EXHIBIT 4.1
================================================================================
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
as Seller and Servicer
and
CHASE MANHATTAN AUTO OWNER TRUST 2002-B
as Issuer
SALE AND SERVICING AGREEMENT
Dated as of June 1, 2002
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions...............................................................1
SECTION 1.2 Usage of Terms ..........................................................22
SECTION 1.3 Simple Interest Method; Methods of Allocating Payments or
Receivables; Allocations...........................................22
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1 Conveyance of Receivables................................................22
SECTION 2.2 Closing..................................................................23
ARTICLE III
THE RECEIVABLES
SECTION 3.1 Representations and Warranties of Seller; Conditions
Relating to Receivables..................................................23
SECTION 3.2 Repurchase Upon Breach or Failure of a Condition.........................27
SECTION 3.3 Custody of Receivable Files..............................................28
SECTION 3.4 Duties of Servicer as Custodian..........................................28
SECTION 3.5 Instructions; Authority to Act...........................................29
SECTION 3.6 Custodian's Indemnification..............................................29
SECTION 3.7 Effective Period and Termination.........................................29
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1 Duties of Servicer.......................................................30
SECTION 4.2 Collection of Receivable Payments; Refinancing...........................30
SECTION 4.3 Realization Upon Receivables.............................................31
SECTION 4.4 Maintenance of Security Interests in Financed Vehicles...................32
SECTION 4.5 Covenants of Servicer....................................................32
SECTION 4.6 Purchase of Receivables Upon Breach......................................32
SECTION 4.7 Servicing Fee............................................................33
SECTION 4.8 Servicer's Certificate...................................................33
SECTION 4.9 Annual Statement as to Compliance........................................34
SECTION 4.10 Annual Audit Report.....................................................34
SECTION 4.11 Access by Holders to Certain Documentation and Information
Regarding Receivables...................................................35
SECTION 4.12 Reports to Holders and the Rating Agencies..............................35
SECTION 4.13 Reports to the Securities and Exchange Commission.......................35
i
Page
----
ARTICLE V
ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1 Establishment of Collection Account and Note Distribution Account.......36
SECTION 5.2 Collections.............................................................36
SECTION 5.3 [Reserved]..............................................................37
SECTION 5.4 Additional Deposits.....................................................37
SECTION 5.5 Distributions...........................................................37
SECTION 5.6 Yield Supplement Account................................................39
SECTION 5.7 Reserve Account.........................................................40
SECTION 5.8 Net Deposits............................................................40
SECTION 5.9 Statements to Certificateholders and Noteholders........................41
ARTICLE VI
THE SELLER
SECTION 6.1 Representations of Seller...............................................42
SECTION 6.2 Liability of Seller; Indemnities........................................43
SECTION 6.3 Merger or Consolidation of Seller.......................................44
SECTION 6.4 Limitation on Liability of Seller and Others............................44
SECTION 6.5 Seller May Own Notes and Certificates...................................44
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations of Servicer.............................................44
SECTION 7.2 Liability of Servicer; Indemnities......................................46
SECTION 7.3 Merger or Consolidation of Servicer.....................................46
SECTION 7.4 Limitation on Liability of Servicer and Others..........................47
SECTION 7.5 Servicer Not To Resign..................................................47
SECTION 7.6 Delegation of Duties....................................................48
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
SECTION 8.1 Events of Servicing Termination.........................................48
SECTION 8.2 Indenture Trustee to Act; Appointment of Successor Servicer.............50
SECTION 8.3 Notification to Noteholders and Certificateholders......................50
SECTION 8.4 Waiver of Past Defaults.................................................51
ii
Page
----
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables; Trust Termination.................51
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment..............................................................52
SECTION 10.2 Protection of Title to Owner Trust Estate..............................53
SECTION 10.3 GOVERNING LAW .........................................................55
SECTION 10.4 Notices................................................................55
SECTION 10.5 Severability of Provisions.............................................56
SECTION 10.6 Assignment.............................................................56
SECTION 10.7 Certificates and Notes Nonassessable and Fully Paid....................56
SECTION 10.8 Third-Party Beneficiaries..............................................56
SECTION 10.9 Assignment to Indenture Trustee........................................56
SECTION 10.10 Limitation of Liability of Owner Trustee and Indenture Trustee........57
SECTION 10.11 No Petition. .........................................................57
iii
SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location of Receivable Files
EXHIBITS
Exhibit A - Form of Servicer's Certificate
Exhibit B - Form of Monthly Report
Exhibit C - Form of Collection Account Control Agreement
Exhibit D - Form of Reserve Account Control Agreement
Exhibit E - Form of Yield Supplement Account Control Agreement
iv
This SALE AND SERVICING AGREEMENT, dated as of June 1, 2002, (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 Xxxxx Xxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000 ("Chase
USA," the "Seller" or the "Servicer" in its respective capacities as such), and
CHASE MANHATTAN AUTO OWNER TRUST 2002-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.
"Administration Agreement" means the Administration Agreement, dated as
of June 1, 2002, among the Issuer, the Administrator and the Indenture Trustee,
as the same may be amended and supplemented from time to time.
"Administrator" means JPMorgan Chase 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 Payment 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 Payment 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.
2
"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 JPMorgan Chase
Bank, 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 Payment Date, the sum of (i) that
portion of Collections on the Receivables received during the related Collection
Period allocated to interest, (ii) the Yield Supplement Withdrawal Amount for
such Payment Date and (iii) that portion of the Repurchase Amounts received with
respect to the Repurchased Receivables repurchased by the Seller or purchased by
the Servicer during the related Collection Period that would have been treated
as Available Interest if the Obligor thereof had prepaid such Receivables in
full on the date as of which such Receivables were repurchased or purchased.
"Available Principal" means, for any Payment Date, the sum of (i) that
portion of Collections on the Receivables received during the related Collection
Period allocated to the principal balance of the Receivables and (ii) that
portion of the Repurchase Amounts received with respect to the Repurchased
Receivables repurchased by the Seller or purchased by the Servicer that would
have been treated as Available Principal if the Obligor thereof had prepaid such
Receivables in full on the date as of which such Receivables were repurchased or
purchased.
"Available Reserve Account Amount" shall mean, for each Payment 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
Payment Date.
"Average Delinquency Percentage" means for any Payment Date, the
average of the Delinquency Percentages for such Payment Date and the preceding
two (2) Payment Dates.
"Average Net Loss Ratio" means for any Payment Date, the average of the
Net Loss Ratios for such Payment Date and the preceding two (2) Payment Dates.
"Basic Documents" means this Agreement, the Certificate of Trust, the
Indenture, the Depository Agreements, the Securities Control Agreements, the
Trust Agreement, the Administration Agreement and other documents and
certificates delivered in connection therewith.
3
"Book-Entry Certificates" means beneficial interests in the
Certificates, the ownership and transfers of which shall be made through book
entries by a Clearing Agency or Foreign Clearing Agency as described in Section
3.10 of the Trust Agreement.
"Book-Entry Notes" means beneficial interests in the Notes, the
ownership and transfers of which shall be made through book entries by a
Clearing Agency or Foreign Clearing Agency as described in Section 2.10 of the
Indenture.
"Business Day" means a day, other than a Saturday or a Sunday, on which
the Indenture Trustee and banks located in New York, New York, Newark, 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. Codess. 3801 et seq., as amended from time to time.
"Capital Accounts" has the meaning specified in Section 5.8 of the
Trust Agreement.
"Certificate" means a certificate evidencing the beneficial interest of
a Certificateholder in the Owner Trust Estate, substantially in the form of
Exhibit A-2 to the Trust Agreement.
"Certificate Balance" means an amount equal to $34,200,000 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 Payment 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
Payment 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 Payment Date to the extent that any portion of the
Total Distribution Amount on such Payment Date is available to pay the existing
Certificateholders' Principal Carryover Shortfall, but not by more than the net
aggregate reductions in the Certificate Balance set forth in the preceding
sentence.
"Certificate Depository Agreement" means the agreement among the
Issuer, the Owner Trustee, JPMorgan Chase Bank, 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.
"Certificate Final Scheduled Payment Date" means the January 2009
Payment Date on which the outstanding principal amount, if any, of the
Certificates is payable.
4
"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 Payment 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 4.24% per annum.
"Certificate Register" and "Certificate Registrar" means the register
maintained and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"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 Payment 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 Payment Date, zero, and (b) for any other Payment Date, the excess of
the Certificateholders' Interest Distributable Amount for the preceding Payment
Date over the amount in respect of the interest actually deposited in the
Certificate Distribution Account on such preceding Payment Date, plus interest
on such excess, to the extent permitted by law, at the Certificate Rate from and
including such preceding Payment Date to, but excluding, the current Payment
Date.
"Certificateholders' Interest Distributable Amount" means, for any
Payment Date, the sum of the Certificateholders' Monthly Interest Distributable
Amount for such Payment Date and the Certificateholders' Interest Carryover
Shortfall for such Payment Date.
"Certificateholders' Monthly Interest Distributable Amount" means, for
any Payment Date, one month's interest (or, in the case of the first Payment
Date, interest accrued from and including the Closing Date to, but excluding,
such Payment Date) at the Certificate Rate on the Certificate Balance on the
immediately preceding Payment Date, after giving effect to all payments of
principal to the Certificateholders on or prior to such Payment Date (or, in the
case of the first Payment 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.
5
"Certificateholders' Monthly Principal Distributable Amount" means, for
any Payment Date, the Certificateholders' Percentage of the Principal
Distribution Amount.
"Certificateholders' Percentage" means, for any Payment Date, 100%
minus the Noteholders' Percentage.
"Certificateholders' Principal Carryover Shortfall" means for any
Payment Date, the sum of (a) the excess of (i) the Certificateholders' Principal
Distributable Amount for the preceding Payment Date, over (ii) the amount in
respect of principal actually deposited in the Certificate Distribution Account
on such Payment 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
Payment Date, the sum of (i) the Certificateholders' Monthly Principal
Distributable Amount for such Payment Date and (ii) the Certificateholders'
Principal Carryover Shortfall for such Payment Date; provided that the
Certificateholders' Principal Distributable Amount shall not exceed the
Certificate Balance. In addition, on the Certificate Final Scheduled Payment
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 Payment 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 USA" means Chase Manhattan Bank USA, National Association.
"Class A-1 Interest Rate" means 1.9291% per annum.
"Class A-1 Notes" means the Class A-1 1.9291% Asset Backed Notes,
substantially in the form of Exhibit B to the Indenture.
"Class A-2 Interest Rate" means 2.70% per annum.
"Class A-2 Notes" means the Class A-2 2.70% Asset Backed Notes,
substantially in the form of Exhibit C to the Indenture.
6
"Class A-3 Interest Rate" means 3.58% per annum.
"Class A-3 Notes" means the Class A-3 3.58% Asset Backed Notes,
substantially in the form of Exhibit D to the Indenture.
"Class A-4 Interest Rate" means 4.21% per annum.
"Class A-4 Notes" means the Class A-4 4.21% Asset Backed Notes,
substantially in the form of Exhibit E to the Indenture.
"Class R Certificate" means the certificate evidencing the beneficial
interest of the Class R Certificateholder in the Owner Trust Estate,
substantially in the form of Exhibit A-1 to the Trust Agreement.
"Class R Certificateholder" means the Person in whose name the Class R
Certificate is registered.
"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).
"Clearstream" means Clearstream Banking, societe anonyme.
"Closing Date" means June 6, 2002.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" means securities account no. 00000000.2 entitled
"Xxxxx Fargo Bank Minnesota, National Association, as Indenture Trustee,
Securities Account of Chase Auto Owner Trust Series 2002-B" maintained by the
Collection Account Securities Intermediary pursuant to the Collection Account
Control Agreement or any successor securities account maintained pursuant to the
Collection Account Control Agreement.
"Collection Account Control Agreement" means the agreement among the
Issuer, JPMorgan Chase Bank, as securities intermediary, and the Indenture
Trustee, dated as of June 1, 2002, relating to the Collection Account,
substantially in the form attached as Exhibit C, as the same may be amended and
supplemented from time to time.
"Collection Account Securities Intermediary" means JPMorgan Chase Bank
or any other securities intermediary that maintains the Collection Account
pursuant to the Collection Account Control Agreement.
"Collection Period" means each calendar month beginning June 1, 2002
until Chase Manhattan Auto Owner Trust 2002-B shall terminate pursuant to
Article IX of the Trust Agreement.
"Collections" means all collections in respect of Receivables,
including Liquidation Proceeds with respect to the Receivables.
7
"Contract Rate" of a Receivable means the annual rate of interest
stated in such Receivable.
"Corporate Trust Office" means the corporate trust office of the
Indenture Trustee in Minneapolis, Minnesota or the office of the Owner Trustee,
as applicable.
"Cutoff Date" means June 1, 2002.
"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 was originated by the
Seller or an Affiliate of the Seller with the involvement of a Dealer.
"Debt Cancellation Policy" means a policy issued by Chase USA to the
obligor that forgives the Principal Balance of a Receivable in excess of
insurance proceeds realized upon the event of a total loss of the related
Financed Vehicle.
"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 any 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 Payment 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 Payment 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.
8
"Deposit Date" means the Business Day immediately preceding each
Payment 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.
"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 and the Yield Supplement
Account, initially be JPMorgan Chase Bank, and may be maintained with JPMorgan
Chase Bank so long as JPMorgan Chase Bank is a Qualified Trust Institution; or
(b) a separately identifiable deposit account established in the deposit taking
department of a Qualified Institution, which may be JPMorgan Chase Bank so long
as JPMorgan Chase Bank is a Qualified Institution.
"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 Euroclear Bank S.A./N.V., in its capacity as
the operator of the Euroclear system.
"Event of Default" means an event specified in Section 5.1 of the
Indenture.
"Event of Servicing Termination" means an event specified in Section
8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" has the meaning specified in Section 8.2 of the Trust
Agreement.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"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 Payment Date.
9
"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.
"Fitch" means Fitch, Inc. and its successors and assigns.
"Fixed Note Percentage" means the percentage equivalent of a fraction
(rounded to the nearest one-one hundred thousandth of 1%) numerator of which is
the Outstanding Amount of the Class A-3 Notes and the Class A-4 Notes on the
Payment Date on which the Class A-2 Notes have been paid in full and the
denominator of which is the sum of the Outstanding Amount of the Class A-3 Notes
and the Class A-4 Notes and the Certificate Balance on the Payment Date on which
the Class A-2 Notes have been paid in full.
"FNMA" means the Federal National Mortgage Association or any successor
thereto.
"Foreign Clearing Agency" means, collectively, Clearstream and the
Euroclear Operator.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Trust Estate or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments and all other moneys payable thereunder, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, to bring Proceedings in the name of the
Granting party or otherwise and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder or with respect
thereto.
"Holder" or "Holders" means, unless the context otherwise requires,
both Certificateholders and Noteholders.
"Indemnified Parties" has the meaning specified in Section 8.2 of the
Trust Agreement.
"Indenture" means the Indenture dated as of June 1, 2002, between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Indenture Trustee" means, initially, Xxxxx Fargo, 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.
10
"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 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 Payment 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 2002-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.
"JPMorgan Chase Bank" means JPMorgan Chase Bank, a New York banking
corporation and its successors.
"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.
11
"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.
"Moody's" means Xxxxx'x Investors Service and its successors and
assigns.
"Net Loss Ratio" means, for any Payment Date, the ratio, expressed as
an annualized percentage, of (i) the Aggregate Net Losses for such Payment Date
to (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, JPMorgan Chase Bank, 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(b).
"Note Final Scheduled Payment Date" means for (a) the Class A-1 Notes,
the June 2003 Payment Date, (b) the Class A-2 Notes, the January 2005 Payment
Date, (c) the Class A-3 Notes, the May 2006 Payment Date, and (d) the Class A-4
Notes, the January 2009 Payment 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 Payment 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.
12
"Noteholders' Distributable Amount" means, for any Payment 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 Payment Date, zero, and (b) for any other Payment
Date, the excess of (x) the Noteholders' Interest Distributable Amount for the
preceding Payment Date for such class of Notes, over (y) the amount in respect
of interest actually deposited in the Note Distribution Account on such
preceding Payment Date with respect to such class of Notes, plus interest on the
amount of interest due but not paid to the Noteholders of such class on the
preceding Payment Date, to the extent permitted by law, at the applicable
Interest Rate from such preceding Payment Date through the current Payment Date.
"Noteholders' Interest Distributable Amount" means, for any Payment
Date for any class of Notes, the sum of (x) the Noteholders' Monthly Interest
Distributable Amount for such class of Notes for such Payment Date and (y) the
Noteholders' Interest Carryover Shortfall for such class of Notes for such
Payment Date.
"Noteholders' Monthly Interest Distributable Amount" means, for any
Payment Date for each class of Notes, one month's interest (or, in the case of
the first Payment Date, interest accrued from and including the Closing Date to
but excluding such Payment Date) at the related Interest Rate on the Outstanding
Amount of the Notes of such class on such Payment Date (or, in the case of the
first Payment 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 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
Payment Date, the Noteholders' Percentage of the Principal Distribution Amount.
"Noteholders' Percentage" means (i) 100% for each Payment Date
occurring before the Payment Date on which the Class A-2 Notes have been paid in
full, (ii) the Fixed Note Percentage (or such greater percentage as would be
necessary to pay the Class A-2 Notes in full) on such Payment Date, (iii) the
Fixed Note Percentage after such Payment Date until all of the Notes have been
paid in full and (iv) zero thereafter; provided, however, that (x) if the amount
on deposit in the Reserve Account on any Payment Date would be, after giving
effect to distributions on such Payment Date, less than 0.50% of the Original
Pool Balance, the Noteholders' Percentage will be 100% for such Payment Date and
each Payment Date thereafter until the Notes have been paid in full or the
amount on deposit in the Reserve Account equals or exceeds the Specified Reserve
Account Balance and (y) if the Notes have been accelerated after the occurrence
of an Event of Default, the Noteholders' Percentage will be 100% for each
Payment Date thereafter until the Notes have been paid in full.
"Noteholders' Principal Carryover Shortfall" means for any Payment
Date, the excess of (x) the Noteholders' Principal Distributable Amount for the
preceding Payment Date over (y) the amount in respect of principal actually
deposited in the Note Distribution Account on such Payment Date.
13
"Noteholders' Principal Distributable Amount" means, for any Payment
Date, the sum of (i) the Noteholders' Monthly Principal Distributable Amount for
such Payment Date and (ii) the Noteholders' Principal Carryover Shortfall for
such Payment Date; provided that the Noteholders' Principal Distributable Amount
shall not exceed the Outstanding Amount of the Notes. In addition, on the Note
Final Scheduled Payment 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 Payment 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 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.
"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 $1,368,000,000.00.
"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 prepaid, notice of such prepayment 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;
14
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that an Authorized Officer of the Indenture Trustee either
actually knows to be so owned or has received written notice that such Note is
so owned shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means, when used with respect to Notes, as of any
date of determination, the aggregate principal amount of all Notes, or a class
of Notes, as applicable, Outstanding as of such date.
"Owner Trust Estate" means all right, title and interest of the Issuer
in and to the property and rights assigned to the Issuer pursuant to Article II
of this Agreement, all funds on deposit from time to time in the Trust Accounts
(other than the Note Distribution Account) and the Certificate Distribution
Account and all other property of Issuer from time to time, including any rights
of the Owner Trustee and the Issuer pursuant to this Agreement.
"Owner Trustee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
the Trust Agreement, and any successor Owner Trustee thereunder.
"Paying Agent" means: (a) when used in the Indenture or otherwise with
respect to the Notes, the Indenture Trustee or any other Person that meets the
eligibility standards for the Indenture Trustee specified in Section 6.11 of the
Indenture and is authorized by the Indenture Trustee to make the payments to and
distributions from the Collection Account and the Note Distribution Account,
including payment of principal of or interest on the Notes on behalf of the
Issuer; and (b) when used in the Trust Agreement or otherwise with respect to
the Certificates, the Owner Trustee or any other paying agent or co-paying agent
appointed pursuant to Section 3.9 of the Trust Agreement, and in the case of the
Indenture with respect to the Notes, and the Trust Agreement with respect to the
Certificates, such Paying Agent shall initially be the corporate trust office of
JPMorgan Chase Bank.
"Payment Date" means, in the case of the first Collection Period, July
15, 2002, 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.
"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):
15
(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, other than commercial paper issued by JPMorgan
Chase Bank or any of its Affiliates, which is then rated P-1 by Moody's, "F1+"
by Fitch (if rated by Fitch) and "A-1+" by Standard & Poor's;
(iv) certificates of deposit, demand or time deposits, federal funds or
banker's acceptances, other than banker's acceptances issued by JPMorgan Chase
Bank or any of its Affiliates, 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, "F1+" 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; and
(ix) such other investments, other than investments in JPMorgan Chase Bank
or any of its affiliates, 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.
16
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 JPMorgan Chase Bank, the Indenture Trustee or an Affiliate thereof serves
as an investment advisor, administrator, shareholder servicing agent, and/or
custodian or subcustodian, notwithstanding that (i) JPMorgan Chase Bank, Xxxxx
Fargo or an Affiliate thereof charges and collects fees and expenses from such
funds for services rendered, (ii) JPMorgan Chase Bank, Xxxxx Fargo or an
Affiliate thereof charges and collects fees and expenses for services rendered
pursuant to this Agreement, and (iii) services performed for such funds and
pursuant to this Agreement may converge at any time. The Indenture Trustee
specifically authorizes JPMorgan Chase Bank, Xxxxx Fargo 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 JPMorgan Chase Bank or Xxxxx Fargo, 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.
"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.
"Prepayment Date" means in the case of a prepayment of the Notes
pursuant to Section 10.1 of the Indenture, the Payment Date specified by the
Servicer pursuant to such Section 10.1.
"Principal Balance" of a Receivable, as of the close of business on the
last day of any Collection Period, means the Amount Financed minus that portion
of all payments received on or prior to such date allocable to principal. The
Principal Balance of a Defaulted Receivable or a Repurchased Receivable shall be
deemed to be zero, in each case, as of such date.
"Principal Distribution Amount" means, for any Payment Date, the sum of
the following amounts, without duplication: (i) Available Principal and (ii)
Aggregate Net Losses.
17
"Principal Prepayment" means a payment or other recovery of principal
on a Receivable (including insurance proceeds and Liquidation Proceeds applied
to principal on a Receivable) which is received in advance of its due date.
"Proceeding" means any suit in equity, action or law or other judicial
or administrative proceeding.
"Projected Weighted Average Life" means, with respect to (a) the Class
A-1 Notes, 0.36, (b) the Class A-2 Notes, 1.05, (c) the Class A-3 Notes, 2.00,
(d) the Class A-4 Notes, 3.27 and (e) the Certificates, 2.62.
"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 opening of business
on the Cutoff Date), which Receivable shall be identified in the Schedule of
Receivables.
"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 Payment Date, the Business Day
prior to such Payment 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.
18
"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.
"Required Rate" means the sum of (i) the Servicing Fee Rate and (ii)
the percentage equivalent of a fraction, the numerator of which is equal to the
sum of the product for each class of Notes and for the Certificates of (x) the
Interest Rate for such class of Notes or the Certificate Rate, (y) the
Outstanding Amount of the Notes of such class on the Closing Date or the
Certificate Balance on the Closing Date and (z) the Projected Weighted Average
Life with respect to such class of Notes or the Certificates, and the
denominator of which is equal to the sum of the product for each class of Notes
and for the Certificates of (1) the Outstanding Amount of the Notes of such
class on the Closing Date or the Certificate Balance on the Closing Date and (2)
the Projected Weighted Average Life with respect to such class of Notes or the
Certificates.
"Reserve Account" means securities account no. 00000000 entitled "Xxxxx
Fargo Bank Minnesota, National Association, as Indenture Trustee, Securities
Account of Chase Auto Owner Trust Series 2002-B" maintained by the Reserve
Account Securities Intermediary pursuant to the Reserve Account Control
Agreement or any successor securities account maintained pursuant to the Reserve
Account Control Agreement.
"Reserve Account Control Agreement" means the agreement among the
Issuer, Xxxxx Fargo, as securities intermediary, and the Indenture Trustee,
dated as of June 1, 2002, relating to the Reserve Account, substantially in the
form attached as Exhibit D, as the same may be amended and supplemented from
time to time.
"Reserve Account Initial Deposit" means an amount equal to $10,260,000.
"Reserve Account Securities Intermediary" means Xxxxx Fargo or any
other securities intermediary that maintains the Reserve Account pursuant to the
Reserve Account Control Agreement.
"Reserve Account Transfer Amount" means, for any Payment 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 Payment Date
(excluding amounts to be paid to the Class R Certificateholder pursuant to
clause (i) of Section 5.7(d), but before giving effect to any other withdrawals
therefrom relating to such Payment 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 Payment Date.
19
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary, or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Sale Proceeds" has the meaning specified in Section 9.1(b).
"Schedule of Receivables" means the list of Receivables attached hereto
as Schedule A.
"SFAS 140" means the Statement of Financial Accounting Standard No.
140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Control Agreements" means, collectively, the Collection
Account Control Agreement, the Reserve Account Control Agreement and the Yield
Supplement Account Control Agreement.
"Securities Intermediaries" means, collectively, JPMorgan Chase Bank,
acting as securities intermediary under the Collection Account Control Agreement
or any successor thereto thereunder and Xxxxx Fargo, acting as securities
intermediary under the Reserve Account Control Agreement and the Yield
Supplement Account Control Agreement or any successor thereto thereunder.
"Seller" means Chase Manhattan Bank USA, National Association, a
national banking association with its principal executive offices in Newark,
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 Newark, 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.
20
"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 Payment Date, the last day of the second Collection
Period preceding the Collection Period in which such Payment 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 Payment Date,
means 1.75% of the Pool Balance as of the related Settlement Date, but in any
event will not be less than the lesser of (i) $10,260,000 and (ii) such Pool
Balance; provided that the Specified Reserve Account Balance will be calculated
using a percentage of 3.50% for any Payment Date (beginning with the September
2002 Payment 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.
"Specified Yield Supplement Amount" with respect to any Payment Date,
means an amount equal to the lesser of (a) the Yield Supplement Account Initial
Deposit and (b) the sum of the Yield Supplement Withdrawal Amounts for all
future Payment Dates, assuming that (i) all scheduled payments on the Yield
Supplemented Receivables are made when due, (ii) no prepayments are made on the
Yield Supplemented Receivables and (iii) the investment income on amounts on
deposit in the Yield Supplement Account will be 1.25% per annum.
"Standard & Poor's" means Standard & Poor's Ratings Services and its
successors and assigns.
"Total Distribution Amount" means, for any Payment Date, the sum of
Available Interest and Available Principal for such Payment Date. The Total
Distribution Amount on any Payment Date shall exclude all payments and proceeds
(including any Liquidation Proceeds and any amounts received from Dealers with
respect to Receivables) of any Receivables the Repurchase Amount of which has
been included in the Total Distribution Amount for a prior Payment Date.
21
"Treasury Regulations" means, the treasury regulations promulgated
under Code.
"Trust Accounts" means, collectively, the Collection Account, the Note
Distribution Account, the Reserve Account and the Yield Supplement Account.
"Trust Agreement" means the Amended and Restated Trust Agreement dated
as of June 1, 2002, between the Depositor 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, the
Reserve Account and the Yield Supplement Account.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"Xxxxx Fargo" means Xxxxx Fargo Bank Minnesota, National Association.
"Yield Supplement Account" means securities account no. 00000000
entitled "Xxxxx Fargo Bank Minnesota, National Association, as Indenture
Trustee, Securities Account of Chase Auto Owner Trust Series 2002-B" maintained
by the Yield Supplement Account Securities Intermediary pursuant to the Yield
Supplement Account Control Agreement or any successor securities account
maintained pursuant to the Yield Supplement Account Control Agreement.
"Yield Supplement Account Control Agreement" means the agreement among
the Issuer, Xxxxx Fargo, as securities intermediary, and the Indenture Trustee,
dated as of June 1, 2002, relating to the Yield Supplement Account,
substantially in the form attached as Exhibit E, as the same may be amended and
supplemented from time to time.
"Yield Supplement Account Initial Deposit" means an amount equal to
$7,017,060.88.
"Yield Supplement Account Securities Intermediary" means Xxxxx Fargo or
any other securities intermediary that maintains the Yield Supplement Account
pursuant to the Yield Supplement Account Control Agreement.
"Yield Supplement Withdrawal Amount" means, for any Payment Date, an
amount equal to the lesser of (i) the amount of cash or other immediately
available funds on deposit in the Yield Supplement Account on such Payment Date
and (ii) the aggregate amount by which one month's interest (assuming a
thirty-day month) on the Principal Balance of each Yield Supplemented Receivable
as of the close of business on the last day of the second Collection Period
preceding such Payment Date at the Required Rate exceeds one month's interest
(assuming a thirty-day month) on such Principal Balance at the Contract Rate of
such Yield Supplemental Receivable.
22
"Yield Supplemented Receivable" means a Receivable that has a Contract
Rate that is less than the Required Rate.
SECTION 1.2 Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation." All references herein to Articles,
Sections, Subsections and Exhibits are references to Articles, Sections,
Subsections and Exhibits contained in or attached to this Agreement unless
otherwise specified, and each such Exhibit is part of the terms of this
Agreement.
SECTION 1.3 Simple Interest Method; 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 Receivables shall be
based on a year with the actual number of days in such year and twelve months
with the actual number of days in each such month. Each payment on a Receivable
shall be applied first, to the 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.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1 Conveyance of Receivables. In consideration of the Issuer's
delivery of the Notes, the Certificates and the Class R Certificate 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 the Schedule of Receivables, 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;
23
(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, guaranteed auto protection, credit life or
credit disability policies relating to the Financed Vehicles or the
Obligors;
(iii) all right, title and interest of the Seller in any
proceeds from Dealer repurchase obligations relating to the
Receivables; and
(iv) all proceeds (as defined in the Relevant UCC) of the
foregoing.
In connection with such sale, the Seller agrees to record and file, at
its own expense, financing statements (and continuation statements with respect
to such financing statements when applicable) with respect to the Receivables
for the sale of accounts and chattel paper meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the sale and assignment of the Receivables to the Issuer.
It is the intention of the Seller and the Issuer that (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, the
Certificates and the Class R Certificate, 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.
24
(i) Schedule of Receivables. The Schedule of Receivables
identifies the Receivables by account number, name of Obligor and
remaining principal balance of the Receivables as of the Cutoff Date
and the information set forth in the Schedule of Receivables with
respect to each Receivable is true and correct in all material
respects, and no selection procedures materially adverse to the Holders
has been utilized in selecting the Receivables from all receivables
owned by the Seller which meet the selection criteria specified herein.
(ii) No Sale or Transfer. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other than
the Issuer.
(iii) Good Title. Immediately prior to the transfer and
assignment of the Receivables to the Issuer herein contemplated, the
Seller has good and marketable title to each Receivable free and clear
of all Liens and rights of others; and, immediately upon the transfer
thereof, the Issuer has either (i) good and marketable title to each
Receivable, free and clear of all Liens and rights of others, other
than the Lien of the Indenture Trustee under the Indenture, and the
transfer has been perfected under applicable law or (ii) a first
priority perfected security interest in each Receivable and the
proceeds thereof.
(b) Each Receivable satisfies the following conditions as of the Cutoff
Date unless otherwise specified and such conditions shall survive the sale,
transfer and assignment of the Receivables to the Issuer and the pledge thereof
to the Indenture Trustee pursuant to the Indenture.
(i) Acquisition. Each Receivable is a Dealer Receivable
acquired directly or indirectly from or made through a Dealer located
in the United States (including the District of Columbia);
(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 nine months and not 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-three 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 sixty-seven months.
(iv) Contract Rate. Each Receivable is a fully-amortizing
fixed rate simple interest contract or note that provides for level
scheduled monthly payments over its remaining term and has a Contract
Rate of not more than 18.00% per annum;
(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;
25
(vii) No Overdue Payments. Each Receivable had no payment that
was more than 30 days past due;
(viii) Remaining Principal Balance. Each Receivable had a
remaining Principal Balance of at least $2,000 and not greater than
$100,000;
(ix) No Force Placed Insurance. 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 were kept at one or
more of the locations specified in Schedule B hereto;
(xi) Characteristics of Receivables. Each Receivable (a) has
been originated in the form of a credit sales transaction by a Dealer
or a purchase money loan or other note 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 and has been fully and
properly executed by the parties thereto, (b) if a retail installment
sales contract, has been purchased by the Seller from the originating
Dealer or an Affiliate of the Seller and has been validly assigned by
such Dealer or an Affiliate of the Seller to the Seller in accordance
with its terms; (c) contains customary and enforceable provisions such
that the rights and remedies of the holder thereof are adequate for
realization against the collateral of the benefits of the security; and
(d) provides for fully amortizing level scheduled monthly payments
(provided that the payment in the last month in the life of the
Receivable may be different from the level scheduled payment) and for
accrual of interest at a fixed rate according to the Simple Interest
Method;
(xii) Compliance with Laws. Each Receivable and each sale of
the related Financed Vehicle complied at the time it was originated or
made, and complied on and after the Cutoff Date, in all material
respects with all requirements of applicable federal, state, and local
laws, and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx
Warranty Act, Federal Reserve Board Regulations B and Z, state
adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and any other consumer credit, equal opportunity, and
disclosure laws applicable to such Receivable and sale thereof;
(xiii) Binding Obligation. Each Receivable constitutes the
legal, valid, and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in all material respects in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, liquidation and other similar
laws and equitable principles relating to or affecting the enforcement
of creditors' rights;
(xiv) No Government Obligor. Each Receivable is not due from
the United States of America or any State or from any agency,
department, instrumentality or political subdivision of the United
States of America or any State or local municipality, and each
Receivable is not due from a business except to the extent that such
Receivable has a personal guaranty;
26
(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, and at such time as enforcement of such security interest is
sought, each Receivable shall be secured by a validly perfected first
priority security interest in the related Financed Vehicle for the
benefit of 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;
(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;
27
(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 is not a Receivable
originated by or through a Dealer located in the State of Alabama or
Maryland; and
(xxvii) No Debt Cancellation Policy. No Receivable is subject
to a Debt Cancellation Policy.
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 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. 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 and shall exist without regard to any limitation set
forth in any representation or warranty concerning the knowledge of the Seller
as to the facts stated therein. 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.
28
SECTION 3.3 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer, upon
the execution and delivery of this Agreement, agrees to have the Servicer act as
custodian of the following documents or instruments (the "Receivable Files")
which are hereby constructively delivered to the Issuer with respect to each
Receivable:
(i) The original executed Receivable; and
(ii) Any and all other documents or records that the Seller or
the Servicer, as the case may be, shall keep on file, in accordance
with its customary procedures, relating to a Receivable, an Obligor or
a Financed Vehicle.
The Servicer hereby agrees to act as custodian and as agent for the
Issuer hereunder. The Servicer acknowledges that it holds the documents and
instruments relating to the Receivables for the benefit of the Issuer. The
Issuer shall have no responsibility to monitor the Servicer's performance as
custodian and shall have no liability in connection with the Servicer's
performance of such duties hereunder.
SECTION 3.4 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold
the Receivable Files on behalf of the Issuer, and maintain such accurate and
complete accounts, records (either original execution documents or copies of
such originally executed documents shall be sufficient) and computer systems
pertaining to the Receivables as shall enable the Issuer to comply with its
obligations pursuant to this Agreement. In performing its duties as custodian,
the Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files of
comparable new or used automobile receivables that the Servicer services for
itself. The Servicer shall conduct, or cause to be conducted, periodic audits of
the files of all receivables owned or serviced by the Servicer which shall
include the Receivable Files held by it under this Agreement and the related
accounts, records and computer systems, in such a manner as shall enable the
Owner Trustee or the Indenture Trustee to identify all Receivable Files and such
related accounts, records and computer systems and to verify, if the Owner
Trustee or the Indenture Trustee so elects, the accuracy of the Servicer's
recordkeeping. The Servicer shall promptly report to the Owner Trustee or the
Indenture Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records, and computer systems as herein provided, and
promptly take appropriate action to remedy any such failure.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of the locations specified in Schedule B to this
Agreement, or at such other location as shall be specified to the Owner Trustee
and the Indenture Trustee by 30 days' prior written notice. The Servicer shall
make available to the Owner Trustee, the Indenture Trustee or their respective
duly authorized representatives, attorneys or auditors, the Receivable Files and
the related accounts, records and computer systems maintained by the Servicer at
such times during normal operating hours as the Owner Trustee or Indenture
Trustee shall reasonably instruct which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations.
29
(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 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 willful
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.
30
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1 Duties of Servicer. The Servicer is hereby authorized to
act as agent for the Issuer and in such capacity shall manage, service,
administer and make collections on the Receivables (other than Repurchased
Receivables) with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to comparable new or used automobile
receivables that it services for itself. The Servicer's duties shall include
collection and posting of all payments, responding to inquiries by Obligors or
by federal, state, or local governmental authorities with respect to the
Receivables, investigating delinquencies, reporting tax information to Obligors
in accordance with its customary practices, advancing costs of disposition of
defaults, monitoring Receivables in cases of Obligor defaults, accounting for
collections, furnishing monthly and annual statements to the Indenture Trustee
with respect to distributions. The Servicer shall follow its customary
standards, policies, and procedures in performing its duties as Servicer
hereunder; provided that the Servicer shall be permitted to take or to refrain
from taking any action not specified in this Agreement with respect to servicing
the Receivables if such action or inaction would not contravene any material
term of this Agreement or materially and adversely affect the interests of
Holders and is not outside customary or normal servicing procedures. 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, that 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.
31
(b) Notwithstanding anything in this Agreement to the contrary, the
Servicer may refinance any Receivable by accepting a new promissory note from
the related Obligor and applying the proceeds of such refinancing to pay all
obligations in full of such Obligor under such Receivable. The receivable
created by the refinancing shall not be property of the Issuer.
SECTION 4.3 Realization Upon Receivables. The Servicer shall use
reasonable efforts, consistent with its customary servicing procedures, to
repossess or otherwise take possession of the Financed Vehicle securing any
Receivable during the calendar month in which more than 10% of any scheduled
payment thereunder becomes 90 days delinquent; provided, however that the
Servicer may repossess or otherwise take possession of the Financed Vehicle
securing a Receivable (i) earlier if (A) such Receivable becomes a Defaulted
Receivable, (B) the Servicer determines that such Financed Vehicle is in danger
of being damaged, destroyed or otherwise made unavailable for repossession or
(C) the related Obligor voluntarily surrenders such Financed Vehicle or (ii)
later if (A) the Servicer is unable to locate such Financed Vehicle, (B) the
related Obligor is the subject of a bankruptcy proceeding or (C) the Servicer
otherwise defers repossession of such Financed Vehicle in accordance with its
normal and customary servicing practices and procedures. After repossession of a
Financed Vehicle, the Servicer shall in accordance with its customary and usual
practices and procedures sell such Financed Vehicle in an auction or consign
such Financed Vehicle to a Dealer for resale as soon as is practicable after
repossession, subject to any applicable laws. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in determining when and if to exercise reasonable efforts to realize
upon any recourse to Dealers. 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.
32
SECTION 4.4 Maintenance of Security Interests in Financed Vehicles. The
Servicer, in accordance with its customary servicing procedures, shall take such
steps as are necessary to maintain perfection of the first priority security
interest of the Seller created in any Financed Vehicle which secures a
Receivable. The Owner Trustee, on behalf of the Issuer, and the Indenture
Trustee hereby authorize the Servicer, and the Servicer hereby agrees, to take
such steps as are necessary to re-perfect such security interest in the event of
the relocation of a Financed Vehicle or for any other reason, in either case,
when the Servicer has knowledge of the need for such re-perfection. In the event
that the assignment of a Receivable to the Issuer and by the Issuer to the
Indenture Trustee pursuant to the Indenture is insufficient without a notation
on the related Financed Vehicle's certificate of title, or without fulfilling
any additional administrative requirements under the laws of the State in which
the Financed Vehicle is located, to grant to the Indenture Trustee a perfected
security interest in the related Financed Vehicle, the Seller and Servicer
hereby agree that the Seller's listing as the secured party on the certificate
of title is deemed to be in its capacity as agent of the Indenture Trustee and
the Servicer further agrees to hold such certificate of title as the Indenture
Trustee's agent and custodian; provided, however, that the Servicer shall not,
nor shall the Owner Trustee, the Indenture Trustee or Holders have the right to
require that the Servicer, make any such notation on the related Financed
Vehicles' certificate of title or fulfill any such additional administrative
requirement of the laws of the State in which a Financed Vehicle is located.
SECTION 4.5 Covenants of Servicer. The Servicer hereby makes the
following covenants on which the Issuer will rely in accepting the Receivables:
(i) Security Interest to Remain in Force. The Financed Vehicle
securing each Receivable shall not be released from the security
interest granted by the Receivable in whole or in part except if such
Financed Vehicle is substituted in whole by the manufacturer, dealer or
seller as a result of mechanical defects or a total loss of the
Financed Vehicle because of accident or theft or as otherwise
contemplated herein;
(ii) No Impairment. The Servicer shall not impair the rights
of the Issuer, the Indenture Trustee or any Holder in the Receivables;
and
(iii) Extensions; Defaulted Receivables. The Servicer shall
not increase the number of payments under a Receivable, nor increase
the Amount Financed under a Receivable, nor extend or forgive payments
on a Receivable or otherwise amend the terms of any 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.
33
SECTION 4.7 Servicing Fee. The Servicing Fee for a Collection Period
shall be payable on the related Payment 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 Payment Date
Investment Earnings when and as paid on amounts on deposit in the Collection
Account or earned on collections pending deposit in the Collection Account. The
Servicer shall be required to pay from its own account all expenses incurred by
it in connection with its activities hereunder (including fees and disbursements
of independent accountants and auditors, taxes imposed on the Servicer, and
other costs incurred in connection with administering and servicing the
Receivables) and the fees and disbursements of the Issuer, the Administrator,
the Owner Trustee, the Indenture Trustee, the Owner Trustee's and the Indenture
Trustee's respective counsel, the Securities Intermediaries, 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, 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 5.9. 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.
34
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, 2003, a certificate signed by the
chairman of the board, the president, the treasurer, the controller, any
executive or senior vice president or any vice president of the Servicer,
stating that (a) a review of the activities of the Servicer during the year
ended the preceding December 31 (or the period since the Cutoff Date in the case
of the first such certificate) and of its performance under this Agreement has
been made under such officer's supervision and (b) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
in all material respects under this Agreement throughout such year (or the
period since the Cutoff Date in the case of the first such certificate), or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Indenture Trustee, the Owner
Trustee and each Rating Agency promptly after having obtained knowledge thereof,
but in no event later than five Business Days thereafter, an Officer's
Certificate specifying any event which with the giving of notice or lapse of
time, or both, would become an Event of Servicing Termination under Section 8.1.
The Seller shall deliver to the Indenture Trustee and the Owner Trustee,
promptly after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, an Officer's Certificate specifying any event
which with the giving of notice or lapse of time, or both, would become an Event
of Servicing Termination under Section 8.1.
SECTION 4.10 Annual Audit Report. The Servicer shall cause a firm of
independent public accountants (which may provide other services to the Servicer
or the Seller) to prepare a report (with a copy of the certificate described in
Section 4.9(a) attached) addressed to the Board of Directors of the Servicer,
for the information and use of the Indenture Trustee, the Owner Trustee and the
Rating Agencies on or before March of each year, beginning March 31, 2003 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 such 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.
35
2. For a sample of monthly cash receipt reports:
a. Agree total cash receipts per the cash receipt reports to
"Total Payments From Obligors Applied to Collection Period"
per monthly Servicer Certificates.
b. Agree total principal payments per the cash receipt reports to
"Principal Payments" per monthly Servicer Certificates.
3. For a sample of loans delinquent 30 days or more and for a sample of
loans in repossession status, selected from the loan delinquency report
or a new repossession report, as applicable, at a point in time, trace
loan number to inclusion in the loan collection system.
The determination of which of the two alternative reports to be prepared and
delivered, and the size of each sample to be tested, shall be decided in the
sole discretion of the Servicer. The report of the independent certified public
accountants shall also indicate that such accounting firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.11 Access by Holders to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Holders access to the
Receivable Files in such cases where the Holders shall be required by applicable
statutes or regulations to have access to such documentation. Access by the
Holders shall be afforded without charge, but only upon reasonable request and
during normal business hours which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations. Nothing in this
Section 4.11 shall affect the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section 4.11.
SECTION 4.12 Reports to Holders and the Rating Agencies. (a) The
Indenture Trustee or the Owner Trustee, as applicable, shall provide to any
Holder who so requests in writing (addressed to the Corporate Trust Office of
such trustee) a copy of any Servicer's Certificate described in Section 4.8, of
the annual statement described in Section 4.9(a), or of the annual report
described in Section 4.10. The Indenture Trustee or the Owner Trustee, as
applicable, may require the Holder to pay a reasonable sum to cover the cost of
the Indenture Trustee's or the Owner Trustee's complying with such request, as
applicable.
(b) The Indenture Trustee or the Owner Trustee, as applicable, shall
forward to the Rating Agencies the statement to Holders described in Section 5.9
and any other reports it may receive pursuant to this Agreement to (i) Standard
& Poor's, Standard & Poor's Ratings Service, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, (ii) Moody's, ABS Monitoring Dept., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 and (iii) 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.
36
ARTICLE V
ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1 Establishment of Collection Account and Note Distribution
Account. (a) On or prior to the Closing Date, the Issuer, the Collection Account
Securities Intermediary and the Indenture Trustee shall have entered into the
Collection Account Control Agreement pursuant to which the Collection Account
shall be established and maintained for the benefit of the Noteholders and the
Certificateholders. If the depositary of the Collection Account ceases to be
either a Qualified Institution or a Qualified Trust Institution, as applicable,
the Issuer shall cause the Collection Account to be moved to a Qualified
Institution or a Qualified Trust Institution and the Indenture Trustee shall
cause the depositary maintaining the new Collection Account to assume the
obligations of the existing Collection Account Securities Intermediary under the
Collection Account Control Agreement 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 in accordance with the
Collection Account Control Agreement at the written direction of the Servicer to
the extent provided in Section 8.3(a) and Section 8.3(c) of the Indenture in
Permitted Investments that mature not later than the Deposit Date next
succeeding the date of investment except, if the Collection Account Securities
Intermediary and the Indenture Trustee are the same Person, 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) may
mature on the next succeeding Payment Date; provided, however, that once such
amounts have been invested in Permitted Investments, such Permitted Investments
must be held or maintained until they mature on or before the dates described
above.
(b) On or prior to the Closing Date, the Servicer shall establish and
maintain for the benefit of the Noteholders, in the name of the Indenture
Trustee, an Eligible Deposit Account for the deposit of distributions to the
Noteholders (the "Note Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders. The Note Distribution Account shall be established initially at
JPMorgan Chase Bank. Should any depositary of the Note Distribution Account or
the Certificate Distribution Account (including JPMorgan Chase Bank (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. 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 Note Distribution Account and
in all proceeds thereof and all such funds, investments, proceeds and income
shall be part of the Owner Trust Estate.
37
SECTION 5.2 Collections. (a) The Servicer shall remit daily within
forty-eight hours of receipt to the Collection Account all Collections collected
during the Collection Period. Chase USA has requested that, so long as it is
acting as the Servicer, the Servicer be permitted to make remittances of
Collections on a less frequent basis than that specified in the immediately
preceding sentence. It is understood that such less frequent remittances may be
made only on the specific terms and conditions set forth below in this Section
5.2 and only for so long as such terms and conditions are fulfilled.
Accordingly, notwithstanding the provisions of the first sentence of this
Section 5.2, the Servicer shall remit such collections to the Collection Account
in Automated Clearinghouse Corporation next-day funds or immediately available
funds no later than 11:00 a.m., New York City time, on the Deposit Date, but
only for so long as (i) the short-term certificate of deposit ratings of the
Servicer are at least P-1 by Moody's, "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 JPMorgan Chase Bank. 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, 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,
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, and (i) the
Servicer discovers its error prior to the Payment following such deposit, the
Indenture Trustee, at the written direction of the Servicer, shall withdraw such
amounts and pay them to the Servicer or (ii) 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.
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 Yield Supplement
Account and 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/or paid to the Class R Certificateholder pursuant to Sections 5.6(d) and
5.7(d) with respect to the next succeeding Payment Date.
38
(b) On each Deposit Date, the Servicer shall instruct the Indenture
Trustee in writing (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section 4.8)
to withdraw from the Yield Supplement Account and deposit in the Collection
Account the Yield Supplement Withdrawal Amount for the related Payment Date and
to withdraw from the Reserve Account and deposit in the Collection Account the
Reserve Account Transfer Amount (if any) for the related Payment Date, and the
Indenture Trustee shall so withdraw and deposit the Yield Supplement Withdrawal
Amount and the Reserve Account Transfer Amount (if any) for such Payment Date.
(c) Not later than 11:00 a.m., New York City time, on each Payment
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 Payment 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 5.8;
(ii) to the Administrator, the sum of (x) the Administration
Fee for such Payment Date, plus (y) the amount of any Administration
Fee previously due but not paid, if any;
(iii) to the Note Distribution Account, the Noteholders'
Interest Distributable Amount;
(iv) except as set forth in Section 5.5(d), to the Owner
Trustee for deposit in the Certificate Distribution Account, the
Certificateholders' Interest Distributable Amount;
(v) except as set forth in Section 5.5(d), to the Note
Distribution Account, the Noteholders' Principal Distributable Amount;
and
(vi) except as set forth in Section 5.5(d), to the Owner
Trustee for deposit in the Certificate Distribution Account, the
Certificateholders' Principal Distributable Amount; and
(vii) except as set forth in Section 5.5(d), to the Reserve
Account, any remaining portion of the Total Distribution Amount.
In the event that the Collection Account is maintained with an
institution other than the Indenture Trustee, the Servicer shall instruct and
cause such institution to make all deposits and distributions pursuant to this
Section 5.5(c) on the related Deposit Date.
39
(d) If the Notes have been declared immediately due and payable as
provided in Section 5.2 of the Indenture following the occurrence of an Event of
Default described in clause (a) or (b) of 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).
SECTION 5.6 Yield Supplement Account. (a) On or prior to the Closing
Date, the Issuer, the Yield Supplement Account Securities Intermediary and the
Indenture Trustee shall have entered into the Yield Supplement Account Control
Agreement pursuant to which the Yield Supplement Account shall be established
and maintained 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 Yield Supplement Account Initial Deposit into the
Yield Supplement Account. No additional deposits will be made to the Yield
Supplement Account after the Closing Date.
(b) If the depositary of the Yield Supplement Account ceases to be
either a Qualified Institution or a Qualified Trust Institution, as applicable,
the Issuer shall cause the Yield Supplement Account to be moved to a Qualified
Institution or a Qualified Trust Institution and the Indenture Trustee shall
cause the depositary maintaining the new Yield Supplement Account to assume the
obligations of the existing Yield Supplement Account Securities Intermediary
under the Yield Supplement Account Control Agreement 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.
(c) All amounts held in the Yield Supplement Account shall be invested
in accordance with the Yield Supplement Account Control Agreement at the written
direction of the Class R Certificateholder to the extent provided in Section
8.3(a) and Section 8.3(c) of the Indenture in Permitted Investments that mature
not later than the Deposit Date next succeeding the date of investment except,
if the Yield Supplement Account Securities Intermediary and the Indenture
Trustee are the same Person, 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) may mature on the next succeeding
Payment Date; provided, however, that amounts on deposit in the Yield Supplement
Account may be invested in Permitted Investments that mature later than the next
succeeding Deposit Date, but in no event that mature later than 90 days after
the date of investment, if the Rating Agency Condition is satisfied. Once
amounts on deposit in the Yield Supplement Account are invested in Permitted
Investments, such Permitted Investments must be held or maintained until they
mature on or before the dates described above.
(d) On each Payment Date, the Indenture Trustee shall withdraw from the
Yield Supplement Account and pay to the Class R Certificateholder an amount
equal to the excess, if any, of the amount on deposit in the Yield Supplement
Account on such Payment Date (after giving effect to the withdrawal of the Yield
Supplement Withdrawal Amount for such Payment Date) over the Specified Yield
Supplement Amount with respect to such Payment Date.
40
SECTION 5.7 Reserve Account. (a) On or prior to the Closing Date, the
Issuer, the Reserve Account Securities Intermediary and the Indenture Trustee
shall have entered into the Reserve Account Control Agreement pursuant to which
the Reserve Account shall be established and maintained 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) If the depositary of the Reserve Account ceases to be either a
Qualified Institution or a Qualified Trust Institution, as applicable, the
Issuer shall cause the Reserve Account to be moved to a Qualified Institution or
a Qualified Trust Institution and the Indenture Trustee shall cause the
depositary maintaining the new Reserve Account to assume the obligations of the
existing Reserve Account Securities Intermediary under the Reserve Account
Control Agreement 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.
(c) All amounts held in the Reserve Account shall be invested in
accordance with the Reserve Account Control Agreement at the written direction
of the Class R Certificateholder to the extent provided in Section 8.3(a) and
Section 8.3(c) of the Indenture in Permitted Investments that mature not later
than the Deposit Date next succeeding the date of investment except, if the
Reserve Account Securities Intermediary and the Indenture Trustee are the same
Person, 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) may mature on the next succeeding Payment
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, but in no event that mature later than 90 days after the date of
investment, if the Rating Agency Condition is satisfied. Once amounts on deposit
in the Reserve Account are invested in Permitted Investments, such Permitted
Investments must be held or maintained until they mature on or before the dates
described above.
(d) On each Payment Date, the Indenture Trustee shall withdraw from the
Reserve Account and pay to the Class R Certificateholder the sum of (i) all
investment earnings (net of losses and investment expenses) credited to the
Reserve Account since the prior Payment Date and (ii) the excess, if any, of the
amount on deposit in the Reserve Account over the Specified Reserve Account
Balance with respect to such Payment Date (after giving effect to all deposits
therein or withdrawals therefrom on such Payment Date). Upon any distribution to
the Class R Certificateholder of amounts from the Reserve Account, the Holders
will have no rights in, or claims, to, such amounts. Amounts properly
distributed to the Class R Certificateholder from the Reserve Account shall not
be available under any circumstances to the Indenture Trustee, and the Class R
Certificateholder shall not in any event thereafter be required to refund any
such distributed amounts.
SECTION 5.8 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.
41
SECTION 5.9 Statements to Certificateholders and Noteholders. (a) On
each Payment Date, the Servicer shall provide to the Indenture Trustee and the
Paying Agent (for the Paying Agent 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 Payment Date;
(v) the Outstanding Amount of each class of the Notes, the
Class A-1 Note Pool Factor, the Class A-2 Note Pool Factor, the Class
A-3 Note Pool Factor, the Class A-4 Note Pool Factor, the Certificate
Balance and the Certificate Pool Factor, in each case after giving
effect to payments allocated to principal reported under (i) above;
(vi) the Pool Balance as of the last day of the preceding
Collection Period;
(vii) the aggregate amount of the Repurchase Amounts for
Repurchased Receivables with respect to the related Collection Period
paid by each of the Seller and the Servicer (accounted for separately);
(viii) the amount of Aggregate Net Losses, if any, for such
Payment Date;
(ix) the balance of the Yield Supplement Account on such
Payment Date, after giving effect to the withdrawal of the Yield
Supplement Withdrawal Amount for such Payment Date;
(x) the balance of the Reserve Account on such Payment Date,
after giving effect to deposits into and withdrawals from the Reserve
Account on such Payment Date;
(xi) the Specified Reserve Account Balance for such Payment
Date;
(xii) the Total Distribution Amount for such Payment Date;
42
(xiii) the Noteholders' Distributable Amount and the
components thereof;
(xiv) the Certificateholders' Distributable Amount and the
components thereof;
(xv) the Yield Supplement Withdrawal Amount for such Payment
Date; and
(xvi) the Reserve Account Transfer Amount, if any, for such
Payment Date.
Each amount set forth pursuant to subclause (i), (ii), (iii), (iv),
(xii) or (xiii) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Note or a Certificate, as applicable.
ARTICLE VI
THE SELLER
SECTION 6.1 Representations of Seller. The Seller makes the following
representations on which the Issuer shall rely in acquiring the Receivables. The
representations shall speak as of the execution and delivery of this Agreement,
and shall survive the sale of the Receivables to the Issuer and pledge thereof
to the Indenture Trustee pursuant to the Indenture.
(i) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a national banking association in
good standing under the laws of the United States of America, with
power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, power, authority,
and legal right to acquire and own the Receivables.
(ii) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their respective
terms, the Seller has full power and authority to sell and assign the
property to be sold and assigned to the Issuer as the Owner Trust
Estate and has duly authorized such sale and assignment to the Issuer
by all necessary corporate action; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it
is a party has been duly authorized by the Seller by all necessary
action.
(iii) Valid Sale; Binding Obligations. This Agreement effects
a valid sale, transfer, and assignment of the Receivables, enforceable
against creditors of and purchasers from the Seller; this Agreement and
each of the other Basic Documents to which it is a party constitutes a
legal, valid, and binding obligation of the Seller enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting
the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
43
(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.
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 willful 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.
44
SECTION 6.3 Merger or Consolidation of Seller. Any corporation or other
entity (i) into which the Seller may be merged or consolidated, (ii) which may
result from any merger, conversion, or consolidation to which the Seller shall
be a party, or (iii) which may succeed to all or substantially all of the
business of the Seller, which corporation or other entity shall be bound to
perform every obligation of the Seller under this Agreement, shall be the
successor to the Seller hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement. The Seller
shall give prompt written notice of any merger or consolidation to the Issuer,
the Owner Trustee, the Indenture Trustee, the Servicer and the Rating Agencies.
SECTION 6.4 Limitation on Liability of Seller and Others. The Seller
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder or under any other Basic Documents. The Seller shall not be under any
obligation under this Agreement to appear in, prosecute, or defend any legal
action that shall be unrelated to its obligations under this Agreement or any
other Basic Document, and that in its opinion may involve it in any expense or
liability.
SECTION 6.5 Seller May Own Notes and Certificates. The Seller or any of
its Affiliates may in its individual or any other capacity become the owner or
pledgee of Notes or Certificates with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as otherwise provided in the
definition of "Outstanding" specified in Section 1.1. Notes or Certificates so
owned by or pledged to the Seller or any Affiliate thereof shall have an equal
and proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Notes or Certificates,
as applicable.
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations of Servicer. The Servicer makes the
following representations on which the Issuer shall rely in acquiring the
Receivables. The representations shall speak as of the execution and delivery of
this Agreement (or as of a date a Person (other than the Indenture Trustee)
becomes Servicer pursuant to Section 7.3 or Section 8.2), and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(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.
45
(ii) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and the Basic Documents
to which it is a party and to carry out the terms thereof; and the
execution, delivery, and performance of this Agreement and the other
Basic Documents has been duly authorized by the Servicer by all
necessary action.
(iii) Binding Obligations. This Agreement and the other Basic
Documents to which it is a party constitute legal, valid, and binding
obligations of the Servicer enforceable in accordance with their
respective terms subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation or other similar laws and
equitable principles relating to or affecting the enforcement of
creditors' rights, whether considered in a proceeding at law or in
equity.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and the
fulfillment of the terms hereof and thereof do not conflict with,
result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under,
the articles of association or bylaws of the Servicer, or conflict with
or breach any of the material terms or provisions of, or constitute
(with or without notice or lapse of time) a default under, any
indenture, agreement, or other instrument to which the Servicer is a
party or by which it is bound; nor result in the creation or imposition
of any lien upon any of its properties pursuant to the terms of any
such indenture, agreement, or other instrument; nor violate any law or,
to the best of the Servicer's knowledge, any order, rule, or regulation
applicable to the Servicer of any court or of any federal or state
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or its
properties.
(v) No Proceedings. There are no proceedings or investigations
pending, or to the Servicer's best knowledge, threatened, before any
court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or its
properties: (a) asserting the invalidity of this Agreement, 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, 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.
46
SECTION 7.2 Liability of Servicer; Indemnities. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement and shall have no other
obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee and the Holders
from and against any and all costs, expenses, losses, damages, claims,
and liabilities, arising out of or resulting from the use, ownership,
or operation by the Servicer or any Affiliate thereof of a Financed
Vehicle.
(ii) The Servicer shall indemnify, defend, and hold harmless
the Issuer, the Owner Trustee and the Indenture Trustee from and
against any taxes that may at any time be asserted against the Issuer
with respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or
license taxes (but not including any taxes asserted with respect to,
and as of the date of, the sale of the Receivables to the Issuer or the
issuance and original sale of the Notes or the Certificates, or
asserted with respect to ownership of the Receivables or federal, state
or other income taxes, including franchise taxes measured by net
income) arising out of distributions on the Notes or the Certificates
and costs and expenses in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee and the Holders
from and against any and all costs, expenses, losses, claims, damages,
and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon the Issuer, the
Owner Trustee, the Indenture Trustee or the Holders through the willful
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.
47
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 willful misfeasance, gross negligence, or bad faith in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer may rely in good faith on the advice of
counsel or on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
(b) The Servicer, and any director, or officer, employee or agent of
the Servicer, shall be indemnified by the Issuer and held harmless against any
loss, liability, or expense (including reasonable attorneys' fees and expenses)
incurred in connection with any legal action relating to the performance of the
Servicer's duties under this Agreement, other than (i) any loss or liability
otherwise reimbursable pursuant to this Agreement or the Basic Documents; (ii)
any loss, liability, or expense incurred solely by reason of the Servicer's
willful 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 Payment Date from amounts distributable to the Class R
Certificateholder from the Reserve Account pursuant to Section 5.7(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 Payment Date from
amounts distributable to the Class R Certificateholder from the Reserve Account
pursuant to Section 5.7(d) and from amounts distributable to the Class R
Certificateholder from the Yield Supplement 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.
48
SECTION 7.5 Servicer Not To Resign. Except as permitted by Section 7.3,
the Servicer shall not resign from its obligations and duties under this
Agreement except (i) upon determination that the performance of its duties shall
no longer be permissible under applicable law or (ii) in the event of the
appointment of a successor Servicer, upon satisfaction of the Rating Agency
Condition. Notice of any such determination permitting the resignation of the
Servicer shall be communicated to the Issuer, the Indenture Trustee, the Owner
Trustee and the Rating Agencies at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Issuer, the Indenture Trustee and the Owner Trustee concurrently with such
notice. No such resignation shall become effective until the Indenture Trustee
(which shall not be obligated to act as successor Servicer if the Servicer has
resigned for a reason other than that the performance of its duties are no
longer permissible under applicable law) or a successor Servicer shall have
assumed the responsibilities and obligations of the Servicer hereunder in
accordance with Section 8.2.
SECTION 7.6 Delegation of Duties. So long as Chase USA acts as
Servicer, the Servicer shall have the right, in the ordinary course of its
business, to delegate any of its duties under this Agreement to any Person. The
Servicer shall pay any compensation payable to such Person 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);
49
(ii) Failure on the part of the Servicer duly to observe or to
perform in any material respect any other covenants or agreements of
the Servicer set forth in this Agreement or the Indenture, which
failure shall (a) materially and adversely affect the rights of the
Issuer or the Holders, and (b) continue unremedied for a period of 60
days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given (1) to the Servicer by
the Indenture Trustee or the Owner Trustee, or (2) to the Indenture
Trustee or the Owner Trustee, as applicable, and the Servicer by the
Holders of Notes evidencing not less than 25% of the Outstanding Amount
of the Notes (or, if the Notes have been paid in full, by Holders of
the Certificates evidencing not less than 25% of the Certificate
Balance);
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, or liquidator for the Servicer
in any insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(iv) The consent by the Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities, or similar proceedings
of or relating to the Servicer or of or relating to substantially all
of its property; or the Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations.
Upon the occurrence of any Event of Servicing Termination as described above,
and in each and every case and for so long as such Event of Servicing
Termination shall not have been remedied, either the Indenture Trustee or the
Holders of Notes evidencing not less than a majority of the Outstanding Amount
of the Notes (or, if the Notes have been paid in full and the Indenture has been
discharged in accordance with its terms, by the Owner Trustee or the Holders of
Certificates evidencing not less than a majority of the Certificate Balance), by
notice given in writing to the Servicer (and to the Indenture Trustee or the
Owner Trustee, as applicable, if given by Holders) may terminate all of the
rights and obligations of the Servicer under this Agreement. On or after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Certificates, the
Notes or the Receivables or otherwise, shall pass to and be vested in the
Indenture Trustee pursuant to this Section 8.1; and, without limitation, the
Indenture Trustee shall be hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of the
Receivable Files, or otherwise. The predecessor Servicer shall cooperate with
the successor Servicer and the Indenture Trustee in effecting the termination of
the responsibilities and rights of the predecessor Servicer under this
Agreement, including the transfer to the successor Servicer for administration
by it of all cash amounts that shall at the time be held by the predecessor
Servicer for deposit, shall have been deposited by the predecessor Servicer in
the Collection Account, or shall thereafter be received with respect to a
Receivable. All reasonable costs and expenses (including attorneys' fees and
disbursements) incurred in connection with transferring the Receivable Files to
the successor Servicer and amending this Agreement to reflect such succession as
Servicer pursuant to this Section 8.1 shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. The
Indenture Trustee and the Owner Trustee shall give written notice of any
termination of the Servicer to their related Holders, and the Indenture Trustee
shall give such notice to the Rating Agencies. Neither the Indenture Trustee nor
any successor Servicer shall be deemed to be in default hereunder by reason of
its failure to make, or any delay in making, any distribution hereunder or any
portion thereof which was caused by (i) the failure of the predecessor Servicer
to deliver, or any delay in delivering cash, documents or records to it, or (ii)
restrictions imposed by any regulatory authority having jurisdiction over the
predecessor Servicer.
50
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.
51
SECTION 8.4 Waiver of Past Defaults. The Holders of Notes evidencing at
least a majority of the Outstanding Amount of the Notes (or, the Holders of
Certificates evidencing not less than a majority of the Certificate Balance, in
the case of any Event of Servicing Termination that does not adversely affect
the Indenture Trustee or the Noteholders) may, on behalf of all such Holders,
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences, except a default in the failure to make any
required deposits to or payments from any of the Trust Accounts or the
Certificate Distribution Account in accordance with this Agreement. Upon any
such waiver of a past default, such default shall cease to exist, and any Event
of Servicing Termination arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived. The Servicer shall give prompt written notice of any
waiver to the Rating Agencies; provided, however, that the Indenture Trustee or
the Owner Trustee shall only be required to give such notice if a Responsible
Officer thereof has actual knowledge of the related event.
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables; Trust Termination.
(a) As of the last day of any Collection Period as of which the Pool Balance
shall be equal to or less than the Optional Purchase Percentage of the Original
Pool Balance, the Servicer shall have the option to purchase the Owner Trust
Estate, other than the Trust Accounts and the Certificate Distribution Account.
To exercise such option, the Servicer shall notify the Indenture Trustee, the
Owner Trustee, the Note Registrar and the Certificate Registrar in writing, no
later than the 25th day of the Collection Period following which purchase is to
be effected, shall pay the aggregate Repurchase Amount for the Receivables
(including Defaulted Receivables) and shall succeed to all interests in, to and
under such property. The payment shall be made in the manner specified in
Section 5.4, and shall be distributed pursuant to 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 Payment Date on which the Sale Proceeds are
deposited in the Collection Account (or, if such proceeds are not so deposited
on a Payment Date, on the Payment 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 Payment Date of the Total Distribution Amount pursuant
to Section 5.5) from the Sale Proceeds and any funds remaining on deposit in the
Yield Supplement Account and the Reserve Account (including the proceeds of any
sale of investments therein):
52
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into
the Note Distribution Account on such Payment Date;
(ii) to the Note Distribution Account, the Outstanding Amount
of the Notes (after giving effect to the reduction in the Outstanding
Amount of the Notes resulting from the deposits made in the Note
Distribution Account on such Payment 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 Payment
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 Payment Date).
Any Sale Proceeds remaining after the deposits described above shall be paid to
the Class R Certificateholder.
(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) 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
Yield Supplement Account, the Reserve Account or the Collection Account shall be
paid to the Class R Certificateholder, and any other assets remaining in the
Owner Trust Estate shall be distributed to the Class R Certificateholder.
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 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 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.
53
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 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.
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. In
addition, the Seller hereby authorizes the Issuer at any time and from time to
time to file any financing statements and amendments thereto in any jurisdiction
as may be necessary or desirable to preserve, maintain, and protect the
interests of the Issuer and the Indenture Trustee in the Receivables and the
proceeds thereof.
54
(b) Neither the Seller nor the Servicer shall change its name in any
manner that would, could, or might make any financing statement or continuation
statement filed by the Seller in accordance with paragraph (a) above seriously
misleading within the meaning of ss. 9-506 (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 change in the
jurisdiction of its organization or the State designated as its location in its
Articles of Association if, as a result of such change in jurisdiction or the
State designated as its location in its Articles of Association, 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 or at which the Receivable Files are located 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.
(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.
55
(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
account number and name of Obligor then held by the Issuer, together with a
reconciliation of such list to the Schedule of Receivables 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, 2003, 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.
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.
56
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, 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 Xxxxx Fargo Bank Minnesota, National
Association, Sixth Street and Marquette Avenue MAC N9311-161, Minneapolis,
Minnesota 55479-0069, 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, Attention:
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 Class R
Certificateholder, and the Indenture Trustee, individually and on behalf of the
Noteholders are third-party beneficiaries to this Agreement and are entitled to
the rights and benefits hereunder and may enforce the provisions hereof as it
were a party hereto. Except as otherwise provided in this Agreement, no other
person will have any right or obligation hereunder.
SECTION 10.9 Assignment to Indenture Trustee. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest of
the Issuer in, to and under the Receivables and the other property constituting
the Owner Trust Estate and/or the assignment of any or all of the Issuer's
rights and obligations hereunder to the Indenture Trustee and agrees that the
enforcement of a right or remedy hereunder by the Indenture Trustee shall have
the same force and effect as if such right or remedy had been enforced or
executed by the Issuer.
57
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 Xxxxx Fargo not in its
individual capacity but solely as Indenture Trustee, and in no event shall Xxxxx
Fargo 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.
SECTION 10.11 No Petition. The Seller and Servicer, by entering into
this Agreement hereby covenant and agree that they will not at any time
institute against the Issuer or join in any institution against the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to this
Agreement or any of the other Basic Documents.
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/ Xxxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
CHASE MANHATTAN AUTO OWNER TRUST,
2002-B, as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee on behalf of the Issuer
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Financial Services Officer
Acknowledged and Accepted:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity,
but solely in its capacity
as Indenture Trustee
By: /s/ Xxxxxx X. X'Xxxxxx
----------------------------------
Name: Xxxxxx X. X'Xxxxxx
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
JPMorgan Xxxxx Xxxx
X.X. Xxx 00
Xxxxx Xxxxxx Xxxx
Records Management
Xxxxxxx, Xxx Xxxx 00000
Chase Manhattan Automotive Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
EXHIBIT A
FORM OF SERVICER'S CERTIFICATE
EXHIBIT B
FORM OF CERTIFICATEHOLDER AND NOTEHOLDER REPORT
EXHIBIT C
FORM OF COLLECTION ACCOUNT CONTROL AGREEMENT
EXHIBIT D
FORM OF RESERVE ACCOUNT CONTROL AGREEMENT
EXHIBIT E
FORM OF YIELD SUPPLEMENT ACCOUNT CONTROL AGREEMENT
