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SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 2001-3,
as the Trust
MMCA AUTO RECEIVABLES TRUST,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of October 1, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS 1
SECTION 1.1 DEFINITIONS.....................................................1
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS..................................23
SECTION 1.3 BUSINESS DAY CERTIFICATE.......................................23
ARTICLE II TRUST PROPERTY 24
SECTION 2.1 CONVEYANCE OF TRUST PROPERTY...................................24
SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO
THE RECEIVABLES................................................29
SECTION 2.3 REPURCHASE UPON BREACH.........................................34
SECTION 2.4 CUSTODY OF RECEIVABLE FILES....................................35
SECTION 2.5 DUTIES OF SERVICER AS CUSTODIAN................................35
SECTION 2.6 INSTRUCTIONS; AUTHORITY TO ACT.................................36
SECTION 2.7 CUSTODIAN'S INDEMNIFICATION....................................37
SECTION 2.8 EFFECTIVE PERIOD AND TERMINATION...............................37
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST PROPERTY 37
SECTION 3.1 DUTIES OF SERVICER.............................................37
SECTION 3.2 COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS...............41
SECTION 3.3 REALIZATION UPON RECEIVABLES...................................43
SECTION 3.4 PHYSICAL DAMAGE INSURANCE......................................44
SECTION 3.5 MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.........44
SECTION 3.6 COVENANTS OF SERVICER. THE SERVICER HEREBY MAKES THE
FOLLOWING COVENANTS:...........................................44
SECTION 3.7 PURCHASE BY SERVICER UPON BREACH...............................44
SECTION 3.8 SERVICING COMPENSATION.........................................45
SECTION 3.9 SERVICER'S CERTIFICATE.........................................45
SECTION 3.10 ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF EVENT OF
SERVICING TERMINATION..........................................46
SECTION 3.11 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
REPORTS........................................................46
SECTION 3.12 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING RECEIVABLES..........................................47
SECTION 3.13 REPORTS TO THE COMMISSION......................................47
SECTION 3.14 REPORTS TO RATING AGENCIES.....................................47
ARTICLE IV DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS 47
SECTION 4.1 ACCOUNTS.......................................................47
SECTION 4.2 COLLECTIONS....................................................52
SECTION 4.3 APPLICATION OF COLLECTIONS.....................................53
SECTION 4.4 ADVANCES.......................................................54
SECTION 4.5 ADDITIONAL DEPOSITS............................................56
SECTION 4.6 ALLOCATION OF TOTAL AVAILABLE FUNDS............................56
SECTION 4.7 RESERVE ACCOUNT................................................58
SECTION 4.8 NET DEPOSITS...................................................60
SECTION 4.9 STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS...............60
SECTION 4.10 CONTROL OF SECURITIES ACCOUNTS.................................62
SECTION 4.11 PRE-FUNDING ACCOUNT............................................62
SECTION 4.12 NEGATIVE CARRY ACCOUNT.........................................63
ARTICLE V YIELD SUPPLEMENT LETTER OF CREDIT AND THE YIELD
SUPPLEMENT ACCOUNT 63
SECTION 5.1 YIELD SUPPLEMENT LETTER OF CREDIT AND THE YIELD
SUPPLEMENT ACCOUNT.............................................63
ARTICLE VI THE SELLER 66
SECTION 6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER............66
SECTION 6.2 LIABILITY OF SELLER; INDEMNITIES...............................67
SECTION 6.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER.........................................68
SECTION 6.4 LIMITATION ON LIABILITY OF SELLER AND OTHERS...................69
SECTION 6.5 SELLER MAY OWN NOTES OR CERTIFICATES...........................69
ARTICLE VII THE SERVICER 69
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF SERVICER.....................69
SECTION 7.2 LIABILITY OF SERVICER; INDEMNITIES.............................71
SECTION 7.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER.......................................72
SECTION 7.4 LIMITATION ON LIABILITY OF SERVICER AND OTHERS.................73
SECTION 7.5 SERVICER NOT TO RESIGN.........................................73
SECTION 7.6 SERVICER MAY OWN NOTES OR CERTIFICATES.........................73
ARTICLE VIII SERVICING TERMINATION 74
SECTION 8.1 EVENTS OF SERVICING TERMINATION................................74
SECTION 8.2 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR SERVICER....75
SECTION 8.3 EFFECT OF SERVICING TRANSFER...................................76
SECTION 8.4 NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS.............77
SECTION 8.5 WAIVER OF PAST EVENTS OF SERVICING TERMINATION.................77
ARTICLE IX TERMINATION 77
SECTION 9.1 OPTIONAL PURCHASE OF ALL RECEIVABLES...........................77
ARTICLE X MISCELLANEOUS PROVISIONS 78
SECTION 10.1 AMENDMENT......................................................78
SECTION 10.2 PROTECTION OF TITLE TO TRUST...................................80
SECTION 10.3 GOVERNING LAW..................................................82
SECTION 10.4 NOTICES........................................................82
SECTION 10.5 SEVERABILITY OF PROVISIONS.....................................83
SECTION 10.6 ASSIGNMENT.....................................................84
SECTION 10.7 FURTHER ASSURANCES.............................................84
SECTION 10.8 NO WAIVER; CUMULATIVE REMEDIES.................................84
SECTION 10.9 THIRD-PARTY BENEFICIARIES......................................84
SECTION 10.10 ACTIONS BY NOTEHOLDER OR CERTIFICATEHOLDERS....................84
SECTION 10.11 COUNTERPARTS...................................................85
SECTION 10.12 AGENT FOR SERVICE..............................................85
SECTION 10.13 NO BANKRUPTCY PETITION; SUBORDINATION; CLAIMS
AGAINST SELLER.................................................85
SECTION 10.14 LIMITATION OF LIABILITY OF OWNER TRUSTEE AND
INDENTURE TRUSTEE..............................................85
SCHEDULES
SCHEDULE A Schedule of Receivables.........................................SA-1
SCHEDULE B Locations of Receivable Files...................................SB-1
EXHIBITS
EXHIBIT A Form of Servicer's Certificate.................................A-1
EXHIBIT B Form of Statement to Noteholders...............................B-1
EXHIBIT C Form of Statement to Certificateholders........................C-1
EXHIBIT D Form of Yield Supplement Agreement.............................D-1
EXHIBIT E Form of Second-Tier Subsequent Assignment......................E-1
SALE AND SERVICING AGREEMENT, dated as of October 1, 2001 (as
amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement"), by and among MMCA AUTO OWNER TRUST 2001-3, a
Delaware business trust (the "Trust"), MMCA AUTO RECEIVABLES TRUST, a
Delaware business trust (the "Seller"), and MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., a Delaware corporation (the "Servicer").
WHEREAS, the Trust desires to purchase portfolios of receivables
arising in connection with motor vehicle retail installment sale contracts
generated by Mitsubishi Motors Credit of America, Inc. in the ordinary
course of its business and sold to the Seller as of the date hereof;
WHEREAS, the Seller is willing to sell such receivables to the
Trust as of the date hereof; and
WHEREAS, Mitsubishi Motors Credit of America, Inc. is willing to
service such receivables on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires,
whenever capitalized shall have the following meanings:
"Accrued Note Interest" shall mean, with respect to any Payment
Date and each Class of Notes, the sum of the Monthly Accrued Note Interest
and the Interest Carryover Shortfall for such Class for such Payment Date.
"Actuarial Advance" shall mean, with respect to an Actuarial
Receivable, the amount, as of the last day of a Collection Period, which is
required to be advanced with respect to such Actuarial Receivable by the
Servicer pursuant to Section 4.4(a).
"Actuarial Method" shall mean the method of allocating a fixed
level payment on a Receivable between principal and interest, pursuant to
which the portion of such payment that is allocated to interest is the
product of one-twelfth (1/12) of the APR n the Receivable multiplied by the
scheduled principal balance of the Receivable, and the remainder of such
payment is allocable to principal.
"Actuarial Receivable" shall mean any Receivable under which the
portion of a payment with respect thereto allocable to interest and the
portion of a payment with respect thereto allocable to principal is
determined in accordance with the Actuarial Method.
"Adjusted Original Pool Balance" shall mean, as of any date of
determination, an amount equal to the aggregate Adjusted Principal Balance
(including the aggregate principal balance of Last Scheduled Payments) of
the Receivables as of the Cutoff Date.
"Adjusted Principal Balance" shall mean, with respect to any
Receivable as of any date of determination, the Principal Balance of such
Receivable, minus the Yield Supplement Overcollateralization Amount for
such Receivable, as of such date.
"Advance" shall mean an Actuarial Advance or a Last Scheduled
Payment Advance, as the context may require.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with such specified Person. For purposes of this
definition, "control" when used with respect to any specified Person shall
mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" shall have the meaning specified in the recitals
hereto.
"Amount Financed" shall mean, with respect to a Receivable, the
aggregate amount advanced under such Receivable toward the purchase price
of the Financed Vehicle and any related costs.
"Applicable Tax State" shall mean, as of any date of
determination, each state as to which any of the following is then
applicable: (a) a state in which the Owner Trustee maintains the Corporate
Trust Office, (b) a state in which the Owner Trustee maintains its
principal executive offices, and (c) a state in which the Servicer
regularly conducts servicing and collection operations other than purely
ministerial activities and which relate to a material portion of the
Receivables.
"APR" of a Receivable shall mean the annual percentage rate of
interest stated in the Contract related to such Receivable.
"Available Funds" shall mean, for any Payment Date, an amount
equal to (a) the sum of the following amounts with respect to the related
Collection Period: (i) all collections on Receivables, including Payaheads
withdrawn from the Payahead Account (but excluding Payaheads deposited into
the Payahead Account), the proceeds of sale by the Trust of any Financed
Vehicle sold to the Trust upon termination, including a prepayment, of a
Final Payment Receivable, (ii) all Liquidation Proceeds on Defaulted
Receivables and any Recoveries; (iii) all extension and deferral fees paid
with respect to the Receivables; (iv) the Purchase Amount of each
Receivable that became a Purchased Receivable during the related Collection
Period (net of applicable expenses); (v) all Actuarial Advances and Last
Scheduled Payment Advances deposited to the Collection Account on such
Payment Date by the Servicer; (vi) amounts paid pursuant to the Yield
Supplement Agreement (including amounts, if any, withdrawn from the Yield
Supplement Account or the Reserve Account pursuant to Section 5.1(a)(ii))
with respect to the related Collection Period; (vii) the Negative Carry
Amount for such Payment Date; (viii) all Net Swap Receipts; (ix) all Swap
Termination Payments received from the Swap Counterparties to the extent
that such amounts will not be applied by the Indenture Trustee to make an
initial payment to another Swap Counterparty relating to a replacement
Interest Rate Swap Agreement; (x) partial prepayments attributable to any
refunded item included in the Amount Financed, such as extended warranty
protection plan costs or physical damage, credit life or disability
insurance premiums, or any partial prepayment which causes a reduction in
the Obligor's periodic payment to be below the Scheduled Payment as of the
Cutoff Date; (xi) the Pre-Funding Account Investment Earnings, if any, for
the related Collection Period; and (xii) with respect to the Payment Date
on or immediately following the last day of the Pre-Funding Period, the
Remaining Pre-Funded Amount; provided, however, that in calculating the
Available Funds, all payments and proceeds (including Liquidation Proceeds)
of any Purchased Receivables the Purchase Amount of which has been included
in the Available Funds in a prior Collection Period (which shall be paid to
the Seller or the Servicer, as applicable) will be excluded, minus (b) the
aggregate amount of funds described in clause (a) above that are used in
the related Collection Period to reimburse the Servicer for the aggregate
amount of Advances previously made by the Servicer that are due and payable
to the Servicer on such Payment Date.
"Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions or trust companies in New York, New
York, Wilmington, Delaware or Los Angeles, California shall be authorized
or obligated by law, regulation or executive order to be closed.
"Capped Receivable" shall mean a Simple Interest Receivable that
is subject to a cap on the aggregate amount of interest to be paid by the
related Obligor during the term of such Receivable.
"Certificate" shall have the meaning assigned thereto in the Trust
Agreement.
"Certificate Balance" shall mean, as the context may require, (i)
with respect to all of the Certificates, an amount equal to, initially, the
Initial Certificate Balance and, thereafter, an amount equal to the Initial
Certificate Balance, as reduced from time to time by all amounts allocable
to principal previously distributed to Certificateholders or (ii) with
respect to any Certificate, an amount equal to, initially, the initial
denomination of such Certificate and, thereafter, an amount equal to such
initial denomination, as reduced from time to time by all amounts allocable
to principal previously distributed in respect of such Certificate;
provided, that in determining whether the Holders of the requisite portion
or percentage of the Certificate Balance of all of the Certificates have
given any request, demand, authorization, direction, notice, consent, or
waiver hereunder or under any other Basic Document, Certificates owned by
the Trust, any other obligor upon the Certificates, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed to be excluded from the Certificate Balance (unless
such Persons own 100% of the Certificate Balance of the Certificates);
provided, further, that where such Persons own 100% of the Certificate
Balance of the Certificates, any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any other Basic Document is
deemed to have been given by the Holders of the Certificates if also given
by the Holders of the Notes, except that, in determining whether the
Indenture Trustee and Owner Trustee shall be protected in relying on any
such request, demand, authorization, direction, notice, consent, or waiver,
only Certificates that a Responsible Officer of the Indenture Trustee, if
applicable, and a Responsible Officer of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement, if
applicable, knows to be so owned shall be so disregarded. Certificates so
owned that have been pledged in good faith may be regarded as included in
the Certificate Balance if the pledgee establishes to the satisfaction of
the Indenture Trustee or the Owner Trustee, as applicable, the pledgee's
right so to act with respect to such Certificates and that the pledgee is
not the Trust, any other obligor upon the Certificates, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons.
"Certificate Distribution Account" shall mean the account
established and maintained as such pursuant to Section 4.1(d).
"Certificate Pool Factor" shall mean, as of the close of business
on the last day of a Collection Period, a seven-digit decimal figure equal
to the Certificate Balance (after giving effect to any reductions therein
to be made on the immediately following Payment Date) divided by the
Initial Certificate Balance. The Certificate Pool Factor will be 1.0000000
as of the Closing Date; thereafter, the Certificate Pool Factor will
decline to reflect reductions in the Certificate Balance.
"Certificateholder" shall have the meaning assigned thereto in the
Trust Agreement.
"Closing Date" shall mean October [12], 2001.
"Collection Account" shall mean the account or accounts
established and maintained as such pursuant to Section 4.1(a).
"Collection Period" shall mean each calendar month during the term
of this Agreement or, in the case of the initial Collection Period, the
period from the Cutoff Date to October 31, 2001. As used herein, the
Collection Period "related to" a Payment Date or "preceding" a Payment Date
refers to the Collection Period that ends on the last day of the calendar
month preceding the calendar month in which such Payment Date occurs.
"Commission" shall mean the Securities and Exchange Commission.
"Computer Tape" shall mean each computer tape or compact disk
generated by the Seller which provides information relating to the
Receivables and which was used by the Seller in selecting the Receivables
conveyed to the Trust hereunder on the Closing Date.
"Contract" shall mean a motor vehicle retail installment sale
contract, including a retail installment contract relating to the sale of
an automobile or a sports-utility vehicle for commercial use.
"Corporate Trust Office" shall mean, as applicable, (i) the
principal office of the Indenture Trustee at which at any particular time
its corporate trust business shall be administered, which office at the
date of the execution of this Agreement is located at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Corporate Trust
Department, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders, the Owner Trustee and the
Seller, or the principal corporate trust office of any successor Indenture
Trustee (of which address such successor Indenture Trustee will notify the
Noteholders, the Owner Trustee and the Seller) or (ii) the principal office
of the Owner Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution
of this Agreement is located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000-0000, Attention: Corporate Trust
Administration or at such other address as the Owner Trustee may designate
from time to time by notice to the Certificateholders, the Indenture
Trustee and the Seller, or the principal corporate trust office of any
successor Owner Trustee (of which address such successor Owner Trustee will
notify the Certificateholders, the Indenture Trustee and the Seller).
"Cutoff Date" shall mean September 30, 2001.
"Dealer" shall mean, with respect to any Receivable, the seller of
the related Financed Vehicle who originated and assigned the Receivable
relating to such Financed Vehicle to MMCA under a Dealer Agreement.
"Dealer Agreement" shall mean an agreement between MMCA and a
Dealer relating to the assignment of Receivables to MMCA and all documents
and instruments relating thereto, as the same may from time to time be
amended, supplemented or otherwise modified and in effect.
"Defaulted Receivable" shall mean a Receivable (other than a
Purchased Receivable) as to which (i) the related Financed Vehicle has been
repossessed and liquidated, (ii) more than 10% of a Scheduled Payment
(including, in the case of a Final Payment Receivable, the amount owed by
an Obligor with respect to a Last Scheduled Payment but excluding in each
case any Excess Wear and Tear or Excess Mileage) is 120 or more days past
due and the Servicer has not repossessed the related Financed Vehicle or
(iii) the Servicer has determined, in accordance with its customary
servicing standards, policies and procedures, that eventual payment in full
(including, in the case of a Final Payment Receivable, the amount owed by
an Obligor with respect to a Last Scheduled Payment but excluding in each
case any Excess Wear and Tear or Excess Mileage) on the Receivable is
unlikely and the Servicer has either (x) repossessed and liquidated the
related Financed Vehicle or (y) repossessed and held the related Financed
Vehicle in its repossession inventory for more than 90 days, which 90 days
shall not be more than 180 days after the date on which a Scheduled Payment
was due but not paid.
"Deferred Payment Receivable" shall mean any Receivable for which
the related Contract specifies that no Scheduled Payment under such
Contract shall be due until a date more than 50 days but less than [480]
days from the date of inception of the such Contract. A Receivable shall
cease to be a Deferred Payment Receivable commencing on the last day of the
Collection Period preceding the Collection Period in which the first
Scheduled Payment is due under the related Contract.
"Depositor" shall mean the Seller, in its capacity as Depositor
under the Trust Agreement.
"Determination Date" shall mean, with respect to any Collection
Period, the seventh Business Day of the next succeeding calendar month (but
not later than the tenth calendar day of such month).
"Eligible Receivable" shall mean each Receivable as to which the
representations and warranties of the Seller in Section 2.2 shall be true
and correct in all material respects as of the Cutoff Date.
"Eligible Servicer" shall mean a Person which, at the time of its
appointment as Servicer or as a subservicer, (i) has a net worth of not
less than $50,000,000, (ii) is servicing a portfolio of motor vehicle
retail installment sale contracts and/or motor vehicle loans, (iii) is
legally qualified, and has the capacity, to service the Receivables, (iv)
has demonstrated the ability professionally and competently to service a
portfolio of motor vehicle retail installment sale contracts and/or motor
vehicle loans similar to the Receivables in accordance with standards of
skill and care that are consistent with prudent industry standards, and (v)
is qualified and entitled to use pursuant to a license or other written
agreement, and agrees to maintain the confidentiality of, the software
which the Servicer or any subservicer uses in connection with performing
its duties and responsibilities under this Agreement or the related
subservicing agreement or obtains rights to use, or develops at its own
expense, software which is adequate to perform its duties and
responsibilities under this Agreement or the related subservicing
agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Event of Servicing Termination" shall mean an event specified in
Section 8.1.
"Excess Mileage" shall mean, with respect to any Financed Vehicle
securing a Final Payment Receivable, the amounts payable by the related
Obligor relating to the excess of the number of miles by which such
Financed Vehicle has been driven over the number of miles such Financed
Vehicle may be driven during the term of the related Final Payment
Receivable (as specified in the Contract related to such Final Payment
Receivable) without incurring an excess mileage charge pursuant to the
related Contract, net of the amount, if any, payable to a third party
collection agency as payment of its fees and expenses in connection with
collecting such amounts from the related Obligor.
"Excess Wear and Tear" shall mean, with respect to any Financed
Vehicle securing a Final Payment Receivable, all amounts payable by the
related Obligor relating to damages to such Financed Vehicle that are not
the result of normal wear and tear, as more specifically described in the
Contract related to such Final Payment Receivable, net of the amount, if
any, payable to a third party collection agency as payment of its fees and
expenses in connection with collecting such amounts from the related
Obligor.
"Final Payment Receivable" shall mean all rights and obligations
arising under a Contract listed on a Schedule of Receivables which provides
for a series of scheduled payments which, if each is made on its scheduled
due date, will amortize the initial Level Pay Balance by the due date
immediately preceding the maturity date of the Receivable. At maturity of
the Final Payment Receivable, the Obligor thereunder will owe (assuming
that all payments have been made on their scheduled due dates) an amount
consisting of interest for the period from the preceding due date through
the maturity date and the remaining Principal Balance of the Receivable. At
maturity of the Final Payment Receivable, the Obligor may either (i) pay
the remaining Principal Balance of the Receivable, all accrued and unpaid
interest, plus any fees, charges, and other amounts then owing, (ii)
refinance the amount then due, subject to certain conditions, or (iii) sell
the Financed Vehicle to MMCA on behalf of the Trust for an amount equal to
the Sale Price, and pay any excess of the total amount owed by the Obligor
(calculated as in clause (i)) over the Sale Price, and satisfy all other
conditions stated under the terms of the Contract.
"Final Scheduled Maturity Date" shall mean, with respect to any
Receivable, [ ].
"Financed Vehicle" shall mean a new or used automobile or
sport-utility vehicle, together with all accessions thereto, securing an
Obligor's indebtedness under the respective Receivable.
"Fitch" shall mean Fitch, Inc..
"GAAP" shall mean generally accepted accounting principles.
"Holder" shall mean a Noteholder or a Certificateholder, as the
case may be.
"Indenture" shall mean the Indenture, dated as of October 1, 2001,
between the Trust and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Indenture Trustee" shall mean Bank of Tokyo-Mitsubishi Trust
Company, a New York banking corporation, as Indenture Trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Certificate Balance" shall mean, as the context may
require, (i) with respect to all of the Certificates, $[ ], or (ii) with
respect to any Certificate, an amount equal to the initial denomination of
such Certificate.
"Initial Pool Balance" shall mean the aggregate Principal Balance
(including the aggregate principal balance of Last Scheduled Payments) of
the Receivables as of the close of business on the Cutoff Date, which is $[ ].
"Initial Weighted Average Rate" shall mean [ ]%.
"Initial Yield Supplement Amount" shall mean $[ ].
"Insolvency Event" shall mean, with respect to any Person, (i) the
making of a general assignment for the benefit of creditors, (ii) the
filing of a voluntary petition in bankruptcy, (iii) being adjudged a
bankrupt or insolvent, or having had entered against such Person an order
for relief in any bankruptcy or insolvency proceeding, (iv) the filing by
such Person of a petition or answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any statute, law or regulation, (v) the filing by such Person of an answer
or other pleading admitting or failing to contest the material allegations
of a petition filed against such Person in any proceeding specified in
(vii) below, (vi) seeking, consenting to or acquiescing in the appointment
of a trustee, receiver or liquidator of such Person or of all or any
substantial part of the assets of such Person or (vii) the failure to
obtain dismissal within 60 days of the commencement of any proceeding
against such Person seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute,
law or regulation, or the entry of any order appointing a trustee,
liquidator or receiver of such Person or of such Person's assets or any
substantial portion thereof.
"Interest Accrual Period" shall mean, with respect to any Payment
Date, and with respect to the Class B Notes, the period from and including
the 15th day of the calendar month immediately preceding such Payment Date
to but excluding the 15th day of the calendar month in which such Payment
Date occurs and, with respect to the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes, the period from and including
the preceding Payment Date through the day preceding the Payment Date;
provided, that for the first Payment Date, the "Interest Accrual Period"
shall mean the period from and including the Closing Date through October
[15], 2001.
"Interest Carryover Shortfall" shall mean, with respect to any
Payment Date and any Class of Notes, the excess of the sum of the Monthly
Accrued Note Interest for the preceding Payment Date and any outstanding
Interest Carryover Shortfall from the close of business on such preceding
Payment Date, over the amount in respect of interest that is actually
deposited in the Note Payment Account on such preceding Payment Date with
respect to such Class, plus interest on such excess to the extent permitted
by law, at the applicable Note Interest Rate for the related Interest
Accrual Period.
"Interest Rate Swap Agreements" shall mean the interest rate swap
agreement relating to the Class A-2 Interest Rate Swap, the interest rate
swap agreement relating to the Class A-3 Interest Rate Swap and the
interest rate swap agreement relating to the Class A-4 Interest Rate Swap,
including all schedules and confirmations thereto, between the Issuer and
the related Swap Counterparty, as the same may be amended, supplemented,
renewed, extended or replaced from time to time, which agreements provide
for payments on notional amounts equal to the outstanding principal balance
of the Class A-2 Notes, the Class A-3 Notes or the Class A-4 Notes, as the
case may be. Each Interest Rate Swap Agreement shall provide that a
termination event will occur thereunder if (a) the long-term rating of the
Swap Counterparty is downgraded below a rating of "A2" by Moody's or "A" by
Fitch or is suspended or withdrawn by either Rating Agency or (b) the
short-term rating of the Swap Counterparty is downgraded below a rating of
"A-1" by S&P or "F-1" by Fitch or is suspended or withdrawn by either
Rating Agency and within 30 days of any such downgrade, suspension or
withdrawal, the Swap Counterparty fails to (i) in the case of a downgrade
by Moody's or Fitch, deliver or post collateral reasonably acceptable to
the Issuer and acceptable to the Rating Agencies, in amounts sufficient or
in accordance with the standards of the Rating Agencies to secure its
obligations under such Interest Rate Swap Agreement, (ii) in the case of a
downgrade by any Rating Agency, assign its rights and obligations under
such Interest Rate Swap Agreement to a replacement counterparty reasonably
acceptable to the Issuer and the Rating Agencies or (iii) in the case of a
downgrade by any Rating Agency, establish other arrangements necessary, if
any, in each case so that the Rating Agencies confirm the ratings of the
Notes that were in effect immediately prior to such downgrade, suspension
or withdrawal.
"Last Scheduled Payment" shall mean, with respect to each Final
Payment Receivable, the amount referred to in the Contract related to such
Final Payment Receivable as the "last scheduled payment."
"Last Scheduled Payment Advance" shall mean, with respect to a
Final Payment Receivable, the amount, as of the close of business on the
last day of a Collection Period, which is required to be advanced by the
Servicer with respect to such Final Payment Receivable pursuant to Section
4.4(b).
"Last Scheduled Payment Pool Balance" shall mean, for any Payment
Date, the aggregate principal balance of Last Scheduled Payments of Final
Payment Receivables as of the close of business on the last day of the
preceding Collection Period.
"Last Scheduled Payment Principal Collections" shall mean (a)
collections of principal on a Final Payment Receivable that are
attributable to Last Scheduled Payments, which includes any collection
attributable to principal on a Final Payment Receivable in excess of the
initial Level Pay Balance of that Receivable, whether or not such payment
is made on the due date of the related Last Scheduled Payment, and
including the proceeds of sale (net of expenses) of any Financed Vehicle
purchased by MMCA on behalf of the Trust pursuant to the terms of the
Receivable and subsequently sold on behalf of the Trust, minus (b) with
respect to any Final Payment Receivable with respect to which the Obligor
exercises its right to have MMCA, on behalf of the Trust, purchase the
related Financed Vehicle, the excess of the purchase price from the Obligor
of such Financed Vehicle over the remaining amount owed by the Obligor.
"Letter of Credit Bank" shall mean any Person having the Required
Rating that has provided a Yield Supplement Letter of Credit in accordance
with Section 5.1.
"Level Pay Balance" shall mean, with respect to each Final Payment
Receivable, (i) initially the Amount Financed under such Final Payment
Receivable minus the principal portion of the Last Scheduled Payment
thereon and (ii) thereafter, shall be the amount set forth in clause (i)
minus all collections on or with respect to principal on such Receivable
other than amounts on deposit in the Payahead Account with respect to
future due dates; provided that such Level Pay Balance for any Final
Payment Receivable shall not be less than zero.
"Level Pay Pool Balance" shall mean, for any Payment Date, the sum
of (i) the aggregate Level Pay Balance of Final Payment Receivables and
(ii) the aggregate Principal Balance of the Receivables other than Final
Payment Receivables, as of the close of business on the last day of the
preceding Collection Period.
"Lien" shall mean a security interest, lien, charge, pledge,
equity or encumbrance of any kind, other than tax liens, mechanics' or
materialmen's liens, judicial liens and any liens that may attach to a
Financed Vehicle by operation of law.
"Liquidation Proceeds" shall mean, with respect to a Defaulted
Receivable, the monies collected from whatever source during the Collection
Period in which such Receivable became a Defaulted Receivable, net of the
sum of (i) any expenses incurred by the Servicer in connection with
collection of such Receivable and the disposition of the Financed Vehicle
and (ii) any amounts required by law to be remitted to the Obligor.
"Maximum Negative Carry Amount" shall mean, as of any Payment
Date, an amount equal to the product of (a) the Weighted Average Rate as of
such Payment Date minus [2.5]%, multiplied by (b) the product of the Note
Percentage as of such Payment Date and the Pre-Funded Amount as of such
Payment Date after giving effect to any withdrawals from the Pre-Funding
Account on such Payment Date, multiplied by (c) the percentage equivalent
of a fraction, the numerator of which is the actual number of days until
the expected end of the Pre-Funding Period and the denominator of which is
360. The Maximum Negative Carry Amount as of any Payment Date shall be
calculated in the manner described in the preceding sentence as an
approximation of the maximum aggregate amount of the Negative Carry Amounts
for all subsequent Payment Dates.
"Mitsubishi Motors" shall mean Mitsubishi Motors Corporation, a
Japanese corporation, and its successors and assigns, and any Affiliates
thereof.
"MMCA" shall mean Mitsubishi Motors Credit of America, Inc., a
Delaware corporation, and its successors and assigns.
"MMSA" shall mean Mitsubishi Motors Sales of America, Inc., a
Delaware corporation, and its successors and assigns.
"Modified Receivable" shall have the meaning assigned thereto in
Section 3.2(a).
"Monthly Accrued Note Interest" shall mean, with respect to any
Payment Date and (i) any Class of Notes, interest accrued for the related
Interest Accrual Period at the applicable Note Interest Rate for such Class
on the aggregate principal balance of the Notes of such Class as of the
immediately preceding Payment Date, after giving effect to all payments of
principal to Noteholders of such Class on or prior to such preceding
Payment Date (or, in the case of the first Payment Date, the initial
principal amount of such Class of Notes); and (ii) with respect to the
Notes collectively, the sum of Monthly Accrued Note Interest for each
Class.
"Monthly Remittance Condition" shall have the meaning assigned
thereto in Section 4.1(f).
"Moody's" shall mean Xxxxx'x Investors Service, Inc., or its
successors and assigns.
"Negative Carry Account" shall mean the account established and
maintained as such pursuant to Section 4.1(c).
"Negative Carry Account Initial Deposit" shall mean $[__________].
"Negative Carry Amount" shall mean, with respect to any Payment
Date, the difference (if positive) between (1) the product of (a) the
Monthly Accrued Note Interest for such Payment Date, multiplied by (b) the
Pre-Funded Percentage as of the immediately preceding Payment Date or, in
the case of the first Payment Date, the Closing Date, minus (2) the
Pre-Funding Account Investment Earnings for the related Collection Period
(or, in the case of the first Payment Date, from the Closing Date until
[October 15], 2001).
"Net Swap Payment" shall mean, with respect to any Swap
Counterparty on any Payment Date, the net amount, if any, then payable by
the Issuer to such Swap Counterparty, excluding any Swap Termination
Payments.
"Net Swap Receipt" shall mean, with respect to any Swap
Counterparty on any Payment Date, the net amount, if any, then payable by
such Swap Counterparty to the Issuer, excluding any Swap Termination
Payments.
"Note Payment Account" shall mean the account established and
maintained as such pursuant to Section 4.1(c).
"Note Percentage" shall mean, as of any Payment Date, the
percentage equivalent of a fraction, the numerator of which is the
aggregate principal amount of the Notes as of such Payment Date (after
giving effect to any payments of principal on such Payment Date), and the
denominator of which is an amount equal to the sum of the aggregate
principal amount of the Notes and the Certificate Balance, in each case as
of such Payment Date (after giving effect to any payment of principal on
such Payment Date).
"Note Pool Factor" shall mean, with respect to any Class of Notes,
as of the close of business on the last day of a Collection Period, a
seven-digit decimal figure equal to the outstanding principal balance of
such Class of Notes (after giving effect to any reductions thereof to be
made on the immediately following Payment Date) divided by the original
outstanding principal balance of such Class of Notes. Each Note Pool Factor
will be 1.0000000 as of the Closing Date; thereafter, the Note Pool Factor
will decline to reflect reductions in the outstanding principal amount of
such Class of Notes.
"Noteholder" shall mean a Person in whose name a Note is
registered on the Note Register.
"Obligor" on a Receivable shall mean the purchaser or
co-purchasers of the related Financed Vehicle purchased in part or in whole
by the execution and delivery of such Receivable, or any other Person who
owes or may be liable for payments under such Receivable.
"Officer's Certificate" shall mean a certificate signed by the
chairman, the president, any executive vice president, vice president or
the treasurer of the Seller or the Servicer, as the case may be, and
delivered to the Owner Trustee and the Indenture Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel (who,
in the case of counsel to the Seller or the Servicer, may be an employee
of, or outside counsel to, the Seller or the Servicer), which counsel shall
be acceptable to the Indenture Trustee, the Owner Trustee or the Rating
Agencies, as applicable.
"Optional Purchase Percentage" shall mean 10%.
"Owner Trust Estate" shall have the meaning assigned thereto in
the Trust Agreement.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, its successors in interest and any
successor trustee under the Trust Agreement.
"Payahead" shall mean, with respect to an Actuarial Receivable,
the amount, as of the close of business on the last day of a Collection
Period, so designated in accordance with Section 4.3(a) with respect to
such Receivable.
"Payahead Account" shall mean the account established and
maintained as such pursuant to Section 4.1(e).
"Payahead Account Deposit" shall mean $[ ].
"Payahead Balance", with respect to an Actuarial Receivable, shall
mean the sum, as of the close of business on the last day of a Collection
Period, of all Payaheads made by or on behalf of the Obligor with respect
to such Actuarial Receivable (including any amount paid by or on behalf of
the Obligor prior to the Cutoff Date that is due after the Cutoff Date and
was not used to reduce the principal balance of such Actuarial Receivable),
as reduced by applications of previous Payaheads with respect to such
Actuarial Receivable, pursuant to Sections 4.3(a) and 4.4.
"Payment Date" shall mean the 15th day of each month, or if such
day is not a Business Day, the immediately following Business Day,
commencing on November 15, 2001.
"Permitted Investments" shall mean, on any date of determination,
book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form with maturities not exceeding the
Business Day preceding the next Payment Date which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of
the United States of America or any state thereof (or any domestic branch
of a foreign bank) and subject to supervision and examination by Federal or
State banking or depository institution authorities; provided, however,
that at the time of the investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee or
any of their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with a depository institution or trust company
(acting as principal) described in clause (b); and
(g) any other investment with respect to which the Trust or the
Servicer has received written notification from the Rating Agencies that
the acquisition of such investment as a Permitted Investment will not
result in a withdrawal or downgrading of the ratings on any Class of Notes
or the Certificates.
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, limited liability partnership, trust,
unincorporated organization, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Pool Balance" shall mean, as of any date of determination, the
aggregate Principal Balance of the Receivables (including the aggregate
Principal Balance of Last Scheduled Payments) as of the close of business
on the last day of the preceding Collection Period or, with respect to any
date of determination during the first Collection Period, as of the Cutoff
Date, after giving effect to, with respect to such Collection Period, (i)
all payments received from Obligors (other than Payaheads), (ii) all
Advances to be made by the Servicer and (iii) all Purchase Amounts to be
remitted by the Seller or the Servicer, in each case for such Collection
Period, and reduced by the aggregate Principal Balance of Receivables that
became Defaulted Receivables during such Collection Period.
"Pre-Funded Amount" shall mean, with respect to any date of
determination, the amount on deposit in the Pre-Funding Account on such
date exclusive of any interest and other income (net of losses and
expenses) on amounts on deposit in the Pre-Funding Account.
"Pre-Funded Percentage" shall mean, as of any date of
determination, the percentage equivalent of a fraction, the numerator of
which is the Pre-Funded Amount as of such date of determination (after
giving effect to any withdrawals from the Pre-Funding Account on or prior
to such date of determination), and the denominator of which is the sum of
the Pool Balance (after giving effect to all conveyances of Subsequent
Receivables to the Trust on or prior to such date of determination) and the
Pre-Funded Amount (after giving effect to any deposits to and withdrawals
from the Pre-Funding Account on or prior to such date of determination).
"Pre-Funding Account" shall mean the account designated as such,
established and maintained pursuant to Section 4.1(b).
"Pre-Funding Account Investment Earnings" shall mean, with respect
to any Collection Period, the interest and other income (net of losses and
expenses) earned on amounts on deposit in the Pre-Funding Account during
such Collection Period and deposited to the Pre-Funding Account on or prior
to the related Payment Date.
"Pre-Funding Period" shall mean the period from and including the
Closing Date and ending on the earliest of: (a) the date on which an Event
of Default or an Event of Servicing Termination occurs, (b) the date on
which an Insolvency Event occurs with respect to the Seller or the
Servicer, and (c) the close of business on [_______________].
"Principal Balance" shall mean, with respect to any Receivable as
of any date of determination, the Amount Financed minus the sum of the
following amounts: (i) in the case of an Actuarial Receivable, that portion
of all Scheduled Payments due on or prior to such date allocable to
principal computed in accordance with the Actuarial Method (to the extent
collected or advanced), (ii) in the case of a Simple Interest Receivable,
that portion of all Scheduled Payments actually received on or prior to
such date allocable to principal using the Simple Interest Method (to the
extent collected or advanced), (iii) any refunded portion of extended
warranty protection plan costs, or of physical damage, credit life, or
disability insurance premiums included in the Amount Financed, and (iv) any
prepayment in full or partial prepayment applied to reduce the unpaid
principal balance of such Receivable. The Principal Balance of a Defaulted
Receivable shall be zero as of the beginning of the Collection Period
following the Collection Period in which it became a Defaulted Receivable.
"Principal Distribution Amount" shall mean, with respect to any
Payment Date, (i) the sum of the outstanding principal balance of the Notes
plus the Certificate Balance on such Payment Date (prior to any payments on
such Payment Date), minus (ii) the sum of (x) the Adjusted Pool Balance as
of the last day of the preceding Collection Period, plus (y) the Pre-Funded
Amount on such Payment Date (after giving effect to all withdrawals from or
deposits to the Pre-Funding Account on such Payment Date), plus (iii) with
respect to the Payment Date on or immediately following the end of the
Pre-Funding Period, the Remaining Pre-Funded Amount; provided, however,
that on the Stated Maturity Date for each Class of Notes, the principal
required to be deposited in the Note Payment Account shall include the
amount necessary (after giving effect to the other amounts to be deposited
in the Note Payment Account on such Payment Date and allocable to
principal) to reduce the outstanding principal amount of the Notes of such
Class to zero.
"Program" shall have the meaning assigned thereto in Section 3.11.
"Purchase Agreement" shall mean the Purchase Agreement, dated as
of October 1, 2001, between the Seller and MMCA, as the same may be
amended, supplemented or otherwise modified and in effect from time to
time.
"Purchase Amount" shall mean, with respect to a Payment Date and a
Receivable to be repurchased by the Seller or purchased by the Servicer on
such Payment Date, an amount equal to the sum of (a) the Principal Balance
of such Receivable as of the first day of the Collection Period preceding
the Collection Period in which such Payment Date occurs and (b) an amount
equal to the amount of accrued and unpaid interest on such Principal
Balance at the related APR from the date a payment was last made by or on
behalf of the Obligor through the due date for payment of such Receivable
in the Collection Period preceding the Collection Period in which such
Payment Date occurs and, in the case of clauses (a) and (b), after giving
effect to the receipt of monies collected on such Receivable in such
preceding Collection Period.
"Purchased Receivable" shall mean, on any date of determination, a
Receivable as to which payment of the Purchase Amount has been made by the
Seller pursuant to Section 2.3 hereof or the Servicer pursuant to Section
3.7 or 9.1 hereof.
"Qualified Institution" shall mean Bank of Tokyo-Mitsubishi Trust
Company, a New York banking corporation, or any depository institution
organized under the laws of the United States of America or any one of the
states thereof or incorporated under the laws of a foreign jurisdiction
with a branch or agency located in the United States of America or one of
the states thereof qualified to take deposits and subject to supervision
and examination by federal or state banking authorities which at all times
has a short-term deposit rating of "Prime-1" by Moody's, "A-1" by S&P and
"F-1" by Fitch and, in the case of any such institution organized under the
laws of the United States of America, whose deposits are insured by the
Federal Deposit Insurance Corporation or any successor thereto.
"Qualified Trust Institution" shall mean the corporate trust
department of Bank of Tokyo-Mitsubishi Trust Company or any other
institution organized under the laws of the United States of America or any
one of the states thereof or incorporated under the laws of a foreign
jurisdiction with a branch or agency located in the United States of
America or one of the states thereof qualified to take deposits and subject
to supervision and examination by federal or state banking authorities
which at all times (i) is authorized under such laws to act as a trustee or
in any other fiduciary capacity, (ii) has not less than one billion dollars
in assets under fiduciary management, and (iii) has a long-term deposit
rating that satisfies the Rating Agency Condition.
"Rating Agency" shall mean either Moody's, S&P or Fitch, and
together, the "Rating Agencies." If no such organization or successor is
any longer in existence, "Rating Agency" shall be a nationally recognized
statistical rating organization or other comparable Person designated by
the Trust, notice of which designation shall be given to the Indenture
Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any action,
that each Rating Agency shall have been given prior written notice thereof
and that each of the Rating Agencies shall have notified the Seller, the
Servicer, the Owner Trustee and the Indenture Trustee in writing that such
action will not result in a reduction or withdrawal of the then current
rating of the Notes or the Certificates.
"Realized Losses" shall mean, with respect to each Payment Date
and each Receivable that became a Defaulted Receivable during the related
Collection Period, the excess of the Principal Balance of such Defaulted
Receivable (including the principal of a Last Scheduled Payment) over the
Liquidation Proceeds attributable to such Defaulted Receivable.
"Receivable" shall mean any Standard Receivable or Final Payment
Receivable conveyed by the Seller to the Trust on the Closing Date, as
described in the Schedule of Receivables.
"Receivable File" shall have the meaning assigned thereto in
Section 2.4.
"Receivable Yield Supplement Amount" shall mean, with respect to
each Payment Date and each Receivable that was a Deferred Payment
Receivable as of the last day of the preceding Collection Period (other
than a Receivable which became a Defaulted Receivable or a Purchased
Receivable or any Receivable sold by the Indenture Trustee following an
Event of Default pursuant to Section 5.4 of the Indenture), an amount equal
to the product of (x) the Adjusted Principal Balance of such Receivable on
the first day of the preceding Collection Period, (y) the Initial Weighted
Average Rate plus 0.25%, and (z) 1/12.
"Record Date" shall mean, with respect to a Payment Date or
Redemption Date, (i) for any Book-Entry Notes, the close of business on the
Business Day immediately preceding such Payment Date or Redemption Date or,
(ii) for any Definitive Notes and for the Certificates, the fifteenth
(15th) day of the preceding month, unless such fifteenth (15th) day is not
a Business Day, in which case the immediately preceding Business Day.
"Recoveries" shall mean, with respect to any Collection Period
following the Collection Period in which such Receivable became a Defaulted
Receivable, all monies received by the Servicer with respect to such
Defaulted Receivable during any Collection Period, net of the sum of (i)
any expenses incurred by the Servicer in connection with the collection of
such Receivable and the disposition of the Financed Vehicle (to the extent
not previously reimbursed) and (ii) any payments on such Receivable
required by law to be remitted to the Obligor.
"Relevant UCC" shall mean the Uniform Commercial Code as in effect
in any relevant jurisdiction. In the event that the Uniform Commercial Code
as in effect on the date hereof in any relevant jurisdiction is revised
subsequent to the date hereof, all references to specific sections of the
Uniform Commercial Code shall be deemed to be references to the successor
provisions of the Uniform Commercial Code.
"Remaining Pre-Funded Amount" shall have the meaning assigned
thereto in Section 4.8(b).
"Required Negative Carry Account Balance" shall mean, as of any
Payment Date, the lesser of (x) the Negative Carry Account Initial Deposit
minus all previous withdrawals of the Negative Carry Amount from the
Negative Carry Account, including any withdrawals of the Negative Carry
Amount therefrom on such Payment Date, and (y) the Maximum Negative Carry
Amount as of such Payment Date.
"Required Rating" shall mean a rating on short-term unsecured debt
obligations of "Prime-1" by Moody's, "A-1" by S&P and "F-1+" by Fitch, and
any requirement that short-term unsecured debt obligations have the
"Required Rating" shall mean that such short-term unsecured debt
obligations have the foregoing required ratings from each of such Rating
Agencies.
"Reserve Account" shall mean the account established and
maintained as such pursuant to Section 4.7(a).
"Reserve Account Advance Draw Amount" shall have the meaning
assigned thereto in Section 4.6(b).
"Reserve Account Amount" shall mean, with respect to any Payment
Date, the amount on deposit in the Reserve Account. Unless specifically
stated to the contrary, the Reserve Account Amount shall be calculated
after giving effect to all deposits and withdrawals therefrom on the prior
Payment Date (or, in the case of the first Payment Date, the Closing Date)
and all interest and other income (net of losses and investment expenses)
on such amounts during the related Collection Period.
"Reserve Account Initial Deposit" shall mean $[ ].
"Reserve Account Property" shall have the meaning assigned thereto
in Section 4.7(a).
"Reserve Account TRP Draw Amount" shall have the meaning assigned
thereto in Section 4.6(b).
"Responsible Officer" shall mean (a) with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture
Trustee with direct responsibility for the administration of the Indenture
and the other Basic Documents on behalf of the Indenture Trustee and also,
with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject, and (b) with respect to the Owner Trustee, any officer
within the Corporate Trust Office of the Owner Trustee with direct
responsibility for administration of the Trust, including any vice
president, assistant vice president, secretary, assistant secretary,
financial services officer or any other officer of the Owner Trustee,
customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject and shall also
mean any officer of the Administrator.
"S&P" shall mean Standard & Poor's Ratings Service, a division of
The XxXxxx-Xxxx Companies, Inc., or its successors and assigns.
"Sale Price" shall mean, with respect to any Final Payment
Receivable, an amount equal to the Last Scheduled Payment, minus the sum of
any charges for Excess Wear and Tear and Excess Mileage and the amount of
any disposition fee payable to the Servicer.
"Schedule of Receivables" shall mean the list of Contracts
attached as Exhibit B to the Purchase Agreement and incorporated by
reference herein (which list may be in the form of computer tape,
microfiche, compact disk or other electronic medium).
"Scheduled Payment" shall mean, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid
by the Obligor in such Collection Period (without giving effect to
modifications of payment terms pursuant to Section 3.2 or any rescheduling
in any insolvency or similar proceedings).
"Second-Tier Subsequent Assignment" shall have the meaning
assigned thereto in Section 2.1(d)(ii).
"Seller" shall mean MMCA Auto Receivables Trust, a Delaware
business trust, in its capacity as seller of the Receivables to the Trust
under this Agreement, and each successor thereto (in the same capacity)
pursuant to Section 6.3.
"Servicer" shall mean MMCA, in its capacity as Servicer of the
Receivables under this Agreement, each successor thereto (in the same
capacity) pursuant to Section 7.3, and each successor Servicer appointed
and acting pursuant to Section 8.2.
"Servicer's Certificate" shall have the meaning assigned thereto
in Section 3.9.
"Servicing Fee" shall mean, with respect to any Payment Date, the
fee payable to the Servicer for services rendered during the related
Collection Period, determined pursuant to and defined in Section 3.8.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables, whose name appears on a list of servicing officers attached to
an Officer's Certificate furnished on the Closing Date to the Owner Trustee
and the Indenture Trustee by the Servicer, as such list may be amended from
time to time by the Servicer in writing.
"Simple Interest Method" shall mean the method of allocating a
fixed payment between principal and interest, pursuant to which the portion
of such payment that is allocated to interest is equal to the product of
the APR multiplied by the unpaid principal balance multiplied by the period
of time (expressed as a fraction of a year, based on the actual number of
days in the calendar month and a 365-day year) elapsed since the preceding
payment was made and the remainder of such payment is allocable to
principal.
"Simple Interest Receivable" shall mean any Receivable under which
the portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Balance" shall mean, with respect to any
Payment Date, the lesser of (a) [ ]% of the Adjusted Original Pool Balance
and (b) the outstanding principal amount of the Notes as of such Payment
Date (after giving effect to any principal payment made on such Payment
Date). Notwithstanding the foregoing, if (i) each Rating Agency delivers a
letter to the Indenture Trustee that the use of any new formulation
requested by the Seller would not cause a downgrade, qualification or
withdrawal of the then current rating on any Class of Notes, and (ii) an
Opinion of Counsel to the effect that the proposed change will not
adversely affect the status of the Notes as debt is delivered to the
Indenture Trustee, then the Specified Reserve Balance may be changed in
accordance with such letters without an amendment hereto.
"Specified Yield Supplement Account Balance" shall mean, (i) on
the Closing Date, $[ ], and (ii) as of the close of business on any Payment
Date, an amount equal to the sum of all projected Yield Supplement Amounts
for all future Payment Dates, assuming that no prepayments are made on the
Deferred Payment Receivables.
"Standard Receivable" shall mean all rights and obligations under
a Contract listed on a Schedule of Receivables which is not a Final Payment
Receivable.
"Subsequent Cuttoff Date" shall have, with respect to any
Subsequent Receivable, the meaning specified in the related Second-Tier
Subsequent Assignment.
"Subsequent Payahead Account Deposit" shall mean, with respect to
any Subsequent Transfer Date, cash or Permitted Investments having a value
equal to the aggregate amount of the Payahead Balances as of the related
Subsequent Cutoff Date of the Subsequent Receivables conveyed to the Trust
on such Subsequent Transfer Date.
"Subsequent Receivable" shall mean any Receivable described in a
Schedule of Subsequent Receivables.
"Subsequent Reserve Account Deposit" shall mean, with respect to
any Subsequent Transfer Date, cash or Permitted Investments having a value
approximately equal to [___]% of the aggregate Adjusted Principal Balances
as of the related Subsequent Cutoff Date of the Subsequent Receivables
conveyed to the Trust on such Subsequent Transfer Date.
"Subsequent Transfer Date" shall mean, with respect to any
Subsequent Receivable, the Business Day during the Pre-Funding Period on
which the related Second-Tier Assignment is executed and delivered by the
Seller to the Trust and the Indenture Trustee pursuant to Section
2.1(d)(ii).
"Subsequent Yield Supplement Account Deposit" shall mean, with
respect to any Subsequent Transfer Date, cash or Permitted Investments
having a value approximately equal to the sum of the projected Receivable
Yield Supplement Amounts for the Subsequent Receivables conveyed to the
Trust on such Subsequent Transfer Date for all future Payment Dates,
assuming the future Scheduled Payments on such Subsequent Receivables are
made on their scheduled due dates.
"Supplemental Servicing Fee" shall mean, with respect to any
Payment Date, the fee payable to the Servicer for services rendered during
the related Collection Period, determined pursuant to and defined in
Section 3.8.
"Swap Counterparty" shall initially mean The Chase Manhattan Bank
as swap counterparty under the Interest Rate Swap Agreements, or any
successors or replacement swap counterparties from time to time under any
Interest Rate Swap Agreement. Each Swap Counterparty (or the institution
guaranteeing such Swap Counterparty's obligations) must have a long-term
rating at least equal to "A2" by Xxxxx'x and "A" by Fitch, and a short-term
rating at least equal to "A-1" by S&P and "F-1" by Fitch at the time of
entering into the Interest Rate Swap Agreements.
"Swap Termination Payment" shall mean any termination payment
payable by the Issuer to a Swap Counterparty or by a Swap Counterparty to
the Issuer under an Interest Rate Swap Agreement.
"Total Available Funds" shall mean, for any Payment Date, an
amount equal to the sum of (i) the Available Funds for such Payment Date
and (ii) the Reserve Account TRP Draw Amount, if any, for such Payment
Date.
"Total Required Payment" shall mean, on any Payment Date, the sum
of (i) the Total Servicing Fee, (ii) any Net Swap Payments and any Swap
Termination Payments due and payable to the Swap Counterparty, (iii) the
Accrued Note Interest and (iv) the Principal Distribution Amount with
respect to such Payment Date.
"Total Servicing Fee" shall mean, with respect to any Payment
Date, the sum of (i) the Servicing Fee for the related Collection Period
plus (ii) all accrued and unpaid Servicing Fees for prior Collection
Periods.
"Total Yield Supplement Overcollateralization Amount" shall mean,
with respect to any Payment Date, the sum of the Yield Supplement
Overcollateralization Amounts with respect to all Receivables (other than
Purchased Receivables or Defaulted Receivables) as of such Payment Date.
"Trust" shall mean MMCA Auto Owner Trust 2001-3, a Delaware
business trust.
"Trust Accounts" shall have the meaning assigned thereto in
Section 5.1(a).
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of October 1, 2001 between the Seller and the Owner
Trustee, as the same may be amended, supplemented or otherwise modified and
in effect from time to time.
"Trust Property" shall mean, as of any date of determination, the
Receivables and other property related thereto sold, transferred, assigned
and otherwise conveyed by the Seller to the Trust pursuant to Section
2.1(a).
"Weighted Average Rate" shall mean, with respect to any date of
determination, a per annum rate equal to (1) the sum of (a) the product of
(x) the outstanding principal amount of the Class A-1 Notes on such date
and (y) the Class A-1 Rate, plus (b) the product of (x) the outstanding
principal amount of the Class A-2 Notes on such date and (y) the Class A-2
Rate, plus (c) the product of (x) the outstanding principal amount of the
Class A-3 Notes on such date and (y) the Class A-3 Rate, plus (D) the
product of (x) the outstanding principal amount of the Class A-4 Notes on
such date and (y) the Class A-4 Rate, plus (e) the product of (x) the
outstanding principal amount of the Class B Notes on such date and (y) the
Class B Rate, divided by (2) the sum of the outstanding principal amount of
the Notes on such date, plus Certificate Balance on such date; provided,
that if the date of determination is a Payment Date, then the outstanding
principal amount of any class of Notes shall be determined after giving
effect to all payments made on such date.
"Yield Supplement Account" shall have the meaning assigned thereto
in Section 5.1(a).
"Yield Supplement Agreement" shall mean the Yield Supplement
Agreement, dated as of October 1, 2001, by and between the Seller and MMCA,
as amended, modified or supplemented from time to time, substantially in
the form of Exhibit D hereto.
"Yield Supplement Amount" shall mean, with respect to any Payment
Date, the sum of all Receivable Yield Supplement Amounts for the related
Collection Period.
"Yield Supplement Letter of Credit" shall mean any letter of
credit issued by the Letter of Credit Bank, as permitted by Section 5.1, to
support payments of the Yield Supplement Amount under the Yield Supplement
Agreement.
"Yield Supplement Overcollateralization Amount" shall mean, with
respect to any Payment Date and any Receivable (other than a Purchased
Receivable or a Defaulted Receivable), an amount equal to the excess of (i)
the present value of the remaining Scheduled Payments due under such
Receivable as of the later to occur of (x) the last day of the preceding
Collection Period and (y) the first date on which interest accrues on such
Receivable as set forth in the related Contract, discounted at a rate equal
to the APR of such Receivable, over (ii) the present value of the remaining
Scheduled Payments due under such Receivable as set forth in clause (i)
above, discounted at a rate equal to the greater of the APR of the
Receivable and 8.350%. For the purposes of the foregoing calculation, the
Payahead Balance with respect to any Actuarial Receivable shall be applied
to reduce the amount of any Scheduled Payment on the related Actuarial
Receivable in the order in which such Scheduled Payments were due.
SECTION 1.2 Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined herein have the meanings assigned to
them in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references
to Articles, Sections, Schedules and Exhibits in or to this Agreement
unless otherwise specified, and the term "including" shall mean "including
without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
SECTION 1.3 Business Day Certificate. On the Closing Date (with
respect to the remainder of calendar year 2001) and thereafter, within 15
days prior to the end of each succeeding calendar year while this Agreement
remains in effect, the Servicer shall deliver to the Owner Trustee and the
Indenture Trustee an Officer's Certificate specifying the days on which
banking institutions or trust companies in New York, New York, Wilmington,
Delaware or Los Angeles, California are authorized or obligated by law,
executive order or governmental decree to remain closed.
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property.(a) In consideration of
the Trust's delivery to, or upon the written order of, the Seller of
authenticated Notes and Certificates, in authorized denominations in
aggregate principal amounts equal to the initial principal amount of the
Notes and the Initial Certificate Balance, respectively, the Seller hereby
irrevocably sells, transfers, assigns and otherwise conveys to the Trust,
without recourse (subject to the obligations herein), all right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and
under the following:
(i) the Receivables;
(ii) with respect to Receivables that are Actuarial
Receivables, monies due thereunder after the Cutoff Date
(including Payaheads) and, with respect to Receivables that are
Simple Interest Receivables, monies received thereunder on or
after the Cutoff Date;
(iii) the security interests in Financed Vehicles granted
by Obligors pursuant to the Receivables and any other interest of
the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to the
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
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 Receivables;
(vii) the Trust Accounts and all amounts, securities,
investments in financial assets, and other property deposited in
or credited to any of the foregoing and all proceeds thereof;
(viii) all of the Seller's rights under the Yield
Supplement Agreement and the Purchase Agreement, including the
right of the Seller to cause MMCA to repurchase Receivables from
the Seller;
(ix) all payments and proceeds with respect to the
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 a
Receivable that is a Final Payment Receivable), guarantees and
other collateral securing a Receivable (other than a 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
Receivables in effect as of the 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, conveying good title to the Trust
Property from the Seller to the Trust. 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 (5)
Business Days prior to the Subsequent Transfer Date and (B) on or
prior to the Subsequent Transfer Date, a statement listing the
approximate aggregate Principal Balance of such Subsequent
Receivables as of the related Subsequent Cutoff Date and any other
information reasonably requested by any of the foregoing;
(ii) the Seller shall have delivered to each of the Owner
Trustee and the Indenture Trustee a duly executed written
assignment in substantially the form of Exhibit E hereto (the
"Second-Tier Subsequent Assignment"), which shall include a
Schedule A attached thereto listing the related Subsequent
Receivables;
(iii) the Seller shall, to the extent required by Section
4.2, have deposited in the Collection Account all collections in
respect of the Subsequent Receivables that are property of the
Trust;
(iv) as of such Subsequent Transfer Date: (A) the Seller
shall not be insolvent and shall not become insolvent as a result
of the transfer of Subsequent Receivables on such Subsequent
Transfer Date, (B) the Seller shall not intend to incur or believe
that it would incur debts that would be beyond the Seller's
ability to pay as such debts matured, (C) such transfer shall not
be made by the Seller with actual intent to hinder, delay or
defraud any Person and (D) the assets of the Seller shall not
constitute unreasonably small capital to carry out its business as
conducted;
(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 remaining
maturity of the Receivables will not be more than [___] months;
and (B) the aggregate principal balance of the Last Scheduled
Payments as a percentage of the Pool Balance will not be greater
than [___]%;
(ix) the Pre-Funding Period shall not have terminated
prior to the Subsequent Transfer Date;
(x) each of the representations and warranties made by
the Seller pursuant to Sections 2.2 and 6.1 of this Agreement and
by MMCA pursuant to Section 3.2 of the Purchase Agreement, with
respect to the Seller, MMCA or the Subsequent Receivables, as
applicable, shall be true and correct as of the date as of which
such representations and warranties are made;
(xi) the Seller shall, at its own expense, on or prior to
the Subsequent Transfer Date, indicate in its computer files that
the Subsequent Receivables have been sold to the Trust pursuant to
this Agreement and the related Second-Tier Subsequent Assignment
and deliver to the Owner Trustee the related Schedule of
Subsequent Receivables certified by an officer of the Seller to be
true, correct and complete;
(xii) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Trust in
the Trust Property and the first perfected security interest of
the Indenture Trustee in the Collateral;
(xiii) no selection procedures believed by the Seller to
be adverse to the interests of the Trust, the Noteholders or the
Certificateholders shall have been utilized in selecting the
Subsequent Receivables;
(xiv) the addition of the Subsequent Receivables will not
result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(xv) the Seller shall have delivered to the Owner
Trustee, the Indenture Trustee and the Rating Agencies an Opinion
of Counsel relating to the security interests of the Owner Trustee
and the Indenture Trustee in the Subsequent Receivables in
substantially the form of the Opinion of Counsel delivered the
Owner Trustee, the Indenture Trustee and the Rating Agencies
regarding such matters on the Closing Date;
(xvi) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Officer's Certificate
confirming the satisfaction of each condition specified in this
Section 2.1(d) (substantially in the form attached as Annex A to
the form of Second-Tier Subsequent Assignment attached hereto as
Exhibit E);
(xvii) all the conditions to the transfer of the
Subsequent Receivables by MMCA to the Seller specified in Section
4.1(b) of the Purchase Agreement shall be satisfied; and
(xviii) the Servicer shall have provided to each of the
Trust and the Indenture Trustee the Officer's Certificate required
to be provided by the Servicer pursuant to Section 2.4.
(e) The Seller agrees to transfer to the Trust, pursuant to
Section 2.1(b), Subsequent Receivables with an aggregate Principal Balance
as of the related Subsequent Cutoff Dates of approximately $[____________],
subject only to availability thereof.
(f) The sales, transfers, assignments and conveyances of the Trust
Property made under Section 2.1(a) and (b) shall not constitute and are not
intended to result in an assumption by the Trust of any obligation of the
Seller to the Obligors, the Dealers or any other Person in connection with
the Receivables and the other Trust Property or any agreement, document or
instrument related thereto.
SECTION 2.2 Representations and Warranties of the Seller as to the
Receivables. The Seller makes the following representations and warranties
as to the Receivables on which the Trust relies in accepting the
Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement, 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 Final Payment Receivables, shall provide for a series
of fixed level monthly payments and a larger payment due after
such level monthly payments that fully amortize the Amount
Financed by maturity and yield interest at the APR, (f) shall
provide for, in the event that such contract is prepaid, a
prepayment that fully pays the Principal Balance and all accrued
and unpaid interest thereon, (g) is a retail installment sale
contract, (h) is secured by a new or used automobile or
sports-utility vehicle, and (i) is an Actuarial Receivable or a
Simple Interest Receivable (and may also be a Final Payment
Receivable).
(ii) Schedule of Receivables. The information set forth
in the related Schedule of Receivables shall be true and correct
in all material respects as of the opening of business on the
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 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, each
Receivable shall be secured by a validly perfected first priority
security interest in the related Financed Vehicle in favor of MMCA
as secured party and, at such time as enforcement of such security
interest is sought, there shall exist a valid, subsisting and
enforceable first priority perfected security interest in such
Financed Vehicle for the benefit of the Seller and the Trust,
respectively (subject to any statutory or other lien arising by
operation of law after the Closing Date 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 Seller and the Purchaser, respectively.
(vii) Receivables in Force. No Receivable shall have been
satisfied, subordinated, or rescinded, nor shall any Financed
Vehicle have been released from the Lien granted by the related
Receivable in whole or in part, which security interest shall be
assignable by MMCA to the Seller and by the Seller to the Trust.
(viii) No Waiver. No provision of a Receivable shall have
been waived in such a manner that such Receivable fails to meet
all of the representations and warranties made by the Seller in
this Section 2.2 with respect thereto.
(ix) No Defenses. No right of rescission, setoff,
counterclaim, or defense shall have been asserted or threatened
with respect to any Receivable.
(x) No Liens. To the best of the Seller's knowledge, no
liens or claims shall have been filed for work, labor, or
materials relating to a Financed Vehicle that shall be liens prior
to, or equal or coordinate with, the security interest in the
Financed Vehicle granted by the Receivable.
(xi) No Default; Repossession. Except for payment
defaults continuing for a period of not more than thirty (30) days
or payment defaults of 10% or less of a Scheduled Payment, in each
case as of the 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 Cutoff Date.
(xii) Insurance. Each Contract shall require the related
Obligor to maintain physical damage insurance (which insurance
shall not be force placed insurance) covering the Financed
Vehicle, in the amount determined by MMCA in accordance with its
customary procedures.
(xiii) Title. It is the intention of the Seller that each
transfer and assignment of the Receivables herein contemplated
constitute a sale of such Receivables from the Seller to the Trust
and that the beneficial interest in, and title to, such
Receivables not be part of the Seller's estate in the event of the
filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. No Receivable has been sold, transferred,
assigned, or pledged by the Seller to any Person other than the
Trust. Immediately prior to each transfer and assignment of the
Receivables herein contemplated, the Seller had good and
marketable title to such Receivables free and clear of all Liens,
encumbrances, security interests, and rights of others and,
immediately upon the transfer thereof, the Trust shall have good
and marketable title to such Receivables, free and clear of all
Liens, encumbrances, security interests, and rights of others; and
the transfer has been perfected by all necessary action under the
Relevant UCC.
(xiv) Valid Assignment. No Receivable shall have been
originated in, or shall be subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment of
such Receivable under this Agreement or the Indenture or pursuant
to transfers of the Certificates shall be unlawful, void, or
voidable. The Seller has not entered into any agreement with any
obligor that prohibits, restricts or conditions the assignment of
any portion of the Receivables.
(xv) All Filings Made. All filings (including, without
limitation, filings under the Relevant UCC) necessary in any
jurisdiction to give the Trust a first priority perfected security
interest in the Receivables, and to give the Indenture Trustee a
first priority perfected security interest therein, shall be made
within ten (10) days of the Closing Date.
(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 Cutoff Date of not less than $100.
(xix) No Bankrupt Obligors. No Receivable was due from an
Obligor who, as of the Cutoff Date, was the subject of a
proceeding under the Bankruptcy Code of the United States or was
bankrupt.
(xx) New and Used Vehicles. Approximately [ ]% of the
Pool Balance, constituting approximately [ ]% of the total number
of the Receivables, relate to new automobiles and sports-utility
vehicles, substantially all of which were manufactured or
distributed by Mitsubishi Motors. Approximately [ ]% of the Pool
Balance, constituting approximately [ ]% of the total number of
Receivables, relate to used automobiles and sports-utility
vehicle, substantially all of which were manufactured or
distributed by Mitsubishi Motors. Approximately [ ]% of the Pool
Balance, constituting approximately [ ]% of the total number of
Receivables, relate to program automobiles and sports-utility
vehicles, substantially all of which were manufactured or
distributed by Mitsubishi Motors. Approximately [ ]% of the Pool
Balance, constituting approximately [ ]% of the total number of
Receivables, relate to other used automobiles and sports-utility
vehicles.
(xxi) Origination. Each Receivable shall have an
origination date during or after [March 10, 1997].
(xxii) Maturity of Receivables. Each Receivable shall
have, as of the Cutoff Date, not more than [ ] remaining Scheduled
Payments due under the Receivable.
(xxiii) Weighted Average Maturity of Receivables. As of
the Cutoff Date, the weighted average number of Scheduled Payments
remaining until the maturity of the Receivables shall be not more
than [ ] Scheduled Payments.
(xxiv) Annual Percentage Rate. Each Receivable shall have
an APR of at least 0% and not more than 30%.
(xxv) Scheduled Payments. No Receivable shall have a
payment of which more than 10% of such payment is more than thirty
(30) days overdue as of the Cutoff Date.
(xxvi) Location of Receivable Files. The Receivable Files
shall be kept at one or more of the locations listed in Schedule B
hereto.
(xxvii) Capped Receivables and Simple Interest
Receivables. Except to the extent that there has been no material
adverse effect on Noteholders or Certificateholders, each Capped
Receivable has been treated consistently by the Seller and the
Servicer as a Simple Interest Receivable and payments with respect
to each Simple Interest Receivable have been allocated
consistently in accordance with the Simple Interest Method.
(xxviii) Agreement. The representations and warranties of
the Seller in Section 6.1 are true and correct.
(xxix) Other Data. The tabular data and the numerical
data relating to the characteristics of the Receivables contained
in the Prospectus (as defined in the Purchase Agreement) are true
and correct in all material respects.
(xxx) Last Scheduled Payments. The aggregate principal
balance of the Last Scheduled Payments of Final Payment
Receivables, as a percentage of the Initial Pool Balance as of the
Cutoff Date, shall be not greater than 10.00%.
(xxxi) Receivable Yield Supplement Amounts. An amount
equal to the sum of all projected Yield Supplement Amounts for all
future Payment Dates with respect to each Deferred Payment
Receivable, assuming that no prepayments are made on the Deferred
Payment Receivable, has been deposited to the Yield Supplement
Account on or prior to the Closing Date.
(xxxii) Prepaid Receivables. No Receivable shall have
been pre-paid by more than six monthly payments as of the Cutoff
Date.
(xxxiii) 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 [ ]%.
(xxxiv) Deferred Payment Receivables. As of the Cutoff
Date $[ ] total Principal Balance of Deferred Payment Receivables
included in the 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 Cutoff Date $[ ] total Principal Balance of
Deferred Payment Receivables included in the Receivables had a
first payment that, as of the date of inception of the
Receivables, was deferred for a period of between 200 and 299
days. As of the Cutoff Date $[ ] total Principal Balance of
Deferred Payment Receivables included in the Receivables had a
first payment that, as of the date of inception of the
Receivables, was deferred for a period of between 100 and 199
days. As of the Cutoff Date $[ ] total Principal Balance of
Deferred Payment Receivables included in the Receivables had a
first payment that, as of the date of inception of the
Receivables, was deferred for a period of 99 days or less. In no
case will the first payment on a Deferred Payment Receivable be
due later than 480 days after the date of inception of that
Receivable.
(xxxv) Modified Receivables. The APR of any Modified
Receivable is equal to the APR of the related Deferred Payment
Receivable. The date on which the final Scheduled Payment is due
on a Modified Receivable is not different than the date set forth
in the related Contract as the date on which the final Scheduled
Payment under such Receivable is due. No Deferred Payment
Receivable became a Modified Receivable after 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 sixtieth (60th) day after the
date on which the Seller becomes aware of, or receives written notice from
the Owner Trustee or the Servicer of, such breach or failure, and such
breach or failure materially and adversely affects the interest of the
Trust in a Receivable, the Seller shall repurchase from the Trust such
Receivable, on the Payment Date immediately following such Collection
Period. In consideration of the repurchase of a Receivable hereunder, the
Seller shall remit the Purchase Amount of such Receivable in the manner
specified in Section 4.5(a). The sole remedy of the Trust, the Owner
Trustee, the Indenture Trustee, the Noteholders and the Certificateholders
with respect to a breach or failure to be true of the representations and
warranties made by the Seller pursuant to Section 2.2 shall be to require
the Seller to repurchase Receivables pursuant to this Section 2.3 and to
enforce the obligation of MMCA to the Seller to repurchase such Receivable
pursuant to the Purchase Agreement. Neither the Owner Trustee nor the
Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 2.3 or the
eligibility of any Receivable for purposes of this Agreement.
SECTION 2.4 Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Trust,
upon the execution and delivery of this Agreement, hereby revocably
appoints the Servicer as its agent, and the Servicer hereby accepts such
appointment, to act as custodian on behalf of the Trust and the Indenture
Trustee of the following documents or instruments, which are hereby
constructively delivered to the Indenture Trustee, as pledgee of the Trust
pursuant to the Indenture, 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, 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
recordkeeping. The Servicer shall promptly report to the Owner Trustee and
the Indenture Trustee any failure on its part to hold the Receivable Files
and maintain its accounts, records, and computer systems as herein provided
and promptly take appropriate action to remedy any such failure. Nothing
herein shall be deemed to require an initial review or any periodic review
by the Trust, the Owner Trustee or the Indenture Trustee of the Receivable
Files and none of the Trust, the Owner Trustee and the Indenture Trustee
shall be liable or responsible for any action or failure to act by the
Servicer in its capacity as custodian hereunder.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B
to this Agreement, or at such other office as shall be specified to the
Trust and the Indenture Trustee by written notice not later than ninety
(90) days after any change in location. The Servicer shall make available
to the Trust and the Indenture Trustee or its duly authorized
representatives, attorneys, or auditors a list of locations of the
Receivable Files, and the related accounts, records, and computer systems
maintained by the Servicer at such times as the Trust or the Indenture
Trustee shall instruct.
(c) Release of Documents. Upon written instructions from the
Indenture Trustee, the Servicer shall release any document in the
Receivable Files to the Indenture Trustee, the Indenture Trustee's agent,
or the Indenture Trustee's designee, as the case may be, at such place or
places as the Indenture Trustee may designate, as soon thereafter as is
practicable. Any document so released shall be handled by the Indenture
Trustee with due care and returned to the Servicer for safekeeping as soon
as the Indenture Trustee or its agent or designee, as the case may be,
shall have no further need therefor.
(d) Title to Receivables. The Servicer agrees that, in respect of
any Receivable held by the Servicer as custodian hereunder, the Servicer
will not at any time have or in any way attempt to assert any interest in
such Receivable or the related Receivable File, other than for collecting
or enforcing the Receivable for the benefit of the Trust and that the
entire equitable interest in such Receivable and the related Receivable
File shall at all times be vested in the Trust.
SECTION 2.6 Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Responsible
Officer of the Indenture Trustee. A certified copy of excerpts of
authorizing resolutions of the Board of Directors of the Indenture Trustee
shall constitute conclusive evidence of the authority of any such
Responsible Officer to act and shall be considered in full force and effect
until receipt by the Servicer of written notice to the contrary given by
the Indenture Trustee.
SECTION 2.7 Custodian's Indemnification. The Servicer, in its
capacity as custodian, shall indemnify and hold harmless the Trust, the
Owner Trustee and the Indenture Trustee and each of their respective
officers, directors, employees and agents from and against 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 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 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 [ ] and that such extensions, in the aggregate, do not
exceed two (2) months for each twelve (12) months of the original
term of the Receivable.
In the event that the Servicer fails to comply with the provisions
of the preceding sentence, the Servicer shall be required to purchase the
Receivable or Receivables affected thereby, for the Purchase Amount, in the
manner specified in Section 3.7, as of the close of the Collection Period
in which such failure occurs. The Servicer may, in its discretion, (but
only in accordance with its customary standards, policies, practices and
procedures), waive any late payment charge or any other fee that may be
collected in the ordinary course of servicing a Receivable.
(b) With respect to each Final Payment Receivable, the Servicer,
in accordance with its customary servicing standards, policies, practices
and procedures, shall contact the Obligor on or before the due date of the
Last Scheduled Payment specified in the related Contract. If, at such time,
the Obligor under the Final Payment Receivable has notified MMCA on behalf
of the Trust that it elects to sell the Financed Vehicle to MMCA on behalf
of the Trust in accordance with the terms of the Receivable, the Servicer
shall, upon delivery of the Financed Vehicle by the Obligor to MMCA on
behalf of the Trust, inspect the Financed Vehicle for Excess Wear and Tear
and Excess Mileage, and determine the necessity of any repairs. If the
Servicer determines that such Financed Vehicle requires repairs as a result
of Excess Wear and Tear, the Servicer shall require the Obligor to pay the
estimated cost of such repairs to the Servicer. If the Obligor disputes the
Servicer's estimate of the cost of such repairs, the Obligor may obtain, at
the Obligor's own expense, a professional appraisal of the Financed
Vehicle's value by an independent third-party appraiser acceptable to both
the Obligor and the Servicer, and the cost of repairs for Excess Wear and
Tear as determined by such appraisal shall be binding on the Obligor and
the Servicer. The Servicer shall, pursuant to the related Contract, offset
(x) the cost of repairs for Excess Wear and Tear as determined by the
appraisal, any charges for Excess Mileage and the disposition fee payable
to the Servicer pursuant to the related Contract, and the Principal
Balance, accrued interest and any other amounts owed by the Obligor on the
Receivable against (y) the purchase price otherwise due to the Obligor for
the Financed Vehicle, and shall collect any excess of (x) over (y) from the
Obligor.
(c) In connection with an Obligor's transfer of a Financed Vehicle
to MMCA on behalf of the Trust in satisfaction of its obligation to pay the
Last Scheduled Payment under a Final Payment Receivable, pursuant to the
terms of the Contract related to such Last Scheduled Payment, the Servicer
shall require the Obligor to pay a disposition fee (which the Servicer will
retain as servicing compensation), whereupon the Servicer shall take
possession of the related Financed Vehicle and shall prepare such Financed
Vehicle for sale at auction or otherwise in accordance with the Servicer's
customary servicing standards, policies, practices and procedures.
(d) Proceeds received by the Servicer from the payment by an
Obligor of a Financed Vehicle of amounts attributable to Last Scheduled
Payments and other amounts (including Excess Wear and Tear and Excess
Mileage) owed by the Obligor and from the sale of a Financed Vehicle at
auction or otherwise constitute proceeds of Last Scheduled Payments and
collections on the Receivables, and shall be deposited into the Collection
Account. Following the sale of the Financed Vehicle, the Servicer, on
behalf of the Trust, shall deliver the related certificate of title to the
purchaser of such Financed Vehicle. Following the Servicer's receipt of
proceeds from the sale of such Financed Vehicle and amounts to be paid by
the Obligor pursuant to subparagraph (b) above, the Servicer shall record
on its books and records the termination of the Trust's ownership and
security interest in the related Final Payment Receivable (and shall
deliver copies thereof to the Indenture Trustee and the Owner Trustee upon
written request within ten days of receipt of such request).
(e) If the Obligor under any Final Payment Receivable has notified
the Dealer that it desires to refinance the amount that it owes on
termination of the Receivable, MMCA will, in accordance with its customary
servicing standards, policies, practices and procedures, make a decision to
grant or deny credit, except for Contracts for which the Obligors have the
right to refinance without such an assessment, in which case MMCA shall
honor the Obligor's right to refinance. If credit is denied, the Servicer
shall require the Obligor to satisfy its obligation to pay the remaining
amounts owed in accordance with the terms of the Final Payment Receivable.
If credit is granted, MMCA shall deposit an amount equal to the total
amount owed by the Obligor on the Receivable to the Collection Account.
Upon deposit of such amount into the Collection Account, the Trust's
ownership and security interest in the related Financed Vehicle shall
terminate, and the Trust will assign all interest in, to and under the
Receivable and the related Financed Vehicle to MMCA. The Servicer shall
record such termination on its books and records (and shall deliver copies
thereof to the Indenture Trustee and the Owner Trustee upon written request
within ten days of receipt of such request). If MMCA is no longer the
Servicer, the Trust or any Holder of the Certificates may make arrangements
for the successor Servicer or another party to provide refinancing of Last
Scheduled Payments to Obligors who desire to satisfy the Last Scheduled
Payment through refinancing and who meet such party's credit criteria, and
any reasonable costs and expenses of the successor Servicer or such third
party in determining whether to provide such refinancing shall be payable
from amounts, if any, which would otherwise be released from the Reserve
Account and paid to the Seller.
SECTION 3.3 Realization upon Receivables.(a) On behalf of the
Trust, the Servicer shall use reasonable efforts, in accordance with the
standard of care required by Section 3.1, to repossess or otherwise convert
the ownership of each Financed Vehicle securing a Defaulted Receivable. In
taking such action, the Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of comparable automotive receivables, and as are otherwise
consistent with the standard of care required under Section 3.1, which
shall include the exercise of any rights of recourse to Dealers under the
Dealer Agreements. The Servicer shall be entitled to recover all reasonable
expenses incurred by it in the course of repossessing and liquidating a
Financed Vehicle into cash proceeds, but only out of the cash proceeds of
such Financed Vehicle and any deficiency obtained from the Obligor. The
foregoing shall be subject to the provision that, in any case in which a
Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds (or Recoveries) of the
related Receivable by an amount equal to or greater than the amount of such
expenses.
(b) If the Servicer elects to commence a legal proceeding to
enforce a Dealer Agreement, the act of commencement shall be deemed to be
an automatic assignment from the Trust to the Servicer of the rights of
recourse under such Dealer Agreement. If, however, in any enforcement suit
or legal proceeding, it is held that the Servicer may not enforce a Dealer
Agreement on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer Agreement, the Owner Trustee, at the
Servicer's expense and direction, shall take such steps as the Servicer
deems necessary to enforce the Dealer Agreement, including bringing suit in
its name or the names of the Indenture Trustee, the Certificateholders, the
Noteholders or any of them.
SECTION 3.4 Physical Damage Insurance. The Servicer shall follow
its customary servicing procedures to determine whether or not each Obligor
shall have maintained physical damage insurance covering the related
Financed Vehicle.
SECTION 3.5 Maintenance of Security Interests in Financed
Vehicles. The Servicer, in accordance with the standard of care required
under Section 3.1, shall take such steps as are necessary to maintain
perfection of the security interest created by each Receivable in the
related Financed Vehicle. The Trust hereby authorizes the Servicer, and the
Servicer hereby agrees, to take such steps as are necessary to re-perfect
such security interest on behalf of the Trust and the Indenture Trustee in
the event the Servicer receives notice of, or otherwise has actual
knowledge of, the relocation of a Financed Vehicle or for any other reason.
SECTION 3.6 Covenants of Servicer. The Servicer hereby makes the
following covenants:
(a) Security Interest to Remain in Force. The Financed Vehicle
securing each Receivable will not be released from the security interest
granted by the Receivable in whole or in part, except as contemplated
herein.
(b) No Impairment. The Servicer will not (nor will it permit any
subservicer to) impair in any material respect the rights of the Trust, the
Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders in the Receivables or, subject to clause (c) below, otherwise
amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders or the Noteholders hereunder would be
materially adversely affected.
(c) Amendments. The Servicer will not increase or decrease the
number or amount of Scheduled Payments or the Amount Financed under a
Receivable, or extend, rewrite or otherwise modify the payment terms of a
Receivable, except pursuant to Section 3.2(a).
SECTION 3.7 Purchase by Servicer upon Breach. The Seller, the
Servicer or the Owner Trustee, as the case may be, shall inform the other
parties to this Agreement promptly, in writing, upon the discovery of any
breach of Section 3.2(a), 3.5 or 3.6. If the breach shall not have been
cured by the last day of the Collection Period which includes the sixtieth
(60th) day after the date on which the Servicer becomes aware of, or
receives written notice of, such breach, and such breach materially and
adversely affects the interests of the Trust in a Receivable, the Servicer
shall purchase such Receivable or Receivables on the immediately succeeding
Payment Date; provided, however, that with respect to a breach of Section
3.2(a), the Servicer shall repurchase the affected Receivable from the
Trust at the end of the Collection Period in which such breach occurs. In
consideration of the purchase of a Receivable hereunder, the Servicer shall
remit the Purchase Amount of such Receivable in the manner specified in
Section 4.5(a). Except as provided in Section 7.2, the sole remedy of the
Trust, the Owner Trustee, the Indenture Trustee, the Certificateholders or
the Noteholders against the Servicer with respect to a breach pursuant to
Section 3.2, 3.5 or 3.6 shall be to require the Servicer to repurchase
Receivables pursuant to this Section 3.7. Neither the Owner Trustee nor the
Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 3.7 or the
eligibility of any Receivable for purposes of this Agreement.
SECTION 3.8 Servicing Compensation. The "Servicing Fee" with
respect to a Collection Period shall be an amount equal to the product of
one-twelfth (1/12) of the sum of (x) 1% of the aggregate Principal Balance
of all Receivables other than Deferred Payment Receivables and (y) 0.25% of
the aggregate Principal Balance of Deferred Payment Receivables, in each
case as of the first day of such Collection Period. As additional servicing
compensation, the Servicer shall also be entitled to earnings (net of
losses and investment expenses) on amounts on deposit in the Payahead
Account, disposition fees paid with respect to Final Payment Receivables
and any administrative fees and charges and all late payment fees actually
collected (from whatever source) on the Receivables other than fees paid in
connection with the extension or deferral of payments on a Receivable (the
"Supplemental Servicing Fee"). The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder
(including fees and expenses of the Owner Trustee and the Indenture Trustee
(and any custodian appointed by the Owner Trustee and the Indenture
Trustee) and independent accountants, any subservicer, taxes imposed on the
Servicer or any subservicer (to the extent not paid by such subservicer),
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, each Swap
Counterparty and the Seller, with a copy to the Rating Agencies, a
certificate of a Servicing Officer substantially in the form of Exhibit A
hereto (a "Servicer's Certificate") and attached to a Servicer's report
containing all information necessary to make the transfers and
distributions pursuant to Sections 4.3, 4.4, 4.5, 4.6 and 4.7, together
with the written statements to be furnished by the Owner Trustee to
Certificateholders pursuant to Section 4.9 and by the Indenture Trustee to
the Noteholders pursuant to Section 4.9 hereof and Section 6.6 of the
Indenture. Upon written request of the Owner Trustee or the Indenture
Trustee, the Servicer also shall separately identify (by account number of
the Receivable as it appears in the related Schedule of Receivables) in a
written notice to the Owner Trustee or the Indenture Trustee, as the case
may be, the Receivables to be repurchased by the Seller or to be purchased
by the Servicer, as the case may be, on the related Payment Date, and, also
upon written request of one of the foregoing parties, each Receivable which
became a Defaulted Receivable during the related Collection Period. The
Servicer shall deliver to the Rating Agencies any information, to the
extent it is available to the Servicer, that the Rating Agencies reasonably
request in order to monitor the Trust.
SECTION 3.10 Annual Statement as to Compliance; Notice of Event of
Servicing Termination.(a) The Servicer shall deliver to the Owner Trustee
and the Indenture Trustee, on or before March 31 of each year, commencing
March 31, 2002, 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 (5) Business Days thereafter, written
notice in an Officer's Certificate of any event which constitutes or, with
the giving of notice or lapse of time or both, would become, an Event of
Servicing Termination under Section 8.1.
SECTION 3.11 Annual Independent Certified Public Accountants'
Reports. The Servicer shall cause a firm of independent certified public
accountants (who may also render other services to the Servicer, the Seller
or to MMCA) to deliver to the Owner Trustee and the Indenture Trustee on or
before March 31 of each year, commencing March 31, 2002, a report addressed
to the Board of Directors of the Servicer with respect to the preceding
calendar year (or such shorter period, with respect to the first such
report) to the effect that such firm has audited the financial statements
of the Servicer and issued its report thereon and that such audit (1) was
made in accordance with generally accepted auditing standards, (2) included
tests relating to motor vehicle loans serviced for others in accordance
with the requirements of the Uniform Single Attestation Program for
Mortgage Bankers (the "Program"), to the extent the procedures in such
Program are applicable to the servicing obligations set forth in this
Agreement, and (3) except as described in the report, disclosed no
exceptions or errors in the records relating to automobile and
sports-utility vehicle loans serviced for others that such firm is required
to report under the Program. Such report shall also indicate that the firm
is independent with respect to the Seller and the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants. A copy of such report shall be delivered by
the Indenture Trustee to each Noteholder, promptly following the Indenture
Trustee's receipt of such report, pursuant to Section 7.4 of the Indenture.
In addition, a copy of such report may be obtained by any Certificateholder
by a request in writing to the Owner Trustee, or by any Person certifying
that it is a Note Owner by a request in writing to the Indenture Trustee,
in either case addressed to the applicable Corporate Trust Office.
SECTION 3.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide the Certificateholders,
the Indenture Trustee and the Noteholders with access to the Receivable
Files in the cases where the Certificateholders, the Indenture Trustee or
the Noteholders shall be required by applicable statutes or regulations to
have access to such documentation. Such access shall be afforded without
charge, but only upon reasonable request and during normal business hours
at the offices of the Servicer. Nothing in this Section 3.12 shall affect
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation
shall not constitute a breach of this Section 3.12. Any Certificateholder
or Noteholder, by its acceptance of a Certificate or Note, as the case may
be, shall be deemed to have agreed to keep any information obtained by it
pursuant to this Section confidential, except as may be required by
applicable law.
SECTION 3.13 Reports to the Commission.The Servicer shall, on
behalf of the Trust, cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act , and
the rules and regulations of the Commission thereunder. The Seller shall,
at its expense, cooperate in any reasonable request made by the Servicer in
connection with such filings.
SECTION 3.14 Reports to Rating Agencies.The Servicer shall deliver
to each Rating Agency, at such address as each Rating Agency may request, a
copy of all reports or notices furnished or delivered pursuant to this
Article and a copy of any amendments, supplements or modifications to this
Agreement and any subservicing agreement and any other information
reasonably requested by such Rating Agency to monitor this transaction.
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1 Accounts.(a) The Servicer shall, prior to the Closing
Date, establish and maintain a segregated trust account in the name of the
Indenture Trustee, at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of
Bank of Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Collection Account." The Collection Account shall be held in trust for the
benefit of the Noteholders and the Certificateholders. The Collection
Account shall be under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Collection
Account in accordance with the terms of this Agreement, the Indenture and
the Trust Agreement. All monies deposited from time to time in the
Collection Account shall be held by the Indenture Trustee as part of the
Trust Property and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant to the
first sentence of Section 4.2(a), all amounts held in the Collection
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
bank or trust company then maintaining the Collection Account, in Permitted
Investments that mature not later than the Business Day immediately prior
to the Payment Date for the Collection Period to which such amounts relate
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Collection Account shall be withdrawn from the Collection Account at
the written direction of the Servicer and shall be deposited in the
Certificate Distribution Account. In the event that the Collection Account
is no longer to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Collection
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within ten (10) Business Days (or such longer period not to
exceed thirty (30) calendar days as to which each Rating Agency may
consent).
(b) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee,
at a Qualified Institution or Qualified Trust Institution (which shall
initially be the corporate trust department of Bank of Tokyo-Mitsubishi
Trust Company), which shall be designated as the "Pre-Funding Account". The
Pre-Funding Account shall be held in trust for the benefit of the
Noteholders and the Certificateholders. The Pre-Funding Account shall be
under the sole dominion and control of the Indenture Trustee; provided,
that the Servicer may make deposits to and direct the Indenture Trustee in
writing to make withdrawals from the Pre-Funding Account in accordance with
the terms of this Agreement and the other Basic Documents. All monies
deposited from time to time in the Pre-Funding Account shall be held by the
Indenture Trustee as part of the Trust Property and all deposits to and
withdrawals therefrom shall be made only upon the terms and conditions of
the Basic Documents.
All amounts held in the Pre-Funding Account shall, to the extent
permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Pre-Funding Account, in Permitted Investments that mature
not later than the Business Day immediately prior to each Payment Date and
such Permitted Investments shall be held until maturity. On the Business
Day preceding each Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account for deposit to the
Collection Account on such date an amount equal to the Pre-Funding Account
Investment Earnings, if any, for the related Collection Period. In the
event that the Pre-Funding Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance
as necessary, cause the Pre-Funding Account to be moved to a Qualified
Institution or a Qualified Trust Institution within ten (10) Business Days
(or such longer period not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
With respect to any amounts, securities, investments, financial
assets and other property deposited in or credited to the Pre-Funding
Account:
(i) any such property that is a "financial asset" as
defined in Section 8-102(a)(9) of the UCC shall be physically
delivered to, or credited to an account in the name of, the
Qualified Institution or Qualified Trust Institution maintaining
the Pre-Funding Account, as applicable, in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any such property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one
or more depository institutions having the Required Rating and
each such deposit account shall be subject to the exclusive
custody and control of the Indenture Trustee, and the Indenture
Trustee shall have sole signature authority with respect thereto;
and
(iii) except for any deposit accounts specified in clause
(ii) above, the Pre-Funding Account shall only be invested in
securities or in other assets which the Qualified Institution or
Qualified Trust Institution maintaining the Pre-Funding Account,
as applicable, agrees to treat as "financial assets" as defined in
Section 8-102(a)(9) of the UCC.
(c) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee,
at a Qualified Institution or Qualified Trust Institution (which shall
initially be the corporate trust department of Bank of Tokyo-Mitsubishi
Trust Company), which shall be designated as the "Negative Carry Account".
The Negative Carry Account shall be held in trust for the exclusive benefit
of the Noteholders. The Negative Carry Account shall be under the sole
dominion and control of the Indenture Trustee; provided, that the Servicer
may make deposits to and direct the Indenture Trustee in writing to make
withdrawals from the Negative Carry Account in accordance with the terms of
this Agreement and the other Basic Documents. All monies deposited from
time to time in the Negative Carry Account shall be held by the Indenture
Trustee as part of the Trust Property and all deposits to and withdrawals
therefrom shall be made only upon the terms and conditions of the Basic
Documents.
All amounts held in the Negative Carry Account shall, to the
extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Negative Carry Account, in Permitted Investments that
mature not later than the Business Day immediately prior to each Payment
Date and such Permitted Investments shall be held until maturity. All
interest and other income (net of losses and investment expenses) on funds
on deposit in the Negative Carry Account shall be withdrawn from the
Negative Carry Account for deposit to the Collection Account or 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 Collection Account to be moved to a Qualified
Institution or a Qualified Trust Institution within ten (10) Business Days
(or such longer period not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
With respect to any amounts, securities, investments, financial
assets and other property deposited in or credited to the Negative Carry
Account:
(i) any such property that is a "financial asset" as
defined in Section 8-102(a)(9) of the UCC shall be physically
delivered to, or credited to an account in the name of, the
Qualified Institution or Qualified Trust Institution maintaining
the Negative Carry Account, as applicable, in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any such property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one
or more depository institutions having the Required Rating and
each such deposit account shall be subject to the exclusive
custody and control of the Indenture Trustee and the Indenture
Trustee shall have sole signature authority with respect thereto;
and
(iii) except for any deposit accounts specified in clause
(ii) above, the Negative Carry Account shall only be invested in
securities or in other assets which the Qualified Institution or
Qualified Trust Institution maintaining the Negative Carry
Account, as applicable, agrees to treat as "financial assets" as
defined in Section 8-102(a)(9) of the UCC.
(d) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee at
a Qualified Institution or Qualified Trust Institution (which shall
initially be the corporate trust department of Bank of Tokyo-Mitsubishi
Trust Company), which shall be designated as the "Note Payment Account."
The Note Payment Account shall be held in trust for the exclusive benefit
of the Noteholders. The Note Payment Account shall be under the sole
dominion and control of the Indenture Trustee. All monies deposited from
time to time in the Note Payment Account pursuant to this Agreement and the
Indenture shall be held by the Indenture Trustee as part of the Trust
Property and shall be applied as provided in this Agreement and the
Indenture. In the event that the Note Payment Account is no longer to be
maintained at the corporate trust department of Bank of Tokyo-Mitsubishi
Trust Company, the Servicer shall, with the Indenture Trustee's assistance
as necessary, cause the Note Payment Account to be moved to a Qualified
Institution or a Qualified Trust Institution within ten (10) Business Days
(or such longer period not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
(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
ten (10) Business Days (or such longer period not to exceed thirty (30)
calendar days as to which each Rating Agency may consent) and shall
promptly notify the Indenture Trustee of the account number and location of
such account.
(f) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee at
a Qualified Institution or Qualified Trust Institution (which shall
initially be the corporate trust department of Bank of Tokyo-Mitsubishi
Trust Company), which shall be designated as the "Payahead Account." The
Payahead Account shall be held in trust for the benefit of the Noteholders
and the Certificateholders. The Payahead Account shall be under the sole
dominion and control of the Indenture Trustee provided, that the Servicer
may make deposits to and direct the Indenture Trustee in writing to make
withdrawals from the Payahead Account in accordance with this Agreement and
the Indenture. All monies deposited from time to time in the Payahead
Account shall be held by the Indenture Trustee as part of the Trust
Property and all deposits to and withdrawals therefrom shall be made only
upon the terms and conditions of the Basic Documents.
On the Closing Date, the Seller shall deposit an amount equal to
the Initial Payahead Account Deposit into the Payahead Account from the net
proceeds of the sale of the Notes and the Certificates. On each Subsequent
Transfer Date, the Servicer shall instruct the Indenture Trustee to
withdraw from the Pre-Funding Account and deposit to the Payahead Account
an amount equal to the applicable Subsequent Payahead Account Deposit.
If the Servicer is required to remit collections pursuant to the
first sentence of Section 4.2(a), all amounts held in the Payahead Account
shall, to the extent permitted by applicable law, rules and regulations, be
invested, as directed in writing by the Servicer, by the bank or trust
company then maintaining the Payahead Account, in Permitted Investments
that mature not later than the Business Day immediately prior to the
Payment Date for the Collection Period to which such amounts relate and
such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Payahead Account shall be withdrawn from the Payahead Account at the
direction of the Servicer and shall be paid to the Servicer as additional
servicing compensation. In the event that the Payahead Account is no longer
to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Payahead
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within ten (10) Business Days (or such longer period not to
exceed thirty (30) calendar days as to which each Rating Agency may
consent).
(g) Notwithstanding the provisions of clause (f) 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 "F-1" by Fitch, 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(f) 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
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(f)), 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 Final Payment Receivable, to interest and principal in
accordance with the Simple Interest Method first, to accrued but unpaid
interest, second, to the Level Pay Balance of such Receivable, third, to
the principal portion of the Last Scheduled Payment to the extent a Last
Scheduled Payment Advance has not been made by the Servicer with respect to
such Last Scheduled Payment and fourth, to the extent of any unreimbursed
Last Scheduled Payment Advance with respect to such Simple Interest
Receivable, to reimburse the Servicer for such Last Scheduled Payment
Advance and (iii) an Actuarial Receivable, first, to the Scheduled Payment
of such Actuarial Receivable, second to the extent of any unreimbursed
Actuarial Advances with respect to such Actuarial Receivable, to reimburse
the Servicer for any such Actuarial Advances, third, to the extent of any
unreimbursed Last Scheduled Payment Advance with respect to such Actuarial
Receivable, to reimburse the Servicer for such Last Scheduled Payment
Advance and fourth, to the extent that any amounts are remaining then due
to a prepayment of such Actuarial Receivable, if the sum of such remaining
amount and the previous Payahead Balance shall be sufficient to prepay the
Actuarial Receivable in full, and otherwise to the Payahead Account (or, if
all Monthly Remittance Conditions are satisfied, to the Servicer) as a
Payahead.
(b) All Liquidation Proceeds and any Recoveries, and any proceeds
realized upon the liquidation, sale or dissolution of the Owner Trust
Estate (or any part thereof) upon the occurrence of an Event of Default
under the Indenture shall, with respect to any Final Payment Receivable be
applied first to accrued but unpaid interest thereon, second, to the Level
Pay Balance of such Receivable and third, to the principal portion of the
related Last Scheduled Payment.
SECTION 4.4 Advances.(a) As of the close of business on the last
day of each Collection Period, if the payments during such Collection
Period by or on behalf of the Obligor on or in respect of an Actuarial
Receivable (other than a Purchased Receivable) after application under
Section 4.3 shall be less than the Scheduled Payment, the Payahead Balance
of such Receivable shall be applied by the Indenture Trustee to the extent
of the shortfall, and such Payahead Balance shall be reduced accordingly.
Subject to the last sentence of this Section 4.4(a), on each Payment Date
the Servicer shall advance an amount equal to the excess, if any, of the
Scheduled Payment with respect to an Actuarial Receivable over the sum of
the (x) payments received on or in respect of such Actuarial Receivable
during the preceding Collection Period and (y) the Payahead Balance with
respect to such Actuarial Receivable (such advance, 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(f) 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
Negative Carry Amount and the Last Scheduled Payment Principal Collections,
in each case with respect to the following Payment Date. In addition, on
each Determination Date the Servicer shall calculate the following amounts
with respect to such Payment Date:
(i) an amount equal to the lesser of (x) the amount, if
any, by which the aggregate amount payable to the Servicer out of
the Collection Account on such Payment Date as reimbursement for
Actuarial Advances pursuant to Section 4.4(d) and for Last
Scheduled Payment Advances pursuant to Section 4.4(e) exceeds the
amount in the Collection Account available for such purpose
(without giving effect to any deposits thereto from amounts in the
Reserve Account but giving effect to all other deposits to the
Collection Account required to be made on such Payment Date) and
(y) the Reserve Account Amount for such Payment Date (without
giving effect to any deposits of Total Available Funds but giving
effect to all other deposits to the Reserve Account on such
Payment Date) (the "Reserve Account Advance Draw Amount");
(ii) an amount equal to the lesser of (x) the amount, if
any, by which the Total Required Payment for such Payment Date
exceeds the Available Funds for such Payment Date and (y) an
amount equal to the Reserve Account Amount (without giving effect
to any deposits of Total Available Funds on such Payment Date) for
such Payment Date, less the Reserve Account Advance Draw Amount
for such Payment Date (the "Reserve Account TRP Draw Amount");
(iii) the Total Available Funds for such Payment Date;
(iv) the Reserve Account Amount with respect to such
Payment Date after giving effect to the Reserve Account Advance
Draw Amount and the Reserve Account TRP Draw Amount for such
Payment Date, and the difference, if any, between the Reserve
Account Amount and the Specified Reserve Balance for such Payment
Date; and
(v) any Net Swap Payments, any Net Swap Receipts and any
Swap Termination Payments.
(c) On each Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
3.9) to withdraw the Total Available Funds on deposit in the Collection
Account for the related Collection Period and make the following payments
and deposits for such Payment Date in the following order of priority:
(i) to the Servicer, the Total Servicing Fee;
(ii) to the Swap Counterparty, the amount of any Net Swap
Payments then due under the Interest Rate Swap Agreements
(exclusive of any Swap Termination Payments);
(iii) with the same priority and ratably, in accordance
with the outstanding principal balance of the Class A Notes and
the amount of any Swap Termination Payments due and payable by the
Issuer to the Swap Counterparties,
(1) to the Note Payment Account, the Accrued
Note Interest for the Class A Notes, and
(2) to the Swap Counterparties, any Swap
Termination Payments;
provided, that, if any amounts allocable to the Class A Notes are
not needed to pay interest due on such Notes, such amounts shall be applied
to pay the portion, if any, of any Swap Termination Payments remaining
unpaid, pro rata based on the amount of the Swap Termination Payments, and
provided, further, that if there are not sufficient funds available to pay
the entire amount of the Accrued Note Interest for the Class A Notes, the
amounts available shall be applied to the payment of such interest on the
Class A Notes on a pro rata basis;
(iv) to the Note Payment Account, the Accrued Note
Interest for the Class B Notes;
(v) to the Note Payment Account, the 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; and
(vii) 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 Servicer shall instruct
the Indenture Trustee to withdraw from the Pre-Funding Account and deposit
to the Reserve Account on such Subsequent Transfer Date an amount equal to
the applicable Subsequent Reserve Account Deposit as provided in Section
4.11(a). The Reserve Account and all amounts, securities, investments,
financial assets and other property deposited in or credited to the Reserve
Account (the "Reserve Account Property") has been conveyed by the Seller to
the Trust pursuant to Section 2.1(a). Pursuant to the Indenture, the Trust
will pledge all of its right, title and interest in, to and under the
Reserve Account and the Reserve Account Property to the Indenture Trustee
on behalf of the Noteholders to secure its obligations under the Notes and
the Indenture.
The Reserve Account Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing
by the Servicer, by the bank or trust company then maintaining the Reserve
Account, in Permitted Investments that mature not later than the Business
Day immediately preceding the next Payment Date, and such Permitted
Investments shall be held to maturity. All interest and other income (net
of losses and investment expenses) on funds on deposit in the Reserve
Account shall, upon the written direction of the Servicer, be paid to the
Seller on any Payment Date to the extent that funds on deposit therein, as
certified by the Servicer, exceed the Specified Reserve Balance. In the
event the Reserve Account is no longer to be maintained at the corporate
trust department of Bank of Tokyo-Mitsubishi Trust Company, the Servicer
shall, with the Indenture Trustee's or Owner Trustee's assistance as
necessary, cause the Reserve Account to be moved to a Qualified Institution
or a Qualified Trust Institution within ten (10) Business Days (or such
longer period not to exceed thirty (30) calendar days as to which each
Rating Agency may consent).
(b) With respect to any Reserve Account Property:
(i) any Reserve Account Property that is a "financial
asset" as defined in Section 8-102(a)(9) of the UCC shall be
physically delivered to, or credited to an account in the name of,
the Qualified Institution or Qualified Trust Institution
maintaining the Reserve Account in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any Reserve Account Property that is held in deposit
accounts shall be held solely in the name of the Indenture Trustee
at one or more depository institutions having the Required Rating
and each such deposit account shall be subject to the exclusive
custody and control of the Indenture Trustee and the Indenture
Trustee shall have sole signature authority with respect thereto;
and
(iii) except for any deposit accounts specified in clause
(ii) above, the Reserve Account shall only be invested in
securities or in other assets which the Qualified Institution or
Qualified Trust Institution maintaining the Reserve Account agrees
to treat as "financial assets" as defined in Section 8-102(a)(9)
of the UCC.
(c) If the amount on deposit in the Reserve Account on any Payment
Date (after giving effect to all deposits thereto or withdrawals therefrom
on such Payment Date) is greater than the Specified Reserve Balance for
such Payment Date, the Servicer shall instruct the Indenture Trustee to
distribute the amount of such excess to the Seller; provided that the
Indenture Trustee and the Owner Trustee hereby release, on each Payment
Date, their security interest in, to and under Reserve Account Property
distributed to the Seller.
(d) Following the payment in full of the aggregate principal
balance of the Notes and the Certificate Balance and of all other amounts
owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to Noteholders or Certificateholders and the termination of the
Trust, any remaining Reserve Account Property shall be distributed to the
Seller.
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, each Swap Counterparty and
each Paying Agent) for the Indenture Trustee to forward to each Noteholder
of record as of the most recent Record Date and to the Owner Trustee (with
copies to the Rating Agencies and to each Paying Agent) for the Owner
Trustee to forward to each Certificateholder of record as of the most
recent Record Date a statement in substantially the forms of Exhibits B and
C, respectively, setting forth at least the following information as to the
Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to
principal paid to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to
interest paid to each Class of Notes;
(iii) the Yield Supplement Amount;
(iv) the amount of the Total Servicing Fee with respect
to the related Collection Period;
(v) the amount of the Net Swap Payments or Net Swap
Receipts, if any, due on that Payment Date;
(vi) the amount of any Swap Termination Payments due on
that Payment Date;
(vii) the aggregate outstanding principal balance of each
Class of Notes, the applicable Note Pool Factor, the Certificate
Balance and the Certificate Pool Factor as of the close of
business on the last day of the preceding Collection Period, after
giving effect to payments allocated to principal reported under
clause (i) above;
(viii) the Pool Balance, the Level Pay Pool Balance and
the Last Scheduled Payment Pool Balance, in each case as of the
close of business on the last day of the related Collection
Period;
(ix) the amounts of the Interest Carryover Shortfall, if
any, for the next Payment Date and the portion thereof
attributable to each Class of Notes;
(x) the amount of the aggregate Realized Losses, if any,
with respect to the related Collection Period;
(xi) the balance of the Reserve Account on such Payment
Date, after giving effect to changes therein on such Payment Date;
(xii) the aggregate Purchase Amount of Receivables
repurchased by the Seller or purchased by the Servicer, if any,
with respect to the related Collection Period;
(xiii) the amount of Actuarial Advances and Last
Scheduled Payment Advances, if any, with respect to the related
Collection Period;
(xiv) for each such Payment Date during the Pre-Funding
Period, (A) the amount, if any, withdrawn from the Pre-Funding
Account to purchase Subsequent Receivables during the related
Collection Period, (B) the Remaining Pre-Funded Amount, if any,
(C) the Negative Carry Amount, if any, for the related Collection
Period, and (D) the amount remaining on deposit in the Negative
Carry Account, if any, after all withdrawals, if any, made on such
Payment Date; and
(xv) 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 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 $[__________] from the net proceeds of the sale of the
Notes. On or prior to the Business Day immediately preceding each
Subsequent Transfer Date, the Servicer shall calculate the following
amounts and instruct the Indenture Trustee to withdraw such amounts from
the Pre-Funding Account on such Subsequent Transfer Date: (i) an amount
equal to the aggregate Principal Balance of the Subsequent Receivables
transferred to the Trust on such Subsequent Transfer Date less an amount
equal to the sum of the amounts described in clauses (ii) through (iv) of
this sentence, which amount the Indenture Trustee shall distribute to the
Seller on such Subsequent Transfer Date, (ii) the Subsequent Reserve
Account Deposit for such Subsequent Transfer Date, which amount the
Indenture Trustee shall deposit to the Reserve Account on behalf of the
Seller on such Subsequent Transfer Date, (iii) if the Yield Supplement
Account has not been replaced by a Yield Supplement Letter of Credit on or
prior to such Subsequent Transfer Date, the Subsequent Yield Supplement
Account Deposit for such Subsequent Transfer Date, which amount the
Indenture Trustee shall deposit to the Yield Supplement Account on behalf
of the Seller on such Subsequent Transfer Date, and (iv) the Subsequent
Payahead Account Deposit, which amount the Indenture Trustee shall deposit
to the Payahead Account on behalf of the Seller on such Subsequent Transfer
Date.
(b) If the Pre-Funded Amount has not been reduced to zero on the
Payment Date on which the Pre-Funding Period ends (or, if the Pre-Funding
Period does not end on a Payment Date, on the first Payment Date following
the end of the Pre-Funding Period), after giving effect to any reductions
in the Pre-Funded Amount on such date pursuant to paragraph (a), the
Servicer shall instruct the Indenture Trustee to withdraw from the
Pre-Funding Account on such Payment Date (or, if the Pre-Funding Period
does not end on a Payment Date, on the first Payment Date following the end
of the Pre-Funding Period), the amount remaining in the Pre-Funding Account
at such time exclusive of the Pre-Funding Account Investment Earnings, if
any, for the related Collection Period (such remaining amount being the
"Remaining Pre-Funded Amount") and deposit such amount in the Collection
Account for inclusion in the Available Funds for such Payment Date. The
Pre-Funding Account Investment Earnings for the related Collection Period
(together with any other interest and other income (net of losses and
expenses) earned on amounts on deposit in the Pre-Funding Account that are
on deposit in the Pre-Funding Account) shall be deposited to the Collection
Account.
SECTION 4.12 Negative Carry Account. On the Closing Date, the
Seller shall deposit the Negative Carry Account Initial Deposit into the
Negative Carry Account. On each Payment Date, the Servicer shall instruct
the Indenture Trustee to withdraw from the Negative Carry Account and
deposit into the Collection Account an amount equal to the lesser of (x)
the amount, if any, on deposit in the Negative Carry Account on such
Payment Date and (y) the Negative Carry Amount, if any, for such Payment
Date. If the amount on deposit in the Negative Carry Account on any Payment
Date (after giving effect to the withdrawal therefrom of the Negative Carry
Amount, if any, for such Payment Date) is greater than the Required
Negative Carry Account Balance for such Payment Date, the excess shall be
released to the Seller on such 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 Servicer shall instruct the
Indenture Trustee to withdraw from the Pre-Funding Account and deposit to
the Yield Supplement Account an amount equal to the applicable Subsequent
Yield Supplement Account Deposit unless the Yield Supplement Account has
been replaced by a Yield Supplement Letter of Credit on or prior to such
Subsequent Transfer Date, in which case the Servicer shall cause the amount
available to be drawn under the Yield Supplement Letter of Credit as of
such Subsequent Transfer Date to be no less than the Specified Yield
Supplement Account Balance as of such Subsequent Transfer Date after giving
effect to the transfer to the Trust of the related Subsequent Receivables.
To the extent, on any Payment Date, the amount on deposit in the Yield
Supplement Account (after giving effect to any withdrawals to be made on
such Payment Date, but exclusive of net investment income) is greater than
the Specified Yield Supplement Account Balance for such Payment Date, then,
in such event, the Servicer shall instruct the Indenture Trustee in writing
to pay such excess amount to the Seller.
All amounts held in the Yield Supplement Account shall be
invested, as directed in writing by the Servicer, by the bank or trust
company then maintaining the Yield Supplement Account in Permitted
Investments that mature not later than the Business Day immediately
preceding the next Payment Date and such Permitted Investments shall be
held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Yield Supplement Account
shall be withdrawn from the Yield Supplement Account at the written
direction of the Servicer and shall be paid to the Seller. In the event
that the Yield Supplement Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's assistance as necessary, cause
the Yield Supplement Account to be moved to a Qualified Institution or a
Qualified Trust Institution within ten (10) Business Days (or such longer
period not to exceed thirty (30) calendar days as to which each Rating
Agency may consent).
The Seller hereby sells, conveys and transfers to the Trust the
Yield Supplement Account, all funds and investments on deposit therein or
credited thereto and all proceeds thereof, subject, however, to the
limitations set forth below.
Pursuant to the Indenture, the Trust will pledge its rights under
the Yield Supplement Agreement (including its rights to amounts on deposit
in the Yield Supplement Account) to the Indenture Trustee to secure its
obligations under the Notes and the Indenture. Such sale, conveyance and
transfer of the Yield Supplement Account by the Seller to the Trust, and
such pledge by the Trust of its rights to amounts in the Yield Supplement
Account to the Indenture Trustee, shall be subject to the following
limitations:
(i) All or a portion of the Yield Supplement Account may
be invested and reinvested in the manner specified in Section
5.1(a) in accordance with written instructions from the Servicer.
All such investments shall be made in the name of the Indenture
Trustee and all income and gain realized thereon shall be solely
for the benefit of the Seller and shall be payable by the
Indenture Trustee to the Seller upon written direction of the
Servicer as specified in Section 5.1(a);
(ii) If, with respect to any Collection Period, MMCA
shall have failed to make or cause to be made in full the
remittance of the Yield Supplement Amount on the date required by
the Yield Supplement Agreement, the Indenture Trustee not later
than 10:00 a.m. (New York City time) on the Payment Date, shall,
upon the written direction of the Servicer, withdraw from the
Yield Supplement Account and deposit into the Collection Account
the amount of the shortfall between the amount of funds that are
required to be remitted by MMCA with respect to the Yield
Supplement Agreement as set forth in the Servicer's Certificate
and the amount of funds actually so remitted and to the extent of
any remaining shortfall, the Indenture Trustee shall withdraw an
amount equal thereto from the Reserve Account, and deposit such
amounts in the Collection Account; and
(iii) Upon termination of this Agreement in accordance
with Section 9.1 or (a) in the event that the Seller obtains a
Yield Supplement Letter of Credit or (b) the Seller otherwise
satisfies the requirements with respect to the Yield Supplement
Agreement established by the Rating Agencies, in either case as
evidenced by satisfaction of the Rating Agency Condition and an
Officer's Certificate of the Seller that all conditions to the
liquidation of the Yield Supplement Account have been satisfied,
any amounts on deposit in the Yield Supplement Account shall, upon
written request of the Seller, be paid to the Seller.
(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,
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 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 Receivables and the other Trust
Property related thereto conveyed by the Seller to the Trust hereunder, 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 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 executed and filed that are necessary to fully preserve and
protect the interest of the Trust and the Indenture Trustee, respectively,
in the Receivables and the other Trust Property, and reciting the details
of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to fully preserve and protect such interest.
The Seller shall provide notice of any merger, conversion, consolidation,
or succession pursuant to this Section 6.3 to the Rating Agencies.
Notwithstanding anything herein to the contrary, the execution of the
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, 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 executed and filed that are
necessary to fully preserve and protect the interest of the Trust and the
Indenture Trustee, respectively, in the Receivables, and reciting the
details of such filings, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to fully preserve and protect
such interests. The Servicer shall provide notice of any merger,
conversion, consolidation or succession pursuant to this Section 7.3 to the
Rating Agencies. Notwithstanding anything herein to the contrary, the
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 (3) Business Days from the date such Servicer's Certificate
was due to be delivered and the related Payment Date, or any
failure by the Servicer to make any required payment or deposit
under this Agreement, which shall continue unremedied for a period
of five (5) Business Days following the due date therefor (or, in
the case of a payment or deposit to be made no later than a
Payment Date, the failure to make such payment or deposit by such
Payment Date); or
(ii) Any failure on the part of the Servicer duly to
observe or to perform in any material respect any other covenant
or agreement set forth in the Notes, the Certificates, or in this
Agreement, which failure shall materially and adversely affect the
rights of Noteholders or Certificateholders and continue
unremedied for a period of thirty (30) days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Owner
Trustee or the Indenture Trustee or to the Owner Trustee, the
Indenture Trustee, the Seller and the Servicer by the Holders of
Notes or Certificates, as applicable, evidencing not less than 25%
of the principal balance of the then Notes Outstanding, in the
aggregate, or 25% of the Certificate Balance; or
(iii) The entry of a decree or order by a court or agency
or supervisory authority of competent jurisdiction for the
appointment of a conservator, receiver, liquidator or trustee for
the Seller or the Servicer in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities, or
similar proceedings, or for the winding up or liquidation of its
affairs, and any such decree or order continues unstayed and in
effect for a period of sixty (60) consecutive days; or
(iv) The consent by the Seller or the Servicer to the
appointment of a conservator, receiver, liquidator or trustee in
any bankruptcy, insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings of or relating to
the Seller or the Servicer or relating to substantially all of its
property, the admission in writing by the Servicer of its
inability to pay its debts generally as they become due, the
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 (2) Business Days of receipt and shall not be retained
by the Servicer. Notwithstanding the above, the Indenture Trustee may, if
it shall be unwilling so to act, or shall, if it is legally unable so to
act, appoint, or petition a court of competent jurisdiction to appoint, an
Eligible Servicer as the successor to the terminated Servicer under this
Agreement. In connection with such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor Servicer out
of payments on Receivables as it and such successor shall agree, which, in
no event, shall be greater than that payable to MMCA as Servicer hereunder.
The Indenture Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such
succession including, but not limited to, making arrangements in respect of
the last sentence of Section 3.2(e) of this Agreement. The Indenture
Trustee shall not be relieved of its duties as successor Servicer under
this Section 8.2 until a newly appointed Servicer shall have assumed the
responsibilities and obligations of the terminated Servicer under this
Agreement.
SECTION 8.3 Effect of Servicing Transfer.(a) After the transfer of
servicing hereunder, the Indenture Trustee or successor Servicer shall
notify Obligors to make directly to the successor Servicer payments that
are due under the Receivables after the effective date of such transfer.
(b) Except as provided in Section 8.2 after the transfer of
servicing hereunder, the outgoing Servicer shall have no further
obligations with respect to the administration, servicing, custody or
collection of the Receivables and the successor Servicer shall have all of
such obligations, except that the outgoing Servicer will transmit or cause
to be transmitted directly to the successor Servicer for its own account,
promptly on receipt and in the same form in which received, any amounts
held by the outgoing Servicer (properly endorsed where required for the
successor Servicer to collect any such items) received as payments upon or
otherwise in connection with the Receivables and the outgoing Servicer
shall continue to cooperate with the successor Servicer by providing
information and in the enforcement of the Dealer Agreements.
(c) Any successor Servicer shall provide the Seller with access to
the Receivable Files and to the successor Servicer's records (whether
written or automated) with respect to the Receivable Files. Such access
shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the successor Servicer.
Nothing in this Section 8.3 shall affect the obligation of the successor
Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 8.3.
SECTION 8.4 Notification to Noteholders and Certificateholders.
Upon any notice of an Event of Servicing Termination or upon any
termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Indenture Trustee shall give prompt written notice
thereof to Noteholders, and the Owner Trustee shall give prompt written
notice thereof to Certificateholders at their addresses of record and to
the Rating Agencies.
SECTION 8.5 Waiver of Past Events of Servicing Termination. The
Holders of Notes evidencing not less than 51% of the Notes Outstanding or
the Holders of Certificates evidencing not less than 51% of the Certificate
Balance (in the case of an Event of Servicing Termination which does not
adversely affect the Indenture Trustee or the Noteholders) may, on behalf
of all Noteholders and Certificateholders, waive any Event of Servicing
Termination hereunder and its consequences, except an event resulting from
the failure to make any required deposits to, or payments from, any of the
Trust Accounts and the Certificate Distribution Account in accordance with
this Agreement. Upon any such waiver of a past Event of Servicing
Termination, such event shall cease to exist, and shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other event or impair any right arising
therefrom, except to the extent expressly so waived.
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables. (a) On each
Payment Date following the last day of a Collection Period as to which the
Pool Balance shall be less than or equal to the Optional Purchase
Percentage (expressed as a seven-digit decimal) multiplied by the Initial
Pool Balance, the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts and the Certificate
Distribution Account. To exercise such option, the Servicer shall notify
the Owner Trustee and the Indenture Trustee no later than the fifteenth day
of the month immediately preceding the month in which such repurchase is to
be effected and shall deposit an amount equal to the aggregate Purchase
Amount for the Receivables, plus the appraised value of any other property
held in the Trust other than in the Trust Accounts and the Certificate
Distribution Account, such value to be determined by an appraiser mutually
agreed upon by the Servicer, the Owner Trustee and the Indenture Trustee,
into the Collection Account on the Payment Date occurring in the month in
which such repurchase is to be effected. Upon such payment, the Servicer
shall succeed to and own all interests in and to the Trust. Notwithstanding
the foregoing, the Servicer shall not be permitted to exercise such option
unless the amount to be deposited in the Collection Account pursuant to the
second preceding sentence is greater than or equal to the sum of the
outstanding principal balance of the Notes and all accrued but unpaid
interest (including any overdue interest) thereon and the Certificate
Balance. The Purchase Amount, any Negative Carry Amounts and any Yield
Supplement Amounts for such Payment Date, plus to the extent necessary all
amounts in the Reserve Account, shall be used to make payments in full to
Noteholders and Certificateholders in the manner set forth in Article IV.
(b) Unless otherwise required by the Rating Agencies as set forth
in writing delivered to the Owner Trustee and the Indenture Trustee, if at
the time the Servicer exercises its purchase option hereunder the
Servicer's long-term unsecured debt has a rating lower than investment
grade by the Rating Agencies, the Servicer shall deliver to the Owner
Trustee and the Indenture Trustee on such Payment Date a letter from an
Independent investment bank or an Independent public accountant to the
effect that the price paid by the Servicer for the Receivables at the time
of transfer pursuant to such purchase option represented a fair market
price for such Receivables.
(c) Following the satisfaction and discharge of the Indenture and
the payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder,
and the Indenture Trustee will continue to carry out its obligations
hereunder with respect to the Certificateholders, including without
limitation making distributions from the Payahead Account and the
Collection Account in accordance with Section 4.6 and making withdrawals
from the Reserve Account in accordance with Sections 4.5(b) and 4.7.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment.(a) This Agreement may be amended by the
Seller, the Servicer and the Trust, with the consent of the Indenture
Trustee (which consent may not be unreasonably withheld), but without the
consent of any of the Noteholders, the Certificateholders or Swap
Counterparties to add, change or eliminate any other provisions with
respect to matters or questions arising under this Agreement as may be
necessary or advisable in order to: (i) cure any ambiguity, to revise,
correct or supplement any provisions herein, (ii) enable the Trust to avoid
becoming a member of MMCA's consolidated group under GAAP or (iii) enable
the Transferor or any Affiliate of the Transferor or any of their
Affiliates to otherwise comply with or obtain more favorable treatment
under any law or regulation or any accounting rule or principle; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Indenture Trustee materially and
adversely affect the interests of any Noteholder or Certificateholder;
provided, further, that no such amendment shall be inconsistent with the
derecognition by MMCA of the Receivables under GAAP or cause the Trust to
become a member of MMCA's consolidated group under GAAP; and provided,
further, that (x) such action shall not materially adversely affect the
rights or obligations of the Swap Counterparties under the Interest Rate
Swap Agreements or modify the obligations of, or impair the ability of, the
Issuer to fully perform any of its obligations under the Interest Rate Swap
Agreements or (y) each Swap Counterparty shall have consented thereto.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Trust, with the consent of the Swap
Counterparties to the extent such amendment adversely affects the rights or
obligations of the Swap Counterparties under the Interest Rate Swap
Agreements, or modifies the obligations of, or impairs the ability of the
Issuer to fully perform any of its obligations under, the Interest Rate
Swap Agreement (which consent may not be unreasonably withheld), and with
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 mail a copy to the
Swap Counterparties and shall furnish written notification of the substance
of such amendment or consent to each Certificateholder, the Indenture
Trustee and each of the Rating Agencies. It shall not be necessary for the
consent of Noteholders or the Certificateholders pursuant to this Section
10.1 to approve the particular form of any proposed amendment or consent,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Noteholders and Certificateholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by Noteholders and
Certificateholders shall be subject to such reasonable requirements as the
Owner Trustee and the Indenture Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Owner Trustee and the Indenture Trustee shall be entitled to receive and
rely upon (i) an Opinion of Counsel stating that the execution of such
amendment (A) is authorized or permitted by this Agreement, (B) will not
materially adversely affect the Federal or any Applicable Tax State income
or franchise taxation of any Outstanding Note or Certificate or any Holder
thereof, and (C) will not cause the Trust to be taxable as a corporation
for Federal or any Applicable Tax State income or franchise tax purposes
and (ii) an Officer's Certificate of the Servicer that all conditions to
the execution of such amendment have been complied with. The Owner Trustee
or the Indenture Trustee may, but shall not be obligated to, enter into any
such amendment which affects such Owner Trustee's or Indenture Trustee's
own rights, duties or immunities under this Agreement or otherwise.
SECTION 10.2 Protection of Title to Trust.(a)The Seller or
Servicer, or both, shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve,
maintain, and protect the interest of the Trust and the Indenture Trustee
for the benefit of the Noteholders in the Receivables and in the proceeds
thereof. The Seller or Servicer, or both, shall deliver (or cause to be
delivered) to the Owner Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might
make any financing statement or continuation statement filed by the Seller
or the Servicer in accordance with paragraph (a) above seriously misleading
within the meaning of ss. 9-506(b) of the Relevant UCC, unless it shall
have given the Owner Trustee and the Indenture Trustee at least sixty (60)
days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Seller and the Servicer shall give the Owner Trustee and
the Indenture Trustee at least sixty (60) days' prior written notice of any
relocation of its principal executive office or 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, its principal executive office and its jurisdiction of
organization within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of each)
and (ii) reconciliation between payments or recoveries on (or with respect
to) each Receivable and the amounts from time to time deposited in the
Collection Account, Payahead Account, the Reserve Account and the Yield
Supplement Account.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Trust, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of
the Trust and the Indenture Trustee in such Receivable and that such
Receivable is owned by the Trust and has been pledged to the Indenture
Trustee pursuant to the Indenture. Indication of the Trust's and the
Indenture Trustee's interest in a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the
Receivable shall have been paid in full or repurchased by the Seller or
purchased by the Servicer.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
any automobile or sports-utility vehicle receivables to any prospective
purchaser, lender, or other transferee, the Servicer shall give to such
prospective purchaser, lender, or other transferee computer tapes, compact
disks, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and
is owned by the Trust and has been pledged to the Indenture Trustee unless
such Receivable has been paid in full or repurchased by the Seller or
purchased by the Servicer.
(g) The Servicer shall permit the Owner Trustee, the Indenture
Trustee and their respective agents at any time during normal business
hours to inspect, audit, and make copies of and abstracts from the
Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee
and the Indenture Trustee, within ten (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 Schedule of
Receivables and to each of the Servicer's Certificates furnished before
such request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and
the Indenture Trustee:
(1) promptly after the execution and delivery of
each amendment to any financing statement, an Opinion of
Counsel either (A) stating that, in the opinion of such
Counsel, all financing statements and continuation
statements have been executed and filed that are
necessary fully to preserve and protect the interest of
the Trust and the Indenture Trustee in the Receivables,
and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to preserve
and protect such interest; and
(2) within ninety (90) days after the beginning
of each calendar year commencing in the year 2002, an
Opinion of Counsel, dated as of a date during such 90-day
period, either (A) stating that, in the opinion of such
Counsel, all financing statements and continuation
statements have been executed and filed that are
necessary fully to preserve and protect the interest of
the Trust and the Indenture Trustee in the Receivables,
and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to preserve
and protect such interest.
Each Opinion of Counsel referred to in clause (i)(1) or (i)(2)
above shall specify any action necessary (as of the date of such opinion)
to be taken in the following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law,
cause the Notes to be registered with the Commission pursuant to Section
12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 10.3 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations,
rights, and remedies of the parties under this Agreement shall be
determined in accordance with such laws.
SECTION 10.4 Notices. All demands, notices, and communications
under this Agreement shall be in writing, personally delivered, sent by
telecopier, overnight courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt,
(a) in the case of the Seller or the Servicer, to the agent for
service as specified in Section 10.12 hereof, or at such other address as
shall be designated by the Seller or the Servicer in a written notice to
the Owner Trustee and the Indenture Trustee;
(b) in the case of the Owner Trustee, at the Corporate Trust
Office of the Owner Trustee;
(c) in the case of the Indenture Trustee, at the Corporate Trust
Office of the Indenture Trustee;
(d) in the case of Moody's, at the following address:
Xxxxx'x Investors Service, Inc.
ABS Monitoring Department
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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, at the following address:
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
Fax: (000) 000-0000
(g) in the case of the initial Swap Counterparty, at the following
address:
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx
Fax: (000) 000-0000
with a copy to:
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxx (Derivatives Marketing)
Fax: (000) 000-0000
and with a copy to:
The Chase Manhattan Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department - Capital Markets Group
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 10.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Agreement and shall in
no way affect the validity or enforceability of the other provisions of
this Agreement or of the Notes, the Certificates, or the rights of the
Holders thereof.
SECTION 10.6 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.3 and 8.2 and as
provided in the provisions of this Agreement concerning the resignation of
the Servicer, this Agreement may not be assigned by the Seller or the
Servicer without the prior written consent of the Owner Trustee, the
Indenture Trustee, the Holders of Notes evidencing not less than 66 2/3% of
the Outstanding Amount of the Notes and the Holders of Certificates
evidencing not less than 66 2/3% of the Certificate Balance and any such
assignment without the required consents shall be null and void.
SECTION 10.7 Further Assurances. The Seller and the Servicer agree
to do and perform, from time to time, any and all acts and to execute any
and all further instruments required or reasonably requested by the Owner
Trustee or the Indenture Trustee more fully to effect the purposes of this
Agreement, including, without limitation, the execution of any financing
statements or continuation statements relating to the Receivables for
filing under the provisions of the Relevant UCC of any applicable
jurisdiction.
SECTION 10.8 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges therein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 10.9 Third-Party Beneficiaries. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the Noteholders,
the Certificateholders, and their respective successors and permitted
assigns. Except as otherwise provided in this Article X, no other Person
will have any right or obligation hereunder. The parties hereto hereby
acknowledge and consent to the pledge of this Agreement by the Trust to the
Indenture Trustee for the benefit of Noteholders pursuant to the Indenture.
SECTION 10.10 Actions by Noteholder or Certificateholders.(a)
Wherever in this Agreement a provision is made that an action may be taken
or a notice, demand, or instruction given by Noteholders or
Certificateholders, such action, notice, or instruction may be taken or
given by any Noteholder or Certificateholder, as applicable, unless such
provision requires a specific percentage of Noteholders or
Certificateholders.
(b) Any request, demand, authorization, direction, notice,
consent, waiver, or other act by a Noteholder or Certificateholder shall
bind such Noteholder or Certificateholder and every subsequent Holder of
such Note or Certificate issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything done or
omitted to be done by the Owner Trustee, the Indenture Trustee or the
Servicer in reliance thereon, whether or not notation of such action is
made upon such Note or Certificate.
SECTION 10.11 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
SECTION 10.12 Agent for Service. The agent for service of the
Seller and the Servicer in respect of this Agreement shall be Executive
Vice President and Treasurer, Mitsubishi Motors Credit of America, Inc.,
0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, mailing address: X.X.
Xxx 0000, Xxxxxxx, Xxxxxxxxxx 00000-0000.
SECTION 10.13 No Bankruptcy Petition; Subordination; Claims
Against Seller. The Owner Trustee, the Indenture Trustee, the Trust and the
Servicer each covenants and agrees that:
(a) prior to the date which is one year and one day after the
payment in full of all securities issued by the Seller or by a trust for
which the Seller was the depositor which securities were rated by any
nationally recognized statistical rating organization, it will not
institute against, or join any other Person in instituting against, the
Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law;
(b) any claim that it may have at any time against the Subtrust
Assets of any Subtrust unrelated to the Receivables, and any claim that it
may have at any time against the Seller that it may seek to enforce against
the Subtrust Assets of any Subtrust unrelated to the Receivables, shall be
subordinate to the payment in full, including post-petition interest, in
the event that the Seller becomes a debtor or debtor in possession in a
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect or otherwise subject to any
insolvency, reorganization, liquidation, rehabilitation or other similar
proceedings, of the claims of the holders of any Securities related to such
unrelated Subtrust and the holders of any other notes, bonds, contracts or
other obligations that are related to such unrelated Subtrust; and
(c) it hereby irrevocably makes the election afforded by Title 00
Xxxxxx Xxxxxx Code Section 1111(b)(1)(A)(i) to secured creditors to receive
the treatment afforded by Title 00 Xxxxxx Xxxxxx Code Section 1111(b)(2)
with respect to any secured claim that it may have at any time against the
Seller. The obligations of the Seller under this Agreement are limited to
the related Subtrust and the related Subtrust Assets. This Section 10.13
shall survive the resignation or removal of the Owner Trustee under the
Trust Agreement or the Indenture Trustee under the Indenture or the
termination of such Agreement.
SECTION 10.14 Limitation of Liability of Owner Trustee and
Indenture Trustee.(a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Wilmington Trust
Company, not in its individual capacity but solely in its capacity as Owner
Trustee of the Trust and in no event shall Wilmington Trust Company in its
individual capacity or, except as expressly provided in the Trust
Agreement, as Owner Trustee of the Trust, have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Trust hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Trust. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Trust hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by Bank of Tokyo-Mitsubishi Trust Company,
not in its individual capacity but solely as Indenture Trustee, and in no
event shall Bank of Tokyo-Mitsubishi Trust Company have any liability for
the representations, warranties, covenants, agreements or other obligations
of the Trust hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Trust.
IN WITNESS WHEREOF, the parties have caused this Sale and
Servicing Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
MMCA AUTO RECEIVABLES TRUST,
as Seller,
By:
------------------------------------
Name:
Title:
MMCA AUTO OWNER TRUST 2001-3
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By:
------------------------------------
Name:
Title:
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By:
------------------------------------
Name:
Title:
Accepted and agreed:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By:
------------------------------------
Name:
Title:
SCHEDULE A
SCHEDULE OF 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 October 1, 2001, by and among the Company, as
Servicer, MMCA Auto Receivables Trust, as Seller, and MMCA Auto Owner Trust
2001-3 (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 ________, 200_.
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
By: ___________________________
Name:
Title:
EXHIBIT B
[FORM OF STATEMENT TO NOTEHOLDERS]
EXHIBIT C
[FORM OF STATEMENT TO CERTIFICATEHOLDERS]
EXHIBIT D
[FORM OF YIELD SUPPLEMENT AGREEMENT]
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re: MMCA Auto Owner Trust 2001-3
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
October 1, 2001 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Purchase Agreement"), between Mitsubishi
Motors Credit of America, Inc., as seller (the "Seller"), and MMCA Auto
Receivables Trust, as purchaser (the "Purchaser").
1. On or prior to the Determination Date preceding each Payment
Date, the Servicer shall notify the Purchaser and the Seller of the Yield
Supplement Amount for such Payment Date.
2. In consideration for the Purchaser entering into the Purchase
Agreement and the purchase price paid to the Seller for the Receivables
under the Purchase Agreement, we agree to make a payment of the Yield
Supplement Amount to the Purchaser, or to the pledgee of the assignee of
the Purchaser referred to in Section 5 hereof, on the Business Day prior to
each Payment Date.
3. All payments pursuant hereto shall be made by federal wire
transfer (same day) funds or in immediately available funds, to such
account as the Purchaser or the pledgee of the assignee of the Purchaser
referred to in Section 5 hereof, may designate in writing to the Seller,
prior to the relevant Payment Date.
4. Our agreements set forth in this Yield Supplement Agreement are
our primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense
and shall remain in full force and effect without regard to, and shall not
be released, discharged or in any way affected by, any circumstances or
condition whatsoever.
5. Pursuant to the Sale and Servicing Agreement, the Purchaser
will sell, transfer, assign and convey its interest in this Yield
Supplement Agreement to MMCA Auto Owner Trust 2001-3 (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
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Secretary/Treasurer
Telephone: (000) 000-0000
Facsimile: (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
Facsimile: (000) 000-0000
8. This Yield Supplement Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts,
all of which shall be deemed to be one and the same document.
If the foregoing satisfactorily sets forth the terms and
conditions of our agreement, please indicate your acceptance thereof by
signing in the space provided below and returning to us the enclosed
duplicate original of this letter.
Very truly yours,
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.,
as Seller
By: ________________________________
Name:
Title:
Agreed and accepted as of the date first above written:
MMCA AUTO RECEIVABLES TRUST,
as Purchaser
By: ____________________________
Name:
Title:
EXHIBIT E
[FORM OF SECOND-TIER SUBSEQUENT ASSIGNMENT]
