CONFORMED COPY
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
a National Banking Association,
as Seller and Servicer
and
CHASE MANHATTAN AUTO OWNER TRUST 1998-B,
as Issuer
SALE AND SERVICING AGREEMENT
Dated as of April 1, 1998
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.......................................... 1
SECTION 1.2 Usage of Terms....................................... 24
SECTION 1.3 Simple Interest and Actuarial Method; Methods of
Allocating Payments or Receivables; Allocations................. 24
SECTION 1.4 Calculations Relating to the May 1999 Distribution
Date............................................................ 25
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1 Conveyance of Receivables............................ 25
SECTION 2.2 Closing.............................................. 26
ARTICLE III
THE RECEIVABLES
SECTION 3.1 Representations and Warranties of Seller; Conditions
Relating to Receivables......................................... 26
SECTION 3.2 Repurchase Upon Breach or Failure of a Condition..... 30
SECTION 3.3 Custody of Receivable Files.......................... 31
SECTION 3.4 Duties of Servicer as Custodian...................... 31
SECTION 3.5 Instructions; Authority to Act....................... 32
SECTION 3.6 Custodian's Indemnification.......................... 33
SECTION 3.7 Effective Period and Termination..................... 33
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1 Duties of Servicer................................... 33
SECTION 4.2 Collection of Receivable Payments; Refinancing....... 34
SECTION 4.3 Realization Upon Receivables......................... 35
SECTION 4.4 Maintenance of Security Interests in Financed
Vehicles........................................................ 35
SECTION 4.5 Covenants of Servicer................................ 35
SECTION 4.6 Purchase of Receivables Upon Breach.................. 36
SECTION 4.7 Servicing Fee........................................ 36
SECTION 4.8 Servicer's Certificate............................... 37
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SECTION 4.9 Annual Statement as to Compliance.................... 37
SECTION 4.10 Annual Audit Report................................. 38
SECTION 4.11 Access by Holders to Certain Documentation and
Information Regarding Receivables............................... 38
SECTION 4.12 Reports to Holders and the Rating Agencies.......... 39
SECTION 4.13 Reports to the Securities and Exchange Commission... 39
ARTICLE V
ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1 Establishment of Accounts............................ 39
SECTION 5.2 Collections.......................................... 40
SECTION 5.3 [Reserved]........................................... 41
SECTION 5.4 Additional Deposits.................................. 41
SECTION 5.5 Distributions........................................ 41
SECTION 5.6 Reserve Account...................................... 43
SECTION 5.7 Net Deposits......................................... 45
SECTION 5.8 Statements to Certificateholders and Noteholders..... 45
ARTICLE VI
THE SELLER
SECTION 6.1 Representations of Seller............................ 46
SECTION 6.2 Liability of Seller; Indemnities..................... 48
SECTION 6.3 Merger or Consolidation of Seller.................... 48
SECTION 6.4 Limitation on Liability of Seller and Others......... 48
SECTION 6.5 Seller May Own Notes and Certificates................ 49
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations of Servicer.......................... 49
SECTION 7.2 Liability of Servicer; Indemnities................... 50
SECTION 7.3 Merger or Consolidation of Servicer.................. 51
SECTION 7.4 Limitation on Liability of Servicer and Others....... 51
SECTION 7.5 Servicer Not To Resign............................... 52
SECTION 7.6 Delegation of Duties................................. 53
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
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SECTION 8.1 Events of Servicing Termination...................... 53
SECTION 8.2 Indenture Trustee to Act; Appointment of Successor
Servicer........................................................ 55
SECTION 8.3 Notification to Noteholders and Certificateholders... 55
SECTION 8.4 Waiver of Past Defaults.............................. 55
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables; Trust
Termination..................................................... 56
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment........................................... 57
SECTION 10.2 Protection of Title to Owner Trust Estate........... 59
SECTION 10.3 GOVERNING LAW....................................... 61
SECTION 10.4 Notices............................................. 61
SECTION 10.5 Severability of Provisions.......................... 61
SECTION 10.6 Assignment.......................................... 61
SECTION 10.7 Certificates and Notes Nonassessable and Fully Paid. 61
SECTION 10.8 Third-Party Beneficiaries........................... 61
SECTION 10.9 Assignment to Indenture Trustee..................... 62
SECTION 10.10 Limitation of Liability of Owner Trustee and
Indenture Trustee............................................... 62
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SCHEDULES
Schedule A - List of Receivables
Schedule B - Location of Receivable Files
EXHIBITS
Exhibit A - Form of Servicer's Certificate
Exhibit B - Form of Monthly Report
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This SALE AND SERVICING AGREEMENT, dated as of April 1, 1998,
(as amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement") is made between CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, a national banking association having its principal executive
offices located at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Chase
USA," the "Seller" or the "Servicer" in its respective capacities as such), and
CHASE MANHATTAN AUTO OWNER TRUST 1998-B, as issuer (the "Issuer").
W I T N E S S E T H :
In consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Whenever used in this
Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
"Accrued Interest" on a Receivable, as of any date of
determination, means that amount of interest accrued on the Principal Balance
at the related Contract Rate but not paid by or on behalf of the Obligor.
"Accounts" means, collectively, the Collection Account and
the Note Distribution Account.
"Actuarial Method" means the method of allocating a
fixed level payment to principal and interest, pursuant to which each
monthly installment consists of an amount of interest equal to the 1/12
of the annual contract rate of interest on the loan multiplied by the
scheduled principal balance of the loan and an amount of principal equal
to the remainder of the monthly payment.
"Actuarial Receivable" means any Receivable providing
for the allocation of payments made thereunder to principal and interest
in accordance with the Actuarial Method.
"Adjusted Contract Value" of an Actuarial Receivable,
as of the close of business on the last day of any Collection Period,
means the excess of the Contract Value of such Actuarial Receivable at
the close of business on such date over the Carryover Scheduled Interest
Payment on such Actuarial Receivable for such Collection Period.
"Administration Agreement" means the Administration
Agreement, dated as of April 1, 1998, among the Issuer, the Administrator
and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
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"Administrator" means The Chase Manhattan Bank, a New
York banking corporation, as administrator, and its successors and
assigns.
"Administration Fee" means $1,000, the fee payable to
the Administrator on each Distribution Date pursuant to Section 5.5(c)
for services rendered pursuant to the Administration Agreement.
"Affiliate" means, with respect to any specified
Person, any other Person controlling or controlled by or under common
control with such specified Person. For purposes of this definition,
"control" when used with respect to any specified Person means the power
to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. A Person shall not be deemed to be
an Affiliate of any specified Person solely because such other Person has
the contractual right or obligation to manage such specified Person
unless such other Person controls such specified Person through equity
ownership or otherwise.
"Aggregate Net Losses" means, for any Distribution
Date, the amount equal to (i) the aggregate Principal Balance of all
Receivables that became Defaulted Receivables during the related
Collection Period minus (ii) the Liquidation Proceeds allocable to
principal collected during such Collection Period with respect to any
Defaulted Receivables.
"Amount Financed" in respect of a Receivable means the
amount advanced under the Receivable toward the purchase price of the
Financed Vehicle and related costs.
"Assertion" has the meaning specified in Section 4.10.
"Authenticating Agent" has the meaning specified in
Section 2.13 of the Indenture and shall initially be the corporate trust
office of Chase, and its successors and assigns in such capacity.
"Authorized Officer" means any officer of the Owner
Trustee, Indenture Trustee or Servicer who is authorized to act on behalf
of the Owner Trustee, Indenture Trustee or Servicer, as applicable, and
who is identified as such on the list of authorized officers delivered by
each such party on the Closing Date.
"Available Interest" means, for any Distribution Date,
the sum of (i) with respect to each Simple Interest Receivable, that
portion of Collections on such Simple Interest Receivable received during
the related Collection Period allocated to interest, (ii) with respect to
each Actuarial Receivable, the lesser of (A) the amount of Collections
received during the related Collection Period on such Actuarial
Receivable and (B) the Scheduled Interest Payment on such Actuarial
Receivable for such Collection Period and (iii) with respect to each
Receivable repurchased by the Seller or purchased by the Servicer under
an obligation that arose during the related Collection Period, that
portion of the Repurchase Amount received with respect to such
Repurchased Receivable that would have been treated as
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Available Interest if the Obligor thereof had prepaid such Receivable in
full on the date as of which such Receivable was repurchased or
purchased.
"Available Principal" means, for any Distribution Date,
the sum of (i) with respect to each Simple Interest Receivable, that
portion of Collections on such Simple Interest Receivable received during
the related Collection Period allocated to the principal balance of such
Simple Interest Receivable, (ii) with respect to each Actuarial
Receivable, the lesser of (A) the excess, if any, of (x) the amount of
Collections received during the related Collection Period on such
Actuarial Receivable over (y) the Scheduled Interest Payment on such
Actuarial Receivable for such Collection Period and (B) the amount (not
less than zero) equal to (x) the Adjusted Contract Value of such
Receivable as of the close of business on the last day of the Collection
Period preceding the related Collection Period less (y) the Adjusted
Contract Value of such Receivable as of the close of business on the last
day of the related Collection Period and (iii) with respect to each
Receivable repurchased by the Seller or purchased by the Servicer under
an obligation that arose during the related Collection Period, that
portion of the Repurchase Amount received with respect to such
Repurchased Receivable that would have been treated as Available
Principal if the Obligor thereof had prepaid such Receivable in full on
the date as of which such Receivable was repurchased or purchased.
"Available Reserve Account Amount" shall mean, for each
Distribution Date, an amount equal to the lesser of (i) the amount on
deposit in the Reserve Account and (ii) the Specified Reserve Account
Balance with respect to such Distribution Date.
"Average Delinquency Percentage" means for any
Distribution Date, the average of the Delinquency Percentages for such
Distribution Date and the preceding two (2) Distribution Dates.
"Average Net Loss Ratio" means for any Distribution
Date, the average of the Net Loss Ratios for such Distribution Date and
the preceding two (2) Distribution Dates.
"Basic Documents" means this Agreement, the Certificate
of Trust, the Indenture, the Depository Agreements, the Trust Agreement,
the Administration Agreement and other documents and certificates
delivered in connection therewith.
"Benefit Plan" has the meaning specified in Section 11.12 of
the Trust Agreement.
"Book-Entry Certificates" means beneficial interests in
the Certificates, the ownership and transfers of which shall be made
through book entries by a Clearing Agency or Foreign Clearing Agency as
described in Section 3.10 of the Trust Agreement.
"Book-Entry Notes" means beneficial interests in the
Notes, the ownership and transfers of which shall be made through book
entries by a Clearing Agency or Foreign Clearing Agency as described in
Section 2.10 of the Indenture.
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"Business Day" means a day, other than a Saturday or a
Sunday, on which the Indenture Trustee and banks located in New York, New
York, Wilmington, Delaware and Minneapolis, Minnesota are open for the
purpose of conducting a commercial banking business.
"Business Trust Statute" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as amended from time to time.
"Carryover Scheduled Interest Payment" on any Actuarial
Receivable means, for any Collection Period, the excess, if any, of (i)
the Scheduled Interest Payment on such Actuarial Receivable for such
Collection Period over (ii) the amount of Collections received during
such Collection Period on such Actuarial Receivable.
"Capital Accounts" has the meaning specified in Section 5.7 of
the Trust Agreement.
"Cedel" means Cedel Bank, societe anonyme.
"Certificate" means a certificate evidencing the
beneficial interest of a Certificateholder in the Owner Trust Estate,
substantially in the form of Exhibit A to the Trust Agreement.
"Certificate Balance" means an amount equal to
$32,604,142.65 as of the Closing Date and, thereafter, shall be an amount
equal to such initial Certificate Balance, reduced by all amounts
allocable to principal previously distributed to Certificateholders. The
Certificate Balance shall also be reduced on any Distribution Date by the
excess, if any, of (i) the sum of (A) the Certificate Balance and (B) the
outstanding principal amount of the Notes (in each case after giving
effect to amounts in respect of principal to be deposited in the
Certificate Distribution Account and the Note Distribution Account on
such Distribution Date), over (ii) the Pool Balance as of the close of
business on the last day of the preceding Collection Period. Thereafter,
the Certificate Balance shall be increased on any Distribution Date to
the extent that any portion of the Total Distribution Amount on such
Distribution Date is available to pay the existing Certificateholders'
Principal Carryover Shortfall, but not by more than the aggregate
reductions in the Certificate Balance set forth in the preceding
sentence.
"Certificate Depository Agreement" means the agreement
among the Issuer, the Owner Trustee, Chase, as agent for the Depository
Trust Company and The Depository Trust Company, as the initial Clearing
Agency, dated the Closing Date, relating to the Certificates,
substantially in the form attached as Exhibit C to the Trust Agreement,
as the same may be amended and supplemented from time to time or any
similar agreement with any successor Clearing Agency.
"Certificate Distribution Account" has the meaning specified
in Section 5.1 of the Trust Agreement.
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"Certificate Final Scheduled Distribution Date" means
the October 2004 Distribution Date on which the outstanding principal
amount, if any, of the Certificates is payable.
"Certificate of Trust" means the Certificate of Trust
in the form of Exhibit B to the Trust Agreement to be filed for the
Issuer pursuant to Section 3810(a) of the Business Trust Statute.
"Certificate Owner" means, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate,
as reflected on the books of the Clearing Agency or Foreign Clearing
Agency or on the books of a direct or indirect Clearing Agency
Participant.
"Certificate Pool Factor" as of the close of business
on a Distribution Date means a eight-digit decimal figure equal to the
Certificate Balance (after giving effect to distributions made on such
date) divided by the initial Certificate Balance. The Certificate Pool
Factor will be 1.00000000 as of the Cutoff Date; thereafter, the
Certificate Pool Factor will decline to reflect reductions in the
Certificate Balance.
"Certificate Rate" means 6.050% per annum.
"Certificate Register" and "Certificate Registrar"
means the register maintained and the registrar appointed pursuant to
Section 3.4 of the Trust Agreement.
"Certificated Security" means a "certificated security" within
the meaning of the Relevant UCC.
"Certificateholder" means the Person in whose name a
Certificate is registered in the Certificate Register, except that,
solely for the purpose of giving any consent, request, waiver or demand
pursuant to any of the Basic Documents (other than pursuant to Section
4.3 of the Trust Agreement), the interest evidenced by any Certificate
registered in the name of the Seller, the Servicer or any Person actually
known by an Authorized Officer of the Owner Trustee to be an Affiliate of
the Seller or the Servicer shall not be taken into account in determining
whether the requisite percentage necessary to effect any such consent,
request or waiver shall have been obtained.
"Certificateholders' Distributable Amount" means for any
Distribution Date, the sum of (x) the Certificateholders' Principal
Distributable Amount and (y) the Certificateholders' Interest Distributable
Amount.
"Certificateholders' Interest Carryover Shortfall"
means, (a) for the initial Distribution Date, zero, and (b) for any other
Distribution Date, the excess of the Certificateholders' Interest
Distributable Amount for the preceding Distribution Date over the amount
in respect of the interest actually deposited in the Certificate
Distribution Account on such preceding Distribution Date, plus interest
on such excess, to the extent permitted by law,
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at the Certificate Rate from and including such preceding Distribution
Date to, but excluding, the current Distribution Date.
"Certificateholders' Interest Distributable Amount"
means, for any Distribution Date, the sum of the Certificateholders'
Monthly Interest Distributable Amount for such Distribution Date and the
Certificateholders' Interest Carryover Shortfall for such Distribution
Date.
"Certificateholders' Monthly Interest Distributable
Amount" means, for any Distribution Date, one month's interest (or, in
the case of the first Distribution Date, interest accrued from and
including the Closing Date to, but excluding, such Distribution Date) at
the Certificate Rate on the Certificate Balance on the immediately
preceding Distribution Date, after giving effect to all payments of
principal to the Certificateholders on or prior to such Distribution Date
(or, in the case of the first Distribution Date, the Certificate Balance
on the Closing Date). Interest shall be computed on the basis of a 360
day-year of twelve 30-day months for purposes of this definition.
"Certificateholders' Monthly Principal Distributable
Amount" means, for any Distribution Date prior to the Distribution Date
on which the Notes have been paid in full, zero; and for any Distribution
Date commencing on or after the Distribution Date on which the Notes have
been paid in full, 100% of the Principal Distribution Amount (less the
portion of the Principal Distribution Amount required on the first such
Distribution Date to pay the Notes in full).
"Certificateholders' Principal Carryover Shortfall"
means for any Distribution Date, the sum of (a) the excess of (i) the
Certificateholders' Principal Distributable Amount for the preceding
Distribution Date, over (ii) the amount in respect of principal actually
deposited in the Certificate Distribution Account on such Distribution
Date and (b) without duplication of clause (a), the unreimbursed portion
of the amount by which the Certificate Balance has been reduced pursuant
to the second sentence of the definition thereof.
"Certificateholders' Principal Distributable Amount"
means, for any Distribution Date, the sum of (i) the Certificateholders'
Monthly Principal Distributable Amount for such Distribution Date and
(ii) the Certificateholders' Principal Carryover Shortfall for such
Distribution Date; provided that the Certificateholders' Principal
Distributable Amount shall not exceed the Certificate Balance. In
addition, on the Certificate Final Scheduled Distribution Date, the
principal required to be distributed to the Certificateholders will
include the lesser of (a) any payments of principal due and remaining
unpaid on each Receivable owned by the Issuer as of the last day of the
immediately preceding Collection Period and (b) the amount that is
necessary (after giving effect to the other amounts to be deposited in
the Certificate Distribution Account on such Distribution Date and
allocable to principal) to reduce the Certificate Balance to zero, in
either case after giving effect to any required distribution of the
Noteholders' Principal Distributable Amount to the Note Distribution
Account.
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
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"Chase Direct Receivable" means a Receivable originated
by Chase directly with an Obligor without the involvement of a Dealer.
"Class A-1 Event" shall have occurred if any Class A-1
Notes are outstanding on the April 1999 Distribution Date (after giving
effect to any payments made on such date).
"Class A-1 Interest Rate" means 5.578% per annum.
"Class A-1 Notes" means the Class A-1 5.578% Asset
Backed Notes, substantially in the form of Exhibit B to the Indenture.
"Class A-2 Interest Rate" means 5.729% per annum.
"Class A-2 Notes" means the Class A-2 5.729% Asset
Backed Notes, substantially in the form of Exhibit C to the Indenture.
"Class A-3 Interest Rate" means 5.750% per annum.
"Class A-3 Notes" means the Class A-3 5.750% Asset
Backed Notes, substantially in the form of Exhibit D to the Indenture.
"Class A-4 Interest Rate" means 5.800% per annum.
"Class A-4 Notes" means the Class A-4 5.800% Asset
Backed Notes, substantially in the form of Exhibit E to the Indenture.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The initial
Clearing Agency shall be The Depository Trust Company.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other person for whom from time to
time a Clearing Agency effects book-entry transfers of securities
deposited with the Clearing Agency (including a Foreign Clearing Agency).
"Closing Date" means April 15, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" has the meaning specified in Section
5.1(a)(i).
"Collection Period" means each calendar month beginning
April 1, 1998 until Chase Manhattan Auto Owner Trust 1998-B shall
terminate pursuant to Article IX of the Trust Agreement.
"Collections" means all collections in respect of Receivables.
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"Contract Rate" of a Receivable means the annual rate
of interest stated in such Receivable.
"Contract Value" of an Actuarial Receivable, as of the
close of business on the last day of any Collection Period means the
amount (excluding any Late Fees with respect to such Actuarial
Receivable) that would have been payable by the Obligor thereof if such
Obligor were to prepay such Actuarial Receivable in full as of such date.
"Control" means (a) with respect to a Security
Entitlement, the Indenture Trustee (i) is identified in the records of
the Securities Intermediary for such Security Entitlement as the person
having such Security Entitlement against such Security Intermediary or
(ii) has obtained the agreement, in writing, of the Securities
Intermediary for such Security Entitlement that it will comply with
orders of the Indenture Trustee regarding the transfer or redemption of
such Security Entitlement without further consent of any other person; or
(b) with respect to a United States Security Entitlement, (i) the
Indenture Trustee is a participant in the book entry system maintained by
the Federal Reserve Bank that is acting as fiscal agent for the issuer of
such United States Security Entitlement and such Federal Reserve Bank has
indicated by book entry that such United States Security Entitlement has
been credited to the Indenture Trustee's securities account in such book
entry system or (ii) (A) the Indenture Trustee (x) is identified in the
records of the Securities Intermediary for such United States Securities
Entitlement as the person having such Securities Entitlement against such
Securities Intermediary or (y) has obtained the agreement, in writing, of
the Securities Intermediary for such Security Entitlement that it will
comply with orders of the Indenture Trustee regarding the transfer or
redemption of such Security Entitlement without further consent of any
other person, (B) the Securities Intermediary for such United States
Securities Entitlement is a participant in the book entry system
maintained by the Federal Reserve Bank that is acting as fiscal agent for
the issuer of such United States Security Entitlement and (C) such
Federal Reserve Bank has indicated by book entry that such United States
Security Entitlement has been credited to such Securities Intermediary's
securities account in such book entry system.
"Corporate Trust Office" means the New York office of
the Indenture Trustee or the Wilmington, Delaware office of the Owner
Trustee, as applicable.
"Cutoff Date" means April 1, 1998.
"Dealer" means the dealer which sold a Financed Vehicle
related to a Dealer Receivable and which originated or assisted in the
origination of such Dealer Receivable under a Dealer Agreement.
"Dealer Agreement" means any agreement and, if
applicable, assignment under which Dealer Receivables were originated by
or through a Dealer and sold to the Seller or an affiliate of the Seller.
"Dealer Receivable" means each Receivable which is not a
Direct Receivable.
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"Default" means any occurrence that is, or with notice
or the lapse of time or both would become, an Event of Default.
"Defaulted Receivable" means a Receivable (other than a
Repurchased Receivable) as to which the Servicer has determined based on
its usual collection practices and procedures, during any Collection
Period, that eventual payment in full of the Amount Financed (including
accrued interest thereon) is unlikely; provided that a Receivable shall
become a Defaulted Receivable during the calendar month in which more
than 10% of the scheduled payment becomes 240 days delinquent, regardless
of whether any such determination has been made.
"Definitive Notes" means Notes issued in certificated,
fully registered form as provided in Section 2.12 of the Indenture.
"Definitive Certificates" means Certificates issued in
certificated, fully registered form as provided in Section 3.12 of the
Trust Agreement.
"Delaware Trustee" has the meaning specified in Section 10.1
of the Trust Agreement.
"Delinquency Percentage" means, for any Distribution
Date, the sum of the outstanding Principal Balances of all Receivables
which were 60 days or more delinquent (including Receivables, which are
not Defaulted Receivables, relating to Financed Vehicles that have been
repossessed), as of the close of business on the last day of the
Collection Period immediately preceding such Distribution Date,
determined in accordance with the Servicer's normal practices, such sum
expressed as a percentage of the Pool Balance as of the close of business
on the last day of such Collection Period.
"Delivery" when used with respect to Reserve Account Property
means:
(a) with respect to any Physical Property (that is not
either a United States Security Entitlement or a Security Entitlement),
physical delivery thereof to the Indenture Trustee or its nominee or
custodian by an effective endorsement, or registered in the name of, the
Indenture Trustee or its nominee or custodian endorsed in blank; and
(b) with respect to any Uncertificated Security (i) if
the issuer of such Uncertificated Security is organized under the laws of
an Old Article 8 Jurisdiction, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the sending
of a confirmation by the financial intermediary of the purchase by the
Indenture Trustee or its nominee, agent or custodian of such
uncertificated security, the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee, agent
or custodian; and (ii) if the issuer of such Uncertificated Security is
organized under the laws of a jurisdiction that has adopted Revised
Article 8, (A) the issuer registers the Indenture Trustee as the
registered owner thereof or (B) the Indenture Trustee otherwise satisfies
the requirements of Revised Article 8.
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"Deposit Date" means the Business Day immediately preceding
each Distribution Date.
"Depositor" means the Seller in its capacity as Depositor
under the Trust Agreement.
"Depository Agreements" means, collectively, the Certificate
Depository Agreement and the Note Depository Agreement.
"Determination Date" means the 10th calendar day of the
month (or, if such 10th calendar day is not a Business Day, the Business
Day preceding the 10th calendar day of the month) immediately succeeding
the related Collection Period.
"Direct Receivable" means either a Chase Direct
Receivable or a Receivable originated by the Seller or an Affiliate of
the Seller directly with an Obligor without the involvement of a Dealer.
"Distribution Date" means, in the case of the first
Collection Period, May 15, 1998, and in the case of every Collection
Period thereafter, the 15th day of the following month, or if the 15th
day is not a Business Day, the next following Business Day; provided,
however, that solely for purposes of determining the Note Final Scheduled
Distribution Date for the Class A-1 Notes, making payments on the Notes
pursuant to Section 5.5, the Indenture and the Notes and making
withdrawals from the Reserve Account, if the Class A-1 Event shall have
occurred, the Distribution Date in the case of the April 1999 Collection
Period means (x) May 10, 1999 with respect to the Class A-1 Notes, and
(y) May 15, 1999 with respect to the Class A-2 Notes, the Class A-3 Notes
and the Class A-4 Notes.
"Eligible Deposit Account" means (a) a segregated
identifiable trust account established in the trust department of a
Qualified Trust Institution, which shall, except in the case of the
Reserve Account, initially be Chase, and may be maintained with Chase so
long as Chase is a Qualified Trust Institution; or (b) a separately
identifiable deposit account established in the deposit taking department
of a Qualified Institution, which, except in the case of the Reserve
Account, may be Chase so long as Chase is a Qualified Institution.
"ERISA" has the meaning specified in Section 11.12 of the
Trust Agreement.
"Executive Officer" means, with respect to any
corporation or bank, the Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, President, Executive Vice President,
any Vice President, the Secretary or the Treasurer of such corporation or
bank, and with respect to any partnership, any general partner thereof.
"Euroclear Operator" means Xxxxxx Guaranty Trust
Company of New York, Brussels, Belgium office, in its capacity as the
operator of the Euroclear system.
"Event of Default" means an event specified in Section 5.1 of
the Indenture.
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"Event of Servicing Termination" means an event specified in
Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expenses" has the meaning specified in Section 8.2 of the
Trust Agreement.
"Farm Credit Entitlement" means a "Security Entitlement" as
defined in 12 C.F.R. Section 615.5450.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FHL Bank Entitlement": means a "Security Entitlement" as
defined in 12 C.F.R. Section 912.1.
"FHLMC" means the Federal Home Loan Mortgage Corporation or
any successor thereto.
"Final Scheduled Maturity Date" means the last day of the
Collection Period immediately preceding the Certificate Final Scheduled
Distribution Date.
"Financed Vehicle" means, with respect to a Receivable,
the new or used automobile or light-duty truck, together with all
accessions thereto, securing an Obligor's indebtedness under such
Receivable.
"Financial Asset" means a "financial asset" within the
meaning of Section 8- 102(a)(9) of Revised Article 8.
"Fitch" means Fitch IBCA, Inc. and its successors and assigns.
"FNMA" means the Federal National Mortgage Association or any
successor thereto.
"Foreign Clearing Agency" means, collectively, Cedel and the
Euroclear Operator.
"Funding Corporation Entitlement" means a "Security
Entitlement" as defined in 12 C.F.R. Section 1511.1.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and xxxxx x
xxxx upon and a security interest in and right of set-off against,
deposit, set over and confirm pursuant to the Indenture. A Grant of the
Trust Estate or of any other agreement or instrument shall include all
rights, powers and options (but none of the obligations) of the Granting
party thereunder, including the immediate and continuing right to claim
for, collect, receive and give receipt for principal and interest
payments and all other moneys payable thereunder, to give and receive
notices and
12
other communications, to make waivers or other agreements, to exercise
all rights and options, to bring Proceedings in the name of the Granting
party or otherwise and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder or with
respect thereto.
"Holder" or "Holders" means, unless the context
otherwise requires, both Certificateholders and Noteholders.
"HUD Entitlement" means a "Security Entitlement" as defined in
24 C.F.R. Section 81.2.
"Indemnified Parties" has the meaning specified in Section 8.2
of the Trust Agreement.
"Indenture" means the Indenture dated as of April 1,
1998, between the Issuer and the Indenture Trustee, as the same may be
amended and supplemented from time to time.
"Indenture Trustee" means, initially, Norwest Bank Minnesota,
National Association, as Indenture Trustee under the Indenture, or any successor
Indenture Trustee under the Indenture.
"Independent" means, when used with respect to any
specified Person, that the person (a) is in fact independent of the
Issuer, any other obligor upon the Notes, the Seller and any Affiliate of
any of the foregoing persons, (b) does not have any direct financial
interest or any material indirect financial interest in the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing
Persons and (c) is not connected with the Issuer, any such other obligor,
the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
"Independent Certificate" means a certificate or
opinion to be delivered to the Indenture Trustee under the circumstances
described in, and otherwise complying with, the applicable requirements
of Section 11.1 of the Indenture, made by an Independent engineer,
appraiser or other expert appointed by the Issuer and approved by the
Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of
"Independent" in this Agreement and that the signer is Independent within
the meaning thereof.
"Insolvency Event" means, for a specified Person, (a)
the filing of a decree or order for relief by a court having jurisdiction
in the premises in respect of such Person or any substantial part of its
property in an involuntary case under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver (including any receiver appointed under the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as
amended), liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its
property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall
13
remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable
Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its
property, or the making of such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its
debts as such debts become due, or the taking of action by such Person in
furtherance of any of the foregoing.
"Interest Rate" means the rate of interest borne by the Notes
of any class.
"Investment Earnings" means, with respect to any
Distribution Date, the investment earnings (net of losses and investment
expenses) on amounts on deposit in the Collection Account.
"Issuer" means Chase Manhattan Auto Owner Trust 1998-B,
a Delaware business trust, until a successor replaces it and, thereafter,
means such successor and, for purposes of any provision contained in the
Indenture and required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written
order or request signed in the name of the Issuer by any of its
authorized officers and delivered to the Indenture Trustee.
"Late Fees" means any late charges, credit related
extension fees, non-credit related extension fees or other administrative
fees or similar charges allowed by applicable law with respect to the
Receivables.
"Lien" means a security interest, lien, charge, pledge
or encumbrance of any kind other than tax liens, mechanics' liens or any
other liens that attach by operation of law.
"Liquidation Proceeds" means, with respect to any
Receivable, (i) insurance proceeds, (ii) the monies collected during a
Collection Period from whatever source on a Defaulted Receivable and
(iii) proceeds of a Financed Vehicle sold after repossession, in each
case net of any liquidation expenses and payments required by law to be
remitted to the Obligor.
"May 1999 Class A-1 Note Distribution" means the amount
distributable from the Collection Account pursuant to Section 5.5(b) to
the Noteholders of the Class A-1 Notes on the May 1999 Distribution Date
with respect to the Class A-1 Notes if the Class A-1 Event has occurred.
"Moody's" means Xxxxx'x Investors Service, a division
of Dun & Bradstreet Corporation, and its successors and assigns.
14
"Net Loss Ratio" means, for any Distribution Date, an
amount, expressed as a percentage, equal to (i) the Aggregate Net Losses
for such Distribution Date divided by (ii) the average of the Pool
Balances on each of the related Settlement Date and the last day of the
related Collection Period.
"Note" means a Class A-1 Note, a Class A-2 Note, a
Class A-3 Note or a Class A-4 Note.
"Note Depository Agreement" means the agreement among
the Issuer, the Indenture Trustee, Chase, as agent for The Depository
Trust Company and The Depository Trust Company, as the initial Clearing
Agency, dated the Closing Date, relating to the Notes, substantially in
the form of Exhibit F to the Indenture, as the same may be amended or
supplemented from time to time or any similar agreement with any
successor Clearing Agency.
"Note Distribution Account" means the account
designated as such, established and maintained pursuant to Section
5.1(a)(ii).
"Note Final Scheduled Distribution Date" means for (a)
the Class A-1 Notes, the May 1999 Distribution Date, (b) the Class A-2
Notes, the June 2000 Distribution Date, (c) the Class A-3 Notes, the
October 2001 Distribution Date, and (d) the Class A-4 Notes, the February
2003 Distribution Date.
"Note Owner" means, with respect to a Book-Entry Note,
the person who is the owner of such Book-Entry Note, as reflected on the
books of the Clearing Agency or Foreign Clearing Agency, or on the books
of a direct or indirect Clearing Agency Participant.
"Note Pool Factor" for each class of Notes as of the
close of business on a Distribution Date means an eight-digit decimal
figure equal to the Outstanding Amount of such class of Notes divided by
the Outstanding Amount as of the Closing Date of such class of Notes. The
Note Pool Factor for each class of Notes will be 1.00000000 as of the
Cutoff Date; thereafter, the Note Pool Factor for each class of Notes
will decline to reflect reductions in the Outstanding Amount of such
class of Notes.
"Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Noteholders' Distributable Amount" means, for any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for all classes of Notes.
"Noteholders' Interest Carryover Shortfall" means, for any
class of Notes, (a) for the initial Distribution Date, zero, and (b) for any
other Distribution Date, the excess of (x) the Noteholders' Interest
Distributable Amount for the preceding Distribution Date for such class of
Notes, over (y) the amount in respect of interest actually deposited in the Note
Distribution Account on such preceding Distribution Date with respect to such
class of Notes,
15
plus interest on the amount of interest due but not paid to the
Noteholders of such class on the preceding Distribution Date, to the
extent permitted by law, at the applicable Interest Rate from such
preceding Distribution Date through the current Distribution Date.
"Noteholders' Interest Distributable Amount" means, for
any Distribution Date for any class of Notes, the sum of (x) the
Noteholders' Monthly Interest Distributable Amount for such class of
Notes for such Distribution Date and (y) the Noteholders' Interest
Carryover Shortfall for such class of Notes for such Distribution Date.
"Noteholders' Monthly Interest Distributable Amount"
means, for any Distribution Date for each class of Notes, one month's
interest (or, in the case of the first Distribution Date, interest
accrued from and including the Closing Date to but excluding such
Distribution Date) at the related Interest Rate on the Outstanding Amount
of the Notes of such class on such Distribution Date (or, in the case of
the first Distribution Date, on the Closing Date). Interest for purposes
of this definition (i) on the Class A-1 Notes shall be computed on the
basis of a 360-day year for the actual number of days elapsed (which will
be 25 days for the May 1999 Distribution Date for the Class A-1 Notes)
and (ii) on the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes shall be computed on the basis of a 360-day year of twelve 30-day
months.
"Noteholders' Monthly Principal Distributable Amount"
means, for any Distribution Date prior to the Distribution Date on which
the Notes have been paid in full, 100% of the Principal Distribution
Amount; and for the Distribution Date on which the Notes are paid in
full, the portion of the Principal Distribution Amount required to pay
the Notes in full.
"Noteholders' Principal Carryover Shortfall" means for
any Distribution Date, the excess of (x) the Noteholders' Principal
Distributable Amount for the preceding Distribution Date over (y) the
amount in respect of principal actually deposited in the Note
Distribution Account on such Distribution Date.
"Noteholders' Principal Distributable Amount" means,
for any Distribution Date, the sum of (i) the Noteholders' Monthly
Principal Distributable Amount for such Distribution Date and (ii) the
Noteholders' Principal Carryover Shortfall for such Distribution Date;
provided that the Noteholders' Principal Distributable Amount shall not
exceed the Outstanding Amount of the Notes. In addition, on the Note
Final Scheduled Distribution Date of each class of Notes, the principal
required to be deposited in the Note Distribution Account will include
the amount necessary (after giving effect to the other amounts to be
deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of such class of
Notes to zero.
"Note Register" and "Note Registrar" means the register
maintained and the registrar appointed pursuant to Section 2.4 of the
Indenture.
"Obligor" on a Receivable means the purchaser or the
co-purchasers of the Financed Vehicle purchased in part or in whole by the
execution and delivery of such
16
Receivable or any other Person who owes or may be liable for payments
under such Receivable.
"Officer's Certificate" means a certificate signed by
the chairman of the board, the president, the treasurer, the controller,
any executive or senior vice president or any vice president of the
Seller or Servicer, as appropriate, meeting the requirements of Section
11.1 of the Indenture.
"Old Article 8 Jurisdiction" means any jurisdiction
that has not adopted Revised Article 8.
"Opinion of Counsel" means a written opinion of counsel
(who may be counsel to the Seller or the Servicer) reasonably acceptable
in form and substance to the Indenture Trustee, meeting the requirements
of Section 11.1 of the Indenture (or in the case of an Opinion of Counsel
delivered to the Owner Trustee, reasonably acceptable in form and
substance to the Owner Trustee).
"Optional Purchase Percentage" shall be 10%.
"Original Pool Balance" shall be $1,086,404,142.65.
"Outstanding" means, when used with respect to Notes,
as of any date of determination, all Notes theretofore authenticated and
delivered under the Indenture except:
(a) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(b) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited
with the Indenture Trustee or any Paying Agent in trust for the
Holders of such Notes (provided that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant
to the Indenture or provision therefor, satisfactory to the
Indenture Trustee, has been made); and
(c) Notes in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under
any Basic Document, Notes owned by the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons shall
be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that an Authorized Officer of the Indenture Trustee
either actually knows to be so owned or has received written notice that
such Note is so owned shall be so disregarded. Notes so owned that have
been pledged in good faith may be
17
regarded as Outstanding if the pledgee establishes to the satisfaction of
the Indenture Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means, when used with respect to
Notes, as of any date of determination, the aggregate principal amount of
all Notes, or a class of Notes, as applicable, Outstanding as of such
date.
"Owner Trust Estate" means all right, title and
interest of the Issuer in and to the property and rights assigned to the
Issuer pursuant to Article II of this Agreement, all funds on deposit
from time to time in the Trust Accounts (other than the Note Distribution
Account) and the Certificate Distribution Account and all other property
of Issuer from time to time, including any rights of the Owner Trustee
and the Issuer pursuant to this Agreement.
"Owner Trustee" means Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity but solely
as owner trustee under the Trust Agreement, and any successor Owner
Trustee thereunder.
"Paying Agent" means: (a) when used in the Indenture or
otherwise with respect to the Notes, the Indenture Trustee or any other
Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 of the Indenture and is authorized by the
Indenture Trustee to make the payments to and distributions from the
Collection Account and the Note Distribution Account, including payment
of principal of or interest on the Notes on behalf of the Issuer; and (b)
when used in the Trust Agreement or otherwise with respect to the
Certificates, the Owner Trustee or any other paying agent or co-paying
agent appointed pursuant to Section 3.9 of the Trust Agreement, and in
the case of the Indenture with respect to the Notes, and the Trust
Agreement with respect to the Certificates, such Paying Agent shall
initially be the corporate trust office of Chase.
"Permitted Investments" means, at any time, any one or
more of the following obligations, securities (certificated or
uncertificated) or instruments (excluding any security with the "r"
symbol attached to its rating):
(i) obligations of the United States of America or any
agency thereof; provided such obligations are backed by the full
faith and credit of the United States of America;
(ii) general obligations of or obligations guaranteed
as to the timely payment of interest and principal by any state
of the United States of America or the District of Columbia then
rated "A-1+" or "AAA" by Standard & Poor's, "F1+" or "AAA" by
Fitch (if rated by Fitch) and "P-1+" or Aaa by Moody's;
(iii) commercial paper which is then rated P-1 by
Moody's, "F1+" by Fitch (if rated by Fitch) and "A-1+" by
Standard & Poor's;
18
(iv) certificates of deposit, demand or time deposits,
federal funds or banker's acceptances issued by any depository
institution or trust company (including the Indenture Trustee
acting in its commercial banking capacity) incorporated under
the laws of the United States or of any state thereof or
incorporated under the laws of a foreign jurisdiction with a
branch or agency located in the United States of America and
subject to supervision and examination by federal or state
banking authorities which short term unsecured deposit
obligations of such depository institution or trust company are
then rated P-1 by Moody's, "F1+" by Fitch (if rated by Fitch)
and "A- 1+" by Standard & Poor's;
(v) demand or time deposits of, or certificates of
deposit issued by, any bank, trust company, savings bank or
other savings institution; provided such deposits or
certificates of deposit are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation the short term
unsecured debt or deposits of which are rated P-1 by Moody's,
"AAA" by Fitch (if rated by Fitch) and "A-1+" by Standard &
Poor's or the long-term unsecured debt of which are rated Aaa by
Moody's, "AAA" by Fitch (if rated by Fitch) and "AAA" by
Standard & Poor's;
(vii) repurchase obligations with respect to any
security described in clauses (i) or (ii) herein or any other
security issued or guaranteed by the FHLMC, FNMA or any other
agency or instrumentality of the United States of America which
is backed by the full faith and credit of the United States of
America, in either case entered into with a federal agency or a
depository institution or trust company (acting as principal)
described in (iv) above;
(viii) investments in money market funds, which funds
(A) are not subject to any sales, load or other similar charge;
and (B) are rated at least "AAAM" or "AAAM-G" by Standard &
Poor's, "AAAV-1+" by Fitch (if rated by Fitch) and Aaa by
Moody's;
(ix) such other investments where either (A) the
short-term unsecured debt or deposits of the obligor on such
investments are rated "A-1+" by Standard & Poor's, "F1" by Fitch
(if rated by Fitch) and P-1 by Moody's; and
(x) any other obligation or security satisfying the
Rating Agency Condition.
Permitted Investments may include money market mutual funds (so long as
such fund has the ratings specified in clause (viii) hereof), including,
without limitation, the VISTA U.S. Government Money Market Fund or any
other fund for which Chase, the Indenture Trustee or an Affiliate thereof
serves as an investment advisor, administrator, shareholder servicing
agent, and/or custodian or subcustodian, notwithstanding that (i) Chase,
Norwest Bank Minnesota, National Association, Wilmington Trust Company or
an Affiliate thereof charges and collects fees and expenses from such
funds for services rendered, (ii) Chase, Norwest Bank Minnesota, National
Association, Wilmington Trust Company or an Affiliate thereof
19
charges and collects fees and expenses for services rendered pursuant to
this Agreement, and (iii) services performed for such funds and pursuant
to this Agreement may converge at any time. The Indenture Trustee
specifically authorizes Chase, Norwest Bank Minnesota, National
Association, Wilmington Trust Company or an Affiliate thereof to charge
and collect all fees and expenses from such funds for services rendered
to such funds (but not to exceed investment earnings), in addition to any
fees and expenses Chase, Norwest Bank Minnesota, National Association or
Wilmington Trust Company as applicable, may charge and collect for
services rendered pursuant to this Agreement.
"Person" means a legal person, including any
individual, corporation, limited liability company, estate, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Physical Property" means banker's acceptances,
commercial paper, negotiable certificates of deposits and other
obligations that constitute "instruments" within the meaning of Section
9-105(l)(i) of the Relevant UCC and are susceptible to physical delivery
and Certificated Securities.
"Pool Balance" as of any date of determination means,
the aggregate Principal Balance of the Receivables as of the close of
business on the last day of the preceding Collection Period, after giving
effect to all payments received from Obligors and Repurchase Amounts to
be remitted by the Servicer or the Seller, as the case may be, for such
Collection Period and all losses realized on Receivables liquidated
during such Collection Period.
"Predecessor Note" means, with respect to any
particular Note, every previous Note evidencing all or a portion of the
same debt as that evidenced by such particular Note; and, for the purpose
of this definition, any Note authenticated and delivered under Section
2.5 of the Indenture in lieu of a mutilated, lost, destroyed or stolen
Note shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note.
"Principal Balance" of a Receivable, as of the close of
business on the last day of any Collection Period, means (i) with respect
to a Simple Interest Receivable, the Amount Financed minus that portion
of all payments received on or prior to such date allocable to principal
and (ii) with respect to an Actuarial Receivable, the Adjusted Contract
Value thereof as of the close of business on such date. The Principal
Balance of a Defaulted Receivable or a Repurchased Receivable shall be
deemed to be zero, in each case, as of such date.
"Principal Distribution Amount" means, for any Distribution
Date, the sum of the following amounts, without duplication: (i) Available
Principal and (ii) Aggregate Net Losses.
"Principal Prepayment" means a payment or other
recovery of principal on a Receivable (including insurance proceeds and
Liquidation Proceeds applied to principal on a Receivable) which is
received in advance of its due date.
20
"Proceeding" means any suit in equity, action or law or other
judicial or administrative proceeding.
"Qualified Institution" means a depository institution
organized under the laws of the United States of America or any State
thereof or incorporated under the laws of a foreign jurisdiction with a
branch or agency located in the United States of America or any State
thereof and subject to supervision and examination by federal or state
banking authorities which at all times has the Required Deposit Rating
and, in the case of any such institution organized under the laws of the
United States of America, whose deposits are insured by the FDIC.
"Qualified Trust Institution" means an institution
organized under the laws of the United States of America or any State
thereof or incorporated under the laws of a foreign jurisdiction with a
branch or agency located in the United States of America or any State
thereof and subject to supervision and examination by federal or state
banking authorities which at all times (i) is authorized under such laws
to act as a trustee or in any other fiduciary capacity, (ii) has not less
than one billion dollars in assets under fiduciary management, and (iii)
has a long term deposits rating of not less than "BBB-" by Standard &
Poor's, Baa3 by Moody's and "BBB-" by Fitch (if rated by Fitch).
"Rating Agency" means any of Standard & Poor's, Moody's or
Xxxxx.
"Rating Agency Condition" means, with respect to any
action or event, that each Rating Agency shall have notified the Seller,
the Servicer, the Indenture Trustee and the Owner Trustee, in writing,
that such action or event will not result in reduction or withdrawal of
any then outstanding rating of any outstanding Note or Certificate with
respect to which it is the Rating Agency.
"Receivable" means a retail installment sale contract
or purchase money promissory note or other promissory note and security
agreement executed by an Obligor in respect of a Financed Vehicle, and
all proceeds thereof and payments thereunder (other than interest accrued
and unpaid as of the close of business on the Cutoff Date), which
Receivable shall be identified on Schedule A to this Agreement.
"Receivable Files" means the documents specified in Section
3.3.
"Receivables Pool" means the pool of Receivables
included in the Trust Estate and all monies received thereunder on or
after the Cutoff Date.
"Record Date" means, with respect to any Distribution
Date, the Business Day prior to such Distribution Date unless Definitive
Notes or Definitive Certificates are issued, in which case, Record Date,
with respect to such Definitive Notes or Definitive Certificates, as
applicable, shall mean the last day of the immediately preceding calendar
month.
21
"Redemption Date" means in the case of a redemption of
the Notes pursuant to Section 10.1 of the Indenture, the Distribution
Date specified by the Servicer pursuant to such Section 10.1.
"Redemption Price" means in the case of a redemption of
the Class A-4 Notes pursuant to Section 10.1 of the Indenture, an amount
equal to the Outstanding Amount of the Class A-4 Notes plus accrued and
unpaid interest thereon to but excluding the Redemption Date.
"Relevant UCC" means the Uniform Commercial Code as in effect
in the applicable jurisdiction.
"Repurchase Amount" of a Repurchased Receivable or any
Receivable purchased by the Servicer pursuant to Section 9.1, means the
sum, as of the last day of the Collection Period on which such Receivable
becomes such, of the Principal Balance thereof plus the Accrued Interest
thereon.
"Repurchased Receivable" means a Receivable repurchased
by the Seller pursuant to Section 3.2 or purchased by the Servicer
pursuant to Section 4.6.
"Required Deposit Rating" shall be a short-term
certificate of deposit rating from Moody's of P-1, from Fitch of "F1+"
(if rated by Fitch) and from Standard & Poor's of "A-1+," and a long-term
unsecured debt rating of not less than Aa3 by Moody's, "AA" by Fitch (if
rated by Fitch) and "AA-" by Standard & Poor's.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 5.6.
"Reserve Account Initial Deposit" means an amount equal to
$16,296,062.14.
"Reserve Account Property" means all amounts and
investments held from time to time in the Reserve Account (whether in the
form of deposit accounts, Physical Property, Securities Entitlements,
Uncertificated Securities or otherwise).
"Reserve Account Transfer Amount" means, for any
Distribution Date, an amount equal to the lesser of (a) the amount of
cash or other immediately available funds on deposit in the Reserve
Account on such Distribution Date (before giving effect to any
withdrawals therefrom relating to such Distribution Date) and (b) the
amount, if any, by which the sum of the amounts set forth in clauses (i)
through (vi) of Section 5.5(c), inclusive, exceeds the Total Distribution
Amount for such Distribution Date.
"Responsible Officer" means, with respect to the
Indenture Trustee, any officer within the Corporate Trust Office of the
Indenture Trustee, including any Vice President, Assistant Vice
President, Assistant Treasurer, Assistant Secretary, or any other officer
of the Indenture Trustee customarily performing functions similar to
those performed by any of the above designated officers and also, with
respect to a particular matter, any other officer to
22
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Revised Article 8" means Revised Article 8 (1994 Version)
(and corresponding amendments to Article 9) as promulgated by the National
Conference of Commissioners on Uniform State Laws.
"Sale Proceeds" has the meaning specified in Section 9.1(b).
"Xxxxxx Xxx Entitlement" means a "Security Entitlement" as
defined in 31 C.F.R. Section 354.1.
"Scheduled Interest Payment" on any Actuarial
Receivable means, for any Collection Period, the sum (i) the Carryover
Scheduled Interest Payment, if any, on such Actuarial Receivable for the
immediately preceding Collection Period and (ii) that portion of the
payment scheduled to be made by the Obligor during the Collection Period
immediately following such Collection Period on such Actuarial Receivable
that is allocable to interest using the Actuarial Method.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" means a "securities
intermediary" within the meaning of Section 8-102(a)(14) of Revised
Article 8.
"Security Entitlement" means a "security entitlement"
within the meaning of Section 8-102(a)(17) of Revised Article 8.
"Seller" means Chase Manhattan Bank USA, National
Association, a national banking association with its principal executive
offices in Wilmington, Delaware, in its capacity as the seller of the
Receivables under this Agreement, and each successor to Chase Manhattan
Bank USA, National Association (in the same capacity) pursuant to Section
6.3.
"Servicer" means Chase Manhattan Bank USA, National
Association, a national banking association with its principal offices in
Wilmington, Delaware, in its capacity as the servicer of the Receivables
under this Agreement, and each successor to Chase Manhattan Bank USA,
National Association (in the same capacity) pursuant to Section 7.3, and
each successor servicer pursuant to Section 8.2.
"Servicer's Certificate" means a certificate,
substantially in the form of Exhibit A attached hereto, completed and
executed by the Servicer by its chairman of the board, the president,
treasurer, controller or any executive, senior vice president or vice
president pursuant to Section 4.8.
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"Servicing Fee" with regard to a Collection Period
means the fee payable to the Servicer for services rendered during such
Collection Period, determined pursuant to Section 4.7.
"Servicing Fee Rate" means 1.00% per annum.
"Settlement Date" means, with respect to any Collection
Period, the last day of the Collection Period immediately preceding such
Collection Period, and with respect to any Distribution Date, the last
day of the second Collection Period preceding the Collection Period in
which such Distribution Date occurs.
"Simple Interest Method" means the method of allocating
a fixed level payment to principal and interest, pursuant to which the
portion of such payment that is allocated to interest is equal to the
product of the fixed rate of interest multiplied by the unpaid Principal
Balance multiplied by the period of time elapsed since the preceding
payment of interest was made, and the remainder of such payment is
allocable to principal.
"Simple Interest Receivable" means any Receivable
providing for the allocation of payments made thereunder to principal and
interest in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" with respect to any
Distribution Date, means 3.00% of the Pool Balance as of the related
Settlement Date, but in any event will not be less than the lesser of (i)
$8,148,031.07 and (ii) such Pool Balance; provided that the Specified
Reserve Account Balance will be calculated using a percentage of 6.00%
for any Distribution Date (beginning with the July 1998 Distribution
Date) for which the Average Net Loss Ratio exceeds 1.75% or the Average
Delinquency Percentage exceeds 1.75%. Upon written notification to the
Indenture Trustee by the Seller, the Specified Reserve Account Balance
may be reduced to a lesser amount as determined by the Seller so long as
such reduction satisfies the Rating Agency Condition.
"Standard & Poor's" means Standard & Poor's Ratings
Services and its successors and assigns.
"Total Distribution Amount" means, for any Distribution
Date, the sum of Available Interest and Available Principal for such
Distribution Date. The Total Distribution Amount on any Distribution Date
shall exclude all payments and proceeds (including any Liquidation
Proceeds and any amounts received from Dealers with respect to
Receivables) of (i) any Receivables the Repurchase Amount of which has
been included in the Total Distribution Amount for a prior Distribution
Date and (ii) Investment Earnings and any Late Fees.
"Treasury Entitlement" means a "Security Entitlement" as
defined in 31 C.F.R. Section 357.2.
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"Treasury Regulations" means, the treasury regulations
promulgated under Code.
"Trust Accounts" means, collectively, the Collection Account,
the Note Distribution Account and the Reserve Account.
"Trust Agreement" means the Trust Agreement dated as of
April 1, 1998, between the Seller and the Owner Trustee, as the same may
be amended and supplemented from time to time.
"Trust Estate" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders
(including all property and interests Granted to the Indenture Trustee),
including all proceeds thereof and the Reserve Account.
"Trust Indenture Act" or "TIA" means the Trust
Indenture Act of 1939 as in force on the date hereof, unless otherwise
specifically provided.
"Uncertificated Security" means an "uncertificated security"
within the meaning of the relevant UCC.
"United States Securities Entitlement" means a Treasury
Entitlement, a HUD Entitlement, a FHL Bank Entitlement, a Funding Corporation
Entitlement, a Farm Credit Entitlement or a Xxxxxx Xxx Entitlement.
SECTION 1.2 Usage of Terms. With respect to all terms
in this Agreement, the singular includes the plural and the plural the
singular; words importing any gender include the other gender; references
to "writing" include printing, typing, lithography, and other means of
reproducing words in a visible form; references to agreements and other
contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms
and not prohibited by this Agreement; references to Persons include their
permitted successors and assigns; and the term "including" means
"including without limitation." All references herein to Articles,
Sections, Subsections and Exhibits are references to Articles, Sections,
Subsections and Exhibits contained in or attached to this Agreement
unless otherwise specified, and each such Exhibit is part of the terms of
this Agreement.
SECTION 1.3 Simple Interest and Actuarial Method;
Methods of Allocating Payments or Receivables; Allocations. All
allocations of payments to principal and interest and determinations of
periodic charges and the like on the Simple Interest Receivables shall be
based on a year with the actual number of days in such year and twelve
months with the actual number of days in each such month. All allocations
of payments to principal and interest on the Actuarial Receivables shall
be based on the Actuarial Method set forth in the related Receivable.
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Each payment on a Receivable shall be applied first, to the
payment of accrued and unpaid interest on such Receivable, second, to
reduce the scheduled principal amount outstanding on the Receivable to
the extent of the remaining scheduled payment, third, to any outstanding
fees and Late Fees under the terms of the Receivable and fourth, to
reduce the principal amount outstanding on the Receivable. Amounts paid
by the Seller or the Servicer in respect of Repurchased Receivables shall
be allocated as if the Obligor thereof had prepaid such Receivable in
full on the date as of which such Receivable was repurchased by the
Seller pursuant to Section 3.2 or purchased by the Servicer pursuant to
Section 4.6 or 9.1.
SECTION 1.4 Calculations Relating to the May 1999
Distribution Date. If the Class A-1 Event has occurred, the calculations
hereunder for the May 1999 Distribution Dates with respect to the Total
Distribution Amount, the Noteholders' Distributable Amount, the
Certificateholders' Distributable Amount, the Specified Reserve Account
Balance and the Reserve Account Transfer Amount, and the respective
components thereof, shall be calculated as if there were a single May
1999 Distribution Date. Amounts hereunder will be distributed on the
respective May 1999 Distribution Dates in accordance with Section 5.5(d).
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1 Conveyance of Receivables. In consideration
of the Issuer's delivery of the Notes and the Certificates to and upon
the order of the Seller, the Seller does hereby sell, transfer, assign,
and otherwise convey to the Issuer, without recourse (subject to the
Seller's obligations herein):
(i) all right, title, and interest of the Seller in, to
and under the Receivables listed in Schedule A hereto, which is
incorporated by reference herein, all proceeds thereof and all
amounts and monies received thereon on or after the Cutoff Date
(including proceeds of the repurchase of Receivables by the
Seller pursuant to Section 3.2 or the purchase of Receivables by
the Servicer pursuant to Section 4.6 or 9.1), together with the
interest of the Seller in the security interests in the Financed
Vehicles granted by the Obligors pursuant to the Receivables and
in any repossessed Financed Vehicles;
(ii) all right, title and interest of the Seller in any
Liquidation Proceeds and in any proceeds of any extended
warranties, theft and physical damage, credit life or credit
disability policies relating to the Financed Vehicles or the
Obligors;
(iii) all right, title and interest of the Seller in
any proceeds from Dealer repurchase obligations relating to the
Receivables; and
(iv) all proceeds (as defined in the Relevant UCC) of
the foregoing.
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In connection with such sale, the Seller agrees to
record and file, at its own expense, financing statements (and
continuation statements with respect to such financing statements when
applicable) with respect to the Receivables for the sale of accounts and
chattel paper meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the sale and
assignment of the Receivables to the Issuer.
It is the intention of the Seller and the Issuer that
(a) the assignment and transfer herein contemplated constitute a sale of
the Receivables, conveying good title thereto free and clear of any liens
and encumbrances, from the Seller to the Issuer and (b) the Receivables
not be part of the Seller's estate in the event of an insolvency. In the
event that such conveyance is deemed to be a pledge to secure a loan, the
Seller hereby grants to the Issuer a first priority perfected security
interest in all of the Seller's right, title and interest in, to and
under the items of property listed in clauses (i) through (iii) above,
and in all proceeds (as defined in the Relevant UCC) of the foregoing, to
secure the loan deemed to be made in connection with such pledge and, in
such event, this Agreement shall constitute a security agreement under
applicable law.
SECTION 2.2 Closing. The conveyance of the Receivables
shall take place at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, New York,
New York on the Closing Date, simultaneously with the closing of the
transactions contemplated by the underwriting agreements related to the
Notes and the Certificates and the other Basic Documents. Upon the
acceptance by the Seller of the Notes and the Certificates, the ownership
of each Receivable and the contents of the related Receivable File will
be vested in the Issuer, subject only to the lien of the Indenture.
ARTICLE III
THE RECEIVABLES
SECTION 3.1 Representations and Warranties of Seller;
Conditions Relating to Receivables.
(a) The Seller makes the following representations and
warranties as to the Receivables on which the Issuer shall rely in
acquiring the Receivables. Such representations and warranties shall
speak as of the Cutoff Date unless otherwise specified, but shall survive
the sale, transfer, and assignment of the Receivables to the Issuer and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(i) Schedule of Receivables. The information set forth
in Schedule A hereto with respect to each Receivable is true and
correct in all material respects, and no selection procedures
materially adverse to the Holders has been utilized in selecting
the Receivables from all receivables owned by the Seller which
meet the selection criteria specified herein.
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(ii) No Sale or Transfer. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person
other than the Issuer.
(iii) Good Title. Immediately prior to the transfer and
assignment of the Receivables to the Issuer herein contemplated,
the Seller has good and marketable title to each Receivable free
and clear of all Liens and rights of others; and, immediately
upon the transfer thereof, the Issuer has either (i) good and
marketable title to each Receivable, free and clear of all Liens
and rights of others, other than the Lien of the Indenture
Trustee under the Indenture, and the transfer has been perfected
under applicable law or (ii) a first priority perfected security
interest in each Receivable and the proceeds thereof.
(b) Each Receivable satisfies the following conditions
as of the Cutoff Date unless otherwise specified and such conditions
shall survive the sale, transfer and assignment of the Receivables to the
Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(i) Acquisition. Each Receivable is either a
Dealer Receivable acquired directly or indirectly from or made
through a Dealer located in the United States (including the
District of Columbia) or is a Direct Receivable;
(ii) Security. Each Receivable is secured by
a new or used automobile or light-duty truck;
(iii) Maturity of Receivables. Each Receivable
had a remaining maturity of not less than six months nor greater
than seventy-two months, and (A) in the case of each Receivable
secured by new Financed Vehicles, had an original maturity of at
least twelve months and not more than seventy-eight months, or
(B) in the case of each Receivable secured by used Financed
Vehicles, had an original maturity of at least twelve months and
not more than seventy-two months.
(iv) Contract Rate. Each Receivable is a
fully-amortizing fixed rate simple interest or actuarial
contract that provides for level scheduled monthly payments over
its remaining term, and has a Contract Rate of at least 6.00%
and not more than 20.00%;
(v) No Repossessions. Each Receivable is
secured by a Financed Vehicle that had not been repossessed
without reinstatement of such Receivable;
(vi) Obligor Not Subject to Bankruptcy
Proceedings. Each Receivable has been entered into by an Obligor
who had not been identified on the computer files of the Seller
as in bankruptcy proceedings as of the Cutoff Date;
(vii) No Overdue Payments. Each Receivable had
no payment that was more than 30 days past due;
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(viii) Remaining Principal Balance. Each Receivable
had a remaining Principal Balance of at least $2,000 and not greater
than $100,000;
(ix) No Force Placed Insurance. As of the
Cutoff Date, each Receivable was secured by a Financed Vehicle
that was not insured by a force placed insurance policy or any
vendor's single interest and non-filing insurance policy;
(x) Receivable Files. The Receivable Files
shall be kept at one or more of the locations specified in
Schedule B hereto;
(xi) Characteristics of Receivables. Each
Receivable (a) (i) in the case of a Dealer Receivable, has been
originated in the form of a credit sales transaction by a Dealer
or a purchase money loan or other notes through a Dealer located
in one of the States of the United States (including the
District of Columbia) for the retail financing of a Financed
Vehicle or (ii) in the case of a Direct Receivable, has been
originated by Chase or an Affiliate thereof in the form of a
secured loan for the retail financing of a Financed Vehicle,
and, in each case, has been fully and properly executed by the
parties thereto, (b) (i) in the case of a Dealer Receivable, if
a retail installment sales contract, has been purchased by the
Seller from the originating Dealer or an Affiliate of the
Seller, has been validly assigned by such Dealer or an Affiliate
of the Seller to the Seller in accordance with its terms or (ii)
in the case of a Chase Direct Receivable, has been purchased by
the Seller from Chase, and has been validly assigned by Chase to
the Seller; (c) contains customary and enforceable provisions
such that the rights and remedies of the holder thereof are
adequate for realization against the collateral of the benefits
of the security; and (d) provides for fully amortizing level
scheduled monthly payments (provided that, in the case of Simple
Interest Receivables, the payment in the last month in the life
of the Receivable may be different from the level scheduled
payment) and for accrual of interest at a fixed rate according
to the Simple Interest Method or the Actuarial Method, as
applicable;
(xii) Compliance with Laws. Each Receivable
and each sale of the related Financed Vehicle complied at the
time it was originated or made, and complied on and after the
Cutoff Date, in all material respects with all requirements of
applicable federal, state, and local laws, and regulations
thereunder, including usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Reporting
Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx
Warranty Act, Federal Reserve Board Regulations B and Z, state
adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code, and any other consumer credit, equal
opportunity, and disclosure laws applicable to such Receivable
and sale thereof;
(xiii) Binding Obligation. Each Receivable
constitutes the legal, valid, and binding payment obligation in
writing of the Obligor, enforceable by the holder thereof in all
material respects in accordance with its terms, subject, as to
enforcement,
29
to applicable bankruptcy, insolvency, reorganization,
liquidation and other similar laws and equitable principles
relating to or affecting the enforcement of creditors' rights;
(xiv) No Government Obligor. Each Receivable
is not due from the United States of America or any State or
from any agency, department, instrumentality or political
subdivision of the United States of America or any State or
local municipality, and each Receivable is not due from a
business except to the extent that such Receivable has a
personal guaranty;
(xv) Security Interest in Financed Vehicle.
Immediately prior to the sale and assignment thereof to the
Issuer as herein contemplated, each Receivable was secured by a
validly perfected first priority security interest in the
related Financed Vehicle in favor of or for the benefit of the
Seller as secured party (subject to administrative delays and
clerical errors on the part of the applicable governmental
agency and to any statutory or other lien arising by operation
of law after the Closing Date which is prior to such security
interest), the Seller's security interest (or beneficial
interest therein) is assignable, and has been so assigned by the
Seller to the Issuer (subject to administrative delays and
clerical errors on the part of the applicable governmental
agency and to any statutory or other lien arising by operation
of law after the Closing Date which is prior to such security
interest);
(xvi) Receivables in Force. No Receivable has
been satisfied, subordinated, or rescinded, nor has any Financed
Vehicle been released from the Lien granted by the related
Receivable, in whole or in part;
(xvii) No Waiver. No provision of a Receivable
has been waived in such a manner that such Receivable fails
either to meet all of the representations and warranties made by
the Seller herein with respect thereto or to meet all of the
conditions with respect thereto pursuant to this Section 3.1(b);
(xviii) No Amendments. No Receivable has been
amended except pursuant to either instruments included in the
Receivable Files or instruments to be included in the Receivable
Files pursuant to Section 4.2 (or otherwise maintained by the
Seller in the ordinary course of its business), and no such
amendment has caused such Receivable either to fail to meet all
of the representations and warranties made by the Seller herein
with respect thereto or to fail to meet all of the conditions
with respect thereto pursuant to this Section 3.1(b);
(xix) No Defenses. The Seller had no knowledge
either of any facts which would give rise to any right of
rescission, setoff, counterclaim, or defense, or of the same
being asserted or threatened, with respect to any Receivable;
(xx) No Liens. The Seller had no knowledge of
any Liens or claims that have been filed, including liens for
work, labor, materials or unpaid taxes relating to a Financed
Vehicle, that would be liens prior to, or equal or coordinate
with, the lien granted by the Receivable;
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(xxi) No Default. Except for payment defaults
continuing for a period of not more than 30 days as of the close
of business on the Cutoff Date, the Seller has no knowledge that
a default, breach, violation, or event permitting acceleration
under the terms of any Receivable exists; the Seller has no
knowledge that a continuing condition that with notice or lapse
of time would constitute a default, breach, violation, or event
permitting acceleration under the terms of any Receivable
exists; and the Seller has not waived any of the foregoing;
(xxii) Insurance. Each Receivable requires that
the Obligor thereunder maintain comprehensive, liability, theft
and physical damage insurance covering the related Financed
Vehicle;
(xxiii) Lawful Assignment. No Receivable has
been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment of
such Receivable under this Agreement or pursuant to transfers of
the Certificates or the Notes is unlawful, void or voidable;
(xxiv) All Filings Made. No filings (other than
filings under the Relevant UCC which have been made) or other
actions are necessary in any jurisdiction to give the Issuer a
first perfected security interest in the Receivables;
(xxv) One Original. There is no more than one
original executed copy of each Receivable which, immediately
prior to the delivery thereof to the Servicer (as custodian for
the Issuer), was in the possession of the Seller;
(xxvi) Excluded Loans. Each Receivable (A) is
not a Receivable whose related Obligor resides in the State of
Alabama (in the case of a Direct Receivable) or a Receivable
originated by or through a Dealer located in the State of
Alabama (in the case of a Dealer Receivable), and (B) has not
been the subject of a previous securitization; and
(xxvii) Account Number. Each Dealer Receivable
has been assigned an account number that corresponds to the
number assigned to the Dealer from or through whom such
Receivable was acquired, and each Direct Receivable has been
assigned an account number that corresponds to the number
assigned to the applicable originating branch (or the
"loan-by-phone" line).
SECTION 3.2 Repurchase Upon Breach or Failure of a
Condition. The Seller, the Servicer, the Indenture Trustee or the Owner
Trustee, as the case may be, shall inform the other parties in writing,
upon the discovery by the Seller, the Servicer or an Authorized Officer
of the Indenture Trustee or the Owner Trustee, as the case may be, of
either any breach of the Seller's representations and warranties set
forth in Section 3.1(a) or the failure of any Receivable to satisfy any
of the conditions set forth in Section 3.1(b) which materially and
adversely affects the Holders' interest in any Receivable. Unless the
breach or failed condition shall have been cured by the last day of the
Collection Period following the Collection Period in which such discovery
occurred (or, at the Seller's option, the last day of
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the Collection Period in which such discovery occurred), the Seller shall
repurchase any Receivable the Holders' interest in which was materially
and adversely affected by the breach or failed condition, as of such last
day. Notwithstanding anything herein to the contrary, with respect to the
breach of a representation and warranty in Section 3.1(b)(xxvii), the
Seller shall repurchase such Receivable regardless of its effect on the
interest of the Holders in such Receivable or whether notice thereof has
been delivered by any of the parties thereto, and the repurchase of any
such Receivable shall take place at any time as is administratively
convenient for the Seller and the Servicer. In consideration of the
repurchase of a Receivable, the Seller shall remit the Repurchase Amount
of such Receivable as of such last day (less any Liquidation Proceeds
deposited, or to be deposited, by the Servicer in the Collection Account
with respect to such Receivable pursuant to Section 4.3) in the manner
specified in Section 5.4. The sole remedy of the Issuer, the Indenture
Trustee or the Holders with respect either to a breach of the Seller's
representations and warranties set forth in Section 3.1(a) or to a
failure of any of the conditions set forth in Section 3.1(b) shall be to
require the Seller to repurchase Receivables pursuant to this Section
3.2. The obligation of the Seller to repurchase under this Section 3.2
shall not be dependent upon the actual knowledge of the Seller of any
breached representation or warranty. The Owner Trustee shall have no duty
to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this
Section 3.2 or the eligibility of any Receivable for purposes of this
Agreement.
SECTION 3.3 Custody of Receivable Files. To assure
uniform quality in servicing the Receivables and to reduce administrative
costs, the Issuer, upon the execution and delivery of this Agreement,
agrees to have the Servicer act as custodian of the following documents
or instruments (the "Receivable Files") which are hereby constructively
delivered to the Issuer with respect to each Receivable:
(i) The original executed Receivable; and
(ii) Any and all other documents or records that the
Seller or the Servicer, as the case may be, shall keep on file,
in accordance with its customary procedures, relating to a
Receivable, an Obligor or a Financed Vehicle.
The Servicer hereby agrees to act as custodian and as
agent for the Issuer hereunder. The Servicer acknowledges that it holds
the documents and instruments relating to the Receivables for the benefit
of the Issuer. The Issuer shall have no responsibility to monitor the
Servicer's performance as custodian and shall have no liability in
connection with the Servicer's performance of such duties hereunder.
SECTION 3.4 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as
custodian, shall hold the Receivable Files on behalf of the Issuer, and
maintain such accurate and complete accounts, records (either original
execution documents or copies of such originally executed documents shall
be sufficient) and computer systems pertaining to the Receivables as
shall enable the Issuer to comply with its obligations pursuant to this
Agreement. In performing its duties as
32
custodian, the Servicer shall act with reasonable care, using that degree
of skill and attention that the Servicer exercises with respect to the
receivable files of comparable new or used automobile receivables that
the Servicer services for itself. The Servicer shall conduct, or cause to
be conducted, periodic audits of the files of all receivables owned or
serviced by the Servicer which shall include the Receivable Files held by
it under this Agreement and the related accounts, records and computer
systems, in such a manner as shall enable the Owner Trustee or the
Indenture Trustee to identify all Receivable Files and such related
accounts, records and computer systems and to verify, if the Owner
Trustee or the Indenture Trustee so elects, the accuracy of the
Servicer's recordkeeping. The Servicer shall promptly report to the Owner
Trustee or the Indenture Trustee any failure on its part to hold the
Receivable Files and maintain its accounts, records, and computer systems
as herein provided, and promptly take appropriate action to remedy any
such failure.
(b) Maintenance of and Access to Records. The Servicer
shall maintain each Receivable File at one of the locations specified in
Schedule B to this Agreement, or at such other location as shall be
specified to the Owner Trustee and the Indenture Trustee by 30 days'
prior written notice. The Servicer shall make available to the Owner
Trustee, the Indenture Trustee or their respective duly authorized
representatives, attorneys or auditors, the Receivable Files and the
related accounts, records and computer systems maintained by the Servicer
at such times during normal operating hours as the Owner Trustee or
Indenture Trustee shall reasonably instruct which does not unreasonably
interfere with the Servicer's normal operations or customer or employee
relations.
(c) Release of Documents. Upon instruction from the
Indenture Trustee (or, if the Notes have been paid in full, from the
Owner Trustee), the Servicer shall release any document in the Receivable
Files to the Indenture Trustee or Owner Trustee, or their respective
agents or designee, as the case may be, at such place or places as such
Person may reasonably designate as soon as reasonably practicable to the
extent it does not unreasonably interfere with the Servicer's normal
operations or customer or employee relations. The Servicer shall not be
responsible for any loss occasioned by the failure of the Owner Trustee
or Indenture Trustee, or their respective agents or designees, to return
any document or any delay in doing so.
(d) Title to Receivables. The Servicer agrees that, in
respect of any Receivable held by it as custodian hereunder, (i) the
Servicer will not at any time have or in any way attempt to assert any
interest in such Receivable or the related Receivable File, other than
solely for the purpose of collecting or enforcing the Receivable for the
benefit of the Issuer and (ii) the related Receivable File shall at all
times be property of the Issuer.
SECTION 3.5 Instructions; Authority to Act. The
Servicer shall be deemed to have received proper instructions with
respect to the Receivable Files upon its receipt of written instructions
signed by an Authorized Officer of the Indenture Trustee (or, if the
Notes have been paid in full, of the Owner Trustee). A certified copy of
a by-law or of a resolution of the Board of Directors of the Owner
Trustee or the Indenture Trustee, as the case may be, shall constitute
conclusive evidence of the authority of any such Authorized Officer to
act and
33
shall be considered in full force and effect until receipt by the
Servicer of written notice to the contrary given by the Owner Trustee or
the Indenture Trustee, as the case may be.
SECTION 3.6 Custodian's Indemnification. The Servicer,
as custodian, shall indemnify the Issuer, the Owner Trustee and the
Indenture Trustee for any and all liabilities, obligations, losses,
damages, payments, costs, or expenses of any kind whatsoever that may be
imposed on, incurred or asserted against the Issuer, the Owner Trustee or
the Indenture Trustee as the result of any act or omission in any way
relating to the maintenance and custody by the Servicer, as custodian, of
the Receivable Files; provided, however, that the Servicer shall not be
liable for any portion of any such amount resulting from the wilful
misfeasance, bad faith, or negligence of the Issuer, the Owner Trustee or
the Indenture Trustee.
SECTION 3.7 Effective Period and Termination. The
Servicer's appointment as custodian shall become effective as of the
Cutoff Date and shall continue in full force and effect until terminated
pursuant to this Section 3.7 or until this Agreement shall be terminated.
If the Servicer shall resign as Servicer under Section 7.5 or if all of
the rights and obligations of the Servicer shall have been terminated
under Section 8.1, the appointment of the Servicer as custodian may be
terminated by the Indenture Trustee or by the Holders of Notes evidencing
not less than a majority of the aggregate Outstanding Amount of the Notes
(or, if there are no Notes outstanding, the Holders of Certificates
representing not less than a majority of the Certificate Balance), in the
same manner as the Indenture Trustee or such Holders may terminate the
rights and obligations of the Servicer under Section 8.1. As soon as
practicable after any termination of such appointment, the Servicer
shall, at its expense, deliver the Receivable Files to the Issuer or the
Issuer's agent at such place or places as the Issuer may reasonably
designate. Notwithstanding the termination of the Servicer as custodian,
the Owner Trustee agrees that upon any such termination, the Issuer shall
provide, or cause its agent to provide, access to the Receivable Files to
the Servicer for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables
hereunder.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1 Duties of Servicer. The Servicer is hereby
authorized to act as agent for the Issuer and in such capacity shall
manage, service, administer and make collections on the Receivables
(other than Repurchased Receivables) with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to
comparable new or used automobile receivables that it services for
itself. The Servicer's duties shall include collection and posting of all
payments, responding to inquiries by Obligors or by federal, state, or
local governmental authorities with respect to the Receivables,
investigating delinquencies, reporting tax information to Obligors in
accordance with its customary practices, advancing costs of disposition
of defaults, monitoring Receivables in cases of Obligor defaults,
accounting for collections, furnishing monthly and annual statements to
the
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Indenture Trustee with respect to distributions. The Servicer shall
follow its customary standards, policies, and procedures in performing
its duties as Servicer hereunder; provided that the Servicer shall be
permitted to take or to refrain from taking any action not specified in
this Agreement with respect to servicing the Receivables if such action
or inaction would not contravene any material term of this Agreement or
materially and adversely affect the interests of Holders. Without
limiting the generality of the foregoing, the Servicer shall be
authorized and empowered by the Issuer to execute and deliver, on behalf
of itself, the Owner Trustee, the Indenture Trustee and the Holders, or
any of them, any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable
instruments, without recourse to the Issuer, with respect to the
Receivables or with respect to the Financed Vehicles. If the Servicer
shall commence a legal proceeding to enforce a Receivable or a Defaulted
Receivable, the Issuer shall thereupon be deemed to have automatically
assigned such Receivable and the related property conveyed to the Issuer
with respect to such Receivable to the Servicer, solely for the purpose
of collection. The Owner Trustee shall furnish the Servicer with such
documents as have been prepared by the Servicer for execution by the
Owner Trustee and as are necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties hereunder.
SECTION 4.2 Collection of Receivable Payments;
Refinancing. (a) The Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Receivables
and of this Agreement as and when the same shall become due, and shall
follow such collection procedures as it follows with respect to
comparable new or used automobile receivables that it services for itself
and that are consistent with prudent industry standards. In connection
therewith, the Servicer may grant extensions, rebates or adjustments on a
Receivable without the consent of the Issuer; provided, however, that if
the Servicer extends the date for final payment by the Obligor of any
Receivable beyond the Final Scheduled Maturity Date, it shall promptly
repurchase such Receivable pursuant to Section 4.6. The Servicer is
authorized in its discretion to waive any Late Fees that may be due in
the ordinary course of collecting a Receivable; provided, further, the
Servicer shall not agree to any change in the underlying Contract Rate on
any Receivable, to any change in the Principal Balance thereof (except
with respect to a prepayment of a scheduled payment that does not result
in a deferral of any other scheduled payment), to any reduction of the
total number of payments due thereunder or, subject to the foregoing, to
any reduction of the amount of any scheduled payment on a Receivable. In
the event that at the end of the scheduled term of any Receivable, the
outstanding principal amount thereof is such that the final payment to be
made by the related Obligor is larger than the regularly scheduled
payment of principal and interest made by such Obligor, the Servicer may
permit such Obligor to pay such remaining principal amount in more than
one payment of principal and interest; provided, however, that the last
such payment shall be due on or prior to the Final Scheduled Maturity
Date.
(b) Notwithstanding anything in this Agreement to the
contrary, the Servicer may refinance any Receivable by accepting a new
promissory note from the related Obligor and applying the proceeds of
such refinancing to pay all obligations in full of such Obligor under
such Receivable. The receivable created by the refinancing shall not be
property of the Issuer.
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SECTION 4.3 Realization Upon Receivables. The Servicer
shall use reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise take possession of the Financed
Vehicle securing any Receivable which the Servicer shall have determined
to be a Defaulted Receivable or otherwise. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary
or advisable in its servicing of new or used automobile receivables,
which may include reasonable efforts to realize upon any recourse to
Dealers, consigning the Financed Vehicle to a Dealer for resale and
selling the Financed Vehicle at public or private sale. The Servicer
shall be entitled to recover from proceeds all reasonable expenses
incurred by it in the course of converting the Financed Vehicle into cash
proceeds. The Liquidation Proceeds with respect to a Receivable shall be
deposited by the Servicer in the Collection Account in the manner
specified in Section 5.2 and shall be applied to reduce (or to satisfy,
as the case may be) the Repurchase Amount of the Receivable, if such
Receivable is to be repurchased by the Seller pursuant to Section 3.2, or
is to be purchased by the Servicer pursuant to Section 4.6. The foregoing
shall be subject to the provision that, in any case in which a Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its sole discretion that such repair
and/or repossession will increase the Liquidation Proceeds of the related
Receivable by an amount equal to or greater than the amount of such
expenses.
SECTION 4.4 Maintenance of Security Interests in
Financed Vehicles. The Servicer, in accordance with its customary
servicing procedures, shall take such steps as are necessary to maintain
perfection of the first priority security interest of the Seller created
in any Financed Vehicle which secures a Receivable. The Owner Trustee, on
behalf of the Issuer, and the Indenture Trustee hereby authorize the
Servicer, and the Servicer hereby agrees, to take such steps as are
necessary to re-perfect such security interest in the event of the
relocation of a Financed Vehicle or for any other reason, in either case,
when the Servicer has knowledge of the need for such re-perfection. In
the event that the assignment of a Receivable to the Issuer and by the
Issuer to the Indenture Trustee pursuant to the Indenture is insufficient
without a notation on the related Financed Vehicle's certificate of
title, or without fulfilling any additional administrative requirements
under the laws of the State in which the Financed Vehicle is located, to
grant to the Indenture Trustee a perfected security interest in the
related Financed Vehicle, the Seller and Servicer hereby agree that the
Seller's listing as the secured party on the certificate of title is
deemed to be in its capacity as agent of the Indenture Trustee and the
Servicer further agrees to hold such certificate of title as the
Indenture Trustee's agent and custodian; provided, however, that the
Servicer shall not, nor shall the Owner Trustee, the Indenture Trustee or
Holders have the right to require that the Servicer, make any such
notation on the related Financed Vehicles' certificate of title or
fulfill any such additional administrative requirement of the laws of the
State in which a Financed Vehicle is located.
SECTION 4.5 Covenants of Servicer. The Servicer hereby
makes the following covenants on which the Issuer will rely in accepting
the Receivables:
(i) Security Interest to Remain in Force. The Financed
Vehicle securing each Receivable shall not be released from the
security interest granted by the
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Receivable in whole or in part except if such Financed Vehicle
is substituted in whole by the manufacturer, dealer or seller as
a result of mechanical defects or a total loss of the Financed
Vehicle because of accident or theft or as otherwise
contemplated herein;
(ii) No Impairment. The Servicer shall not impair the rights
of the Issuer, the Indenture Trustee or any Holder in the Receivables;
and
(iii) Extensions; Defaulted Receivables. The Servicer
shall not increase the number of payments under a Receivable,
nor increase the Amount Financed under a Receivable, nor extend
or forgive payments on a Receivable, except as provided in
Section 4.2.
SECTION 4.6 Purchase of Receivables Upon Breach. The
Seller, the Servicer, the Indenture Trustee or the Owner Trustee, as the
case may be, shall inform the other parties promptly, in writing, upon
the discovery by the Seller, the Servicer or an Authorized Officer of the
Indenture Trustee or the Owner Trustee, as the case may be, of any breach
by the Servicer of its covenants under Section 4.5 which materially and
adversely affects the interest of the Holders in any Receivable (for this
purpose, any breach of the covenant set forth in Section 4.5(iii) shall
be deemed to materially and adversely affect the interest of the Holders
in a Receivable). Except as otherwise specified in Section 4.2, unless
the breach shall have been cured by the last day of the Collection Period
following the Collection Period in which such discovery occurred (or, at
the Servicer's election, the last day of the Collection Period in which
such discovery occurred), the Servicer shall purchase any Receivable
materially and adversely affected by such breach as of such last day. In
consideration of the purchase of such Receivable, the Servicer shall
remit the Repurchase Amount (less any Liquidation Proceeds deposited, or
to be deposited, by the Servicer in the Collection Account with respect
to such Receivable pursuant to Section 4.3) in the manner specified in
Section 5.4. The sole remedy of the Issuer, the Owner Trustee, the
Indenture Trustee or the Holders against the Servicer with respect to a
breach pursuant to Section 4.2 or 4.5 shall be to require the Servicer to
purchase Receivables pursuant to this Section 4.6. The Owner Trustee
shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section 4.6 or the eligibility of any Receivable for
purposes of this Agreement.
SECTION 4.7 Servicing Fee. The Servicing Fee for a
Collection Period shall be payable on the related Distribution Date
pursuant to Section 5.5 and shall equal the sum of (i) the product of
one-twelfth of the Servicing Fee Rate and the Pool Balance as of the
related Settlement Date and (ii) Late Fees received from Obligors during
such Collection Period. In addition, as part of the Servicing Fee, the
Servicer shall be entitled to receive on each Distribution Date
Investment Earnings when and as paid on amounts on deposit in the
Collection Account or earned on collections pending deposit in the
Collection Account. The Servicer shall be required to pay from its own
account all expenses incurred by it in connection with its activities
hereunder (including fees and disbursements of independent accountants
and auditors, taxes imposed on the Servicer, and other costs incurred in
connection with administering and servicing the Receivables) and the fees
and disbursements of the Issuer, the Administrator, the Owner Trustee,
the Indenture Trustee, the Owner
37
Trustee's and the Indenture Trustee's respective counsel, the Paying
Agent, the Authenticating Agent, the Note Registrar and the Certificate
Registrar except for United States federal, state and local income and
franchise taxes, if any, imposed on the Issuer or any Holder or any
expenses in connection with realizing upon Receivables under Section 4.3.
SECTION 4.8 Servicer's Certificate. On or before each
Determination Date, the Servicer shall deliver to the Indenture Trustee,
the Owner Trustee, the Paying Agent and the Rating Agencies a Servicer's
Certificate, substantially in the form of Exhibit A hereto, for the
Collection Period preceding such Determination Date, containing all
information necessary to make the distributions pursuant to Section 5.5,
and all information necessary for the Paying Agent to send statements to
Holders pursuant to Section 5.8; provided, however, that if the Class A-1
Event has occurred, the Servicer shall deliver the Servicer's Certificate
for the April 1999 Collection Period to such parties no later than May 6,
1999. The Servicer shall deliver to the Rating Agencies any information,
to the extent it is available to the Servicer, that the Rating Agencies
reasonably request in order to monitor the Issuer. The Servicer shall
also specify each Receivable which the Seller or the Servicer is required
to repurchase or purchase, as the case may be, as of the last day of the
preceding Collection Period and each Receivable which the Servicer shall
have determined to be a Defaulted Receivable during the preceding
Collection Period. Subsequent to the Closing Date, the form of Servicer's
Certificate may be revised or modified to cure any ambiguities or
inconsistencies between such form and this Agreement; provided, however,
that no material information shall be deleted from the form of Servicer's
Certificate. In the event that the form of Servicer's Certificate is
revised or modified in accordance with the preceding sentence, a form
thereof, as so revised or modified, shall be provided to the Owner
Trustee, the Paying Agent, the Indenture Trustee and each Rating Agency.
SECTION 4.9 Annual Statement as to Compliance. (a) The
Servicer shall deliver to a firm of independent certified public
accountants, on or before March 31 of each year commencing March 31,
1999, a certificate signed by the chairman of the board, the president,
the treasurer, the controller, any executive or senior vice president or
any vice president of the Servicer, stating that (a) a review of the
activities of the Servicer during the year ended the preceding December
31 (or the period since the Cutoff Date in the case of the first such
certificate) and of its performance under this Agreement has been made
under such officer's supervision and (b) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its
obligations in all material respects under this Agreement throughout such
year (or the period since the Cutoff Date in the case of the first such
certificate), or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and
the nature and status thereof.
(b) The Servicer shall deliver to the Indenture
Trustee, the Owner Trustee and each Rating Agency promptly after having
obtained knowledge thereof, but in no event later than five Business Days
thereafter, an Officer's Certificate specifying any event which with the
giving of notice or lapse of time, or both, would become an Event of
Servicing Termination under Section 8.1. The Seller shall deliver to the
Indenture Trustee and the Owner Trustee, promptly after having obtained
knowledge thereof, but in no event later than five Business Days
thereafter, an Officer's Certificate specifying any event which with the
38
giving of notice or lapse of time, or both, would become an Event of
Servicing Termination under Section 8.1.
SECTION 4.10 Annual Audit Report. The Servicer shall
cause a firm of independent public accountants (which may provide other
services to the Servicer or the Seller) to prepare a report (with a copy
of the certificate described in Section 4.9(a) attached) addressed to the
Board of Directors of the Servicer, for the information and use of the
Indenture Trustee, the Owner Trustee and the Rating Agencies on or before
March of each year, beginning March 31, 1999, to the effect that, with
respect to the twelve months ended the preceding December 31 (or the
period since the Cutoff Date, in the case of the first such certificate),
such firm has either (A) examined a written assertion by the Servicer
about the effectiveness of the Servicer's internal control structure over
the processing and reporting of transactions relating to securitized
automobile loans with respect to the criteria set forth by the Servicer
(the "Assertion") and that, on the basis of such examination, such firm
is of the opinion that the Servicer's Assertion is fairly stated in all
material respects except for (i) such exceptions as such firm believes to
be immaterial and (ii) such other exceptions as shall be set forth in
such firm's report, or (B) such firm has performed the following
procedures:
1. For a sample of daily cash receipts during the preceding calendar year:
a. Trace total cash receipts to deposits on bank statements.
b. Agree cash receipts for securitized loans to computer reports.
c. Trace cash receipts for securitized loans to disbursements to the Owner
Trustee and the Indenture Trustee.
2. For a sample of monthly cash receipt reports:
a. Agree total cash receipts per the cash receipt reports to "Total
Payments From Obligors Applied to Collection Period" per monthly
Servicer Certificates.
b. Agree total principal payments per the cash receipt reports to
"Principal Payments" per monthly Servicer Certificates.
3. For a sample of loans delinquent 30 days or more and for a sample of loans
in repossession status, selected from the loan delinquency report or a new
repossession report, as applicable, at a point in time, trace loan number to
inclusion in the loan collection system.
The determination of which of the two alternative reports to be prepared
and delivered, and the size of each sample to be tested, shall be decided
in the sole discretion of the Servicer. The report of the independent
certified public accountants shall also indicate that such accounting
firm is independent of the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants.
SECTION 4.11 Access by Holders to Certain Documentation
and Information Regarding Receivables. The Servicer shall provide to the
Holders access to the Receivable Files in such cases where the Holders
shall be required by applicable statutes or regulations to
39
have access to such documentation. Access by the Holders shall be
afforded without charge, but only upon reasonable request and during
normal business hours which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations. Nothing
in this Section 4.11 shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access
to information as a result of such obligation shall not constitute a
breach of this Section 4.11.
SECTION 4.12 Reports to Holders and the Rating
Agencies. (a) The Indenture Trustee or the Owner Trustee, as applicable,
shall provide to any Holder who so requests in writing (addressed to the
Corporate Trust Office of such trustee) a copy of any Servicer's
Certificate described in Section 4.8, of the annual statement described
in Section 4.9(a), or of the annual report described in Section 4.10. The
Indenture Trustee or the Owner Trustee, as applicable, may require the
Holder to pay a reasonable sum to cover the cost of the Indenture
Trustee's or the Owner Trustee's complying with such request, as
applicable.
(b) The Indenture Trustee or the Owner Trustee, as
applicable, shall forward to the Rating Agencies the statement to Holders
described in Section 5.8 and any other reports it may receive pursuant to
this Agreement to (i) Standard & Poor's, Asset-Backed Surveillance Group,
00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) Xxxxx'x, ABS Monitoring
Dept., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (iii) to
Fitch, Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 4.13 Reports to the Securities and Exchange
Commission. The Servicer shall, on behalf of the Issuer, cause to be
filed with the Commission any periodic reports required to be filed under
the provisions of the Exchange Act and the rules and regulations of the
Securities and Exchange Commission thereunder.
ARTICLE V
ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1 Establishment of Accounts. (a) The Servicer shall
establish and maintain:
(i) For the benefit of the Noteholders and the
Certificateholders, in the name of the Indenture Trustee, an
Eligible Deposit Account for the deposit of Collections (the
"Collection Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Noteholders and the Certificateholders.
(ii) For the benefit of the Noteholders, in the name of
the Indenture Trustee, an Eligible Deposit Account for the
deposit of distributions to the Noteholders (the
40
"Note Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of the Noteholders.
Each Account shall be an Eligible Deposit Account
established initially at Chase.
(b) Should any depositary of an Account or of the
Certificate Distribution Account (including Chase (or an Affiliate
thereof)) cease to be either a Qualified Institution or a Qualified Trust
Institution, as applicable, then the Servicer shall, with the Seller's
assistance as necessary, cause the related Account to be moved to a
Qualified Institution or a Qualified Trust Institution, unless the Rating
Agency Condition is satisfied in connection with such depositary's
ceasing to be a Qualified Institution or a Qualified Trust Institution,
as the case may be.
All amounts held in the Collection Account shall be
invested by the bank or trust company then maintaining the account (at
the written direction of the Servicer) in Permitted Investments that
mature not later than the Deposit Date next succeeding the date of
investment (or, if the Class A-1 Event has occurred, not later than May
7, 1999, in the case of investments made on or after the Deposit Date in
April 1999 and prior to the Deposit Date in May 1999, in an amount at
least equal to the May 1999 Class A-1 Note Distribution) except, if the
Collection Account is maintained with the Indenture Trustee for
investments on which the Indenture Trustee is the obligor (including
repurchase agreements on which the Indenture Trustee, in its commercial
capacity, is liable as principal), which investments may mature on the
next succeeding Distribution Date; provided, however, that once such
amounts have been invested by such bank or trust company, as applicable,
in Permitted Investments, such Permitted Investments must be held or
maintained until they mature on or before the dates described above.
Amounts on deposit in the Note Distribution Account shall not be
invested.
(c) The Indenture Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the
Accounts and in all proceeds thereof (excluding Investment Earnings) and
all such funds, investments, proceeds and income shall be part of the
Owner Trust Estate. Except as otherwise provided herein, the Accounts
shall be under the sole dominion and control of Indenture Trustee for the
benefit of the Noteholders and the Certificateholders, or the
Noteholders, as the case may be.
SECTION 5.2 Collections. (a) The Servicer shall remit
daily within forty-eight hours of receipt to the Collection Account all
Collections collected during the Collection Period. Chase USA has
requested that, so long as it is acting as the Servicer, the Servicer be
permitted to make remittances of Collections on a less frequent basis
than that specified in the immediately preceding sentence. It is
understood that such less frequent remittances may be made only on the
specific terms and conditions set forth below in this Section 5.2 and
only for so long as such terms and conditions are fulfilled. Accordingly,
notwithstanding the provisions of the first sentence of this Section 5.2,
the Servicer shall remit such collections to the Collection Account in
Automated Clearinghouse Corporation next-day funds or immediately
available funds no later than 11:00 a.m., New York City time, on the
Deposit
41
Date, but only for so long as (i) the short-term certificate of deposit
ratings of the Servicer are at least P-1 by Xxxxx'x, "F1" by Fitch (if
rated by Fitch) and "A-1" by Standard & Poor's, or the Rating Agency
Condition is satisfied as a result of Collections being remitted on a
monthly, rather than daily, basis and (ii) the Servicer shall be Chase
USA or Chase; provided, however, that if the Class A-1 Event has
occurred, with respect to Collections received during the April 1999
Collection Period, the Servicer shall remit to the Collection Account on
May 7, 1999 an amount of such Collections equal to the May 1999 Class A-1
Note Distribution. Upon remittance by the Servicer of Collections to the
Collection Account pursuant to the preceding sentence, the Paying Agent
shall provide written notice to the Indenture Trustee and the Owner
Trustee no later than 11 a.m., New York City time, on each Deposit Date
(or May 7, 1999), setting forth the amounts remitted by the Servicer on
such date and, if the Paying Agent fails to provide the Indenture Trustee
and the Owner Trustee, with such written notice by 12 noon, New York City
time, on such Deposit Date (or May 7, 1999), then the Indenture Trustee
and the Owner Trustee shall assume that no deposits were made to the
Collection Account pursuant to this Section 5.2. For purposes of this
Section 5.2 the phrase "payments made on behalf of the Obligors" shall
mean payments made by Persons other than the Seller or the Servicer.
(b) Notwithstanding anything in this Agreement to the
contrary, if the Servicer inadvertently deposits amounts that it
mistakenly believes are Collections resulting in the payment in full of a
Receivable, the Servicer shall be deemed to have purchased such
Receivable pursuant to Section 4.6 as of the last day of the Collection
Period during which such error shall have occurred.
SECTION 5.3 [Reserved].
SECTION 5.4 Additional Deposits. The Servicer, or the
Seller, as the case may be, shall deposit into the Collection Account the
aggregate Repurchase Amount pursuant to Sections 3.2, 4.6 and 9.1(a), as
applicable. All remittances shall be made to the Collection Account, in
Automated Clearinghouse Corporation next-day funds or immediately
available funds, no later than 11 a.m., New York City time, on the
Deposit Date; provided, however, that if the Class A-1 Event has occurred
and the amount of Collections on the Receivables received during the
April 1999 Collection Period is less than the May 1999 Class A-1 Note
Distribution, such remittances (up to the amount of such shortfall) shall
be deposited into the Collection Account no later than May 7, 1999.
SECTION 5.5 Distributions. (a) No later than 12 noon,
New York City time, on each Determination Date, the Servicer shall
calculate all amounts required to determine the amounts to be withdrawn
from the Reserve Account (if any) and deposited into the Collection
Account and the amounts to be withdrawn from the Collection Account and
paid to the Servicer and the Administrator, deposited into the Note
Distribution Account and the Certificate Distribution Account and paid to
the Seller with respect to the next succeeding Distribution Date.
(b) On each Deposit Date, the Servicer shall instruct
the Indenture Trustee in writing (based on the information contained in
the Servicer's Certificate delivered
42
on the related Determination Date pursuant to Section 4.8) to withdraw
from the Reserve Account and deposit in the Collection Account the
Reserve Account Transfer Amount (if any) for the related Distribution
Date, and the Indenture Trustee shall so withdraw and deposit the Reserve
Account Transfer Amount for such Distribution Date; provided, however,
that if the Class A-1 Event has occurred and the Total Distribution
Amount for the May 1999 Distribution Date is less than the May 1999 Class
A-1 Note Distribution, the Servicer shall instruct the Indenture Trustee
in writing to withdraw from the Reserve Account and deposit in the
Collection Account on May 7, 1999 a portion of the Reserve Account
Transfer Amount for the May 1999 Distribution Date equal to the lesser of
such Reserve Account Transfer Amount and the amount of such insufficiency
as determined by the Servicer.
(c) Not later than 11:00 a.m., New York City time, on
each Distribution Date, at the Servicer's direction, the Indenture
Trustee, or the Paying Agent on behalf of the Indenture Trustee, shall
cause to be made the following distributions, to the extent of the Total
Distribution Amount then on deposit in the Collection Account and amounts
withdrawn from the Reserve Account and deposited in the Collection
Account by wire transfer of immediately available funds, in the following
order of priority and in the amounts set forth in the Servicer's
Certificate for such Distribution Date:
(i) to the Servicer, the sum of (x) the Servicing Fee
for the preceding Collection Period, plus (y) the amount of any
Servicing Fee previously due but not paid, if any, to the extent
such amounts are not deducted from the Servicer's remittance to
the Collection Account pursuant to Section 5.7;
(ii) to the Administrator, the sum of (x) the
Administration Fee for such Distribution Date, plus (y) the
amount of any Administration Fee previously due but not paid, if
any;
(iii) to the Note Distribution Account, the Noteholders'
Interest Distributable Amount;
(iv) except as set forth in Section 5.5(d), to the
Owner Trustee for deposit in the Certificate Distribution
Account, the Certificateholders' Interest Distributable
Amount;
(v) except as set forth in Section 5.5(d), to the Note
Distribution Account, the Noteholders' Principal Distributable
Amount; and
(vi) except as set forth in Section 5.5(d), to the
Owner Trustee for deposit in the Certificate Distribution
Account, the Certificateholders' Principal Distributable Amount;
and
(vii) except as set forth in Section 5.5(d), to the
Reserve Account, any remaining portion of the Total Distribution
Amount.
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In the event that the Collection Account is maintained
with an institution other than the Indenture Trustee, the Servicer shall
instruct and cause such institution to make all deposits and
distributions pursuant to this Section 5.5(c) on the related Deposit
Date.
(d) If the Notes have been declared immediately due and
payable as provided in Section 5.2 of the Indenture, any amounts
remaining in the Collection Account after the distributions described in
clauses (i), (ii) and (iii) of Section 5.5(c) shall be distributed as
follows: (1) an amount equal to the Outstanding Amount of the Notes will
be deposited in the Note Distribution Account, and (2) any remaining
amounts will be applied pursuant to clauses (iv), (v), (vi) and (vii) of
Section 5.5(c).
(e) Notwithstanding any of the foregoing to the
contrary, if the Class A-1 Event shall have occurred (x) the May 1999
Class A-1 Note Distribution will be deposited in the Note Distribution
Account on the May 1999 Distribution Date with respect to Class A-1 Notes
pursuant to clauses (iii) and (v) of Section 5.5(c) and (y) the remainder
of the Noteholders' Distributable Amount will be withdrawn from the
Collection Account, as applicable, and applied on the May 1999
Distribution Date with respect to the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes and the Certificates pursuant to clauses (i)
through (vi), inclusive, of Section 5.5(c); provided, however if the sum
of the Total Distribution Amount and the Reserve Account Transfer Amount
for the May 1999 Distribution Date is less than the sum of the amounts
set forth in clauses (i) through (v) of Section 5.5(c), amounts shall be
distributed from the Collection Account with respect to the Class A-1
Notes only to the same extent that such amounts would have been
distributable therefrom if the May 1999 Distribution Date with respect to
the Class A-1 Notes were the same as that with respect to the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Certificates.
SECTION 5.6 Reserve Account. (a) The Seller shall
establish and maintain an Eligible Deposit Account (the "Reserve
Account") at Norwest Bank Minnesota, National Association in the name of
the Indenture Trustee for the benefit of the Noteholders and the
Certificateholders. Pursuant to Section 2.5 of the Trust Agreement, on
the Closing Date, the Owner Trustee shall deposit the Reserve Account
Initial Deposit into the Reserve Account.
(b) Should any sole depositary of the Reserve Account
cease to be either a Qualified Institution or a Qualified Trust
Institution, the Seller shall cause the Reserve Account to be moved to a
Qualified Institution or a Qualified Trust Institution, as applicable,
unless the Seller provides the Indenture Trustee with a letter from the
Rating Agencies to the effect that the Rating Agency Condition will be
satisfied in connection with such depositary's ceasing to be a Qualified
Institution or a Qualified Trust Institution, as the case may be.
All amounts held in the Reserve Account shall be
invested by the bank or trust company then maintaining the account (at
the written direction of the Seller) in Permitted Investments that mature
not later than the Deposit Date next succeeding the date of investment
(or, if the Class A-1 Event has occurred, not later than May 7, 1999 to
the extent of the May 1999 Class A-1 Note Distribution) except, if the
Reserve Account is maintained with the Indenture Trustee, for investments
on which the Indenture Trustee is the obligor
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(including repurchase agreements on which the Indenture Trustee in its
commercial capacity is liable as principal), which investments may mature
on the next succeeding Distribution Date; provided, however, that amounts
on deposit in the Reserve Account may be invested in Permitted
Investments that mature later than the next succeeding Deposit Date (or
May 7, 1999 if the Class A-1 Event has occurred) if the Rating Agency
Condition is satisfied.
(c) With respect to the Reserve Account Property:
(i) any Reserve Account Property that constitutes
Physical Property (and that is not either a United States
Security Entitlement or a Security Entitlement) shall be
delivered to the Indenture Trustee in accordance with paragraph
(a) of the definition of "Delivery" and shall be held by the
Indenture Trustee pending maturity or disposition;
(ii) any Reserve Account Property that is a United
States Security Entitlement or a Security Entitlement, the
Indenture Trustee shall maintain Control over such Reserve
Account Property pending maturity or disposition; and
(iii) any Reserve Account Property that is an
Uncertificated Security (and that is not a United States
Security Entitlement) shall be delivered to the Indenture
Trustee in accordance with paragraph (b) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee
pending maturity or disposition.
The Indenture Trustee shall, at the expense of the Servicer, take such
action as is required to maintain the Indenture Trustee's security
interest in any Reserve Account Property; provided, however, that (x) the
Indenture Trustee shall not be required to prepare or file any financing
statements or continuation statements and (y) the Indenture Trustee may
rely upon the written instructions of the Servicer as to the method by
which the security interest of the Indenture Trustee may be perfected.
Upon written request from the Indenture Trustee, the Servicer shall
provide such instructions and an opinion of counsel with respect to the
method of perfection of such security interest; provided, however, that
the Servicer shall not be obligated to deliver to the Indenture Trustee
an opinion of counsel with respect to the method of perfecting a security
interest in any Permitted Investment the method of perfecting an
ownership interest in which was described in that certain legal opinion
of Xxxxxxx Xxxxxxx & Xxxxxxxx, special counsel to the Indenture Trustee,
dated April 15, 1998, unless there has been change in law or the
interpretation thereof from the date of such opinion with respect to the
method of perfecting a security interest in such Permitted Investment.
(d) On each Distribution Date, the Indenture Trustee
shall withdraw from the Reserve Account and pay to the Seller the excess,
if any, of the amount on deposit in the Reserve Account over the
Specified Reserve Account Balance with respect to such Distribution Date
(after giving effect to all deposits therein or withdrawals therefrom on
such Distribution Date). Upon any distribution to the Seller of amounts
from the Reserve Account, the Holders will have no rights in, or claims,
to, such amounts. Amounts properly distributed to the Seller from the
Reserve Account shall not be available under any circumstances to the
Indenture Trustee, and the Seller shall not in any event thereafter be
required to refund any
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such distributed amounts. For purposes of this Section 5.6(d), the May
1999 Distribution Date shall be May 15, 1999 regardless of whether the
Class A-1 Event has occurred.
(e) The Indenture Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the
Reserve Account and in all proceeds thereof and all such funds,
investments, proceeds and income shall be part of the Trust Estate.
Except as otherwise provided herein, the Reserve Account shall be under
the sole dominion and control of the Indenture Trustee for the benefit of
the Noteholders and the Certificateholders.
SECTION 5.7 Net Deposits. Chase USA (in its capacity as
the Seller or the Servicer) may make the remittances pursuant to Sections
5.2 and 5.4 above, net of amounts to be retained by it or distributed to
it (also in any such capacity) pursuant to Section 4.7 (if applicable)
and Section 5.5, if (a) it shall be the Servicer and (b) it is entitled,
pursuant to Section 5.2, to make deposits on a monthly basis, rather than
a daily basis. Nonetheless, the Servicer shall account for all of the
above described amounts as if such amounts were deposited and distributed
separately.
SECTION 5.8 Statements to Certificateholders and
Noteholders. (a) On each Distribution Date, the Servicer shall provide to
the Indenture Trustee (for the Indenture Trustee to forward to each
Noteholder of record pursuant to the Indenture) and to the Owner Trustee
(for the Owner Trustee to forward to each Certificateholder of record
pursuant to the Trust Agreement) a statement substantially in the form of
Exhibit B (or such other form that is acceptable to the Indenture
Trustee, the Owner Trustee and the Servicer), with a copy to the Rating
Agencies, setting forth at least the following information as to the
Notes (separately stating such information as to the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes) and the
Certificates, to the extent applicable:
(i) the amount of such distribution allocable to principal on
each class of Notes and the Certificates;
(ii) the amount of such distribution allocable to
interest on each class of Notes and the Certificates;
(iii) the amount of the Servicing Fee paid to the
Servicer pursuant to Section 5.5(c);
(iv) the amount of the Administration Fee paid to the
Administrator on such Distribution Date;
(v) the Outstanding Amount of each class of the Notes,
the Class A-1 Note Pool Factor, the Class A-2 Note Pool Factor,
the Class A-3 Note Pool Factor, the Class A-4 Note Pool Factor,
the Certificate Balance and the Certificate Pool Factor, in each
case after giving effect to payments allocated to principal
reported under (i) above;
(vi) the Pool Balance as of the last day of the preceding
Collection Period;
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(vii) the aggregate amount of the Repurchase Amounts
for Repurchased Receivables with respect to the related
Collection Period paid by each of the Seller and the Servicer
(accounted for separately);
(viii) the amount of Aggregate Net Losses, if any, for
such Distribution Date;
(ix) the balance of the Reserve Account on such
Distribution Date, after giving effect to deposits into and
withdrawals from the Reserve Account on such Distribution Date;
(x) the Specified Reserve Account Balance for such
Distribution Date;
(xi) the Total Distribution Amount for such Distribution Date;
(xii) the Noteholders' Distributable Amount and the components
thereof;
(xiii) the Certificateholders' Distributable Amount and the
components thereof; and
(xiv) the Reserve Account Transfer Amount, if any, for such
Distribution Date.
Each amount set forth pursuant to subclause (i), (ii),
(iii), (iv), (xii) or (xiii) above shall be expressed as a dollar amount
per $1,000 of original principal balance of a Note or a Certificate, as
applicable.
ARTICLE VI
THE SELLER
SECTION 6.1 Representations of Seller. The Seller makes
the following representations on which the Issuer shall rely in acquiring
the Receivables. The representations shall speak as of the execution and
delivery of this Agreement, and shall survive the sale of the Receivables
to the Issuer and pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(i) Organization and Good Standing. The Seller has been
duly organized and is validly existing as a national banking
association in good standing under the laws of the United States
of America, with power and authority to own its properties and
to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all
relevant times, and has, power, authority, and legal right to
acquire and own the Receivables.
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(ii) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and the other
Basic Documents to which it is a party and to carry out their
respective terms, the Seller has full power and authority to
sell and assign the property to be sold and assigned to the
Issuer as the Owner Trust Estate and has duly authorized such
sale and assignment to the Issuer by all necessary corporate
action; and the execution, delivery, and performance of this
Agreement and the other Basic Documents to which it is a party
has been duly authorized by the Seller by all necessary action.
(iii) Valid Sale; Binding Obligations. This Agreement
effects a valid sale, transfer, and assignment of the
Receivables, enforceable against creditors of and purchasers
from the Seller; this Agreement and each of the other Basic
Documents to which it is a party constitutes a legal, valid, and
binding obligation of the Seller enforceable in accordance with
its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights in general and by
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and
the fulfillment of the terms hereof and thereof do not conflict
with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time) a
default under, the articles of association or bylaws of the
Seller, or conflict with or breach any of the material terms or
provisions of, or constitute (with or without notice or lapse of
time) a default under, any indenture, agreement, or other
instrument to which the Seller is a party or by which it is
bound; nor result in the creation or imposition of any lien upon
any of its properties pursuant to the terms of any such
indenture, agreement, or other instrument; nor violate any law
or, to the best of the Seller's knowledge, any order, rule, or
regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the
Seller or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or, to the Seller's best knowledge,
threatened, before any court, regulatory body, administrative
agency, or other governmental instrumentality having
jurisdiction over the Seller or its properties: (a) asserting
the invalidity of this Agreement, any other Basic Document, the
Notes or the Certificates, (b) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of
the transactions contemplated by this Agreement or any other
Basic Document, (c) seeking any determination or ruling that
might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or
enforceability of, this Agreement, any other Basic Document, or
the Notes or the Certificates, or (d) relating to the Seller and
which might adversely affect the federal or state income tax
attributes of the Notes or the Certificates.
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SECTION 6.2 Liability of Seller; Indemnities. The
Seller shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Seller in such capacity under
this Agreement and shall have no other obligations or liabilities
hereunder.
The Seller shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee and the Indenture Trustee from and against
any taxes that may at any time be asserted against any such Person with
respect to, and as of the date of, the sale of the Receivables to the
Issuer or the issuance and original sale of the Notes and the
Certificates, including any sales, gross receipts, general corporation,
tangible or intangible personal property, privilege, or license taxes
(but not including any taxes asserted with respect to ownership of the
Receivables or federal or other income taxes, including franchise taxes
measured by net income), arising out of the transactions contemplated by
this Agreement and the other Basic Documents, and costs and expenses in
defending against the same.
The Seller shall indemnify, defend, and hold harmless
the Issuer, the Owner Trustee and the Indenture Trustee from and against
any loss, liability or expense incurred by reason of (i) the Seller's
wilful misfeasance, bad faith, or gross negligence in the performance of
its duties hereunder, or by reason of reckless disregard of the
obligations and duties hereunder and (ii) the Seller's violation of
federal or state securities laws in connection with the registration of
the sale of the Notes and the Certificates.
Indemnification under this Section 6.2 shall include
reasonable fees and expenses of counsel and expenses of litigation. If
the Seller shall have made any indemnity payments to the Issuer, the
Owner Trustee or the Indenture Trustee, respectively, pursuant to this
Section 6.2 and the Issuer, the Owner Trustee or the Indenture Trustee,
respectively, thereafter shall collect any of such amounts from others,
the Issuer, the Owner Trustee or the Indenture Trustee, respectively,
shall repay such amounts to the Seller, without interest.
SECTION 6.3 Merger or Consolidation of Seller. Any
corporation or other entity (i) into which the Seller may be merged or
consolidated, (ii) which may result from any merger, conversion, or
consolidation to which the Seller shall be a party, or (iii) which may
succeed to all or substantially all of the business of the Seller, which
corporation or other entity shall be bound to perform every obligation of
the Seller under this Agreement, shall be the successor to the Seller
hereunder without the execution or filing of any document or any further
act by any of the parties to this Agreement. The Seller shall give prompt
written notice of any merger or consolidation to the Issuer, the Owner
Trustee, the Indenture Trustee, the Servicer and the Rating Agencies.
SECTION 6.4 Limitation on Liability of Seller and
Others. The Seller and any director, officer, employee or agent of the
Seller may rely in good faith on the advice of counsel or on any document
of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising hereunder or under any other Basic
Documents. The Seller shall not be under any obligation under this
Agreement to appear in, prosecute, or defend any legal action that shall
be unrelated to its obligations under this Agreement or any other Basic
Document, and that in its opinion may involve it in any expense or
liability.
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SECTION 6.5 Seller May Own Notes and Certificates. The
Seller or any of its Affiliates may in its individual or any other
capacity become the owner or pledgee of Notes or Certificates with the
same rights as it would have if it were not the Seller or an Affiliate
thereof, except as otherwise provided in the definition of "Outstanding"
specified in Section 1.1. Notes or Certificates so owned by or pledged to
the Seller or any Affiliate thereof shall have an equal and proportionate
benefit under the provisions of this Agreement, without preference,
priority, or distinction as among all of the Notes or Certificates, as
applicable.
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations of Servicer. The Servicer
makes the following representations on which the Issuer shall rely in
acquiring the Receivables. The representations shall speak as of the
execution and delivery of this Agreement (or as of a date a Person (other
than the Indenture Trustee) becomes Servicer pursuant to Section 7.3 or
Section 8.2), and shall survive the sale of the Receivables to the Issuer
and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(i) Organization and Good Standing. The Servicer has
been duly organized and is validly existing as a national
banking association or corporation and is in good standing under
the laws of the United States of America or the jurisdiction of
its incorporation, with power and authority to own its
properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and
had at all relevant times, and has, power, authority, and legal
right to acquire, own, sell, and service the Receivables and to
hold the Receivable Files as custodian on behalf of the Issuer.
(ii) Power and Authority. The Servicer has the power
and authority to execute and deliver this Agreement and the
Basic Documents to which it is a party and to carry out the
terms thereof; and the execution, delivery, and performance of
this Agreement and the other Basic Documents has been duly
authorized by the Servicer by all necessary action.
(iii) Binding Obligations. This Agreement and the other
Basic Documents to which it is a party constitute legal, valid,
and binding obligations of the Servicer enforceable in
accordance with their respective terms subject, as to
enforcement, to applicable bankruptcy, insolvency,
reorganization, liquidation or other similar laws and equitable
principles relating to or affecting the enforcement of
creditors' rights, whether considered in a proceeding at law or
in equity.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and
the fulfillment of the terms hereof and thereof do not conflict
with, result in any breach of any of the terms and
50
provisions of, nor constitute (with or without notice or lapse
of time) a default under, the articles of association or bylaws
of the Servicer, or conflict with or breach any of the material
terms or provisions of, or constitute (with or without notice or
lapse of time) a default under, any indenture, agreement, or
other instrument to which the Servicer is a party or by which it
is bound; nor result in the creation or imposition of any lien
upon any of its properties pursuant to the terms of any such
indenture, agreement, or other instrument; nor violate any law
or, to the best of the Servicer's knowledge, any order, rule, or
regulation applicable to the Servicer of any court or of any
federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the
Servicer or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or to the Servicer's best knowledge,
threatened, before any court, regulatory body, administrative
agency, or other governmental instrumentality having
jurisdiction over the Servicer or its properties: (a) asserting
the invalidity of this Agreement, or the Notes or the
Certificates, (b) seeking to prevent the issuance of the Notes
or the Certificates or the consummation of any of the
transactions contemplated by this Agreement or any other Basic
Document, (c) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer
of its obligations under, or the validity or enforceability of,
this Agreement, any other Basic Document, or the Notes or the
Certificates, or (d) relating to the Servicer and which might
adversely affect the federal or state income tax attributes of
the Notes or the Certificates.
(vi) Fidelity Bond. The Servicer maintains a fidelity
bond in such form and amount as is customary for banks acting as
custodian of funds and documents in respect of retail automotive
installment sales contracts.
SECTION 7.2 Liability of Servicer; Indemnities. The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this Agreement
and shall have no other obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold
harmless the Issuer, the Owner Trustee, the Indenture Trustee
and the Holders from and against any and all costs, expenses,
losses, damages, claims, and liabilities, arising out of or
resulting from the use, ownership, or operation by the Servicer
or any Affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend, and hold
harmless the Issuer, the Owner Trustee and the Indenture Trustee
from and against any taxes that may at any time be asserted
against the Issuer with respect to the transactions contemplated
in this Agreement, including, without limitation, any sales,
gross receipts, general corporation, tangible or intangible
personal property, privilege, or license taxes (but not
including any taxes asserted with respect to, and as of the date
of, the sale of the Receivables to the Issuer or the issuance
and original sale of the Notes or the Certificates, or asserted
with respect to ownership of the Receivables or federal, state
or other income taxes,
51
including franchise taxes measured by net income) arising out of
distributions on the Notes or the Certificates and costs and
expenses in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold
harmless the Issuer, the Owner Trustee, the Indenture Trustee
and the Holders from and against any and all costs, expenses,
losses, claims, damages, and liabilities to the extent that such
cost, expense, loss, claim, damage, or liability arose out of,
or was imposed upon the Issuer, the Owner Trustee, the Indenture
Trustee or the Holders through the wilful misfeasance, gross
negligence, or bad faith of the Servicer in the performance of
its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement.
Indemnification under this Section 7.2 shall include
reasonable fees and expenses of counsel and expenses of litigation. If
the Servicer shall have made any indemnity payments pursuant to this
Section 7.2 and the recipient thereafter collects any of such amounts
from others, the recipient shall promptly repay such amounts to the
Servicer, without interest. The indemnification obligations of the
Servicer set forth in this Section 7.2 shall survive the termination of
such Servicer with respect to any act or failure to act which occurs
prior to such Servicer's termination. The provisions of Section 6.7 of
the Indenture and Sections 8.1 and 8.2 of the Trust Agreement with
respect to the Servicer's obligations are incorporated by reference
herein.
SECTION 7.3 Merger or Consolidation of Servicer. Any
corporation or other entity (i) into which the Servicer may be merged or
consolidated, (ii) which may result from any merger, conversion, or
consolidation to which the Servicer shall be a party, or (iii) which may
succeed to all or substantially all of the business of the Servicer,
which corporation or other entity shall be bound to perform every
obligation of the Servicer hereunder, shall be the successor to the
Servicer under this Agreement without the execution or filing of any
document or any further act on the part of any of the parties to this
Agreement. The Servicer shall promptly inform the Issuer, the Owner
Trustee, the Indenture Trustee, the Seller and the Rating Agencies in
writing of any such merger or consolidation.
SECTION 7.4 Limitation on Liability of Servicer and
Others. (a) Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the
Issuer, the Owner Trustee, the Indenture Trustee or the Holders, except
as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement; provided,
however, that this provision shall not protect the Servicer or any such
person against any liability that would otherwise be imposed by reason of
wilful misfeasance, gross negligence, or bad faith in the performance of
duties or by reason of reckless disregard of obligations and duties under
this Agreement. The Servicer and any director or officer or employee or
agent of the Servicer may rely in good faith on the advice of counsel or
on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising under this Agreement.
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(b) The Servicer, and any director, or officer,
employee or agent of the Servicer, shall be indemnified by the Issuer and
held harmless against any loss, liability, or expense (including
reasonable attorneys' fees and expenses) incurred in connection with any
legal action relating to the performance of the Servicer's duties under
this Agreement, other than (i) any loss or liability otherwise
reimbursable pursuant to this Agreement or the Basic Documents; (ii) any
loss, liability, or expense incurred solely by reason of the Servicer's
wilful misfeasance, negligence, or bad faith in the performance of its
duties hereunder or by reason of reckless disregard of its obligations
and duties under this Agreement or the Basic Documents; and (iii) any
loss, liability, or expense for which the Issuer is to be indemnified by
the Servicer under this Agreement or the Basic Documents. Any amounts due
the Servicer pursuant to this Section 7.4 shall be payable on a
Distribution Date from amounts distributable to the Seller from the
Reserve Account pursuant to Section 5.6(d).
(c) Except as provided in this Agreement, the Servicer
shall not be under any obligation to appear in, prosecute, or defend any
legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties to this Agreement
and the interests of the Holders under this Agreement. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs, and liabilities of the Issuer, and
the Servicer shall be entitled to be reimbursed therefor. Any amounts due
the Servicer pursuant to this Section 7.4 shall be payable on a
Distribution Date from amounts distributable to the Seller from the
Reserve Account pursuant to Section 5.6(d).
The Person to be indemnified shall provide the Issuer,
the Owner Trustee and the Indenture Trustee with a certificate and
accompanying Opinion of Counsel requesting indemnification and setting
forth the basis for such request.
SECTION 7.5 Servicer Not To Resign. Except as permitted
by Section 7.3, the Servicer shall not resign from its obligations and
duties under this Agreement except (i) upon determination that the
performance of its duties shall no longer be permissible under applicable
law or (ii) in the event of the appointment of a successor Servicer, upon
satisfaction of the Rating Agency Condition. Notice of any such
determination permitting the resignation of the Servicer shall be
communicated to the Issuer, the Indenture Trustee, the Owner Trustee and
the Rating Agencies at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Issuer, the Indenture Trustee and the
Owner Trustee concurrently with such notice. No such resignation shall
become effective until the Indenture Trustee (which shall not be
obligated to act as successor Servicer if the Servicer has resigned for a
reason other than that the performance of its duties are no longer
permissible under applicable law) or a successor Servicer shall have
assumed the responsibilities and obligations of the Servicer hereunder in
accordance with Section 8.2.
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SECTION 7.6 Delegation of Duties. So long as Chase USA
acts as Servicer, the Servicer shall have the right, in the ordinary
course of its business, to delegate any of its duties under this
Agreement to any Person. Any compensation payable to such Person shall be
paid by the Servicer from its own funds and none of the Issuer, the Owner
Trustee, the Indenture Trustee or the Holders shall have any liability to
such Person with respect thereto. Notwithstanding any delegation of
duties by the Servicer pursuant to this Section 7.6, the Servicer shall
not be relieved of its liability and responsibility with respect to such
duties, and any such delegation shall not constitute a resignation within
the meaning of Section 7.5. Any agreement that may be entered into by the
Servicer and a Person that provides for any delegation of the Servicer's
duties hereunder to such Person shall be deemed to be between the
Servicer and such Person alone, and the Issuer, the Owner Trustee, the
Indenture Trustee and Holders shall not be deemed parties thereto and
shall have no claims, rights, obligations, duties or liabilities with
respect thereto.
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
SECTION 8.1 Events of Servicing Termination. Any one of
the following events which shall occur and be continuing shall constitute
an event of servicing termination hereunder (each, an "Event of Servicing
Termination"):
(i) Any failure by the Servicer to deliver to the
Indenture Trustee the Servicer's Certificate for the related
Collection Period, or any failure by the Servicer to deliver to
the Indenture Trustee, for deposit in any of the Trust Accounts
or the Certificate Distribution Account, any proceeds or payment
required to be so delivered under the terms of the Certificates
or the Notes and this Agreement (or, in the case of a payment or
deposit to be made not later than the Deposit Date, the failure
to make such payment or deposit on such Deposit Date), which
failure continues unremedied for a period of five Business Days
after (A) discovery by an officer of the Servicer or (B) written
notice (1) to the Servicer by the Indenture Trustee or the Owner
Trustee or (2) to the Indenture Trustee or the Owner Trustee, as
applicable, and the Servicer by the Holders of Notes evidencing
not less than 25% of the Outstanding Amount of the Notes (or, if
the Notes have been paid in full, by Holders of the Certificates
evidencing not less than 25% of the Certificate Balance);
(ii) Failure on the part of the Servicer duly to
observe or to perform in any material respect any other
covenants or agreements of the Servicer set forth in this
Agreement or the Indenture, which failure shall (a) materially
and adversely affect the rights of the Issuer or the Holders,
and (b) continue unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same
to be remedied, shall have been given (1) to the Servicer by the
Indenture Trustee or the Owner Trustee, or (2) to the Indenture
Trustee or the Owner Trustee, as applicable, and the Servicer by
the Holders of Notes evidencing not less than 25% of the
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Outstanding Amount of the Notes (or, if the Notes have been paid
in full, by Holders of the Certificates evidencing not less than
25% of the Certificate Balance);
(iii) The entry of a decree or order by a court or
agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, or
liquidator for the Servicer in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar
proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(iv) The consent by the Servicer to the appointment of
a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities, or
similar proceedings of or relating to the Servicer or of or
relating to substantially all of its property; or the Servicer
shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations.
Upon the occurrence of any Event of Servicing Termination as described
above, and in each and every case and for so long as such Event of
Servicing Termination shall not have been remedied, either the Indenture
Trustee or the Holders of Notes evidencing not less than a majority of
the Outstanding Amount of the Notes (or, if the Notes have been paid in
full and the Indenture has been discharged in accordance with its terms,
by the Owner Trustee or the Holders of Certificates evidencing not less
than a majority of the Certificate Balance), by notice given in writing
to the Servicer (and to the Indenture Trustee or the Owner Trustee, as
applicable, if given by Holders) may terminate all of the rights and
obligations of the Servicer under this Agreement. On or after the receipt
by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Certificates,
the Notes or the Receivables or otherwise, shall pass to and be vested in
the Indenture Trustee pursuant to this Section 8.1; and, without
limitation, the Indenture Trustee shall be hereby authorized and
empowered to execute and deliver, on behalf of the predecessor Servicer,
as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of the Receivable Files,
or otherwise. The predecessor Servicer shall cooperate with the successor
Servicer and the Indenture Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this
Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held
by the predecessor Servicer for deposit, shall have been deposited by the
predecessor Servicer in the Collection Account, or shall thereafter be
received with respect to a Receivable. All reasonable costs and expenses
(including attorneys' fees and disbursements) incurred in connection with
transferring the Receivable Files to the successor Servicer and amending
this Agreement to reflect such succession as Servicer pursuant to this
Section 8.1 shall be paid by the predecessor Servicer upon presentation
of reasonable documentation of such costs and expenses. The Indenture
Trustee and the Owner Trustee shall give written notice of any
termination of the Servicer to their related Holders, and the
55
Indenture Trustee shall give such notice to the Rating Agencies. Neither
the Indenture Trustee nor any successor Servicer shall be deemed to be in
default hereunder by reason of its failure to make, or any delay in
making, any distribution hereunder or any portion thereof which was
caused by (i) the failure of the predecessor Servicer to deliver, or any
delay in delivering cash, documents or records to it, or (ii)
restrictions imposed by any regulatory authority having jurisdiction over
the predecessor Servicer.
SECTION 8.2 Indenture Trustee to Act; Appointment of
Successor Servicer. Upon the Servicer's receipt of notice of termination
pursuant to Section 8.1 or resignation pursuant to Section 7.5, the
Indenture Trustee shall be the successor in all respects to the Servicer
in its capacity as Servicer under this Agreement, and shall be subject to
all the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the Servicer by the terms and provisions of
this Agreement. As compensation therefor, the Indenture Trustee shall be
entitled to such compensation (whether payable out of the Collection
Account or otherwise) as the Servicer would have been entitled to under
this Agreement if no such notice of termination or resignation had been
given. Notwithstanding the above, the Indenture Trustee may, if it shall
be unwilling so to act, or shall, if it shall be legally unable so to
act, appoint, or petition a court of competent jurisdiction to appoint,
any established financial institution (x) having a net worth of not less
than $100,000,000 as of the last day of the most recent fiscal quarter
for such institution and (y) whose regular business shall include the
servicing of automobile receivables, as successor Servicer under this
Agreement; provided, that the appointment of any such successor Servicer
is required to satisfy the Rating Agency Condition. In connection with
such appointment, the Indenture Trustee may make such arrangements for
the compensation of such successor Servicer out of payments on
Receivables as it and such successor Servicer shall agree; provided,
however, that no such compensation shall be in excess of that permitted
the Servicer under this Agreement. The Indenture Trustee and such
successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
Unless the Indenture Trustee shall be prohibited by law from so acting,
the Indenture Trustee shall not be relieved of its duties as successor
Servicer under this Section 8.2 until the newly appointed successor
Servicer shall have assumed the responsibilities and obligations of the
Servicer under this Agreement.
SECTION 8.3 Notification to Noteholders and
Certificateholders. Upon any Event of Servicing Termination, or
appointment of a successor Servicer pursuant to this Article VIII, the
Owner Trustee shall give prompt written notice thereof to
Certificateholders and the Indenture Trustee shall give prompt written
notice thereof to the Noteholders, at their respective addresses of
record, and to the Rating Agencies.
SECTION 8.4 Waiver of Past Defaults. The Holders of
Notes evidencing at least a majority of the Outstanding Amount of the
Notes (or, the Holders of Certificates evidencing not less than a
majority of the Certificate Balance, in the case of any Event of
Servicing Termination that does not adversely affect the Indenture
Trustee or the Noteholders) may, on behalf of all such Holders, waive any
default by the Servicer in the performance of its obligations hereunder
and its consequences, except a default in the failure to make any
required deposits to or payments from any of the Trust Accounts or the
Certificate
56
Distribution Account in accordance with this Agreement. Upon any such
waiver of a past default, such default shall cease to exist, and any
Event of Servicing Termination arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived. The Servicer shall give
prompt written notice of any waiver to the Rating Agencies; provided,
however, that the Indenture Trustee or the Owner Trustee shall only be
required to give such notice if a Responsible Officer thereof has actual
knowledge of the related event.
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables; Trust
Termination. (a) As of the last day of any Collection Period as of which
the Pool Balance shall be equal to or less than the Optional Purchase
Percentage of the Original Pool Balance, the Servicer shall have the
option to purchase the Owner Trust Estate, other than the Trust Accounts
and the Certificate Distribution Account. To exercise such option, the
Servicer shall notify the Indenture Trustee, the Owner Trustee, the Note
Registrar and the Certificate Registrar in writing, no later than the
25th day of the Collection Period following which purchase is to be
effected, shall pay the aggregate Repurchase Amount for the Receivables
(including Defaulted Receivables) and shall succeed to all interests in,
to and under such property. The payment shall be made in the manner
specified in Section 5.4, and shall be distributed pursuant to Section
5.5. The Indenture Trustee shall not permit the purchase of the Owner
Trust Estate pursuant to this Section 9.1 unless (i) the Servicer's
long-term unsecured debt is rated at the time of such purchase at least
"BBB-" by Standard & Poor's and Fitch (if rated by Fitch) and Baa3 by
Moody's or (ii) the Servicer provides to the Indenture Trustee an Opinion
of Counsel in form and substance satisfactory to the Rating Agencies to
the effect that such purchase will not constitute a fraudulent transfer
under applicable state and federal law.
(b) Upon any sale of the assets of the Issuer pursuant
to Article V of the Indenture, the Servicer shall instruct the Indenture
Trustee in writing to deposit the proceeds from such sale after all
payments and reserves therefrom (including the expenses of such sale)
have been made (the "Sale Proceeds") in the Collection Account. On the
Distribution Date on which the Sale Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a
Distribution Date, on the Distribution Date immediately following such
deposit), the Servicer shall instruct the Indenture Trustee in writing to
make, and the Indenture Trustee shall make, the following deposits and
distributions (after the application on such Distribution Date of the
Total Distribution Amount pursuant to Section 5.5) from the Sale Proceeds
and any funds remaining on deposit in the Reserve Account (including the
proceeds of any sale of investments therein):
(i) to the Note Distribution Account, any portion of
the Noteholders' Interest Distributable Amount not otherwise
deposited into the Note Distribution Account on such
Distribution Date;
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(ii) to the Note Distribution Account, the Outstanding
Amount of the Notes (after giving effect to the reduction in the
Outstanding Amount of the Notes resulting from the deposits made
in the Note Distribution Account on such Distribution Date);
(iii) to the Certificate Distribution Account, any
portion of the Certificateholders' Interest Distributable Amount
not otherwise deposited into the Certificate Distribution
Account on such Distribution Date; and
(iv) to the Certificate Distribution Account, the
Certificate Balance and any Certificateholders' Principal
Carryover Shortfall (after giving effect to the reduction in the
Certificate Balance resulting from the deposits made in the
Certificate Distribution Account on such Distribution Date).
Any Sale Proceeds remaining after the deposits described above shall be
paid to the Seller.
(c) Notice of any termination of the Issuer shall be
given by the Servicer to the Owner Trustee, the Indenture Trustee and the
Rating Agencies as soon as practicable after the Servicer has received
notice thereof.
(d) Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the
Notes, the Certificateholders will succeed to the rights of the
Noteholders hereunder and the Owner Trustee will succeed to the rights
of, and assume the obligations of, the Indenture Trustee pursuant to this
Agreement.
(e) After the payment to the Indenture Trustee, the
Owner Trustee, the Holders and the Servicer of all amounts required to be
paid under this Agreement, the Indenture and the Trust Agreement, any
amounts on deposit in the Reserve Account or the Collection Account shall
be paid to the Seller, and any other assets remaining in the Owner Trust
Estate shall be distributed to the Seller.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment. This Agreement may be amended
by the Seller, the Servicer and the Owner Trustee, on behalf of the
Issuer, with the prior consent of the Indenture Trustee and prior notice
to the Rating Agencies but without prior notice to or the consent of any
of the Holders, (i) to cure any ambiguity, to correct or supplement any
provisions in this Agreement which may be inconsistent with any other
provisions herein, to evidence a succession to the Servicer or the Seller
pursuant to this Agreement or to add any other provisions with respect to
matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; provided, however,
that such action shall not, as evidenced by an Officer's Certificate
and/or an Opinion of Counsel reasonably acceptable and delivered to the
Owner Trustee and the Indenture Trustee, adversely and materially affect
the interests of the Issuer or any of the Holders; provided, further,
that the
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Servicer shall deliver written notice of such changes to each Rating
Agency prior to the execution of any such amendment, or (ii) to effect a
transfer or assignment in compliance with Section 10.6(a) of this
Agreement. Notwithstanding the foregoing, no amendment modifying the
provisions of Section 5.5 shall become effective without satisfaction of
the Rating Agency Condition.
This Agreement may also be amended from time to time by
the Seller, the Servicer and the Owner Trustee, on behalf of the Issuer,
with the consent of the Indenture Trustee, the Holders of Certificates
evidencing at least a majority of the Certificate Balance of the
Certificates and the consent of the Holders of Notes evidencing at least
a majority of the Outstanding Amount of the Notes, for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement, or of modifying in any manner the
rights of the Noteholders or the Certificateholders (including effecting
a transfer or assignment in compliance with Section 10.6(a) of this
Agreement); provided, however, that no such amendment, except with the
consent of the Holders of all Certificates or Notes, as applicable, then
outstanding, shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments of
Receivables, or distributions that shall be required to be made on any
Certificate or Note, or (b) reduce the aforesaid percentage of the
Certificate Balance of the Certificates or the Outstanding Amount of the
Notes required to consent to any such amendment.
Promptly after the execution of any amendment or
consent referred to in this Section 10.1, the Owner Trustee shall furnish
a copy of such amendment or consent to each Certificateholder and the
Indenture Trustee, who shall promptly furnish a copy to each Noteholder
and to the Rating Agencies.
It shall not be necessary for the consent of the
Indenture Trustee, the Certificateholders or the Noteholders pursuant to
this Section 10.1 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by
Certificateholders or Noteholders shall be subject to such reasonable
requirements as the Indenture Trustee or the Owner Trustee may prescribe.
Prior to the execution of any amendment to this
Agreement, the Indenture Trustee and the Owner Trustee shall be entitled
to receive and rely upon an Opinion of Counsel stating that the execution
of such amendment is authorized or permitted by this Agreement. The
Indenture Trustee and the Owner Trustee shall not be obligated to enter
into any such amendment which affects the Indenture Trustee's and the
Owner Trustee's own rights, duties or immunities under this Agreement.
Satisfaction of the Rating Agency Condition is required
prior to the execution of any amendment to this Agreement, other than an
amendment permitted pursuant to clause (i) of the first paragraph of this
Section 10.1.
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SECTION 10.2 Protection of Title to Owner Trust Estate.
(a) The Seller shall execute and file such financing statements and cause
to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain,
and protect the interests of the Issuer and the Indenture Trustee in the
Receivables and in the proceeds thereof. The Servicer shall deliver (or
cause to be delivered) to the Owner Trustee and the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change
its name, identity, or corporate structure in any manner that would,
could, or might make any financing statement or continuation statement
filed by the Seller in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) (or any comparable
section) of the Relevant UCC, unless it shall have given the Owner
Trustee and the Indenture Trustee at least 30 days prior written notice
thereof.
(c) The Seller and the Servicer shall give the Owner
Trustee and the Indenture Trustee at least 60 days prior written notice
of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the Relevant UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The Servicer
shall at all times maintain each office from which it shall service
Receivables, and its principal executive office, within the United States
of America.
(d) The Servicer shall maintain accounts and records as
to each Receivable accurately and in sufficient detail to permit (i) the
reader thereof to know at any time the status of such Receivable,
including payments and recoveries made and payments owing (and the nature
of each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Receivable and the amounts from time to time
deposited in the Collection Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so
that, from and after the time of sale under this Agreement of the
Receivables to the Issuer, the Servicer's master computer records
(including archives) that shall refer to a Receivable indicate clearly,
by numerical code or otherwise, that such Receivable is owned by the
Issuer and has been pledged to the Indenture Trustee. Indication of the
Issuer's and Indenture Trustee's interest in a Receivable shall be
deleted from or modified on the Servicer's computer systems when, and
only when, the Receivable shall have been paid in full, repurchased or
assigned pursuant hereto.
(f) If at any time the Seller or the Servicer shall
propose to sell, grant a security interest in, or otherwise transfer any
interest in a new or used automobile receivable to any prospective
purchaser, creditor, or other transferee, the Seller or the Servicer, as
the case may be, shall give to such prospective purchaser, creditor, or
other transferee computer tapes, records, or print-outs (including any
restored from archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly that such Receivable
has been sold and is owned by the Issuer and has been pledged to the
Indenture Trustee.
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(g) The Servicer shall permit the Indenture Trustee and
the Owner Trustee and their respective agents upon reasonable notice at
any time during normal business hours which does not unreasonably
interfere with the Servicer's normal operations or customer or employee
relations to inspect, audit, and make copies of and abstracts from the
Servicer's records regarding the Receivables.
(h) Upon request, the Servicer shall furnish to the
Owner Trustee or the Indenture Trustee, within five Business Days, a list
of all Receivables by contract number and name of Obligor then held by
the Issuer, together with a reconciliation of such list to the Schedule
of Receivables attached as Schedule A to this Agreement and to each of
the Servicer Certificates indicating removal of Receivables from the
Owner Trust Estate.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
(i) upon the execution and delivery of this Agreement,
an Opinion of Counsel either (a) stating that, in the opinion of
such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully
to preserve and protect the interest of the Issuer and the
Indenture Trustee in the Receivables, and reciting the details
of such filings or referring to prior Opinions of Counsel in
which such details are given, or (b) stating that, in the
opinion of such counsel, no such action shall be necessary to
preserve and protect such interest; and
(ii) on or before March 31 of each year, commencing
with March 31, 1999, an Opinion of Counsel, dated as of such
date, either (a) stating that, in the opinion of such counsel,
all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and
protect the interest of the Issuer and the Indenture Trustee in
the Receivables, and reciting the details of such filings or
referring to prior opinions of Counsel in which such details are
given, or (b) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such
interest. Notwithstanding the provisions of Section 10.4, such
Opinion of Counsel may be sent by regular non-certified mail,
and such mailed opinion shall be deemed delivered when so
mailed.
(j) The Seller shall, to the extent required by
applicable law, cause the Certificates and the Notes to be registered
with the Securities and Exchange Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in
such sections.
(k) For the purpose of facilitating the execution of
this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and all of which counterparts shall
constitute but one and the same instrument.
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SECTION 10.3 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.4 Notices. All demands, notices, and
communications under this Agreement shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of
the Seller, c/o Chase Automotive Finance Corporation, 000 Xxxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxx Xxxx 00000 Attention: Financial Controller, or at such
other address as shall be designated by the Seller in a written notice to
the Indenture Trustee, (b) in the case of the Servicer, c/o Chase
Manhattan Automotive Finance Corporation, 000 Xxxxxxx, Xxxxxx Xxxx, Xxx
Xxxx 00000, Attention: Financial Controller, or at such other address as
shall be designated by the Servicer in a written notice to the Indenture
Trustee, (c) in the case of the Indenture Trustee, at Norwest Bank
Minnesota, National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Corporate Trust Office and
(d) in the case of the Issuer and the Owner Trustee, at c/o Wilmington
Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Corporate Trust Administration. Any notice required or
permitted to be mailed to a Holder shall be given by first class mail,
postage prepaid, at the address of record of such Holder. Any notice to a
Holder so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Holder
shall receive such notice.
SECTION 10.5 Severability of Provisions. If any one or
more of the covenants, agreements, provisions, or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the
remaining covenants, agreements, provisions, or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of the Certificates or of the Notes or
the rights of the Holders thereof.
SECTION 10.6 Assignment. Notwithstanding anything to
the contrary contained herein, except as provided in Sections 6.3, 7.3,
7.5 and 8.2, neither the Seller nor the Servicer may assign all, or a
portion of, its rights, obligations and duties under this Agreement
unless such transfer or assignment satisfies the Rating Agency Condition.
In the event of a transfer or assignment pursuant to this Section 10.6,
the Rating Agencies shall be provided with notice of such transfer or
assignment.
SECTION 10.7 Certificates and Notes Nonassessable and
Fully Paid. The interests represented by the Certificates and Notes shall
be nonassessable for any losses or expenses of the Issuer or for any
reason whatsoever, and, upon authentication thereof by the Indenture
Trustee and the Owner Trustee pursuant to the Trust Agreement and the
Indenture, respectively, each Certificate and Note shall be deemed fully
paid.
SECTION 10.8 Third-Party Beneficiaries. This Agreement
will inure to the benefit of and be binding upon the parties hereto, and
their respective successors and permitted assigns. The Administrator, the
Owner Trustee, individually and on behalf of the Certificateholders, and
the Indenture Trustee, individually and on behalf of the Noteholders
62
are third-party beneficiaries to this Agreement and are entitled to the
rights and benefits hereunder and may enforce the provisions hereof as it
were a party hereto. Except as otherwise provided in this Agreement, no
other person will have any right or obligation hereunder.
SECTION 10.9 Assignment to Indenture Trustee. The
Seller hereby acknowledges and consents to any mortgage, pledge,
assignment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders of all right, title and interest of the Issuer in, to and
under the Receivables and the other property constituting the Owner Trust
Estate and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
SECTION 10.10 Limitation of Liability of Owner Trustee
and Indenture Trustee. (a) Notwithstanding anything contained herein to
the contrary, this Agreement has been countersigned by Wilmington Trust
Company not in its individual capacity but solely in its capacity as
Owner Trustee of the Issuer, and in no event shall Wilmington Trust
Company in its individual capacity or, except as expressly provided in
the Trust Agreement, as Owner Trustee of the Issuer have any liability
for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of its duties or
obligations hereunder or in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII
and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the
contrary, this Agreement has been acknowledged and accepted by Norwest
Bank Minnesota, National Association not in its individual capacity but
solely as Indenture Trustee, and in no event shall Norwest Bank
Minnesota, National Association have any liability for the
representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall
be had solely to the assets of the Issuer.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective officers as of the day
and year first above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION,
as Seller and Servicer
By: /s/ Xxxxx Xxxxxx
---------------------
Title: Vice President
CHASE MANHATTAN AUTO OWNER TRUST,
1998-B, as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solel as Owner Trustee on
behalf of the Issuer
By: /s/ Xxxxxx Xxxxxx
---------------------
Title: Vice President
Acknowledged and Accepted:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity,
but solely in its capacity
as Indenture Trustee
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------------
Title: Assistant Vice President
SCHEDULE A
LIST OF RECEIVABLES
Delivered to the Owner Trustee and the Indenture Trustee
on the Closing Date.
SCHEDULE B
Location of Receivable Files
The Chase Manhattan Bank
20 Clinton Avenue South
0xx Xxxxx
XXXXXX Xxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Iron Mountain
Xxxxx 0-X Xxxxx
X.X. Xxx 000
Xx. Xxxx, XX 00000
Chase Manhattan Automotive Finance Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
EXHIBIT A
[FORM OF SERVICER'S CERTIFICATE]
A-1
EXHIBIT B
[FORM OF CERTIFICATEHOLDER AND NOTEHOLDER REPORT]
B-1