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Exhibit 4.2
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SALE AND SERVICING AGREEMENT
by and among
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A,
as Issuer,
DAIMLER-BENZ VEHICLE RECEIVABLES CORPORATION,
as Seller
and
MERCEDES-BENZ CREDIT CORPORATION,
as Servicer
Dated as of November 1, 1998
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.................................................... 2
SECTION 1.2 Other Definitional Provisions.................................. 19
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property................................... 20
SECTION 2.2 Representations and Warranties of the Seller as to the
Receivables ................................................... 20
SECTION 2.3 Repurchase upon Breach......................................... 25
SECTION 2.4 Custody of Receivable Files.................................... 26
SECTION 2.5 Duties of Servicer as Custodian................................ 26
SECTION 2.6 Instructions; Authority to Act................................. 28
SECTION 2.7 Indemnification of the Custodian............................... 28
SECTION 2.8 Effective Period and Termination............................... 29
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND OTHER TRUST PROPERTY
SECTION 3.1 Duties of Servicer............................................. 29
SECTION 3.2 Collection and Allocation of Receivable Payments............... 33
SECTION 3.3 Realization upon Receivables................................... 34
SECTION 3.4 Physical Damage Insurance...................................... 35
SECTION 3.5 Maintenance of Security Interests in Financed Vehicles......... 35
SECTION 3.6 Covenants of Servicer.......................................... 35
SECTION 3.7 Purchase by Servicer upon Breach............................... 36
SECTION 3.8 Servicing Compensation......................................... 36
SECTION 3.9 Servicer's Certificate......................................... 37
SECTION 3.10 Annual Statement as to Compliance; Notice of Event
of Servicing Termination....................................... 37
SECTION 3.11 Annual Independent Certified Public Accountants' Reports....... 38
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SECTION 3.12 Access to Certain Documentation and Information
Regarding Receivables.......................................... 39
SECTION 3.13 Reports to the Commission...................................... 39
SECTION 3.14 Reports to Rating Agencies..................................... 39
ARTICLE IV
ACCOUNTS; COLLECTIONS; ADVANCES; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1 Accounts....................................................... 40
SECTION 4.2 Collections.................................................... 44
SECTION 4.3 Application of Collections..................................... 45
SECTION 4.4 Advances....................................................... 46
SECTION 4.5 Additional Deposits............................................ 47
SECTION 4.6 Distributions.................................................. 47
SECTION 4.7 Subordination; Reserve Accounts................................ 49
SECTION 4.8 Net Deposits................................................... 54
SECTION 4.9 Statements to Noteholders and Certificateholders............... 54
SECTION 4.10 Control of Securities Accounts................................. 55
ARTICLE V
THE SELLER
SECTION 5.1 Representations, Warranties and Covenants of Seller............ 56
SECTION 5.2 Liability of Seller; Indemnities............................... 58
SECTION 5.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller......................................... 59
SECTION 5.4 Limitation on Liability of Seller and Others................... 60
SECTION 5.5 Seller May Own Notes or Certificates .......................... 60
ARTICLE VI
THE SERVICER
SECTION 6.1 Representations and Warranties of Servicer..................... 60
SECTION 6.2 Liability of Servicer; Indemnities............................. 62
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SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer....................................... 64
SECTION 6.4 Limitation on Liability of Servicer and Others................. 65
SECTION 6.5 Servicer Not to Resign......................................... 65
SECTION 6.6 Servicer May Own Notes or Certificates......................... 66
ARTICLE VII
SERVICING TERMINATION
SECTION 7.1 Events of Servicing Termination................................ 66
SECTION 7.2 Indenture Trustee to Act; Appointment of Successor Servicer.... 68
SECTION 7.3 Effect of Servicing Transfer................................... 69
SECTION 7.4 Notification to Noteholders and Certificateholders............. 70
SECTION 7.5 Waiver of Past Events of Servicing Termination................. 70
ARTICLE VIII
TERMINATION
SECTION 8.1 Optional Purchase of All Receivables........................... 71
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment...................................................... 72
SECTION 9.2 Protection of Title to Trust................................... 74
SECTION 9.3 Governing Law.................................................. 76
SECTION 9.4 Notices........................................................ 77
SECTION 9.5 Severability of Provisions..................................... 77
SECTION 9.6 Assignment..................................................... 77
SECTION 9.7 Further Assurances............................................. 78
SECTION 9.8 No Waiver; Cumulative Remedies................................. 78
SECTION 9.9 Third-Party Beneficiaries...................................... 78
SECTION 9.10 Actions by Noteholder or Certificateholders.................... 78
SECTION 9.11 Counterparts................................................... 79
SECTION 9.12 Agent for Service.............................................. 79
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SECTION 9.13 No Bankruptcy Petition......................................... 79
SECTION 9.14 Limitation of Liability of Owner Trustee and Indenture
Trustee ................................................... 79
SCHEDULES
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
EXHIBITS
EXHIBIT A Form of Servicer's Certificate
EXHIBIT B Form of Statement to Noteholders
EXHIBIT C Form of Statement to Certificateholders
EXHIBIT D Form of Servicing Guaranty Agreement
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SALE AND SERVICING AGREEMENT, dated as of November 1, 1998 (as the
same may be amended, supplemented or otherwise modified and in effect from time
to time, this "Agreement"), by and among DAIMLER-BENZ VEHICLE OWNER TRUST
1998-A, a Delaware business trust (the "Issuer"), DAIMLER-BENZ VEHICLE
RECEIVABLES CORPORATION, a Delaware corporation (the "Seller"), and
MERCEDES-BENZ CREDIT CORPORATION, a Delaware corporation (the "Servicer").
WHEREAS, the Issuer desires to purchase a portfolio of accounts
receivable arising in connection with (i) motor vehicle retail installment
contracts generated by authorized Mercedes-Benz motor vehicle dealers throughout
the United States and (ii) commercial vehicle retail installment contracts for,
and retail loans evidenced by notes secured by, new and used medium- and
heavy-duty trucks, tractors and trailers generated by authorized Freightliner
(as defined herein) commercial vehicle dealers throughout the United States and
used trucks and tractors and new and used trailers manufactured by companies
other than Freightliner and certain other property, as more fully described
herein, in the ordinary course of business and sold to the Seller;
WHEREAS, the Seller is willing to sell such Receivables (as defined
herein) to the Issuer; and
WHEREAS, the Servicer is willing to service such Receivables on
behalf of the Issuer;
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:
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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 Certificate Interest" shall have the meaning assigned
thereto in the Trust Agreement.
"Accrued Note Interest" shall have the meaning assigned thereto in
the Indenture.
"Actuarial Method" shall mean the method of allocating a fixed level
payment between principal and interest, pursuant to which the portion of each
such payment that is allocated to interest is the product of one-twelfth of the
APR on the Receivable multiplied by the scheduled principal balance.
"Administration Agreement" shall have the meaning assigned thereto
in the Indenture.
"Administrator" shall have the meaning assigned thereto in the
Indenture.
"Advance" shall have the meaning assigned thereto in Section 4.4.
"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 assigned thereto in the recitals
hereto.
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"Amount Financed" shall mean, with respect to a Receivable, the
amount originally advanced under such Receivable toward the purchase price of
the related Financed Vehicles and any related costs.
"Applicable Tax State" shall mean, as of any date of determination,
each state in the United States 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.
"Assignment" shall mean the Assignment, dated as of November 1,
1998, by MBCC to the Seller.
"Authorized Officer" shall mean, in the case of the Indenture
Trustee, any duly authorized officer within the Corporate Trust Office of the
Indenture Trustee, including any vice president, assistant vice president,
senior trust officer, trust officer, secretary, assistant secretary, financial
services officer or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject and, with respect to the Owner Trustee,
any duly authorized officer of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement and the Basic Documents on behalf of
the Owner Trustee and shall also mean any officer of the Administrator.
"Available Funds" shall mean, for any Payment Date, an amount equal
to (a) the sum of the following amounts with respect to the immediately
preceding Collection Period: (i) all collections on the Receivables including
Payaheads withdrawn from the Payahead Account but excluding Payaheads deposited
into the Payahead Account; (ii) all Liquidation Proceeds; (iii) all Recoveries;
(iv) all Advances; (v) all proceeds from claims on physical damage, credit life
and disability insurance policies covering the Financed Vehicles or the Obligors
and (vi) the Purchase Amount of each Purchased Receivable, minus (b) the
sum of the following
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amounts with respect to the related Collection Period: (i) the aggregate amount
of funds described in clause (a) above that are used in the related Collection
Period or to be used on or before such Payment Date 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; (ii) the Supplemental
Servicing Fee, if any; and (iii) any investment earnings and interest earned on
the Reserve Accounts.
"Balloon Payment" shall mean a payment that becomes due on the
maturity date of a Balloon Receivable, which is sufficient to pay accrued
interest plus the remaining Amount Financed of such Receivable.
"Balloon Receivable" shall mean a Receivable that provides for (a)
fixed monthly payments prior to the maturity date for such Receivable that
amortize a portion of the Amount Financed of such Receivable, and (b) a Balloon
Payment on the maturity date of such Receivable.
"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
or Wilmington, Delaware shall be authorized or obligated by law, executive
order, or governmental decree to remain closed.
"Certificate" shall have the meaning assigned thereto in the Trust
Agreement.
"Certificate Balance" shall have the meaning assigned thereto in the
Trust Agreement.
"Certificate Distribution Account" shall have the meaning assigned
thereto in the Trust Agreement.
"Certificateholder" shall have the meaning assigned thereto in the
Trust Agreement.
"Certificate Interest Carryover Shortfall" shall have the meaning
assigned thereto in the Trust Agreement.
"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
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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.
"Certificate Register" shall have the meaning assigned thereto in
the Trust Agreement.
"Certificate Registrar" shall have the meaning assigned thereto in
the Trust Agreement.
"Class" shall have the meaning assigned thereto in the Indenture.
"Class A Reserve Account" shall mean the account established and
maintained as such pursuant to Section 4.7.
"Class A Reserve Account Amount" shall mean, with respect to any
Payment Date, the amount on deposit in the Class A Reserve Account 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), as determined in
accordance with Section 4.7.
"Class A Reserve Initial Deposit" shall mean, with respect to the
Closing Date, $40,786,363.79.
"Class B Reserve Account" shall have the meaning assigned thereto in
the Trust Agreement, as determined in accordance with Section 4.7.
"Class B Reserve Account Amount" shall mean, with respect to any
Payment Date, the amount on deposit in the Class B Reserve Account 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), as determined in
accordance with Section 4.7.
"Class B Reserve Initial Deposit" shall mean, with respect to the
Closing Date, $0, which amount may be increased upon any sale by the Seller of
the Certificates and receipt of an Opinion of Counsel to the effect that such
increase would not adversely affect the status of the Trust for federal income
tax purposes.
"Closing Date" shall mean [_______ __], 1998.
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"Collection Account" shall mean the account established and
maintained as such pursuant to Section 4.1(a).
"Collection Period" shall mean (a) with respect to each Payment Date
during the term of this Agreement, the immediately preceding calendar month, or,
(b) in the case of the initial Collection Period, the period from the Cutoff
Date to and including the last day of the month in which the Cutoff Date
occurred.
"Commercial Vehicle" shall mean a medium- or heavy-duty truck,
tractor or trailer securing the indebtedness of the Obligor under the related
Receivable.
"Commercial Vehicle Dealers" shall mean authorized Freightliner
commercial vehicle dealers throughout the United States.
"Commission" shall have meaning assigned thereto in the Indenture.
"Contract" shall mean a retail installment sale contract, including
a retail installment contract or retail loan, relating to the sale of a Motor
Vehicle or Commercial Vehicle.
"Corporate Trust Office" with respect to (a) the Indenture Trustee,
shall have the meaning assigned thereto in the Indenture, and (b) the Owner
Trustee, shall have the meaning assigned thereto in the Trust Agreement.
"Cutoff Date" shall mean November 1, 1998.
"DBNA" shall mean Daimler-Benz North America Corporation, a Delaware
corporation, and its successors and assigns.
"Dealers" shall mean the Mercedes-Benz Dealers and the Commercial
Vehicle Dealers.
"Dealer Agreement" shall mean an agreement by and between MBCC and
any Dealer relating to the assignment of a Receivable to MBCC and all documents
and instruments relating thereto, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
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"Dealers" shall mean the Mercedes-Benz Dealers and the Commercial
Vehicle Dealers.
"Defaulted Receivable" shall mean a Receivable which, by its terms,
is in default and as to which (a) a Scheduled Payment is 240 or more days past
due, (b) the Servicer has determined, in accordance with its customary servicing
procedures, that eventual payment in full is unlikely and the outstanding
balance of the Receivable has been charged-off or (c) the Servicer has
repossessed and disposed of the related Financed Vehicle.
"Determination Date" shall mean, with respect to any Collection
Period, the earlier of (a) the sixteenth (16th) calendar day of the next
succeeding calendar month and (b) the third Business Day preceding the next
succeeding Payment Date.
"Due Date" shall mean the date a payment is due under a Contract.
"Eligible Bank" shall mean (a) the corporate trust department of the
Owner Trustee, the Indenture Trustee or The Chase Manhattan Bank so long as it
shall be Paying Agent under the Trust Agreement or (b) any depository
institution with trust powers organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), (i) which has a net worth in excess of
$50,000,000, (ii) the deposits of which are insured to the full extent permitted
by law by the Federal Deposit Insurance Corporation (except with respect to any
domestic branch of a foreign bank), (iii) which is subject to supervision and
examination by Federal or state banking authorities and (iv) which has a rating
of P-1 from Moody's and A-1+ from S&P with respect to short-term deposit
obligations or if such institution has issued long-term unsecured debt
obligations, a rating of A2 or higher from Moody's and A from S&P with respect
to long-term unsecured debt obligations.
"Eligible Deposit Account" shall mean either (a) a segregated
account with an Eligible Bank or (b) a segregated trust account with the trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having trust powers and acting as
trustee for funds deposited in such account, so long as the long-term unsecured
debt of such depository institution will have a credit rating from each Rating
Agency in one of its generic rating categories
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which signifies investment grade (which, for Xxxxx'x, is Baa3 or higher, and for
S&P, is BBB- or higher).
"Eligible Servicer" shall mean a Person which, at the time of its
appointment as Servicer or as a subservicer, (a) has a net worth of not less
than $50,000,000, (b) is servicing a portfolio of motor vehicle or commercial
vehicle retail installment sale contracts and/or loans, (c) is legally
qualified, and has the capacity, to service the Receivables, (d) has
demonstrated the ability to service a portfolio of motor vehicle or commercial
vehicle retail installment sale contracts and/or loans similar to the
Receivables professionally and competently in accordance with standards of skill
and care that are consistent with prudent industry standards, and (e) 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.
"Event of Servicing Termination" shall mean an event specified in
Section 7.1.
"Exchange Act" shall have the meaning assigned thereto in the
Indenture.
"Financed Vehicle" shall mean a new or used Motor Vehicle or
Commercial Vehicle, together with all accessions thereto, securing the
indebtedness of the Obligor under the related Receivable.
"Freightliner" shall mean Freightliner Corporation and its
subsidiaries.
"Holder" shall have the meaning assigned thereto in the Indenture.
"Indenture" shall mean the Indenture, dated as of November 1, 1998,
by and between the Issuer and Citibank, N.A., a national banking association, as
the Indenture Trustee, as the same may be amended, supplemented or otherwise
modified and in effect from time to time.
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"Indenture Trustee" shall have the meaning assigned thereto in the
Indenture.
"Initial Certificate Balance" shall have the meaning assigned
thereto in the Trust Agreement.
"Initial Pool Balance" shall mean $1,631,454,551.40.
"Issuer" shall have the meaning assigned thereto in the Indenture.
"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
(a) any expenses incurred by the Servicer in connection with collection of such
Receivable and the disposition of the Financed Vehicle and (b) any amounts
required by law to be remitted to the Obligor. Liquidation Proceeds shall be
allocated first to accrued and unpaid interest on the Receivables and then to
the unpaid principal balance thereof.
"MBCC" shall mean Mercedes-Benz Credit Corporation, a Delaware
corporation, and its successors and assigns.
"Mercedes-Benz Dealers" shall mean authorized Mercedes-Benz motor
vehicle dealers throughout the United States.
"Monthly Remittance Condition" shall have the meaning assigned
thereto in Section 4.1(e).
"Moody's" shall mean Xxxxx'x Investors Service, Inc., and its
successors and assigns.
"Motor Vehicle" shall mean a Mercedes-Benz motor vehicle securing
the indebtedness of the Obligor under the related Receivable.
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"Note Distribution Account" shall mean the account established and
maintained as such pursuant to Section 4.1(b).
"Note Interest Carryover Shortfall" shall have the meaning assigned
thereto in the Indenture.
"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 have the meaning assigned thereto in the
Indenture.
"Obligor" on a Receivable shall mean, with respect to any
Receivable, 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 (a) the
chairman, the president, any executive vice president, vice president or the
treasurer of the Seller or the Servicer, as the case may be or (b) an Authorized
Officer of the Owner Trustee on behalf of the Issuer, in each case delivered to
the Owner Trustee or the Indenture Trustee, as applicable.
"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 and opinion shall
be acceptable to the Indenture Trustee, the Owner Trustee or the Rating
Agencies, as applicable.
"Optional Purchase Percentage" shall mean ten percent (10%).
"Outstanding" shall have the meaning assigned thereto in the
Indenture.
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"Owner Trust Estate" shall have the meaning assigned thereto in the
Trust Agreement.
"Owner Trustee" shall have the meaning assigned thereto in the Trust
Agreement.
"Payahead" shall mean, with respect to a 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.
"Payahead Account" shall mean the account established and maintained
as such pursuant to Section 4.1(d).
"Payahead Balance" shall mean, with respect to a Receivable, 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 Receivable
(including any amount paid by or on behalf of the Obligor prior to the Cutoff
Date that is due on or after the Cutoff Date and was not used to reduce the
Principal Balance of such Receivable), as reduced by applications of previous
Payaheads with respect to such Receivable, pursuant to Sections 4.3 and 4.4.
"Paying Agent" shall mean a Paying Agent under the Indenture or a
Paying Agent under the Trust Agreement.
"Payment Date" shall mean the twentieth (20th) day of each month, or
if such day is not a Business Day, the immediately following Business Day,
commencing on December 21, 1998.
"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 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
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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 Issuer 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.
"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.
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"Pool Balance" shall mean, as of any date, the aggregate outstanding
Principal Balance of the Receivables (excluding Defaulted Receivables) as of the
close of business on such date.
"Principal Balance" shall mean, with respect to any Receivable as of
any date, the Amount Financed minus the sum of: (a) that portion of all
Scheduled Payments due on or prior to such date and, with respect to periods
prior to the initial Collection Period, the amount indicated in such Receivable
as required to be paid by the Obligor in each such period, whether or not paid,
allocable to principal in accordance with the Actuarial Method, and (b) any
prepayment in full applied by the Servicer 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 Carryover Shortfall" shall mean, as of the close of
business on any Payment Date, the excess of the Principal Distribution Amount
and any outstanding Principal Carryover Shortfall from the preceding Payment
Date over the amount in respect of principal that is actually deposited into the
Note Distribution Account and the Certificate Distribution Account, as
applicable, on such Payment Date.
"Principal Distribution Amount" shall mean, with respect to any
Payment Date, the sum of (a) the Scheduled Principal for such Payment Date plus
(b) any outstanding Principal Carryover Shortfall as of the close of business on
the preceding Payment Date; provided, however, that the Principal Distribution
Amount shall not exceed the outstanding aggregate principal amount of the Notes
and the Certificate Balance, as applicable; and provided, further, that, on the
Final Payment Date for each Class of Notes or the Certificates, as applicable,
the amount required to be deposited in the Note Distribution Account to pay
principal of the Notes and the amount required to be deposited in the
Certificate Distribution Account to pay the Certificate Balance, as applicable,
shall include the amount necessary (after giving effect to the other amounts to
be deposited in the Note Distribution Account and the Certificate Distribution
Account, as applicable, on such Payment Date and allocable to principal or the
Certificate Balance) to reduce the outstanding principal amount of the Notes of
such Class or the Certificate Balance, as applicable, to zero.
"Proceedings" shall have the meaning assigned thereto in the
Indenture.
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"Program" shall have the meaning assigned thereto in Section 3.11.
"Purchase Agreement" shall mean the Purchase Agreement, dated as of
November 1, 1998, by and between the Seller and MBCC, as the same may be
amended, supplemented or otherwise modified and in effect from time to time,
relating to the purchase of the Receivables by the Seller from MBCC.
"Purchase Amount" shall mean, with respect to a Payment Date and a
Receivable to be purchased or repurchased by the Seller or the Servicer on such
Payment Date, an amount equal to the sum of (a) the outstanding Principal
Balance of such Receivable as of the first day of the Collection Period
preceding the Collection Period in which such Payment Date occurred 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
occurred 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
8.1 hereof.
"Rating Agency" shall mean either S&P or Moody's, and together, the
"Rating Agencies." If no such organization or successor is any longer in
existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Issuer, notice of
which designation shall be given to each of the Indenture Trustee, the Owner
Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any action,
that each Rating Agency shall have been given prior notice thereof and that each
of the Rating Agencies shall have notified each of 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 any Class of
the Notes.
"Receivable" shall mean each retail installment contract, retail
loan or Contract for a Financed Vehicle described in the Schedule of Receivables
and all rights and obligations thereunder, but excluding Purchased Receivables.
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"Receivable File" shall mean, with respect to a Receivable, the
electronic entries, documents, instruments and writings specified in Section
2.4.
"Record Date" (a) with respect to the Notes and any Payment Date,
shall mean the close of business on the day immediately preceding such Payment
Date or, if Definitive Notes have been issued, the last day of the calendar
month preceding such Payment Date and (b) with respect to the Certificates and
any Payment Date, shall have the meaning assigned thereto in the Trust
Agreement.
"Recoveries" shall mean, with respect to any Collection Period
following the Collection Period in which a Receivable became a Defaulted
Receivable, all monies received by the Servicer with respect to any Defaulted
Receivable during any Collection Period, net of the sum of (a) 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 (b) any payments on such Receivable required by law to be
remitted to the Obligor.
"Required Rating" shall mean a rating on short-term unsecured debt
obligations of (a) P-1 by Moody's and (b) A-1+ by S&P; and any requirement that
short-term unsecured debt obligations have the "Required Rating" shall mean that
such short-term unsecured debt obligations have the foregoing required ratings
from each of such Rating Agencies.
"Reserve Accounts" shall have the meaning assigned thereto in
Section 4.7(a).
"Reserve Account Property" shall have the meaning assigned thereto
in Section 4.7(a).
"S&P" shall mean Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., and its successors and assigns.
"Schedule of Receivables" shall mean the list identifying the
Receivables attached hereto as Schedule A (which list may be in the form of
microfiche, computer disk or tape or any other medium acceptable to the Issuer
and the Indenture Trustee), as supplemented or amended from time to time.
"Scheduled Payment" shall mean, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid by
the
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Obligor in such Collection Period (without giving effect to deferrals of any Due
Date or payment pursuant to Section 3.2 or any rescheduling in any insolvency or
similar Proceedings).
"Scheduled Principal" shall mean, with respect to any Payment Date,
the sum of (a) the principal portion of each Scheduled Payment due on any
Receivable during the related Collection Period, (b) without duplication of
amounts taken into account under (a), the outstanding principal balance of (i)
Receivables prepaid in full during the related Collection Period and (ii)
Receivables which became Defaulted Receivables during the related Collection
Period, (c) the Purchase Amount of each Receivable that was purchased or
repurchased by the Seller or the Servicer during such Collection Period, to the
extent attributable to principal, and (d) without duplication of amounts taken
into account under (b), the proceeds of any other sale of a Receivable to the
extent allocable to principal; provided, however, that in calculating the
Scheduled Principal, all payments and proceeds (including Liquidation Proceeds)
of any Purchased Receivable, the Purchase Amount of which has been included in
Scheduled Principal in a prior Collection Period (which shall be paid to the
Seller or the Servicer, as applicable), will be excluded.
"Seller" shall mean Daimler-Benz Vehicle Receivables Corporation, a
Delaware corporation, 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 5.3.
"Servicer" shall mean MBCC, in its capacity as Servicer of the
Receivables under this Agreement, each successor thereto (in the same capacity)
pursuant to Section 6.3, and each Successor Servicer appointed and acting
pursuant to Section 7.2 and Section 3.7(e) of the Indenture.
"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 Guarantor" shall mean DBNA, as Servicing Guarantor under
the Servicing Guaranty Agreement, and any successor thereto thereunder.
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"Servicing Guaranty Agreement" shall mean an agreement,
substantially in the form of Exhibit D hereto, between DBNA, as Servicing
Guarantor, and the Issuer.
"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.
"Servicing Rate" shall mean one percent (1.0%) per annum.
"Shortfall" have the meaning assigned in Section 4.4(a).
"Specified Class A Reserve Balance" shall mean, with respect to the
Closing Date, $40,786,363.79, and with respect to any Payment Date,
$57,100,909.30, except where on any Payment Date (a) the annualized average for
the preceding three Collection Periods of the ratios of net losses (that is, the
net balances of all Receivables which are charged off in the applicable
Collection Period, less any Liquidation Proceeds or Recoveries received in such
Collection Period) to the Pool Balance as of the first day of each such
Collection Period exceeds two and one-quarter percent (2.25%) or (b) the average
for the preceding three Collection Periods of the ratios of (i) the sum of (A)
the balance of Receivables that are delinquent sixty-one (61) days or more plus
(B) the balance of Receivables for any Contracts relating to repossessed
Vehicles which in both cases have not been charged off to (ii) such outstanding
Pool Balance exceeds four and one-quarter percent (4.25%), then the Specified
Class A Reserve Balance for such Payment Date will equal $65,258,182.06.
Notwithstanding the foregoing, if (1) 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 (2) there is delivered to the
Indenture Trustee 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 Class A Reserve Balance may be reduced in
accordance with such letters without an amendment hereto.
"Specified Class B Reserve Balance" shall mean, initially zero and
remain zero for so long as the Seller retains the Class B Certificates; if the
Seller sells the Class B Certificates, the Specified Class B Reserve Balance
shall be set at
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an amount determined by the Seller, in consultation with the Rating Agencies, in
order to achieve the desired rating for the Class B Certificates, and provided
that the Rating Agency Condition will be satisfied with respect to each Class of
the Notes.
"Successor Servicer" shall have the meaning assigned thereto in the
Indenture.
"Supplemental Servicing Fee" shall mean, with respect to any Payment
Date, the fee payable to the Servicer for services rendered during the related
Collection Period, determined pursuant to and defined in Section 3.8.
"Total Servicing Fee" shall mean, with respect to any Payment Date,
the sum of (a) the Servicing Fee and the Supplemental Servicing Fee for the
related Collection Period plus (b) all accrued and unpaid Servicing Fees or
Supplemental Servicing Fees for prior Collection Periods.
"Trust" shall have the meaning assigned thereto in the Trust
Agreement.
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of November 1, 1998, by and between the Owner Trustee and
the Seller, as the same may be amended, supplemented or otherwise modified and
in effect from time to time.
"Trust Property" shall mean, collectively, (a) the Receivables, (b)
all monies due or received thereunder on or after the Cutoff Date, (c) all of
the Seller's security interests in the Financed Vehicles, (d) the Collection
Account, the Note Distribution Account, the Certificate Distribution Account,
the Payahead Account and the Reserve Accounts and all money, financial assets or
other property from time to time held in or credited to or purchased with funds
from, any of the foregoing accounts, (e) all of the Seller's rights to receive
proceeds from claims on physical damage, credit life and disability insurance
policies covering the Financed Vehicles or the Obligors, (f) all of the Seller's
rights to all documents contained in the Receivables Files, (g) all of the
Seller's rights under the Purchase Agreement and this Agreement, (h) all of the
Seller's rights, if any, of recourse against Dealers arising out of breaches by
Dealers in connection with the Receivables, (i) all property (including the
right to receive future Liquidation Proceeds and Recoveries) that secures a
Receivable and that will have been acquired by or on behalf of the Indenture
Trustee,
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(j) the Servicing Guaranty Agreement, and (k) all proceeds (within the meaning
of Section 9-306 of the UCC) of the foregoing.
"UCC" or "Relevant UCC" shall mean the Uniform Commercial Code as in
effect in the relevant jurisdiction.
"Vehicle" shall mean a Motor Vehicle or a Commercial Vehicle.
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, or if not defined therein, the meanings assigned to them in
the Trust Agreement.
(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.
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(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.
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property. In consideration of the
delivery by the Issuer 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 conveys to the Issuer all right, title and interest of
the Seller, whether now owned or hereafter acquired, in, to and under the Trust
Property, without recourse (subject to the obligations herein). The sale,
transfer, assignment and conveyance made hereunder shall not constitute and is
not intended to result in an assumption by the Issuer 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.
It is the intention of the Seller and the Issuer that the transfer
of the Trust Property contemplated herein constitute a sale of the Trust
Property, conveying good title to the Trust Property from the Seller to the
Issuer. However, in the event that such transfer is deemed to be a pledge to
secure the payment of the Notes and the Certificates, the Seller hereby grants
to the Issuer a first priority security interest in and Lien on all of the
right, title and interest of the Seller in, to and under the Trust Property, and
all proceeds thereof, to secure the payment of the Notes and the Certificates,
and in such event, this Agreement shall constitute a security agreement under
applicable law.
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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 Issuer relies in accepting the Receivables. Such
representations and warranties speak as of the execution and delivery of this
Agreement, but shall survive the sale, transfer and assignment of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Characteristics of Receivables. Each Receivable (a) was
originated in the United States of America by a Dealer for the retail sale of
one or more Financed Vehicles in the ordinary course of such Dealer's business,
was fully and properly executed by the parties thereto, has been purchased by
the Seller from MBCC, which in turn purchased such Receivable from such Dealer
under an existing Dealer Agreement with MBCC, has been validly assigned by such
Dealer to MBCC, which in turn has validly assigned such Receivable to the
Seller, (b) contains 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, (c) except in the case of a Balloon
Receivable, provides for level monthly payments that fully amortize the Amount
Financed by maturity and yields interest at the APR of such Receivable, and in
the case of a Balloon Receivable, provides for fixed monthly payments that
amortize the Amount Financed to an amount equal to the Balloon Payment by
maturity, provides for a Balloon Payment at maturity that is sufficient to pay
the remaining Amount Financed of the Receivable, and yields interest at the APR
of such Receivable, (d) is a retail installment contract, and (e) is secured by
one or more Financed Vehicles.
(b) Schedule of Receivables. The information set forth in the
Schedule of Receivables was true and correct in all material respects as of the
opening of business on the Cutoff Date, and no selection procedures believed by
the Seller to be adverse to the Certificateholders were utilized in selecting
the Receivables.
(c) Compliance with Law. Each Receivable and the sale of the
related Financed Vehicle complied at the time it was originated or made, and
complies at 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 Debt
Collection Practices Act, the Federal Trade Commission Act, the Xxxxxxxx Xxxx
Warranty Act, the Federal Reserve Board's Regulations B and Z, and state
adaptations of the National
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Consumer Act and of the Uniform Consumer Credit Code, and other consumer credit
laws and equal credit opportunity and disclosure laws.
(d) Binding Obligations. To the best of the Seller's
knowledge, each Receivable represents the legal, valid, and binding payment
obligation in writing of the related Obligor, enforceable by the holder thereof
in accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(e) No Government Obligor. Neither the United States of
America nor any state or any agency, department, or instrumentality of the
United States of America or any state is an Obligor.
(f) Security Interest in Financed Vehicles. To the best of the
Seller's knowledge, immediately prior to the sale, assignment, and transfer of
each Receivable by MBCC to the Seller, such Receivable was secured by a validly
perfected first priority security interest and Lien in the related Financed
Vehicle in favor of MBCC as secured party. Such security interest and Lien was
validly assigned by MBCC to the Seller pursuant to the Purchase Agreement and is
being assigned by the Seller to the Issuer pursuant to this Agreement, except
that no certificate of title or certificate of ownership with respect to such
Financed Vehicle has been or will be amended to identify the Seller or the
Issuer as a secured party. At such time as enforcement of such security interest
is sought, there shall exist a valid, subsisting and enforceable first priority
security interest in such Financed Vehicle for the benefit of the Issuer. The
foregoing representations and warranties with respect to perfection and
enforceability of a security interest in a Financed Vehicle do not cover
statutory or other liens arising after the Closing Date by operation of law or
any rights of third parties arising after the Closing Date as a result of the
fraud or forgery of the Vehicle owner or administrative error by state recording
officials which are prior to such security interest.
(g) 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 MBCC to the Seller and by the
Seller to the Issuer.
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(h) 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.
(i) No Defenses. No right of rescission, setoff, counterclaim,
or defense has been asserted or, to the best of the Seller's knowledge,
threatened with respect to any Receivable.
(j) No Liens. To the best of the Seller's knowledge, no liens
or claims have been filed for work, labor, or materials relating to a Financed
Vehicle that are liens prior to, or equal or on a parity with, the security
interest in the Financed Vehicle granted by the related Receivable.
(k) No Default; Repossession. Except for payment defaults
continuing for a period of not more than thirty (30) days in the case of Motor
Vehicles or sixty (60) days in the case of Commercial Vehicles as of the Cutoff
Date, to the best of the Seller's knowledge, no default, breach, violation, or
event permitting acceleration under the terms of any Receivable, and no event
that with notice or the lapse of time would constitute such a default, breach,
violation, or event permitting acceleration under the terms of any Receivable
has occurred; and no Financed Vehicle was repossessed on or prior to the Cutoff
Date.
(l) Insurance. Except in the case of certain fleet customers
which are permitted to be self-insured in accordance with MBCC's customary
standards, MBCC, in accordance with its customary procedures, has determined
that each Obligor has obtained or agreed to obtain physical damage insurance
covering the Financed Vehicle.
(m) Title. It is the intention of the Seller that the transfer
and assignment of the Receivables herein contemplated constitute a sale of the
Receivables from the Seller to the Issuer and that the beneficial interest in
and title to the Receivables not be part of the estate of the Seller in the
event of the filing of a bankruptcy petition or the commencement of any
Proceeding by or against the Seller under any bankruptcy or other insolvency
law. No Receivable has been sold, transferred, assigned, or pledged by the
Seller to any Person other than the Issuer. The Seller is transferring title to
each Receivable free and clear of all Liens and rights of others and has
perfected such transfer under the UCC.
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(n) Valid Assignment. No Receivable was originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer, and
assignment of such Receivable under this Agreement is 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.
(o) All Filings Made. All filings (including, without
limitation, UCC filings) and agreements necessary in any jurisdiction to give
the Issuer a first priority perfected security interest in the Receivables have
been made.
(p) Chattel Paper. Each Receivable constitutes "chattel paper"
as defined in the Relevant UCC.
(q) One Original. There is only one original executed copy of
each Receivable.
(r) Principal Balances. Each Receivable had a remaining
Principal Balance as of the Cutoff Date of not more than $5,617,494.16 and not
less than $217.25.
(s) No Bankrupt Obligors. To the best of the Seller's
knowledge, no Obligor was, as of the Cutoff Date, the subject of a Proceeding
under title 11 of the United States Code or any other bankruptcy or insolvency
law.
(t) New and Used Vehicles. Approximately 70.13% of the
aggregate Principal Balance of the Receivables, constituting approximately
57.53% of the number of Receivables as of the Cutoff Date, relate to new
Financed Vehicles, and approximately 29.87% of the aggregate Principal Balance
of the Receivables, constituting 42.47% of the number of Receivables as of the
Cutoff Date, relate to used Financed Vehicles.
(u) Origination. Each Receivable shall have an origination
date on or after November 7, 1991.
(v) Maturity of Receivables. Each Receivable had a remaining
maturity, as of the Cutoff Date, of not more than 84 months, and an original
maturity of not more than 85 months.
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(w) Annual Percentage Rate. Each Receivable has an APR of at
least 8.25% and not more than 13.0%.
(x) Scheduled Payments. Each Receivable shall have a first
Scheduled Payment due on or prior to November 1, 1998, and no Receivable shall
have a payment that was more than thirty (30) days overdue in the case of Motor
Vehicles or sixty (60) days overdue in the case of Commercial Vehicles as of the
Cutoff Date.
(y) Location of Receivable Files. The Receivable Files shall
be kept at one or more of the locations listed in Schedule B hereto, as
supplemented from time to time.
(z) Billing Address. The Obligor under each Receivable had a
current billing address in the United States as of the Cutoff Date.
(aa) Representations and Warranties. The representations and
warranties of the Seller in Section 5.1 are true and correct.
(bb) 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) is true and correct in all material
respects as of its date.
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 Owner Trustee, the Indenture Trustee and MBCC (if it is no longer
the Servicer) 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 (and, in the case of subsections 2.2(d), (f), (i), (j), (k) and
(s), any breach or failure which would have occurred if such warranty had not
been made to the best knowledge of the Seller). Unless any such breach or
failure shall have been cured by 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, the Indenture
Trustee or the Servicer of, such breach or failure, and such breach or failure
materially and adversely affects the interests of the Trust in
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any Receivable, the Seller shall repurchase from the Issuer any such Receivable
on the Payment Date immediately following such Collection Period, but with
effect from the first day of the Collection Period in which such Payment Date
occurs. 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. The sole remedy of the Issuer, the Owner Trustee, the
Certificateholders, the Indenture Trustee and the Noteholders 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 MBCC
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 Issuer,
upon the execution and delivery of this Agreement, revocably appoints the
Servicer, and the Servicer accepts such appointment, to act as custodian on
behalf of the Issuer and the Indenture Trustee of the following documents or
instruments, which are hereby constructively delivered to the Indenture Trustee,
as pledgee of the Issuer pursuant to the Indenture, with respect to each
Receivable (collectively, a "Receivable File"):
(a) the single original of the Receivable;
(b) the original credit application fully executed by the
Obligor or a photocopy or other imaged copy thereof;
(c) the original certificate of title or such other documents
that the Servicer or MBCC shall keep on file, in accordance with its customary
procedures, evidencing the security interest of MBCC in the Financed Vehicle;
(d) documents evidencing the existence of any insurance
covering the Financed Vehicle; and
(e) any and all other electronic entries, documents,
instruments and writings that the Servicer or the Seller shall keep on file, in
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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 Issuer and the Indenture Trustee confirming that the Servicer
has received, on behalf of the Issuer and the Indenture Trustee, all the
documents and instruments necessary for the Servicer to act as the agent of the
Issuer and the Indenture Trustee for the purposes set forth herein, including
the documents referred to herein, and the Issuer, 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 Issuer 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
Issuer 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 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
Issuer or the Indenture Trustee to verify the accuracy of the recordkeeping of
the Servicer. 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
Issuer, the Owner Trustee or the Indenture Trustee of the Receivable Files and
none of the Issuer, 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 Owner
Trustee and
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the Indenture Trustee by written notice not later than ninety (90) days after
any change in location. The Servicer shall make available to the Issuer, the
Owner Trustee and the Indenture Trustee or its duly authorized representatives,
attorneys, or auditors a list of locations of the Receivable Files, the
Receivable Files themselves, and the related accounts, records, and computer
systems maintained by the Servicer at such times as the Owner Trustee 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, or the agent or designee of the Indenture
Trustee, as the case may be, at such place or places as the Indenture Trustee
may designate, as soon thereafter as is practicable and prior to the occurrence
of an Event of Servicing Termination or an event which with the passage of time
and delivery of notice would constitute an Event of Servicing Termination, so
long as doing so will not adversely affect the ability of the Servicer to
perform its obligations under this Agreement. 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 and in any event at such time
as may be required by the Servicer to perform its obligations under this
Agreement.
(d) Title to Receivables. The Servicer agrees that, in respect
of any Receivable held by the Servicer as custodian hereunder, (i) the Servicer
will not at any time have or in any way attempt to assert any interest in such
Receivable or the related Receivable File, other than for the purpose of
collecting or enforcing the Receivable for the benefit of the Issuer and (ii)
the entire equitable interest in such Receivable and the related Receivable File
shall at all times be vested in the Issuer.
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 an Authorized 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 Authorized Officer to act and shall be
considered in full force and effect until receipt by the Servicer of written
notice to the contrary given by the Indenture Trustee.
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SECTION 2.7 Indemnification of the Custodian. The Servicer, in its
capacity as custodian, shall indemnify and hold harmless the Issuer, 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 Issuer, 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 Issuer or 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, errors in judgment 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, errors in
judgment or negligence of the Indenture Trustee or from the compliance by the
Servicer with instructions given by the Indenture Trustee or the Owner Trustee
to the Servicer pursuant hereto; and provided, further, that such
indemnification shall not extend to any credit losses on any Receivables.
SECTION 2.8 Effective Period and Termination. The appointment of the
Servicer 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 6.5, or if all of the
rights and obligations of the Servicer shall have been terminated under Section
7.1, 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
twenty-five percent (25%) of the principal amount of the then Outstanding Notes
or, with the consent of Holders of Notes evidencing not less than twenty-five
percent (25%) of the principal amount of the then Outstanding Notes, by the
Owner Trustee or by Holders of Certificates evidencing not less than twenty-five
percent (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 7.1. As soon as practicable after any termination of such
appointment, the Servicer (at its own expense) shall deliver, or cause to be
delivered, the Receivable Files and the related accounts and records maintained
by the Servicer to the Indenture Trustee or an agent or designee of the
Indenture Trustee (including any Successor Servicer) at such place or places as
the Indenture Trustee may reasonably designate.
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ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND OTHER TRUST PROPERTY
SECTION 3.1 Duties of Servicer. (a) The Servicer, acting alone
and/or through subservicers as provided in this Section, shall administer the
Receivables with reasonable care. The duties of the Servicer 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 Indenture Trustee
and the Owner Trustee with respect to distributions and providing collection and
repossession services in the event of Obligor default and making Advances
pursuant to Section 4.4(a). 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 or commercial vehicle receivables that it services for itself or others.
Subject to Section 3.2, the Servicer shall follow its customary standards,
policies and procedures in performing its duties 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 Issuer, the Owner Trustee,
Certificateholders, the Indenture Trustee, 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 which the Servicer would not attempt to collect in accordance with
its customary procedures, in which event the Servicer shall indemnify the Issuer
for such deficiency. 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 on behalf of the Trust to the Servicer,
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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
expense and direction of the Servicer, take steps to enforce the Receivable,
including bringing suit in its name or the names of the Trust, the
Certificateholders, the Indenture Trustee, 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 Issuer or the Owner Trustee, as applicable, all licenses, if any,
required by the laws of any jurisdiction to be held by the Issuer or the Owner
Trustee, as applicable, 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;
provided, however, that the Servicer shall remain fully liable hereunder for the
performance of the duties of Servicer and any such subservicer shall be and
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 Property, 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.
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(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 which had been serviced by the terminated subservicer or
enter into a subservicing agreement with a successor subservicer which will be
bound by the terms of the subservicing agreement with the terminated
subservicer.
(d) As conditions to the appointment of any subservicer, (i)
the Servicer shall notify each of the Owner Trustee, the Indenture Trustee and
the Rating Agencies in writing before such assignment becomes effective, and
(ii) 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 any other Trust Property being serviced by it, (A) 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, (B) it shall be required to perform its obligations as subservicer
for the benefit of the Issuer 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), (C) notwithstanding any
provision of a subservicing agreement to the contrary, such subservicer shall be
directly liable to the Owner Trustee and the Issuer (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 (D) the Owner Trustee may enforce the provisions of
this Agreement and any subservicing agreement against the subservicer for the
benefit of the Issuer (notwithstanding any failure by the Servicer to perform
its duties and obligations hereunder), without diminution of such obligations or
liabilities by virtue of (1) any subservicing agreement, (2) any indemnification
provided thereunder or (3) 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 any 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 Issuer and the
Owner Trustee for the servicing and administering of the Receivables and the
other Trust
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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 any such subservicing agreements or
arrangements or by virtue of any 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 shall for any reason no longer
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 any
subservicing agreement. In such event, the Successor Servicer shall be deemed to
have assumed all of the interest of the Servicer 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 the 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 any 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 any 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 any other Trust Property being serviced by such
subservicer to the Successor Servicer.
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SECTION 3.2 Collection and Allocation of Receivable Payments. 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 and commercial 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 or commercial vehicle
receivables that it services for itself or others. The Servicer will 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 Due Date or other payment terms of a Receivable;
provided, however, that 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 or commercial vehicle
receivables that it services for itself and others and in accordance with its
customary standards, policies, practices and procedures if the cumulative
extensions with respect to any Receivable shall not cause the term of such
Receivable to extend beyond the Final Scheduled Maturity Date. 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 first day of the Collection Period following 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.
SECTION 3.3 Realization upon Receivables. (a) On behalf of the
Issuer, the Servicer shall charge off a delinquent Receivable in accordance with
its customary standards and shall use its best efforts to repossess and
liquidate the Financed Vehicle securing any Defaulted Receivable as soon as
feasible after default, in accordance with the standard of care required by
Section 3.1. 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 motor vehicle and commercial vehicle 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 a Financed Vehicle and
liquidating a Financed Vehicle into cash proceeds, but only
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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 Issuer 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 expense and direction of
the Servicer, 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
Trust, the Certificateholders, the Indenture Trustee, 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 obtained 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 Issuer 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 Issuer and the Indenture Trustee for the benefit of the Noteholders in
the event the Servicer receives notice of, or otherwise has actual knowledge of,
the relocation of a Financed Vehicle to a location in the United States of
America or Canada 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 Servicer will
not (nor will it permit any subservicer to) release the Financed Vehicle
securing any
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Receivable from the security interest granted by the Receivable in whole or in
part, except as contemplated herein, or voluntarily allow an Obligor to relocate
outside the United States of America or Canada.
(b) No Impairment. The Servicer will not (nor will it permit
any subservicer to) impair in any material respect the rights of the Issuer, the
Owner Trustee, the Indenture Trustee, the Certificateholders or the Noteholders
in the Receivables or, subject to clause (c) and (d) below, otherwise amend or
alter the terms thereof if, as a result of such amendment or alteration, the
interests of the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders hereunder would be materially adversely
affected.
(c) Amendments. The Servicer will not (nor will it permit any
subservicer to) increase or decrease the number or amount of Scheduled Payments,
or the Amount Financed under or the APR of, a Receivable, or extend, rewrite or
otherwise modify the Due Xxxx or any other payment terms of a Receivable, except
pursuant to Section 3.2.
(d) Extensions. The Servicer will not (nor will it permit any
subservicer to) extend a Receivable except in accordance with Section 3.2.
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, the Owner Trustee, the Indenture Trustee and MBCC (if
it is no longer the Servicer) promptly, in writing, upon the discovery of any
breach of Sections 3.2, 3.5 or 3.6. Subject to Section 3.2, unless any such
breach shall 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 any Receivable, the Servicer
shall purchase from the Issuer any such Receivable on the immediately succeeding
Payment Date; provided, however, that with respect to a breach of Section 3.2,
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. Except as provided in
Section 6.2, the sole remedy of the Issuer, the Owner Trustee, the
Certificateholders, the Indenture Trustee and the Noteholders against the
Servicer with respect to a breach of Sections 3.2, 3.5 or 3.6 shall be to
require the Servicer to repurchase Receivables pursuant to this Section 3.7.
Neither
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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 Servicing Rate and the Pool Balance as of the first day of such
Collection Period. As additional servicing compensation, the Servicer shall also
be entitled to 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, as agreed upon
between the Seller, the Owner Trustee and the Indenture Trustee (and any
custodian or Paying Agent appointed by the Owner Trustee and the Indenture
Trustee), independent accountants, any subservicer, taxes imposed on the
Servicer or any subservicer (to the extent not paid by such subservicer), and
expenses incurred in connection with distributions and reports to the
Certificateholders and the Noteholders), except expenses incurred in connection
with realizing upon Receivables under Section 3.3.
SECTION 3.9 Servicer's Certificate. On or before the Determination
Date immediately preceding each Payment Date, the Servicer shall deliver to the
Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller, with a
copy to each Rating Agency, a certificate of a Servicing Officer substantially
in the form of Exhibit A hereto (a "Servicer's Certificate") and attached to a
report of the Servicer containing all information necessary to make the
deposits, transfers and distributions pursuant to Sections 4.2, 4.3, 4.4, 4.5,
4.6 and 4.7, together with the written statements to be furnished by the Owner
Trustee to the Certificateholders pursuant to Section 4.9 hereof and by the
Indenture Trustee to the Noteholders pursuant to Section 4.9 hereof and Section
5.5 of the Trust Agreement and Section 6.6 of the Indenture. The Servicer also
shall identify separately (by account number of the Receivable as it appears in
the related Schedule of Receivables) in a written notice to the Owner Trustee
and the Indenture Trustee the Receivables to be purchased or repurchased by the
Seller or the Servicer, as the case may be, on such Payment Date, and, upon
request of the Owner Trustee or the Indenture Trustee, each Receivable which
became a Defaulted Receivable during the Collection Period immediately preceding
such Payment Date. The Servicer shall deliver to each Rating
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Agency any information, to the extent it is available to the Servicer, that any
Rating Agency reasonably requests in order to monitor the Issuer.
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,
2000, an Officer's Certificate, stating that (i) a review of the activities of
the Servicer during the preceding calendar year (or longer period, in the case
of the first such Officer's Certificate) and of its performance of its
obligations under this Agreement has been made under the supervision of such
officer 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 longer period, in the case of the first such certificate), or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof. A
copy of such certificate may be obtained by any Certificateholder by a request
in writing to the Owner Trustee, or by any Noteholder or 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.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee, the Seller 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 7.1.
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
MBCC) to deliver to the Owner Trustee and the Indenture Trustee on or before
March 31 of each year, commencing March 31, 2000, a report addressed to the
Board of Directors of the Servicer with respect to the preceding calendar year
(or longer period, in the case of 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 (a) was made in accordance with generally accepted
auditing standards, (b) included tests relating to motor vehicle and commercial
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 (c) except as described in the
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report, disclosed no exceptions or errors in the records relating to Motor
Vehicle and Commercial 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 may be obtained by any
Certificateholder by a request in writing to the Owner Trustee, or by any
Noteholder or 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. In the event such firm of independent certified public accountants
requires the Indenture Trustee to agree or consent to the procedures performed
by such firm, the Issuer shall direct the Indenture Trustee in writing to so
agree, and the Indenture Trustee will not make any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of the
sufficiency, validity or correctness of such procedures.
SECTION 3.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide the Owner Trustee, the
Certificateholders, the Indenture Trustee and the Noteholders with access to the
Receivable Files in the cases where the Owner Trustee, 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, and, prior to the occurrence of
an Event of Servicing Termination or an event which with the passage of time and
delivery of notice would constitute an Event of Servicing Termination, only to
the extent that such access does not disrupt the normal business operations of
the Servicer and does not adversely affect the ability of the Servicer to
perform its obligations under this Agreement. 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, and
the Owner Trustee and the Indenture Trustee 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 and not to use any such information
except as permitted by, or to enforce, this Agreement, the Trust Agreement or
the Indenture.
SECTION 3.13 Reports to the Commission. The Servicer shall, on
behalf of the Issuer, cause to be filed with the Commission any periodic reports
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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
ACCOUNTS; COLLECTIONS; ADVANCES; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1 Accounts. (a) (i) The Servicer shall, prior to the
Closing Date, establish and maintain a segregated trust account, in the name of
"Citibank, N.A. as Indenture Trustee, as secured party from Daimler-Benz Vehicle
Owner Trust 1998-A" at an Eligible Bank (which shall initially be the corporate
trust department of Citibank, N.A.), 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 and conditions of the Basic Documents. 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 thereto and withdrawals therefrom shall be
made only upon the terms and conditions of the Basic Documents.
(ii) If the Servicer is required to remit collections pursuant to
the first sentence of Section 4.2, 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
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interest and other income (net of losses and investment expenses) on funds on
deposit in the Collection Account shall remain on deposit therein pending
distribution of all funds therein in accordance with the Basic Documents. In the
event that the Collection Account is no longer to be maintained at the corporate
trust department of Citibank, N.A., the Servicer shall, with the assistance of
the Indenture Trustee or the Owner Trustee as necessary, cause the Collection
Account to be moved to an Eligible Bank within ten (10) Business Days of the
date of determination that the Collection Account shall no longer be maintained
at the corporate trust department of Citibank, N.A. (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 "Citibank, N.A. as
Indenture Trustee, as secured party from Daimler-Benz Vehicle Owner Trust
1998-A" at an Eligible Bank (which shall initially be the corporate trust
department of Citibank, N.A.), which shall be designated as the "Note
Distribution Account". The Note Distribution Account shall be held in trust for
the benefit of the Noteholders. The Note Distribution Account shall be under the
sole dominion and control of the Indenture Trustee; provided, that the Servicer
may direct the Indenture Trustee in writing to make withdrawals from the Note
Distribution Account in accordance with the terms and conditions of the Basic
Documents. All monies deposited from time to time in the Note Distribution
Account 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 Distribution Account is no longer to be maintained at the
corporate trust department of Citibank, N.A., the Servicer shall, with the
assistance of the Indenture Trustee as necessary, cause the Note Distribution
Account to be moved to an Eligible Bank within ten (10) Business Days of the
date of determination that the Note Distribution Account shall no longer be
maintained at the corporate trust department of Citibank, N.A. (or such longer
period not to exceed thirty (30) calendar days as to which each Rating Agency
may consent).
(c) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account, in the name of "Citibank, N.A. as
Paying Agent for Daimler-Benz Vehicle Owner Trust 1998-A" at an Eligible Bank
(which shall initially be the corporate trust department of Citibank, N.A.),
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 Servicer and the
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Indenture Trustee in accordance with the directions of the Servicer may make
deposits to such account pursuant to this Agreement and the Indenture, and that
the Servicer may direct Citibank, N.A., as Paying Agent under the Trust
Agreement, or any successor thereto as Paying Agent, in writing to make
withdrawals from the Certificate Distribution Account in accordance with the
terms and conditions of the Basic Documents. All monies deposited from time to
time in the Certificate Distribution Account shall be held by Citibank, N.A., as
Paying Agent under the Trust Agreement, or any successor Paying Agent, as part
of the Trust Property and shall be applied as provided in the Basic Documents.
In the event that the Certificate Distribution Account is no longer to be
maintained at Citibank, N.A., the Servicer shall, with the assistance of the
Owner Trustee as necessary, cause the Certificate Distribution Account to be
moved to an Eligible Bank within ten (10) Business Days of the determination
that the Certificate Distribution Account shall no longer be maintained at the
corporate trust department of Citibank, N.A. (or such longer period not to
exceed thirty (30) calendar days as to which each Rating Agency may consent) and
shall promptly notify the Owner Trustee in writing of the account number and
location of such account.
(d) (i) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of "Citibank, N.A.
as Indenture Trustee, as secured party from Daimler-Benz Vehicle Owner Trust
1998-A" at an Eligible Bank (which shall initially be the corporate trust
department of Citibank, N.A.), 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 the terms and
conditions of 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 thereto and withdrawals therefrom shall
be made only upon the terms and conditions of the Basic Documents.
(ii) If the Servicer is required to remit collections pursuant to
the first sentence of Section 4.2, 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
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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 deposited into the Collection Account, for
distribution together with all other amounts on deposit therein in accordance
with the Basic Documents. In the event that the Payahead Account is no longer to
be maintained at the corporate trust department of Citibank, N.A., the Servicer
shall, with the assistance of the Indenture Trustee or the Owner Trustee as
necessary, cause the Payahead Account to be moved to an Eligible Bank within ten
(10) Business Days of the determination that the Payahead Account shall no
longer be maintained at the corporate trust department of Citibank, N.A. (or
such longer period not to exceed thirty (30) calendar days as to which each
Rating Agency may consent).
(e) Notwithstanding the provisions of clause (d) above and of
Sections 4.3 and 4.6(a)(ii), for so long as (i) MBCC is the Servicer, (ii) the
rating of the short-term unsecured debt of the Servicing Guarantor is at least
P-1 by Xxxxx'x and is at least A-1 by S&P and (iii) no Event of Servicing
Termination shall have occurred (each of the conditions in clauses (i), (ii) and
(iii) above, 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 each of the Monthly Remittance Conditions is 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 any
time that a Monthly Remittance Condition is not met, the Servicer shall deposit
in the Payahead Account, as soon as practicable but in no event after the close
of business on the second Business Day after receipt thereof, 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 such 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 each Class of the Notes.
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(e) 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
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evidencing not less than twenty-five percent (25%) of the principal balance of
the then Outstanding Notes or from the Holders of Certificates evidencing not
less than twenty-five percent (25%) of the Certificate Balance or unless an
Authorized Officer in the Corporate Trust Office of the Owner Trustee or of the
Indenture Trustee with knowledge hereof and familiarity herewith has actual
knowledge of such event or circumstance.
(f) The Servicer shall be permitted to remit to any Obligor,
upon the request of such Obligor, the Payahead Balance with respect to any
Receivable of such Obligor or such lesser amount as is requested by such
Obligor, in accordance with the customary standards, policies, practices and
procedures of the Servicer, 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)(i) Subject to the provisions of
subsections 4.2(a)(ii) and (b) below, the Servicer shall remit to the Collection
Account (A) all payments by or on behalf of the Obligors (including, subject to
the next sentence, Payaheads on the Receivables, but excluding payments with
respect to amounts included in the Supplemental Servicing Fee and excluding
amounts received on a particular Receivable to the extent that unreimbursed
Advances with respect to such Receivable have previously been made by the
Servicer), including amounts treated as collections on Balloon Receivables, (B)
all Liquidation Proceeds (except Liquidation Proceeds with respect to a
particular Receivable to the extent of any unreimbursed Advances with respect to
such Receivable), (C) all Recoveries (except Recoveries with respect to a
particular Receivable to the extent of any unreimbursed Advances with respect to
such Receivable), (D) all Advances made by the Servicer of principal or interest
due on the Receivables and (E) all proceeds from claims on physical damage,
credit life and disability insurance policies covering the Financed Vehicles or
the Obligors and (F) all proceeds for Purchased Receivables, in each case
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 by the Servicer in
the Collection Account, pursuant to the preceding sentence for purposes of
administrative convenience only, pending determination of any amount to be
deposited in the Payahead Account (or in the event that each Monthly Remittance
Condition is satisfied, remitted to the Servicer pursuant to Section 4.1(e)),
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
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amounts shall not be transferred to the Collection Account until due, which
payments upon determination shall be made to the Servicer, and the Trust shall
not be entitled to such amounts.
(ii) MBCC, 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 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, the Servicer shall remit collections received during a
Collection Period to the Collection Account in immediately available funds on
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 such 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 any Class of the Notes. 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 written 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
twenty-five percent (25%) of the principal balance of the then Outstanding Notes
or from the Holders of Certificates evidencing not less than twenty-five percent
(25%) of the Certificate Balance or an Authorized Officer in the Corporate Trust
Office of the Owner Trustee or the Indenture Trustee with knowledge hereof or
familiarity herewith has actual knowledge of such event or circumstance.
(b) Notwithstanding the provisions of Section 4.2(a) hereof,
the Servicer may retain, or will be entitled to be reimbursed, from amounts
otherwise payable into, or on deposit in, the Collection Account with respect to
a Collection Period, any amounts previously deposited in the Collection Account
but later determined to have resulted from mistaken deposits or postings or
checks returned unpaid for insufficient funds or other reasons, in each case,
with respect to which the Servicer has not been previously reimbursed hereunder.
The amount to be retained
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or reimbursed hereunder shall not be included in collections with respect to the
related Payment Date.
SECTION 4.3 Application of Collections. (a) For the purposes of this
Agreement, all collections with respect to each Receivable (other than amounts
received by the Servicer with respect to the Supplemental Servicing Fee) in each
Collection Period shall be applied by the Servicer as follows:
Payments by or on behalf of the Obligor with respect to such
Receivable shall be applied first, to reduce outstanding Advances from
prior Collection Periods as described in Section 4.4(a) below. Next, any
excess shall be applied to the Scheduled Payment for such Collection
Period in respect of such Receivable. Any remaining excess shall be
applied to prepay the Receivable, but only if the sum of such excess and
the existing Payahead Balance in respect of such Receivable shall be
sufficient to prepay such Receivable in full. Otherwise, any such
remaining excess shall constitute a Payahead, shall increase the Payahead
Balance with respect to such Receivable, and shall be deposited into the
Payahead Account.
(b) Collections with respect to the Supplemental Servicing Fee
in each Collection Period shall be applied by the Servicer as additional
compensation to the Servicer.
SECTION 4.4 Advances. (a)(i) 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 a Receivable (other than a
Purchased Receivable) after application under Section 4.3 shall be less than the
Scheduled Payment in respect of such Receivable (a "Shortfall"), the Payahead
Balance with respect to such Receivable shall be applied by the Indenture
Trustee in accordance with the written direction of the Servicer to the extent
of such Shortfall, and such Payahead Balance shall be reduced accordingly. On
the Payment Date immediately following such Collection Period, subject to the
following sentence, an advance shall be made by the Servicer to the extent of
any remaining Shortfall in respect of such Receivable (such advance, an
"Advance"); provided that notwithstanding anything in this Agreement to the
contrary, no Successor Servicer shall be required to make Advances. Outstanding
Advances with respect to a Receivable shall be reduced by subsequent payments by
or on behalf of the related Obligor, collections of Liquidation Proceeds and
Recoveries in respect of the related Receivables, and payment of the Purchase
Amount.
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(ii) If the Servicer shall determine that an outstanding Advance
with respect to any Receivable shall not be recoverable as described in the
preceding paragraph, the Servicer shall be reimbursed from any collections
credited to payments made on other Receivables in the Trust (including
Liquidation Proceeds and Recoveries), and outstanding Advances with respect to
such Receivable shall be reduced accordingly.
(iii) The Servicer may elect not to make an Advance with respect to
a Receivable to the extent that the Servicer, in its sole discretion, does not
expect to recover such Advance from subsequent payments on such Receivable.
(b) 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 Section 4.4(a)(i) 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.
(i) On each Payment Date, the Servicer shall deposit
into the Collection Account an amount equal to the aggregate amount of
Advances required to be made with respect to the related Collection
Period.
(c) On each Payment Date, the Servicer shall instruct the
Indenture Trustee in writing 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 Receivables with respect
to which the Servicer has made Advances in a prior Collection Period that are
allocable to the reimbursement of such Advances pursuant to Sections 4.3(a) and
4.4(a) and (ii) the aggregate amount of Advances that the Servicer has not been
reimbursed for pursuant to this Section 4.4(c) or Section 4.5 that are with
respect to Receivables that became Defaulted Receivables in the related
Collection Period.
SECTION 4.5 Additional Deposits. At the written direction of the
Servicer, the Indenture Trustee shall deposit in the Collection Account the
amounts required pursuant to Section 4.4(a)(i) and (b). The Servicer shall
deposit in the Collection Account amounts required to be paid by the Servicer
pursuant to Sections 4.4(a) and (b). The Seller and the Servicer shall deposit
or cause to be deposited in
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the Collection Account the aggregate Purchase Amount with respect to Purchased
Receivables pursuant to Section 2.3, 3.7 or 8.1. 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.
SECTION 4.6 Distributions. (a) On each Payment Date, after repayment
of Advances pursuant to Sections 4.3(a) and 4.4(c), the Indenture Trustee shall
cause to be made the following transfers and distributions in the amounts set
forth in the Servicer's Certificate for such Payment Date pursuant to Section
3.9:
(i) If the Monthly Remittance Conditions are not then
satisfied, from the Payahead Account, and otherwise from amounts paid by
the Servicer pursuant to Section 4.1(e), to the Collection Account in
immediately available funds, (x) the aggregate portion of Payaheads
constituting Scheduled Payments or prepayments in full, required by
Sections 4.2 and 4.3(a), and (y) the Payahead Balance, if any, relating to
any Purchased Receivable;
(ii) From the Collection Account to the Payahead
Account, or to the Servicer in each event that the Monthly Remittance
Condition is then satisfied, in immediately available funds, the aggregate
Payaheads required by Section 4.3 for the Collection Period related to
such Payment Date.
(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 Accrued Certificate Interest, the Scheduled Principal, the
Principal Distribution Amount, the Class A Reserve Account Amount, the Specified
Class A Reserve Balance, the Class B Reserve Account Amount and the Specified
Class B Reserve Balance, in each case with respect to the next succeeding
Payment Date.
(c) On each Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section 3.9)
to withdraw (i) all Available Funds on deposit in the Collection Account for the
related Collection Period and (ii) the additional amounts from the sources
specified below and make the following payments and deposits from the sources
specified below for such Payment Date in the following order of priority:
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(i) to the Servicer, the Total Servicing Fee, such amount to
be paid, first, from Available Funds in the Collection Account, second,
from the Class B Reserve Account, and third, from the Class A Reserve
Account;
(ii) to the Note Distribution Account, the Accrued Note
Interest on each Class of Notes, such amount to be paid, first, from
Available Funds in the Collection Account, and second, from the Class A
Reserve Account;
(iii) to the Certificate Distribution Account, the Accrued
Certificate Interest, such amount to be paid, first, from Available Funds
in the Collection Account, and second, from the Class B Reserve Account;
(iv) to the Note Distribution Account, the Principal
Distribution Amount with respect to each Class of Notes, such amount to be
paid, first, from Available Funds in the Collection Account, and second,
from the Class A Reserve Account;
(v) to the Certificate Distribution Account, the Principal
Distribution Amount with respect to the Certificates, such amount to be
paid first, from Available Funds in the Collection Account, and second,
from the Class B Reserve Account;
(vi) to the Class A Reserve Account, from Available Funds in
the Collection Account, the amount required to bring the amount in the
Class A Reserve Account up to the Class A Specified Reserve Balance;
(vii) to the Class B Reserve Account, from Available Funds in
the Collection Account, the amount required to bring the amount in the
Class B Reserve Account up to the Class B Specified Reserve Balance; and
(viii) to the Seller, any remaining Available Funds.
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(d) The rights of the Certificateholders to receive
distributions in respect of the Certificates shall be and hereby are
subordinated, to the extent set forth in Section 4.6(c), to the rights of the
Noteholders to receive distributions in respect of the Class A Notes and the
rights of the Servicer to receive reimbursements of Advances and payment of the
Total Servicing Fee (and any accrued and unpaid Servicing Fees or Supplemental
Servicing Fees from prior Collection Periods) in the event of delinquency or
defaults on the Receivables. Upon the written instructions of the Servicer
included in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 3.9, the Indenture Trustee shall release amounts
available in the Class A Reserve Account and the Class B Reserve Account,
respectively, as provided in Sections 4.4(a) and 4.6(c) and distribute such
amounts in accordance with Section 4.6(c).
SECTION 4.7 Subordination; Reserve Accounts. (a) The Seller shall,
prior to the Closing Date, establish and maintain a segregated trust account in
the name of "Citibank, N.A. as Indenture Trustee, as secured party from
Daimler-Benz Vehicle Owner Trust 1998-A" at an Eligible Bank (which shall
initially be the corporate trust department of Citibank, N.A.) which shall be
designated the "Class A Reserve Account" and shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of "Citibank,
N.A., as Paying Agent for Daimler-Benz Vehicle Owner Trust 1998-A" at an
Eligible Bank (which shall initially be the corporate trust department of
Citibank, N.A.) which shall be designated the "Class B Reserve Account"
(collectively, the "Reserve Accounts"). On the Closing Date, the Seller shall
deposit the Class A Reserve Initial Deposit into the Class A Reserve Account,
and the Class B Reserve Initial Deposit, if any, into the Class B Reserve
Account. The Class A Reserve Account shall be under the sole dominion and
control of the Indenture Trustee, and the Class B Reserve Account shall be under
the sole dominion and control of the Owner Trustee; provided, that the Servicer
may make deposits to the Reserve Accounts in accordance with this Agreement and
the Indenture. The Reserve Accounts and all amounts, securities, investments,
financial assets and other property deposited in or credited to the respective
Reserve Accounts (the "Reserve Account Property") has been conveyed by the
Seller to the Trust pursuant to Section 2.1. Pursuant to the Indenture, the
Trust will pledge all of its right, title and interest in, to and under the
Class A Reserve Account and the Reserve Account Property deposited therein or
credited thereto to the Indenture Trustee on behalf of the Noteholders to secure
its obligations under the Notes and the Indenture. The Class B Reserve Account
and the Reserve Account Property deposited therein or credited thereto will not
be pledged to the Indenture Trustee or the Noteholders.
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The Reserve Account Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing by
the Seller, by the bank or trust company then maintaining the Reserve Accounts
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 Class A Reserve Account and the Class B 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 Class A Reserve Balance and the Specified
Class B Reserve Balance, respectively. In the event that either of the Class A
Reserve Account or the Class B Reserve Account is no longer to be maintained at
the corporate trust department of Citibank, N.A., the Servicer shall, with the
assistance of the Indenture Trustee or the Owner Trustee as necessary, cause
such Class A Reserve Account or Class B Reserve Account, as applicable, to be
moved to an Eligible Bank 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 Eligible Bank
maintaining the applicable Reserve Account, in accordance with customary
procedures of such institution such that such Institution establishes a
"securities entitlement" in favor of the Indenture Trustee or the Owner
Trustee, as applicable, 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, any appropriate Paying Agent or the Owner Trustee, as applicable,
at one or more depository institutions having the Required Rating and such
Indenture Trustee, appropriate Paying Agent or Owner Trustee, as
applicable, shall have sole signature authority with respect thereto; and
(iii) except for any deposit accounts specified in
clause (ii) above, the Reserve Accounts shall only be invested in
securities or in other assets which the Eligible Bank maintaining the
applicable Reserve
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Account agrees to treat as "financial assets" as defined in Section
8-102(a)(9) of the UCC.
(c) On any Distribution Date (i) if the principal amount of
the Reserve Account Property on deposit in the Class A Reserve Account (after
taking into account any withdrawals from and deposits into the Class A Reserve
Account pursuant to Section 4.6) is greater than the Specified Class A Reserve
Balance for such Distribution Date, the Indenture Trustee shall upon the written
instruction of the Servicer, release such excess from the Class A Reserve
Account and (ii) if the principal amount on deposit in the Class B Reserve
Account (after taking into account any withdrawals from and deposits in the
Class B Reserve Account pursuant to Section 4.6) is less than the Specified
Class B Reserve Balance for such Distribution Date, deposit such excess, as
directed by the Servicer, to the extent of such shortfall, in the Class B
Reserve Account and (iii) to the extent that the principal amount of the Reserve
Account Property (after taking into account any withdrawals from and deposits in
the Class B Reserve Account pursuant to Section 4.6) is equal to or greater than
the Specified Class B Reserve Balance for such Distribution Date, the Indenture
Trustee shall upon written instruction of the Servicer, release such excess from
the Class B Reserve Account to the Seller. Amounts properly released from the
Class A Reserve Account and deposited in the Class B Reserve Account or
distributed to the Seller pursuant to Section 4.6(c) or this Section 4.7(c),
either directly from the Collection Account without deposit in the Class A
Reserve Account and/or the Class B Reserve Account or from the Class A Reserve
Account and/or the Class B Reserve Account, shall be deemed released from the
trust established by this Section 4.7, and neither the Indenture Trustee, the
Noteholders, nor the Certificateholders shall have any further claim upon any
such distributed amounts. The delivery of the Servicer's Certificate pursuant to
Section 3.9 shall, unless otherwise specified by the Servicer, be deemed an
appropriate written instruction for purposes of this Section 4.7(c).
(d) (i) Amounts held in the Reserve Accounts shall be invested
in Permitted Investments in the manner specified in Section 4.1(a), in
accordance with written instructions from the Servicer, and such investments
shall not be sold or disposed of prior to their maturity; provided, however,
that to the extent permitted by the Rating Agencies, funds on deposit in the
Reserve Accounts may be invested in Permitted Investments that mature later than
the next succeeding Payment Date. All such investments shall be made in the name
of the Indenture Trustee or its nominee and all income and gain realized thereon
shall be solely for the benefit of the Seller and shall be payable to the Seller
on each Distribution Date.
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Additionally, it is understood and agreed that the Indenture Trustee shall not
be liable for any loss arising from investments in Permitted Investments or for
the selection of Permitted Investments and the Indenture Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of any
Permitted Investments prior to its stated maturity or the failure of the
Servicer to provide timely written investment directions.
(ii) Each of the Seller and the Servicer agrees to take
or cause to be taken such further actions, to execute, deliver and file or
cause to be executed, delivered and filed such further documents and
instruments (including, without limitation, any UCC financing statements
or this Agreement) as may be determined to be necessary, in the Opinion of
Counsel of the Seller delivered to the Indenture Trustee, in order to
perfect the security interests in favor of the Indenture Trustee created
by this Section 4.7 and otherwise fully to effectuate the purposes, terms
and conditions of this Section 4.7. The Seller and the Servicer shall:
(A) promptly execute, deliver and file any financing
statements, amendments, continuation statements, assignments,
certificates and other documents with respect to such
interests and perform all such other acts as may be necessary
in order to perfect or to maintain the perfection of the
security interest of the Indenture Trustee for the benefit of
the Noteholders; and
(B) make the necessary filings of financing statements
or amendments thereto within five days after the occurrence of
any of the following: (1) any change in their respective
corporate names or any trade names, (2) any change in the
location of their respective chief executive offices or
principal places of business and (3) any merger or
consolidation or other change in their respective identities
or corporate structures; and shall promptly notify the
Indenture Trustee of any such filings.
(iii) Investment earnings attributable to the Class A
Reserve Account and the Class B Reserve Account and proceeds therefrom
shall be held by the Indenture Trustee for the benefit of the Seller.
Investment earnings attributable to the Class A Reserve Account and the
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Class B Reserve Account shall not be available to satisfy the
subordination provisions of this Agreement and shall not otherwise be
subject to any claims or rights of the Noteholders, the Certificateholders
or the Servicer. The Indenture Trustee shall cause all investment earnings
received on or prior to each Distribution Date and attributable to the
Class A Reserve Account and the Class B Reserve Account, respectively, to
be distributed on such Distribution Date to the Seller in accordance with
the written direction of the Servicer. Losses, if any, on investments in
the Class A Reserve Account or the Class B Reserve Account shall be
charged first against undistributed investment earnings attributable to
the Class A Reserve Account or Class B Reserve Account, respectively, and
then against the principal amount of the applicable Class A Reserve
Account or Class B Reserve Account, respectively.
(iv) The Indenture Trustee shall not enter into any
subordination or intercreditor agreement with respect to the Class A
Reserve Account or the Class B Reserve Account.
(e) Upon termination of this Agreement, all remaining Reserve
Account Property shall, upon written instruction of either the Servicer or the
Seller, be paid to the Seller.
(f) 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 Section 4.2,
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. Three
Business Days prior to each Payment Date, the Servicer shall provide to the
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Indenture Trustee (with copies to the Rating Agencies and each Paying Agent) for
the Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date and to the Owner Trustee (with copies to the Rating Agencies
and to each Paying Agent) for the Owner Trustee or the Paying Agent for the
Certificates 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 Certificate Balance;
(ii) the amount of such distribution allocable to
interest paid to each Class of Notes and to the Certificates;
(iii) the amount of the Total Servicing Fee and
Supplemental Servicing Fee with respect to the related Collection Period;
(iv) 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;
(v) the Pool Balance as of the close of business on the
last day of the related Collection Period;
(vi) the amounts of the Note Interest Carryover
Shortfall, the Certificate Interest Carryover Shortfall and the Principal
Carryover Shortfall, if any, for such Payment Date and the portion thereof
attributable to each Class of Notes and to the Certificates, as
applicable;
(vii) the balance of the Class A Reserve Account and the
Class B Reserve Account, if any, on such Payment Date, after giving effect
to changes therein on such Payment Date; and
(viii) the aggregate Purchase Amount of Receivables
repurchased by the Seller or purchased by the Servicer, if any, with
respect to the related Collection Period.
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Each amount set forth on the Payment Date statement pursuant to
clauses (i), (ii), (iv) and (vi) above shall be expressed as a dollar amount per
$1,000 of original principal balance of a Note or Certificate Balance, as
applicable.
SECTION 4.10 Control of Securities Accounts. Notwithstanding
anything else contained herein, the Issuer agrees that each of the Collection
Account, the Note Distribution Account, and the Class A Reserve Account will be
an Eligible Deposit Account established at an Eligible Bank which agrees
substantially as follows: (a) 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 Issuer; (b) 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 (c) all
assets delivered or credited to it in connection with such accounts and all
investments thereof will be promptly credited to such accounts.
ARTICLE V
THE SELLER
SECTION 5.1 Representations, Warranties and Covenants of Seller. The
Seller makes the following representations, warranties and covenants on which
the Issuer is deemed to have relied in acquiring the Trust Property. The
representations, warranties and covenants speak as of the execution and delivery
of this Agreement and shall survive the sale of the Trust Property to the Issuer
and the pledge thereof by the Issuer to the Indenture Trustee pursuant to the
Indenture:
(a) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a corporation 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 corporation in good standing, and has obtained all
necessary
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licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications,
except where the failure of the Seller to so qualify or obtain such licenses or
approvals would not have a material adverse effect on the Seller, the Issuer or
any Receivable.
(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 Issuer and has duly authorized such sale and assignment to
the Issuer by all necessary corporate action; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it is a
party 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 conveyed by the Seller to the Issuer hereunder, 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 affecting the enforcement of creditors' rights generally and by
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 incorporation or bylaws 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,
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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) Officer's Certificates. Each representation and warranty
made by the Seller in each of the Seller Officer's Certificates attached as
exhibits to the Purchase Agreement is true and correct as of the Closing Date,
and the Seller covenants to fulfill each covenant made by it in such Seller
Officer's Certificates.
SECTION 5.2 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
Issuer, the Owner Trustee and the Indenture Trustee from and against any taxes
that may at any time be asserted against any such Person with respect to, and as
of the date of, the sale of the Receivables to the Issuer or the issuance and
original sale of the Notes or the Certificates, including any sales, gross
receipts, general corporation, tangible personal property, privilege, or license
taxes (but, in the case of the Issuer, 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
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the
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Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the willful misfeasance, bad faith, or negligence of the Seller
(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 violation by the Seller 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.
Notwithstanding the foregoing, such indemnification shall not
extend to any credit losses on any Receivables. Indemnification under this
Section 5.2 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 5.2 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 5.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) resulting from any merger, conversion, or consolidation to
which the Seller shall be a party or (c) 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
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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 (i) 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 5.3, and (ii) 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 Issuer 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 5.3, any amendment to the Articles of
Incorporation of the Seller or of the issuance of any other securities by the
Seller to the Rating Agencies. Notwithstanding anything herein to the contrary,
the execution of the foregoing agreement of assumption and compliance with
clauses (i) or (ii) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
SECTION 5.4 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 and shall be protected in acting or refraining from acting upon
the advice of counsel or on any resolution, certificate of auditors or
accountants or any other certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, appraisal, bond, note or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties. 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 5.5 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 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
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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 VI
THE SERVICER
SECTION 6.1 Representations and Warranties of Servicer. The Servicer
makes the following representations and warranties on which the Issuer is deemed
to have relied in acquiring the Trust Property, and such representations and
warranties speak as of the execution and delivery of this Agreement and shall
survive the sale of the Trust Property to the Issuer and the pledge thereof by
the Issuer 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 Indenture 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,
except where the failure of the Servicer so to qualify or obtain such licenses
or approvals would not have a material adverse effect on the Servicer, the
Issuer or any Receivable.
(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.
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(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 affecting the enforcement of creditors' rights generally and by
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: (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 or 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 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 (iv) that may adversely
affect the Federal or Applicable Tax State income, excise, franchise or similar
tax attributes of the Notes or the Certificates.
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SECTION 6.2 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
Issuer, 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
Issuer, the Owner Trustee and the Indenture Trustee from and against any taxes
that may at any time be asserted against any such Person with respect to 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
Issuer, not including any taxes asserted with respect to, and as of the date of,
the sale of the Receivables to the Issuer or the issuance and original sale of
the Notes 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
Issuer, 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,
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bad faith or negligence 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 breach by the Owner Trustee 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 breach by the Indenture
Trustee of any of its representations or warranties set forth in the Indenture;
or (d) shall be one as to which the Seller is required to indemnify the
Indenture Trustee or the Owner Trustee.
For purposes of this Section 6.2, in the event of the termination of
the rights and obligations of MBCC (or any successor thereto pursuant to Section
7.2) as Servicer pursuant to Section 7.1, 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 7.2.
Notwithstanding the foregoing, such indemnification shall not extend
to any credit losses on any Receivables. Indemnification under this Section 6.2
by MBCC (or any successor thereto pursuant to Section 7.2) 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 6.3 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
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merger, conversion, consolidation or succession and such agreement of assumption
comply with this Section 6.3, 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 Issuer 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 6.3 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 6.4 Limitation on Liability of Servicer and Others. (a)
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Issuer, the 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 and shall be protected in acting or refraining from acting upon any
resolution, certificate of auditors or accountants or any other certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, appraisal, bond, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties.
(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
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of such action and any liability resulting therefrom shall be expenses, costs
and liabilities of the Servicer.
SECTION 6.5 Servicer Not to Resign. Subject to the provisions of
Section 6.3, 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 (a) assumed the responsibilities and obligations of the
Servicer in accordance with Section 7.2 and (b) become the Administrator under
the Administration Agreement pursuant to Section 8 thereof.
SECTION 6.6 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 VII
SERVICING TERMINATION
SECTION 7.1 Events of Servicing Termination. (a) If any one of the
following events ("Events of Servicing Termination") shall occur and be
continuing:
(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
(or, for so long as the Servicer is an Affiliate of the Seller, the
Seller) to make any required payment or deposit under this Agreement,
which shall continue unremedied for a
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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 (or, for so
long as the Servicer is an Affiliate of the Seller, the Seller) 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
ninety (90) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer
(or, for so long as the Servicer is an Affiliate of the Seller, the
Seller) 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
twenty-five percent (25%) of the principal balance of the then Outstanding
Notes, in the aggregate, or if the Notes have been paid in full and the
Indenture has been discharged in accordance with its terms, twenty-five
percent (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
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(v) The failure by the Servicer to be an Eligible
Servicer;
then, and in each and every case and for so long as such Event of Servicing
Termination shall not have been remedied, either the Indenture Trustee, or the
Holders of Notes evidencing not less than a majority of the Outstanding Amount
of the Notes, voting as a group, or if the Notes have been paid in full and
discharged in accordance with its terms, the Owner Trustee pursuant to the Trust
Agreement, or the holders of Certificates evidencing not less than a majority of
the Certificate Balance, 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 7.2; 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 and shall cooperate with the successor servicer in the
enforcement of the Dealer Agreements. 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.
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(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 7.1(a).
SECTION 7.2 Indenture Trustee to Act; Appointment of Successor
Servicer. Upon the resignation by the Servicer pursuant to Section 6.5 or upon
the receipt by the Servicer of notice of termination as Servicer pursuant to
Section 7.1, the Indenture Trustee shall be the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement, and shall be subject
to all the responsibilities, duties and liabilities relating thereto placed on
the Servicer by the terms and provisions of this Agreement, whether or not the
Indenture has been terminated. In the ordinary course of business, the Indenture
Trustee and any other Person, in either case acting as Successor Servicer, may
at any time delegate any of its duties hereunder to any Person, including any of
its affiliates, who agrees to conduct such duties in accordance with standards
comparable to those that the Servicer executes pursuant to Section 3.1 hereof.
Such delegation shall not relieve the Indenture Trustee and any other Person, in
either case acting as Successor Servicer, of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Article VI of this Agreement. The Indenture
Trustee and any other Person, in either case acting as Successor Servicer, shall
provide each Rating Agency and the Indenture Trustee with written notice prior
to the delegation of any of its duties to any Person. 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 MBCC as Servicer hereunder. The Indenture Trustee and such Successor
Servicer shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. The Indenture Trustee shall not be
relieved of its duties as Successor Servicer under this Section 7.2 until a
newly
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appointed Servicer shall have assumed the responsibilities and obligations of
the terminated Servicer under this Agreement. Notwithstanding anything herein or
in the Indenture to the contrary, in no event shall the Indenture Trustee be
liable for any Servicing Fee, for any Advances or for any differential in the
amount of the Servicing Fee paid hereunder and the amount necessary to induce
any Successor Servicer to act as Successor Servicer under this Agreement and the
transactions set forth or provided for herein.
SECTION 7.3 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 7.2 after the transfer of
servicing hereunder, the outgoing Servicer shall have no further obligations
with respect to the management, 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 records the Successor Servicer
(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 7.3 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 7.3.
SECTION 7.4 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
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Owner Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses of record and to the Rating Agencies.
SECTION 7.5 Waiver of Past Events of Servicing Termination. The
Holders of Notes evidencing not less than a majority of the Outstanding Amount
(as defined in the Indenture) of the Notes or the Holders of Certificates
evidencing not less than a majority 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 Collection Account, the Note
Distribution Account, the Payahead Account, the Certificate Distribution Account
or the Reserve Accounts 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 VIII
TERMINATION
SECTION 8.1 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 Collection Account, the Note Distribution Account, the Payahead Account, the
Certificate Distribution Account and the Reserve Accounts. To exercise such
option, the Servicer shall notify the Owner Trustee and the Indenture Trustee in
writing no later than the twentieth (20th) 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
Collection Account, the Note Distribution Account, the Payahead Account, the
Certificate Distribution Account and the Reserve Accounts, 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
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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 Redemption Price of the Notes and the Prepayment
Price of the Certificates. The Purchase Amount for such Payment Date, plus to
the extent necessary all amounts in the Reserve Accounts, shall be used to make
payments in full to Noteholders and Certificateholders in the manner set forth
in Article IV. Following payment of all amounts payable to the Noteholders and
the Certificateholders, all remaining available funds (including the amounts
remaining in the Class A Reserve Account and the Class B Reserve Account) shall
be distributed to the Seller.
(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 long-term
unsecured debt of the Servicer 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 Class A Reserve Account in
accordance with Sections 4.5 and 4.7.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment. (a) This Agreement may be amended by the
Seller, the Servicer and the Issuer, with the consent of the Indenture Trustee,
but without the consent of any of the Noteholders or the Certificateholders to
cure any ambiguity, to correct or supplement any provisions in this Agreement
which may be inconsistent with any other provisions in this Agreement, or to
add, change or eliminate any other provisions with respect to matters or
questions arising under this Agreement that shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Owner Trustee and the
Indenture Trustee, materially and adversely affect the interests of any
Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time by
the Seller, the Servicer and the Issuer, with the consent of the Indenture
Trustee and the consent of the Holders of Notes evidencing not less than a
majority of Outstanding Amount of the Notes, voting as a group, 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 Class A Reserve
Balance without the consent of all adversely affected Noteholders or
Certificateholders, or change the Certificate Interest Rate or the Specified
Class B Reserve Balance without the consent of all of the Class B
Certificateholders then outstanding, (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 sixty-six and two-thirds (66-2/3%) of
the Notes of such Class Outstanding or adversely affect the rating, if any, of
the Certificates by the Rating Agencies without the consent of
Certificateholders evidencing not less than sixty-six and two thirds (66-2/3)%
of the Certificates then outstanding.
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(c) Prior to the execution of any amendment or consent
pursuant to Section 9.1(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 9.1, the Servicer shall furnish written notification of
the substance of such amendment or consent to each Noteholder and
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 9.1 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
conclusively 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 precedent 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 the respective rights, duties, indemnities or immunities of the Owner
Trustee or the Indenture Trustee under this Agreement or otherwise.
SECTION 9.2 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 Issuer 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
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filing receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed by the Seller or the
Servicer in accordance with paragraph (a) above seriously misleading within the
meaning of Section 9-402(7) of the UCC, unless it shall have given the Owner
Trustee and the Indenture Trustee at least sixty (60) days' prior written notice
thereof and shall have promptly filed appropriate amendments to all previously
filed financing statements or continuation statements.
(c) The Seller and the Servicer shall give the Owner Trustee
and the Indenture Trustee at least sixty (60) days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall promptly file any such amendment, continuation
statement or any new financing statement. The Servicer shall at all times
maintain each office from which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account, Payahead Account and Reserve Accounts in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables to the
Issuer, the master computer records of the Servicer (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of the
Issuer and the Indenture Trustee in such Receivable and that such Receivable is
owned by the Issuer and has been pledged to the Indenture Trustee pursuant to
the Indenture. Indication of the respective interests of the Issuer or the
Indenture Trustee in a Receivable shall be deleted from or modified on the
computer systems of the Servicer when, and only
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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
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 Issuer 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 records of the
Servicer regarding any Receivable, but, prior to the occurrence of an Event of
Servicing Termination or an event that with the passage of time and delivery of
notice would constitute an Event of Servicing Termination, only to the extent
that such activities do not disrupt the normal business operations of the
Servicer and do not adversely affect the ability of the Servicer to perform its
obligations under this Agreement.
(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, vehicle number, name and address 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
Issuer and the Indenture Trustee in the Receivables, and reciting
the details of such filings or referring to prior Opinions of
Counsel in
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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 beginning with the first calendar year beginning more
than three months after the Cutoff Date, 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 Issuer
and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) stating that, in the opinion of
such Counsel, no such action shall be necessary to preserve and
protect such interest.
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 9.3 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ITS
ENTIRETY 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 9.4 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 9.12
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 Issuer or 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
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case of Moody's, at the following address: Xxxxx'x Investors Service, Inc., ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (e) in
the case of S&P, at the following address: Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Asset Backed Surveillance Department. Any notice required or
permitted to be mailed to a Noteholder or Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Note Register or the Certificate Register, as applicable. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Noteholder or Certificateholder shall
receive such notice. Any notice to be delivered to the Rating Agencies hereunder
shall also be delivered to the Seller.
SECTION 9.5 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 9.6 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.3 and 7.2 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.
SECTION 9.7 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 9.8 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Owner Trustee, the Indenture
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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 9.9 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 IX, 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 Issuer to the Indenture Trustee for the
benefit of Noteholders pursuant to the Indenture.
SECTION 9.10 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 9.11 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 9.12 Agent for Service. The agent for service of the Seller
and the Servicer in respect of this Agreement shall be Xxxxxx X. Xxxxxxx,
79
00
Xxxxxxx-Xxxx Xxxxx Xxxxxxx Corporation, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000.
SECTION 9.13 No Bankruptcy Petition. The Owner Trustee, the
Indenture Trustee, the Issuer and the Servicer each covenants and agrees that,
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. This Section 9.13 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 either such Agreement.
SECTION 9.14 Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Chase Manhattan Bank Delaware, not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Chase Manhattan Bank Delaware, in its individual capacity
or, except as expressly provided in the Trust Agreement, as beneficial owner of
the Issuer, have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all purposes
of this Agreement, in the performance of its duties or obligations hereunder or
in the performance of any duties or obligations of the Issuer hereunder, the
Owner Trustee shall be subject to, and entitled to the benefits of, the terms
and provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by Citibank, N.A., not in its individual
capacity but solely as Indenture Trustee, and in no event shall Citibank, N.A.
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer and under no circumstances shall
Citibank, N.A. be personally liable for the payment of any indebtedness or
expenses of the Trust.
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IN WITNESS WHEREOF, the parties have caused this Sale and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
DAIMLER-BENZ VEHICLE
RECEIVABLES CORPORATION,
as Seller
By:
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
MERCEDES-BENZ CREDIT
CORPORATION, as Servicer and
in its individual capacity
By:
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director,
Accounting Services
DAIMLER-BENZ VEHICLE
OWNER TRUST 1998-A,
as Issuer
By: CHASE MANHATTAN BANK
DELAWARE
not in its individual
capacity but solely as
Owner Trustee
By:
---------------------------------
Name:
Title:
87
Accepted and agreed:
CITIBANK, N.A.
as Indenture Trustee
By:
-----------------------------
Name:
Title:
88
SCHEDULE A
[SCHEDULE OF RECEIVABLES]
Delivered to Indenture Trustee at Closing
89
SCHEDULE B
Locations of Receivables Files
Commercial Vehicles
Mercedes-Benz Credit Corporation
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Motor Vehicles
Mercedes-Benz Credit Corporation
Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
90
EXHIBIT A
[FORM OF SERVICER'S CERTIFICATE]
The undersigned certifies that he is a [title] of Mercedes-Benz
Credit Corporation, 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 November 1, 1998,
by and among the Company, as Servicer, Daimler-Benz Vehicle Receivables
Corporation, as Seller, and Daimler-Benz Vehicle Owner Trust 1998-A, as Issuer
(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 [____________], [____].
MERCEDES-BENZ CREDIT
CORPORATION, as Servicer
By: _____________________________
Name:
Title:
X-0
00
XXXXXXX X
[FORM OF STATEMENT TO NOTEHOLDERS]
B-1
92
EXHIBIT C
[FORM OF STATEMENT TO CERTIFICATEHOLDERS]
C-1
