EXHIBIT 4.1(B)(1)
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CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
a National Banking Association,
as Seller and Servicer
and
CHASE MANHATTAN AUTO OWNER TRUST 1998-A,
as Issuer
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SALE AND SERVICING AGREEMENT
Dated as of February 1, 1998
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TABLE OF CONTENTS
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Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions......................................................................... 1
SECTION 1.2 Usage of Terms...................................................................... 23
SECTION 1.3 Simple Interest Method; Allocations................................................. 23
SECTION 1.4 Calculations Relating to the March 1999 Distribution
Date.......................................................................................... 23
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1 Conveyance of Receivables........................................................... 24
SECTION 2.2 Closing............................................................................. 25
ARTICLE III
THE RECEIVABLES
SECTION 3.1 Representations and Warranties of Seller; Conditions
Relating to Receivables....................................................................... 25
SECTION 3.2 Repurchase Upon Breach or Failure of a Condition.................................... 29
SECTION 3.3 Custody of Receivable Files......................................................... 30
SECTION 3.4 Duties of Servicer as Custodian..................................................... 30
SECTION 3.5 Instructions; Authority to Act...................................................... 31
SECTION 3.6 Custodian's Indemnification......................................................... 31
SECTION 3.7 Effective Period and Termination.................................................... 31
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1 Duties of Servicer.................................................................. 32
SECTION 4.2 Collection of Receivable Payments; Refinancing...................................... 32
SECTION 4.3 Realization Upon Receivables........................................................ 33
SECTION 4.4 Maintenance of Security Interests in Financed Vehicles.............................. 34
SECTION 4.5 Covenants of Servicer............................................................... 34
SECTION 4.6 Purchase of Receivables Upon Breach................................................. 34
SECTION 4.7 Servicing Fee....................................................................... 35
SECTION 4.8 Servicer's Certificate.............................................................. 35
SECTION 4.9 Annual Statement as to Compliance................................................... 36
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SECTION 4.10 Annual Audit Report................................................................ 36
SECTION 4.11 Access by Holders to Certain Documentation and
Information Regarding Receivables............................................................. 37
SECTION 4.12 Reports to Holders and the Rating Agencies......................................... 37
SECTION 4.13 Reports to the Securities and Exchange Commission.................................. 38
ARTICLE V
ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1 Establishment of Accounts........................................................... 38
SECTION 5.2 Collections......................................................................... 39
SECTION 5.3 [Reserved].......................................................................... 40
SECTION 5.4 Additional Deposits................................................................. 40
SECTION 5.5 Distributions....................................................................... 40
SECTION 5.6 Reserve Account..................................................................... 42
SECTION 5.7 Net Deposits........................................................................ 43
SECTION 5.8 Statements to Certificateholders and Noteholders.................................... 43
ARTICLE VI
THE SELLER
SECTION 6.1 Representations of Seller........................................................... 45
SECTION 6.2 Liability of Seller; Indemnities.................................................... 46
SECTION 6.3 Merger or Consolidation of Seller................................................... 47
SECTION 6.4 Limitation on Liability of Seller and Others........................................ 47
SECTION 6.5 Seller May Own Notes and Certificates............................................... 47
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations of Servicer......................................................... 47
SECTION 7.2 Liability of Servicer; Indemnities.................................................. 49
SECTION 7.3 Merger or Consolidation of Servicer................................................. 50
SECTION 7.4 Limitation on Liability of Servicer and Others...................................... 50
SECTION 7.5 Servicer Not To Resign.............................................................. 51
SECTION 7.6 Delegation of Duties................................................................ 51
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
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Page
SECTION 8.1 Events of Servicing Termination..................................................... 51
SECTION 8.2 Indenture Trustee to Act; Appointment of Successor
Servicer...................................................................................... 53
SECTION 8.3 Notification to Noteholders and Certificateholders.................................. 54
SECTION 8.4 Waiver of Past Defaults............................................................. 54
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables; Trust
Termination................................................................................... 54
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment.......................................................................... 56
SECTION 10.2 Protection of Title to Owner Trust Estate.......................................... 57
SECTION 10.3 GOVERNING LAW...................................................................... 59
SECTION 10.4 Notices............................................................................ 59
SECTION 10.5 Severability of Provisions......................................................... 59
SECTION 10.6 Assignment......................................................................... 60
SECTION 10.7 Certificates and Notes Nonassessable and Fully Paid................................ 60
SECTION 10.8 Third-Party Beneficiaries.......................................................... 60
SECTION 10.9 Assignment to Indenture Trustee.................................................... 60
SECTION 10.10 Limitation of Liability of Owner Trustee and
Indenture Trustee............................................................................. 60
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SCHEDULES
Schedule A - List of Receivables
Schedule B - Location of Receivable Files
EXHIBITS
Exhibit A - Form of Servicer's Certificate
Exhibit B - Form of Monthly Report
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This SALE AND SERVICING AGREEMENT, dated as of February 1,
1998, (as amended, supplemented or otherwise modified and in effect from time
to time, this "Agreement") is made between CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, a national banking association having its principal executive
offices located at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Chase
USA," the "Seller" or the "Servicer" in its respective capacities as such),
and CHASE MANHATTAN AUTO OWNER TRUST 1998-A, as issuer (the "Issuer").
W I T N E S S E T H :
- - - - - - - - - -
In consideration of the premises and of the mutual
agreements herein contained, the parties hereto 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, shall
have the following meanings:
"Accrued Interest" on a Receivable, as of any date of
determination, means that amount of interest accrued on the Principal Balance
at the related Contract Rate but not paid by or on behalf of the Obligor.
"Accounts" means, collectively, the Collection Account and
the Note Distribution Account.
"Administration Agreement" means the Administration
Agreement dated as of February 1, 1998, among the Issuer, the Administrator
and the Indenture Trustee, as the same may be amended and supplemented from
time to time.
"Administrator" means The Chase Manhattan Bank, a New York
banking corporation, as administrator, and its successors and assigns.
"Administration Fee" means $1,000, the fee payable to the
Administrator on each Distribution Date pursuant to Section 5.5(c) for
services rendered pursuant to the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing. A Person shall
not be deemed to be an Affiliate of any specified Person solely because such
other Person has the
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contractual right or obligation to manage such specified Person unless such
other Person controls such specified Person through equity ownership or
otherwise.
"Aggregate Net Losses" means, for any Distribution Date, the
amount equal to (i) the aggregate principal balance of all Receivables that
became Defaulted Receivables during the related Collection Period minus (ii)
the Liquidation Proceeds allocable to principal collected during such
Collection Period with respect to any Defaulted Receivables.
"Amount Financed" in respect of a Receivable means the
amount advanced under the Receivable toward the purchase price of the Financed
Vehicle and related costs.
"Assertion" has the meaning specified in Section 4.10.
"Authenticating Agent" has the meaning specified in Section
2.13 of the Indenture and shall initially be the corporate trust office of
Chase, and its successors and assigns in such capacity.
"Authorized Officer" means any officer of the Owner Trustee,
Indenture Trustee or Servicer who is authorized to act on behalf of the Owner
Trustee, Indenture Trustee or Servicer, as applicable, and who is identified
as such on the list of authorized officers delivered by each such party on the
Closing Date.
"Available Interest" means, for any Distribution Date, that
portion of Collections on the Receivables received during the related
Collection Period allocated to interest and, to the extent attributable to
interest, the Repurchase Amount received with respect to each Receivable
repurchased by the Seller or purchased by the Servicer under an obligation
that arose during the related Collection Period.
"Available Principal" means, for any Distribution Date, that
portion of Collections on the Receivables received during the related
Collection Period allocated to the principal balance of the Receivables and,
to the extent attributable to principal, the Repurchase Amount received with
respect to each Receivable repurchased by the Seller or purchased by the
Servicer under an obligation that arose during the related Collection Period.
"Available Reserve Account Amount" shall mean, for each
Distribution Date, an amount equal to the lesser of (i) the amount on deposit
in the Reserve Account and (ii) the Specified Reserve Account Balance with
respect to such Distribution Date.
"Average Delinquency Percentage" means for any Distribution
Date, the average of the Delinquency Percentages for such Distribution Date
and the preceding two (2) Distribution Dates.
"Average Net Loss Ratio" means for any Distribution Date,
the average of the Net Loss Ratios for such Distribution Date and the
preceding two (2) Distribution Dates.
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"Basic Documents" means this Agreement, the Certificate of
Trust, the Indenture, the Depository Agreements, the Trust Agreement, the
Administration Agreement and other documents and certificates delivered in
connection therewith.
"Benefit Plan" has the meaning specified in Section 11.12 of
the Trust Agreement.
"Book-Entry Certificates" means beneficial interests in the
Certificates, the ownership and transfers of which shall be made through book
entries by a Clearing Agency or Foreign Clearing Agency as described in
Section 3.10 of the Trust Agreement.
"Book-Entry Notes" means beneficial interests in the Notes,
the ownership and transfers of which shall be made through book entries by a
Clearing Agency or Foreign Clearing Agency as described in Section 2.10 of the
Indenture.
"Business Day" means a day, other than a Saturday or a
Sunday, on which the Indenture Trustee and banks located in New York, New
York, Wilmington, Delaware and Minneapolis, Minnesota are open for the purpose
of conducting a commercial banking business.
"Business Trust Statute" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as amended from time to time.
"Capital Accounts" has the meaning specified in Section 5.7
of the Trust Agreement.
"Cedel" means Cedel Bank, societe anonyme.
"Certificate" means a certificate evidencing the beneficial
interest of a Certificateholder in the Owner Trust Estate, substantially in
the form of Exhibit A to the Trust Agreement.
"Certificate Balance" means an amount equal to
$30,620,164.79 as of the Closing Date and, thereafter, shall be an amount
equal to such initial Certificate Balance, reduced by all amounts allocable to
principal previously distributed to Certificateholders. The Certificate
Balance shall also be reduced on any Distribution Date by the excess, if any,
of (i) the sum of (A) the Certificate Balance and (B) the outstanding
principal amount of the Notes (in each case after giving effect to amounts in
respect of principal to be deposited in the Certificate Distribution Account
and the Note Distribution Account on such Distribution Date), over (ii) the
Pool Balance as of the close of business on the last day of the preceding
Collection Period. Thereafter, the Certificate Balance shall be increased on
any Distribution Date to the extent that any portion of the Total Distribution
Amount on such Distribution Date is available to pay the existing
Certificateholders' Principal Carryover Shortfall, but not by more than the
aggregate reductions in the Certificate Balance set forth in the preceding
sentence.
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"Certificate Depository Agreement" means the agreement among
the Issuer, the Owner Trustee, Chase, as agent for the Depository Trust
Company and The Depository Trust Company, as the initial Clearing Agency,
dated the Closing Date, relating to the Certificates, substantially in the
form attached as Exhibit C to the Trust Agreement, as the same may be amended
and supplemented from time to time.
"Certificate Distribution Account" has the meaning specified
in Section 5.1 of the Trust Agreement.
"Certificate Final Scheduled Distribution Date" means the
August 2004 Distribution Date on which the outstanding principal amount, if
any, of the Certificates is payable.
"Certificate of Trust" means the Certificate of Trust in the
form of Exhibit B to the Trust Agreement to be filed for the Issuer pursuant
to Section 3810(a) of the Business Trust Statute.
"Certificate Owner" means, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency or Foreign Clearing Agency or on
the books of a direct or indirect Clearing Agency Participant.
"Certificate Pool Factor" as of the close of business on a
Distribution Date means a eight-digit decimal figure equal to the Certificate
Balance (after giving effect to distributions made on such date) divided by
the initial Certificate Balance. The Certificate Pool Factor will be
1.00000000 as of the Cutoff Date; thereafter, the Certificate Pool Factor will
decline to reflect reductions in the Certificate Balance.
"Certificate Rate" means 6.000% per annum.
"Certificate Register" and "Certificate Registrar" means the
register maintained and the registrar appointed pursuant to Section 3.4 of the
Trust Agreement.
"Certificated Security" means a "certificated security"
within the meaning of the Relevant UCC.
"Certificateholder" means the Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent, request, waiver or demand pursuant to any
of the Basic Documents (other than pursuant to Section 4.3 of the Trust
Agreement), the interest evidenced by any Certificate registered in the name
of the Seller, the Servicer or any Person actually known by an Authorized
Officer of the Owner Trustee to be an Affiliate of the Seller or the Servicer
shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, request or waiver shall have
been obtained.
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"Certificateholders' Distributable Amount" means for any
Distribution Date, the sum of (x) the Certificateholders' Principal
Distributable Amount and (y) the Certificateholders' Interest Distributable
Amount.
"Certificateholders' Interest Carryover Shortfall" means,
(a) for the initial Distribution Date, zero, and (b) for any other
Distribution Date, the excess of the Certificateholders' Interest
Distributable Amount for the preceding Distribution Date over the amount in
respect of the interest actually deposited in the Certificate Distribution
Account on such preceding Distribution Date, plus interest on such excess, to
the extent permitted by law, at the Certificate Rate from and including such
preceding Distribution Date to, but excluding, the current Distribution Date.
"Certificateholders' Interest Distributable Amount" means,
for any Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date.
"Certificateholders' Monthly Interest Distributable Amount"
means, for any Distribution Date, one month's interest (or, in the case of the
first Distribution Date, interest accrued from and including the Closing Date
to, but excluding, such Distribution Date) at the Certificate Rate on the
Certificate Balance on the immediately preceding Distribution Date, after
giving effect to all payments of principal to the Certificateholders on or
prior to such Distribution Date (or, in the case of the first Distribution
Date, the Certificate Balance on the Closing Date). Interest shall be computed
on the basis of a 360 day-year of twelve 30-day months for purposes of this
definition.
"Certificateholders' Monthly Principal Distributable Amount"
means, for any Distribution Date prior to the Distribution Date on which the
Notes have been paid in full, zero; and for any Distribution Date commencing
on or after the Distribution Date on which the Notes have been paid in full,
100% of the Principal Distribution Amount (less the portion of the Principal
Distribution Amount required on the first such Distribution Date to pay the
Notes in full).
"Certificateholders' Principal Carryover Shortfall" means
for any Distribution Date, the sum of (a) the excess of (i) the
Certificateholders' Principal Distributable Amount for the preceding
Distribution Date, over (ii) the amount in respect of principal actually
deposited in the Certificate Distribution Account on such Distribution Date
and (b) without duplication of clause (a), the unreimbursed portion of the
amount by which the Certificate Balance has been reduced pursuant to the
second sentence of the definition thereof.
"Certificateholders' Principal Distributable Amount" means,
for any Distribution Date, the sum of (i) the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date and (ii) the
Certificateholders' Principal Carryover Shortfall for such Distribution Date;
provided that the Certificateholders' Principal Distributable Amount shall not
exceed the Certificate Balance. In addition, on the Certificate Final
Scheduled Distribution Date, the principal required to be distributed to the
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Certificateholders will include the lesser of (a) any payments of principal
due and remaining unpaid on each Receivable owned by the Issuer as of the last
day of the immediately preceding Collection Period and (b) the amount that is
necessary (after giving effect to the other amounts to be deposited in the
Certificate Distribution Account on such Distribution Date and allocable to
principal) to reduce the Certificate Balance to zero, in either case after
giving effect to any required distribution of the Noteholders' Principal
Distributable Amount to the Note Distribution Account.
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
"Chase Direct Receivable" means a Receivable originated by
Chase directly with an Obligor without the involvement of a Dealer.
"Class A-1 Event" shall have occurred if any Class A-1 Notes
are outstanding on the February 1999 Distribution Date (after giving effect to
any payments made on such date).
"Class A-1 Interest Rate" means 5.549% per annum.
"Class A-1 Notes" means the Class A-1 5.549% Asset Backed
Notes, substantially in the form of Exhibit B to the Indenture.
"Class A-2 Interest Rate" means 5.679% per annum.
"Class A-2 Notes" means the Class A-2 5.679% Asset Backed
Notes, substantially in the form of Exhibit C to the Indenture.
"Class A-3 Interest Rate" means 5.700% per annum.
"Class A-3 Notes" means the Class A-3 5.700% Asset Backed
Notes, substantially in the form of Exhibit D to the Indenture.
"Class A-4 Interest Rate" means 5.800% per annum.
"Class A-4 Notes" means the Class A-4 5.800% Asset Backed
Notes, substantially in the form of Exhibit E to the Indenture.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The initial
Clearing Agency shall be The Depository Trust Company.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other person for whom from time to time a
Clearing Agency effects book-entry transfers of securities deposited with the
Clearing Agency (including a Foreign Clearing Agency).
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"Closing Date" means February 18, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" has the meaning specified in Section
5.1(a)(i).
"Collection Period" means each calendar month beginning
February 1, 1998 until Chase Manhattan Auto Owner Trust 1998-A shall terminate
pursuant to Article IX of the Trust Agreement.
"Collections" means all collections in respect of Receivables.
"Contract Rate" of a Receivable means the annual rate of
interest stated in such Receivable.
"Control" means (a) with respect to a Security Entitlement,
the Indenture Trustee (i) is identified in the records of the Securities
Intermediary for such Security Entitlement as the person having such Security
Entitlement against such Security Intermediary or (ii) has obtained the
agreement, in writing, of the Securities Intermediary for such Security
Entitlement that it will comply with orders of the Indenture Trustee regarding
the transfer or redemption of such Security Entitlement without further
consent of any other person; or (b) with respect to a United States Security
Entitlement, (i) the Indenture Trustee is a participant in the book entry
system maintained by the Federal Reserve Bank that is acting as fiscal agent
for the issuer of such United States Security Entitlement and such Federal
Reserve Bank has indicated by book entry that such United States Security
Entitlement has been credited to the Indenture Trustee's securities account in
such book entry system or (ii) (A) the Indenture Trustee (x) is identified in
the records of the Securities Intermediary for such United States Securities
Entitlement as the person having such Securities Entitlement against such
Securities Intermediary or (y) has obtained the agreement, in writing, of the
Securities Intermediary for such Security Entitlement that it will comply with
orders of the Indenture Trustee regarding the transfer or redemption of such
Security Entitlement without further consent of any other person, (B) the
Securities Intermediary for such United States Securities Entitlement is a
participant in the book entry system maintained by the Federal Reserve Bank
that is acting as fiscal agent for the issuer of such United States Security
Entitlement and (C) such Federal Reserve Bank has indicated by book entry that
such United States Security Entitlement has been credited to such Securities
Intermediary's securities account in such book entry system.
"Corporate Trust Office" shall mean the New York office of
the Indenture Trustee or the Wilmington, Delaware office of the Owner Trustee,
as applicable.
"Cutoff Date" means February 1, 1998.
"Dealer" means the dealer which sold a Financed Vehicle
related to a Dealer Receivable and which originated or assisted in the
origination of such Dealer Receivable under a Dealer Agreement.
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"Dealer Agreement" means any agreement and, if applicable,
assignment under which Dealer Receivables were originated by or through a
Dealer and sold to the Seller or an affiliate of the Seller.
"Dealer Receivable" means each Receivable which is not a
Direct Receivable.
"Default" means any occurrence that is, or with notice or
the lapse of time or both would become, an Event of Default.
"Defaulted Receivable" means a Receivable (other than a
Repurchased Receivable) as to which the Servicer has determined based on its
usual collection practices and procedures, during any Collection Period, that
eventual payment in full of the Amount Financed (including accrued interest
thereon) is unlikely; provided that a Receivable shall become a Defaulted
Receivable during the calendar month in which more than 10% of the scheduled
payment becomes 240 days delinquent, regardless of whether any such
determination has been made.
"Definitive Notes" means Notes issued in certificated, fully
registered form as provided in Section 2.12 of the Indenture.
"Definitive Certificates" means Certificates issued in
certificated, fully registered form as provided in Section 3.12 of the Trust
Agreement.
"Delaware Trustee" has the meaning specified in Section 10.1
of the Trust Agreement.
"Delinquency Percentage" means, for any Distribution Date,
the sum of the outstanding principal balances of all Receivables which were 60
days or more delinquent (including Receivables, which are not Defaulted
Receivables, relating to Financed Vehicles that have been repossessed), as of
the close of business on the last day of the Collection Period immediately
preceding such Distribution Date, determined in accordance with the Servicer's
normal practices, such sum expressed as a percentage of the Pool Balance as of
the close of business on the last day of such Collection Period.
"Delivery" when used with respect to Reserve Account
Property means:
(a) with respect to any Physical Property (that is not
either a United States Security Entitlement or a Security Entitlement),
physical delivery thereof to the Indenture Trustee or its nominee or custodian
by an effective endorsement, or registered in the name of, the Indenture
Trustee or its nominee or custodian endorsed in blank; and
(b) with respect to any Uncertificated Security (i) if the
issuer of such Uncertificated Security is organized under the laws of an Old
Article 8 Jurisdiction, registration on the books and records of the issuer
thereof in the name of the financial intermediary, the sending of a
confirmation by the financial intermediary of the purchase by the Indenture
Trustee or its nominee, agent or custodian of such uncertificated security,
the
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making by such financial intermediary of entries on its books and records
identifying such uncertificated certificates as belonging to the Indenture
Trustee or its nominee, agent or custodian; and (ii) if the issuer of such
Uncertificated Security is organized under the laws of a jurisdiction that has
adopted Revised Article 8, (A) the issuer registers the Indenture Trustee as
the registered owner thereof or (B) the Indenture Trustee otherwise satisfies
the requirements of Revised Article 8.
"Deposit Date" means the Business Day immediately preceding
each Distribution Date.
"Depositor" means the Seller in its capacity as Depositor
under the Trust Agreement.
"Depository Agreements" means, collectively, the Certificate
Depository Agreement and the Note Depository Agreement.
"Determination Date" means the 10th calendar day of the
month (or, if such 10th calendar day is not a Business Day, the Business Day
preceding the 10th calendar day of the month) immediately succeeding the
related Collection Period.
"Direct Receivable" means either a Chase Direct Receivable
or a Receivable originated by the Seller or an Affiliate of the Seller
directly with an Obligor without the involvement of a Dealer.
"Distribution Date" means, in the case of the first
Collection Period, March 16, 1998, and in the case of every Collection Period
thereafter, the 15th day of the following month, or if the 15th day is not a
Business Day, the next following Business Day; provided, however, that solely
for purposes of determining the Note Final Scheduled Distribution Date for the
Class A-1 Notes, making payments on the Notes pursuant to Section 5.5, the
Indenture and the Notes and making withdrawals from the Reserve Account, if
the Class A-1 Event shall have occurred, the Distribution Date in the case of
the February 1999 Collection Period means (x) March 12, 1999 with respect to
the Class A-1 Notes, and (y) March 15, 1999 with respect to the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes.
"Eligible Deposit Account" means (a) a segregated
identifiable trust account established in the trust department of a Qualified
Trust Institution, which shall, except in the case of the Reserve Account,
initially be Chase, and may be maintained with Chase so long as Chase is a
Qualified Trust Institution; or (b) a separately identifiable deposit account
established in the deposit taking department of a Qualified Institution,
which, except in the case of the Reserve Account, may be Chase so long as
Chase is a Qualified Institution.
"ERISA" has the meaning specified in Section 11.12 of the
Trust Agreement.
"Executive Officer" means, with respect to any corporation
or bank, the Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, President, Executive Vice
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President, any Vice President, the Secretary or the Treasurer of such
corporation or bank, and with respect to any partnership, any general partner
thereof.
"Euroclear Operator" means Xxxxxx Guaranty Trust Company of
New York, Brussels, Belgium office, in its capacity as the operator of the
Euroclear system.
"Event of Default" means an event specified in Section 5.1
of the Indenture.
"Event of Servicing Termination" means an event specified in
Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expenses" has the meaning specified in Section 8.2 of the
Trust Agreement.
"Farm Credit Entitlement" means a "Security Entitlement" as
defined in 12 C.F.R. ss. 615.5450.
"FDIC" means the Federal Deposit Insurance Corporation or
any successor thereto.
"FHL Bank Entitlement": means a "Security Entitlement" as
defined in 12 C.F.R. ss. 912.1.
"FHLMC" means the Federal Home Loan Mortgage Corporation or
any successor thereto.
"Final Scheduled Maturity Date" means the last day of the
Collection Period immediately preceding the Certificate Final Scheduled
Distribution Date.
"Financed Vehicle" means, with respect to a Receivable, the
new or used automobile or light-duty truck, together with all accessions
thereto, securing an Obligor's indebtedness under such Receivable.
"Financial Asset" means a "financial asset" within the
meaning of Section 8- 102(a)(9) of Revised Article 8.
"Fitch" means Fitch IBCA, Inc. and its successors and
assigns.
"FNMA" means the Federal National Mortgage Association or
any successor thereto.
"Foreign Clearing Agency" means, collectively, Cedel and the
Euroclear Operator.
"Funding Corporation Entitlement" means a "Security
Entitlement" as defined in 12 C.F.R. ss. 1511.1.
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"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and xxxxx x xxxx
upon and a security interest in and right of set-off against, deposit, set
over and confirm pursuant to the Indenture. A Grant of the Trust Estate or of
any other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the Granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments and all other moneys payable thereunder,
to give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the
name of the Granting party or otherwise and generally to do and receive
anything that the Granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"Holder" or "Holders" means, unless the context otherwise
requires, both Certificateholders and Noteholders.
"HUD Entitlement" means a "Security Entitlement" as defined
in 24 X.X.X.xx. 81.2.
"Indemnified Parties" has the meaning specified in Section
8.2 of the Trust Agreement.
"Indenture" means the Indenture dated as of February 1,
1998, between the Issuer and the Indenture Trustee, as the same may be amended
and supplemented from time to time.
"Indenture Trustee" means, initially, Norwest Bank
Minnesota, National Association, as Indenture Trustee under the Indenture, or
any successor Indenture Trustee under the Indenture.
"Independent" means, when used with respect to any specified
Person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller
or any Affiliate of any of the foregoing Persons and (c) is not connected with
the Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to
be delivered to the Indenture Trustee under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1 of
the Indenture, made by an Independent engineer, appraiser or other expert
appointed by the Issuer and approved by the Indenture Trustee in the exercise
of reasonable care, and such opinion or certificate shall state that the
signer has read the definition of "Independent" in this Agreement and that the
signer is Independent within the meaning thereof.
12
"Insolvency Event" means, for a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver (including any receiver appointed under the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended), liquidator,
assignee, custodian, trustee, sequestrator or similar official for such Person
or for any substantial part of its property, or ordering the winding-up or
liquidation of such Person's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (b) the
commencement by such Person of a voluntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the consent by such Person to the entry of an order for relief in
an involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making of such Person of any
general assignment for the benefit of creditors, or the failure by such Person
generally to pay its debts as such debts become due, or the taking of action
by such Person in furtherance of any of the foregoing.
"Interest Rate" means the rate of interest borne by the Notes of any class.
"Investment Earnings" means, with respect to any
Distribution Date, the investment earnings (net of losses and investment
expenses) on amounts on deposit in the Collection Account.
"Issuer" means Chase Manhattan Auto Owner Trust 1998-A, a
Delaware business trust, until a successor replaces it and, thereafter, means
such successor and, for purposes of any provision contained in the Indenture
and required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any of its authorized officers and
delivered to the Indenture Trustee.
"Late Fees" means any late charges, credit related extension
fees, non-credit related extension fees or other administrative fees or
similar charges allowed by applicable law with respect to the Receivables.
"Lien" means a security interest, lien, charge, pledge or
encumbrance of any kind other than tax liens, mechanics' liens or any other
liens that attach by operation of law.
"Liquidation Proceeds" means, with respect to any
Receivable, (i) insurance proceeds, (ii) the monies collected during a
Collection Period from whatever source on a Defaulted Receivable and (iii)
proceeds of a Financed Vehicle sold after repossession, in each case net of
any liquidation expenses and payments required by law to be remitted to the
Obligor.
13
"March 1999 Class A-1 Note Distribution" means the amount
distributable from the Collection Account pursuant to Section 5.5(b) to the
Noteholders of the Class A-1 Notes on the March 1999 Distribution Date with
respect to the Class A-1 Notes if the Class A-1 Event has occurred.
"Moody's" means Xxxxx'x Investors Service, a division of Dun
& Bradstreet Corporation, and its successors and assigns.
"Net Loss Ratio" means, for any Distribution Date, an
amount, expressed as a percentage, equal to (i) the Aggregate Net Losses for
such Distribution Date divided by (ii) the average of the Pool Balances on
each of the related Settlement Date and the last day of the related Collection
Period.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3
Note or a Class A-4 Note.
"Note Depository Agreement" means the agreement among the
Issuer, the Indenture Trustee, Chase, as agent for The Depository Trust
Company and The Depository Trust Company, as the initial Clearing Agency,
dated the Closing Date, relating to the Notes, substantially in the form of
Exhibit F to the Indenture, as the same may be amended or supplemented from
time to time or any similar agreement with any successor Clearing Agency.
"Note Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.1(a)(ii).
"Note Final Scheduled Distribution Date" means for (a) the
Class A-1 Notes, the March 1999 Distribution Date, (b) the Class A-2 Notes,
the May 2000 Distribution Date, (c) the Class A-3 Notes, the September 2001
Distribution Date, and (d) the Class A-4 Notes, the December 2002 Distribution
Date.
"Note Owner" means, with respect to a Book-Entry Note, the
person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or Foreign Clearing Agency, or on the books of a direct or
indirect Clearing Agency Participant.
"Note Pool Factor" for each class of Notes as of the close
of business on a Distribution Date means an eight-digit decimal figure equal
to the Outstanding Amount of such class of Notes divided by the Outstanding
Amount as of the Closing Date of such class of Notes. The Note Pool Factor for
each class of Notes will be 1.00000000 as of the Cutoff Date; thereafter, the
Note Pool Factor for each class of Notes will decline to reflect reductions in
the Outstanding Amount of such class of Notes.
"Noteholder" means the Person in whose name a Note is
registered on the Note Register.
14
"Noteholders' Distributable Amount" means, for any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for all classes of Notes.
"Noteholders' Interest Carryover Shortfall" means, for any
Distribution Date for any class of Notes (other than the initial Distribution
Date), the excess of (x) the Noteholders' Interest Distributable Amount for
the preceding Distribution Date for such class of Notes, over (y) the amount
in respect of interest actually deposited in the Note Distribution Account on
such preceding Distribution Date with respect to such class of Notes, plus
interest on the amount of interest due but not paid to the Noteholders of such
class on the preceding Distribution Date, to the extent permitted by law, at
the applicable Interest Rate from such preceding Distribution Date through the
current Distribution Date.
"Noteholders' Interest Distributable Amount" means, for any
Distribution Date for any class of Notes, the sum of (x) the Noteholders'
Monthly Interest Distributable Amount for such class of Notes for such
Distribution Date and (y) the Noteholders' Interest Carryover Shortfall for
such class of Notes for such Distribution Date.
"Noteholders' Monthly Interest Distributable Amount" means,
for any Distribution Date for each class of Notes, one month's interest (or,
in the case of the first Distribution Date, interest accrued from and
including the Closing Date to but excluding such Distribution Date) at the
related Interest Rate on the Outstanding Amount of the Notes of such class on
such Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date). Interest for purposes of this definition (i) on the Class A-1
Notes shall be computed on the basis of a 360-day year for the actual number
of days elapsed (which will be 25 days for the March 1999 Distribution Date
for the Class A-1 Notes) and (ii) on the Class A-2 Notes, the Class A-3 Notes
and the Class A-4 Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.
"Noteholders' Monthly Principal Distributable Amount" means,
for any Distribution Date prior to the Distribution Date on which the Notes
have been paid in full, 100% of the Principal Distribution Amount; and for the
Distribution Date on which the Notes are paid in full, the portion of the
Principal Distribution Amount required to pay the Notes in full.
"Noteholders' Principal Carryover Shortfall" means for any
Distribution Date, the excess of (x) the Noteholders' Principal Distributable
Amount for the preceding Distribution Date over (y) the amount in respect of
principal actually deposited in the Note Distribution Account on such
Distribution Date.
"Noteholders' Principal Distributable Amount" means, for any
Distribution Date, the sum of (i) the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and (ii) the Noteholders'
Principal Carryover Shortfall for such Distribution Date; provided that the
Noteholders' Principal Distributable Amount shall not exceed the Outstanding
Amount of the Notes. In addition, on the Note Final Scheduled Distribution
Date of each class of Notes, the principal required to be deposited in the
Note Distribution
15
Account will include the amount necessary (after giving effect to the other
amounts to be deposited in the Note Distribution Account on such Distribution
Date and allocable to principal) to reduce the Outstanding Amount of such
class of Notes to zero.
"Note Register" and "Note Registrar" have the meanings
specified in Section 2.4 of the Indenture.
"Obligor" on a Receivable means the purchaser or the
co-purchasers of the 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" means a certificate signed by the
chairman of the board, the president, the treasurer, the controller, any
executive or senior vice president or any vice president of the Seller or
Servicer, as appropriate, meeting the requirements of Section 11.1 of the
Indenture.
"Old Article 8 Jurisdiction" means any jurisdiction that has
not adopted Revised Article 8.
"Opinion of Counsel" means a written opinion of counsel (who
may be counsel to the Seller or the Servicer) reasonably acceptable in form
and substance to the Indenture Trustee, meeting the requirements of Section
11.1 of the Indenture (or in the case of an Opinion of Counsel delivered to
the Owner Trustee, reasonably acceptable in form and substance to the Owner
Trustee).
"Optional Purchase Percentage" shall be 10%.
"Original Pool Balance" shall be $1,012,620,164.79.
"Outstanding" means, when used with respect to Notes, as of
the date of determination, all Notes theretofore authenticated and delivered
under the Indenture except:
(a) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Holders of
such Notes (provided that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to the Indenture or
provision therefor, satisfactory to the Indenture Trustee, has been
made); and
(c) Notes in exchange for or in lieu of other Notes which
have been authenticated and delivered pursuant to the Indenture
unless proof satisfactory to the Indenture Trustee is presented that
any such Notes are held by a bona fide purchaser;
16
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned
by the Issuer, any other obligor upon the Notes, the Seller or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall
be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that an Authorized Officer of
the Indenture Trustee either actually knows to be so owned or has received
written notice that such Note is so owned shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is
not the Issuer, any other obligor upon the Notes, the Seller or any Affiliate
of any of the foregoing Persons.
"Outstanding Amount" means, when used with respect to Notes,
as of any date of determination, the aggregate principal amount of all Notes,
or a class of Notes, as applicable, Outstanding as of such date.
"Owner Trust Estate" means all right, title and interest of
the Issuer in and to the property and rights assigned to the Issuer pursuant
to Article II of this Agreement, all funds on deposit from time to time in the
Trust Accounts (other than the Note Distribution Account) and the Certificate
Distribution Account and all other property of Issuer from time to time,
including any rights of the Owner Trustee and the Issuer pursuant to this
Agreement.
"Owner Trustee" means Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as owner
trustee under the Trust Agreement, and any successor Owner Trustee thereunder.
"Paying Agent" means: (a) when used in the Indenture or
otherwise with respect to the Notes, the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Indenture Trustee to
make the payments to and distributions from the Collection Account and the
Note Distribution Account, including payment of principal of or interest on
the Notes on behalf of the Issuer; and (b) when used in the Trust Agreement or
otherwise with respect to the Certificates, the Owner Trustee or any other
paying agent or co-paying agent appointed pursuant to Section 3.9 of the Trust
Agreement, and in the case of the Indenture with respect to the Notes, and the
Trust Agreement with respect to the Certificates, such Paying Agent shall
initially be the corporate trust office of Chase.
"Permitted Investments" means, at any time, any one or more
of the following obligations, securities (certificated or uncertificated) or
instruments (excluding any security with the "r" symbol attached to its
rating):
(i) obligations of the United States of America or any
agency thereof; provided such obligations are backed by the full
faith and credit of the United States of America;
17
(ii) general obligations of or obligations guaranteed as to
the timely payment of interest and principal by any state of the
United States of America or the District of Columbia then rated
"A-1+" or "AAA" by Standard & Poor's, "F-1+" or "AAA" by Fitch (if
rated by Fitch) and "P-1+" or Aaa by Moody's;
(iii) commercial paper which is then rated P-1 by Moody's,
"F-1+" by Fitch (if rated by Fitch) and "A-1+" by Standard & Poor's;
(iv) certificates of deposit, demand or time deposits,
federal funds or banker's acceptances issued by any depository
institution or trust company (including the Indenture Trustee acting
in its commercial banking capacity) incorporated under the laws of
the United States or of any state thereof or incorporated under the
laws of a foreign jurisdiction with a branch or agency located in the
United States of America and subject to supervision and examination
by federal or state banking authorities which short term unsecured
deposit obligations of such depository institution or trust company
are then rated P-1 by Moody's, "F-1+" by Fitch (if rated by Fitch)
and "A- 1+" by Standard & Poor's;
(v) demand or time deposits of, or certificates of deposit
issued by, any bank, trust company, savings bank or other savings
institution; provided such deposits or certificates of deposit are
fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation the short term unsecured debt
or deposits of which are rated P-1 by Moody's, "AAA" by Fitch (if
rated by Fitch) and "A-1+" by Standard & Poor's or the long-term
unsecured debt of which are rated Aaa by Moody's, "AAA" by Fitch (if
rated by Fitch) and "AAA" by Standard & Poor's;
(vii) repurchase obligations with respect to any security
described in clauses (i) or (ii) herein or any other security issued
or guaranteed by the FHLMC, FNMA or any other agency or
instrumentality of the United States of America which is backed by
the full faith and credit of the United States of America, in either
case entered into with a federal agency or a depository institution
or trust company (acting as principal) described in (iv) above;
(viii) investments in money market funds, which funds (A)
are not subject to any sales, load or other similar charge; and (B)
are rated at least "AAAM" or "AAAM-G" by Standard & Poor's, "AAAV-1+"
by Fitch (if rated by Fitch) and Aaa by Moody's;
(ix) such other investments where either (A) the short-term
unsecured debt or deposits of the obligor on such investments are
rated "A-1+" by Standard & Poor's, "F-1" by Fitch (if rated by Fitch)
and P-1 by Moody's; and
(x) any other obligation or security satisfying the Rating
Agency Condition.
18
Permitted Investments may include money market mutual funds (so long as such
fund has the ratings specified in clause (viii) hereof), including, without
limitation, the VISTA U.S. Government Money Market Fund or any other fund for
which Chase, the Indenture Trustee or an Affiliate thereof serves as an
investment advisor, administrator, shareholder servicing agent, and/or
custodian or subcustodian, notwithstanding that (i) Chase, Norwest Bank
Minnesota, National Association, Wilmington Trust Company or an Affiliate
thereof charges and collects fees and expenses from such funds for services
rendered, (ii) Chase, Norwest Bank Minnesota, National Association, Wilmington
Trust Company or an Affiliate thereof charges and collects fees and expenses
for services rendered pursuant to this Agreement, and (iii) services performed
for such funds and pursuant to this Agreement may converge at any time. The
Indenture Trustee specifically authorizes Chase, Norwest Bank Minnesota,
National Association, Wilmington Trust Company or an Affiliate thereof to
charge and collect all fees and expenses from such funds for services rendered
to such funds (but not to exceed investment earnings), in addition to any fees
and expenses Chase, Norwest Bank Minnesota, National Association or Wilmington
Trust Company as applicable, may charge and collect for services rendered
pursuant to this Agreement.
"Person" means a legal person, including any individual,
corporation, limited liability company, estate, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Physical Property" means banker's acceptances, commercial
paper, negotiable certificates of deposits and other obligations that
constitute "instruments" within the meaning of Section 9-105(l)(i) of the
Relevant UCC and are susceptible to physical delivery and Certificated
Securities.
"Pool Balance" as of any date of determination means, the
aggregate Principal Balance of the Receivables as of the close of business on
the last day of the preceding Collection Period, after giving effect to all
payments received from Obligors and Repurchase Amounts to be remitted by the
Servicer or the Seller, as the case may be, for such Collection Period and all
losses realized on Receivables liquidated during such Collection Period.
"Predecessor Note" means, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition,
any Note authenticated and delivered under Section 2.5 of the Indenture in
lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Principal Balance" of a Receivable, as of any date of
determination, means the Amount Financed minus that portion of all payments
received on or prior to such date allocable to principal. The Principal
Balance of a Defaulted Receivable or a Repurchased Receivable shall be deemed
to be zero, in each case, as of such date.
19
"Principal Distribution Amount" means, for any Distribution
Date, the sum of the following amounts, without duplication: (i) Available
Principal and (ii) Aggregate Net Losses.
"Principal Prepayment" means a payment or other recovery of
principal on a Receivable (including insurance proceeds and Liquidation
Proceeds applied to principal on a Receivable) which is received in advance of
its due date.
"Proceeding" means any suit in equity, action or law or
other judicial or administrative proceeding.
"Qualified Institution" means a depository institution
organized under the laws of the United States of America or any State thereof
or incorporated under the laws of a foreign jurisdiction with a branch or
agency located in the United States of America or any State thereof and
subject to supervision and examination by federal or state banking authorities
which at all times has the Required Deposit Rating and, in the case of any
such institution organized under the laws of the United States of America,
whose deposits are insured by the FDIC.
"Qualified Trust Institution" means an institution organized
under the laws of the United States of America or any State thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or any State thereof 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 deposits rating of not
less than "BBB-" by Standard & Poor's, Baa3 by Moody's and "BBB-" by Fitch (if
rated by Fitch).
"Rating Agency" means any of Standard & Poor's, Moody's or
Xxxxx.
"Rating Agency Condition" means, with respect to any action
or event, that each Rating Agency shall have notified the Seller, the
Servicer, the Indenture Trustee and the Owner Trustee, in writing, that such
action or event will not result in reduction or withdrawal of any then
outstanding rating of any outstanding Note or Certificate with respect to
which it is the Rating Agency.
"Receivable" means a retail installment sale contract or
purchase money promissory note or other promissory note and security agreement
executed by an Obligor in respect of a Financed Vehicle, and all proceeds
thereof and payments thereunder (other than interest accrued and unpaid as of
the close of business on the Cutoff Date), which Receivable shall be
identified on Schedule A to this Agreement.
"Receivable Files" means the documents specified in Section
3.3.
"Receivables Pool" means the pool of Receivables included in
the Trust Estate and all monies received thereunder on or after the Cutoff
Date.
20
"Record Date" means, with respect to any Distribution Date,
the Business Day prior to such Distribution Date unless Definitive Notes or
Definitive Certificates are issued, in which case, Record Date, with respect
to such Definitive Notes or Definitive Certificates, as applicable, shall mean
the last day of the immediately preceding calendar month.
"Redemption Date" means in the case of a redemption of the
Notes pursuant to Section 10.1 of the Indenture, the Distribution Date
specified by the Servicer pursuant to such Section 10.1.
"Redemption Price" means in the case of a redemption of the
Class A-4 Notes pursuant to Section 10.1 of the Indenture, an amount equal to
the Outstanding Amount of the Class A-4 Notes plus accrued and unpaid interest
thereon to but excluding the Redemption Date.
"Relevant UCC" means the Uniform Commercial Code as in
effect in the applicable jurisdiction.
"Repurchase Amount" of a Repurchased Receivable or any
Receivable purchased by the Servicer pursuant to Section 9.1, means the sum,
as of the last day of the Collection Period on which such Receivable becomes
such, of the Principal Balance thereof plus the Accrued Interest thereon.
"Repurchased Receivable" means a Receivable repurchased by
the Seller pursuant to Section 3.2 or purchased by the Servicer pursuant to
Section 4.6.
"Required Deposit Rating" shall be a short-term certificate
of deposit rating from Moody's of P-1, from Fitch of "F-1+" (if rated by
Fitch) and from Standard & Poor's of "A-1+," and a long-term unsecured debt
rating of not less than Aa3 by Moody's, "AA" by Fitch (if rated by Fitch) and
"AA-" by Standard & Poor's.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 5.6.
"Reserve Account Initial Deposit" means an amount equal to
$15,189,302.47.
"Reserve Account Property" means all amounts and investments
held from time to time in the Reserve Account (whether in the form of deposit
accounts, Physical Property, Securities Entitlements, Uncertificated
Securities or otherwise).
"Reserve Account Transfer Amount" means, for any
Distribution Date, an amount equal to the lesser of (a) the amount of cash or
other immediately available funds on deposit in the Reserve Account on such
Distribution Date (before giving effect to any withdrawals therefrom relating
to such Distribution Date) and (b) the amount, if any, by which the sum of the
amounts set forth in clauses (i) through (vi) of Section 5.5(c), inclusive,
exceeds the Total Distribution Amount for such Distribution Date.
21
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture
Trustee, including any Vice President, Assistant Vice President, Assistant
Treasurer, Assistant Secretary, or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Revised Article 8" means Revised Article 8 (1994 Version)
(and corresponding amendments to Article 9) as promulgated by the National
Conference of Commissioners on Uniform State Laws.
"Sale Proceeds" has the meaning specified in Section 9.1(b).
"Xxxxxx Xxx Entitlement" means a "Security Entitlement" as
defined in 31 C.F.R. ss. 354.1.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" means a "securities intermediary"
within the meaning of Section 8-102(a)(14) of Revised Article 8.
"Security Entitlement" means a "security entitlement" within
the meaning of Section 8-102(a)(17) of Revised Article 8.
"Seller" means Chase Manhattan Bank USA, National
Association, a national banking association with its principal executive
offices in Wilmington, Delaware, in its capacity as the seller of the
Receivables under this Agreement, and each successor to Chase Manhattan Bank
USA, National Association (in the same capacity) pursuant to Section 6.3.
"Servicer" means Chase Manhattan Bank USA, National
Association, a national banking association with its principal offices in
Wilmington, Delaware, in its capacity as the servicer of the Receivables under
this Agreement, and each successor to Chase Manhattan Bank USA, National
Association (in the same capacity) pursuant to Section 7.3, and each successor
servicer pursuant to Section 8.2.
"Servicer's Certificate" means a certificate, substantially
in the form of Exhibit A attached hereto, completed and executed by the
Servicer by its chairman of the board, the president, treasurer, controller or
any executive, senior vice president or vice president pursuant to Section
4.8.
"Servicing Fee" with regard to a Collection Period means the
fee payable to the Servicer for services rendered during such Collection
Period, determined pursuant to Section 4.7.
22
"Servicing Fee Rate" means 1.00% per annum.
"Settlement Date" means, with respect to any Collection
Period, the last day of the Collection Period immediately preceding such
Collection Period, and with respect to any Distribution Date, the last day of
the second Collection Period preceding the Collection Period in which such
Distribution Date occurs.
"Specified Reserve Account Balance" with respect to any
Distribution Date, means 3.00% of the Pool Balance as of the related
Settlement Date, but in any event will not be less than the lesser of (i)
$7,594,651.24 and (ii) such Pool Balance; provided that the Specified Reserve
Account Balance will be calculated using a percentage of 6.00% for any
Distribution Date (beginning with the May 1998 Distribution Date) for which
the Average Net Loss Ratio exceeds 1.25% or the Average Delinquency Percentage
exceeds 1.25%. Upon written notification to the Indenture Trustee by the
Seller, the Specified Reserve Account Balance may be reduced to a lesser
amount as determined by the Seller so long as such reduction satisfies the
Rating Agency Condition.
"Standard & Poor's" means Standard & Poor's Ratings
Services, and its successors and assigns.
"Total Distribution Amount" means, for any Distribution
Date, the sum of Available Interest and Available Principal for such
Distribution Date. The Total Distribution Amount on any Distribution Date
shall exclude all payments and proceeds (including any Liquidation Proceeds
and any amounts received from Dealers with respect to Receivables) of (i) any
Receivables the Repurchase Amount of which has been included in the Total
Distribution Amount for a prior Distribution Date and (ii) Investment Earnings
and any Late Fees.
"Treasury Entitlement" means a "Security Entitlement" as
defined in 31 C.F.R. ss.357.2.
"Treasury Regulations" means, the treasury regulations
promulgated under Code.
"Trust Accounts" means, collectively, the Collection
Account, the Note Distribution Account and the Reserve Account.
"Trust Agreement" means the Trust Agreement dated as of
February 1, 1998, between the Seller and the Owner Trustee, as the same may be
amended and supplemented from time to time.
"Trust Estate" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders
(including all property and interests Granted to the Indenture Trustee),
including all proceeds thereof and the Reserve Account.
23
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as in force on the date hereof, unless otherwise specifically
provided.
"Uncertificated Security" means an "uncertificated security"
within the meaning of the relevant UCC.
"United States Securities Entitlement" means a Treasury
Entitlement, a HUD Entitlement, a FHL Bank Entitlement, a Funding Corporation
Entitlement, a Farm Credit Entitlement or a Xxxxxx Xxx Entitlement.
SECTION 1.2 Usage of Terms. With respect to all terms in
this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words in
a visible form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein entered into in
accordance with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns; and the
term "including" means "including without limitation." All references herein
to Articles, Sections, Subsections and Exhibits are references to Articles,
Sections, Subsections and Exhibits contained in or attached to this Agreement
unless otherwise specified, and each such Exhibit is part of the terms of this
Agreement.
SECTION 1.3 Simple Interest Method; Allocations. All
allocations of payments to principal and interest and determinations of
periodic charges and the like on the Receivables shall be based on a year with
the actual number of days in such year and twelve months with the actual
number of days in each such month.
Each payment on a Receivable shall be applied first to the amount of
interest accrued on such Receivable to the date of receipt, then to reduce the
scheduled principal amount outstanding on the Receivable to the extent of the
remaining scheduled payment and then to any outstanding fees and Late Fees
under the terms of the Receivable. Amounts paid by the Seller or the Servicer
in respect of Repurchased Receivables shall be allocated first to any Accrued
Interest and then to the Principal Balance of the related Receivable.
SECTION 1.4 Calculations Relating to the March 1999
Distribution Date. If the Class A-1 Event has occurred, the calculations
hereunder for the March 1999 Distribution Dates with respect to the Total
Distribution Amount, the Noteholders' Distributable Amount, the
Certificateholders' Distributable Amount, the Specified Reserve Account
Balance and the Reserve Account Transfer Amount, and the respective components
thereof, shall be calculated as if there were a single March 1999 Distribution
Date. Amounts hereunder will be distributed on the respective March 1999
Distribution Dates in accordance with Section 5.5(d).
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ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1 Conveyance of Receivables. In consideration of
the Issuer's delivery of the Notes and the Certificates to and upon the order
of the Seller, the Seller does hereby sell, transfer, assign, and otherwise
convey to the Issuer, without recourse (subject to the Seller's obligations
herein):
(i) all right, title, and interest of the Seller in, to and
under the Receivables listed in Schedule A hereto, which is
incorporated by reference herein, all proceeds thereof and all
amounts and monies received thereon on or after the Cutoff Date
(including proceeds of the repurchase of Receivables by the Seller
pursuant to Section 3.2 or the purchase of Receivables by the
Servicer pursuant to Section 4.6 or 9.1), together with the interest
of the Seller in the security interests in the Financed Vehicles
granted by the Obligors pursuant to the Receivables and in any
repossessed Financed Vehicles;
(ii) all right, title and interest of the Seller in any
Liquidation Proceeds and in any proceeds of any extended warranties,
theft and physical damage, credit life or credit disability policies
relating to the Financed Vehicles or the Obligors;
(iii) all right, title and interest of the Seller in any
proceeds from Dealer repurchase obligations relating to the
Receivables; and
(iv) all proceeds (as defined in the Relevant UCC) of the
foregoing.
In connection with such sale, the Seller agrees to record
and file, at its own expense, financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables for the sale of accounts and chattel paper meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale and assignment of the
Receivables to the Issuer.
It is the intention of the Seller and the Issuer that the
assignment and transfer herein contemplated constitute a sale of the
Receivables, conveying good title thereto free and clear of any liens and
encumbrances, from the Seller to the Issuer and the Receivables not be part of
the Seller's estate in the event of an insolvency. In the event that such
conveyance is deemed to be a pledge to secure a loan, the Seller hereby grants
to the Issuer a first priority perfected security interest in all of the
Seller's right, title and interest in, to and under the items of property
listed in clauses (i) through (iii) above, and in all proceeds (as defined in
the Relevant UCC) of the foregoing, to secure the loan deemed to be made in
connection with such pledge and, in such event, this Agreement shall
constitute a security agreement under applicable law.
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SECTION 2.2 Closing. The conveyance of the Receivables shall
take place at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, New York, New York on
the Closing Date, simultaneously with the closing of the transactions
contemplated by the underwriting agreements related to the Notes and the
Certificates and the other Basic Documents. Upon the acceptance by the Seller
of the Notes and the Certificates, the ownership of each Receivable and the
contents of the related Receivable File will be vested in the Issuer, subject
only to the lien of the Indenture.
ARTICLE III
THE RECEIVABLES
SECTION 3.1 Representations and Warranties of Seller;
Conditions Relating to Receivables.
(a) The Seller makes the following representations and
warranties as to the Receivables on which the Issuer shall rely in acquiring
the Receivables. Such representations and warranties shall speak as of the
Cutoff Date unless otherwise specified, but shall survive the sale, transfer,
and assignment of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(i) Schedule of Receivables. The information set forth in
Schedule A hereto with respect to each Receivable is true and correct
in all material respects, and no selection procedures materially
adverse to the Holders has been utilized in selecting the Receivables
from all receivables owned by the Seller which meet the selection
criteria specified herein.
(ii) No Sale or Transfer. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other
than the Issuer.
(iii) Good Title. Immediately prior to the transfer and
assignment of the Receivables to the Issuer herein contemplated, the
Seller has good and marketable title to each Receivable free and
clear of all Liens and rights of others; and, immediately upon the
transfer thereof, the Issuer has either (i) good and marketable title
to each Receivable, free and clear of all Liens and rights of others,
other than the Lien of the Indenture Trustee under the Indenture, and
the transfer has been perfected under applicable law or (ii) a first
priority perfected security interest in each Receivable and the
proceeds thereof.
(b) Each Receivable satisfies the following conditions as of
the Cutoff Date unless otherwise specified and such conditions shall survive
the sale, transfer and assignment of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
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(i) Acquisition. Each Receivable is either a
Dealer Receivable acquired directly or indirectly from or made
through a Dealer located in the United States (including the District
of Columbia) or is a Direct Receivable;
(ii) Security. Each Receivable is secured by a new
or used automobile or light-duty truck;
(iii) Maturity of Receivables. Each Receivable had
a remaining maturity of not less than six months nor greater than
seventy-two months, and (A) in the case of each Receivable secured by
new Financed Vehicles, had an original maturity of at least twelve
months and not more than seventy-six months, or (B) in the case of
each Receivable secured by used Financed Vehicles, had an original
maturity of at least twelve months and not more than seventy-two
months.
(iv) Contract Rate. Each Receivable is a
fully-amortizing fixed rate simple interest contract that provides
for level scheduled monthly payments over its remaining term, and has
a Contract Rate of at least 6.0% and not more than 20.0%;
(v) No Repossessions. Each Receivable is secured
by a Financed Vehicle that had not been repossessed without
reinstatement of such Receivable;
(vi) Obligor Not Subject to Bankruptcy
Proceedings. Each Receivable has been entered into by an Obligor who
had not been identified on the computer files of the Seller as in
bankruptcy proceedings as of the Cutoff Date;
(vii) No Overdue Payments. Each Receivable had no
payment that was more than 30 days past due;
(viii) Remaining Principal Balance. Each
Receivable had a remaining principal balance of at least $2,000 and
not greater than $100,000;
(ix) No Force Placed Insurance. As of the Cutoff
Date, each Receivable was secured by a Financed Vehicle that was not
insured by a force placed insurance policy or any vendor's single
interest and non-filing insurance policy;
(x) Receivable Files. The Receivable Files shall
be kept at one or more of the locations specified in Schedule B
hereto;
(xi) Characteristics of Receivables. Each
Receivable (a) (i) in the case of a Dealer Receivable, has been
originated in the form of a credit sales transaction by a Dealer or a
purchase money loan or other notes through a Dealer located in one of
the States of the United States (including the District of Columbia)
for the retail financing of a Financed Vehicle or (ii) in the case of
a Direct Receivable, has been originated by Chase or an affiliate
thereof in the form of a secured loan for the retail financing of a
Financed Vehicle, and, in each case, has been fully and properly
executed by the parties thereto, (b) (i) in the case of a Dealer
Receivable, if a
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retail installment sales contract, has been purchased by the Seller
from the originating Dealer or an affiliate of the Seller, has been
validly assigned by such Dealer or an affiliate of the Seller to the
Seller in accordance with its terms or (ii) in the case of a Chase
Direct Receivable, has been purchased by the Seller from Chase, and
has been validly assigned by Chase to the Seller; (c) contains
customary and enforceable provisions such that the rights and
remedies of the holder thereof are adequate for realization against
the collateral of the benefits of the security; and (d) provides for
fully amortizing level scheduled monthly payments (provided that the
payment in the last month in the life of the Receivable may be
different from the level scheduled payment) and for accrual of
interest at a fixed rate according to the simple interest method;
(xii) Compliance with Laws. Each Receivable and
each sale of the related Financed Vehicle complied at the time it was
originated or made, and complied on and after the Cutoff Date, in all
material respects with all requirements of applicable federal, state,
and local laws, and regulations thereunder, including usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Reporting Act, the Federal Trade Commission Act, the
Xxxxxxxx-Xxxx Warranty Act, Federal Reserve Board Regulations B and
Z, state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code, and any other consumer credit, equal
opportunity, and disclosure laws applicable to such Receivable and
sale thereof;
(xiii) Binding Obligation. Each Receivable
constitutes the legal, valid, and binding payment obligation in
writing of the Obligor, enforceable by the holder thereof in all
material respects in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization,
liquidation and other similar laws and equitable principles relating
to or affecting the enforcement of creditors' rights;
(xiv) No Government Obligor. Each Receivable is not
due from the United States of America or any State or from any
agency, department, instrumentality or political subdivision of the
United States of America or any State or local municipality, and each
Receivable is not due from a business except to the extent that such
Receivable has a personal guaranty;
(xv) Security Interest in Financed Vehicle.
Immediately prior to the sale and assignment thereof to the Issuer as
herein contemplated, each Receivable was secured by a validly
perfected first priority security interest in the related Financed
Vehicle in favor of or for the benefit of the Seller as secured party
(subject to administrative delays and clerical errors on the part of
the applicable governmental agency and to any statutory or other lien
arising by operation of law after the Closing Date which is prior to
such security interest), the Seller's security interest (or
beneficial interest therein) is assignable, and has been so assigned
by the Seller to the Issuer (subject to administrative delays and
clerical errors on the part of the applicable governmental agency and
to any statutory or other lien arising by operation of law after the
Closing Date which is prior to such security interest);
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(xvi) Receivables in Force. No Receivable has been
satisfied, subordinated, or rescinded, nor has any Financed Vehicle
been released from the Lien granted by the related Receivable, in
whole or in part;
(xvii) No Waiver. No provision of a Receivable has
been waived in such a manner that such Receivable fails either to
meet all of the representations and warranties made by the Seller
herein with respect thereto or to meet all of the conditions with
respect thereto pursuant to this Section 3.1(b);
(xviii) No Amendments. No Receivable has been amended
except pursuant to either instruments included in the Receivable
Files or instruments to be included in the Receivable Files pursuant
to Section 4.2 (or otherwise maintained by the Seller in the ordinary
course of its business), and no such amendment has caused such
Receivable either to fail to meet all of the representations and
warranties made by the Seller herein with respect thereto or to fail
to meet all of the conditions with respect thereto pursuant to this
Section 3.1(b);
(xix) No Defenses. The Seller had no knowledge
either of any facts which would give rise to any right of rescission,
setoff, counterclaim, or defense, or of the same being asserted or
threatened, with respect to any Receivable;
(xx) No Liens. The Seller had no knowledge of any
Liens or claims that have been filed, including liens for work,
labor, materials or unpaid taxes relating to a Financed Vehicle, that
would be liens prior to, or equal or coordinate with, the lien
granted by the Receivable;
(xxi) No Default. Except for payment defaults
continuing for a period of not more than 30 days as of the close of
business on the Cutoff Date, the Seller has no knowledge that a
default, breach, violation, or event permitting acceleration under
the terms of any Receivable exists; the Seller has no knowledge that
a continuing condition that with notice or lapse of time would
constitute a default, breach, violation, or event permitting
acceleration under the terms of any Receivable exists; and the Seller
has not waived any of the foregoing;
(xxii) Insurance. Each Receivable requires that the
Obligor thereunder maintain comprehensive, liability, theft and
physical damage insurance covering the related Financed Vehicle;
(xxiii) Lawful Assignment. No Receivable has been
originated in, or is subject to the laws of, any jurisdiction under
which the sale, transfer, and assignment of such Receivable under
this Agreement or pursuant to transfers of the Certificates or the
Notes is unlawful, void or voidable;
(xxiv) All Filings Made. No filings (other than
filings under the Relevant UCC which have been made) or other actions
are necessary in any jurisdiction to give the Issuer a first
perfected security interest in the Receivables;
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(xxv) One Original. There is no more than one
original executed copy of each Receivable which, immediately prior to
the delivery thereof to the Servicer (as custodian for the Issuer),
was in the possession of the Seller;
(xxvi) Excluded Loans. Each Receivable (A) is not a
Receivable whose related Obligor resides in the State of Alabama (in
the case of a Direct Receivable) or a Receivable originated by or
through a Dealer located in the State of Alabama (in the case of a
Dealer Receivable), and (B) has not been the subject of a previous
securitization; and
(xxvii) Account Number. Each Dealer Receivable has
been assigned an account number that corresponds to the number
assigned to the Dealer from or through whom such Receivable was
acquired, and each Direct Receivable has been assigned an account
number that corresponds to the number assigned to the applicable
originating branch (or the "loan-by-phone" line).
SECTION 3.2 Repurchase Upon Breach or Failure of a
Condition. The Seller, the Servicer, the Indenture Trustee or the Owner
Trustee, as the case may be, shall inform the other parties in writing, upon
the discovery by the Seller, the Servicer or an Authorized Officer of the
Indenture Trustee or the Owner Trustee of either any breach of the Seller's
representations and warranties set forth in Section 3.1(a) or the failure of
any Receivable to satisfy any of the conditions set forth in Section 3.1(b)
which materially and adversely affects the Holders' interest in any
Receivable. Unless the breach or failed condition shall have been cured by the
last day of the Collection Period following the Collection Period in which
such discovery occurred (or, at the Seller's option, the last day of the
Collection Period in which such discovery occurred), the Seller shall
repurchase any Receivable the Holders' interest in which was materially and
adversely affected by the breach or failed condition, as of such last day.
Notwithstanding anything herein to the contrary, with respect to the breach of
a representation and warranty in Section 3.1(b)(xxvii), the Seller shall
repurchase such Receivable regardless of its effect on the interest of the
Holders in such Receivable or whether notice thereof has been delivered by any
of the parties thereto, and the repurchase of any such Receivable shall take
place at any time as is administratively convenient for the Seller and the
Servicer. In consideration of the repurchase of a Receivable, the Seller shall
remit the Repurchase Amount of such Receivable as of such last day (less any
Liquidation Proceeds deposited, or to be deposited, by the Servicer in the
Collection Account with respect to such Receivable pursuant to Section 4.3) in
the manner specified in Section 5.4. The sole remedy of the Issuer, the
Indenture Trustee or the Holders with respect either to a breach of the
Seller's representations and warranties set forth in Section 3.1(a) or to a
failure of any of the conditions set forth in Section 3.1(b) shall be to
require the Seller to repurchase Receivables pursuant to this Section 3.2. The
obligation of the Seller to repurchase under this Section 3.2 shall not be
dependent upon the actual knowledge of the Seller of any breached
representation or warranty. The Owner Trustee shall have no duty to conduct
any affirmative investigation as to the occurrence of any condition requiring
the repurchase of any Receivable pursuant to this Section 3.2 or the
eligibility of any Receivable for purposes of this Agreement.
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SECTION 3.3 Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Issuer, upon the execution and delivery of this Agreement, agrees to have the
Servicer act as custodian of the following documents or instruments (the
"Receivable Files") which are hereby constructively delivered to the Issuer
with respect to each Receivable:
(i) The original executed Receivable; and
(ii) Any and all other documents or records that the Seller
or the Servicer, as the case may be, shall keep on file, in
accordance with its customary procedures, relating to a Receivable,
an Obligor, or a Financed Vehicle.
The Servicer hereby agrees to act as custodian and as agent
for the Issuer hereunder. The Servicer acknowledges that it holds the
documents and instruments relating to the Receivables for the benefit of the
Issuer. The Issuer shall have no responsibility to monitor the Servicer's
performance as custodian and shall have no liability in connection with the
Servicer's performance of such duties hereunder.
SECTION 3.4 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian,
shall hold the Receivable Files on behalf of the Issuer, and maintain such
accurate and complete accounts, records (either original execution documents
or copies of such originally executed documents shall be sufficient), and
computer systems pertaining to the Receivables as shall enable the Issuer to
comply with its obligations pursuant to this Agreement. In performing its
duties as custodian, the Servicer shall act with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to the
receivable files of comparable new or used automobile receivables that the
Servicer services for itself. The Servicer shall conduct, or cause to be
conducted, periodic audits of the files of all receivables owned or serviced
by the Servicer which shall include the Receivable Files held by it under this
Agreement and the related accounts, records, and computer systems, in such a
manner as shall enable the Owner Trustee or the Indenture Trustee to identify
all Receivable Files and such related accounts, records and computer systems
and to verify, if the Owner Trustee or the Indenture Trustee so elects, the
accuracy of the Servicer's recordkeeping. The Servicer shall promptly report
to the Owner Trustee or 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.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of the locations specified in Schedule B
to this Agreement, or at such other location as shall be specified to the
Owner Trustee and the Indenture Trustee by 30 days' prior written notice. The
Servicer shall make available to the Owner Trustee, the Indenture Trustee or
their respective duly authorized representatives, attorneys, or auditors, the
Receivable Files and the related accounts, records, and computer systems
maintained by the Servicer at such times during normal operating hours as the
Owner Trustee or Indenture
31
Trustee shall reasonably instruct which does not unreasonably interfere with
the Servicer's normal operations or customer or employee relations.
(c) Release of Documents. Upon instruction from the
Indenture Trustee (or, if the Notes have been paid in full, from the Owner
Trustee), the Servicer shall release any document in the Receivable Files to
the Indenture Trustee or Owner Trustee, or their respective agents or
designee, as the case may be, at such place or places as such Person may
reasonably designate as soon as reasonably practicable to the extent it does
not unreasonably interfere with the Servicer's normal operations or customer
or employee relations. The Servicer shall not be responsible for any loss
occasioned by the failure of the Owner Trustee or Indenture Trustee, or their
respective agents or designees, to return any document or any delay in doing
so.
(d) Title to Receivables. The Servicer agrees that, in
respect of any Receivable held by it as custodian hereunder, (i) 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 solely for the purpose
of collecting or enforcing the Receivable for the benefit of the Issuer and
(ii) the related Receivable File shall at all times be property of the Issuer.
SECTION 3.5 Instructions; Authority to Act. The Servicer
shall be deemed to have received proper instructions with respect to the
Receivable Files upon its receipt of written instructions signed by an
Authorized Officer of the Indenture Trustee (or, if the Notes have been paid
in full, of the Owner Trustee). A certified copy of a by-law or of a
resolution of the Board of Directors of the Owner Trustee or the Indenture
Trustee shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect
until receipt by the Servicer of written notice to the contrary given by the
Owner Trustee or the Indenture Trustee.
SECTION 3.6 Custodian's Indemnification. The Servicer, as
custodian, shall indemnify the Issuer, the Owner Trustee and the Indenture
Trustee for any and all liabilities, obligations, losses, damages, payments,
costs, or expenses of any kind whatsoever that may be imposed on, incurred, or
asserted against the Issuer, the Owner Trustee or the Indenture Trustee as the
result of any act or omission in any way relating to the maintenance and
custody by the Servicer, as custodian, of the Receivable Files; provided,
however, that the Servicer shall not be liable for any portion of any such
amount resulting from the wilful misfeasance, bad faith, or negligence of the
Issuer, the Owner Trustee or the Indenture Trustee.
SECTION 3.7 Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and
shall continue in full force and effect until terminated pursuant to this
Section 3.7 or until this Agreement shall be terminated. 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 may be terminated by the Indenture Trustee or by
the Holders of Notes evidencing not less than a majority of the aggregate
Outstanding Amount of the Notes (or, if there are no Notes outstanding, the
Holders of Certificates representing not less than a
32
majority 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, at its expense, deliver the Receivable
Files to the Issuer or the Issuer's agent at such place or places as the
Issuer may reasonably designate. Notwithstanding the termination of the
Servicer as custodian, the Owner Trustee agrees that upon any such
termination, the Issuer shall provide, or cause its agent to provide, access
to the Receivable Files to the Servicer for the purpose of carrying out its
duties and responsibilities with respect to the servicing of the Receivables
hereunder.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1 Duties of Servicer. The Servicer is hereby
authorized to act as agent for the Issuer and in such capacity shall manage,
service, administer and make collections on the Receivables (other than
Repurchased Receivables) with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to comparable new or used
automobile receivables that it services for itself. The Servicer's duties
shall include collection and posting of all payments, responding to inquiries
by Obligors or by federal, state, or local governmental authorities with
respect to the Receivables, investigating delinquencies, reporting tax
information to Obligors in accordance with its customary practices, advancing
costs of disposition of defaults, monitoring Receivables in cases of Obligor
defaults, accounting for collections, furnishing monthly and annual statements
to the Indenture Trustee with respect to distributions. The Servicer shall
follow its customary standards, policies, and procedures in performing its
duties as Servicer hereunder; provided that the Servicer shall be permitted to
take or to refrain from taking any action not specified in this Agreement with
respect to servicing the Receivables if such action or inaction would not
contravene any material term of this Agreement or materially adversely affect
the interests of Holders. Without limiting the generality of the foregoing,
the Servicer shall be authorized and empowered by the Issuer to execute and
deliver, on behalf of itself, the Owner Trustee, the Indenture Trustee and the
Holders, or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, without recourse to the Issuer, with respect to the
Receivables or with respect to the Financed Vehicles. If the Servicer shall
commence a legal proceeding to enforce a Receivable or a Defaulted Receivable,
the Issuer shall thereupon be deemed to have automatically assigned such
Receivable and the related property conveyed to the Issuer with respect to
such Receivable to the Servicer, solely for the purpose of collection. The
Owner Trustee shall furnish the Servicer with such documents as have been
prepared by the Servicer for execution by the Owner Trustee and as are
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
SECTION 4.2 Collection of Receivable Payments; Refinancing.
(a) The Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Receivables and of this Agreement as
and when the same shall become due,
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and shall follow such collection procedures as it follows with respect to
comparable new or used automobile receivables that it services for itself and
that are consistent with prudent industry standards. In connection therewith,
the Servicer may grant extensions, rebates or adjustments on a Receivable
without the consent of the Issuer; provided, however, that if the Servicer
extends the date for final payment by the Obligor of any Receivable beyond the
Final Scheduled Maturity Date, it shall promptly repurchase such Receivable
pursuant to Section 4.6. The Servicer is authorized in its discretion to waive
any Late Fees that may be due in the ordinary course of collecting a
Receivable; provided, further, the Servicer shall not agree to any change in
the underlying Contract Rate on any Receivable, to any change in the Principal
Balance thereof (except with respect to a prepayment of a scheduled payment
that does not result in a deferral of any other scheduled payment), to any
reduction of the total number of payments due thereunder or, subject to the
foregoing, to any reduction of the amount of any scheduled payment on a
Receivable. In the event that at the end of the scheduled term of any
Receivable, the outstanding principal amount thereof is such that the final
payment to be made by the related Obligor is larger than the regularly
scheduled payment of principal and interest made by such Obligor, the Servicer
may permit such Obligor to pay such remaining principal amount in more than
one payment of principal and interest; provided, however, that the last such
payment shall be due on or prior to the Final Scheduled Maturity Date.
(b) Notwithstanding anything in this Agreement to the
contrary, the Servicer may refinance any Receivable by accepting a new
promissory note from the related Obligor and applying the proceeds of such
refinancing to pay all obligations in full of such Obligor under such
Receivable. The receivable created by the refinancing shall not be property of
the Issuer.
SECTION 4.3 Realization Upon Receivables. The Servicer shall
use reasonable efforts, consistent with its customary servicing procedures, to
repossess or otherwise take possession of the Financed Vehicle securing any
Receivable which the Servicer shall have determined to be a Defaulted
Receivable or otherwise. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of new or used automobile receivables, which may include reasonable
efforts to realize upon any recourse to Dealers, consigning the Financed
Vehicle to a Dealer for resale and selling the Financed Vehicle at public or
private sale. The Servicer shall be entitled to recover from proceeds all
reasonable expenses incurred by it in the course of converting the Financed
Vehicle into cash proceeds. The Liquidation Proceeds with respect to a
Receivable shall be deposited by the Servicer in the Collection Account in the
manner specified in Section 5.2 and shall be applied to reduce (or to satisfy,
as the case may be) the Repurchase Amount of the Receivable, if such
Receivable is to be repurchased by the Seller pursuant to Section 3.2, or is
to be purchased by the Servicer pursuant to Section 4.6. 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 sole discretion that such repair and/or repossession will
increase the Liquidation Proceeds of the related Receivable by an amount equal
to or greater than the amount of such expenses.
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SECTION 4.4 Maintenance of Security Interests in Financed
Vehicles. The Servicer, in accordance with its customary servicing procedures,
shall take such steps as are necessary to maintain perfection of the first
priority security interest of the Seller created in any Financed Vehicle which
secures a Receivable. The Owner Trustee, on behalf of the Issuer, and the
Indenture Trustee hereby authorize the Servicer, and the Servicer hereby
agrees, to take such steps as are necessary to re-perfect such security
interest in the event of the relocation of a Financed Vehicle or for any other
reason, in either case, when the Servicer has knowledge of the need for such
re-perfection. In the event that the assignment of a Receivable to the Issuer
and by the Issuer to the Indenture Trustee pursuant to the Indenture is
insufficient without a notation on the related Financed Vehicle's certificate
of title, or without fulfilling any additional administrative requirements
under the laws of the State in which the Financed Vehicle is located, to grant
to the Indenture Trustee a perfected security interest in the related Financed
Vehicle, the Seller and Servicer hereby agree that the Seller's listing as the
secured party on the certificate of title is deemed to be in its capacity as
agent of the Indenture Trustee and the Servicer further agrees to hold such
certificate of title as the Indenture Trustee's agent and custodian; provided,
however, that the Servicer shall not, nor shall the Owner Trustee, the
Indenture Trustee or Holders have the right to require that the Servicer, make
any such notation on the related Financed Vehicles' certificate of title or
fulfill any such additional administrative requirement of the laws of the
State in which a Financed Vehicle is located.
SECTION 4.5 Covenants of Servicer. The Servicer hereby makes
the following covenants on which the Issuer will rely in accepting the
Receivables:
(i) Security Interest to Remain in Force. The Financed
Vehicle securing each Receivable shall not be released from the
security interest granted by the Receivable in whole or in part
except if such Financed Vehicle is substituted in whole by the
manufacturer, dealer or seller as a result of mechanical defects or a
total loss of the Financed Vehicle because of accident or theft or as
otherwise contemplated herein;
(ii) No Impairment. The Servicer shall not impair the
rights of the Issuer, the Indenture Trustee or any Holder in the
Receivables; and
(iii) Extensions; Defaulted Receivables. The Servicer shall
not increase the number of payments under a Receivable, nor increase
the Amount Financed under a Receivable, nor extend or forgive
payments on a Receivable, except as provided in Section 4.2.
SECTION 4.6 Purchase of Receivables Upon Breach. The Seller,
the Servicer, the Indenture Trustee or the Owner Trustee, as the case may be,
shall inform the other parties promptly, in writing, upon the discovery by the
Seller, the Servicer or an Authorized Officer of the Indenture Trustee or the
Owner Trustee, as the case may be, of any breach by the Servicer of its
covenants under Section 4.5 which materially and adversely affects the
interest of the Holders in any Receivable (for this purpose, any breach of the
covenant set forth in Section 4.5(iii) shall be deemed to materially and
adversely affect the interest of the Holders in a Receivable). Except as
otherwise specified in Section 4.2, unless
35
the breach shall have been cured by the last day of the Collection Period
following the Collection Period in which such discovery occurred (or, at the
Servicer's election, the last day of the Collection Period in which such
discovery occurred), the Servicer shall purchase any Receivable materially and
adversely affected by such breach as of such last day. In consideration of the
purchase of such Receivable, the Servicer shall remit the Repurchase Amount
(less any Liquidation Proceeds deposited, or to be deposited, by the Servicer
in the Collection Account with respect to such Receivable pursuant to Section
4.3) in the manner specified in Section 5.4. The sole remedy of the Issuer,
the Owner Trustee, the Indenture Trustee or the Holders against the Servicer
with respect to a breach pursuant to Section 4.2 or 4.5 shall be to require
the Servicer to purchase Receivables pursuant to this Section 4.6. The Owner
Trustee shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section 4.6 or the eligibility of any Receivable for purposes
of this Agreement.
SECTION 4.7 Servicing Fee. The Servicing Fee for a
Collection Period shall be payable on the related Distribution Date pursuant
to Section 5.5 and shall equal the sum of (i) the product of one-twelfth of
the Servicing Fee Rate and the Pool Balance as of the related Settlement Date
and (ii) Late Fees received from Obligors during such Collection Period. In
addition, as part of the Servicing Fee, the Servicer shall be entitled to
receive on each Distribution Date Investment Earnings when and as paid on
amounts on deposit in the Collection Account or earned on collections pending
deposit in the Collection Account. The Servicer shall be required to pay from
its own account all expenses incurred by it in connection with its activities
hereunder (including fees and disbursements of independent accountants and
auditors, taxes imposed on the Servicer, and other costs incurred in
connection with administering and servicing the Receivables) and the fees and
disbursements of the Issuer, the Administrator, the Owner Trustee, the
Indenture Trustee, the Owner Trustee's and the Indenture Trustee's counsel,
the Paying Agent, the Authenticating Agent, the Note Registrar and the
Certificate Registrar except for United States federal, state and local income
and franchise taxes, if any, imposed on the Issuer or any Holder or any
expenses in connection with realizing upon Receivables under Section 4.3.
SECTION 4.8 Servicer's Certificate. On or before each
Determination Date, the Servicer shall deliver to the Indenture Trustee, the
Owner Trustee, the Paying Agent and the Rating Agencies a Servicer's
Certificate, substantially in the form of Exhibit A hereto, for the Collection
Period preceding such Determination Date, containing all information necessary
to make the distributions pursuant to Section 5.5, and all information
necessary for the Paying Agent to send statements to Holders pursuant to
Section 5.8; provided, however, that if the Class A-1 Event has occurred, the
Servicer shall deliver the Servicer's Certificate for the February 1999
Collection Period to such parties no later than March 9, 1999. 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 Issuer. The Servicer shall also specify each Receivable
which the Seller or the Servicer is required to repurchase or purchase, as the
case may be, as of the last day of the preceding Collection Period and each
Receivable which the Servicer shall have determined to be a Defaulted
Receivable during the preceding Collection Period. Subsequent to the Closing
Date, the form of Servicer's Certificate may be revised or modified to cure
any ambiguities or
36
inconsistencies between such form and this Agreement; provided, however, that
no material information shall be deleted from the form of Servicer's
Certificate. In the event that the form of Servicer's Certificate is revised
or modified in accordance with the preceding sentence, a form thereof, as so
revised or modified, shall be provided to the Owner Trustee, the Paying Agent,
the Indenture Trustee and each Rating Agency.
SECTION 4.9 Annual Statement as to Compliance. (a) The
Servicer shall deliver to a firm of independent certified public accountants,
on or before March 31 of each year commencing March 31, 1999, a certificate
signed by the chairman of the board, the president, the treasurer, the
controller, any executive or senior vice president or any vice president of
the Servicer, stating that (a) a review of the activities of the Servicer
during the year ended the preceding December 31 (or the period since the
Cutoff Date in the case of the first such certificate) and of its performance
under this Agreement has been made under such officer's supervision and (b) to
the best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations in all material respects under this Agreement
throughout such year (or the period since the Cutoff Date in the case of the
first such 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.
(b) The Servicer shall deliver to the Indenture Trustee, the
Owner Trustee and each Rating Agency promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, an
Officer's Certificate specifying any event which with the giving of notice or
lapse of time, or both, would become an Event of Servicing Termination under
Section 8.1. The Seller shall deliver to the Indenture Trustee and the Owner
Trustee, promptly after having obtained knowledge thereof, but in no event
later than five Business Days thereafter, an Officer's Certificate specifying
any event which with the giving of notice or lapse of time, or both, would
become an Event of Servicing Termination under Section 8.1.
SECTION 4.10 Annual Audit Report. The Servicer shall cause a
firm of independent public accountants (which may provide other services to
the Servicer or the Seller) to prepare a report (with a copy of the
certificate described in Section 4.9(a) attached) addressed to the Board of
Directors of the Servicer, for the information and use of the Indenture
Trustee, the Owner Trustee and the Rating Agencies on or before March of each
year, beginning March 31, 1999, to the effect that, with respect to the twelve
months ended the preceding December 31 (or the period since the Cutoff Date,
in the case of the first such certificate), such firm has either (A) examined
a written assertion by the Servicer about the effectiveness of the Servicer's
internal control structure over the processing and reporting of transactions
relating to securitized automobile loans with respect to the criteria set
forth by the Servicer (the "Assertion") and that, on the basis of such
examination, such firm is of the opinion that the Servicer's Assertion is
fairly stated in all material respects except for (i) such exceptions as such
firm believes to be immaterial and (ii) such other exceptions as shall be set
forth in such firm's report, or (B) such firm has performed the following
procedures:
1. For a sample of daily cash receipts during the preceding calendar year:
37
a. Trace total cash receipts to deposits on bank statements.
b. Agree cash receipts for securitized loans to computer reports.
c. Trace cash receipts for securitized loans to disbursements to
the Owner Trustee and the Indenture Trustee.
2. For a sample of monthly cash receipt reports:
a. Agree total cash receipts per the cash receipt reports to
"Total Payments From Obligors Applied to Collection Period"
per monthly Servicer Certificates.
b. Agree total principal payments per the cash receipt reports
to "Principal Payments" per monthly Servicer Certificates.
3. For a sample of loans delinquent 30 days or more and for a sample of
loans in repossession status, selected from the loan delinquency
report or a new repossession report, as applicable, at a point in
time, trace loan number to inclusion in the loan collection system.
The determination of which of the two alternative reports to be prepared and
delivered, and the size of each sample to be tested, shall be decided in the
sole discretion of the Servicer. The report of the independent certified
public accountants shall also indicate that such accounting firm is
independent of the Servicer within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants.
SECTION 4.11 Access by Holders to Certain Documentation and
Information Regarding Receivables. The Servicer shall provide to the Holders
access to the Receivable Files in such cases where the Holders shall be
required by applicable statutes or regulations to have access to such
documentation. Access by the Holders shall be afforded without charge, but
only upon reasonable request and during normal business hours which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Nothing in this Section 4.11 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 4.11.
SECTION 4.12 Reports to Holders and the Rating Agencies. (a)
The Indenture Trustee or the Owner Trustee, as applicable, shall provide to
any Holder who so requests in writing (addressed to the Corporate Trust Office
of such trustee) a copy of any Servicer's Certificate described in Section
4.8, of the annual statement described in Section 4.9(a), or of the annual
report described in Section 4.10. The Indenture Trustee or the Owner Trustee,
as applicable, may require the Holder to pay a reasonable sum to cover the
cost of the Indenture Trustee's or the Owner Trustee's complying with such
request, as applicable.
(b) The Indenture Trustee or the Owner Trustee, as
applicable, shall forward to the Rating Agencies the statement to Holders
described in Section 5.8 and any other reports it may receive pursuant to this
Agreement to (i) Standard & Poor's, Asset-Backed Surveillance Group, 00
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) Xxxxx'x,
38
ABS Monitoring Dept., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
and (iii) to Fitch, Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
SECTION 4.13 Reports to the Securities and Exchange
Commission. The Servicer shall, on behalf of the Issuer, 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 Securities
and Exchange Commission thereunder.
ARTICLE V
ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1 Establishment of Accounts. (a) The Servicer shall
establish and maintain:
(i) For the benefit of the Noteholders and the
Certificateholders, in the name of the Indenture Trustee, an Eligible
Deposit Account for the deposit of Collections (the "Collection
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders.
(ii) For the benefit of the Noteholders, in the name of the
Indenture Trustee, an Eligible Deposit Account for the deposit of
distributions to the Noteholders (the "Note Distribution Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders.
Each Account shall be an Eligible Deposit Account
established initially at Chase.
(b) Should any depositary of an Account or of the
Certificate Distribution Account (including Chase (or an Affiliate thereof))
cease to be either a Qualified Institution or a Qualified Trust Institution,
as applicable, then the Servicer shall, with the Seller's assistance as
necessary, cause the related Account to be moved to a Qualified Institution or
a Qualified Trust Institution, unless the Rating Agency Condition is satisfied
in connection with such depositary's ceasing to be a Qualified Institution or
a Qualified Trust Institution, as the case may be.
All amounts held in the Collection Account shall be invested
by the bank or trust company then maintaining the account (at the written
direction of the Servicer) in Permitted Investments that mature not later than
the Deposit Date next succeeding the date of investment (or, if the Class A-1
Event has occurred, not later than March 11, 1999, in the case of investments
made on or after the Deposit Date in February 1999 and prior to the Deposit
Date in March 1999, in an amount at least equal to the March 1999 Class A-1
Note Distribution) except, if the Collection Account is maintained with the
Indenture Trustee for
39
investments on which the Indenture Trustee is the obligor (including
repurchase agreements on which the Indenture Trustee, in its commercial
capacity, is liable as principal), which investments may mature on the next
succeeding Distribution Date; provided, however, that once such amounts have
been invested by such bank or trust company, as applicable, in Permitted
Investments, such Permitted Investments must be held or maintained until they
mature on or before the dates described above. Amounts on deposit in the Note
Distribution Account shall not be invested.
(c) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Accounts and in all
proceeds thereof (excluding Investment Earnings) and all such funds,
investments, proceeds and income shall be part of the Owner Trust Estate.
Except as otherwise provided herein, the Accounts shall be under the sole
dominion and control of Indenture Trustee for the benefit of the Noteholders
and the Certificateholders, or the Noteholders, as the case may be.
SECTION 5.2 Collections. (a) The Servicer shall remit daily
within forty-eight hours of receipt to the Collection Account all Collections
collected during the Collection Period. Chase USA has requested that, so long
as it is acting as the Servicer, the Servicer be permitted to make remittances
of Collections on a less frequent basis than that specified in the immediately
preceding sentence. It is understood that such less frequent remittances may
be made only on the specific terms and conditions set forth below in this
Section 5.2 and only for so long as such terms and conditions are fulfilled.
Accordingly, notwithstanding the provisions of the first sentence of this
Section 5.2, the Servicer shall remit such collections to the Collection
Account in Automated Clearinghouse Corporation next-day funds or immediately
available funds no later than 11:00 a.m., New York City time, on the Deposit
Date, but only for so long as (i) the short-term certificate of deposit
ratings of the Servicer are at least P-1 by Moody's, "F-1" by Fitch (if rated
by Fitch) and "A-1" by Standard & Poor's, or the Rating Agency Condition is
satisfied as a result of Collections being remitted on a monthly, rather than
daily, basis and (ii) the Servicer shall be Chase USA or Chase; provided,
however, that if the Class A-1 Event has occurred, with respect to Collections
received during the February 1999 Collection Period, the Servicer shall remit
to the Collection Account on March 11, 1999 an amount of such Collections
equal to the March 1999 Class A-1 Note Distribution. Upon remittance by the
Servicer of Collections to the Collection Account pursuant to the preceding
sentence, the Paying Agent shall provide written notice to the Indenture
Trustee and the Owner Trustee no later than 11 a.m., New York City time, on
each Deposit Date (or March 11, 1999), setting forth the amounts remitted by
the Servicer on such date and, if the Paying Agent fails to provide the
Indenture Trustee and the Owner Trustee, with such written notice by 12 noon,
New York City time, on such Deposit Date (or March 11, 1999), then the
Indenture Trustee and the Owner Trustee shall assume that no deposits were
made to the Collection Account pursuant to this Section 5.2. For purposes of
this Section 5.2 the phrase "payments made on behalf of the Obligors" shall
mean payments made by Persons other than the Seller or the Servicer.
(b) Notwithstanding anything in this Agreement to the
contrary, if the Servicer inadvertently deposits amounts that it mistakenly
believes are Collections resulting in the payment in full of a Receivable, the
Servicer shall be deemed to have purchased such
40
Receivable pursuant to Section 4.6 as of the last day of the Collection Period
during which such error shall have occurred.
SECTION 5.3 [Reserved].
SECTION 5.4 Additional Deposits. The Servicer, or the
Seller, as the case may be, shall deposit into the Collection Account the
aggregate Repurchase Amount pursuant to Sections 3.2, 4.6 and 9.1(a), as
applicable. All remittances shall be made to the Collection Account, in
Automated Clearinghouse Corporation next-day funds or immediately available
funds, no later than 11 a.m., New York City time, on the Deposit Date;
provided, however, that if the Class A-1 Event has occurred and the amount of
Collections on the Receivables received during the February 1999 Collection
Period is less than the March 1999 Class A-1 Note Distribution, such
remittances (up to the amount of such shortfall) shall be deposited into the
Collection Account no later than March 11, 1999.
SECTION 5.5 Distributions. (a) No later than 12 noon, New
York City time, on each Determination Date, the Servicer shall calculate all
amounts required to determine the amounts to be withdrawn from the Reserve
Account (if any) and deposited into the Collection Account and the amounts to
be withdrawn from the Collection Account and paid to the Servicer and the
Administrator, deposited into the Note Distribution Account and the
Certificate Distribution Account and paid to the Seller with respect to the
next succeeding Distribution Date.
(b) On each Deposit Date, the Servicer shall instruct the
Indenture Trustee in writing (based on the information contained in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.8) to withdraw from the Reserve Account and deposit in the
Collection Account the Reserve Account Transfer Amount (if any) for the
related Distribution Date, and the Indenture Trustee shall so withdraw and
deposit the Reserve Account Transfer Amount for such Distribution Date;
provided, however, that if the Class A-1 Event has occurred and the Total
Distribution Amount for the March 1999 Distribution Date is less than the
March 1999 Class A-1 Note Distribution, the Servicer shall instruct the
Indenture Trustee in writing to withdraw from the Reserve Account and deposit
in the Collection Account on March 11, 1999 a portion of the Reserve Account
Transfer Amount for the March 1999 Distribution Date equal to the lesser of
such Reserve Account Transfer Amount and the amount of such insufficiency as
determined by the Servicer.
(c) Not later than 11:00 a.m., New York City time, on each
Distribution Date, at the Servicer's direction, the Indenture Trustee, or the
Paying Agent on behalf of the Indenture Trustee, shall cause to be made the
following distributions, to the extent of the Total Distribution Amount then
on deposit in the Collection Account and amounts withdrawn from the Reserve
Account and deposited in the Collection Account by wire transfer of
immediately available funds, in the following order of priority and in the
amounts set forth in the Servicer's Certificate for such Distribution Date:
(i) to the Servicer, the sum of (x) the Servicing Fee for
the preceding Collection Period, plus (y) the amount of any Servicing
Fee previously due but not
41
paid, if any, to the extent such amounts are not deducted from the
Servicer's remittance to the Collection Account pursuant to Section
5.7;
(ii) to the Administrator, the sum of (x) the Administration
Fee for such Distribution Date, plus (y) the amount of any
Administration Fee previously due but not paid, if any;
(iii) to the Note Distribution Account, the Noteholders'
Interest Distributable Amount;
(iv) except as set forth in Section 5.5(d), to the Owner
Trustee for deposit in the Certificate Distribution Account, the
Certificateholders' Interest Distributable
Amount;
(v) except as set forth in Section 5.5(d), to the Note
Distribution Account, the Noteholders' Principal Distributable
Amount; and
(vi) except as set forth in Section 5.5(d), to the Owner
Trustee for deposit in the Certificate Distribution Account, the
Certificateholders' Principal Distributable Amount; and
(vii) except as set forth in Section 5.5(d), to the Reserve
Account, any remaining portion of the Total Distribution Amount.
In the event that the Collection Account is maintained with
an institution other than the Indenture Trustee, the Servicer shall instruct
and cause such institution to make all deposits and distributions pursuant to
this Section 5.5(c) on the related Deposit Date.
(d) If the Notes have been declared immediately due and
payable as provided in Section 5.2 of the Indenture, any amounts remaining in
the Collection Account after the distributions described in clauses (i), (ii)
and (iii) of Section 5.5(c) shall be distributed as follows: (1) an amount
equal to the Outstanding Amount of the Notes will be deposited in the Note
Distribution Account, and (2) any remaining amounts will be applied pursuant
to clauses (iv), (v), (vi) and (vii) of Section 5.5(c).
(e) Notwithstanding any of the foregoing to the contrary, if
the Class A-1 Event shall have occurred (x) the March 1999 Class A-1 Note
Distribution will be deposited in the Note Distribution Account on the March
1999 Distribution Date with respect to Class A-1 Notes pursuant to clauses
(iii) and (v) of Section 5.5(c) and (y) the remainder of the Noteholders'
Distributable Amount will be withdrawn from the Collection Account, as
applicable, and applied on the March 1999 Distribution Date with respect to
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the
Certificates pursuant to clauses (i) through (vi), inclusive, of Section
5.5(c); provided, however if the sum of the Total Distribution Amount and the
Reserve Account Transfer Amount for the March 1999 Distribution Date is less
than the sum of the amounts set forth in clauses (i) through (v) of Section
5.5(c), amounts shall be distributed from the Collection Account with respect
to the
42
Class A-1 Notes only to the same extent that such amounts would have been
distributable therefrom if the March 1999 Distribution Date with respect to
the Class A-1 Notes were the same as that with respect to the Class A-2 Notes,
the Class A-3 Notes, the Class A-4 Notes and the Certificates.
SECTION 5.6 Reserve Account. (a) The Seller shall establish
and maintain an Eligible Deposit Account (the "Reserve Account") at Norwest
Bank Minnesota, National Association in the name of the Indenture Trustee for
the benefit of the Noteholders and the Certificateholders. Pursuant to Section
2.5 of the Trust Agreement, on the Closing Date, the Owner Trustee shall
deposit the Reserve Account Initial Deposit into the Reserve Account.
(b) Should any sole depositary of the Reserve Account cease
to be either a Qualified Institution or a Qualified Trust Institution, the
Seller shall cause the Reserve Account to be moved to a Qualified Institution
or a Qualified Trust Institution, as applicable, unless the Seller provides
the Indenture Trustee with a letter from the Rating Agencies to the effect
that the Rating Agency Condition will be satisfied in connection with such
depositary's ceasing to be a Qualified Institution or a Qualified Trust
Institution, as the case may be.
All amounts held in the Reserve Account shall be invested by
the bank or trust company then maintaining the account (at the written
direction of the Seller) in Permitted Investments that mature not later than
the Deposit Date next succeeding the date of investment (or, if the Class A-1
Event has occurred, not later than March 11, 1999 to the extent of the March
1999 Class A-1 Note Distribution) except, if the Reserve Account is maintained
with the Indenture Trustee, for investments on which the Indenture Trustee is
the obligor (including repurchase agreements on which the Indenture Trustee in
its commercial capacity is liable as principal), which investments may mature
on the next succeeding Distribution Date; provided, however, that amounts on
deposit in the Reserve Account may be invested in Permitted Investments that
mature later than the next succeeding Deposit Date (or March 11, 1999 if the
Class A-1 Event has occurred) if the Rating Agency Condition is satisfied.
(c) With respect to the Reserve Account Property:
(i) any Reserve Account Property that constitutes Physical
Property (and that is not either a United States Security Entitlement
or a Security Entitlement) shall be delivered to the Indenture
Trustee in accordance with paragraph (a) of the definition of
"Delivery" and shall be held by the Indenture Trustee pending
maturity or disposition;
(ii) any Reserve Account Property that is a United States
Security Entitlement or a Security Entitlement, the Indenture Trustee
shall maintain Control over such Reserve Account Property pending
maturity or disposition; and
(iii) any Reserve Account Property that is an Uncertificated
Security (and that is not a United States Security Entitlement) shall
be delivered to the Indenture Trustee
43
in accordance with paragraph (b) of the definition of "Delivery" and
shall be maintained by the Indenture Trustee pending maturity or
disposition.
The Indenture Trustee shall, at the expense of the Servicer, take such action
as is required to maintain the Indenture Trustee's security interest in any
Reserve Account Property; provided, however, that (x) the Indenture Trustee
shall not be required to prepare or file any financing statements or
continuation statements and (y) the Indenture Trustee may rely upon the
written instructions of the Servicer as to the method by which the security
interest of the Indenture Trustee may be perfected. Upon written request from
the Indenture Trustee, the Servicer shall provide such instructions and an
opinion of counsel with respect to the method of perfection of such security
interest; provided, however, that the Servicer shall not be obligated to
deliver to the Indenture Trustee an opinion of counsel with respect to the
method of perfecting a security interest in any Permitted Investment the
method of perfecting an ownership interest in which was described in that
certain legal opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, special counsel to the
Indenture Trustee, dated February 18, 1998, unless there has been change in
law or the interpretation thereof from the date of such opinion with respect
to the method of perfecting a security interest in such Permitted Investment.
(d) On each Distribution Date, the Indenture Trustee shall
withdraw from the Reserve Account and pay to the Seller the excess, if any, of
the amount on deposit in the Reserve Account over the Specified Reserve
Account Balance with respect to such Distribution Date (after giving effect to
all deposits therein or withdrawals therefrom on such Distribution Date). Upon
any distribution to the Seller of amounts from the Reserve Account, the
Holders will have no rights in, or claims, to, such amounts. Amounts properly
distributed to the Seller from the Reserve Account shall not be available
under any circumstances to the Indenture Trustee, and the Seller shall not in
any event thereafter be required to refund any such distributed amounts. For
purposes of this Section 5.6(d), the March 1999 Distribution Date shall be
March 15, 1999 regardless of whether the Class A-1 Event has occurred.
(e) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Reserve Account and
in all proceeds thereof and all such funds, investments, proceeds and income
shall be part of the Trust Estate. Except as otherwise provided herein, the
Reserve Account shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders.
SECTION 5.7 Net Deposits. Chase USA (in its capacity as the
Seller or the Servicer) may make the remittances pursuant to Sections 5.2 and
5.4 above, net of amounts to be retained by it or distributed to it (also in
any such capacity) pursuant to Section 4.7 (if applicable) and Section 5.5, if
(a) it shall be the Servicer and (b) it is entitled, pursuant to Section 5.2,
to make deposits on a monthly basis, rather than a daily basis. Nonetheless,
the Servicer shall account for all of the above described amounts as if such
amounts were deposited and distributed separately.
SECTION 5.8 Statements to Certificateholders and
Noteholders. (a) On each Distribution Date, the Servicer shall provide to the
Indenture Trustee (for the Indenture Trustee to forward to each Noteholder of
record pursuant to the Indenture) and to the Owner
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Trustee (for the Owner Trustee to forward to each Certificateholder of record
pursuant to the Trust Agreement) a statement substantially in the form of
Exhibit B (or such other form that is acceptable to the Indenture Trustee, the
Owner Trustee and the Servicer), with a copy to the Rating Agencies, setting
forth at least the following information as to the Notes (separately stating
such information as to the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes) and the Certificates, to the extent applicable:
(i) the amount of such distribution allocable to
principal on each class of Notes and the Certificates;
(ii) the amount of such distribution allocable to interest
on each class of Notes and the Certificates;
(iii) the amount of the Servicing Fee paid to the Servicer
pursuant to Section 5.5(c);
(iv) the amount of the Administration Fee paid to the
Administrator on such Distribution Date;
(v) the Outstanding Amount of each class of the Notes, the
Class A-1 Note Pool Factor, the Class A-2 Note Pool Factor, the Class
A-3 Note Pool Factor, the Class A-4 Note Pool Factor, the Certificate
Balance and the Certificate Pool Factor, in each case after giving
effect to payments allocated to principal reported under (i) above;
(vi) the Pool Balance as of the last day of the preceding
Collection Period;
(vii) the aggregate amount of the Repurchase Amounts for
Repurchased Receivables with respect to the related Collection Period
paid by each of the Seller and the Servicer (accounted for
separately);
(viii) the amount of Aggregate Net Losses, if any, for such
Distribution Date;
(ix) the balance of the Reserve Account on such Distribution
Date, after giving effect to deposits into and withdrawals from the
Reserve Account on such Distribution Date;
(x) the Specified Reserve Account Balance for such
Distribution Date;
(xi) the Total Distribution Amount for such Distribution
Date;
(xii) the Noteholders' Distributable Amount and the
components thereof;
(xiii) the Certificateholders' Distributable Amount and the
components thereof; and
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(xiv) the Reserve Account Transfer Amount, if any, for such
Distribution Date.
Each amount set forth pursuant to subclause (i), (ii),
(iii), (iv), (xii) or (xiii) above shall be expressed as a dollar amount per
$1,000 of original principal balance of a Note or a Certificate, as
applicable.
ARTICLE VI
THE SELLER
SECTION 6.1 Representations of Seller. The Seller makes the
following representations on which the Issuer shall rely in acquiring the
Receivables. The representations shall speak as of the execution and delivery
of this Agreement, and shall survive the sale of the Receivables to the Issuer
and pledge thereof to the Indenture Trustee pursuant to the Indenture.
(i) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a national banking association
in good standing under the laws of the United States of America, with
power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, power, authority,
and legal right to acquire and own the Receivables.
(ii) 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 respective
terms, the Seller has full power and authority to sell and assign the
property to be sold and assigned to the Issuer as the Owner Trust
Estate and has duly authorized such sale and assignment to the Issuer
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 has been duly authorized by the Seller by all necessary
action.
(iii) Valid Sale; Binding Obligations. This Agreement
effects a valid sale, transfer, and assignment of the Receivables,
enforceable against creditors of and purchasers from the Seller; this
Agreement and each of the other Basic Documents to which it is a
party constitutes a legal, valid, and binding obligation of the
Seller enforceable 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 in general and by general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and the
fulfillment of the terms hereof and thereof do not conflict with,
result in any breach of any of the terms and
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provisions of, nor constitute (with or without notice or lapse of
time) a default under, the articles of association or bylaws of the
Seller, or conflict with or breach any of the material terms or
provisions of, or constitute (with or without notice or lapse of
time) a default under, any indenture, agreement, or other instrument
to which the Seller is a party or by which it is bound; nor result in
the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, or other
instrument; nor violate any law or, to the best of the Seller's
knowledge, any order, rule, or regulation applicable to the Seller of
any court or of any federal or state regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction
over the Seller or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or, to the Seller's best knowledge,
threatened, before any court, regulatory body, administrative agency,
or other governmental instrumentality having jurisdiction over the
Seller or its properties: (a) asserting the invalidity of this
Agreement, any other Basic Document, 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 or any other Basic Document, (c) 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, any other Basic Document, or the
Notes or the Certificates, or (d) relating to the Seller and which
might adversely affect the federal or state income tax attributes of
the Notes or the Certificates.
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 in such capacity under this Agreement
and shall have no other obligations or liabilities hereunder.
The Seller shall indemnify, defend and hold harmless the
Issuer, 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 Issuer or the issuance
and original sale of the Notes and the Certificates, including any sales,
gross receipts, general corporation, tangible or intangible personal property,
privilege, or license taxes (but not including any taxes asserted with respect
to ownership of the Receivables or federal or other income taxes, including
franchise taxes measured by net income), arising out of the transactions
contemplated by this Agreement and the other Basic Documents, and costs and
expenses in defending against the same.
The Seller shall indemnify, defend, and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee from and against any loss,
liability or expense incurred by reason of (i) the Seller's wilful
misfeasance, bad faith, or gross negligence in the performance of its duties
hereunder, or by reason of reckless disregard of the obligations and duties
hereunder and (ii) the Seller's violation of federal or state securities laws
in connection with the registration of the sale of the Notes and the
Certificates.
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Indemnification under this Section 6.2 shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Seller shall have made any indemnity payments to the Issuer, the Owner Trustee
or the Indenture Trustee, respectively, pursuant to this Section 6.2 and the
Issuer, the Owner Trustee or the Indenture Trustee, respectively, thereafter
shall collect any of such amounts from others, the Issuer, the Owner Trustee
or the Indenture Trustee, respectively, shall repay such amounts to the
Seller, without interest.
SECTION 6.3 Merger or Consolidation of Seller. Any
corporation or other entity (i) into which the Seller may be merged or
consolidated, (ii) which may result from any merger, conversion, or
consolidation to which the Seller shall be a party, or (iii) which may succeed
to all or substantially all of the business of the Seller, which corporation
or other entity shall be bound to perform every obligation of the Seller under
this Agreement, shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by any of the parties
to this Agreement. The Seller shall give prompt written notice of any merger
or consolidation to the Issuer, the Owner Trustee, the Indenture Trustee, the
Servicer and the Rating Agencies.
SECTION 6.4 Limitation on Liability of Seller and Others.
The Seller and any director, officer, 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 or under any other Basic Documents. The Seller shall not be
under any obligation under this Agreement to appear in, prosecute, or defend
any legal action that shall be unrelated to its obligations under this
Agreement or any other Basic Document, and that in its opinion may involve it
in any expense or liability.
SECTION 6.5 Seller May Own Notes and Certificates. The
Seller or any of its Affiliates 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 Seller or an Affiliate thereof, except as
otherwise provided in the definition of "Outstanding" specified in Section
1.1. Notes or Certificates so owned by or pledged to the Seller or any
Affiliate thereof shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority, or distinction as
among all of the Notes or Certificates, as applicable.
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations of Servicer. The Servicer makes
the following representations on which the Issuer shall rely in acquiring the
Receivables. The representations shall speak as of the execution and delivery
of this Agreement (or as of a date a Person (other than the Indenture Trustee)
becomes Servicer pursuant to Section 7.3 or Section 8.2), and shall survive
the sale of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
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(i) Organization and Good Standing. The Servicer has been
duly organized and is validly existing as a national banking
association or corporation and is in good standing under the laws of
the United States of America or the jurisdiction of its
incorporation, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and
has, 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 Issuer.
(ii) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and the Basic
Documents to which it is a party and to carry out the terms thereof;
and the execution, delivery, and performance of this Agreement and
the other Basic Documents has been duly authorized by the Servicer by
all necessary action.
(iii) Binding Obligations. This Agreement and the other
Basic Documents to which it is a party constitute legal, valid, and
binding obligations of the Servicer enforceable in accordance with
their respective terms subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, liquidation or other similar
laws and equitable principles relating to or affecting the
enforcement of creditors' rights, whether considered in a proceeding
at law or in equity.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and the
fulfillment of the terms hereof and thereof do not conflict with,
result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under,
the articles of association or bylaws of the Servicer, or conflict
with or breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default under,
any indenture, agreement, or other instrument to which the Servicer
is a party or by which it is bound; nor result in the creation or
imposition of any lien upon any of its properties pursuant to the
terms of any such indenture, agreement, or other instrument; nor
violate any law or, to the best of the Servicer's knowledge, any
order, rule, or regulation applicable to the Servicer of any court or
of any federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the
Servicer or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or to the Servicer's best knowledge,
threatened, before any court, regulatory body, administrative agency,
or other governmental instrumentality having jurisdiction over the
Servicer or its properties: (a) asserting the invalidity of this
Agreement, or 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 or any other
Basic Document, (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, any other Basic Document, or the Notes or the
Certificates, or (d) relating to the Servicer and which
49
might adversely affect the federal or state income tax attributes of
the Notes or the Certificates.
(vi) Fidelity Bond. The Servicer maintains a fidelity bond
in such form and amount as is customary for banks acting as custodian
of funds and documents in respect of retail automotive installment
sales contracts.
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 shall have no
other obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee and the Holders
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.
(ii) The Servicer shall indemnify, defend, and hold harmless
the Issuer, the Owner Trustee and the Indenture Trustee from and
against any taxes that may at any time be asserted against the Issuer
with respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or
license taxes (but not including any taxes asserted with respect to,
and as of the date of, the sale of the Receivables to the Issuer or
the issuance and original sale of the Notes or the Certificates, or
asserted with respect to ownership of the Receivables or federal,
state or other income taxes, including franchise taxes measured by
net income) arising out of distributions on the Notes or the
Certificates and costs and expenses in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold
harmless the Issuer, the Owner Trustee, the Indenture Trustee and the
Holders from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss,
claim, damage, or liability arose out of, or was imposed upon the
Issuer, the Owner Trustee, the Indenture Trustee or the Holders
through the wilful misfeasance, gross negligence, or bad faith of the
Servicer in the performance of its duties under this Agreement or by
reason of reckless disregard of its obligations and duties under this
Agreement.
Indemnification under this Section 7.2 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 7.2
and the recipient thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts to the Servicer, without interest.
The indemnification obligations of the Servicer set forth in this Section 7.2
shall survive the termination of such Servicer with respect to any act or
failure to act which occurs prior to such Servicer's termination. The
provisions of Section 6.7 of the Indenture and Sections 8.1 and 8.2 of the
Trust Agreement with respect to the Servicer's obligations are incorporated by
reference herein.
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SECTION 7.3 Merger or Consolidation of Servicer. Any
corporation or other entity (i) into which the Servicer may be merged or
consolidated, (ii) which may result from any merger, conversion, or
consolidation to which the Servicer shall be a party, or (iii) which may
succeed to all or substantially all of the business of the Servicer, which
corporation or other entity shall be bound to perform every obligation of the
Servicer hereunder, shall be the successor to the Servicer 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. The Servicer shall
promptly inform the Issuer, the Owner Trustee, the Indenture Trustee, the
Seller and the Rating Agencies in writing of any such merger or consolidation.
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 Issuer, the Owner
Trustee, the Indenture Trustee or the Holders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement; provided, however, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of wilful misfeasance, gross negligence,
or bad faith in the performance of duties or by reason of reckless disregard
of obligations and duties under this Agreement. The Servicer and any director
or officer or employee or agent of the Servicer may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this
Agreement.
(b) The Servicer, and any director, or officer, employee or
agent of the Servicer, shall be indemnified by the Issuer and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees
and expenses) incurred in connection with any legal action relating to the
performance of the Servicer's duties under this Agreement, other than (i) any
loss or liability otherwise reimbursable pursuant to this Agreement or the
Basic Documents; (ii) any loss, liability, or expense incurred solely by
reason of the Servicer's wilful misfeasance, negligence, or bad faith in the
performance of its duties hereunder or by reason of reckless disregard of its
obligations and duties under this Agreement or the Basic Documents; and (iii)
any loss, liability, or expense for which the Issuer is to be indemnified by
the Servicer under this Agreement or the Basic Documents. Any amounts due the
Servicer pursuant to this Section 7.4 shall be payable on a Distribution Date
from amounts distributable to the Seller from the Reserve Account pursuant to
Section 5.6(d).
(c) 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 obligations under 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 Holders 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 Issuer, and the Servicer shall be entitled to be reimbursed therefor. Any
amounts due the Servicer pursuant to this Section 7.4 shall be
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payable on a Distribution Date from amounts distributable to the Seller from
the Reserve Account pursuant to Section 5.6(d).
The Person to be indemnified shall provide the Issuer, the
Owner Trustee and the Indenture Trustee with a certificate and accompanying
Opinion of Counsel requesting indemnification and setting forth the basis for
such request.
SECTION 7.5 Servicer Not To Resign. Except as permitted by
Section 7.3, the Servicer shall not resign from its obligations and duties
under this Agreement except (i) upon determination that the performance of its
duties shall no longer be permissible under applicable law or (ii) in the
event of the appointment of a successor Servicer, upon satisfaction of the
Rating Agency Condition. Notice of any such determination permitting the
resignation of the Servicer shall be communicated to the Issuer, the Indenture
Trustee, the Owner Trustee and the Rating Agencies at the earliest practicable
time (and, if such communication is not in writing, shall be confirmed in
writing at the earliest practicable time) and any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Issuer, the Indenture Trustee and the
Owner Trustee concurrently with such notice. No such resignation shall become
effective until the Indenture Trustee (which shall not be obligated to act as
successor Servicer if the Servicer has resigned for a reason other than that
the performance of its duties are no longer permissible under applicable law)
or a successor Servicer shall have assumed the responsibilities and
obligations of the Servicer hereunder in accordance with Section 8.2.
SECTION 7.6 Delegation of Duties. So long as Chase USA acts
as Servicer, the Servicer shall have the right, in the ordinary course of its
business, to delegate any of its duties under this Agreement to any Person.
Any compensation payable to such Person shall be paid by the Servicer from its
own funds and none of the Issuer, the Owner Trustee, the Indenture Trustee or
the Holders shall have any liability to such Person with respect thereto.
Notwithstanding any delegation of duties by the Servicer pursuant to this
Section 7.6, the Servicer shall not be relieved of its liability and
responsibility with respect to such duties, and any such delegation shall not
constitute a resignation within the meaning of Section 7.5. Any agreement that
may be entered into by the Servicer and a Person that provides for any
delegation of the Servicer's duties hereunder to such Person shall be deemed
to be between the Servicer and such Person alone, and the Issuer, the Owner
Trustee, the Indenture Trustee and Holders shall not be deemed parties thereto
and shall have no claims, rights, obligations, duties or liabilities with
respect thereto.
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
SECTION 8.1 Events of Servicing Termination. Any one of the
following events which shall occur and be continuing shall constitute an event
of servicing termination hereunder (each, an "Event of Servicing
Termination"):
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(i) Any failure by the Servicer to deliver to the Indenture
Trustee the Servicer's Certificate for the related Collection Period,
or any failure by the Servicer to deliver to the Indenture Trustee,
for deposit in any of the Trust Accounts or the Certificate
Distribution Account, any proceeds or payment required to be so
delivered under the terms of the Certificates or the Notes and this
Agreement (or, in the case of a payment or deposit to be made not
later than the Deposit Date, the failure to make such payment or
deposit on such Deposit Date), which failure continues unremedied for
a period of five Business Days after (A) discovery by an officer of
the Servicer or (B) written notice (1) to the Servicer by the
Indenture Trustee or the Owner Trustee or (2) to the Indenture
Trustee or the Owner Trustee, as applicable, and the Servicer by the
Holders of Notes evidencing not less than 25% of the Outstanding
Amount of the Notes (or, if the Notes have been paid in full, by
Holders of the Certificates evidencing not less than 25% of the
Certificate Balance);
(ii) Failure on the part of the Servicer duly to observe or
to perform in any material respect any other covenants or agreements
of the Servicer set forth in this Agreement or the Indenture, which
failure shall (a) materially and adversely affect the rights of the
Issuer or the Holders, and (b) continue unremedied for a period of 60
days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (1) to the
Servicer by the Indenture Trustee or the Owner Trustee, or (2) to the
Indenture Trustee or the Owner Trustee, as applicable, and the
Servicer by the Holders of Notes evidencing not less than 25% of the
Outstanding Amount of the Notes (or, if the Notes have been paid in
full, by Holders of the Certificates evidencing not less than 25% of
the Certificate Balance);
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, or liquidator for the
Servicer in any insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings, or for the winding up
or liquidation of its affairs, and the continuance of any such decree
or order unstayed and in effect for a period of 60 consecutive days;
or
(iv) The consent by the Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities, or similar
proceedings of or relating to the Servicer or of or relating to
substantially all of its property; or the Servicer shall admit in
writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations.
Upon the occurrence of any Event of Servicing Termination as described above,
and in each and every case and for so long as such Event of Servicing
Termination shall not have been remedied, either the Indenture Trustee or the
Holders of Notes evidencing not less than a majority of the Outstanding Amount
of the Notes (or, if the Notes have been paid in full and the Indenture has
been discharged in accordance with its terms, by the Owner Trustee or the
Holders of Certificates evidencing not less than a majority of the Certificate
Balance), by
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notice given in writing to the Servicer (and to the Indenture Trustee or the
Owner Trustee, as applicable, if given by Holders) 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 Certificates, the
Notes or the Receivables or otherwise, shall pass to and be vested in the
Indenture Trustee pursuant to this Section 8.1; and, without limitation, the
Indenture Trustee shall be hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivable Files, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer and the Indenture Trustee in
effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, shall have been
deposited by the predecessor Servicer in the Collection Account, or shall
thereafter be received with respect to a Receivable. All reasonable costs and
expenses (including attorneys' fees and disbursements) incurred in connection
with transferring the Receivable Files to the successor Servicer and amending
this Agreement to reflect such succession as Servicer pursuant to this Section
8.1 shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. The Indenture Trustee and the Owner
Trustee shall give written notice of any termination of the Servicer to their
related Holders, and the Indenture Trustee shall give such notice to the
Rating Agencies. Neither the Indenture Trustee nor any successor Servicer
shall be deemed to be in default hereunder by reason of its failure to make,
or any delay in making, any distribution hereunder or any portion thereof
which was caused by (i) the failure of the predecessor Servicer to deliver, or
any delay in delivering cash, documents or records to it, or (ii) restrictions
imposed by any regulatory authority having jurisdiction over the predecessor
Servicer.
SECTION 8.2 Indenture Trustee to Act; Appointment of
Successor Servicer. Upon the Servicer's receipt of notice of termination
pursuant to Section 8.1 or resignation pursuant to Section 7.5, the Indenture
Trustee shall be the successor in all respects to the Servicer in its capacity
as Servicer under this Agreement, and shall be subject to all the
responsibilities, duties and liabilities arising thereafter 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. Notwithstanding the
above, the Indenture Trustee may, if it shall be unwilling so to act, or
shall, if it shall be legally unable so to act, appoint, or petition a court
of competent jurisdiction to appoint, any established financial institution
(x) having a net worth of not less than $100,000,000 as of the last day of the
most recent fiscal quarter for such institution and (y) whose regular business
shall include the servicing of automobile receivables, as successor Servicer
under this Agreement; provided, that the appointment of any such successor
Servicer is required to satisfy the Rating Agency Condition. In connection
with such appointment, the Indenture Trustee may make such arrangements for
the compensation of such successor Servicer out of payments on
54
Receivables as it and such successor Servicer shall agree; provided, however,
that no such compensation shall be in excess of that permitted the Servicer
under this Agreement. The Indenture Trustee and such successor Servicer shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Unless the Indenture Trustee shall be
prohibited by law from so acting, the Indenture Trustee shall not be relieved
of its duties as successor Servicer under this Section 8.2 until the newly
appointed successor Servicer shall have assumed the responsibilities and
obligations of the Servicer under this Agreement.
SECTION 8.3 Notification to Noteholders and
Certificateholders. Upon any Event of Servicing Termination, or appointment of
a successor Servicer pursuant to this Article VIII, the Owner Trustee shall
give prompt written notice thereof to Certificateholders and the Indenture
Trustee shall give prompt written notice thereof to the Noteholders, at their
respective addresses of record, and to the Rating Agencies.
SECTION 8.4 Waiver of Past Defaults. The Holders of Notes
evidencing at least a majority of the Outstanding Amount of the Notes (or, the
Holders of Certificates evidencing not less than a majority of the Certificate
Balance, in the case of any Event of Servicing Termination that does not
adversely affect the Indenture Trustee or the Noteholders) may, on behalf of
all such Holders, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits to or payments from any of the Trust Accounts or
the Certificate Distribution Account in accordance with this Agreement. Upon
any such waiver of a past default, such default shall cease to exist, and any
Event of Servicing Termination arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived. The Servicer shall give prompt written
notice of any waiver to the Rating Agencies; provided, however, that the
Indenture Trustee or the Owner Trustee shall only be required to give such
notice if a Responsible Officer thereof has actual knowledge of the related
event.
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables; Trust
Termination. (a) As of the last day of any Collection Period as of which the
Pool Balance shall be equal to or less than the Optional Purchase Percentage
of 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
Indenture Trustee, the Owner Trustee, the Note Registrar and the Certificate
Registrar in writing, no later than the 25th day of the Collection Period
following which purchase is to be effected, shall pay the aggregate Repurchase
Amount for the Receivables (including Defaulted Receivables) and shall succeed
to all interests in, to and under such property. The payment shall be made in
the manner specified in Section 5.4, and shall be distributed pursuant to
55
Section 5.5. The Indenture Trustee shall not permit the purchase of the Owner
Trust Estate pursuant to this Section 9.1 unless (i) the Servicer's long-term
unsecured debt is rated at the time of such purchase at least "BBB-" by
Standard & Poor's and Fitch (if rated by Fitch) and Baa3 by Moody's or (ii)
the Servicer provides to the Indenture Trustee an Opinion of Counsel in form
and substance satisfactory to the Rating Agencies to the effect that such
purchase will not constitute a fraudulent transfer under applicable state and
federal law.
(b) Upon any sale of the assets of the Issuer pursuant to
Article V of the Indenture, the Servicer shall instruct the Indenture Trustee
in writing to deposit the proceeds from such sale after all payments and
reserves therefrom (including the expenses of such sale) have been made (the
"Sale Proceeds") in the Collection Account. On the Distribution Date on which
the Sale Proceeds are deposited in the Collection Account (or, if such
proceeds are not so deposited on a Distribution Date, on the Distribution Date
immediately following such deposit), the Servicer shall instruct the Indenture
Trustee in writing to make, and the Indenture Trustee shall make, the
following deposits and distributions (after the application on such
Distribution Date of the Total Distribution Amount pursuant to Section 5.5)
from the Sale Proceeds and any funds remaining on deposit in the Reserve
Account (including the proceeds of any sale of investments therein):
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited
into the Note Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the Outstanding
Amount of the Notes (after giving effect to the reduction in the
Outstanding Amount of the Notes resulting from the deposits made in
the Note Distribution Account on such Distribution Date);
(iii) to the Certificate Distribution Account, any portion
of the Certificateholders' Interest Distributable Amount not
otherwise deposited into the Certificate Distribution Account on such
Distribution Date; and
(iv) to the Certificate Distribution Account, the
Certificate Balance and any Certificateholders' Principal Carryover
Shortfall (after giving effect to the reduction in the Certificate
Balance resulting from the deposits made in the Certificate
Distribution Account on such Distribution Date).
Any Sale Proceeds remaining after the deposits described above shall be paid
to the Seller.
(c) Notice of any termination of the Issuer shall be given
by the Servicer to the Owner Trustee, the Indenture Trustee and the Rating
Agencies as soon as practicable after the Servicer has received notice
thereof.
(d) Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the
Notes, the Certificateholders will succeed to the rights of the Noteholders
hereunder and the Owner Trustee will succeed to the rights of, and assume the
obligations of, the Indenture Trustee pursuant to this Agreement.
56
(e) After the payment to the Indenture Trustee, the Owner
Trustee, the Holders and the Servicer of all amounts required to be paid under
this Agreement, the Indenture and the Trust Agreement, any amounts on deposit
in the Reserve Account or the Collection Account shall be paid to the Seller,
and any other assets remaining in the Owner Trust Estate shall be distributed
to the Seller.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment. This Agreement may be amended by the
Seller, the Servicer and the Owner Trustee, with the prior consent of the
Indenture Trustee and prior notice to the Rating Agencies but without prior
notice to or the consent of any of the Holders, (i) to cure any ambiguity, to
correct or supplement any provisions in this Agreement which may be
inconsistent with any other provisions herein, to evidence a succession to the
Servicer or the Seller pursuant to this Agreement or to add 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 Officer's
Certificate and/or an Opinion of Counsel reasonably acceptable and delivered
to the Owner Trustee and the Indenture Trustee, adversely and materially
affect the interests of the Issuer or any of the Holders; provided, further,
that the Servicer shall deliver written notice of such changes to each Rating
Agency prior to the execution of any such amendment, or (ii) to effect a
transfer or assignment in compliance with Section 10.6(a) of this Agreement.
Notwithstanding the foregoing, no amendment modifying the provisions of
Section 5.5 shall become effective without satisfaction of the Rating Agency
Condition.
This Agreement may also be amended from time to time by the
Seller, the Servicer and the Owner Trustee, with the consent of the Indenture
Trustee, the Holders of Certificates evidencing at least a majority of the
Certificate Balance of the Certificates and the consent of the Holders of
Notes evidencing at least a majority of the Outstanding Amount of the Notes,
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 (including
effecting a transfer or assignment in compliance with Section 10.6(a) of this
Agreement); provided, however, that no such amendment, except with the consent
of the Holders of all Certificates or Notes, as applicable, then outstanding,
shall (a) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments of Receivables, or distributions
that shall be required to be made on any Certificate or Note, or (b) reduce
the aforesaid percentage of the Certificate Balance of the Certificates or the
Outstanding Amount of the Notes required to consent to any such amendment.
Promptly after the execution of any amendment or consent
referred to in this Section 10.1, the Owner Trustee shall furnish a copy of
such amendment or consent to each Certificateholder and the Indenture Trustee,
who shall promptly furnish a copy to each Noteholder and to the Rating
Agencies.
57
It shall not be necessary for the consent of the Indenture
Trustee, the Certificateholders or the Noteholders 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 of evidencing the authorization of
the execution thereof by Certificateholders or Noteholders shall be subject to
such reasonable requirements as the Indenture Trustee or the Owner Trustee may
prescribe.
Prior to the execution of any amendment to this Agreement,
the Indenture Trustee and the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement. The Indenture Trustee and the
Owner Trustee shall not be obligated to enter into any such amendment which
affects the Indenture Trustee's and the Owner Trustee's own rights, duties or
immunities under this Agreement.
Satisfaction of the Rating Agency Condition is required
prior to the execution of any amendment to this Agreement, other than an
amendment permitted pursuant to clause (i) of the first paragraph of this
Section 10.1.
SECTION 10.2 Protection of Title to Owner Trust Estate. (a)
The Seller shall execute and file such financing statements and cause to be
executed and filed such continuation statements, all in such manner and in
such places as may be required by law fully to preserve, maintain, and protect
the interests of the Issuer and the Indenture Trustee in the Receivables and
in the proceeds thereof. The Servicer shall deliver (or cause to be delivered)
to the Owner Trustee and the Indenture Trustee file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) Neither the Seller nor the Servicer shall change its
name, identity, or corporate structure in any manner that would, could, or
might make any financing statement or continuation statement filed by the
Seller in accordance with paragraph (a) above seriously misleading within the
meaning of ss. 9-402(7) (or any comparable section) of the Relevant UCC,
unless it shall have given the Owner Trustee and the Indenture Trustee at
least 30 days prior written notice thereof.
(c) The Seller and the Servicer shall give the Owner Trustee
and the Indenture Trustee at least 60 days prior written notice of any
relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the Relevant UCC would require the
filing of any amendment of any previously filed financing or continuation
statement or of 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
58
to) each Receivable and the amounts from time to time deposited in the
Collection Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so
that, from and after the time of sale under this Agreement of the Receivables
to the Issuer, the Servicer's master computer records (including archives)
that shall refer to a Receivable indicate clearly, by numerical code or
otherwise, that such Receivable is owned by the Issuer and has been pledged to
the Indenture Trustee. Indication of the Issuer's and 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, repurchased or assigned pursuant hereto.
(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 a
new or used automobile receivable to any prospective purchaser, creditor, or
other transferee, the Seller or the Servicer, as the case may be, shall give
to such prospective purchaser, creditor, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Issuer and has been
pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and the
Owner Trustee and their respective agents upon reasonable notice at any time
during normal business hours which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations to inspect,
audit, and make copies of and abstracts from the Servicer's records regarding
the Receivables.
(h) Upon request, the Servicer shall furnish to the Owner
Trustee or the Indenture Trustee, within five Business Days, a list of all
Receivables by contract number and name of Obligor then held by the Issuer,
together with a reconciliation of such list to the Schedule of Receivables
attached as Schedule A to this Agreement and to each of the Servicer
Certificates indicating removal of Receivables from the Owner Trust Estate.
(i) The Servicer shall deliver to the Owner Trustee and
the Indenture Trustee:
(i) upon the execution and delivery of this Agreement, 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 Issuer 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
(ii) on or before March 31 of each year, commencing with
March 31, 1999, an Opinion of Counsel, dated as of such date, either
(a) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed
59
and filed that are necessary fully to preserve and protect the
interest of the Issuer 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. Notwithstanding the
provisions of Section 10.4, such Opinion of Counsel may be sent by
regular non-certified mail, and such mailed opinion shall be deemed
delivered when so mailed.
(j) The Seller shall, to the extent required by applicable
law, cause the Certificates and the Notes to be registered with the Securities
and Exchange Commission pursuant to Section 12(b) or Section 12(g) of the
Exchange Act within the time periods specified in such sections.
(k) 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 10.3 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.4 Notices. All demands, notices, and
communications under this Agreement shall be in writing, personally delivered
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, c/o Chase
Automotive Finance Corporation, 000 Xxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxx
00000 Attention: Financial Controller, or at such other address as shall be
designated by the Seller in a written notice to the Indenture Trustee, (b) in
the case of the Servicer, c/o Chase Manhattan Automotive Finance Corporation,
000 Xxxxxxx, Xxxxxx Xxxx, Xxx Xxxx 00000, Attention: Financial Controller, or
at such other address as shall be designated by the Servicer in a written
notice to the Indenture Trustee, (c) in the case of the Indenture Trustee, at
Norwest Bank Minnesota, National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Corporate Trust Office
and (d) in the case of the Issuer and the Owner Trustee, at c/o Wilmington
Trust Company, Xxxxxx Square North, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Corporate Trust Administration. Any notice required or permitted to be
mailed to a Holder shall be given by first class mail, postage prepaid, at the
address of record of such Holder. Any notice to a Holder so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Holder 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 Certificates or of the Notes or the rights of the Holders thereof.
60
SECTION 10.6 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 6.3, 7.3, 7.5 and
8.2, neither the Seller nor the Servicer may assign all, or a portion of, its
rights, obligations and duties under this Agreement unless such transfer or
assignment satisfies the Rating Agency Condition. In the event of a transfer
or assignment pursuant to this Section 10.6, the Rating Agencies shall be
provided with notice of such transfer or assignment.
SECTION 10.7 Certificates and Notes Nonassessable and Fully
Paid. The interests represented by the Certificates and Notes shall be
nonassessable for any losses or expenses of the Issuer or for any reason
whatsoever, and, upon authentication thereof by the Indenture Trustee and the
Owner Trustee pursuant to the Trust Agreement and the Indenture, respectively,
each Certificate and Note shall be deemed fully paid.
SECTION 10.8 Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, and their
respective successors and permitted assigns. The Administrator, the Owner
Trustee, individually and on behalf of the Certificateholders, and the
Indenture Trustee, individually and on behalf of the Noteholders are
third-party beneficiaries to this Agreement and are entitled to the rights and
benefits hereunder and may enforce the provisions hereof as it were a party
hereto. Except as otherwise provided in this Agreement, no other person will
have any right or obligation hereunder.
SECTION 10.9 Assignment to Indenture Trustee. The Seller
hereby acknowledges and consents to any mortgage, pledge, assignment and grant
of a security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest
of the Issuer in, to and under the Receivables and the other property
constituting the Owner Trust Estate and/or the assignment of any or all of the
Issuer's rights and obligations hereunder to the Indenture Trustee.
SECTION 10.10 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 Issuer, and in no event shall Wilmington Trust Company in its individual
capacity or, except as expressly provided in the Trust Agreement, as
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of the
Issuer. For all purposes of this Agreement, in the performance of its duties
or obligations hereunder or in the performance of any duties or obligations of
the Issuer 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 acknowledged and accepted by Norwest Bank
Minnesota, National Association not in its individual capacity but solely as
Indenture Trustee, and in no event shall Norwest Bank Minnesota, National
Association have any liability for the representations,
61
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of the
Issuer.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed by their respective officers as of the day and year first
above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION,
as Seller and Servicer
By: /s/ Xxxxx Xxxxxx
------------------------------------
Title: Vice President
CHASE MANHATTAN AUTO OWNER TRUST,
1998-A, as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee on behalf of the Issuer
By: /s/ Xxxxxx X. XxxXxxxxx
---------------------------------
Title: Assistant Vice President
Acknowledged and Accepted:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity,
but solely in its capacity
as Indenture Trustee
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------
Title: Assistant Vice President
SCHEDULE A
----------
LIST OF RECEIVABLES
Delivered to the Owner Trustee and the Indenture Trustee
on the Closing Date.
SCHEDULE B
----------
Location of Receivable Files
----------------------------
The Chase Manhattan Bank
20 Clinton Avenue South
0xx Xxxxx
XXXXXX Xxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Iron Mountain
Xxxxx 0-X Xxxxx
X.X. Xxx 000
Xx. Xxxx, XX 00000
Chase Manhattan Automotive Finance Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
EXHIBIT A
---------
[FORM OF SERVICER'S CERTIFICATE]
A-1
EXHIBIT B
---------
[FORM OF CERTIFICATEHOLDER AND NOTEHOLDER REPORT]
B-1
