closing Date, minus (2) the Pre-Funding Account Investment
Earnings for the related Collection Period (or, in the case of the first Payment
Date, from the Closing Date until the close of business on [ ], 2000).
"Note Payment Account" shall mean the account established and
maintained as such pursuant to Section 4.1(d).
"Note Percentage" shall mean, as of any Payment Date, the percentage
equivalent of a fraction, the numerator of which is the aggregate principal
amount of the Notes as of such Payment Date (after giving effect to any payments
of principal on such Payment Date), and the denominator of which is an amount
equal to the sum of the aggregate principal amount of the Notes and the
Certificate Balance, in each case as of such Payment Date (after giving effect
to any payment of principal on such Payment Date).
"Note Pool Factor" shall mean, with respect to any Class of Notes, as
of the close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the outstanding principal balance of such Class of Notes
(after giving effect to any reductions thereof to be made on the immediately
following Payment Date) divided by the original outstanding principal balance of
such Class of Notes. Each Note Pool Factor will be 1.0000000 as of the Closing
Date; thereafter, the Note Pool Factor will decline to reflect reductions in the
outstanding principal amount of such Class of Notes.
11
"Noteholder" shall mean a Person in whose name a Note is registered on
the Note Register.
"Obligor" on a Receivable shall mean the purchaser or co-purchasers of
the related Financed Vehicle purchased in part or in whole by the execution and
delivery of such Receivable, or any other Person who owes or may be liable for
payments under such Receivable.
"Officer's Certificate" shall mean a certificate signed by the
chairman, the president, any executive vice president, vice president or the
treasurer of the Seller or the Servicer, as the case may be, and delivered to
the Owner Trustee and the Indenture Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel (who, in
the case of counsel to the Seller or the Servicer, may be an employee of, or
outside counsel to, the Seller or the Servicer), which counsel shall be
acceptable to the Indenture Trustee, the Owner Trustee or the Rating Agencies,
as applicable.
"Optional Purchase Percentage" shall mean 10%.
"Original Pool Balance" shall mean, as of any date of determination, an
amount equal to the sum of (i) the Initial Pool Balance plus (ii) the aggregate
Principal Balance (including the aggregate principal balance of Last Scheduled
Payments) of all Subsequent Receivables conveyed to the Trust on or prior to
such date as of the close of business on their respective Subsequent Cutoff
Dates.
"Owner Trust Estate" shall have the meaning assigned thereto in the
Trust Agreement.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, its successors in interest and any successor trustee under
the Trust Agreement.
"Payahead" shall mean, with respect to an Actuarial Receivable, the
amount, as of the close of business on the last day of a Collection Period, so
designated in accordance with Section 4.3(a) with respect to such Receivable.
"Payahead Account" shall mean the account established and maintained as
such pursuant to Section 4.1(f).
"Payahead Balance", with respect to an Actuarial Receivable, shall mean
the sum, as of the close of business on the last day of a Collection Period, of
all Payaheads made by or on behalf of the Obligor with respect to such Actuarial
Receivable (including any amount paid by or on behalf of the Obligor prior to
the related Cutoff Date that is due on or after the related Cutoff Date and was
not used to reduce the principal balance of such Actuarial Receivable), as
reduced
12
by applications of previous Payaheads with respect to such Actuarial Receivable,
pursuant to Sections 4.3(a) and 4.4.
"Payment Date" shall mean the 15th day of each month, or if such day is
not a Business Day, the immediately following Business Day, commencing on [ ]
15, 2000.
"Permitted Investments" shall mean, on any date of determination,
book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form with maturities not exceeding the
Business Day preceding the next Payment Date which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest investment category granted
thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee or any of
their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
described in clause (b); and
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(g) any other investment with respect to which the Trust or the
Servicer has received written notification from the Rating Agencies that the
acquisition of such investment as a Permitted Investment will not result in a
withdrawal or downgrading of the ratings on any Class of Notes or the
Certificates.
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, limited liability partnership, trust,
unincorporated organization, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Pool Balance" shall mean, as of any date of determination, the
aggregate Principal Balance of the Receivables (including the aggregate
Principal Balance of Last Scheduled Payments) as of the close of business on the
last day of the preceding Collection Period or, with respect to any date of
determination during the first Collection Period, as of the Initial Cutoff Date,
after giving effect to, with respect to such Collection Period, (i) all payments
received from Obligors (other than Payaheads), (ii) all Advances to be made by
the Servicer and (iii) all Purchase Amounts to be remitted by the Seller or the
Servicer, in each case for such Collection Period, and reduced by the aggregate
Principal Balance of Receivables that became Defaulted Receivables during such
Collection Period.
"Pre-Funded Amount" shall mean, with respect to any date of
determination, the amount on deposit in the Pre-Funding Account on such date
exclusive of any interest and other income (net of losses and expenses) on
amounts on deposit in the Pre-Funding Account.
"Pre-Funded Percentage" shall mean, as of any date of determination,
the percentage equivalent of a fraction, the numerator of which is the
Pre-Funded Amount as of such date of determination (after giving effect to any
withdrawals from the Pre-Funding Account on or prior to such date of
determination), and the denominator of which is the sum of the Pool Balance
(after giving effect to all conveyances of Subsequent Receivables to the Trust
on or prior to such date of determination) and the Pre-Funded Amount (after
giving effect to any withdrawals from the Pre-Funding Account on or prior to
such date of determination).
"Pre-Funding Account" shall mean the account designated as such,
established and maintained pursuant to Section 4.1(b).
"Pre-Funding Account Investment Earnings" shall mean, with respect to
any Collection Period, the interest and other income (net of losses and
expenses) earned on amounts on deposit in the Pre-Funding Account during such
Collection Period and deposited to the Pre-Funding Account on or prior to the
related Payment Date.
"Pre-Funding Period" shall mean the period from and including the
Closing Date and ending on the earliest of: (a) the date on which an Event of
Default or an Event of Servicing
14
Termination occurs, (b) the date on which an Insolvency Event occurs with
respect to the Seller or the Servicer and (d) the close of business on [ ],
2001.
"Principal Balance" shall mean, with respect to any Receivable as of
any date of determination, the Amount Financed minus the sum of the following
amounts: (i) in the case of an Actuarial Receivable, that portion of all
Scheduled Payments due on or prior to such date allocable to principal computed
in accordance with the Actuarial Method (to the extent collected or advanced),
(ii) in the case of a Simple Interest Receivable, that portion of all Scheduled
Payments actually received on or prior to such date allocable to principal using
the Simple Interest Method (to the extent collected or advanced), (iii) any
refunded portion of extended warranty protection plan costs, or of physical
damage, credit life, or disability insurance premiums included in the Amount
Financed, and (iv) any prepayment in full or partial prepayment applied to
reduce the unpaid principal balance of such Receivable. The Principal Balance of
a Defaulted Receivable shall be zero as of the beginning of the Collection
Period following the Collection Period in which it became a Defaulted
Receivable.
"Principal Distribution Amount" shall mean, with respect to any Payment
Date, (i) the sum of the outstanding principal balance of the Notes plus the
Certificate Balance on such Payment Date (prior to any payments on such Payment
Date), minus (ii) the sum of (x) the Adjusted Pool Balance as of the last day of
the preceding Collection Period, plus (y) the Pre-Funded Amount on such Payment
Date (after giving effect to all withdrawals from or deposits to the Pre-Funding
Account on such Payment Date), plus (iii) with respect to the Payment Date on or
immediately following the end of the Pre-Funding Period, the Remaining
Pre-Funded Amount; provided, however, that on the Final Payment Date for each
Class of Notes, the principal required to be deposited in the Note Payment
Account shall include the amount necessary (after giving effect to the other
amounts to be deposited in the Note Payment Account on such Payment Date and
allocable to principal) to reduce the outstanding principal amount of the Notes
of such Class to zero.
"Program" shall have the meaning assigned thereto in Section 3.11.
"Purchase Agreement" shall mean the Purchase Agreement, dated as of
November [ ], 2000, between the Seller and MMCA, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Purchase Amount" shall mean, with respect to a Payment Date and a
Receivable to be repurchased by the Seller or purchased by the Servicer on such
Payment Date, an amount equal to the sum of (a) the Principal Balance of such
Receivable as of the first day of the Collection Period preceding the Collection
Period in which such Payment Date occurs and (b) an amount equal to the amount
of accrued and unpaid interest on such Principal Balance at the related APR from
the date a payment was last made by or on behalf of the Obligor through the due
date for payment of such Receivable in the Collection Period preceding the
Collection Period
15
in which such Payment Date occurs and, in the case of clauses (a) and (b), after
giving effect to the receipt of monies collected on such Receivable in such
preceding Collection Period.
"Purchased Receivable" shall mean, on any date of determination, a
Receivable as to which payment of the Purchase Amount has been made by the
Seller pursuant to Section 2.3 hereof or the Servicer pursuant to Section 3.7 or
9.1 hereof.
"Qualified Institution" shall mean Bank of Tokyo - Mitsubishi Trust
Company, a New York banking corporation, or any depository institution organized
under the laws of the United States of America or any one of the states thereof
or incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the states thereof qualified
to take deposits and subject to supervision and examination by federal or state
banking authorities which at all times has a short-term deposit rating of P-1 by
Moody's and A-1 by S&P and, in the case of any such institution organized under
the laws of the United States of America, whose deposits are insured by the
Federal Deposit Insurance Corporation or any successor thereto.
"Qualified Trust Institution" shall mean the corporate trust department
of Bank of Tokyo - Mitsubishi Trust Company or any other institution organized
under the laws of the United States of America or any one of the states thereof
or incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the states thereof qualified
to take deposits and subject to supervision and examination by federal or state
banking authorities which at all times (i) is authorized under such laws to act
as a trustee or in any other fiduciary capacity, (ii) has not less than one
billion dollars in assets under fiduciary management, and (iii) has a long-term
deposit rating that satisfies the Rating Agency Condition.
"Rating Agency" shall mean either S&P or Moody's, and together, the
"Rating Agencies." If no such organization or successor is any longer in
existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Trust, notice of which
designation shall be given to the Indenture Trustee, the Owner Trustee and the
Servicer.
"Rating Agency Condition" shall mean, with respect to any action, that
each Rating Agency shall have been given prior notice thereof and that each of
the Rating Agencies shall have notified the Seller, the Servicer, the Owner
Trustee and the Indenture Trustee in writing that such action will not result in
a reduction or withdrawal of the then current rating of the Notes or the
Certificates.
"Realized Losses" shall mean, with respect to each Payment Date and
each Receivable that became a Defaulted Receivable during the related Collection
Period, the excess of the Principal Balance of such Defaulted Receivable
(including the principal of a Last Scheduled Payment) over the Liquidation
Proceeds attributable to such Defaulted Receivable.
16
"Receivable File" shall have the meaning assigned thereto in Section
2.4.
"Receivable Yield Supplement Amount" shall mean, with respect to each
Payment Date and each Receivable that was a Deferred Payment Receivable as of
the last day of the preceding Collection Period (other than a Receivable which
became a Defaulted Receivable or a Purchased Receivable or any Receivable sold
by the Indenture Trustee following an Event of Default pursuant to Section 5.4
of the Indenture), an amount equal to the product of (x) the Adjusted Principal
Balance of such Receivable on the first day of the preceding Collection Period,
(y) the Initial Weighted Average Rate plus 0.25%, and (z) 1/12.
"Receivable Yield Supplement Overcollateralization Amount" shall mean,
with respect to any Payment Date and any Receivable (other than a Purchased
Receivable or a Defaulted Receivable), an amount equal to the excess of (i) the
present value of the remaining Scheduled Payments due under such Receivable as
of the later to occur of (x) the last day of the preceding Collection Period and
(y) the first date on which interest accrues on such Receivable as set forth in
the related Contract, discounted at a rate equal to the APR of such Receivable,
over (ii) the present value of the remaining Scheduled Payments due under such
Receivable as set forth in clause (i) above, discounted at a rate equal to
[9.5]%. For the purposes of the foregoing calculation the Payahead Balance with
respect to any Actuarial Receivable shall be applied to reduce the amount of any
Scheduled Payment on the related Actuarial Receivable in the order in which such
Scheduled Payments were due.
"Receivables" shall mean, as of any date of determination, the Initial
Receivables together with any Subsequent Receivables conveyed to the Trust as of
such date of determination pursuant to Section 2.1(b) hereof or any Second-Tier
Subsequent Assignment.
"Record Date" shall mean, with respect to a Payment Date or Redemption
Date, (i) for any Book-Entry Notes, the close of business on the Business Day
immediately preceding such Payment Date or Redemption Date or, (ii) for any
Definitive Notes and for the Certificates, the fifteenth (15th) day of the
preceding month, unless such fifteenth (15th) day is not a Business Day, in
which case the immediately preceding Business Day.
"Recoveries" shall mean, with respect to any Collection Period
following the Collection Period in which such Receivable became a Defaulted
Receivable, all monies received by the Servicer with respect to such Defaulted
Receivable during any Collection Period, net of the sum of (i) any expenses
incurred by the Servicer in connection with the collection of such Receivable
and the disposition of the Financed Vehicle (to the extent not previously
reimbursed) and (ii) any payments on such Receivable required by law to be
remitted to the Obligor.
"Relevant UCC" shall mean the Uniform Commercial Code as in effect in
any relevant jurisdiction.
17
"Remaining Pre-Funded Amount" shall have the meaning assigned thereto
in Section 4.8(b).
"Required Negative Carry Account Balance" shall mean, as of any Payment
Date, the lesser of (x) the Negative Carry Account Initial Deposit, minus all
previous withdrawals of the Negative Carry Amount from the Negative Carry
Account, including any withdrawals of the Negative Carry Amount therefrom on
such Payment Date, and (y) the Maximum Negative Carry Amount as of such Payment
Date.
"Required Rating" shall mean a rating on (i) short-term unsecured debt
obligations of P-1 by Moody's and (ii) short-term unsecured debt obligations of
A-1+ by S&P; and any requirement that short-term unsecured debt obligations have
the "Required Rating" shall mean that such short-term unsecured debt obligations
have the foregoing required ratings from each of such Rating Agencies.
"Reserve Account" shall mean the account established and maintained as
such pursuant to Section 4.7(a).
"Reserve Account Advance Draw Amount" shall have the meaning assigned
thereto in Section 4.6(b).
"Reserve Account Amount" shall mean, with respect to any Payment Date,
the amount on deposit in the Reserve Account. Unless specifically stated to the
contrary, the Reserve Account Amount shall be calculated after giving effect to
all deposits and withdrawals therefrom on the prior Payment Date (or, in the
case of the first Payment Date, the Closing Date) and all interest and other
income (net of losses and investment expenses) on such amounts during the
related Collection Period.
"Reserve Account Initial Deposit" shall mean $[ ].
"Reserve Account Property" shall have the meaning assigned thereto in
Section 4.7(a).
"Reserve Account TRP Draw Amount" shall have the meaning assigned
thereto in Section 4.6(b).
"Responsible Officer" shall mean (a) with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee
with direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject, and (b)
with respect to the Owner Trustee, any officer within the Corporate Trust Office
of the Owner Trustee, including any vice president, assistant vice president,
secretary, assistant secretary,
18
financial services officer or any other officer of the Owner Trustee,
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject and shall also mean any officer of
the Administrator.
"Sale Price" shall mean, with respect to any Final Payment Receivable,
an amount equal to the Last Scheduled Payment, minus the sum of any charges for
Excess Wear and Tear and Excess Mileage and the amount of any disposition fee
payable to the Servicer.
"S&P" shall mean Standard & Poor's Ratings Services, a Division of The
XxXxxx-Xxxx Companies, Inc., or its successors and assigns.
"Schedule of Initial Receivables" shall mean the list of Contracts
attached hereto as Schedule A (which list may be in the form of computer tape,
microfiche, compact disk or other electronic medium).
"Schedule of Receivables" shall mean the Schedule of Initial
Receivables or any Schedule of Subsequent Receivables, as the context may
require.
"Schedule of Subsequent Receivables" shall mean any list of Contracts
attached as Schedule A to the related Second-Tier Subsequent Assignment (which
list may be in the form of computer tape, microfiche, compact disk or other
electronic medium).
"Scheduled Payment" shall mean, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid by
the Obligor in such Collection Period (without giving effect to modifications of
payment terms pursuant to Section 3.2 or any rescheduling in any insolvency or
similar proceedings).
"Second-Tier Subsequent Assignment" shall have the meaning assigned
thereto in Section 2.1(d)(ii).
"Seller" shall mean MMCA Auto Receivables Trust, a Delaware business
trust, in its capacity as seller of the Receivables to the Trust under this
Agreement, and each successor thereto (in the same capacity) pursuant to Section
6.3.
"Servicer" shall mean MMCA, in its capacity as Servicer of the
Receivables under this Agreement, each successor thereto (in the same capacity)
pursuant to Section 7.3, and each successor Servicer appointed and acting
pursuant to Section 8.2.
"Servicer's Certificate" shall have the meaning assigned thereto in
Section 3.9.
19
"Servicing Fee" shall mean, with respect to any Payment Date, the fee
payable to the Servicer for services rendered during the related Collection
Period, determined pursuant to and defined in Section 3.8.
"Servicing Officer" shall mean any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Receivables, whose
name appears on a list of servicing officers attached to an Officer's
Certificate furnished on the Closing Date to the Owner Trustee and the Indenture
Trustee by the Servicer, as such list may be amended from time to time by the
Servicer in writing.
"Simple Interest Method" shall mean the method of allocating a fixed
level payment between principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the product of the APR
multiplied by the unpaid principal balance multiplied by the period of time
(expressed as a fraction of a year, based on the actual number of days in the
calendar month and a 365-day year) elapsed since the preceding payment was made
and the remainder of such payment is allocable to principal.
"Simple Interest Receivable" shall mean any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Balance" shall mean, with respect to any Payment
Date, the lesser of (a) 2.25% of the Adjusted Original Pool Balance (after
giving effect to all conveyances of Subsequent Receivables to the Trust on or
prior to such Payment Date) and (b) the outstanding principal amount of the
Notes as of such Payment Date (after giving effect to any principal payment made
on such Payment Date). Notwithstanding the foregoing, if (i) each Rating Agency
delivers a letter to the Indenture Trustee that the use of any new formulation
requested by the Seller would not cause a downgrade, qualification or withdrawal
of the then current rating on any Class of Notes, and (ii) an Opinion of Counsel
to the effect that the proposed change will not adversely affect the status of
the Notes as debt is delivered to the Indenture Trustee, then the Specified
Reserve Balance may be changed in accordance with such letters without an
amendment hereto.
"Specified Yield Supplement Account Balance" shall mean, (i) on the
Closing Date, $[ ] (ii) as of the close of business on any Payment Date to but
excluding the Payment Date occurring on [ ] 15, 2001, an amount equal to the sum
of all projected Yield Supplement Amounts for all future Payment Dates, assuming
that no prepayments are made on the Deferred Payment Receivables, and (iii) from
and after the close of business on the Payment Date occurring on [ ] 15, 2001,
zero.
"Standard Receivable" shall mean all rights and obligations under a
Contract listed on a Schedule of Receivables which is not a Final Payment
Receivable.
20
"Subsequent Cutoff Date", with respect to any Subsequent Receivable,
shall have the meaning specified in the related Second-Tier Subsequent
Assignment.
"Subsequent Payahead Account Deposit" shall mean, with respect to any
Subsequent Transfer Date, cash or Permitted Investments having a value equal to
the aggregate amount of the Payahead Balances as of the related Subsequent
Cutoff Date of the Subsequent Receivables conveyed to the Trust on such
Subsequent Transfer Date.
"Subsequent Receivable" shall mean any Receivable described in a
Schedule of Subsequent Receivables.
"Subsequent Reserve Account Deposit" shall mean, with respect to any
Subsequent Transfer Date, cash or Permitted Investments having a value
approximately equal to 1.00% of the aggregate Adjusted Principal Balance of the
Subsequent Receivables conveyed to the Trust on such Subsequent Transfer Date as
of the close of business on the related Subsequent Cutoff Date.
"Subsequent Transfer Date" shall mean, with respect to any Subsequent
Receivable, the Business Day during the Pre-Funding Period on which the related
Second-Tier Subsequent Assignment is executed and delivered by the Seller to the
Trust and the Indenture Trustee pursuant to Section 2.1(d)(ii).
"Subsequent Yield Supplement Account Deposit" shall mean, with respect
to any Subsequent Transfer Date, cash or Permitted Investments having a value
approximately equal to the sum of the projected Receivable Yield Supplement
Amounts for the Subsequent Receivables conveyed to the Trust on such Subsequent
Transfer Date for all future Payment Dates, assuming the future Scheduled
Payments on such Subsequent Receivables are made on their scheduled due dates.
"Supplemental Servicing Fee" shall mean, with respect to any Payment
Date, the fee payable to the Servicer for services rendered during the related
Collection Period, determined pursuant to and defined in Section 3.8.
"Total Available Funds" shall mean, for any Payment Date, an amount
equal to the sum of (i) the Available Funds for such Payment Date and (ii) the
Reserve Account TRP Draw Amount, if any, for such Payment Date.
"Total Required Payment" shall mean, with respect to any Payment Date,
the sum of (i) the Total Servicing Fee, (ii) the Accrued Note Interest and (iii)
the Principal Distribution Amount with respect to such Payment Date.
21
"Total Servicing Fee" shall mean, with respect to any Payment Date, the
sum of (i) the Servicing Fee for the related Collection Period plus (ii) all
accrued and unpaid Servicing Fees for prior Collection Periods.
"Trust" shall mean the MMCA Auto Owner Trust 2000-2, a Delaware
business trust.
"Trust Accounts" shall have the meaning assigned thereto in Section
5.1(a).
"Trust Agreement" shall mean the Amended and Restated Trust Agreement,
dated as of November [ ], 2000 between the Seller and the Owner Trustee, as the
same may be amended, supplemented or otherwise modified and in effect from time
to time.
"Trust Property" shall mean, as of any date of determination, the
Initial Receivables and other property related thereto sold, transferred,
assigned and otherwise conveyed by the Seller to the Trust pursuant to Section
2.1(a), together with the Subsequent Receivables and other property related
thereto sold, transferred, assigned and otherwise conveyed by the Seller to the
Trust pursuant to Section 2.1(b) on or prior to such date of determination
pursuant to any Second-Tier Subsequent Assignment.
"Weighted Average Rate" shall mean, with respect to any date of
determination, a per annum rate equal to (1) the sum of (a) the product of (x)
the outstanding principal amount of the Class A-1 Notes on such date and (y) the
Class A-1 Rate, plus (b) the product of (x) the outstanding principal amount of
the Class A-2 Notes on such date and (y) the Class A-2 Rate, plus (c) the
product of (x) the outstanding principal amount of the Class A-3 Notes on such
date and (y) the Class A-3 Rate, plus (D) the product of (x) the outstanding
principal amount of the Class A-4 Notes on such date and (y) the Class A-4 Rate,
plus (e) the product of (x) the outstanding principal amount of the Class B
Notes on such date and (y) the Class B Rate, divided by (2) the sum of the
outstanding principal amount of the Notes on such date, plus Certificate Balance
on such date; provided, that if the date of determination is a Payment Date,
then the outstanding principal amount of any class of Notes shall be determined
after giving effect to all payments made on such date.
"Yield Supplement Account" shall have the meaning assigned thereto in
Section 5.1(a).
"Yield Supplement Agreement" shall mean the Yield Supplement Agreement,
dated as of November [ ], 2000, by and between the Seller and MMCA, as amended,
modified or supplemented from time to time, substantially in the form of Exhibit
D hereto.
"Yield Supplement Amount" shall mean, with respect to any Payment Date,
the sum of all Receivable Yield Supplement Amounts for the related Collection
Period.
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"Yield Supplement Letter of Credit" shall mean any letter of credit
issued by the Letter of Credit Bank, as permitted by Section 5.1, to support
payments of the Yield Supplement Amount under the Yield Supplement Agreement.
"Yield Supplement Overcollateralization Amount" shall mean, with
respect to any Payment Date, the sum of the Receivable Yield Supplement
Overcollateralization Amounts with respect to all Receivables (other than
Purchased Receivables or Defaulted Receivables) as of such Payment Date.
SECTION 1.2 Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein have the meanings assigned to them in
the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified, and the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
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SECTION 1.3 Business Day Certificate. On the Closing Date (with respect
to the remainder of calendar year 2000) 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 Owner Trustee and the Indenture 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 on or after the Initial Cutoff Date
(including Payaheads) and, with respect to Initial Receivables that are
Simple Interest Receivables, monies received thereunder on or 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;
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(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 Receivable 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 4.8(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;
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(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 (as defined in the Purchase Agreement);
(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
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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 transfers
of the Trust Property contemplated by Sections 2.1(a) and any Second-Tier
Subsequent Assignments executed pursuant to Section 2.1(b) constitute sales of
the Trust Property, conveying good title to the Trust Property from the Seller
to the Trust. However, in the event that such transfers are deemed to be
pledges, 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 (5) 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;
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(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 amount on deposit in the Negative Carry Account for
such Subsequent Transfer Date is not less than the Required Negative Carry
Account Balance for such Subsequent Transfer Date;
(ix) the Pre-Funding Period shall not have terminated prior to the
Subsequent Transfer Date;
(x) 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;
(xi) 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;
(xii) 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;
(xiii) 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;
(xiv) the addition of the Subsequent Receivables will not result
in a material adverse tax consequence to the Trust, the Noteholders or the
Certificateholders;
(xv) 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
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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;
(xvi) 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);
(xvii) 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
(xviii) 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 Seller agrees to transfer to the Trust, pursuant to Section
2.1(b), Subsequent Deferred Payment Receivables having an aggregate Principal
Balance as of the related Subsequent Cutoff Dates of approximately $[ ], subject
only to availability thereof.
(f) The sales, transfers, assignments and conveyances of the Trust
Property made under Sections 2.1(a) and (b) 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 Receivables 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
29
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 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 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.
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(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 by MMCA to the Seller, 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 Seller and
the Trust, respectively (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).
(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 thirty (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
31
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 account debtor 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 (10) days of the Closing Date (with
respect to the Initial Receivables) or ten (10) 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.
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(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 of [ ]% the Initial Pool
Balance, constituting approximately [ ]% 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 of [ ]% the Initial Pool Balance, constituting
approximately 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 [ ]% of the
Initial Pool Balance, constituting approximately [ ]% 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 [ ]% of the Initial Pool Balance,
constituting approximately [ ]% of the total number of Initial Receivables,
relate to used automobiles and sports-utility vehicles.
(xxi) Origination. Each Receivable shall have an origination date
during or after May 1996.
(xxii) Maturity of Receivables. Each Receivable shall have, as of
the related Cutoff Date, of not more than sixty (60) 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 ____ 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 60 Scheduled Payments.]
(xxiv) Annual Percentage Rate. Each Receivable shall have an APR
of at least 0% and not more than 30%.
(xxv) Scheduled Payments. No Receivable shall have a payment of
which more than 10% of such payment is more than thirty (30) days overdue as
of the related Cutoff Date.
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(xxvi) Location of Receivable Files. The Receivable Files shall be
kept at one or more of the locations listed in Schedule B hereto.
(xxvii) 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.
(xxviii) Agreement. The representations and warranties of the
Seller in Section 6.1 are true and correct.
(xxix) 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.
(xxx) Last Scheduled Payments. The aggregate principal balance of
the Last Scheduled Payments of 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 ____%. The aggregate principal
balance of the Last Scheduled Payments of 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 ____%.
(xxxi) 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, assuming that no
prepayments are made on the Deferred Payment Receivable, has been deposited
to the Yield Supplement Account on or prior to the Closing Date or the
related Subsequent Transfer Date, as applicable.
(xxxii) Prepaid Receivables. No Receivable shall have been
pre-paid by more than six monthly payments as of the related Cutoff Date.
(xxxiii) Limited Credit Experience. The aggregate principal
balance of the Subsequent Receivables sold to the Purchaser on a Subsequent
Transfer Date on which the Obligor has limited credit experience, 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 ____%.
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[(xxxiv) Deferred Payment Receivables. As of the Initial Cutoff
Date $[ ] total Principal Balance of Deferred Payment Receivables included
in the Initial Receivables were Long Deferment Period Receivables. As of the
related Subsequent Cutoff Date, all of the $[ ] Principal Balance of
Subsequent Receivables to be purchased by the Trust from the Seller with
funds deposited to the Pre-Funding Account on the Closing Date are Long
Deferment Period Receivables. No Deferred Payment Receivable is a Final
Payment Receivable.]
(xxxv) 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 May 15, 2001.
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 sixtieth (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
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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
36
manner as shall enable the Trust or the Indenture Trustee to verify the accuracy
of the Servicer's recordkeeping. 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 ninety (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
37
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
38
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
39
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.
40
(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.
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
41
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 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 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 provided, further
that the Servicer may not cause a Deferred Payment Receivable to be a
Modified Receivable after May 15, 2001; 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 the Final Scheduled Maturity Date and that such extensions,
in the aggregate, do not exceed two (2) months for each twelve (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
42
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 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 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
43
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.
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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 sixtieth (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
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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 (y) 0.25% of the
aggregate Principal Balance of Deferred 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),
and expenses incurred in connection with distributions and reports to the
Certificateholders and the Noteholders), 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 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 4.11 and by the Indenture Trustee to the Noteholders
pursuant to Section 4.11 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,
2001, an Officer's Certificate, stating that (i) a review of the activities of
the Servicer during the preceding calendar
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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 (5) 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, 2001, 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.
47
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.
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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 (10) Business Days (or such longer period not to exceed
thirty (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
(10) Business Days (or such longer period not to exceed thirty (30) calendar
days as to which each Rating Agency may consent).
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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 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
(iii) 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 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 "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 released to the Seller at the time and in the manner
provided in Section 4.9. In the event that the Negative Carry
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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 (10) Business Days (or such longer period not to exceed thirty (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 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
(iii) 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 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 "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 (10) Business
Days (or such longer period not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
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(e) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Owner Trustee 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
(10) Business Days (or such longer period not to exceed thirty (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.
(f) 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.
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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 (10) Business
Days (or such longer period not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
(g) Notwithstanding the provisions of clause (d) above, for so long as
(i) MMCA is the Servicer, (ii) the rating of MMCA's short-term unsecured debt is
at least P-1 by Xxxxx'x and is at least A-1 by S&P 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(g) that would require remittance
of the Payaheads to the Payahead 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 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.
(h) 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.
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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 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(g)), 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
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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 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 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,
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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.
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(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(g) an amount equal
to the sum of:
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(A) 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
(B) 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 Last Scheduled Payment
Principal Collections, 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; and
(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.
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(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 Note Payment Account, the Accrued Note Interest for
the Class A Notes;
(iii) to the Note Payment Account, the Accrued Note Interest for
the Class B Notes;
(iv) to the Note Payment Account, the Principal Distribution
Amount;
(v) to the Reserve Account, the amount, if any, necessary to
reinstate the balance in the Reserve Account up to the Specified Reserve
Balance; and
(vi) to the Certificate Distribution Account, any remaining
portion of the Total Available Funds.
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 Servicer shall instruct the Indenture Trustee to
withdraw from the Pre-Funding Account and deposit to the Reserve Account on such
Subsequent Transfer Date an amount equal to the applicable Subsequent Reserve
Account Deposit as provided in Section 4.8(a). 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 Sections 2.1(a) and (b).
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
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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 (10) Business Days (or such longer period not to exceed thirty (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 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 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.
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SECTION 4.8 Pre-Funding Account. (a) On the Closing Date, the Seller
shall deposit in the Pre-Funding Account $[ ] 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 and
instruct the Indenture Trustee to withdraw such amounts from the Pre-Funding
Account on such Subsequent Transfer Date: (i) an amount equal to the aggregate
Principal Balance of the Subsequent Receivables transferred to the Trust on such
Subsequent Transfer Date less an amount equal to the sum of the amounts
described in clauses (ii) through (iv) of this sentence, which amount the
Indenture Trustee shall distribute to the Seller on such Subsequent Transfer
Date, (ii) the Subsequent Reserve Account Deposit for such Subsequent Transfer
Date, which amount the Indenture Trustee shall deposit to the Reserve Account on
behalf of the Seller on such Subsequent Transfer Date, (iii) if the Yield
Supplement Account has not been replaced by a Yield Supplement Letter of Credit
on or prior to such Subsequent Transfer Date, the Subsequent Yield Supplement
Account Deposit for such Subsequent Transfer Date, which amount the Indenture
Trustee shall deposit to the Yield Supplement Account on behalf of the Seller on
such Subsequent Transfer Date, and (iv) the Subsequent Payahead Account Deposit,
which amount the Indenture Trustee shall deposit to the Payahead Account on
behalf of the Seller on such Subsequent Transfer Date.
(b) If the Pre-Funded Amount 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-Funded
Amount 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 4.9 Negative Carry Account. 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
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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 4.10 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 4.11 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 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 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;
(vi) 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;
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(vii) the amounts of the Interest Carryover Shortfall, if any, for
the next Payment Date and the portion thereof attributable to each Class of
Notes;
(viii) the amount of the aggregate Realized Losses, if any, with
respect to the related Collection Period;
(ix) the balance of the Reserve Account on such Payment Date,
after giving effect to changes therein on such Payment Date;
(x) the aggregate Purchase Amount of Receivables repurchased by
the Seller or purchased by the Servicer, if any, with respect to the related
Collection Period;
(xi) the amount of Actuarial Advances and Last Scheduled Payment
Advances, if any, with respect to the related Collection Period;
(xii) 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;
(xiii) 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), (iii), (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 4.12 Control of Securities Accounts. Notwithstanding anything
else contained herein, the Trust agrees that each of the Collection Account, the
Pre-Funding 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 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.
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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 Note Payment Account, the Reserve Account and the
Negative Carry 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 Servicer shall instruct the Indenture Trustee
to withdraw from the Pre-Funding Account and 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. 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
64
necessary, cause the Yield Supplement Account to be moved to a Qualified
Institution or a Qualified Trust Institution within ten (10) Business Days (or
such longer period not to exceed thirty (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.
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(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 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
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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
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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.
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(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 executed 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
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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 Trust
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
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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.
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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
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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 executed 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
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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
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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 (3) 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 (5) 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 thirty (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 sixty (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
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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,
the Indenture Trustee (or an Affiliate of the
76
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 (2) 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.
77
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 Original 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
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accrued but unpaid interest (including any overdue interest) thereon and the
Certificate Balance. The Purchase Amount, any Negative Carry Amount 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,
but without the consent of any of the Noteholders or the Certificateholders to
cure any ambiguity, to correct or supplement any provisions in this Agreement
which may be inconsistent with any other provisions in this Agreement, or to
add, change or eliminate any other provisions with respect to matters or
questions arising under this Agreement that shall not be inconsistent with the
provisions of this Agreement; 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.
(b) This Agreement may also be amended from time to time by the Seller,
the Servicer and the Trust, with the consent of the Indenture Trustee, the
consent of the Holders of Notes evidencing not less than 51% of Outstanding
Amount of all of the Notes, voting as a group, and the consent of 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)
79
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 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 execute and file such financing statements and cause to be
executed and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve, maintain, and protect the
interest of the 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-
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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. 9-402(7) of the Relevant UCC, unless it shall have given the
Owner Trustee and the Indenture Trustee at least sixty (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 sixty (60) days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the 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 principal
executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature 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
81
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 (10) 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 executed 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 ninety (90) days after the beginning of each calendar year
commencing in the year 2001, 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
executed 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 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights,
and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
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SECTION 10.4 Notices. All demands, notices, and communications under
this Agreement shall be in writing, personally delivered, sent by telecopier,
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 10.12
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, and (e) in the case of S&P, at the following address:
Standard & Poor's Ratings Services, a Division of The XxXxxx-Xxxx Companies,
Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset
Backed Surveillance Department. 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 10.5 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 10.6 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 10.7 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.
83
SECTION 10.8 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 10.9 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 10.10 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 10.11 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 10.12 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 10.13 No Bankruptcy Petition; Subordination; Claims Against
Seller. The Owner Trustee, the Indenture Trustee, the Trust and the Servicer
each covenants and agrees that:
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(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 10.14 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.
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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:
--------------------------------------
Name:
Title:
MMCA AUTO OWNER TRUST 2000-2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By:
--------------------------------------
Name:
Title:
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By:
--------------------------------------
Name:
Title:
Accepted and agreed:
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By:
--------------------------------------
Name:
Title:
SCHEDULE A
[SCHEDULE OF INITIAL RECEIVABLES PROVIDED TO
THE INDENTURE TRUSTEE ON THE CLOSING DATE,
WHICH MAY BE ON COMPUTER TAPE,
COMPACT DISK, OR MICROFICHE]
SA-1
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
SB-1
EXHIBIT A
[FORM OF SERVICER'S CERTIFICATE]
The undersigned certifies that he is a [title] 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 2000-2 (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 [____________], 2000.
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.
By:
-------------------------------------
Name:
Title:
A-1
EXHIBIT B
[FORM OF STATEMENT TO NOTEHOLDERS]
B-1
EXHIBIT C
[FORM OF STATEMENT TO CERTIFICATEHOLDERS]
C-1
EXHIBIT D
[FORM OF YIELD SUPPLEMENT AGREEMENT]
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re: MMCA Auto Owner Trust 2000-2
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
D-1
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 2000-2 (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
Telecopy: 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
Telecopy: (000) 000-0000
D-2
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:
D-3
EXHIBIT E
FORM OF SECOND-TIER SUBSEQUENT ASSIGNMENT
For value received, in accordance with and subject to the Sale and
Servicing Agreement, dated as of [ ] (the "Sale and Servicing Agreement"), among
MMCA Auto Owner Trust 2000-2 (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);
E-1
(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
E-2
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 [ ], 2000.
MMCA AUTO RECEIVABLES TRUST
By:
-------------------------------------
Name:
Title:
E-3
SCHEDULE A
[SCHEDULE OF SUBSEQUENT RECEIVABLES PROVIDED TO THE
INDENTURE TRUSTEE ON THE SUBSEQUENT CLOSING DATE, WHICH
MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE]
E-4
ANNEX A
OFFICER'S CERTIFICATE
The undersigned officer of MMCA Auto Receivables Trust (the
"Company"), does hereby certify, pursuant to Section 2.1(d)(xvi) of the Sale and
Servicing Agreement, dated as of [ ], among MMCA Auto Owner Trust 2000-2 (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 [__________], 2000.
By:
----------------------------------
Name:
Title:
E-5
