EXHIBIT 4.2
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SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 2002-3,
as the Trust
MMCA AUTO RECEIVABLES TRUST II,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of August 1, 2002
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS AND USAGE.................................................................................1
Section 1.1 Definitions............................................................................1
Section 1.2 Business Day Certificate...............................................................1
ARTICLE II - TRUST PROPERTY.......................................................................................1
Section 2.1 Conveyance of Trust Property...........................................................1
Section 2.2 Representations and Warranties of the Seller as to the Receivables.....................6
Section 2.3 Repurchase upon Breach................................................................13
Section 2.4 Custody of Receivable Files...........................................................14
Section 2.5 Duties of Servicer as Custodian.......................................................15
Section 2.6 Instructions; Authority to Act........................................................15
Section 2.7 Custodian's Indemnification...........................................................16
Section 2.8 Effective Period and Termination......................................................16
ARTICLE III - ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST PROPERTY...................................16
Section 3.1 Duties of Servicer....................................................................16
Section 3.2 Collection and Allocation of Receivable Payments......................................19
Section 3.3 Realization upon Receivables..........................................................21
Section 3.4 Physical Damage Insurance.............................................................22
Section 3.5 Maintenance of Security Interests in Financed Vehicles................................22
Section 3.6 Covenants of Servicer.................................................................22
Section 3.7 Purchase by Servicer upon Breach......................................................23
Section 3.8 Servicing Compensation................................................................23
Section 3.9 Servicer's Certificate................................................................23
Section 3.10 Annual Statement as to Compliance; Notice of Event of Servicing
Termination...........................................................................24
Section 3.11 Annual Independent Certified Public Accountants' Reports..............................24
Section 3.12 Access to Certain Documentation and Information Regarding Receivables.................25
Section 3.13 Reports to the Commission.............................................................25
Section 3.14 Reports to Rating Agencies............................................................25
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS...................25
Section 4.1 Accounts..............................................................................25
Section 4.2 Collections...........................................................................30
Section 4.3 Application of Collections............................................................31
Section 4.4 Advances..............................................................................32
Section 4.5 Additional Deposits...................................................................33
Section 4.6 Allocation of Total Available Funds...................................................33
Section 4.7 Reserve Account.......................................................................35
Section 4.8 Net Deposits..........................................................................37
Section 4.9 Statements to Noteholders and Certificateholders......................................37
Section 4.10 Control of Securities Accounts........................................................38
Section 4.11 Pre-Funding Account...................................................................38
Section 4.12 Negative Carry Account................................................................39
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND THE YIELD SUPPLEMENT ACCOUNT...................................39
Section 5.1 Yield Supplement Letter of Credit and the Yield Supplement Account....................39
ARTICLE VI - THE SELLER..........................................................................................42
Section 6.1 Representations, Warranties and Covenants of Seller...................................42
Section 6.2 Liability of Seller; Indemnities......................................................43
Section 6.3 Merger or Consolidation of, or Assumption of the Obligations of,
Seller................................................................................44
Section 6.4 Limitation on Liability of Seller and Others..........................................45
Section 6.5 Seller May Own Notes or Certificates..................................................45
ARTICLE VII - THE SERVICER.......................................................................................45
Section 7.1 Representations and Warranties of Servicer............................................45
Section 7.2 Liability of Servicer; Indemnities....................................................46
Section 7.3 Merger or Consolidation of, or Assumption of the Obligations of,
Servicer..............................................................................48
Section 7.4 Limitation on Liability of Servicer and Others........................................48
Section 7.5 Servicer Not to Resign................................................................49
Section 7.6 Servicer May Own Notes or Certificates................................................49
ARTICLE VIII - SERVICING TERMINATION.............................................................................49
Section 8.1 Events of Servicing Termination.......................................................49
Section 8.2 Indenture Trustee to Act; Appointment of Successor Servicer...........................51
Section 8.3 Effect of Servicing Transfer..........................................................51
Section 8.4 Notification to Noteholders and Certificateholders....................................52
Section 8.5 Waiver of Past Events of Servicing Termination........................................52
ARTICLE IX - TERMINATION.........................................................................................52
Section 9.1 Optional Purchase of All Receivables..................................................52
ARTICLE X - MISCELLANEOUS PROVISIONS.............................................................................53
Section 10.1 Amendment.............................................................................53
Section 10.2 Protection of Title to Trust..........................................................54
Section 10.3 Representations of the Seller and the Purchaser.......................................56
Section 10.4 Governing Law.........................................................................56
Section 10.5 Notices...............................................................................57
Section 10.6 Severability of Provisions............................................................58
Section 10.7 Assignment............................................................................58
Section 10.8 Further Assurances....................................................................58
Section 10.9 No Waiver; Cumulative Remedies........................................................58
Section 10.10 Third-Party Beneficiaries.............................................................58
Section 10.11 Actions by Noteholder or Certificateholders...........................................58
Section 10.12 Counterparts..........................................................................59
Section 10.13 Agent for Service.....................................................................59
Section 10.14 No Bankruptcy Petition; Subordination; Claims Against Seller..........................59
Section 10.15 Limitation of Liability of Owner Trustee and Indenture Trustee........................59
SCHEDULES
Schedule of Initial Receivables..........................................................................Schedule A
Locations of Receivable Files............................................................................Schedule B
EXHIBITS
Form of Servicer's Certificate............................................................................Exhibit A
Form of Statement to Noteholders..........................................................................Exhibit B
Form of Statement to Certificateholders...................................................................Exhibit C
Form of Yield Supplement Agreement....................................................................... Exhibit D
Form of Second-Tier Subsequent Assignment.................................................................Exhibit E
SALE AND SERVICING AGREEMENT, dated as of August 1, 2002
(as amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement"), by and among MMCA AUTO OWNER TRUST 2002-3, a
Delaware business trust (the "Trust"), MMCA AUTO RECEIVABLES TRUST II, a
Delaware business trust (the "Seller"), and MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., a Delaware corporation (the "Servicer").
WHEREAS, the Trust desires to purchase portfolios of
receivables arising in connection with motor vehicle retail installment
sale contracts generated by Mitsubishi Motors Credit of America, Inc. in
the ordinary course of its business and sold to the Seller as of the date
hereof and from time to time hereafter;
WHEREAS, the Seller is willing to sell such receivables
to the Trust as of the date hereof and from time to time hereafter; and
WHEREAS, Mitsubishi Motors Credit of America, Inc. is
willing to service such receivables on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I - DEFINITIONS AND USAGE
Section 1.1 Definitions. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but
not otherwise defined herein are defined in Appendix A to the Indenture
(the "Indenture"), dated as of August 1, 2002, between MMCA Auto Owner
Trust 2002-3, as issuer, and Bank of Tokyo-Mitsubishi Trust Company, as
indenture trustee (the "Indenture Trustee"), which also contains rules as
to usage that shall be applicable herein.
Section 1.2 Business Day Certificate. On the Closing Date
(with respect to the calendar year 2002) and thereafter, within 15 days
prior to the end of each succeeding calendar year while this Agreement
remains in effect, the Servicer shall deliver to the Indenture Trustee and
to Wilmington Trust Company, not in its individual capacity but solely as
owner trustee (the "Owner Trustee"), an Officer's Certificate specifying
the days on which banking institutions or trust companies in New York, New
York, Wilmington, Delaware or Los Angeles, California are authorized or
obligated by law, executive order or governmental decree to remain closed.
ARTICLE II - TRUST PROPERTY
Section 2.1 Conveyance of Trust Property. (a) In
consideration of the Trust's delivery to, or upon the written order of, the
Seller of authenticated Notes and Certificates, in authorized denominations
in aggregate principal amounts equal to the initial principal amount of the
Notes and the Initial Certificate Balance, respectively, the Seller hereby
irrevocably sells, transfers, assigns and otherwise conveys to the Trust,
without recourse (subject to the obligations herein), all right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and
under the following:
(i) the Initial Receivables;
(ii) with respect to Initial Receivables that are
Actuarial Receivables, monies due thereunder after the Initial Cutoff Date
(including Payaheads) and, with respect to Initial Receivables that are
Simple Interest Receivables, monies received thereunder after the Initial
Cutoff Date;
(iii) the security interests in Financed Vehicles
granted by Obligors pursuant to the Initial Receivables and any other
interest of the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to
the Initial Receivables from claims on any physical damage, theft, credit
life or disability insurance policies covering the related Financed
Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to
the Initial Receivables from recourse to Dealers thereon pursuant to Dealer
Agreements;
(vi) all of the Seller's rights to the Receivable
Files that relate to the Initial Receivables;
(vii) the Trust Accounts and all amounts, securities,
financial assets, investments and other property deposited in or credited
to any of the foregoing and all proceeds thereof;
(viii) all of the Seller's rights under the Yield
Supplement Agreement and the Purchase Agreement, including the right of the
Seller to cause MMCA to repurchase Receivables from the Seller;
(ix) all payments and proceeds with respect to the
Initial Receivables held by MMCA;
(x) all property (including the right to receive
Liquidation Proceeds and Recoveries and Financed Vehicles and the proceeds
thereof acquired by the Seller pursuant to the terms of an Initial
Receivable that is a Final Payment Receivable), guarantees and other
collateral securing an Initial Receivable (other than an Initial Receivable
purchased by the Servicer or repurchased by the Seller);
(xi) all rebates of premiums and other amounts
relating to insurance policies and other items financed under the Initial
Receivables in effect as of the Initial Cutoff Date; and
(xii) all present and future claims, demands, causes
of action and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every
kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
(b) Subject to satisfaction of the conditions set forth
in Section 2.1(d), in consideration of the Indenture Trustee's delivery on
or prior to any Subsequent Transfer Date to the Seller of the amount
described in Section 4.11(a) to be delivered to the Seller, the Seller
shall, pursuant to a Second-Tier Subsequent Assignment, irrevocably sell,
transfer, assign and otherwise convey to the Trust, without recourse
(subject to the obligations herein), on each Subsequent Transfer Date, all
right, title and interest of the Seller, whether now owned or hereafter
acquired, in, to and under the following:
(i) the Subsequent Receivables listed on Schedule A
to the related Second-Tier Subsequent Assignment;
(ii) with respect to the Subsequent Receivables that
are Actuarial Receivables, monies due thereunder on or after the related
Subsequent Cutoff Date (including Payaheads) and, with respect to
Subsequent Receivables that are Simple Interest Receivables, monies
received thereunder on or after the related Subsequent Cutoff Date;
(iii) the security interests in Financed Vehicles
granted by Obligors pursuant to the Subsequent Receivables and any other
interest of the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to
such Subsequent Receivables from claims on any physical damage, theft,
credit life or disability insurance policies covering the related Financed
Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to
such Subsequent Receivables from recourse to Dealers thereon pursuant to
Dealer Agreements;
(vi) all of the Seller's rights to the Receivable
Files that relate to such Subsequent Receivables;
(vii) all payments and proceeds with respect to such
Subsequent Receivables held by the Servicer;
(viii) all property (including the right to receive
Liquidation Proceeds and Recoveries and Financed Vehicles and the proceeds
thereof acquired by the Seller pursuant to the terms of a Subsequent
Receivable that is a Final Payment Receivable), guarantees and other
collateral securing a Subsequent Receivable (other than a Subsequent
Receivable purchased by the Servicer or repurchased by the Seller);
(ix) all of the Seller's rights under the related
First-Tier Subsequent Assignment;
(x) all rebates of premiums and other amounts
relating to insurance policies and other items financed under such
Subsequent Receivables in effect as of the related Subsequent Cutoff Date;
and
(xi) all present and future claims, demands, causes
of action and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every
kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
(c) It is the intention of the Seller and the Trust that
the transfer of the Trust Property contemplated by Section 2.1(a) and any
Second-Tier Subsequent Assignments executed pursuant to Section 2.1(b)
constitute sales of the Trust Property from the Seller to the Trust,
conveying good title to the Trust Property free and clear of any liens and,
in the event of the filing of a bankruptcy petition by or against the
Seller under any bankruptcy or similar law, that the Trust Property shall
not be part of the Seller's estate. However, in the event that such
transfer is deemed to be a pledge, the Seller hereby grants to the Trust a
first priority security interest in all of the Seller's right, title and
interest in, to and under the Trust Property, and all proceeds thereof, to
secure a loan deemed to have been made by the Trust to the Seller in an
amount equal to the sum of the initial principal amount of the Notes plus
accrued interest thereon and the Initial Certificate Balance.
(d) The Seller shall sell, transfer, assign and otherwise
convey to the Trust on any Subsequent Transfer Date the Subsequent
Receivables and the other property and rights related thereto described in
Section 2.1(b) only upon the satisfaction of each of the following
conditions on or prior to such Subsequent Transfer Date:
(i) the Seller shall have provided the Indenture
Trustee, the Owner Trustee and the Rating Agencies (A) written
notification of the addition of such Subsequent Receivables at
least five Business Days prior to the Subsequent Transfer Date and
(B) on or prior to the Subsequent Transfer Date, a statement
listing the approximate aggregate Principal Balance of such
Subsequent Receivables as of the related Subsequent Cutoff Date
and any other information reasonably requested by any of the
foregoing;
(ii) the Seller shall have delivered to each of the
Owner Trustee and the Indenture Trustee a duly executed written
assignment in substantially the form of Exhibit E hereto (the
"Second-Tier Subsequent Assignment"), which shall include a
Schedule A attached thereto listing the related Subsequent
Receivables;
(iii) the Seller shall, to the extent required by
Section 4.2, have deposited in the Collection Account all
collections in respect of the Subsequent Receivables that are
property of the Trust;
(iv) as of such Subsequent Transfer Date: (A) the
Seller shall not be insolvent and shall not become insolvent as a
result of the transfer of Subsequent Receivables on such
Subsequent Transfer Date, (B) the Seller shall not intend to incur
or believe that it would incur debts that would be beyond the
Seller's ability to pay as such debts matured, (C) such transfer
shall not be made by the Seller with actual intent to hinder,
delay or defraud any Person and (D) the assets of the Seller shall
not constitute unreasonably small capital to carry out its
business as conducted;
(v) the applicable Subsequent Reserve Account Deposit
for such Subsequent Transfer Date shall have been made;
(vi) the applicable Subsequent Payahead Account
Deposit for such Subsequent Transfer Date shall have been made;
(vii) the applicable Subsequent Yield Supplement
Account Deposit for such Subsequent Transfer Date shall have been
made;
(viii) the Receivables, including the Subsequent
Receivables to be conveyed to the Trust on the Subsequent Transfer
Date, shall meet the following criteria as of the related
Subsequent Cutoff Date: (A) the weighted average number of
payments remaining until the maturity of the Receivables will not
be more than 72 payments; (B) the aggregate principal balance of
the Last Scheduled Payments as a percentage of the Pool Balance
will not be greater than 7.15%; (C) if any Receivable is a
Deferred Payment Receivable, the deferral period will not extend
for more than 450 days after origination of that Receivable; (D)
the weighted average FICO score of the obligors on the Receivables
will not be less than 673; (E) the aggregate principal balance of
the Receivables relating to new automobiles and sports utility
vehicles will be at least 98.18%, substantially all of which will
be manufactured or distributed by Mitsubishi Motors; (F) the
aggregate principal balance of the limited credit experience
Receivables as a percentage of the aggregate principal balance of
the Receivables will not be more than 5.70%; and (G) the weighted
average annual percentage rate of the Receivables will be at least
7.25%;
(ix) the Subsequent Receivables to be conveyed to the
Trust on the Subsequent Transfer Date will have a weighted average
deferral period, as of the related Subsequent Cutoff Date, that is
less than or substantially the same as the weighted average
deferral period of the Initial Receivables as of the Initial
Cutoff Date;
(x) the Pre-Funding Period shall not have terminated
prior to the Subsequent Transfer Date;
(xi) each of the representations and warranties made
by the Seller pursuant to Sections 2.2 and 6.1 of this Agreement
and by MMCA pursuant to Section 3.2 of the Purchase Agreement,
with respect to the Seller, MMCA or the Subsequent Receivables, as
applicable, shall be true and correct as of the date as of which
such representations and warranties are made;
(xii) the Seller shall, at its own expense, on or
prior to the Subsequent Transfer Date, indicate in its computer
files that the Subsequent Receivables have been sold to the Trust
pursuant to this Agreement and the related Second-Tier Subsequent
Assignment and deliver to the Owner Trustee the related Schedule
of Subsequent Receivables certified by an officer of the Seller to
be true, correct and complete;
(xiii) the Seller shall have taken any action
required to maintain the first perfected ownership interest of the
Trust in the Trust Property and the first perfected security
interest of the Indenture Trustee in the Collateral;
(xiv) no selection procedures believed by the Seller
to be adverse to the interests of the Trust, the Noteholders or
the Certificateholders shall have been utilized in selecting the
Subsequent Receivables;
(xv) the addition of the Subsequent Receivables will
not result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(xvi) the Seller shall have delivered to the Owner
Trustee, the Indenture Trustee and the Rating Agencies an Opinion
of Counsel relating to the security interests of the Owner Trustee
and the Indenture Trustee in the Subsequent Receivables in
substantially the form of the Opinion of Counsel delivered the
Owner Trustee, the Indenture Trustee and the Rating Agencies
regarding such matters on the Closing Date;
(xvii) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Officer's Certificate
confirming the satisfaction of each condition specified in this
Section 2.1(d) (substantially in the form attached as Annex A to
the form of Second-Tier Subsequent Assignment attached hereto as
Exhibit E);
(xviii) all the conditions to the transfer of the
Subsequent Receivables by MMCA to the Seller specified in Section
4.1(b) of the Purchase Agreement shall be satisfied; and
(xix) the Servicer shall have provided to each of the
Trust and the Indenture Trustee the Officer's Certificate required
to be provided by the Servicer pursuant to Section 2.4.
(e) The sales, transfers, assignments and conveyances of
the Trust Property made under Section 2.1(a) shall not constitute and are
not intended to result in an assumption by the Trust of any obligation of
the Seller to the Obligors, the Dealers or any other Person in connection
with the Receivables and the other Trust Property or any agreement,
document or instrument related thereto.
Section 2.2 Representations and Warranties of the Seller
as to the Receivables. The Seller makes the following representations and
warranties as to the Receivables on which the Trust relies in accepting the
Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement in the case of the Initial Receivable and as
of the applicable Subsequent Transfer Date in the case of the Subsequent
Receivables, except in each case to the extent otherwise provided in the
following representations and warranties, but shall survive the sale,
transfer and assignment of the Receivables to the Trust and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(i) Characteristics of Receivables. Each Receivable
(a) shall have been originated (x) in the United States of America
by a Dealer for the consumer or commercial sale of a Financed
Vehicle in the ordinary course of such Dealer's business or (y) by
MMCA in connection with the refinancing of a motor vehicle retail
installment sale contract of the type described in subclause (x)
above, shall have been fully and properly executed by the parties
thereto, shall have been purchased by the Seller from MMCA, which
in turn shall have purchased such Receivable from such Dealer
under an existing Dealer Agreement with MMCA (unless such
Receivable was originated by MMCA in connection with a
refinancing), and shall have been validly assigned by such Dealer
to MMCA in accordance with its terms (unless such Receivable was
originated by MMCA in connection with a refinancing), which in
turn shall have been validly assigned by MMCA to the Seller in
accordance with its terms, (b) shall have created or shall create
a valid, binding, subsisting and enforceable first priority
security interest in favor of MMCA on the related Financed
Vehicle, which security interest has been validly assigned by MMCA
to the Seller, which in turn shall be validly assigned by the
Seller to the Trust and by the Trust to the Indenture Trustee, (c)
shall contain customary and enforceable provisions such that the
rights and remedies of the holder thereof shall be adequate for
realization against the collateral of the benefits of the
security, (d) in the case of Standard Receivables, shall provide
for monthly payments that fully amortize the Amount Financed by
maturity of the Receivable and yield interest at the APR, (e) in
the case of Balloon Payment Receivables and Final Payment
Receivables, shall provide for a series of fixed level monthly
payments and a larger payment due after such level monthly
payments that fully amortize the Amount Financed by maturity and
yield interest at the APR, (f) shall provide for, in the event
that such contract is prepaid, a prepayment that fully pays the
Principal Balance and all accrued and unpaid interest thereon, (g)
is a retail installment sale contract, (h) is secured by a new or
used automobile or sports-utility vehicle and (i) is an Actuarial
Receivable or a Simple Interest Receivable (and may also be a
Balloon Payment Receivable or a Final Payment Receivable).
(ii) Schedule of Receivables. The information set
forth in the related Schedule of Receivables shall be true and
correct in all material respects as of the opening of business on
the related Cutoff Date and no selection procedures believed to be
adverse to the Noteholders or the Certificateholders shall have
been utilized in selecting the Receivables from those receivables
which meet the criteria contained herein. The compact disk or
other listing regarding the Receivables made available to the
Trust and its assigns (which compact disk or other listing is
required to be delivered as specified herein) is true and correct
in all respects.
(iii) Compliance with Law. Each Receivable and the
sale of the related Financed Vehicle shall have complied, at the
time it was originated or made, and shall comply on the Closing
Date (with respect to each Initial Receivable) or the related
Subsequent Transfer Date (with respect to each Subsequent
Receivable) in all material respects with all requirements of
applicable Federal, state, and local laws, and regulations
thereunder, including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair
Credit Reporting Act, the Fair Credit Billing Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldiers' and Sailors' Civil Relief Act
of 1940, the Texas Consumer Credit Code, and State adaptations of
the Uniform Consumer Credit Code, and other consumer credit laws
and equal credit opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall
represent the genuine, legal, valid and binding payment obligation
in writing of the Obligor, enforceable by the holder thereof in
accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and by
general principles of equity.
(v) No Government Obligor. None of the Receivables is
due from the United States of America or any state or from any
agency, department or instrumentality of the United States of
America or any state.
(vi) Security Interest in Financed Vehicle.
Immediately prior to the sale, assignment, and transfer thereof
pursuant to the Purchase Agreement, each Receivable shall be
secured by a validly perfected first priority security interest in
the related Financed Vehicle in favor of MMCA as secured party
and, at such time as enforcement of such security interest is
sought, there shall exist a valid, subsisting and enforceable
first priority perfected security interest in such Financed
Vehicle for the benefit of the Trust (subject to any statutory or
other lien arising by operation of law after the Closing Date
(with respect to each Initial Receivable) or the related
Subsequent Transfer Date (with respect to each Subsequent
Receivable) which is prior to such security interest), or all
necessary and appropriate action with respect to such Receivables
shall have been taken to perfect a first priority security
interest in such Financed Vehicle for the benefit of the Trust.
(vii) Receivables in Force. No Receivable shall have
been satisfied, subordinated, or rescinded, nor shall any Financed
Vehicle have been released from the Lien granted by the related
Receivable in whole or in part, which security interest shall be
assignable by MMCA to the Seller and by the Seller to the Trust.
(viii) No Waiver. No provision of a Receivable shall
have been waived in such a manner that such Receivable fails to
meet all of the representations and warranties made by the Seller
in this Section 2.2 with respect thereto.
(ix) No Defenses. No right of rescission, setoff,
counterclaim, or defense shall have been asserted or threatened
with respect to any Receivable.
(x) No Liens. To the best of the Seller's knowledge,
no liens or claims shall have been filed for work, labor, or
materials relating to a Financed Vehicle that shall be liens prior
to, or equal or coordinate with, the security interest in the
Financed Vehicle granted by the Receivable.
(xi) No Default; Repossession. Except for payment
defaults continuing for a period of not more than 30 days or
payment defaults of 10% or less of a Scheduled Payment, in each
case as of the related Cutoff Date, or the failure of the Obligor
to maintain satisfactory physical damage insurance covering the
Financed Vehicle, no default, breach, violation, or event
permitting acceleration under the terms of any Receivable shall
have occurred; no continuing condition that with notice or the
lapse of time or both would constitute a default, breach,
violation, or event permitting acceleration under the terms of any
Receivable shall have arisen; the Seller shall not have waived any
of the foregoing; and no Financed Vehicle shall have been
repossessed as of the related Cutoff Date.
(xii) Insurance. Each Contract shall require the
related Obligor to maintain physical damage insurance (which
insurance shall not be force placed insurance) covering the
Financed Vehicle, in the amount determined by MMCA in accordance
with its customary procedures.
(xiii) Title. It is the intention of the Seller that
each transfer and assignment of the Receivables herein
contemplated constitute a sale of such Receivables from the Seller
to the Trust and that the beneficial interest in, and title to,
such Receivables not be part of the Seller's estate in the event
of the filing of a bankruptcy petition by or against the Seller
under any bankruptcy law. No Receivable has been sold,
transferred, assigned, or pledged by the Seller to any Person
other than the Trust. Immediately prior to each transfer and
assignment of the Receivables herein contemplated, the Seller had
good and marketable title to such Receivables free and clear of
all Liens, encumbrances, security interests, and rights of others
and, immediately upon the transfer thereof, the Trust shall have
good and marketable title to such Receivables, free and clear of
all Liens, encumbrances, security interests, and rights of others;
and the transfer has been perfected by all necessary action under
the Relevant UCC.
(xiv) Valid Assignment. No Receivable shall have been
originated in, or shall be subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment of
such Receivable under this Agreement or the Indenture or pursuant
to transfers of the Certificates shall be unlawful, void, or
voidable. The Seller has not entered into any agreement with any
obligor that prohibits, restricts or conditions the assignment of
any portion of the Receivables.
(xv) All Filings Made. All filings (including,
without limitation, filings under the Relevant UCC) necessary in
any jurisdiction to give the Trust a first priority perfected
security interest in the Receivables, and to give the Indenture
Trustee a first priority perfected security interest therein,
shall be made within 10 days of the Closing Date (with respect to
the Initial Receivables) or 10 days of the related Subsequent
Transfer Date (with respect to the Subsequent Receivables).
(xvi) Chattel Paper. Each Receivable constitutes
"chattel paper" as defined in the Relevant UCC.
(xvii) One Original. There shall be only one original
executed copy of each Receivable in existence.
(xviii) Principal Balance. Each Receivable had an
original principal balance (net of unearned precomputed finance
charges) of not more than $60,000, and a remaining Principal
Balance as of the related Cutoff Date of not less than $100.
(xix) No Bankrupt Obligors. No Receivable was due
from an Obligor who, as of the related Cutoff Date, was the
subject of a proceeding under the Bankruptcy Code of the United
States or was bankrupt.
(xx) New and Used Vehicles. Approximately 98.18% of
the Initial Pool Balance, constituting approximately 96.88% of the
total number of the Initial Receivables, relate to new automobiles
and sports-utility vehicles, substantially all of which were
manufactured or distributed by Mitsubishi Motors. Approximately
1.50% of the Initial Pool Balance, constituting approximately
2.43% of the total number of Initial Receivables, relate to used
automobiles and sports-utility vehicle, substantially all of which
were manufactured or distributed by Mitsubishi Motors.
Approximately 0.32% of the Initial Pool Balance, constituting
approximately 0.70% of the total number of Initial Receivables,
relate to program automobiles and sports-utility vehicles,
substantially all of which were manufactured or distributed by
Mitsubishi Motors.
(xxi) Origination. Each Receivable shall have an
origination date during or after January 27, 1999.
(xxii) Maturity of Receivables. Each Receivable shall
have, as of the related Cutoff Date, not more than 72 remaining
Scheduled Payments due under the Receivable.
(xxiii) Weighted Average Maturity of Receivables. As
of the Initial Cutoff Date, the weighted average number of
Scheduled Payments remaining until the maturity of the Initial
Receivables shall be not more than 72 Scheduled Payments. As of
the related Subsequent Cutoff Date, the weighted average number of
Scheduled Payments remaining until the maturity of any Subsequent
Receivables transferred to the Trust on the same Subsequent
Transfer Date shall be not more than 72 Scheduled Payments.
(xxiv) Weighted Average Deferral Period. With respect
to Subsequent Receivables transferred to the Issuer on the related
Subsequent Transfer Date, the weighted average deferral period
will be less than or substantially the same as the weighted
average deferral period of the Initial Receivables as of the
Initial Cutoff Date.
(xxv) Annual Percentage Rate. Each Receivable shall
have an APR of at least 0% and not more than 30%.
(xxvi) Scheduled Payments. No Receivable shall have a
payment of which more than 10% of such payment is more than 30
days overdue as of the related Cutoff Date.
(xxvii) Location of Receivable Files. The Receivable
Files shall be kept at one or more of the locations listed in
Schedule B hereto.
(xxviii) Capped Receivables and Simple Interest
Receivables. Except to the extent that there has been no material
adverse effect on Noteholders or Certificateholders, each Capped
Receivable has been treated consistently by the Seller and the
Servicer as a Simple Interest Receivable and payments with respect
to each Simple Interest Receivable have been allocated
consistently in accordance with the Simple Interest Method.
(xxix) Agreement. The representations and warranties
of the Seller in Section 6.1 are true and correct.
(xxx) Other Data. The tabular data and the numerical
data relating to the characteristics of the Receivables contained
in the Prospectus (as defined in the Purchase Agreement) are true
and correct in all material respects.
(xxxi) Last Scheduled Payments. The aggregate
principal balance of the Last Scheduled Payments of Balloon
Payment Receivables and Final Payment Receivables that are Initial
Receivables, as a percentage of the Initial Pool Balance as of the
Initial Cutoff Date, shall be not greater than 7.15%. The
aggregate principal balance of the Last Scheduled Payments of
Balloon Payment Receivables and Final Payment Receivables that are
Subsequent Receivables sold to the Purchaser on a Subsequent
Transfer Date, as of the related Subsequent Cutoff Date, as a
percentage of the aggregate principal balance of all of such
Subsequent Receivables as of such related Subsequent Cutoff Date,
shall be not greater than 7.15%.
(xxxii) Receivable Yield Supplement Amounts. An
amount equal to the sum of all projected Yield Supplement Amounts
for all future Payment Dates with respect to each Deferred Payment
Receivable and each Deferred Balloon Payment Receivable, assuming
that no prepayments are made on the Deferred Payment Receivable or
the Deferred Balloon Payment Receivable, as the case may be, has
been deposited to the Yield Supplement Account on or prior to the
Closing Date or the related Subsequent Transfer Date, as
applicable.
(xxxiii) Prepaid Receivables. No Receivable shall
have been pre-paid by more than six monthly payments as of the
related Cutoff Date.
(xxxiv) Limited Credit Experience. The aggregate
principal balance of the Receivables on which the Obligor has
limited credit experience, as a percentage of the aggregate
principal balance of all Receivables, in each case as of the
Cutoff Date, shall be not greater than 5.70%.
(xxxv) Deferred Payment Receivables. As of the
Initial Cutoff Date, $128,402,141.03 total Principal Balance of
Deferred Payment Receivables included in the Initial Receivables
had a first payment that, as of the date of inception of the
Receivable, was deferred for 300 days or greater. As of the
Initial Cutoff Date, $50,240,124.87 total Principal Balance of
Deferred Payment Receivables included in the Initial Receivables
had a first payment that, as of the date of inception of the
Receivable, was deferred for a period of between 200 and 299 days.
As of the Initial Cutoff Date $30,120,031.55 total Principal
Balance of Deferred Payment Receivables included in the Initial
Receivables had a first payment that, as of the date of inception
of the Receivable, was deferred for a period of between 100 and
199 days. As of the Initial Cutoff Date $6,761,295.64 total
Principal Balance of Deferred Payment Receivables included in the
Initial Receivables had a first payment that, as of the date of
inception of the Receivable, was deferred for a period of 99 days
or less. In no case will the first payment on a Deferred Payment
Receivable be due later than 480 days after the date of inception
of that Receivable.
(xxxvi) Long Deferment Period Receivables. As of the
Initial Cutoff Date $128,402,141.03 total Principal Balance of
Deferred Payment Receivables included in the Initial Receivables
were Long Deferment Period Receivables.
(xxxvii) Deferred Balloon Payment Receivables. As of
the Initial Cutoff Date, $6,761,295.64 total principal balance of
Deferred Balloon Payment Receivables were originated with a
deferral period of 90 days, and $30,120,031.55 total principal
balance of Deferred Balloon Payment Receivables were originated
with a deferral period of 180 days.
(xxxviii) Modified Receivables. The APR of any
Modified Receivable is equal to the APR of the related Deferred
Payment Receivable. The date on which the final Scheduled Payment
is due on a Modified Receivable is not different than the date set
forth in the related Contract as the date on which the final
Scheduled Payment under such Receivable is due. No Deferred
Payment Receivable became a Modified Receivable after 90 days
following the date the first Scheduled Payment on the Receivable
was due.
Section 2.3 Repurchase upon Breach. The Seller, the
Servicer, or the Owner Trustee, as the case may be, shall inform the other
parties to this Agreement, the Indenture Trustee and MMCA promptly, in
writing, upon the discovery of any breach or failure to be true of the
representations and warranties made by the Seller pursuant to Section 2.2.
If the breach or failure shall not have been cured by the close of business
on the last day of the Collection Period which includes the 60th day after
the date on which the Seller becomes aware of, or receives written notice
from the Owner Trustee or the Servicer of, such breach or failure, and such
breach or failure materially and adversely affects the interest of the
Trust in a Receivable, the Seller shall repurchase from the Trust such
Receivable, on the Payment Date immediately following such Collection
Period. In consideration of the repurchase of a Receivable hereunder, the
Seller shall remit the Purchase Amount of such Receivable in the manner
specified in Section 4.5(a). The sole remedy of the Trust, the Owner
Trustee, the Indenture Trustee, the Noteholders and the Certificateholders
with respect to a breach or failure to be true of the representations and
warranties made by the Seller pursuant to Section 2.2 shall be to require
the Seller to repurchase Receivables pursuant to this Section 2.3 and to
enforce the obligation of MMCA to the Seller to repurchase such Receivable
pursuant to the Purchase Agreement. Neither the Owner Trustee nor the
Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 2.3 or the
eligibility of any Receivable for purposes of this Agreement.
Section 2.4 Custody of Receivable Files. To assure
uniform quality in servicing the Receivables and to reduce administrative
costs, the Trust, upon the execution and delivery of this Agreement, hereby
revocably appoints the Servicer as its agent, and the Servicer hereby
accepts such appointment, to act as custodian on behalf of the Trust and
the Indenture Trustee of the following documents or instruments, which are
hereby constructively delivered to the Indenture Trustee, as pledgee of the
Trust pursuant to the Indenture (or, in the case of the Subsequent
Receivables, will as of the applicable Subsequent Transfer Date be
constructively delivered to the Indenture Trustee, as pledgee of the Trust
pursuant to the Indenture), with respect to each Receivable (collectively,
a "Receivable File"):
(i) the single original of the Receivable;
(ii) the original credit application fully executed
by the Obligor or a photocopy thereof or a record thereof on a
computer file tape, microfiche or other electronic medium;
(iii) the original certificate of title or such other
documents that the Servicer or MMCA shall keep on file, in
accordance with its customary practices and procedures, evidencing
the security interest of MMCA in the Financed Vehicle;
(iv) documents evidencing the existence, at the time
of origination of the Receivable, of any insurance covering the
Financed Vehicle; and
(v) any and all other documents (including any
computer tape, microfiche or other electronic medium) that the
Servicer or the Seller shall keep on file, in accordance with its
customary procedures, relating to a Receivable, an Obligor, or a
Financed Vehicle.
On the Closing Date (with respect to the Initial
Receivables) and each Subsequent Transfer Date (with respect to the related
Subsequent Receivables), the Servicer shall provide an Officer's
Certificate to the Trust and the Indenture Trustee confirming that the
Servicer has received, on behalf of the Trust and the Indenture Trustee,
all the documents and instruments necessary for the Servicer to act as the
agent of the Trust and the Indenture Trustee for the purposes set forth in
this Section 2.4, including the documents referred to herein, and the
Trust, the Owner Trustee and the Indenture Trustee are hereby authorized to
rely on such Officer's Certificate.
Section 2.5 Duties of Servicer as Custodian
(a)Safekeeping. The Servicer, in its capacity as custodian, shall hold the
Receivable Files for the benefit of the Trust and the Indenture Trustee and
maintain such accurate and complete accounts, records, and computer systems
pertaining to each Receivable File as shall enable the Servicer and the
Trust to comply with the terms and provisions of this Agreement, and the
Indenture Trustee to comply with the terms and conditions of the Indenture.
In performing its duties as custodian, the Servicer shall act with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the receivable files relating to all comparable
motor vehicle receivables that the Servicer services for itself or others.
In accordance with its customary practices and procedures with respect to
its retail installment sale contracts, the Servicer shall conduct, or cause
to be conducted, periodic audits of the Receivable Files held by it under
this Agreement, and of the related accounts, records, and computer systems,
in such a manner as shall enable the Trust or the Indenture Trustee to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Owner Trustee and the Indenture Trustee any failure
on its part to hold the Receivable Files and maintain its accounts,
records, and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be
deemed to require an initial review or any periodic review by the Trust,
the Owner Trustee or the Indenture Trustee of the Receivable Files and none
of the Trust, the Owner Trustee and the Indenture Trustee shall be liable
or responsible for any action or failure to act by the Servicer in its
capacity as custodian hereunder.
(b) Maintenance of and Access to Records. The Servicer
shall maintain each Receivable File at one of its offices specified in
Schedule B to this Agreement, or at such other office as shall be specified
to the Trust and the Indenture Trustee by written notice not later than 90
days after any change in location. The Servicer shall make available to the
Trust and the Indenture Trustee or its duly authorized representatives,
attorneys, or auditors a list of locations of the Receivable Files, and the
related accounts, records, and computer systems maintained by the Servicer
at such times as the Trust or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon written instructions from
the Indenture Trustee, the Servicer shall release any document in the
Receivable Files to the Indenture Trustee, the Indenture Trustee's agent,
or the Indenture Trustee's designee, as the case may be, at such place or
places as the Indenture Trustee may designate, as soon thereafter as is
practicable. Any document so released shall be handled by the Indenture
Trustee with due care and returned to the Servicer for safekeeping as soon
as the Indenture Trustee or its agent or designee, as the case may be,
shall have no further need therefor.
(d) Title to Receivables. The Servicer agrees that, in
respect of any Receivable held by the Servicer as custodian hereunder, the
Servicer will not at any time have or in any way attempt to assert any
interest in such Receivable or the related Receivable File, other than for
collecting or enforcing the Receivable for the benefit of the Trust and
that the entire equitable interest in such Receivable and the related
Receivable File shall at all times be vested in the Trust.
Section 2.6 Instructions; Authority to Act. The Servicer
shall be deemed to have received proper instructions with respect to the
Receivable Files upon its receipt of written instructions signed by a
Responsible Officer of the Indenture Trustee. A certified copy of excerpts
of authorizing resolutions of the Board of Directors of the Indenture
Trustee shall constitute conclusive evidence of the authority of any such
Responsible Officer to act and shall be considered in full force and effect
until receipt by the Servicer of written notice to the contrary given by
the Indenture Trustee.
Section 2.7 Custodian's Indemnification. The Servicer, in
its capacity as custodian, shall indemnify and hold harmless the Trust, the
Owner Trustee and the Indenture Trustee and each of their respective
officers, directors, employees and agents from and against any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses (including legal fees if any) of any kind whatsoever that may be
imposed on, incurred, or asserted against the Trust, the Owner Trustee and
the Indenture Trustee or any of their respective officers, directors,
employees and agents as the result of any act or omission by the Servicer
relating to the maintenance and custody of the Receivable Files; provided,
however, that the Servicer shall not be liable hereunder to the Owner
Trustee to the extent, but only to the extent, that such liabilities,
obligations, losses, compensatory damages, payments, costs or expenses
result from the willful misfeasance, bad faith, or negligence of the Owner
Trustee and shall not be liable hereunder to the Indenture Trustee to the
extent, but only to the extent, that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith, or negligence of the Indenture Trustee.
Section 2.8 Effective Period and Termination. The
Servicer's appointment as custodian shall become effective as of the
Initial Cutoff Date and shall continue in full force and effect until
terminated pursuant to this Section 2.8. If the Servicer shall resign as
Servicer under Section 7.5, or if all of the rights and obligations of the
Servicer shall have been terminated under Section 8.1, the appointment of
the Servicer as custodian hereunder may be terminated by the Indenture
Trustee or by the Holders of Notes evidencing not less than 25% of the
principal amount of the then Outstanding Notes or, with the consent of
Holders of Notes evidencing not less than 25% of the principal amount of
the then Outstanding Notes, by the Owner Trustee or by Holders of
Certificates evidencing not less than 25% of the Certificate Balance, in
the same manner as the Indenture Trustee or such Holders may terminate the
rights and obligations of the Servicer under Section 8.1. As soon as
practicable after any termination of such appointment, the Servicer shall
deliver, or cause to be delivered, the Receivable Files and the related
accounts and records maintained by the Servicer to the Indenture Trustee,
the Indenture Trustee's agent or the Indenture Trustee's designee at such
place or places as the Indenture Trustee may reasonably designate.
ARTICLE III - ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
Section 3.1 Duties of Servicer. (a) The Servicer, acting
alone and/or through subservicers as provided in this Section 3.1, shall
administer the Receivables with reasonable care. The Servicer's duties
shall include, but not be limited to, the collection and posting of all
payments, responding to inquiries by Obligors on the Receivables, or by
federal, state, or local governmental authorities, investigating
delinquencies, reporting tax information to Obligors, furnishing monthly
and annual statements to the Owner Trustee and the Indenture Trustee with
respect to distributions, providing collection and repossession services in
the event of Obligor default, coordinating or arranging inspection of
Financed Vehicles relating to Final Payment Receivables at the end of the
related Contract term, refinancing or selling Financed Vehicles relating to
Final Payment Receivables at the end of the related Contract term depending
upon the options chosen by the Obligors and making Advances pursuant to
Sections 4.4(a) and (c). The Servicer shall also administer and enforce all
rights and responsibilities of the holder of the Receivables provided for
in the Dealer Agreements, to the extent that such Dealer Agreements relate
to the Receivables, the Financed Vehicles or the Obligors. In performing
its duties as Servicer hereunder, the Servicer will exercise that degree of
skill and attention that the Servicer exercises with respect to all
comparable motor vehicle receivables that it services for itself or others.
Subject to Section 3.2, the Servicer shall follow its customary standards,
policies, practices and procedures in performing its duties hereunder as
Servicer. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered to execute and deliver, on behalf of
itself, the Trust, the Owner Trustee, the Indenture Trustee, the
Certificateholders, the Noteholders or any one or more of them, any and all
instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the
Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided, however, that notwithstanding the foregoing, the
Servicer shall not, except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under
any Receivable or waive the right to collect the unpaid balance (including
accrued interest) of any Receivable from the Obligor, except in connection
with a de minimis deficiency, Excess Wear and Tear, Excess Mileage or
disposition fees which the Servicer would not attempt to collect in
accordance with its customary procedures, in which event the Servicer shall
indemnify the Trust for such deficiency, Excess Wear and Tear, Excess
Mileage or disposition fee. If the Servicer shall commence a legal
proceeding to enforce a Receivable, the Owner Trustee shall thereupon be
deemed to have automatically assigned such Receivable to the Servicer,
which assignment shall be solely for purposes of collection. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may
not enforce a Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce the Receivable, the Owner Trustee
shall, at the Servicer's expense and direction, take steps to enforce the
Receivable, including bringing suit in its name or the names of the
Indenture Trustee, the Certificateholders, the Noteholders or any of them.
The Owner Trustee shall execute and deliver to the Servicer any powers of
attorney and other documents as shall be prepared by the Servicer and
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer, at its
expense, shall obtain on behalf of the Trust or the Owner Trustee all
licenses, if any, required by the laws of any jurisdiction to be held by
the Trust or the Owner Trustee in connection with ownership of the
Receivables, and shall make all filings and pay all fees as may be required
in connection therewith during the term hereof.
The Servicer may enter into subservicing agreements with
one or more subservicers for the servicing and administration of certain of
the Receivables and may perform its duties as Servicer hereunder utilizing
the employees of MMSA. Notwithstanding anything to the contrary herein, the
Servicer shall remain fully liable hereunder for the performance of the
duties of Servicer, including such duties as may be performed by employees
of MMSA or by any subservicer. In addition, any subservicer shall be and
shall remain, for so long as it is acting as subservicer, an Eligible
Servicer, and any fees paid to such subservicer shall be paid by the
Servicer and not out of the proceeds of the Trust, and any such subservicer
shall agree to service the Receivables in a manner consistent with the
terms of this Agreement.
(b) References in this Agreement to actions taken, to be
taken, permitted to be taken, or restrictions on actions permitted to be
taken by the Servicer in servicing the Receivables and other actions taken,
to be taken, permitted to be taken, or restrictions on actions to be taken
with respect to the Trust Property shall include actions taken, to be
taken, permitted to be taken, or restrictions on actions permitted to be
taken by a subservicer on behalf of the Servicer and references herein to
payments received by the Servicer shall include payments received by a
subservicer, irrespective of whether such payments are actually deposited
in the Collection Account by such subservicer. Any such subservicing
agreement will contain terms and provisions substantially identical to the
terms and provisions of this Agreement and such other terms and provisions
as are not inconsistent with this Agreement and as the Servicer and the
subservicer have agreed.
(c) The Servicer shall be entitled to terminate any
subservicing agreement in accordance with the terms and conditions of such
subservicing agreement and without any limitation by virtue of this
Agreement; provided, however, that, in the event of termination of any
subservicing agreement by the Servicer, the Servicer shall either act
directly as Servicer of the related Receivables or enter into a
subservicing agreement with a successor subservicer which will be bound by
the terms of the related subservicing agreement.
(d) As a condition to the appointment of any subservicer,
the Servicer shall notify the Owner Trustee, the Indenture Trustee and the
Rating Agencies in writing before such assignment becomes effective and
such subservicer shall be required to execute and deliver an instrument in
which it agrees that, for so long as it acts as subservicer of the
Receivables and the other Trust Property being serviced by it, the
covenants, conditions, indemnities, duties, obligations and other terms and
provisions of this Agreement applicable to the Servicer hereunder shall be
applicable to it as subservicer, that it shall be required to perform its
obligations as subservicer for the benefit of the Trust as if it were
Servicer hereunder (subject, however, to the right of the Servicer to
direct the performance of such obligations in accordance with this
Agreement) and that, notwithstanding any provision of a subservicing
agreement to the contrary, such subservicer shall be directly liable to the
Owner Trustee and the Trust (notwithstanding any failure by the Servicer to
perform its duties and obligations hereunder) for the failure by such
subservicer to perform its obligations hereunder or under any subservicing
agreement, and that (notwithstanding any failure by the Servicer to perform
its duties and obligations hereunder) the Owner Trustee may enforce the
provisions of this Agreement and any subservicing agreement against the
subservicer for the benefit of the Trust, without diminution of such
obligations or liabilities by virtue of any subservicing agreement, by
virtue of any indemnification provided thereunder or by virtue of the fact
that the Servicer is primarily responsible hereunder for the performance of
such duties and obligations, as if a subservicer alone were servicing and
administering, under this Agreement, the Receivables and the other Trust
Property being serviced by it under the subservicing agreement.
(e) Notwithstanding any subservicing agreement, any of
the provisions of this Agreement relating to agreements or arrangements
between the Servicer or a subservicer or reference to actions taken through
such Persons or otherwise, the Servicer shall remain obligated and liable
to the Trust and the Owner Trustee for the servicing and administering of
the Receivables and the other Trust Property in accordance with the
provisions of this Agreement (including for the deposit of payments
received by a subservicer, irrespective of whether such payments are
actually remitted to the Servicer or deposited in the Collection Account by
such subservicer; provided that if such amounts are so deposited, the
Servicer shall have no further obligation to do so) without diminution of
such obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from a subservicer, to the
same extent and under the same terms and conditions as if the Servicer
alone were servicing and administering the Receivables and the other Trust
Property. The Servicer shall be entitled to enter into any agreement with a
subservicer for indemnification of the Servicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
(f) In the event the Servicer for any reason no longer
shall be acting as such (including by reason of the occurrence of an Event
of Servicing Termination), the successor Servicer may, in its discretion,
thereupon assume all of the rights and obligations of the outgoing Servicer
under a subservicing agreement. In such event, the successor Servicer shall
be deemed to have assumed all of the Servicer's interest therein and to
have replaced the outgoing Servicer as a party to such subservicing
agreement to the same extent as if such subservicing agreement had been
assigned to the successor Servicer, except that the outgoing Servicer shall
not thereby be relieved of any liability or obligation on the part of the
outgoing Servicer to the subservicer under such subservicing agreement. The
outgoing Servicer shall, upon request of the Indenture Trustee, but at the
expense of the outgoing Servicer, deliver to the successor Servicer all
documents and records relating to each such subservicing agreement and the
Receivables and the other Trust Property then being serviced thereunder and
an accounting of amounts collected and held by it and otherwise use its
best efforts to effect the orderly and efficient transfer of the
subservicing agreement to the successor Servicer. In the event that the
successor Servicer elects not to assume a subservicing agreement, such
subservicing agreement shall be immediately cancellable by the successor
Servicer upon written notice to the subservicer and the outgoing Servicer,
at its expense, shall cause the subservicer to deliver to the successor
Servicer all documents and records relating to the Receivables and the
other Trust Property being serviced thereunder and all amounts held (or
thereafter received) by such subservicer (together with an accounting of
such amounts) and shall otherwise use its best efforts to effect the
orderly and efficient transfer of servicing of the Receivables and the
other Trust Property being serviced by such subservicer to the successor
Servicer.
(g) The Servicer shall be required to provide a computer
tape or compact disk each month to Lewtan Technologies, Inc. containing
information relating to the Receivables, including the name, address and
telephone number of each Obligor and the balance on the Receivables. Lewtan
Technologies shall provide a copy of the tape or disk to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee
upon the written request of the Indenture Trustee. Lewtan Technologies,
Inc. shall be paid a fee for such services and shall be reimbursed for any
expenses incurred by it in connection with such services. The Servicer
shall pay these amounts from its monthly Servicing Fee.
Section 3.2 Collection and Allocation of Receivable
Payments. (a) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as
and when the same shall become due and shall follow such collection
procedures as it follows with respect to all comparable motor vehicle
receivables that it services for itself or others. The Servicer shall
allocate collections between principal and interest in accordance with the
customary servicing practices and procedures it follows with respect to all
comparable motor vehicle receivables that it services for itself or others.
The Servicer shall not increase or decrease the number or amount of any
Scheduled Payment, or the Amount Financed under a Receivable or the APR of
a Receivable, or extend, rewrite or otherwise modify the payment terms of a
Receivable; provided, however, that:
(i) in the case of a Deferred Payment Receivable or a
Deferred Balloon Payment Receivable upon which the related Obligor
has made one or more partial pre-payments on or prior to the date
on which the first Scheduled Payment is due under the related
Contract, the Servicer may, at any time on or before 90 days after
that first Scheduled Payment is due, modify the terms of the
Receivable including by reducing the amount of each Scheduled
Payment; provided, that the Servicer may not change (x) the APR of
such Receivable, and (y) the date on which the final Scheduled
Payment under the Receivable is due from the date set forth in the
related Contract as the date on which such final Scheduled Payment
shall be due (any such Receivable, a "Modified Receivable"); and
(ii) the Servicer may extend the due date for one or
more payments due on a Receivable for credit-related reasons that
would be acceptable to the Servicer with respect to comparable
motor vehicle receivables that it services for itself and others
and in accordance with its customary standards, policies,
practices and procedures if the cumulative extensions with respect
to any Receivable shall not cause the term of such Receivable to
extend beyond June 2009 and that such extensions, in the
aggregate, do not exceed two months for each 12 months of the
original term of the Receivable.
In the event that the Servicer fails to comply with the
provisions of the preceding sentence, the Servicer shall be required to
purchase the Receivable or Receivables affected thereby, for the Purchase
Amount, in the manner specified in Section 3.7, as of the close of the
Collection Period in which such failure occurs. The Servicer may, in its
discretion, (but only in accordance with its customary standards, policies,
practices and procedures), waive any late payment charge or any other fee
that may be collected in the ordinary course of servicing a Receivable.
(b) With respect to each Final Payment Receivable, the
Servicer, in accordance with its customary servicing standards, policies,
practices and procedures, shall contact the Obligor on or before the due
date of the Last Scheduled Payment specified in the related Contract. If,
at such time, the Obligor under the Final Payment Receivable has notified
MMCA on behalf of the Trust that it elects to sell the Financed Vehicle to
MMCA on behalf of the Trust in accordance with the terms of the Receivable,
the Servicer shall, upon delivery of the Financed Vehicle by the Obligor to
MMCA on behalf of the Trust, inspect the Financed Vehicle for Excess Wear
and Tear and Excess Mileage, and determine the necessity of any repairs. If
the Servicer determines that such Financed Vehicle requires repairs as a
result of Excess Wear and Tear, the Servicer shall require the Obligor to
pay the estimated cost of such repairs to the Servicer. If the Obligor
disputes the Servicer's estimate of the cost of such repairs, the Obligor
may obtain, at the Obligor's own expense, a professional appraisal of the
Financed Vehicle's value by an independent third-party appraiser acceptable
to both the Obligor and the Servicer, and the cost of repairs for Excess
Wear and Tear as determined by such appraisal shall be binding on the
Obligor and the Servicer. The Servicer shall, pursuant to the related
Contract, offset (x) the cost of repairs for Excess Wear and Tear as
determined by the appraisal, any charges for Excess Mileage and the
disposition fee payable to the Servicer pursuant to the related Contract,
and the Principal Balance, accrued interest and any other amounts owed by
the Obligor on the Receivable against (y) the purchase price otherwise due
to the Obligor for the Financed Vehicle, and shall collect any excess of
(x) over (y) from the Obligor.
(c) In connection with an Obligor's transfer of a
Financed Vehicle to MMCA on behalf of the Trust in satisfaction of its
obligation to pay the Last Scheduled Payment under a Final Payment
Receivable, pursuant to the terms of the Contract related to such Last
Scheduled Payment, the Servicer shall require the Obligor to pay a
disposition fee (which the Servicer will retain as servicing compensation),
whereupon the Servicer shall take possession of the related Financed
Vehicle and shall prepare such Financed Vehicle for sale at auction or
otherwise in accordance with the Servicer's customary servicing standards,
policies, practices and procedures.
(d) Proceeds received by the Servicer from the payment by
an Obligor of a Financed Vehicle of amounts attributable to Last Scheduled
Payments and other amounts (including Excess Wear and Tear and Excess
Mileage) owed by the Obligor and from the sale of a Financed Vehicle at
auction or otherwise constitute proceeds of Last Scheduled Payments and
collections on the Receivables, and shall be deposited into the Collection
Account. Following the sale of the Financed Vehicle, the Servicer, on
behalf of the Trust, shall deliver the related certificate of title to the
purchaser of such Financed Vehicle. Following the Servicer's receipt of
proceeds from the sale of such Financed Vehicle and amounts to be paid by
the Obligor pursuant to subparagraph (b) above, the Servicer shall record
on its books and records the termination of the Trust's ownership and
security interest in the related Final Payment Receivable (and shall
deliver copies thereof to the Indenture Trustee and the Owner Trustee upon
written request within 10 days of receipt of such request).
(e) If the Obligor under any Balloon Payment Receivable
or Final Payment Receivable has notified the Dealer that it desires to
refinance the amount that it owes on termination of the Receivable, MMCA
will, in accordance with its customary servicing standards, policies,
practices and procedures, make a decision to grant or deny credit, except
for Contracts for which the Obligors have the right to refinance without
such an assessment, in which case MMCA shall honor the Obligor's right to
refinance. If credit is denied, the Servicer shall require the Obligor to
satisfy its obligation to pay the remaining amounts owed in accordance with
the terms of the Balloon Payment Receivable or Final Payment Receivable. If
credit is granted, MMCA shall deposit an amount equal to the total amount
owed by the Obligor on the Receivable to the Collection Account. Upon
deposit of such amount into the Collection Account, the Trust's ownership
and security interest in the related Financed Vehicle shall terminate, and
the Trust will assign all interest in, to and under the Receivable and the
related Financed Vehicle to MMCA. The Servicer shall record such
termination on its books and records (and shall deliver copies thereof to
the Indenture Trustee and the Owner Trustee upon written request within 10
days of receipt of such request). If MMCA is no longer the Servicer, the
Trust or any Holder of the Certificates may make arrangements for the
successor Servicer or another party to provide refinancing of Last
Scheduled Payments to Obligors who desire to satisfy the Last Scheduled
Payment through refinancing and who meet such party's credit criteria, and
any reasonable costs and expenses of the successor Servicer or such third
party in determining whether to provide such refinancing shall be payable
from amounts, if any, which would otherwise be released from the Reserve
Account and paid to the Seller.
Section 3.3 Realization upon Receivables. (a) On behalf
of the Trust, the Servicer shall use reasonable efforts, in accordance with
the standard of care required by Section 3.1, to repossess or otherwise
convert the ownership of each Financed Vehicle securing a Defaulted
Receivable. In taking such action, the Servicer shall follow such customary
and usual practices and procedures as it shall deem necessary or advisable
in its servicing of comparable automotive receivables, and as are otherwise
consistent with the standard of care required under Section 3.1, which
shall include the exercise of any rights of recourse to Dealers under the
Dealer Agreements. The Servicer shall be entitled to recover all reasonable
expenses incurred by it in the course of repossessing and liquidating a
Financed Vehicle into cash proceeds, but only out of the cash proceeds of
such Financed Vehicle and any deficiency obtained from the Obligor. The
foregoing shall be subject to the provision that, in any case in which a
Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds (or Recoveries) of the
related Receivable by an amount equal to or greater than the amount of such
expenses.
(b) If the Servicer elects to commence a legal proceeding
to enforce a Dealer Agreement, the act of commencement shall be deemed to
be an automatic assignment from the Trust to the Servicer of the rights of
recourse under such Dealer Agreement. If, however, in any enforcement suit
or legal proceeding, it is held that the Servicer may not enforce a Dealer
Agreement on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer Agreement, the Owner Trustee, at the
Servicer's expense and direction, shall take such steps as the Servicer
deems necessary to enforce the Dealer Agreement, including bringing suit in
its name or the names of the Indenture Trustee, the Certificateholders, the
Noteholders or any of them.
Section 3.4 Physical Damage Insurance. The Servicer shall
follow its customary servicing procedures to determine whether or not each
Obligor shall have maintained physical damage insurance covering the
related Financed Vehicle.
Section 3.5 Maintenance of Security Interests in Financed
Vehicles. The Servicer, in accordance with the standard of care required
under Section 3.1, shall take such steps as are necessary to maintain
perfection of the security interest created by each Receivable in the
related Financed Vehicle. The Trust hereby authorizes the Servicer, and the
Servicer hereby agrees, to take such steps as are necessary to re-perfect
such security interest on behalf of the Trust and the Indenture Trustee in
the event the Servicer receives notice of, or otherwise has actual
knowledge of, the relocation of a Financed Vehicle or for any other reason.
Section 3.6 Covenants of Servicer. The Servicer hereby
makes the following covenants:
(a) Security Interest to Remain in Force. The Financed
Vehicle securing each Receivable will not be released from the security
interest granted by the Receivable in whole or in part, except as
contemplated herein.
(b) No Impairment. The Servicer will not (nor will it
permit any subservicer to) impair in any material respect the rights of the
Trust, the Owner Trustee, the Indenture Trustee, the Certificateholders or
the Noteholders in the Receivables or, subject to clause (c) below,
otherwise amend or alter the terms thereof if, as a result of such
amendment or alteration, the interests of the Trust, the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders hereunder
would be materially adversely affected.
(c) Amendments. The Servicer will not increase or
decrease the number or amount of Scheduled Payments or the Amount Financed
under a Receivable, or extend, rewrite or otherwise modify the payment
terms of a Receivable, except pursuant to Section 3.2(a).
Section 3.7 Purchase by Servicer upon Breach. The Seller,
the Servicer or the Owner Trustee, as the case may be, shall inform the
other parties to this Agreement promptly, in writing, upon the discovery of
any breach of Section 3.2(a), 3.5 or 3.6. If the breach shall not have been
cured by the last day of the Collection Period which includes the 60th day
after the date on which the Servicer becomes aware of, or receives written
notice of, such breach, and such breach materially and adversely affects
the interests of the Trust in a Receivable, the Servicer shall purchase
such Receivable or Receivables on the immediately succeeding Payment Date;
provided, however, that with respect to a breach of Section 3.2(a), the
Servicer shall repurchase the affected Receivable from the Trust at the end
of the Collection Period in which such breach occurs. In consideration of
the purchase of a Receivable hereunder, the Servicer shall remit the
Purchase Amount of such Receivable in the manner specified in Section
4.5(a). Except as provided in Section 7.2, the sole remedy of the Trust,
the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders against the Servicer with respect to a breach pursuant to
Section 3.2, 3.5 or 3.6 shall be to require the Servicer to repurchase
Receivables pursuant to this Section 3.7. Neither the Owner Trustee nor the
Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 3.7 or the
eligibility of any Receivable for purposes of this Agreement.
Section 3.8 Servicing Compensation. The "Servicing Fee"
with respect to a Collection Period shall be an amount equal to the product
of one-twelfth (1/12) of the sum of (x) 1% of the aggregate Principal
Balance of all Receivables other than Deferred Payment Receivables and
Deferred Balloon Payment Receivables and (y) 0.25% of the aggregate
Principal Balance of Deferred Payment Receivables and Deferred Balloon
Payment Receivables, in each case as of the first day of such Collection
Period. As additional servicing compensation, the Servicer shall also be
entitled to earnings (net of losses and investment expenses) on amounts on
deposit in the Payahead Account, disposition fees paid with respect to
Final Payment Receivables and any administrative fees and charges and all
late payment fees actually collected (from whatever source) on the
Receivables other than fees paid in connection with the extension or
deferral of payments on a Receivable (the "Supplemental Servicing Fee").
The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder (including fees and expenses of
the Owner Trustee and the Indenture Trustee (and any custodian appointed by
the Owner Trustee and the Indenture Trustee) and independent accountants,
any subservicer, taxes imposed on the Servicer or any subservicer (to the
extent not paid by such subservicer), expenses incurred in connection with
distributions and reports to the Certificateholders and the Noteholders,
and any fees and reimbursements for expenses paid to Lewtan Technologies,
Inc.), except expenses incurred in connection with realizing upon
Receivables under Section 3.3.
Section 3.9 Servicer's Certificate. On or before the
Determination Date immediately preceding each Payment Date, the Servicer
shall deliver to the Owner Trustee, each Paying Agent, the Indenture
Trustee and the Seller, with a copy to the Rating Agencies, a certificate
of a Servicing Officer substantially in the form of Exhibit A hereto (a
"Servicer's Certificate") and attached to a Servicer's report containing
all information necessary to make the transfers and distributions pursuant
to Sections 4.3, 4.4, 4.5, 4.6 and 4.7, together with the written
statements to be furnished by the Owner Trustee to Certificateholders
pursuant to Section 4.9 and by the Indenture Trustee to the Noteholders
pursuant to Section 4.9 hereof and Section 6.6 of the Indenture. Upon
written request of the Owner Trustee or the Indenture Trustee, the Servicer
also shall separately identify (by account number of the Receivable as it
appears in the related Schedule of Receivables) in a written notice to the
Owner Trustee or the Indenture Trustee, as the case may be, the Receivables
to be repurchased by the Seller or to be purchased by the Servicer, as the
case may be, on the related Payment Date, and, also upon written request of
one of the foregoing parties, each Receivable which became a Defaulted
Receivable during the related Collection Period. The Servicer shall deliver
to the Rating Agencies any information, to the extent it is available to
the Servicer, that the Rating Agencies reasonably request in order to
monitor the Trust.
Section 3.10 Annual Statement as to Compliance; Notice of
Event of Servicing Termination. (a) The Servicer shall deliver to the Owner
Trustee and the Indenture Trustee, on or before March 31 of each year,
commencing March 31, 2003, an Officer's Certificate, stating that (i) a
review of the activities of the Servicer during the preceding calendar year
(or such shorter period, with respect to the first such Officer's
Certificate) and of its performance of its obligations under this Agreement
has been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year (or such shorter
period with respect to the first such Officer's Certificate), or, if there
has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof.
A copy of such certificate shall be delivered by the Indenture Trustee to
each Noteholder, promptly following the Indenture Trustee's receipt of such
certificate, pursuant to Section 7.4 of the Indenture. In addition, a copy
of such certificate may be obtained by any Certificateholder by a request
in writing to the Owner Trustee or by any Person certifying that it is a
Note Owner by a request in writing to the Indenture Trustee, in either case
addressed to the applicable Corporate Trust Office. Upon the telephone
request of the Owner Trustee, the Indenture Trustee shall promptly furnish
the Owner Trustee a list of Noteholders as of the date specified by the
Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and the Rating Agencies, promptly upon having knowledge
thereof, but in no event later than five Business Days thereafter, written
notice in an Officer's Certificate of any event which constitutes or, with
the giving of notice or lapse of time or both, would become, an Event of
Servicing Termination under Section 8.1.
Section 3.11 Annual Independent Certified Public
Accountants' Reports. The Servicer shall cause a firm of independent
certified public accountants (who may also render other services to the
Servicer, the Seller or to MMCA) to deliver to the Owner Trustee and the
Indenture Trustee on or before March 31 of each year, commencing March 31,
2003, a report addressed to the Board of Directors of the Servicer with
respect to the preceding calendar year (or such shorter period, with
respect to the first such report) to the effect that such firm has audited
the financial statements of the Servicer and issued its report thereon and
that such audit (1) was made in accordance with generally accepted auditing
standards, (2) included tests relating to motor vehicle loans serviced for
others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the "Program"), to the extent the
procedures in such Program are applicable to the servicing obligations set
forth in this Agreement, and (3) except as described in the report,
disclosed no exceptions or errors in the records relating to automobile and
sports-utility vehicle loans serviced for others that such firm is required
to report under the Program. Such report shall also indicate that the firm
is independent with respect to the Seller and the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants. A copy of such report shall be delivered by
the Indenture Trustee to each Noteholder, promptly following the Indenture
Trustee's receipt of such report, pursuant to Section 7.4 of the Indenture.
In addition, a copy of such report may be obtained by any Certificateholder
by a request in writing to the Owner Trustee, or by any Person certifying
that it is a Note Owner by a request in writing to the Indenture Trustee,
in either case addressed to the applicable Corporate Trust Office.
Section 3.12 Access to Certain Documentation and
Information Regarding Receivables. The Servicer shall provide the
Certificateholders, the Indenture Trustee and the Noteholders with access
to the Receivable Files in the cases where the Certificateholders, the
Indenture Trustee or the Noteholders shall be required by applicable
statutes or regulations to have access to such documentation. Such access
shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the Servicer. Nothing in
this Section 3.12 shall affect the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information
as a result of such obligation shall not constitute a breach of this
Section 3.12. Any Certificateholder or Noteholder, by its acceptance of a
Certificate or Note, as the case may be, shall be deemed to have agreed to
keep any information obtained by it pursuant to this Section confidential,
except as may be required by applicable law.
Section 3.13 Reports to the Commission. The Servicer
shall, on behalf of the Trust, cause to be filed with the Commission any
periodic reports required to be filed under the provisions of the Exchange
Act, and the rules and regulations of the Commission thereunder. The Seller
shall, at its expense, cooperate in any reasonable request made by the
Servicer in connection with such filings.
Section 3.14 Reports to Rating Agencies. The Servicer
shall deliver to each Rating Agency, at such address as each Rating Agency
may request, a copy of all reports or notices furnished or delivered
pursuant to this Article and a copy of any amendments, supplements or
modifications to this Agreement and any subservicing agreement and any
other information reasonably requested by such Rating Agency to monitor
this transaction.
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 4.1 Accounts. (a) The Servicer shall, prior to
the Closing Date, establish and maintain a segregated trust account in the
name of the Indenture Trustee, at a Qualified Institution or Qualified
Trust Institution (which shall initially be the corporate trust department
of Bank of Tokyo-Mitsubishi Trust Company), which shall be designated as
the "Collection Account." The Collection Account shall be held in trust for
the benefit of the Noteholders and the Certificateholders. The Collection
Account shall be under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Collection
Account in accordance with the terms of this Agreement, the Indenture and
the Trust Agreement. All monies deposited from time to time in the
Collection Account shall be held by the Indenture Trustee as part of the
Trust Property and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant
to the first sentence of Section 4.2(a), all amounts held in the Collection
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
bank or trust company then maintaining the Collection Account, in Permitted
Investments that mature not later than the Business Day immediately prior
to the Payment Date for the Collection Period to which such amounts relate
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Collection Account shall be withdrawn from the Collection Account at
the written direction of the Servicer and shall be deposited in the
Certificate Distribution Account. In the event that the Collection Account
is no longer to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Collection
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(b) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the
Indenture Trustee, at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of
Bank of Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Pre-Funding Account." The Pre-Funding Account shall be held in trust for
the benefit of the Noteholders and the Certificateholders. The Pre-Funding
Account shall be under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Pre-Funding
Account in accordance with the terms of this Agreement and the other Basic
Documents. All monies deposited from time to time in the Pre-Funding
Account shall be held by the Indenture Trustee as part of the Trust
Property and all deposits to and withdrawals therefrom shall be made only
upon the terms and conditions of the Basic Documents.
All amounts held in the Pre-Funding Account shall, to the
extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Pre-Funding Account, in Permitted Investments that mature
not later than the Business Day immediately prior to each Payment Date and
such Permitted Investments shall be held until maturity. On the Business
Day preceding each Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account for deposit to the
Collection Account on such date an amount equal to the Pre-Funding Account
Investment Earnings, if any, for the related Collection Period. In the
event that the Pre-Funding Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance
as necessary, cause the Pre-Funding Account to be moved to a Qualified
Institution or a Qualified Trust Institution within 10 Business Days (or
such longer period not to exceed 30 calendar days as to which each Rating
Agency may consent).
With respect to any amounts, securities, investments,
financial assets and other property deposited in or credited to the
Pre-Funding Account:
(i) any such property that is a "financial asset" as
defined in Section 8-102(a)(9) of the Relevant UCC shall be
physically delivered to, or credited to an account in the name of,
the Qualified Institution or Qualified Trust Institution
maintaining the Pre-Funding Account, as applicable, in accordance
with such institution's customary procedures such that such
institution establishes a "securities entitlement" in favor of the
Indenture Trustee with respect thereto;
(ii) any such property that is held in deposit
accounts shall be held solely in the name of the Indenture Trustee
at one or more depository institutions having the Required Rating
and each such deposit account shall be subject to the exclusive
custody and control of the Indenture Trustee, and the Indenture
Trustee shall have sole signature authority with respect thereto;
and
(iii) except for any deposit accounts specified in
clause (ii) above, the Pre-Funding Account shall only be invested
in securities or in other assets which the Qualified Institution
or Qualified Trust Institution maintaining the Pre-Funding
Account, as applicable, agrees to treat as "financial assets" as
defined in Section 8-102(a)(9) of the Relevant UCC.
(c) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the
Indenture Trustee, at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of
Bank of Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Negative Carry Account." The Negative Carry Account shall be held in trust
for the exclusive benefit of the Noteholders. The Negative Carry Account
shall be under the sole dominion and control of the Indenture Trustee;
provided, that the Servicer may make deposits to and direct the Indenture
Trustee in writing to make withdrawals from the Negative Carry Account in
accordance with the terms of this Agreement and the other Basic Documents.
All monies deposited from time to time in the Negative Carry Account shall
be held by the Indenture Trustee as part of the Trust Property and all
deposits to and withdrawals therefrom shall be made only upon the terms and
conditions of the Basic Documents.
All amounts held in the Negative Carry Account shall, to
the extent permitted by applicable law, rules and regulations, be invested,
as directed in writing by the Servicer, by the bank or trust company then
maintaining the Negative Carry Account, in Permitted Investments that
mature not later than the Business Day immediately prior to each Payment
Date and such Permitted Investments shall be held until maturity. All
interest and other income (net of losses and investment expenses) on funds
on deposit in the Negative Carry Account shall be withdrawn from the
Negative Carry Account for deposit to the Collection Account or release to
the Seller at the time and in the manner provided in Section 4.12. In the
event that the Negative Carry Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance
as necessary, cause the Negative Carry Account to be moved to a Qualified
Institution or a Qualified Trust Institution within 10 Business Days (or
such longer period not to exceed 30 calendar days as to which each Rating
Agency may consent).
With respect to any amounts, securities, investments,
financial assets and other property deposited in or credited to the
Negative Carry Account:
(i) any such property that is a "financial asset" as
defined in Section 8-102(a)(9) of the Relevant UCC shall be
physically delivered to, or credited to an account in the name of,
the Qualified Institution or Qualified Trust Institution
maintaining the Negative Carry Account, as applicable, in
accordance with such institution's customary procedures such that
such institution establishes a "securities entitlement" in favor
of the Indenture Trustee with respect thereto;
(ii) any such property that is held in deposit
accounts shall be held solely in the name of the Indenture Trustee
at one or more depository institutions having the Required Rating
and each such deposit account shall be subject to the exclusive
custody and control of the Indenture Trustee and the Indenture
Trustee shall have sole signature authority with respect thereto;
and
except for any deposit accounts specified in clause (ii)
above, the Negative Carry Account shall only be invested in securities or
in other assets which the Qualified Institution or Qualified Trust
Institution maintaining the Negative Carry Account, as applicable, agrees
to treat as "financial assets" as defined in Section 8-102(a)(9) of the
Relevant UCC.
(d) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the
Indenture Trustee at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Note
Payment Account." The Note Payment Account shall be held in trust for the
exclusive benefit of the Noteholders. The Note Payment Account shall be
under the sole dominion and control of the Indenture Trustee. All monies
deposited from time to time in the Note Payment Account pursuant to this
Agreement and the Indenture shall be held by the Indenture Trustee as part
of the Trust Property and shall be applied as provided in this Agreement
and the Indenture. In the event that the Note Payment Account is no longer
to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's assistance as necessary, cause the Note Payment Account to be
moved to a Qualified Institution or a Qualified Trust Institution within 10
Business Days (or such longer period not to exceed 30 calendar days as to
which each Rating Agency may consent).
(e) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the Trust
at a Qualified Institution or Qualified Trust Institution (which shall
initially be Wilmington Trust Company), which shall be designated as the
"Certificate Distribution Account." Except as provided in the Trust
Agreement, the Certificate Distribution Account shall be held in trust for
the benefit of the Certificateholders. The Certificate Distribution Account
shall be under the sole dominion and control of the Owner Trustee; provided
that the Indenture Trustee may make deposits to such account in accordance
with the directions of the Servicer pursuant to this Agreement and the
Indenture. All monies deposited from time to time in the Certificate
Distribution Account pursuant to this Agreement and the Indenture shall be
held by the Owner Trustee as part of the Trust Property and shall be
applied as provided in this Agreement and the Trust Agreement. In the event
that the Certificate Distribution Account is no longer to be maintained at
Wilmington Trust Company, the Servicer shall, with the Owner Trustee's
assistance as necessary, cause the Certificate Distribution Account to be
moved to a Qualified Institution or a Qualified Trust Institution within 10
Business Days (or such longer period not to exceed 30 calendar days as to
which each Rating Agency may consent) and shall promptly notify the
Indenture Trustee of the account number and location of such account.
(f) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the
Indenture Trustee at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Payahead
Account." The Payahead Account shall be held in trust for the benefit of
the Noteholders and the Certificateholders. The Payahead Account shall be
under the sole dominion and control of the Indenture Trustee provided, that
the Servicer may make deposits to and direct the Indenture Trustee in
writing to make withdrawals from the Payahead Account in accordance with
this Agreement and the Indenture. All monies deposited from time to time in
the Payahead Account shall be held by the Indenture Trustee as part of the
Trust Property and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
On the Closing Date, the Seller shall deposit an amount
equal to the Initial Payahead Account Deposit into the Payahead Account
from the net proceeds of the sale of the Notes and the Certificates. On
each Subsequent Transfer Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account and deposit to the
Payahead Account an amount equal to the applicable Subsequent Payahead
Account Deposit.
If the Servicer is required to remit collections pursuant
to the first sentence of Section 4.2(a), all amounts held in the Payahead
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
bank or trust company then maintaining the Payahead Account, in Permitted
Investments that mature not later than the Business Day immediately prior
to the Payment Date for the Collection Period to which such amounts relate
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Payahead Account shall be withdrawn from the Payahead Account at the
direction of the Servicer and shall be paid to the Servicer as additional
servicing compensation. In the event that the Payahead Account is no longer
to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Payahead
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(g) Notwithstanding the provisions of clause (g) above,
for so long as (i) MMCA is the Servicer, (ii) the rating of MMCA's
short-term unsecured debt is at least "Prime-1" by Xxxxx'x, at least "A-1"
by S&P and at least "F1" by Fitch Ratings and (iii) no Events of Servicing
Termination shall have occurred (each, a "Monthly Remittance Condition"),
Payaheads need not be remitted to and deposited in the Payahead Account but
instead may be remitted to and held by the Servicer. So long as such
Monthly Remittance Conditions are met, the Servicer shall not be required
to segregate or otherwise hold separate any Payaheads remitted to the
Servicer as aforesaid but shall be required to remit Payaheads to the
Collection Account in accordance with Section 4.6(a)(i). At all times as
such Monthly Remittance Conditions are not met, the Servicer shall deposit
in the Payahead Account the amount of any Payaheads then held or received
by it. Notwithstanding the foregoing, if a Monthly Remittance Condition is
not satisfied, the Servicer may utilize, with respect to Payaheads, an
alternative remittance schedule (which may include the remittance schedule
utilized by the Servicer before the Monthly Remittance Condition became
unsatisfied), if the Servicer provides to the Owner Trustee and the
Indenture Trustee written confirmation from the Rating Agencies that such
alternative remittance schedule will not result in the downgrading or
withdrawal by the Rating Agencies of the ratings then assigned to the Notes
and the Certificates. The Owner Trustee and the Indenture Trustee shall not
be deemed to have knowledge of any event or circumstance under clauses (ii)
or (iii) of the first sentence of this Section 4.1(h) that would require
remittance of the Payaheads to the Payahead Account unless the Owner
Trustee or the Indenture Trustee has received written notice of such event
or circumstance from the Seller or the Servicer in an Officer's Certificate
or from the Holders of Notes evidencing not less than 25% of the principal
balance of the then Outstanding Notes or from the Holders of Certificates
evidencing not less than 25% of the Certificate Balance or unless a
Responsible Officer in the Corporate Trust Office with knowledge hereof and
familiarity herewith has actual knowledge of such event or circumstance.
(h) The Servicer shall be permitted to remit to any
Obligor, upon the request of such Obligor, the Payahead Balance with
respect to such Obligor's Receivable or such lesser amount as is requested
by such Obligor, in accordance with the Servicer's customary standards,
policies, practices and procedures, to the extent that such amount is not
then due on such Receivable. Upon any such remittance, the Payahead Balance
with respect to such Receivable shall be reduced by the amount of such
remittance.
Section 4.2 Collections. (a) Subject to the provisions of
subsection (b) below, the Servicer shall remit to the Collection Account
(i) all payments by or on behalf of the Obligors (including, subject to the
next two sentences, Payaheads on the Receivables, but excluding payments
with respect to Purchased Receivables and amounts included in the
Supplemental Servicing Fee), including amounts treated as collections on
Balloon Payment Receivables and Final Payment Receivables pursuant to
Section 3.2(d) and (ii) all Liquidation Proceeds and all Recoveries,
received by the Servicer during any Collection Period, as soon as
practicable, but in no event after the close of business on the second
Business Day after receipt thereof. Collections of Payaheads shall be
deposited in the Collection Account, pursuant to the preceding sentence for
purposes of administrative convenience only, pending determination of the
amount to be deposited in the Payahead Account (or in the event that the
Monthly Remittance Conditions are satisfied, remitted to the Servicer
pursuant to Section 4.1(h)), which amount shall be deposited in the
Payahead Account as soon as practicable but in no event later than the
Payment Date immediately following collection, and such amounts shall not
be transferred to the Collection Account until due.
MMCA, for so long as it is acting as the Servicer, may
make remittances of collections on a less frequent basis than that
specified in the immediately preceding paragraph. It is understood that
such less frequent remittances may be made only on the specific terms and
conditions set forth below in this Section 4.2(a) and only for so long as
such terms and conditions are fulfilled. Accordingly, notwithstanding the
provisions of the first sentence of this Section 4.2(a), the Servicer shall
remit collections received during a Collection Period to the Collection
Account in immediately available funds on the Business Day prior to the
related Payment Date but only for so long as each Monthly Remittance
Condition is satisfied. Notwithstanding the foregoing, if a Monthly
Remittance Condition is not satisfied, the Servicer may utilize an
alternative remittance schedule (which may include the remittance schedule
utilized by the Servicer before the Monthly Remittance Condition became
unsatisfied), if the Servicer provides to the Owner Trustee and the
Indenture Trustee written confirmation from the Rating Agencies that such
alternative remittance schedule will not result in the downgrading or
withdrawal by the Rating Agencies of the ratings then assigned to the Notes
and the Certificates. The Owner Trustee or the Indenture Trustee shall not
be deemed to have knowledge of any event or circumstance under clauses (ii)
or (iii) of the definition of Monthly Remittance Condition that would
require daily remittance by the Servicer to the Collection Account unless
the Owner Trustee or the Indenture Trustee has received notice of such
event or circumstance from the Seller or the Servicer in an Officer's
Certificate or written notice from the Holders of Notes evidencing not less
than 25% of the principal balance of the then outstanding Notes or from the
Holders of Certificates evidencing not less than 25% of the Certificate
Balance or a Responsible Officer in the Corporate Trust Office with
knowledge hereof or familiarity herewith has actual knowledge of such event
or circumstance.
(b) In those cases where a subservicer is servicing a
Receivable, the Servicer shall cause the subservicer to remit to the
Collection Account, as soon as practicable, but in no event after the close
of business on the second Business Day after receipt thereof by the
subservicer (but subject to the provisions of Section 4.2(a)) the amounts
referred to in Section 4.2(a) in respect of a Receivable being serviced by
the subservicer.
Section 4.3 Application of Collections. (a) For the
purposes of this Agreement, as of the close of business on the last day of
each Collection Period, all collections received pursuant to Section 4.2
for such Collection Period for each Receivable (excluding the amounts
actually collected with respect to the Supplemental Servicing Fee and
amounts collected with respect to a Purchased Receivable) shall be applied
by the Servicer, in the case of (i) a Simple Interest Receivable that is a
Standard Receivable, to interest and principal on the Receivable in
accordance with the Simple Interest Method, (ii) a Simple Interest
Receivable that is a Balloon Payment Receivable or a Final Payment
Receivable, to interest and principal in accordance with the Simple
Interest Method first, to accrued but unpaid interest, second, to the Level
Pay Balance of such Receivable, third, to the principal portion of the Last
Scheduled Payment to the extent a Last Scheduled Payment Advance has not
been made by the Servicer with respect to such Last Scheduled Payment and
fourth, to the extent of any unreimbursed Last Scheduled Payment Advance
with respect to such Simple Interest Receivable, to reimburse the Servicer
for such Last Scheduled Payment Advance and (iii) an Actuarial Receivable,
first, to the Scheduled Payment of such Actuarial Receivable, second to the
extent of any unreimbursed Actuarial Advances with respect to such
Actuarial Receivable, to reimburse the Servicer for any such Actuarial
Advances, third, to the extent of any unreimbursed Last Scheduled Payment
Advance with respect to such Actuarial Receivable, to reimburse the
Servicer for such Last Scheduled Payment Advance and fourth, to the extent
that any amounts are remaining then due to a prepayment of such Actuarial
Receivable, if the sum of such remaining amount and the previous Payahead
Balance shall be sufficient to prepay the Actuarial Receivable in full, and
otherwise to the Payahead Account (or, if all Monthly Remittance Conditions
are satisfied, to the Servicer) as a Payahead.
(b) All Liquidation Proceeds and any Recoveries, and any
proceeds realized upon the liquidation, sale or dissolution of the Owner
Trust Estate (or any part thereof) upon the occurrence of an Event of
Default under the Indenture shall, with respect to any Balloon Payment
Receivable or Final Payment Receivable be applied first to accrued but
unpaid interest thereon, second, to the Level Pay Balance of such
Receivable and third, to the principal portion of the related Last
Scheduled Payment.
Section 4.4 Advances. (a) As of the close of business on
the last day of each Collection Period, if the payments during such
Collection Period by or on behalf of the Obligor on or in respect of an
Actuarial Receivable (other than a Purchased Receivable) after application
under Section 4.3 shall be less than the Scheduled Payment, the Payahead
Balance of such Receivable shall be applied by the Indenture Trustee to the
extent of the shortfall, and such Payahead Balance shall be reduced
accordingly. Subject to the last sentence of this Section 4.4(a), on each
Payment Date the Servicer shall advance an amount equal to the excess, if
any, of the Scheduled Payment with respect to an Actuarial Receivable over
the sum of the (x) payments received on or in respect of such Actuarial
Receivable during the preceding Collection Period and (y) the Payahead
Balance with respect to such Actuarial Receivable (such advance, an
"Actuarial Advance"); provided that the Servicer shall make Actuarial
Advances with respect to the Last Scheduled Payment on Actuarial
Receivables that are Final Payment Receivables in accordance with Section
4.4(b). All applications of the Payahead Balance of a Receivable by the
Indenture Trustee and all Actuarial Advances by the Servicer pursuant to
this Section 4.4(a) shall be made based on the information set forth in the
Servicer's report attached to the Servicer's Certificate delivered pursuant
to Section 3.9. Notwithstanding anything in this Agreement to the contrary,
no successor to Mitsubishi Motors Credit of America, Inc. as Servicer shall
be required to make Actuarial Advances.
(b) As of the last day of the Collection Period in which
the Last Scheduled Payment with respect to a Final Payment Receivable is
due, if the payments during such Collection Period by or on behalf of the
related Obligor on or in respect of such Last Scheduled Payment after
application under Section 4.3(a) and, in the case of an Actuarial
Receivable, the amounts, if any, in the Payahead Account allocable to such
Last Scheduled Payment, shall be less than the amount of such Last
Scheduled Payment, the Servicer shall advance an amount equal to the
shortfall by depositing such amount into the Collection Account on the
related Payment Date (such advance, a "Last Scheduled Payment Advance").
Notwithstanding anything in this Agreement to the contrary, no successor to
Mitsubishi Motors Credit of America, Inc. as Servicer shall be required to
make Last Scheduled Payment Advances.
(c) (i) Upon either the written instructions of the
Servicer or based solely upon the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
3.9, the Indenture Trustee shall release from amounts available in the
Payahead Account, the amounts required to be released from amounts
available in the Payahead Account pursuant to Sections 4.4(a) and (b) with
respect to each Collection Period and shall deposit such amounts in the
Collection Account on the related Payment Date pursuant to Section 4.5(a).
(ii) On each Payment Date, the Servicer shall deposit
into the Collection Account an amount equal to the aggregate
amount of Actuarial Advances required to be made with respect to
related Collection Period.
(d) On each Payment Date, the Servicer shall instruct the
Indenture Trustee to withdraw from the Collection Account for distribution
to the Servicer, in immediately available funds, an amount equal to the sum
of (i) the aggregate amount of collections on Actuarial Receivables with
respect to which the Servicer has made Actuarial Advances in a prior
Collection Period that are allocable to the reimbursement of such Actuarial
Advances pursuant to Section 4.3(a) and (ii) the aggregate amount of
Actuarial Advances that the Servicer has not been reimbursed for pursuant
to this Section 4.4(d) or Section 4.5(b) with respect to Actuarial
Receivables that became Defaulted Receivables in the related Collection
Period.
(e) On each Payment Date, the Servicer shall instruct the
Indenture Trustee to withdraw from the Collection Account for distribution
to the Servicer, in immediately available funds, an amount equal to the sum
of (i) the aggregate amount of collections on Final Payment Receivables in
the related Collection Period that are allocable to the reimbursement of
Last Scheduled Payment Advances pursuant to Section 4.3(a) and (ii) the
aggregate amount of losses on Last Scheduled Payments that the Servicer has
recorded in its books and records during the related Collection Period to
the extent such losses are allocable to Last Scheduled Payments with
respect to which the Servicer has made Last Scheduled Payment Advances, but
only to the extent such Last Scheduled Payment Advances have not already
been reimbursed pursuant to this Section 4.4(e) or Section 4.5(b).
Section 4.5 Additional Deposits. (a) The Indenture
Trustee shall deposit in the Collection Account amounts required pursuant
to Section 4.4(c). The Servicer shall deposit in the Collection Account
amounts required to be advanced by the Servicer pursuant to Sections 4.4(a)
and (b). The Seller and the Servicer shall deposit or cause to be deposited
in the Collection Account the aggregate Purchase Amount with respect to
Purchased Receivables pursuant to Section 2.3, 3.7 or 9.1. The Indenture
Trustee shall deposit in the Collection Account any amounts received
pursuant to the Yield Supplement Agreement and any amounts received from
the Letter of Credit Bank or the Yield Supplement Account pursuant to
Article V on the date of receipt thereof. All such deposits with respect to
a Collection Period shall be made in immediately available funds no later
than 10:00 a.m., New York City time, on the Payment Date related to such
Collection Period.
(b) The Indenture Trustee shall, on or prior to 10:00
a.m., New York City time, on the Payment Date relating to each Collection
Period make the following withdrawals from the Reserve Account in the
following order of priority (in each case as set forth in the Servicer's
Certificate for such Payment Date): (i) an amount equal to the Reserve
Account Advance Draw Amount, if any, calculated by the Servicer pursuant to
Section 4.6(b), and shall pay such amount to the Servicer and (ii) an
amount equal to the Reserve Account TRP Draw Amount, if any, calculated by
the Servicer pursuant to Section 4.6(b), and shall deposit to the
Collection Account.
Section 4.6 Allocation of Total Available Funds. (a) On
each Payment Date, the Indenture Trustee shall cause to be made the
following transfers and distributions in immediately available funds in the
amounts set forth in the Servicer's Certificate for such Payment Date:
(i) To the Collection Account from the Payahead
Account (if the Monthly Remittance Conditions are not then
satisfied) or otherwise from amounts remitted by the Servicer
pursuant to Section 4.1(h) an amount equal to the sum of:
(1) the aggregate portion of Payaheads
constituting Scheduled Payments with respect to the
preceding Collection Period and prepayments in full
received during the preceding Collection Period, as
required by Sections 4.3 and 4.4(a); and
(2) the Payahead Balance, if any, relating to
any Purchased Receivable;
(ii) From the Collection Account to the Payahead
Account or, if the Monthly Remittance Conditions are then
satisfied, to the Servicer, the aggregate Payaheads received
during the preceding Collection Period, as required by Section
4.3.
(b) On each Determination Date, the Servicer shall
calculate the Available Funds, the Total Servicing Fee, the Accrued Note
Interest for each Class of Notes, the Principal Distribution Amount, the
Total Yield Supplement Overcollateralization Amount, the Yield Supplement
Amount, the Last Scheduled Payment Principal Collections and the Negative
Carry Amount, if any, in each case with respect to the following Payment
Date. In addition, on each Determination Date the Servicer shall calculate
the following amounts with respect to such Payment Date:
(i) an amount equal to the lesser of (x) the amount,
if any, by which the aggregate amount payable to the Servicer out
of the Collection Account on such Payment Date as reimbursement
for Actuarial Advances pursuant to Section 4.4(d) and for Last
Scheduled Payment Advances pursuant to Section 4.4(e) exceeds the
amount in the Collection Account available for such purpose
(without giving effect to any deposits thereto from amounts in the
Reserve Account but giving effect to all other deposits to the
Collection Account required to be made on such Payment Date) and
(y) the Reserve Account Amount for such Payment Date (without
giving effect to any deposits of Total Available Funds but giving
effect to all other deposits to the Reserve Account on such
Payment Date) (the "Reserve Account Advance Draw Amount");
(ii) an amount equal to the lesser of (x) the amount,
if any, by which the Total Required Payment for such Payment Date
exceeds the Available Funds for such Payment Date and (y) an
amount equal to the Reserve Account Amount (without giving effect
to any deposits of Total Available Funds on such Payment Date) for
such Payment Date, less the Reserve Account Advance Draw Amount
for such Payment Date (the "Reserve Account TRP Draw Amount");
(iii) the Total Available Funds for such Payment
Date; and
(iv) the Reserve Account Amount with respect to such
Payment Date after giving effect to the Reserve Account Advance
Draw Amount and the Reserve Account TRP Draw Amount for such
Payment Date, and the difference, if any, between the Reserve
Account Amount and the Specified Reserve Balance for such Payment
Date.
(c) On each Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
3.9) to withdraw the Total Available Funds on deposit in the Collection
Account for the related Collection Period and make the following payments
and deposits for such Payment Date in the following order of priority:
(i) to the Servicer, the Total Servicing Fee;
(ii) with the same priority and ratably, in
accordance with the outstanding principal balance of the Class A
Notes, to the Note Payment Account, the Accrued Note Interest for
the Class A Notes;
provided, that, if there are not sufficient funds available to pay the
entire amount of the Accrued Note Interest for the Class A Notes, the
amounts available shall be applied to the payment of such interest on the
Class A Notes on a pro rata basis;
(iii) to the Note Payment Account, the Accrued Note
Interest for the Class B Notes;
(iv) to the Note Payment Account, the Accrued Note
Interest for the Class C Notes;
(v) to the Note Payment Account, the Principal
Distribution Amount;
(vi) to the Reserve Account, the amount, if any,
necessary to reinstate the balance in the Reserve Account up to
the Specified Reserve Balance;
(vii) prior to the payment in full of the aggregate
principal balance of the Notes, to the Note Payment Account, any
remaining portion of the Total Available Funds; and
(viii) following the payment in full of the aggregate
principal balance of the Notes, to the Certificate Distribution
Account, any remaining portion of the Total Available Funds.
Notwithstanding the foregoing, following the occurrence
and during the continuation of an Event of Default which has resulted in an
acceleration of the Notes, on each Payment Date the Total Available Funds
shall be deposited in the Note Payment Account and applied in accordance
with Section 2.8(f) of the Indenture.
Section 4.7 Reserve Account. (a) The Seller shall, prior
to the Closing Date, establish and maintain a segregated trust account in
the name of the Indenture Trustee at a Qualified Institution or Qualified
Trust Institution (which shall initially be the corporate trust department
of Bank of Tokyo-Mitsubishi Trust Company), which shall be designated as
the "Reserve Account." The Reserve Account shall be under the sole dominion
and control of the Indenture Trustee; provided, that the Servicer may make
deposits to the Reserve Account in accordance with this Agreement and the
Indenture. On the Closing Date, the Seller will deposit the Reserve Account
Initial Deposit into the Reserve Account from the net proceeds of the sale
of the Notes. On each Subsequent Transfer Date, the Seller shall deposit to
the Reserve Account an amount equal to the applicable Subsequent Reserve
Amount Deposit. It shall be a condition to the purchase by the Trust of
Subsequent Receivables from the Seller with funds on deposit in the
Pre-Funding Account that the Seller make such deposit. The Reserve Account
and all amounts, securities, investments, financial assets and other
property deposited in or credited to the Reserve Account (the "Reserve
Account Property") has been conveyed by the Seller to the Trust pursuant to
Section 2.1(a). Pursuant to the Indenture, the Trust will pledge all of its
right, title and interest in, to and under the Reserve Account and the
Reserve Account Property to the Indenture Trustee on behalf of the
Noteholders to secure its obligations under the Notes and the Indenture.
The Reserve Account Property shall, to the extent
permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Reserve Account, in Permitted Investments that mature not
later than the Business Day immediately preceding the next Payment Date,
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Reserve Account shall, upon the written direction of the Servicer, be
paid to the Seller on any Payment Date to the extent that funds on deposit
therein, as certified by the Servicer, exceed the Specified Reserve
Balance. In the event the Reserve Account is no longer to be maintained at
the corporate trust department of Bank of Tokyo-Mitsubishi Trust Company,
the Servicer shall, with the Indenture Trustee's or Owner Trustee's
assistance as necessary, cause the Reserve Account to be moved to a
Qualified Institution or a Qualified Trust Institution within 10 Business
Days (or such longer period not to exceed 30 calendar days as to which each
Rating Agency may consent).
(b) With respect to any Reserve Account Property:
(i) any Reserve Account Property that is a "financial
asset" as defined in Section 8-102(a)(9) of the Relevant UCC shall
be physically delivered to, or credited to an account in the name
of, the Qualified Institution or Qualified Trust Institution
maintaining the Reserve Account in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any Reserve Account Property that is held in
deposit accounts shall be held solely in the name of the Indenture
Trustee at one or more depository institutions having the Required
Rating and each such deposit account shall be subject to the
exclusive custody and control of the Indenture Trustee and the
Indenture Trustee shall have sole signature authority with respect
thereto; and
(iii) except for any deposit accounts specified in
clause (ii) above, the Reserve Account shall only be invested in
securities or in other assets which the Qualified Institution or
Qualified Trust Institution maintaining the Reserve Account agrees
to treat as "financial assets" as defined in Section 8-102(a)(9)
of the Relevant UCC.
(c) If the amount on deposit in the Reserve Account on
any Payment Date (after giving effect to all deposits thereto or
withdrawals therefrom on such Payment Date) is greater than the Specified
Reserve Balance for such Payment Date, the Servicer shall instruct the
Indenture Trustee to distribute the amount of such excess to the Seller;
provided that the Indenture Trustee and the Owner Trustee hereby release,
on each Payment Date, their security interest in, to and under Reserve
Account Property distributed to the Seller.
(d) Following the payment in full of the aggregate
principal balance of the Notes and the Certificate Balance and of all other
amounts owing or to be distributed hereunder or under the Indenture or the
Trust Agreement to Noteholders or Certificateholders and the termination of
the Trust, any remaining Reserve Account Property shall be distributed to
the Seller.
Section 4.8 Net Deposits. As an administrative
convenience only, unless the Servicer is required to remit collections
pursuant to the first sentence of Section 4.2(a), the Seller and the
Servicer may make any remittance pursuant to this Article IV with respect
to a Collection Period net of distributions to be made to the Seller or the
Servicer with respect to such Collection Period. Nonetheless, such
obligations shall remain separate obligations, no party shall have a right
of offset, and each such party shall account for all of the above described
remittances and distributions as if the amounts were deposited and/or
transferred separately.
Section 4.9 Statements to Noteholders and
Certificateholders. On or prior to each Payment Date, the Servicer shall
provide to the Indenture Trustee (with copies to the Rating Agencies and
each Paying Agent) for the Indenture Trustee to forward to each Noteholder
of record as of the most recent Record Date and to the Owner Trustee (with
copies to the Rating Agencies and to each Paying Agent) for the Owner
Trustee to forward to each Certificateholder of record as of the most
recent Record Date a statement in substantially the forms of Exhibits B and
C, respectively, setting forth at least the following information as to the
Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to
principal paid to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to
interest paid to each Class of Notes;
(iii) the Yield Supplement Amount;
(iv) the amount of the Total Servicing Fee with
respect to the related Collection Period;
(v) the aggregate outstanding principal balance of
each Class of Notes, the applicable Note Pool Factor, the
Certificate Balance and the Certificate Pool Factor as of the
close of business on the last day of the preceding Collection
Period, after giving effect to payments allocated to principal
reported under clause (i) above;
(vi) the Pool Balance, the Level Pay Pool Balance and
the Last Scheduled Payment Pool Balance, in each case as of the
close of business on the last day of the related Collection
Period;
(vii) the amounts of the Interest Carryover
Shortfall, if any, for the next Payment Date and the portion
thereof attributable to each Class of Notes;
(viii) the amount of the aggregate Realized Losses,
if any, with respect to the related Collection Period;
(ix) the balance of the Reserve Account on such
Payment Date, after giving effect to changes therein on such
Payment Date;
(x) the aggregate Purchase Amount of Receivables
repurchased by the Seller or purchased by the Servicer, if any,
with respect to the related Collection Period;
(xi) the amount of Actuarial Advances and Last
Scheduled Payment Advances, if any, with respect to the related
Collection Period;
(xii) for each such Payment Date during the
Pre-Funding Period, (A) the amount, if any, withdrawn from the
Pre-Funding Account to purchase Subsequent Receivables during the
related Collection Period, (B) the Remaining Pre-Funded Amount, if
any, (C) the Negative Carry Amount, if any, for the related
Collection Period, and (D) the amount remaining on deposit in the
Negative Carry Account, if any, after all withdrawals, if any,
made on such Payment Date; and
(xiii) for the first Payment Date on or immediately
following the end of the Pre-Funding Period, the Remaining
Pre-Funded Amount, if any.
Each amount set forth on the Payment Date statement
pursuant to clauses (i), (ii), (iv) and (vii) above shall be expressed as a
dollar amount per $1,000 of original principal balance of a Certificate or
Note, as applicable.
Section 4.10 Control of Securities Accounts.
Notwithstanding anything else contained herein, the Trust agrees that each
of the Collection Account, the Pre-Funding Account, the Note Payment
Account, the Reserve Account, the Negative Carry Account and the Yield
Supplement Account will only be established at a Qualified Institution or
Qualified Trust Institution that agrees substantially as follows: (i) it
will comply with "entitlement orders" (as defined in Section 8-102(a)(8) of
the Relevant UCC; i.e., orders directing the transfer or redemption of any
financial asset) relating to such accounts issued by the Indenture Trustee
without further consent by the Seller or the Trust; (ii) until the
termination of the Indenture, it will not enter into any other agreement
relating to any such account pursuant to which it agrees to comply with
entitlement orders of any Person other than the Indenture Trustee; and
(iii) all assets delivered or credited to it in connection with such
accounts and all investments thereof will be promptly credited to such
accounts.
Section 4.11 Pre-Funding Account. (a) On the Closing
Date, the Seller shall deposit in the Pre-Funding Account $158,539,161.88
from the net proceeds of the sale of the Notes. On or prior to the Business
Day immediately preceding each Subsequent Transfer Date, the Servicer shall
calculate the following amounts: (i) the aggregate Principal Balance of the
Subsequent Receivables transferred to the Trust on such Subsequent Transfer
Date, and (ii) the Subsequent Payahead Account Deposit. The Servicer shall
instruct the Indenture Trustee to distribute the amount in clause (i) to
the Seller and to deposit the amount in clause (ii) to the Payahead Account
on behalf of the Seller on such Subsequent Transfer Date.
The Trust has applied for but has not yet obtained a
sales finance company license from the State of Pennsylvania. In the event
that the Trust does not obtain this license before the Closing Date, the
Trust will not acquire Receivables originated in Pennsylvania from the
Seller on the Closing Date. Instead, an amount equal to the principal
balance of these Receivables will be deposited into the Pre-Funding Account
on the Closing Date and the Trust will use the funds to purchase these
Receivables during the Pre-Funding Period after it obtains the license.
Approximately 3.71% of the Receivables available for acquisition by the
Trust from the Seller on the Closing Date were originated in Pennsylvania.
(b) If the Pre-Funding Account has not been reduced to
zero on the Payment Date on which the Pre-Funding Period ends (or, if the
Pre-Funding Period does not end on a Payment Date, on the first Payment
Date following the end of the Pre-Funding Period), after giving effect to
any reductions in the Pre-Funding Account on such date pursuant to
paragraph (a), the Servicer shall instruct the Indenture Trustee to
withdraw from the Pre-Funding Account on such Payment Date (or, if the
Pre-Funding Period does not end on a Payment Date, on the first Payment
Date following the end of the Pre-Funding Period), the amount remaining in
the Pre-Funding Account at such time exclusive of the Pre-Funding Account
Investment Earnings, if any, for the related Collection Period (such
remaining amount being the "Remaining Pre-Funded Amount") and deposit such
amount in the Collection Account for inclusion in the Available Funds for
such Payment Date. The Pre-Funding Account Investment Earnings for the
related Collection Period (together with any other interest and other
income (net of losses and expenses) earned on amounts on deposit in the
Pre-Funding Account that are on deposit in the Pre-Funding Account) shall
be deposited to the Collection Account.
Section 4.12 Negative Carry Account. (a) On the Closing
Date, the Seller shall deposit the Negative Carry Account Initial Deposit
into the Negative Carry Account. On each Payment Date, the Servicer shall
instruct the Indenture Trustee to withdraw from the Negative Carry Account
and deposit into the Collection Account an amount equal to the lesser of
(x) the amount, if any, on deposit in the Negative Carry Account on such
Payment Date and (y) the Negative Carry Amount, if any, for such Payment
Date. If the amount on deposit in the Negative Carry Account on any Payment
Date (after giving effect to the withdrawal therefrom of the Negative Carry
Amount, if any, for such Payment Date) is greater than the Required
Negative Carry Account Balance for such Payment Date, the excess shall be
released to the Seller on such Payment Date. On the Payment Date on which
the Pre-Funding Period ends (or, if the Pre-Funding Period does not end on
a Payment Date, on the first Payment Date following the end of the
Pre-Funding Period), the Servicer shall instruct the Indenture Trustee to
release to the Seller on such Payment Date all amounts remaining on deposit
in the Negative Carry Account after giving effect to any withdrawals of the
Negative Carry Amount on such Payment Date.
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND
THE YIELD SUPPLEMENT ACCOUNT
Section 5.1 Yield Supplement Letter of Credit and the
Yield Supplement Account.
(a) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the
Indenture Trustee at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Yield
Supplement Account" (the Yield Supplement Account, together with the
Payahead Account, the Collection Account, the Pre-Funding Account, the Note
Payment Account, the Negative Carry Account and the Reserve Account, the
"Trust Accounts"). Amounts on deposit in the Yield Supplement Account will
be used for the payment of any Yield Supplement Amounts required to be paid
on any Payment Date pursuant to the Yield Supplement Agreement which MMCA
has not paid as of such Payment Date. The Yield Supplement Account shall be
under the sole dominion and control of the Indenture Trustee provided, that
the Servicer may make deposits to and direct the Indenture Trustee to make
withdrawals from the Yield Supplement Account in accordance with this
Agreement and the Yield Supplement Agreement. On the Closing Date, the
Seller shall deposit an amount equal to the Initial Yield Supplement Amount
into the Yield Supplement Account from the net proceeds of the sale of the
Notes. On each Subsequent Transfer Date, the Seller shall deposit to the
Yield Supplement Account an amount equal to the applicable Subsequent Yield
Supplement Account Deposit unless the Yield Supplement Account has been
replaced by a Yield Supplement Letter of Credit on or prior to such
Subsequent Transfer Date, in which case the Servicer shall cause the amount
available to be drawn under the Yield Supplement Letter of Credit as of
such Subsequent Transfer Date to be no less than the Specified Yield
Supplement Account Balance as of such Subsequent Transfer Date after giving
effect to the transfer to the Trust of the related Subsequent Receivables.
It shall be a condition to the sale of Subsequent Receivables that are
Deferred Payment Receivables to the Trust that the Seller make such
deposit. To the extent, on any Payment Date, the amount on deposit in the
Yield Supplement Account (after giving effect to any withdrawals to be made
on such Payment Date, but exclusive of net investment income) is greater
than the Specified Yield Supplement Account Balance for such Payment Date,
then, in such event, the Servicer shall instruct the Indenture Trustee in
writing to pay such excess amount to the Seller.
All amounts held in the Yield Supplement Account shall be
invested, as directed in writing by the Servicer, by the bank or trust
company then maintaining the Yield Supplement Account in Permitted
Investments that mature not later than the Business Day immediately
preceding the next Payment Date and such Permitted Investments shall be
held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Yield Supplement Account
shall be withdrawn from the Yield Supplement Account at the written
direction of the Servicer and shall be paid to the Seller. In the event
that the Yield Supplement Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's assistance as necessary, cause
the Yield Supplement Account to be moved to a Qualified Institution or a
Qualified Trust Institution within 10 Business Days (or such longer period
not to exceed 30 calendar days as to which each Rating Agency may consent).
The Seller hereby sells, conveys and transfers to the
Trust the Yield Supplement Account, all funds and investments on deposit
therein or credited thereto and all proceeds thereof, subject, however, to
the limitations set forth below.
Pursuant to the Indenture, the Trust will pledge its
rights under the Yield Supplement Agreement (including its rights to
amounts on deposit in the Yield Supplement Account) to the Indenture
Trustee to secure its obligations under the Notes and the Indenture. Such
sale, conveyance and transfer of the Yield Supplement Account by the Seller
to the Trust, and such pledge by the Trust of its rights to amounts in the
Yield Supplement Account to the Indenture Trustee, shall be subject to the
following limitations:
(i) All or a portion of the Yield Supplement Account
may be invested and reinvested in the manner specified in Section
5.1(a) in accordance with written instructions from the Servicer.
All such investments shall be made in the name of the Indenture
Trustee and all income and gain realized thereon shall be solely
for the benefit of the Seller and shall be payable by the
Indenture Trustee to the Seller upon written direction of the
Servicer as specified in Section 5.1(a);
(ii) If, with respect to any Collection Period, MMCA
shall have failed to make or cause to be made in full the
remittance of the Yield Supplement Amount on the date required by
the Yield Supplement Agreement, the Indenture Trustee not later
than 10:00 a.m. (New York City time) on the Payment Date, shall,
upon the written direction of the Servicer, withdraw from the
Yield Supplement Account and deposit into the Collection Account
the amount of the shortfall between the amount of funds that are
required to be remitted by MMCA with respect to the Yield
Supplement Agreement as set forth in the Servicer's Certificate
and the amount of funds actually so remitted and to the extent of
any remaining shortfall, the Indenture Trustee shall withdraw an
amount equal thereto from the Reserve Account, and deposit such
amounts in the Collection Account; and
(iii) Upon termination of this Agreement in
accordance with Section 9.1 or (a) in the event that the Seller
obtains a Yield Supplement Letter of Credit or (b) the Seller
otherwise satisfies the requirements with respect to the Yield
Supplement Agreement established by the Rating Agencies, in either
case as evidenced by satisfaction of the Rating Agency Condition
and an Officer's Certificate of the Seller that all conditions to
the liquidation of the Yield Supplement Account have been
satisfied, any amounts on deposit in the Yield Supplement Account
shall, upon written request of the Seller, be paid to the Seller.
(b) If a Yield Supplement Letter of Credit has been
obtained by MMCA, and if, with respect to any Collection Period, MMCA shall
have failed to make or cause to be made in full the remittance of the Yield
Supplement Amount, upon written notice by the Servicer of such failure
(which notice shall be given no later than 10:00 a.m. (New York City time)
on the Payment Date for such Collection Period), the Indenture Trustee
shall draw on the Yield Supplement Letter of Credit in accordance with the
terms thereof, in the amount of the shortfall between the amount of funds
with respect to the Yield Supplement Amount that are required to be
remitted by MMCA with respect to the Yield Supplement Agreement as set
forth in the Servicer's Certificate and the amount of funds actually so
remitted as set forth in the Servicer's Certificate. Any such draw on the
Yield Supplement Letter of Credit shall be made after receipt of the
related Servicer's Certificate on or before 11:00 a.m. (New York City time)
on the Payment Date for such Collection Period. Upon receipt of a request
for a draw by the Indenture Trustee under the Yield Supplement Letter of
Credit, the Letter of Credit Bank is to promptly make a payment to the
Indenture Trustee in an amount equal to the Yield Supplement Amount (minus
payments made on the Yield Supplement Agreement), and the Indenture Trustee
shall deposit into the Collection Account pursuant to Section 4.5(a) the
amount received from the Letter of Credit Bank in respect of such drawing.
The Servicer shall include in each Servicer's Certificate, or in an
Officer's Certificate provided to the Indenture Trustee with each
Servicer's Certificate, the Stated Amount (as defined in the Yield
Supplement Letter of Credit) of the Yield Supplement Letter of Credit as of
the close of business on the last day of the Collection Period preceding
the date of such Servicer's Certificate. In the event that the rating of
the Letter of Credit Bank declines below the Required Rating, the Servicer
shall promptly notify the Indenture Trustee in writing of such decline, and
upon receipt of such notification, the Indenture Trustee shall, unless a
suitable replacement letter of credit shall have been delivered, promptly
draw the full amount available under the Yield Supplement Letter of Credit
and deposit such amount in the Yield Supplement Account.
ARTICLE VI - THE SELLER
Section 6.1 Representations, Warranties and Covenants of
Seller. The Seller makes the following representations, warranties and
covenants on which the Trust is deemed to have relied in acquiring the
Trust Property. The representations, warranties and covenants speak as of
the Closing Date in the case of the Initial Receivables and the other Trust
Property related thereto, and as of the related Subsequent Transfer Date in
the case of the Subsequent Receivables and the other Trust Property related
thereto, and shall survive the sale of the Trust Property to the Trust and
the pledge thereof by the Trust to the Indenture Trustee pursuant to the
Indenture:
(a) Organization and Good Standing. The Seller has been
duly established and is validly existing as a business trust in good
standing under the laws of the State of Delaware, with power and authority
to own its properties and to conduct its business as such properties shall
be currently owned and such business is presently conducted, and had at all
relevant times, and shall have, power, authority, and legal right to
acquire and own the Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign business trust in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall require
such qualifications.
(c) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their terms. The Seller
has full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust and has duly authorized such sale
and assignment to the Trust by all necessary corporate action; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which it is a party have been, and the execution, delivery and
performance of each Second-Tier Subsequent Assignment has been or will be
on or before the related Subsequent Transfer Date, duly authorized by the
Seller by all necessary corporate action.
(d) Valid Sale; Binding Obligation. This Agreement
effects a valid sale, transfer and assignment of the Initial Receivables
and the other Trust Property related thereto conveyed by the Seller to the
Trust hereunder and this Agreement together with each Second-Tier
Subsequent Assignment will effect a valid sale, transfer and assignment of
the related Subsequent Receivables and the other Trust Property related
thereto, in each case enforceable against creditors of and purchasers from
the Seller; and this Agreement and the other Basic Documents to which the
Seller is a party constitute, and each Second-Tier Subsequent Assignment
when executed and delivered by the Seller will constitute, legal, valid,
and binding obligations of the Seller, enforceable against the Seller in
accordance with their terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(e) No Violation. The execution, delivery and performance
by the Seller of this Agreement and the other Basic Documents to which the
Seller is a party and the consummation of the transactions contemplated
hereby and thereby and the fulfillment of the terms hereof and thereof will
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
default under, the certificate of trust or amended and restated trust
agreement of the Seller, or conflict with, or breach any of the terms or
provisions of, or constitute (with or without notice or lapse of time or
both) a default under, any indenture, agreement, mortgage, deed of trust or
other instrument to which the Seller is a party or by which the Seller is
bound or any of its properties are subject, or result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other instrument
(other than this Agreement), or violate any law, order, rule, or
regulation, applicable to the Seller or its properties, of any federal or
state regulatory body, any court, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or any of
its properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to the best knowledge of the Seller,
threatened, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality having jurisdiction over the
Seller or its properties: (i) asserting the invalidity of this Agreement,
the Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes, the
Certificates or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, any of the
other Basic Documents, the Notes or the Certificates, or (iv) that may
adversely affect the Federal or Applicable Tax State income, excise,
franchise or similar tax attributes of the Notes or the Certificates.
(g) Florida Securities and Investor Protection Act. In
connection with the offering of the Notes in the State of Florida, the
Seller hereby certifies that it has complied with all provisions of Section
517.075 of the Florida Securities and Investor Protection Act.
Section 6.2 Liability of Seller; Indemnities. The Seller
shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Seller under this Agreement, and
hereby agrees to the following:
(a) The Seller shall indemnify, defend, and hold harmless
the Trust, the Owner Trustee and the Indenture Trustee from and against any
taxes that may at any time be asserted against any such Person with respect
to, and as of the date of, the sale of the Receivables to the Trust or the
issuance and original sale of the Notes or the Certificates, including any
sales, gross receipts, general corporation, tangible personal property,
privilege, or license taxes (but, in the case of the Trust, not including
any taxes asserted with respect to ownership of the Receivables or Federal
or other Applicable Tax State income taxes arising out of the transactions
contemplated by this Agreement and the other Basic Documents) and costs and
expenses in defending against the same.
(b) The Seller shall indemnify, defend, and hold harmless
the Trust, the Owner Trustee, the Indenture Trustee, the Noteholders and
the Certificateholders from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith, or
negligence (other than errors in judgment) in the performance of its duties
under this Agreement, or by reason of reckless disregard of its obligations
and duties under this Agreement and (ii) the Seller's violation of Federal
or state securities laws in connection with the registration or the sale of
the Notes or the Certificates.
(c) The Seller shall indemnify, defend and hold harmless
the Owner Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
contained herein and in the Trust Agreement, in the case of the Owner
Trustee, and in the Indenture, in the case of the Indenture Trustee, except
to the extent that such cost, expense, loss, claim, damage or liability:
(i) shall be due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Owner Trustee or the Indenture
Trustee, as applicable; (ii) in the case of the Owner Trustee shall arise
from the breach by the Owner Trustee of any of its representations or
warranties set forth in Section 7.3 of the Trust Agreement or (iii) in the
case of the Indenture Trustee shall arise from the breach by the Indenture
Trustee of any of its representations and warranties set forth in the
Indenture.
(d) The Seller shall pay any and all taxes levied or
assessed upon all or any part of the Owner Trust Estate.
(e) Indemnification under this Section 6.2 shall survive
the resignation or removal of the Owner Trustee or the Indenture Trustee
and the termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Seller shall have
made any indemnity payments pursuant to this Section 6.2 and the Person to
or on behalf of whom such payments are made thereafter shall collect any of
such amounts from others, such Person shall promptly repay such amounts to
the Seller, without interest.
Section 6.3 Merger or Consolidation of, or Assumption of
the Obligations of, Seller. Any Person (i) into which the Seller may be
merged or consolidated, (ii) resulting from any merger, conversion, or
consolidation to which the Seller shall be a party or (iii) that may
succeed by purchase and assumption to all or substantially all of the
business of the Seller, which Person in any of the foregoing cases executes
an agreement of assumption to perform every obligation of the Seller under
this Agreement, will be the successor to the Seller under this Agreement
without the execution or filing of any document or any further act on the
part of any of the parties to this Agreement; provided, however, that (x)
the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such merger, conversion, consolidation or succession and such
agreement of assumption comply with this Section 6.3, and (y) the Seller
shall have delivered to the Owner Trustee and the Indenture Trustee an
Opinion of Counsel either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements and amendments thereto
have been authorized and filed that are necessary to fully preserve and
protect the interest of the Trust and the Indenture Trustee, respectively,
in the Receivables and the other Trust Property, and reciting the details
of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to fully preserve and protect such interest.
The Seller shall provide notice of any merger, conversion, consolidation,
or succession pursuant to this Section 6.3 to the Rating Agencies.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (x) or (y)
above shall be conditions to the consummation of the transactions referred
to in clauses (i), (ii) or (iii) above.
Section 6.4 Limitation on Liability of Seller and Others.
The Seller, and any director or officer or employee or agent of the Seller,
may rely in good faith on the advice of counsel or on any document of any
kind, prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Seller shall not be under any obligation
to appear in, prosecute, or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability.
Section 6.5 Seller May Own Notes or Certificates. The
Seller, and any Affiliate of the Seller, may in its individual or any other
capacity become the owner or pledgee of Notes not to exceed 20% (calculated
on an aggregate basis of the Seller and any Affiliates which are owners or
pledgees of the Notes) of the Outstanding Notes or Certificates with the
same rights as it would have if it were not the Seller or an Affiliate
thereof, except as otherwise expressly provided herein or in the other
Basic Documents. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to the Seller or
such controlling, controlled or commonly controlled Person shall have an
equal and proportionate benefit under the provisions of this Agreement and
the other Basic Documents, without preference, priority, or distinction as
among all of the Notes and Certificates.
ARTICLE VII - THE SERVICER
Section 7.1 Representations and Warranties of Servicer.
The Servicer makes the following representations and warranties on which
the Trust is deemed to have relied in acquiring the Trust Property, and
such representations and warranties speak as of the Closing Date, in the
case of the Initial Receivables and the other Trust Property related
thereto, and as of the related Subsequent Transfer Date, in the case of the
Subsequent Receivables and the other Trustee Property related thereto, and
shall survive the sale of the Trust Property to the Trust and the pledge
thereof by the Trust pursuant to the Indenture:
(a) Organization and Good Standing. The Servicer has been
duly organized and is validly existing as a corporation in good standing
under the laws of the state of its incorporation, with power and authority
to own its properties and to conduct its business as such properties shall
be currently owned and such business is presently conducted, and had at all
relevant times, and shall have, power, authority, and legal right to
acquire, own, sell, and service the Receivables and to hold the Receivable
Files as custodian on behalf of the Trustee.
(b) Due Qualification. The Servicer is duly qualified to
do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Receivables as required by this Agreement) shall
require such qualifications.
(c) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their terms, and the
execution, delivery and performance of this Agreement and the other Basic
Documents to which it is a party have been duly authorized by the Servicer
by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other
Basic Documents to which it is a party constitute legal, valid, and binding
obligations of the Servicer, enforceable against the Servicer in accordance
with their terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.
(e) No Violation. The execution, delivery and performance
by the Servicer of this Agreement and the other Basic Documents to which it
is a party, the consummation of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof will not
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default
under, the certificate of incorporation or bylaws of the Servicer, or
conflict with, or breach any of the terms or provisions of, or constitute
(with or without notice or lapse of time or both) a default under, any
indenture, agreement, mortgage, deed of trust or other instrument to which
the Servicer is a party or by which the Servicer is bound or to which any
of its properties are subject, or result in the creation or imposition of
any lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument (other
than this Agreement), or violate any law, order, rule, or regulation
applicable to the Servicer or its properties of any Federal or state
regulatory body, any court, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or any of its
properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to the Servicer's knowledge, threatened, before
any court, regulatory body, administrative agency, or tribunal or other
governmental instrumentality having jurisdiction over the Servicer or its
properties: (a) asserting the invalidity of this Agreement, the Indenture,
any of the other Basic Documents, the Notes, or the Certificates, (b)
seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement, the
Indenture or any of the other Basic Documents, (c) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates, or (d) that may adversely affect
the Federal or Applicable Tax State income, excise, franchise or similar
tax attributes of the Notes or the Certificates.
Section 7.2 Liability of Servicer; Indemnities. The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this Agreement,
and hereby agrees to the following:
(a) The Servicer shall defend, indemnify and hold
harmless the Trust, the Owner Trustee, the Indenture Trustee, the
Noteholders, the Certificateholders and the Seller from and against any and
all costs, expenses, losses, damages, claims and liabilities, arising out
of or resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold
harmless the Trust, the Owner Trustee and the Indenture Trustee from and
against any taxes that may at any time be asserted against any such Person
with respect to the transactions contemplated herein or in the other Basic
Documents, if any, including, without limitation, any sales, gross
receipts, general corporation, tangible personal property, privilege or
license taxes (but, in the case of the Trust, not including any taxes
asserted with respect to, and as of the date of, the sale of the
Receivables to the Trust or the issuance and original sale of the Notes and
the Certificates and the issuance of the Certificates, or asserted with
respect to ownership of the Receivables, or Federal or other Applicable Tax
State income taxes arising out of the transactions contemplated by this
Agreement and the other Basic Documents) and costs and expenses in
defending against the same.
(c) The Servicer shall indemnify, defend and hold
harmless the Trust, the Owner Trustee, the Indenture Trustee, the
Noteholders, the Certificateholders and the Seller from and against any and
all costs, expenses, losses, claims, damages and liabilities to the extent
that such cost, expense, loss, claim, damage or liability arose out of, or
was imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its duties
under this Agreement or any other Basic Document to which it is a party
(except for errors in judgment), or by reason of reckless disregard of its
obligations and duties under this Agreement or any other Basic Document to
which it is a party. (d) The Servicer shall indemnify, defend and hold
harmless the Owner Trustee and the Indenture Trustee, as applicable, from
and against all costs, expenses, losses, claims, damages and liabilities
arising out of or incurred in connection with the acceptance or performance
of the trusts and duties contained herein and in the other Basic Documents,
if any, except to the extent that such cost, expense, loss, claim, damage
or liability: (a) shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Owner Trustee or the
Indenture Trustee, as applicable; (b) relates to any tax other than the
taxes with respect to which either the Seller or the Servicer shall be
required to indemnify the Owner Trustee or the Indenture Trustee, as
applicable; (c) in the case of the Owner Trustee, shall arise from the
Owner Trustee's breach of any of its representations or warranties set
forth in Section 7.3 of the Trust Agreement or, in the case of the
Indenture Trustee, from the Indenture Trustee's breach of any of its
representations or warranties set forth in the Indenture; or (d) in the
case of the Indenture Trustee, shall arise out of or be incurred in
connection with the performance by the Indenture Trustee of the duties of
successor Servicer hereunder.
In addition to the foregoing indemnities, if the Owner
Trustee or the Indenture Trustee is entitled to indemnification by the
Seller pursuant to Section 6.2 and the Seller is unable for any reason to
provide such indemnification to the Owner Trustee or the Indenture Trustee,
then the Servicer shall be liable for any indemnification that the Owner
Trustee or the Indenture Trustee is entitled to under Section 6.2.
For purposes of this Section 7.2, in the event of the
termination of the rights and obligations of MMCA (or any successor thereto
pursuant to Section 8.2) as Servicer pursuant to Section 8.1, or a
resignation by such Servicer pursuant to this Agreement, such Servicer
shall be deemed to be the Servicer pending appointment of a successor
Servicer (other than the Indenture Trustee) pursuant to Section 8.2.
Indemnification under this Section 7.2 by MMCA (or any
successor thereto pursuant to Section 8.2) as Servicer, with respect to the
period such Person was (or was deemed to be) the Servicer, shall survive
the termination of such Person as Servicer or a resignation by such Person
as Servicer as well as the termination of this Agreement or the resignation
or removal of the Owner Trustee or the Indenture Trustee and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section
and the recipient thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts to the Servicer, without
interest.
Section 7.3 Merger or Consolidation of, or Assumption of
the Obligations of, Servicer. Any Person (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger, conversion, or
consolidation to which the Servicer shall be a party, or (iii) that may
succeed by purchase and assumption to all or substantially all of the
business of the Servicer, which Person in any of the foregoing cases is an
Eligible Servicer and executes an agreement of assumption to perform every
obligation of the Servicer under this Agreement, will be the successor to
the Servicer under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties to this
Agreement; provided, however, that (x) the Servicer shall have delivered to
the Owner Trustee and the Indenture Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such merger, conversion, consolidation
or succession and such agreement of assumption comply with this Section
7.3, and (y) the Servicer shall have delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation
statements and amendments thereto have been authorized and filed that are
necessary to fully preserve and protect the interest of the Trust and the
Indenture Trustee, respectively, in the Receivables, and reciting the
details of such filings, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to fully preserve and protect
such interests. The Servicer shall provide notice of any merger,
conversion, consolidation or succession pursuant to this Section 7.3 to the
Rating Agencies. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement or assumption and compliance with
clauses (x) and (y) above shall be conditions to the consummation of the
transactions referred to in clauses (i), (ii) or (iii) above.
Section 7.4 Limitation on Liability of Servicer and
Others. (a) Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the
Trust, the Noteholders or the Certificateholders, except as provided under
this Agreement, for any action taken or for refraining from the taking of
any action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such
Person against any liability that would otherwise be imposed by reason of
willful misfeasance or bad faith in the performance of duties or by reason
of reckless disregard of obligations and duties under this Agreement, or by
reason of negligence in the performance of its duties under this Agreement
(except for errors in judgment). The Servicer and any director, officer or
employee or agent of the Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person in
respect of any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer
shall not be under any obligation to appear in, prosecute or defend any
legal action that shall not be incidental to its duties to service the
Receivables in accordance with this Agreement, and that in its opinion may
involve it in any expense or liability; provided, however, that the
Servicer may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties to this Agreement and the interests of the Noteholders and
Certificateholders under this Agreement. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
Section 7.5 Servicer Not to Resign. Subject to the
provisions of Section 7.3, the Servicer shall not resign from its
obligations and duties under this Agreement except upon a determination
that the performance of its duties is no longer permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee and the Indenture Trustee. No such
resignation shall become effective until the Indenture Trustee or a
successor Servicer shall have (i) assumed the responsibilities and
obligations of the Servicer in accordance with Section 8.2 and (ii) become
the Administrator under the Administration Agreement pursuant to Section 8
thereof.
Section 7.6 Servicer May Own Notes or Certificates. The
Servicer, and any Affiliate of the Servicer, may, in its individual or any
other capacity, become the owner or pledgee of Notes or Certificates with
the same rights as it would have if it were not the Servicer or an
Affiliate thereof, except as otherwise expressly provided herein or in the
other Basic Documents. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to the Servicer or
such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority or distinction
as among all of the Notes and Certificates.
ARTICLE VIII - SERVICING TERMINATION
Section 8.1 Events of Servicing Termination. (a) The
occurrence of any one of the following events shall constitute an event of
servicing termination hereunder (each, an "Event of Servicing
Termination"):
(i) Any failure by the Servicer to deliver to the
Owner Trustee or the Indenture Trustee the Servicer's Certificate
for any Collection Period, which shall continue beyond the earlier
of three Business Days from the date such Servicer's Certificate
was due to be delivered and the related Payment Date, or any
failure by the Servicer to make any required payment or deposit
under this Agreement, which shall continue unremedied for a period
of five Business Days following the due date therefor (or, in the
case of a payment or deposit to be made no later than a Payment
Date, the failure to make such payment or deposit by such Payment
Date); or
(ii) Any failure on the part of the Servicer duly to
observe or to perform in any material respect any other covenant
or agreement set forth in the Notes, the Certificates, or in this
Agreement, which failure shall materially and adversely affect the
rights of Noteholders or Certificateholders and continue
unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner Trustee or the
Indenture Trustee or to the Owner Trustee, the Indenture Trustee,
the Seller and the Servicer by the Holders of Notes or
Certificates, as applicable, evidencing not less than 25% of the
principal balance of the then Notes Outstanding, in the aggregate,
or 25% of the Certificate Balance; or
(iii) The entry of a decree or order by a court or
agency or supervisory authority of competent jurisdiction for the
appointment of a conservator, receiver, liquidator or trustee for
the Seller or the Servicer in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities, or
similar proceedings, or for the winding up or liquidation of its
affairs, and any such decree or order continues unstayed and in
effect for a period of 60 consecutive days; or
(iv) The consent by the Seller or the Servicer to the
appointment of a conservator, receiver, liquidator or trustee in
any bankruptcy, insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings of or relating to
the Seller or the Servicer or relating to substantially all of its
property, the admission in writing by the Servicer of its
inability to pay its debts generally as they become due, the
filing by the Seller or the Servicer of a petition to take
advantage of any applicable bankruptcy, insolvency or
reorganization statute, the making by the Seller or the Servicer
of an assignment for the benefit of its creditors or the voluntary
suspension by the Seller or the Servicer of payment of its
obligations; or
(v) The failure by the Servicer to be an Eligible
Servicer;
then, and in each and every case and for so long as an Event of Servicing
Termination shall not have been remedied, either the Indenture Trustee, or
the Holders of Notes evidencing not less than 51% of the aggregate
principal amount of the Notes Outstanding, voting as a group, or if no
Notes are Outstanding, the Owner Trustee pursuant to the Trust Agreement by
notice then given in writing to the Servicer (with a copy to the Indenture
Trustee and the Owner Trustee if given by the Noteholders), may terminate
all of the rights and obligations of the Servicer under this Agreement. On
or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Notes, the Certificates, or the Trust Property or otherwise, shall pass to
and be vested in the Indenture Trustee or a successor Servicer appointed
under Section 8.2; and, without limitation, the Indenture Trustee and the
Owner Trustee shall be authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivable Files, the certificates of title to the Financed Vehicles, or
otherwise. The Servicer shall cooperate with the Indenture Trustee, the
Owner Trustee and such successor Servicer in effecting the termination of
its responsibilities and rights as Servicer under this Agreement, including
the transfer to the Indenture Trustee or such successor Servicer for
administration of all cash amounts that are at the time held by the
Servicer for deposit or thereafter shall be received with respect to a
Receivable, all Receivable Files and all information or documents that the
Indenture Trustee or such successor Servicer may require. In addition, the
Servicer shall transfer its electronic records relating to the Receivables
to the successor Servicer in such electronic form as the successor Servicer
may reasonably request. All reasonable costs and expenses incurred by the
successor Servicer, including allowable compensation of employees and
overhead costs, in connection with the transfer of servicing shall be paid
by the outgoing Servicer (or by the initial Servicer if the outgoing
Servicer is the Indenture Trustee acting on an interim basis) upon
presentation of reasonable documentation of such costs and expenses.
(b) If any of the foregoing Events of Servicing
Termination occur, the Indenture Trustee and the Owner Trustee shall have
no obligation to notify Noteholders, Certificateholders or any other Person
of such occurrence prior to the continuance of such event through the end
of any cure period specified in Section 8.1(a).
Section 8.2 Indenture Trustee to Act; Appointment of
Successor Servicer. Upon the Servicer's resignation pursuant to Section 7.5
or upon the Servicer's receipt of notice of termination as Servicer
pursuant to Section 8.1(a), the Indenture Trustee (or an Affiliate of the
Indenture Trustee that is an Eligible Servicer appointed by the Indenture
Trustee) shall be the successor in all respects to the Servicer in its
capacity as Servicer under this Agreement (provided that neither the
Indenture Trustee nor any other successor Servicer shall have any
obligation, but may elect, to make available to an Obligor any refinancing
of a Last Scheduled Payment in the manner specified in the last sentence of
Section 3.2(e) hereof), and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms
and provisions of this Agreement. As compensation therefor, the Indenture
Trustee shall be entitled to such compensation (whether payable out of the
Collection Account or otherwise) as the Servicer would have been entitled
to under this Agreement if no such notice of termination or resignation had
been given, except that all collections shall be deposited in the
Collection Account within two Business Days of receipt and shall not be
retained by the Servicer. Notwithstanding the above, the Indenture Trustee
may, if it shall be unwilling so to act, or shall, if it is legally unable
so to act, appoint, or petition a court of competent jurisdiction to
appoint, an Eligible Servicer as the successor to the terminated Servicer
under this Agreement. In connection with such appointment, the Indenture
Trustee may make such arrangements for the compensation of such successor
Servicer out of payments on Receivables as it and such successor shall
agree, which, in no event, shall be greater than that payable to MMCA as
Servicer hereunder. The Indenture Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession including, but not limited to, making
arrangements in respect of the last sentence of Section 3.2(e) of this
Agreement. The Indenture Trustee shall not be relieved of its duties as
successor Servicer under this Section 8.2 until a newly appointed Servicer
shall have assumed the responsibilities and obligations of the terminated
Servicer under this Agreement.
Section 8.3 Effect of Servicing Transfer. (a) After the
transfer of servicing hereunder, the Indenture Trustee or successor
Servicer shall notify Obligors to make directly to the successor Servicer
payments that are due under the Receivables after the effective date of
such transfer.
(b) Except as provided in Section 8.2 after the transfer
of servicing hereunder, the outgoing Servicer shall have no further
obligations with respect to the administration, servicing, custody or
collection of the Receivables and the successor Servicer shall have all of
such obligations, except that the outgoing Servicer will transmit or cause
to be transmitted directly to the successor Servicer for its own account,
promptly on receipt and in the same form in which received, any amounts
held by the outgoing Servicer (properly endorsed where required for the
successor Servicer to collect any such items) received as payments upon or
otherwise in connection with the Receivables and the outgoing Servicer
shall continue to cooperate with the successor Servicer by providing
information and in the enforcement of the Dealer Agreements.
(c) Any successor Servicer shall provide the Seller with
access to the Receivable Files and to the successor Servicer's records
(whether written or automated) with respect to the Receivable Files. Such
access shall be afforded without charge, but only upon reasonable request
and during normal business hours at the offices of the successor Servicer.
Nothing in this Section 8.3 shall affect the obligation of the successor
Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 8.3.
Section 8.4 Notification to Noteholders and
Certificateholders. Upon any notice of an Event of Servicing Termination or
upon any termination of, or appointment of a successor to, the Servicer
pursuant to this Article VIII, the Indenture Trustee shall give prompt
written notice thereof to Noteholders, and the Owner Trustee shall give
prompt written notice thereof to Certificateholders at their addresses of
record and to the Rating Agencies.
Section 8.5 Waiver of Past Events of Servicing
Termination. The Holders of Notes evidencing not less than 51% of the Notes
Outstanding or the Holders of Certificates evidencing not less than 51% of
the Certificate Balance (in the case of an Event of Servicing Termination
which does not adversely affect the Indenture Trustee or the Noteholders)
may, on behalf of all Noteholders and Certificateholders, waive any Event
of Servicing Termination hereunder and its consequences, except an event
resulting from the failure to make any required deposits to, or payments
from, any of the Trust Accounts and the Certificate Distribution Account in
accordance with this Agreement. Upon any such waiver of a past Event of
Servicing Termination, such event shall cease to exist, and shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other event or impair any right arising
therefrom, except to the extent expressly so waived.
ARTICLE IX - TERMINATION
Section 9.1 Optional Purchase of All Receivables. (a) On
each Payment Date following the last day of a Collection Period as to which
the Pool Balance shall be less than or equal to the product of (i) the
Optional Purchase Percentage, and (ii) the Initial Pool Balance, the
Servicer shall have the option to purchase the Owner Trust Estate, other
than the Trust Accounts and the Certificate Distribution Account. To
exercise such option, the Servicer shall notify the Owner Trustee and the
Indenture Trustee no later than the 15th day of the month immediately
preceding the month in which such repurchase is to be effected and shall
deposit an amount equal to the aggregate Purchase Amount for the
Receivables, plus the appraised value of any other property held in the
Trust other than in the Trust Accounts and the Certificate Distribution
Account, such value to be determined by an appraiser mutually agreed upon
by the Servicer, the Owner Trustee and the Indenture Trustee, into the
Collection Account on the Payment Date occurring in the month in which such
repurchase is to be effected. Upon such payment, the Servicer shall succeed
to and own all interests in and to the Trust. Notwithstanding the
foregoing, the Servicer shall not be permitted to exercise such option
unless the amount to be deposited in the Collection Account pursuant to the
second preceding sentence is greater than or equal to the sum of the
outstanding principal balance of the Notes and all accrued but unpaid
interest (including any overdue interest) thereon and the Certificate
Balance. The Purchase Amount, any Negative Carry Amounts and any Yield
Supplement Amounts for such Payment Date, plus to the extent necessary all
amounts in the Reserve Account, shall be used to make payments in full to
Noteholders and Certificateholders in the manner set forth in Article IV.
(b) Unless otherwise required by the Rating Agencies as
set forth in writing delivered to the Owner Trustee and the Indenture
Trustee, if at the time the Servicer exercises its purchase option
hereunder the Servicer's long-term unsecured debt has a rating lower than
investment grade by the Rating Agencies, the Servicer shall deliver to the
Owner Trustee and the Indenture Trustee on such Payment Date a letter from
an Independent investment bank or an Independent public accountant to the
effect that the price paid by the Servicer for the Receivables at the time
of transfer pursuant to such purchase option represented a fair market
price for such Receivables.
(c) Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the
Notes, the Certificateholders will succeed to the rights of the Noteholders
hereunder, and the Indenture Trustee will continue to carry out its
obligations hereunder with respect to the Certificateholders, including
without limitation making distributions from the Payahead Account and the
Collection Account in accordance with Section 4.6 and making withdrawals
from the Reserve Account in accordance with Sections 4.5(b) and 4.7.
ARTICLE X - MISCELLANEOUS PROVISIONS
Section 10.1 Amendment. (a) This Agreement may be amended
by the Seller, the Servicer and the Trust with the consent of the Indenture
Trustee (which consent may not be unreasonably withheld), but without the
consent of any of the Noteholders or the Certificateholders to add, change
or eliminate any other provisions with respect to matters or questions
arising under this Agreement as may be necessary or advisable in order to:
(i) cure any ambiguity, to revise, correct or supplement any provisions
herein, (ii) enable the Trust to avoid becoming a member of MMCA's
consolidated group under GAAP or (iii) enable the Transferor or any
Affiliate of the Transferor or any of their Affiliates to otherwise comply
with or obtain more favorable treatment under any law or regulation or any
accounting rule or principle; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee
and the Indenture Trustee materially and adversely affect the interests of
any Noteholder or Certificateholder; provided, further, that no such
amendment shall be inconsistent with the derecognition by MMCA of the
Receivables under GAAP or cause the Trust to become a member of MMCA's
consolidated group under GAAP.
(b) This Agreement may also be amended from time to time
by the Seller, the Servicer and the Trust with the consent of the Indenture
Trustee, the consent of the Holders of Notes evidencing not less than 51%
of Outstanding Amount of all of the Notes, voting as a group, and the
consent of the Holders of Certificates evidencing not less than 51% of the
Certificate Balance for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, or change the allocation or priority of, collections of payments
on Receivables or distributions that shall be required to be made on any
Note or Certificate or change the Note Interest Rate or the Specified
Reserve Balance, without the consent of all adversely affected Noteholders
or Certificateholders, (b) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of the Holders of all
Notes and Certificates affected thereby or (c) adversely affect the rating
of any Class of Notes by the Rating Agencies without the consent, as
applicable, of Noteholders evidencing not less than 66 2/3% of the Notes of
such Class Outstanding.
(c) Prior to the execution of any amendment or consent
pursuant to Section 10.1(b), the Servicer shall provide written
notification of the substance of such amendment or consent to each Rating
Agency.
(d) Promptly after the execution of any amendment or
consent pursuant to this Section 10.1, the Owner Trustee shall furnish
written notification of the substance of such amendment or consent to each
Certificateholder, the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Noteholders or the
Certificateholders pursuant to this Section 10.1 to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Noteholders and Certificateholders
provided for in this Agreement) and of evidencing the authorization of the
execution thereof by Noteholders and Certificateholders shall be subject to
such reasonable requirements as the Owner Trustee and the Indenture Trustee
may prescribe.
(e) Prior to the execution of any amendment to this
Agreement, the Owner Trustee and the Indenture Trustee shall be entitled to
receive and rely upon (i) an Opinion of Counsel stating that the execution
of such amendment (A) is authorized or permitted by this Agreement, (B)
will not materially adversely affect the Federal or any Applicable Tax
State income or franchise taxation of any Outstanding Note or Certificate
or any Holder thereof, and (C) will not cause the Trust to be taxable as a
corporation for Federal or any Applicable Tax State income or franchise tax
purposes and (ii) an Officer's Certificate of the Servicer that all
conditions to the execution of such amendment have been complied with. The
Owner Trustee or the Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which affects such Owner Trustee's or
Indenture Trustee's own rights, duties or immunities under this Agreement
or otherwise.
Section 10.2 Protection of Title to Trust. (a) The Seller
or Servicer, or both, shall authorize and file such financing statements
and cause to be authorized and filed such continuation statements, all in
such manner and in such places as may be required by law fully to preserve,
maintain, and protect the interest of the Trust and the Indenture Trustee
for the benefit of the Noteholders in the Receivables and in the proceeds
thereof. The Seller or Servicer, or both, shall deliver (or cause to be
delivered) to the Owner Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its
name, identity, or corporate structure in any manner that would, could, or
might make any financing statement or continuation statement filed by the
Seller or the Servicer in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-506(b) of the Relevant UCC,
unless it shall have given the Owner Trustee and the Indenture Trustee at
least 60 days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Seller and the Servicer shall give the Owner
Trustee and the Indenture Trustee at least 60 days' prior written notice of
any change in its jurisdiction of organization if, as a result of such
relocation or change, the applicable provisions of the Relevant UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly
file any such amendment, continuation statement or any new financing
statement. The Servicer shall at all times maintain each office from which
it shall service Receivables and its jurisdiction of organization within
the United States of America.
(d) The Servicer shall maintain accounts and records as
to each Receivable accurately and in sufficient detail to permit (i) the
reader thereof to know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of each)
and (ii) reconciliation between payments or recoveries on (or with respect
to) each Receivable and the amounts from time to time deposited in the
Collection Account, Payahead Account, the Reserve Account and the Yield
Supplement Account.
(e) The Servicer shall maintain its computer systems so
that, from and after the time of sale under this Agreement of the
Receivables to the Trust, the Servicer's master computer records (including
any back-up archives) that refer to a Receivable shall indicate clearly the
interest of the Trust and the Indenture Trustee in such Receivable and that
such Receivable is owned by the Trust and has been pledged to the Indenture
Trustee pursuant to the Indenture. Indication of the Trust's and the
Indenture Trustee's interest in a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the
Receivable shall have been paid in full or repurchased by the Seller or
purchased by the Servicer.
(f) If at any time the Seller or the Servicer shall
propose to sell, grant a security interest in, or otherwise transfer any
interest in any automobile or sports-utility vehicle receivables to any
prospective purchaser, lender, or other transferee, the Servicer shall give
to such prospective purchaser, lender, or other transferee computer tapes,
compact disks, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and
is owned by the Trust and has been pledged to the Indenture Trustee unless
such Receivable has been paid in full or repurchased by the Seller or
purchased by the Servicer.
(g) The Servicer shall permit the Owner Trustee, the
Indenture Trustee and their respective agents at any time during normal
business hours to inspect, audit, and make copies of and abstracts from the
Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner
Trustee and the Indenture Trustee, within 10 Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of
the Trust, together with a reconciliation of such list to the Schedules of
Receivables and to each of the Servicer's Certificates furnished before
such request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and
the Indenture Trustee:
(1) promptly after the execution and delivery of
each amendment to any financing statement, an Opinion of
Counsel either (A) stating that, in the opinion of such
Counsel, all financing statements and continuation
statements have been authorized and filed that are
necessary fully to preserve and protect the interest of
the Trust and the Indenture Trustee in the Receivables,
and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to preserve
and protect such interest; and
(2) within 90 days after the beginning of each
calendar year commencing in the year 2003, an Opinion of
Counsel, dated as of a date during such 90-day period,
either (A) stating that, in the opinion of such Counsel,
all financing statements and continuation statements have
been authorized and filed that are necessary fully to
preserve and protect the interest of the Trust and the
Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating
that, in the opinion of such Counsel, no such action
shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i)(1) or
(i)(2) above shall specify any action necessary (as of the date of such
opinion) to be taken in the following year to preserve and protect such
interest.
(j) The Seller shall, to the extent required by
applicable law, cause the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the
time periods specified in such sections.
Section 10.3 Representations of the Seller and the
Purchaser. The respective agreements, representations, warranties and other
statements by the Seller and the Purchaser set forth in or made pursuant to
this Agreement shall remain in full force and effect and will survive the
Closing.
Section 10.4 Governing Law. This Agreement shall be
construed in accordance with the laws of the State of New York without
reference to its conflict of laws provisions (other than section 5-1401 of
the general obligations law) and the obligations, rights, and remedies of
the parties hereunder shall be determined in accordance with such laws.
Section 10.5 Notices. All demands, notices, and
communications under this Agreement shall be in writing, personally
delivered, sent via facsimile, overnight courier or mailed by certified
mail, return receipt requested, and shall be deemed to have been duly given
upon receipt,
(a) in the case of the Seller or the Servicer, to the
agent for service as specified in Section 10.13 hereof, or at such other
address as shall be designated by the Seller or the Servicer in a written
notice to the Owner Trustee and the Indenture Trustee;
(b) in the case of the Owner Trustee, at the Corporate
Trust Office of the Owner Trustee;
(c) in the case of the Indenture Trustee, at the
Corporate Trust Office of the Indenture Trustee;
(d) in the case of Moody's, at the following address:
Xxxxx'x Investors Service, Inc.
ABS Monitoring Department
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(e) in the case of S&P, at the following address:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(f) in the case of Fitch Ratings, at the following
address:
Fitch Ratings
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
Fax: (000) 000-0000
Any notice required or permitted to be mailed to a
Noteholder or Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Note Register or the
Certificate Register, as applicable. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Noteholder or Certificateholder shall
receive such notice.
Section 10.6 Severability of Provisions. If any one or
more of the covenants, agreements, provisions, or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the
remaining covenants, agreements, provisions, or terms of this Agreement and
shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of the Notes, the Certificates, or the
rights of the Holders thereof.
Section 10.7 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 7.3 and 8.2 and
as provided in the provisions of this Agreement concerning the resignation
of the Servicer, this Agreement may not be assigned by the Seller or the
Servicer without the prior written consent of the Owner Trustee, the
Indenture Trustee, the Holders of Notes evidencing not less than 66 2/3% of
the Outstanding Amount of the Notes and the Holders of Certificates
evidencing not less than 66 2/3% of the Certificate Balance and any such
assignment without the required consents shall be null and void.
Section 10.8 Further Assurances. The Seller and the
Servicer agree to do and perform, from time to time, any and all acts and
to execute any and all further instruments required or reasonably requested
by the Owner Trustee or the Indenture Trustee more fully to effect the
purposes of this Agreement, including, without limitation, the execution of
any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the Relevant UCC of any
applicable jurisdiction.
Section 10.9 No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of the Owner Trustee,
the Indenture Trustee, the Noteholders or the Certificateholders, any
right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges therein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
Section 10.10 Third-Party Beneficiaries. This Agreement
will inure to the benefit of and be binding upon the parties hereto, the
Noteholders, the Certificateholders, and their respective successors and
permitted assigns. Except as otherwise provided in this Article X, no other
Person will have any right or obligation hereunder. The parties hereto
hereby acknowledge and consent to the pledge of this Agreement by the Trust
to the Indenture Trustee for the benefit of Noteholders pursuant to the
Indenture.
Section 10.11 Actions by Noteholder or
Certificateholders. (a) Wherever in this Agreement a provision is made that
an action may be taken or a notice, demand, or instruction given by
Noteholders or Certificateholders, such action, notice, or instruction may
be taken or given by any Noteholder or Certificateholder, as applicable,
unless such provision requires a specific percentage of Noteholders or
Certificateholders.
(b) Any request, demand, authorization, direction,
notice, consent, waiver, or other act by a Noteholder or Certificateholder
shall bind such Noteholder or Certificateholder and every subsequent Holder
of such Note or Certificate issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything
done or omitted to be done by the Owner Trustee, the Indenture Trustee or
the Servicer in reliance thereon, whether or not notation of such action is
made upon such Note or Certificate.
Section 10.12 Counterparts. For the purpose of
facilitating the execution of this Agreement and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of
which counterparts shall constitute but one and the same instrument.
Section 10.13 Agent for Service. The agent for service of
the Seller and the Servicer in respect of this Agreement shall be Executive
Vice President and Treasurer, Mitsubishi Motors Credit of America, Inc.,
0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, mailing address: X.X.
Xxx 0000, Xxxxxxx, Xxxxxxxxxx 00000-0000.
Section 10.14 No Bankruptcy Petition; Subordination;
Claims Against Seller. The Owner Trustee, the Indenture Trustee, the Trust
and the Servicer each covenants and agrees that:
(a) prior to the date which is one year and one day after
the payment in full of all securities issued by the Seller or by a trust
for which the Seller was the depositor which securities were rated by any
nationally recognized statistical rating organization, it will not
institute against, or join any other Person in instituting against, the
Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law;
(b) any claim that it may have at any time against the
Subtrust Assets of any Subtrust unrelated to the Receivables, and any claim
that it may have at any time against the Seller that it may seek to enforce
against the Subtrust Assets of any Subtrust unrelated to the Receivables,
shall be subordinate to the payment in full, including post-petition
interest, in the event that the Seller becomes a debtor or debtor in
possession in a case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect or otherwise
subject to any insolvency, reorganization, liquidation, rehabilitation or
other similar proceedings, of the claims of the holders of any Securities
related to such unrelated Subtrust and the holders of any other notes,
bonds, contracts or other obligations that are related to such unrelated
Subtrust; and
(c) it hereby irrevocably makes the election afforded by
Title 00 Xxxxxx Xxxxxx Code Section 1111(b)(1)(A)(i) to secured creditors
to receive the treatment afforded by Title 00 Xxxxxx Xxxxxx Code Section
1111(b)(2) with respect to any secured claim that it may have at any time
against the Seller. The obligations of the Seller under this Agreement are
limited to the related Subtrust and the related Subtrust Assets. This
Section 10.13 shall survive the resignation or removal of the Owner Trustee
under the Trust Agreement or the Indenture Trustee under the Indenture or
the termination of such Agreement.
Section 10.15 Limitation of Liability of Owner Trustee
and Indenture Trustee. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Wilmington Trust
Company, not in its individual capacity but solely in its capacity as Owner
Trustee of the Trust and in no event shall Wilmington Trust Company in its
individual capacity or, except as expressly provided in the Trust
Agreement, as Owner Trustee of the Trust, have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Trust hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Trust. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Trust hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the
contrary, this Agreement has been accepted by Bank of Tokyo-Mitsubishi
Trust Company, not in its individual capacity but solely as Indenture
Trustee, and in no event shall Bank of Tokyo-Mitsubishi Trust Company have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Trust hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Trust.
IN WITNESS WHEREOF, the parties have caused this Sale and
Servicing Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
MMCA AUTO RECEIVABLES TRUST II,
as Seller
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Secretary & Treasurer
MMCA AUTO OWNER TRUST 2002-3
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Assistant Vice President
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By: /s/ C. A. Xxxxxxx
------------------------------
Name: C. A. Xxxxxxx
Title: Executive Vice President
and General Manager
Accepted and agreed:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By: /s/ X. Xxxxxxxxx
-----------------------------
Name: X. Xxxxxxxxx
Title: Trust Officer
Schedule A
SCHEDULE OF INITIAL RECEIVABLES
Exhibit B to the Purchase Agreement
Incorporated by Reference Herein
Schedule B
LOCATIONS OF RECEIVABLES FILES
Corporate Xxxxxx
0000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
National Service Center
00000 Xxxxxx Xxxxxx, Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Exhibit A
[Form of Servicer's Certificate]
The undersigned certifies that he is a
_____________________ of Mitsubishi Motors Credit of America, Inc., a
corporation in good standing under the laws of the state of its
incorporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 3.9 of the Sale and Servicing Agreement, dated as of __________,
_____, by and among the Company, as Servicer, MMCA Auto Receivables Trust
II, as Seller, and MMCA Auto Owner Trust ____-__ (the "Sale and Servicing
Agreement") (all capitalized terms used herein without definition have the
respective meanings specified in the Sale and Servicing Agreement), and
further certifies that:
(a) The Servicer's report for the period from
__________ to ____________ attached to this certificate is
complete and accurate and contains all information required by
Section 3.9 of the Sale and Servicing Agreement; and
(b) As of the date hereof, no Event of Servicing
Termination or event that with notice or lapse of time or both
would become an Event of Servicing Termination has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature
and the corporate seal of the Company this ___ day of __________, _____.
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC.
By:
------------------------
Name:
Title:
Exhibit B
FORM OF STATEMENT TO NOTEHOLDERS
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Noteholders
MMCA Auto Owner Trust ___-__
July 1, ____ through June 30, _____
Per Original
Aggregate $1,000 Note or
Certificate
I. A. Distribution of Note Principal
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6,. Class C
B. Distribution of Certificate Principal
II. Distribution of Note Interest
A. Class A-1
B. Class A-2
C. Class A-3
D. Class A-4
E. Class B
F. Class C
III. Yield Supplement Amount
IV. Total Servicing Fee
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Note Pool Factors
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
C. Certificate Balance
D. Certificate Pool Factor
VI. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
VIII. Principal Balance of Deferred Receivables
IX. Interest Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
X. Principal Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
XI. Aggregate Realized Losses for This Collection Period
XII. Reserve Account Balance on Payment Date
XIII. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased
by Servicer
Exhibit C
FORM OF STATEMENT TO CERTIFICATEHOLDERS
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Certificateholders
MMCA Auto Owner Trust ___-__
July 1, ____ through June 30, _____
Per Original
Aggregate $1,000 Note or
Certificate
I. A. Distribution of Note Principal
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Distribution of Certificate Principal
II. Distribution of Note Interest
A. Class A-1
B. Class A-2
C. Class A-3
D. Class A-4
E. Class B
F. Class C
III. Yield Supplement Amount
IV. Total Servicing Fee
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Note Pool Factors
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
C. Certificate Balance
D. Certificate Pool Factor
VI. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
VIII. Principal Balance of Deferred Receivables
IX. Interest Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
X. Principal Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
XI. Aggregate Realized Losses for This Collection Period
XII. Reserve Account Balance on Payment Date
XIII. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased
by Servicer
Exhibit D
[Form of Yield Supplement Agreement]
MMCA Auto Receivables Trust II
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re: MMCA Auto Owner Trust 2002-3
Ladies and Gentlemen:
We hereby confirm arrangements made as of the date hereof
with you to be effective upon (i) receipt by us of the enclosed copy of
this letter agreement (as amended, supplemented or otherwise modified and
in effect from time to time, the "Yield Supplement Agreement"), executed by
you, and (ii) execution of the Purchase Agreement referred to below and
payment of the purchase price specified thereunder. Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to such
terms in, or incorporated by reference into, the Purchase Agreement, dated
as of August 1, 2002 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Purchase Agreement"), between Mitsubishi
Motors Credit of America, Inc., as seller (the "Seller"), and MMCA Auto
Receivables Trust II, as purchaser (the "Purchaser").
1. On or prior to the Determination Date preceding each
Payment Date, the Servicer shall notify the Purchaser and the Seller of the
Yield Supplement Amount for such Payment Date.
2. In consideration for the Purchaser entering into the
Purchase Agreement and the purchase price paid to the Seller for the
Receivables under the Purchase Agreement, we agree to make a payment of the
Yield Supplement Amount to the Purchaser, or to the pledgee of the assignee
of the Purchaser referred to in Section 5 hereof, on the Business Day prior
to each Payment Date.
3. All payments pursuant hereto shall be made by federal
wire transfer (same day) funds or in immediately available funds, to such
account as the Purchaser or the pledgee of the assignee of the Purchaser
referred to in Section 5 hereof, may designate in writing to the Seller,
prior to the relevant Payment Date.
4. Our agreements set forth in this Yield Supplement
Agreement are our primary obligations and such obligations are irrevocable,
absolute and unconditional, shall not be subject to any counterclaim,
setoff or defense and shall remain in full force and effect without regard
to, and shall not be released, discharged or in any way affected by, any
circumstances or condition whatsoever.
5. Pursuant to the Sale and Servicing Agreement, the
Purchaser will sell, transfer, assign and convey its interest in this Yield
Supplement Agreement to MMCA Auto Owner Trust 2002-3 (the "Trust"), and the
Seller hereby acknowledges and consents to such sale, transfer, assignment
and conveyance. Concurrent with such sale, transfer, assignment and
conveyance, pursuant to the Indenture, the Trust will pledge its rights
under this Yield Supplement Agreement, along with certain other assets of
the Trust, to Bank of Tokyo-Mitsubishi Trust Company, as Indenture Trustee,
to secure its obligations under the Notes and the Indenture, and the Seller
hereby acknowledges and consents to such pledge. The Seller hereby agrees,
for the benefit of the Trust, that following such sale, transfer,
assignment, conveyance and pledge, this Yield Supplement Agreement shall
not be amended, modified or terminated without the consent of Wilmington
Trust Company, as Owner Trustee on behalf of the Trust, and, prior to the
payment in full of the Notes, the Indenture Trustee.
6. This Yield Supplement Agreement will be governed by,
and construed in accordance with, the laws of the State of New York.
7. Except as otherwise provided herein, all notices
pursuant to this Yield Supplement Agreement shall be in writing and shall
be effective upon receipt thereof. All notices shall be directed as set
forth below, or to such other address or to the attention of such other
person as the relevant party shall have designated for such purpose in a
written notice.
If to the Purchaser:
MMCA Auto Receivables Trust II
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Secretary/Treasurer
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Seller:
Mitsubishi Motors Credit of America, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Executive Vice President and Treasurer
Telephone: (000) 000-0000
Fax: (000) 000-0000
8. This Yield Supplement Agreement may be executed in one
or more counterparts and by the different parties hereto on separate
counterparts, all of which shall be deemed to be one and the same document.
If the foregoing satisfactorily sets forth the terms and
conditions of our agreement, please indicate your acceptance thereof by
signing in the space provided below and returning to us the enclosed
duplicate original of this letter.
Very truly yours,
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.,
as Seller
By:
----------------------
Name:
Title:
Agreed and accepted as of
the date first above written:
MMCA AUTO RECEIVABLES TRUST II,
as Purchaser
By:
____________________________
Name:
Title:
Exhibit E
[Form of Second-Tier Subsequent Assignment]
Dated:__________, _____
For value received, in accordance with and subject to the
Sale and Servicing Agreement, dated as of August 1, 2002 (the "Sale and
Servicing Agreement"), among MMCA Auto Owner Trust 2002-3 (the "Trust"),
MMCA Auto Receivables Trust II, as the Seller (the "Seller"), and
Mitsubishi Motors Credit of America, Inc., as the Servicer (the
"Servicer"), the Seller hereby irrevocably sells, transfers, assigns and
otherwise conveys to the Trust, without recourse (subject to the
obligations herein), all right, title and interest of the Seller, whether
now owned or hereafter acquired, in, to and under the following:
(i) the Subsequent Receivables listed on Schedule A hereto;
(ii) with respect to the Subsequent Receivables that are Actuarial
Receivables, monies due thereunder on or after __________, _____
(the "Subsequent Cutoff Date") (including Payaheads), and, with
respect to Subsequent Receivables that are Simple Interest
Receivables, monies received thereunder on or after the Subsequent
Cutoff Date;
(iii) the security interests in Financed Vehicles granted by
Obligors pursuant to such Subsequent Receivables and any other
interest of the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to such
Subsequent Receivables from claims on any physical damage, theft,
credit life or disability insurance policies covering the related
Financed Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to such Subsequent
Receivables from recourse to Dealers thereon pursuant to Dealer
Agreements;
(vi) all of the Seller's rights to the Receivable Files that
relate to such Subsequent Receivables;
(vii) all payments and proceeds with respect to such Subsequent
Receivables held by the Servicer;
(viii) all property (including the right to receive Liquidation
Proceeds and Recoveries and Financed Vehicles and the proceeds
thereof acquired by the Seller pursuant to the terms of a
Subsequent Receivable that is a Final Payment Receivable),
guarantees and other collateral securing a Subsequent Receivable
(other than a Subsequent Receivable purchased by the Servicer or
repurchased by the Seller);
(ix) all of the Seller's rights under the related First-Tier
Subsequent Assignment;
(x) all rebates of premiums and other amounts relating to
insurance policies and other items financed under such Subsequent
Receivables in effect as of the Subsequent Cutoff Date; and
(xi) all present and future claims, demands, causes of action and
choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards,
rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which
at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
The Seller hereby represents that as of the Subsequent
Cutoff Date, the aggregate Principal Balance of the Subsequent Receivables
was $______________.
The foregoing sale, transfer, assignment and conveyance
shall not constitute and is not intended to result in an assumption by the
Trust of any obligation of the Seller to the Obligors, the Dealers or any
other Person with respect the Subsequent Receivables set forth in Schedule
A attached hereto and the other Trust Property related thereto or any
agreement, document or instrument related thereto.
In the event that the foregoing sale, transfer,
assignment and conveyance is deemed to be a pledge, the Seller hereby
grants to the Trust a first priority security interest in all of the
Seller's right to and interest in the Subsequent Receivables and other
property described in clauses (i) through (xi) above to secure a loan
deemed to have been made by the Trust to the Seller in an amount equal to
the sum of the initial principal amount of the Notes plus accrued interest
thereon and the Initial Certificate Balance.
This Second-Tier Subsequent Assignment shall be construed
in accordance with the laws of the State of New York and the obligations of
the Seller under this Second-Tier Subsequent Assignment shall be determined
in accordance with such laws.
This Second-Tier Subsequent Assignment is made pursuant
to and upon the representations, warranties and agreements on the part of
the Seller contained in the Sale and Servicing Agreement and is to be
governed in all respects by the Sale and Servicing Agreement. Capitalized
terms used but not otherwise defined herein shall have the meanings
assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Second-Tier Subsequent Assignment to be duly executed as of the day
hereinabove set forth.
MMCA AUTO RECEIVABLES TRUST II
By: ___________________________
Name:
Title:
Schedule A (to Exhibit E)
SCHEDULE OF SUBSEQUENT RECEIVABLES PROVIDED TO THE
INDENTURE TRUSTEE ON THE SUBSEQUENT CLOSING DATE, WHICH
MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE
Annex A (to Exhibit E)
OFFICER'S CERTIFICATE
The undersigned officer of MMCA Auto Receivables Trust II
(the "Company"), does hereby certify, pursuant to Section 2.1(d)(xvii) of
the Sale and Servicing Agreement, dated as of August 1, 2002 among MMCA
Auto Owner Trust 2002-3 (the "Trust"), MMCA Auto Receivables Trust II, as
the Seller, and Mitsubishi Motors Credit of America, Inc., as the Servicer
(as amended, supplemented or otherwise modified as of the date hereof, the
"Agreement") that all of the conditions to the transfer to the Trust of the
Subsequent Receivables listed on Schedule A to the Second-Tier Subsequent
Assignment delivered herewith and the other property and rights related to
such Subsequent Receivable, as described in Section 2.1(d) of the
Agreement, have been satisfied on or prior to the related Subsequent
Transfer Date.
Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Agreement.
IN WITNESS WHEREOF, the undersigned have caused this
certificate to be duly executed this ____ day of __________, ____.
By: ____________________________
Name:
Title:
