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SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 2002-2,
as the Trust
MMCA AUTO RECEIVABLES TRUST,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of June 3, 2002
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TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS AND USAGE............................................1
Section 1.1 Definitions.......................................1
Section 1.2 Business Day Certificate..........................1
ARTICLE II - TRUST PROPERTY..................................................1
Section 2.1 Conveyance of Trust Property......................1
Section 2.2 Representations and Warranties of
the Seller as to the Receivables................6
Section 2.3 Repurchase upon Breach...........................12
Section 2.4 Custody of Receivable Files......................12
Section 2.5 Duties of Servicer as Custodian..................13
Section 2.6 Instructions; Authority to Act...................14
Section 2.7 Custodian's Indemnification......................14
Section 2.8 Effective Period and Termination.................14
ARTICLE III - ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST
PROPERTY......................................................14
Section 3.1 Duties of Servicer...............................14
Section 3.2 Collection and Allocation of Receivable
Payments.......................................17
Section 3.3 Realization upon Receivables.....................19
Section 3.4 Physical Damage Insurance........................20
Section 3.5 Maintenance of Security Interests in
Financed Vehicles..............................20
Section 3.6 Covenants of Servicer............................20
Section 3.7 Purchase by Servicer upon Breach.................20
Section 3.8 Servicing Compensation...........................21
Section 3.9 Servicer's Certificate...........................21
Section 3.10 Annual Statement as to Compliance; Notice
of Event of Servicing Termination..............21
Section 3.11 Annual Independent Certified Public
Accountants' Reports...........................22
Section 3.12 Access to Certain Documentation and
Information Regarding Receivables..............22
Section 3.13 Reports to the Commission........................23
Section 3.14 Reports to Rating Agencies.......................23
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS.............................23
Section 4.1 Accounts.........................................23
Section 4.2 Collections......................................27
Section 4.3 Application of Collections.......................28
Section 4.4 Advances.........................................29
Section 4.5 Additional Deposits..............................30
Section 4.6 Allocation of Total Available Funds..............30
Section 4.7 Reserve Account..................................33
Section 4.8 Net Deposits.....................................34
Section 4.9 Statements to Noteholders and
Certificateholders.............................34
Section 4.10 Control of Securities Accounts...................35
Section 4.11 Pre-Funding Account..............................35
Section 4.12 Negative Carry Account...........................36
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND THE YIELD
SUPPLEMENT ACCOUNT..............................................36
Section 5.1 Yield Supplement Letter of Credit and
the Yield Supplement Account...................36
ARTICLE VI - THE SELLER.....................................................38
Section 6.1 Representations, Warranties and Covenants
of Seller......................................38
Section 6.2 Liability of Seller; Indemnities.................40
Section 6.3 Merger or Consolidation of, or Assumption
of the Obligations of, Seller..................41
Section 6.4 Limitation on Liability of Seller and Others.....41
Section 6.5 Seller May Own Notes or Certificates.............41
ARTICLE VII - THE SERVICER..................................................42
Section 7.1 Representations and Warranties of Servicer.......42
Section 7.2 Liability of Servicer; Indemnities...............43
Section 7.3 Merger or Consolidation of, or Assumption
of the Obligations of Servicer.................44
Section 7.4 Limitation on Liability of Servicer
and Others.....................................45
Section 7.5 Servicer Not to Resign...........................45
Section 7.6 Servicer May Own Notes or Certificates...........45
ARTICLE VIII - SERVICING TERMINATION........................................45
Section 8.1 Events of Servicing Termination..................45
Section 8.2 Indenture Trustee to Act; Appointment of
Successor Servicer.............................47
Section 8.3 Effect of Servicing Transfer.....................47
Section 8.4 Notification to Noteholders and
Certificateholders.............................48
Section 8.5 Waiver of Past Events of Servicing
Termination....................................48
ARTICLE IX - TERMINATION....................................................48
Section 9.1 Optional Purchase of All Receivables.............48
Section 9.2 Automatic Termination............................
ARTICLE X - MISCELLANEOUS PROVISIONS........................................49
Section 10.1 Amendment........................................49
Section 10.2 Protection of Title to Trust.....................51
Section 10.3 Representations of the Seller and
the Purchaser..................................52
Section 10.4 Governing Law....................................52
Section 10.5 Notices..........................................53
Section 10.6 Severability of Provisions.......................54
Section 10.7 Assignment.......................................54
Section 10.8 Further Assurances...............................54
Section 10.9 No Waiver; Cumulative Remedies...................54
Section 10.10 Third-Party Beneficiaries........................54
Section 10.11 Actions by Noteholder or Certificateholders......55
Section 10.12 Counterparts.....................................55
Section 10.13 Agent for Service................................55
Section 10.14 No Bankruptcy Petition; Subordination;
Claims Against Seller..........................55
Section 10.15 Limitation of Liability of Owner Trustee
and Indenture Trustee..........................56
SCHEDULES
Schedule of Initial Receivables......................................Schedule A
Locations of Receivable Files........................................Schedule B
EXHIBITS
Form of Servicer's Certificate........................................Exhibit A
Form of Statement to Noteholders......................................Exhibit B
Form of Statement to Certificateholders...............................Exhibit C
Form of Yield Supplement Agreement................................... Exhibit D
Form of Second-Tier Subsequent Assignment.............................Exhibit E
SALE AND SERVICING AGREEMENT, dated as of June 3, 2002
(as amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement"), by and among MMCA AUTO OWNER TRUST 2002-2, a
Delaware business trust (the "Trust"), MMCA AUTO RECEIVABLES TRUST, a
Delaware business trust (the "Seller"), and MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., a Delaware corporation (the "Servicer").
WHEREAS, the Trust desires to purchase portfolios of
receivables arising in connection with motor vehicle retail installment
sale contracts generated by Mitsubishi Motors Credit of America, Inc. in
the ordinary course of its business and sold to the Seller as of the date
hereof and from time to time hereafter;
WHEREAS, the Seller is willing to sell such receivables
to the Trust as of the date hereof and from time to time hereafter; and
WHEREAS, Mitsubishi Motors Credit of America, Inc. is
willing to service such receivables on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I - DEFINITIONS AND USAGE
Section 1.1 Definitions. Except as otherwise specified herein or as the
context may otherwise require, capitalized terms used but not otherwise
defined herein are defined in Appendix A to the Indenture (the
"Indenture"), dated as of June 3, 2002, between MMCA Auto Owner Trust
2002-2, as issuer, and Bank of Tokyo-Mitsubishi Trust Company, as indenture
trustee (the "Indenture Trustee"), which also contains rules as to usage
that shall be applicable herein.
Section 1.2 Business Day Certificate. On the Closing Date (with respect to
the calendar year 2002) and thereafter, within 15 days prior to the end of
each succeeding calendar year while this Agreement remains in effect, the
Servicer shall deliver to the Indenture Trustee and to Wilmington Trust
Company, not in its individual capacity but solely as owner trustee (the
"Owner Trustee"), an Officer's Certificate specifying the days on which
banking institutions or trust companies in New York, New York, Wilmington,
Delaware or Los Angeles, California are authorized or obligated by law,
executive order or governmental decree to remain closed.
ARTICLE II - TRUST PROPERTY
Section 2.1 Conveyance of Trust Property. (a) In consideration of the
Trust's delivery to, or upon the written order of, the Seller of
authenticated Notes and Certificates, in authorized denominations in
aggregate principal amounts equal to the initial principal amount of the
Notes and the Initial Certificate Balance, respectively, the Seller hereby
irrevocably sells, transfers, assigns and otherwise conveys to the Trust,
without recourse (subject to the obligations herein), all right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and
under the following:
(i) the Initial Receivables;
(ii) with respect to Initial Receivables that are Actuarial
Receivables, monies due thereunder after the Initial Cutoff Date
(including Payaheads) and, with respect to Initial Receivables
that are Simple Interest Receivables, monies received thereunder
after the Initial Cutoff Date;
(iii) the security interests in Financed Vehicles granted by Obligors
pursuant to the Initial Receivables and any other interest of the
Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to the Initial
Receivables from claims on any physical damage, theft, credit life
or disability insurance policies covering the related Financed
Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to the Initial
Receivables from recourse to Dealers thereon pursuant to Dealer
Agreements;
(vi) all of the Seller's rights to the Receivable Files that relate to
the Initial Receivables;
(vii) the Trust Accounts and all amounts, securities, investments in
financial assets, and other property deposited in or credited to
any of the foregoing and all proceeds thereof;
(viii) all of the Seller's rights under the Yield Supplement Agreement
and the Purchase Agreement, including the right of the Seller to
cause MMCA to repurchase Receivables from the Seller;
(ix) all payments and proceeds with respect to the Initial Receivables
held by MMCA;
(x) all property (including the right to receive Liquidation Proceeds
and Recoveries and Financed Vehicles and the proceeds thereof
acquired by the Seller pursuant to the terms of an Initial
Receivables that is a Final Payment Receivable), guarantees and
other collateral securing an Initial Receivable (other than an
Initial Receivable purchased by the Servicer or repurchased by the
Seller);
(xi) all rebates of premiums and other amounts relating to insurance
policies and other items financed under the Initial Receivables in
effect as of the Initial Cutoff Date; and
(xii) all present and future claims, demands, causes of action and
choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards,
rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which
at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
(b) Subject to satisfaction of the conditions set forth in Section 2.1(d),
in consideration of the Indenture Trustee's delivery on or prior to any
Subsequent Transfer Date to the Seller of the amount described in Section
4.11(a) to be delivered to the Seller, the Seller shall, pursuant to a
Second-Tier Subsequent Assignment, irrevocably sell, transfer, assign and
otherwise convey to the Trust, without recourse (subject to the obligations
herein), on each Subsequent Transfer Date, all right, title and interest of
the Seller, whether now owned or hereafter acquired, in, to and under the
following:
(i) the Subsequent Receivables listed on Schedule A to the related
Second-Tier Subsequent Assignment;
(ii) with respect to the Subsequent Receivables that are Actuarial
Receivables, monies due thereunder on or after the related
Subsequent Cutoff Date (including Payaheads) and, with respect to
Subsequent Receivables that are Simple Interest Receivables,
monies received thereunder on or after the related Subsequent
Cutoff Date;
(iii) the security interests in Financed Vehicles granted by Obligors
pursuant to the Subsequent Receivables and any other interest of
the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to such Subsequent
Receivables from claims on any physical damage, theft, credit life
or disability insurance policies covering the related Financed
Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to such Subsequent
Receivables from recourse to Dealers thereon pursuant to Dealer
Agreements;
(vi) all of the Seller's rights to the Receivable Files that relate to
such Subsequent Receivables;
(vii) all payments and proceeds with respect to such Subsequent
Receivables held by the Servicer;
(viii) all property (including the right to receive Liquidation Proceeds
and Recoveries and Financed Vehicles and the proceeds thereof
acquired by the Seller pursuant to the terms of a Subsequent
Receivable that is a Final Payment Receivable), guarantees and
other collateral securing a Subsequent Receivable (other than a
Subsequent Receivable purchased by the Servicer or repurchased by
the Seller);
(ix) all of the Seller's rights under the related First-Tier Subsequent
Assignment;
(x) all rebates of premiums and other amounts relating to insurance
policies and other items financed under such Subsequent
Receivables in effect as of the related Subsequent Cutoff Date;
and
(xi) all present and future claims, demands, causes of action and
choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards,
rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which
at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
(c) It is the intention of the Seller and the Trust that the transfer of
the Trust Property contemplated by Section 2.1(a) and any Second-Tier
Subsequent Assignments executed pursuant to Section 2.1(b) constitute sales
of the Trust Property from the Seller to the Trust, conveying good title to
the Trust Property free and clear of any liens and, in the event of the
filing of a bankruptcy petition by or against the Seller under any
bankruptcy or similar law, that the Trust Property shall not be part of the
Seller's estate. However, in the event that such transfer is deemed to be a
pledge, the Seller hereby grants to the Trust a first priority security
interest in all of the Seller's right, title and interest in, to and under
the Trust Property, and all proceeds thereof, to secure a loan deemed to
have been made by the Trust to the Seller in an amount equal to the sum of
the initial principal amount of the Notes plus accrued interest thereon and
the Initial Certificate Balance.
(d) The Seller shall sell, transfer, assign and otherwise convey to the
Trust on any Subsequent Transfer Date the Subsequent Receivables and the
other property and rights related thereto described in Section 2.1(b) only
upon the satisfaction of each of the following conditions on or prior to
such Subsequent Transfer Date:
(i) the Seller shall have provided the Indenture Trustee, the Owner
Trustee and the Rating Agencies (A) written notification of the
addition of such Subsequent Receivables at least five Business
Days prior to the Subsequent Transfer Date and (B) on or prior to
the Subsequent Transfer Date, a statement listing the approximate
aggregate Principal Balance of such Subsequent Receivables as of
the related Subsequent Cutoff Date and any other information
reasonably requested by any of the foregoing;
(ii) the Seller shall have delivered to each of the Owner Trustee and
the Indenture Trustee a duly executed written assignment in
substantially the form of Exhibit E hereto (the "Second-Tier
Subsequent Assignment"), which shall include a Schedule A attached
thereto listing the related Subsequent Receivables;
(iii) the Seller shall, to the extent required by Section 4.2, have
deposited in the Collection Account all collections in respect of
the Subsequent Receivables that are property of the Trust;
(iv) as of such Subsequent Transfer Date: (A) the Seller shall not be
insolvent and shall not become insolvent as a result of the
transfer of Subsequent Receivables on such Subsequent Transfer
Date, (B) the Seller shall not intend to incur or believe that it
would incur debts that would be beyond the Seller's ability to pay
as such debts matured, (C) such transfer shall not be made by the
Seller with actual intent to hinder, delay or defraud any Person
and (D) the assets of the Seller shall not constitute unreasonably
small capital to carry out its business as conducted;
(v) the applicable Subsequent Reserve Account Deposit for such
Subsequent Transfer Date shall have been made;
(vi) the applicable Subsequent Payahead Account Deposit for such
Subsequent Transfer Date shall have been made;
(vii) the applicable Subsequent Yield Supplement Account Deposit for
such Subsequent Transfer Date shall have been made;
(viii) the Receivables, including the Subsequent Receivables to be
conveyed to the Trust on the Subsequent Transfer Date, shall meet
the following criteria as of the related Subsequent Cutoff Date:
(A) the weighted average number of payments remaining until the
maturity of the Receivables will not be more than [66] payments;
(B) the aggregate principal balance of the Last Scheduled Payments
as a percentage of the Pool Balance will not be greater than [ ]%;
(C) if any Receivable is a Deferred Payment Receivable, the
deferral period will not extend for more than 450 days after
origination of that Receivable; (D) the weighted average FICO
score of the obligors on the Receivables will not be less than
[674]; (E) the aggregate principal balance of the Receivables
relating to new automobiles and sports utility vehicles will be at
least [ ]%, substantially all of which will be manufactured or
distributed by Mitsubishi Motors; (F) the aggregate principal
balance of the limited credit experience Receivables as a
percentage of the aggregate principal balance of the Receivables
will not be more than [ ]%; and (G) the weighted average annual
percentage rate of the Receivables will be at least [ ]%;
(ix) the Subsequent Receivables to be conveyed to the Trust on the
Subsequent Transfer Date will have a weighted average deferral
period, as of the related Subsequent Cutoff Date, that is less
than or substantially the same as the weighted average deferral
period of the Initial Receivables as of the Initial Cutoff Date;
(x) the Pre-Funding Period shall not have terminated prior to the
Subsequent Transfer Date;
(xi) each of the representations and warranties made by the Seller
pursuant to Sections 2.2 and 6.1 of this Agreement and by MMCA
pursuant to Section 3.2 of the Purchase Agreement, with respect to
the Seller, MMCA or the Subsequent Receivables, as applicable,
shall be true and correct as of the date as of which such
representations and warranties are made;
(xii) the Seller shall, at its own expense, on or prior to the
Subsequent Transfer Date, indicate in its computer files that the
Subsequent Receivables have been sold to the Trust pursuant to
this Agreement and the related Second-Tier Subsequent Assignment
and deliver to the Owner Trustee the related Schedule of
Subsequent Receivables certified by an officer of the Seller to be
true, correct and complete;
(xiii) the Seller shall have taken any action required to maintain the
first perfected ownership interest of the Trust in the Trust
Property and the first perfected security interest of the
Indenture Trustee in the Collateral;
(xiv) no selection procedures believed by the Seller to be adverse to
the interests of the Trust, the Noteholders or the
Certificateholders shall have been utilized in selecting the
Subsequent Receivables;
(xv) the addition of the Subsequent Receivables will not result in a
material adverse tax consequence to the Trust, the Noteholders or
the Certificateholders;
(xvi) the Seller shall have delivered to the Owner Trustee, the
Indenture Trustee and the Rating Agencies an Opinion of Counsel
relating to the security interests of the Owner Trustee and the
Indenture Trustee in the Subsequent Receivables in substantially
the form of the Opinion of Counsel delivered the Owner Trustee,
the Indenture Trustee and the Rating Agencies regarding such
matters on the Closing Date;
(xvii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate confirming the
satisfaction of each condition specified in this Section 2.1(d)
(substantially in the form attached as Annex A to the form of
Second-Tier Subsequent Assignment attached hereto as Exhibit E);
(xviii) all the conditions to the transfer of the Subsequent Receivables
by MMCA to the Seller specified in Section 4.1(b) of the Purchase
Agreement shall be satisfied; and
(xix) the Servicer shall have provided to each of the Trust and the
Indenture Trustee the Officer's Certificate required to be
provided by the Servicer pursuant to Section 2.4.
(e) The sales, transfers, assignments and conveyances of the Trust Property
made under Section 2.1(a) shall not constitute and are not intended to
result in an assumption by the Trust of any obligation of the Seller to the
Obligors, the Dealers or any other Person in connection with the
Receivables and the other Trust Property or any agreement, document or
instrument related thereto.
Section 2.2 Representations and Warranties of the Seller as to the
Receivables. The Seller makes the following representations and warranties
as to the Receivables on which the Trust relies in accepting the
Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement in the case of the Initial Receivable and as
of the applicable Subsequent Transfer Date in the case of the Subsequent
Receivables, except in each case to the extent otherwise provided in the
following representations and warranties, but shall survive the sale,
transfer and assignment of the Receivables to the Trust and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(i) Characteristics of Receivables. Each Receivable (a) shall have
been originated (x) in the United States of America by a Dealer
for the consumer or commercial sale of a Financed Vehicle in the
ordinary course of such Dealer's business or (y) by MMCA in
connection with the refinancing of a motor vehicle retail
installment sale contract of the type described in subclause (x)
above, shall have been fully and properly executed by the parties
thereto, shall have been purchased by the Seller from MMCA, which
in turn shall have purchased such Receivable from such Dealer
under an existing Dealer Agreement with MMCA (unless such
Receivable was originated by MMCA in connection with a
refinancing), and shall have been validly assigned by such Dealer
to MMCA in accordance with its terms (unless such Receivable was
originated by MMCA in connection with a refinancing), which in
turn shall have been validly assigned by MMCA to the Seller in
accordance with its terms, (b) shall have created or shall create
a valid, binding, subsisting and enforceable first priority
security interest in favor of MMCA on the related Financed
Vehicle, which security interest has been validly assigned by MMCA
to the Seller, which in turn shall be validly assigned by the
Seller to the Trust and by the Trust to the Indenture Trustee, (c)
shall contain customary and enforceable provisions such that the
rights and remedies of the holder thereof shall be adequate for
realization against the collateral of the benefits of the
security, (d) in the case of Standard Receivables, shall provide
for monthly payments that fully amortize the Amount Financed by
maturity of the Receivable and yield interest at the APR, (e) in
the case of Balloon Payment Receivables and Final Payment
Receivables, shall provide for a series of fixed level monthly
payments and a larger payment due after such level monthly
payments that fully amortize the Amount Financed by maturity and
yield interest at the APR, (f) shall provide for, in the event
that such contract is prepaid, a prepayment that fully pays the
Principal Balance and all accrued and unpaid interest thereon, (g)
is a retail installment sale contract, (h) is secured by a new or
used automobile or sports-utility vehicle and (i) is an Actuarial
Receivable or a Simple Interest Receivable (and may also be a
Balloon Payment Receivable or a Final Payment Receivable).
(ii) Schedule of Receivables. The information set forth in the related
Schedule of Receivables shall be true and correct in all material
respects as of the opening of business on the related Cutoff Date
and no selection procedures believed to be adverse to the
Noteholders or the Certificateholders shall have been utilized in
selecting the Receivables from those receivables which meet the
criteria contained herein. The compact disk or other listing
regarding the Receivables made available to the Trust and its
assigns (which compact disk or other listing is required to be
delivered as specified herein) is true and correct in all
respects.
(iii) Compliance with Law. Each Receivable and the sale of the related
Financed Vehicle shall have complied, at the time it was
originated or made, and shall comply on the Closing Date (with
respect to each Initial Receivable) or the related Subsequent
Transfer Date (with respect to each Subsequent Receivable) in all
material respects with all requirements of applicable Federal,
state, and local laws, and regulations thereunder, including,
without limitation, usury laws, the Federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
the Fair Credit Billing Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx Warranty
Act, the Federal Reserve Board's Regulations B and Z, the
Soldiers' and Sailors' Civil Relief Act of 1940, the Texas
Consumer Credit Code, and State adaptations of the Uniform
Consumer Credit Code, and other consumer credit laws and equal
credit opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall represent the genuine,
legal, valid and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity.
(v) No Government Obligor. None of the Receivables is due from the
United States of America or any state or from any agency,
department or instrumentality of the United States of America or
any state.
(vi) Security Interest in Financed Vehicle. Immediately prior to the
sale, assignment, and transfer thereof pursuant to the Purchase
Agreement, each Receivable shall be secured by a validly perfected
first priority security interest in the related Financed Vehicle
in favor of MMCA as secured party and, at such time as enforcement
of such security interest is sought, there shall exist a valid,
subsisting and enforceable first priority perfected security
interest in such Financed Vehicle for the benefit of the Trust
(subject to any statutory or other lien arising by operation of
law after the Closing Date (with respect to each Initial
Receivable) or the related Subsequent Transfer Date (with respect
to each Subsequent Receivable) which is prior to such security
interest), or all necessary and appropriate action with respect to
such Receivables shall have been taken to perfect a first priority
security interest in such Financed Vehicle for the benefit of the
Trust.
(vii) Receivables in Force. No Receivable shall have been satisfied,
subordinated, or rescinded, nor shall any Financed Vehicle have
been released from the Lien granted by the related Receivable in
whole or in part, which security interest shall be assignable by
MMCA to the Seller and by the Seller to the Trust.
(viii) No Waiver. No provision of a Receivable shall have been waived in
such a manner that such Receivable fails to meet all of the
representations and warranties made by the Seller in this Section
2.2 with respect thereto.
(ix) No Defenses. No right of rescission, setoff, counterclaim, or
defense shall have been asserted or threatened with respect to any
Receivable.
(x) No Liens. To the best of the Seller's knowledge, no liens or
claims shall have been filed for work, labor, or materials
relating to a Financed Vehicle that shall be liens prior to, or
equal or coordinate with, the security interest in the Financed
Vehicle granted by the Receivable.
(xi) No Default; Repossession. Except for payment defaults continuing
for a period of not more than 30 days or payment defaults of 10%
or less of a Scheduled Payment, in each case as of the related
Cutoff Date, or the failure of the Obligor to maintain
satisfactory physical damage insurance covering the Financed
Vehicle, no default, breach, violation, or event permitting
acceleration under the terms of any Receivable shall have
occurred; no continuing condition that with notice or the lapse of
time or both would constitute a default, breach, violation, or
event permitting acceleration under the terms of any Receivable
shall have arisen; the Seller shall not have waived any of the
foregoing; and no Financed Vehicle shall have been repossessed as
of the related Cutoff Date.
(xii) Insurance. Each Contract shall require the related Obligor to
maintain physical damage insurance (which insurance shall not be
force placed insurance) covering the Financed Vehicle, in the
amount determined by MMCA in accordance with its customary
procedures.
(xiii) Title. It is the intention of the Seller that each transfer and
assignment of the Receivables herein contemplated constitute a
sale of such Receivables from the Seller to the Trust and that the
beneficial interest in, and title to, such Receivables not be part
of the Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned, or pledged by the
Seller to any Person other than the Trust. Immediately prior to
each transfer and assignment of the Receivables herein
contemplated, the Seller had good and marketable title to such
Receivables free and clear of all Liens, encumbrances, security
interests, and rights of others and, immediately upon the transfer
thereof, the Trust shall have good and marketable title to such
Receivables, free and clear of all Liens, encumbrances, security
interests, and rights of others; and the transfer has been
perfected by all necessary action under the Relevant UCC.
(xiv) Valid Assignment. No Receivable shall have been originated in, or
shall be subject to the laws of, any jurisdiction under which the
sale, transfer, and assignment of such Receivable under this
Agreement or the Indenture or pursuant to transfers of the
Certificates shall be unlawful, void, or voidable. The Seller has
not entered into any agreement with any obligor that prohibits,
restricts or conditions the assignment of any portion of the
Receivables.
(xv) All Filings Made. All filings (including, without limitation,
filings under the Relevant UCC) necessary in any jurisdiction to
give the Trust a first priority perfected security interest in the
Receivables, and to give the Indenture Trustee a first priority
perfected security interest therein, shall be made within 10 days
of the Closing Date (with respect to the Initial Receivables) or
10 days of the related Subsequent Transfer Date (with respect to
the Subsequent Receivables).
(xvi) Chattel Paper. Each Receivable constitutes "chattel paper" as
defined in the Relevant UCC.
(xvii) One Original. There shall be only one original executed copy of
each Receivable in existence.
(xviii) Principal Balance. Each Receivable had an original principal
balance (net of unearned precomputed finance charges) of not more
than $60,000, and a remaining Principal Balance as of the related
Cutoff Date of not less than $100.
(xix) No Bankrupt Obligors. No Receivable was due from an Obligor who,
as of the related Cutoff Date, was the subject of a proceeding
under the Bankruptcy Code of the United States or was bankrupt.
(xx) New and Used Vehicles. Approximately [ ]% of the Initial Pool
Balance, constituting approximately [ ]% of the total number of
the Initial Receivables, relate to new automobiles and
sports-utility vehicles, substantially all of which were
manufactured or distributed by Mitsubishi Motors. Approximately [
]% of the Initial Pool Balance, constituting approximately [ ]% of
the total number of Initial Receivables, relate to used
automobiles and sports-utility vehicle, substantially all of which
were manufactured or distributed by Mitsubishi Motors.
Approximately [ ]% of the Initial Pool Balance, constituting
approximately [ ]% of the total number of Initial Receivables,
relate to program automobiles and sports-utility vehicles,
substantially all of which were manufactured or distributed by
Mitsubishi Motors. Approximately [ ]% of the Initial Pool Balance,
constituting approximately [ ]% of the total number of Initial
Receivables, relate to other used automobiles and sports-utility
vehicles.
(xxi) Origination. Each Receivable shall have an origination date during
or after [January 27, 1999].
(xxii) Maturity of Receivables. Each Receivable shall have, as of the
related Cutoff Date, not more than [66] remaining Scheduled
Payments due under the Receivable.
(xxiii) Weighted Average Maturity of Receivables. As of the Initial Cutoff
Date, the weighted average number of Scheduled Payments remaining
until the maturity of the Initial Receivables shall be not more
than [66] Scheduled Payments. As of the related Subsequent Cutoff
Date, the weighted average number of Scheduled Payments remaining
until the maturity of any Subsequent Receivables transferred to
the Trust on the same Subsequent Transfer Date shall be not more
than [66] Scheduled Payments.
(xxiv) Weighted Average Deferral Period. With respect to Subsequent
Receivables transferred to the Issuer on the related Subsequent
Transfer Date, the weighted average deferral period will be less
than or substantially the same as the weighted average deferral
period of the Initial Receivables as of the Initial Cutoff Date.
(xxv) Annual Percentage Rate. Each Receivable shall have an APR of at
least 0% and not more than 30%.
(xxvi) Scheduled Payments. No Receivable shall have a payment of which
more than 10% of such payment is more than 30 days overdue as of
the related Cutoff Date.
(xxvii) Location of Receivable Files. The Receivable Files shall be kept
at one or more of the locations listed in Schedule B hereto.
(xxviii) Capped Receivables and Simple Interest Receivables. Except to the
extent that there has been no material adverse effect on
Noteholders or Certificateholders, each Capped Receivable has been
treated consistently by the Seller and the Servicer as a Simple
Interest Receivable and payments with respect to each Simple
Interest Receivable have been allocated consistently in accordance
with the Simple Interest Method.
(xxix) Agreement. The representations and warranties of the Seller in
Section 6.1 are true and correct.
(xxx) Other Data. The tabular data and the numerical data relating to
the characteristics of the Receivables contained in the Prospectus
(as defined in the Purchase Agreement) are true and correct in all
material respects.
(xxxi) Last Scheduled Payments. The aggregate principal balance of the
Last Scheduled Payments of Balloon Payment Receivables and Final
Payment Receivables that are Initial Receivables, as a percentage
of the Initial Pool Balance as of the Initial Cutoff Date, shall
be not greater than [ ]%. The aggregate principal balance of the
Last Scheduled Payments of Balloon Payment Receivables and Final
Payment Receivables that are Subsequent Receivables sold to the
Purchaser on a Subsequent Transfer Date, as of the related
Subsequent Cutoff Date, as a percentage of the aggregate principal
balance of all of such Subsequent Receivables as of such related
Subsequent Cutoff Date, shall be not greater than [ ]%.
(xxxii) Receivable Yield Supplement Amounts. An amount equal to the sum of
all projected Yield Supplement Amounts for all future Payment
Dates with respect to each Deferred Payment Receivable and each
Deferred Balloon Payment Receivable, assuming that no prepayments
are made on the Deferred Payment Receivable or the Deferred
Balloon Payment Receivable, as the case may be, has been deposited
to the Yield Supplement Account on or prior to the Closing Date or
the related Subsequent Transfer Date, as applicable.
(xxxiii) Prepaid Receivables. No Receivable shall have been pre-paid by
more than six monthly payments as of the related Cutoff Date.
(xxxiv) Limited Credit Experience. The aggregate principal balance of the
Receivables on which the Obligor has limited credit experience, as
a percentage of the aggregate principal balance of all
Receivables, in each case as of the Cutoff Date, shall be not
greater than [ ]%.
(xxxv) Deferred Payment Receivables. As of the Initial Cutoff Date $[ ]
total Principal Balance of Deferred Payment Receivables included
in the Initial Receivables had a first payment that, as of the
date of inception of the Receivable, was deferred for 300 days or
greater. As of the Initial Cutoff Date $[ ] total Principal
Balance of Deferred Payment Receivables included in the Initial
Receivables had a first payment that, as of the date of inception
of the Receivables, was deferred for a period of between 200 and
299 days. As of the Initial Cutoff Date $[ ] total Principal
Balance of Deferred Payment Receivables included in the Initial
Receivables had a first payment that, as of the date of inception
of the Receivables, was deferred for a period of between 100 and
199 days. As of the Initial Cutoff Date $[ ] total Principal
Balance of Deferred Payment Receivables included in the Initial
Receivables had a first payment that, as of the date of inception
of the Receivables, was deferred for a period of 99 days or less.
In no case will the first payment on a Deferred Payment Receivable
be due later than 480 days after the date of inception of that
Receivable.
(xxxvi) Long Deferment Period Receivables. As of the Initial Cutoff Date
$[ ] total Principal Balance of Deferred Payment Receivables
included in the Initial Receivables were Long Deferment Period
Receivables.
(xxxvii) Reinvested Receivables. With respect to Reinvested Receivables
transferred to the Issuer on the same Subsequent Transfer Date:
(A) the weighted average number of payments remaining until the
maturity of the Receivables will not be more than 66 payments; (B)
the aggregate principal balance of the Last Scheduled Payments as
a percentage of the Pool Balance will not be greater than [ ]%;
(C) the weighted average FICO score of the obligors on the
Receivables will not be less than [674]; (D) the aggregate
principal balance of the Receivables relating to new automobiles
and sports utility vehicles will be at least [ ]%, substantially
all of which will be manufactured or distributed by Mitsubishi
Motors; (E) the aggregate principal balance of the limited credit
experience Receivables as a percentage of the aggregate principal
balance of the Receivables will not be more than [ ]%; (F) the
weighted average annual percentage rate of the Receivables will be
at least [ ]%; and (G) none of such Reinvested Receivables shall
be Deferred Payment Receivables.
(xxxviii) Deferred Balloon Payment Receivables. As of the Initial Cutoff
Date, $[ ] total principal balance of Deferred Balloon Payment
Receivables were originated with a deferral period of 90 days, and
$[ ] total principal balance of Deferred Balloon Payment
Receivables were originated with a deferral period of 180 days.
(xxxix) Modified Receivables. The APR of any Modified Receivable is equal
to the APR of the related Deferred Payment Receivable. The date on
which the final Scheduled Payment is due on a Modified Receivable
is not different than the date set forth in the related Contract
as the date on which the final Scheduled Payment under such
Receivable is due. No Deferred Payment Receivable became a
Modified Receivable after 90 days following the date the first
Scheduled Payment on the Receivable was due.
Section 2.3 Repurchase upon Breach. The Seller, the Servicer, or the Owner
Trustee, as the case may be, shall inform the other parties to this
Agreement, the Indenture Trustee and MMCA promptly, in writing, upon the
discovery of any breach or failure to be true of the representations and
warranties made by the Seller pursuant to Section 2.2. If the breach or
failure shall not have been cured by the close of business on the last day
of the Collection Period which includes the 60th day after the date on
which the Seller becomes aware of, or receives written notice from the
Owner Trustee or the Servicer of, such breach or failure, and such breach
or failure materially and adversely affects the interest of the Trust in a
Receivable, the Seller shall repurchase from the Trust such Receivable, on
the Payment Date immediately following such Collection Period. In
consideration of the repurchase of a Receivable hereunder, the Seller shall
remit the Purchase Amount of such Receivable in the manner specified in
Section 4.5(a). The sole remedy of the Trust, the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholders with respect
to a breach or failure to be true of the representations and warranties
made by the Seller pursuant to Section 2.2 shall be to require the Seller
to repurchase Receivables pursuant to this Section 2.3 and to enforce the
obligation of MMCA to the Seller to repurchase such Receivable pursuant to
the Purchase Agreement. Neither the Owner Trustee nor the Indenture Trustee
shall have any duty to conduct an affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section 2.3 or the eligibility of any Receivable for
purposes of this Agreement.
Section 2.4 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Trust,
upon the execution and delivery of this Agreement, hereby revocably
appoints the Servicer as its agent, and the Servicer hereby accepts such
appointment, to act as custodian on behalf of the Trust and the Indenture
Trustee of the following documents or instruments, which are hereby
constructively delivered to the Indenture Trustee, as pledgee of the Trust
pursuant to the Indenture (or, in the case of the Subsequent Receivables,
will as of the applicable Subsequent Transfer Date be constructively
delivered to the Indenture Trustee, as pledgee of the Trust pursuant to the
Indenture), with respect to each Receivable (collectively, a "Receivable
File"):
(i) the single original of the Receivable;
(ii) the original credit application fully executed by the Obligor or a
photocopy thereof or a record thereof on a computer file tape,
microfiche or other electronic medium;
(iii) the original certificate of title or such other documents that the
Servicer or MMCA shall keep on file, in accordance with its
customary practices and procedures, evidencing the security
interest of MMCA in the Financed Vehicle;
(iv) documents evidencing the existence, at the time of origination of
the Receivable, of any insurance covering the Financed Vehicle;
and
(v) any and all other documents (including any computer tape,
microfiche or other electronic medium) that the Servicer or the
Seller shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor, or a Financed
Vehicle.
On the Closing Date (with respect to the Initial
Receivables) and each Subsequent Transfer Date (with respect to the related
Subsequent Receivables), the Servicer shall provide an Officer's
Certificate to the Trust and the Indenture Trustee confirming that the
Servicer has received, on behalf of the Trust and the Indenture Trustee,
all the documents and instruments necessary for the Servicer to act as the
agent of the Trust and the Indenture Trustee for the purposes set forth in
this Section 2.4, including the documents referred to herein, and the
Trust, the Owner Trustee and the Indenture Trustee are hereby authorized to
rely on such Officer's Certificate.
Section 2.5 Duties of Servicer as Custodian.(a)Safekeeping. The Servicer,
in its capacity as custodian, shall hold the Receivable Files for the
benefit of the Trust and the Indenture Trustee and maintain such accurate
and complete accounts, records, and computer systems pertaining to each
Receivable File as shall enable the Servicer and the Trust to comply with
the terms and provisions of this Agreement, and the Indenture Trustee to
comply with the terms and conditions of the Indenture. In performing its
duties as custodian, the Servicer shall act with reasonable care, using
that degree of skill and attention that the Servicer exercises with respect
to the receivable files relating to all comparable motor vehicle
receivables that the Servicer services for itself or others. In accordance
with its customary practices and procedures with respect to its retail
installment sale contracts, the Servicer shall conduct, or cause to be
conducted, periodic audits of the Receivable Files held by it under this
Agreement, and of the related accounts, records, and computer systems, in
such a manner as shall enable the Trust or the Indenture Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the Owner Trustee and the Indenture Trustee any failure on its
part to hold the Receivable Files and maintain its accounts, records, and
computer systems as herein provided and promptly take appropriate action to
remedy any such failure. Nothing herein shall be deemed to require an
initial review or any periodic review by the Trust, the Owner Trustee or
the Indenture Trustee of the Receivable Files and none of the Trust, the
Owner Trustee and the Indenture Trustee shall be liable or responsible for
any action or failure to act by the Servicer in its capacity as custodian
hereunder.
(b) Maintenance of and Access to Records. The Servicer shall maintain each
Receivable File at one of its offices specified in Schedule B to this
Agreement, or at such other office as shall be specified to the Trust and
the Indenture Trustee by written notice not later than 90 days after any
change in location. The Servicer shall make available to the Trust and the
Indenture Trustee or its duly authorized representatives, attorneys, or
auditors a list of locations of the Receivable Files, and the related
accounts, records, and computer systems maintained by the Servicer at such
times as the Trust or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon written instructions from the Indenture
Trustee, the Servicer shall release any document in the Receivable Files to
the Indenture Trustee, the Indenture Trustee's agent, or the Indenture
Trustee's designee, as the case may be, at such place or places as the
Indenture Trustee may designate, as soon thereafter as is practicable. Any
document so released shall be handled by the Indenture Trustee with due
care and returned to the Servicer for safekeeping as soon as the Indenture
Trustee or its agent or designee, as the case may be, shall have no further
need therefor.
(d) Title to Receivables. The Servicer agrees that, in respect of any
Receivable held by the Servicer as custodian hereunder, the Servicer will
not at any time have or in any way attempt to assert any interest in such
Receivable or the related Receivable File, other than for collecting or
enforcing the Receivable for the benefit of the Trust and that the entire
equitable interest in such Receivable and the related Receivable File shall
at all times be vested in the Trust.
Section 2.6 Instructions; Authority to Act. The Servicer shall be deemed to
have received proper instructions with respect to the Receivable Files upon
its receipt of written instructions signed by a Responsible Officer of the
Indenture Trustee. A certified copy of excerpts of authorizing resolutions
of the Board of Directors of the Indenture Trustee shall constitute
conclusive evidence of the authority of any such Responsible Officer to act
and shall be considered in full force and effect until receipt by the
Servicer of written notice to the contrary given by the Indenture Trustee.
Section 2.7 Custodian's Indemnification. The Servicer, in its capacity as
custodian, shall indemnify and hold harmless the Trust, the Owner Trustee
and the Indenture Trustee and each of their respective officers, directors,
employees and agents from and against any and all liabilities, obligations,
losses, compensatory damages, payments, costs or expenses (including legal
fees if any) of any kind whatsoever that may be imposed on, incurred, or
asserted against the Trust, the Owner Trustee and the Indenture Trustee or
any of their respective officers, directors, employees and agents as the
result of any act or omission by the Servicer relating to the maintenance
and custody of the Receivable Files; provided, however, that the Servicer
shall not be liable hereunder to the Owner Trustee to the extent, but only
to the extent, that such liabilities, obligations, losses, compensatory
damages, payments, costs or expenses result from the willful misfeasance,
bad faith, or negligence of the Owner Trustee and shall not be liable
hereunder to the Indenture Trustee to the extent, but only to the extent,
that such liabilities, obligations, losses, compensatory damages, payments,
costs or expenses result from the willful misfeasance, bad faith, or
negligence of the Indenture Trustee.
Section 2.8 Effective Period and Termination. The Servicer's appointment as
custodian shall become effective as of the Initial Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section
2.8. If the Servicer shall resign as Servicer under Section 7.5, or if all
of the rights and obligations of the Servicer shall have been terminated
under Section 8.1, the appointment of the Servicer as custodian hereunder
may be terminated by the Indenture Trustee or by the Holders of Notes
evidencing not less than 25% of the principal amount of the then
Outstanding Notes or, with the consent of Holders of Notes evidencing not
less than 25% of the principal amount of the then Outstanding Notes, by the
Owner Trustee or by Holders of Certificates evidencing not less than 25% of
the Certificate Balance, in the same manner as the Indenture Trustee or
such Holders may terminate the rights and obligations of the Servicer under
Section 8.1. As soon as practicable after any termination of such
appointment, the Servicer shall deliver, or cause to be delivered, the
Receivable Files and the related accounts and records maintained by the
Servicer to the Indenture Trustee, the Indenture Trustee's agent or the
Indenture Trustee's designee at such place or places as the Indenture
Trustee may reasonably designate.
ARTICLE III - ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
Section 3.1 Duties of Servicer. (a) The Servicer, acting alone and/or
through subservicers as provided in this Section 3.1, shall administer the
Receivables with reasonable care. The Servicer's duties shall include, but
not be limited to, the collection and posting of all payments, responding
to inquiries by Obligors on the Receivables, or by federal, state, or local
governmental authorities, investigating delinquencies, reporting tax
information to Obligors, furnishing monthly and annual statements to the
Owner Trustee and the Indenture Trustee with respect to distributions,
providing collection and repossession services in the event of Obligor
default, coordinating or arranging inspection of Financed Vehicles relating
to Final Payment Receivables at the end of the related Contract term,
refinancing or selling Financed Vehicles relating to Final Payment
Receivables at the end of the related Contract term depending upon the
options chosen by the Obligors and making Advances pursuant to Sections
4.4(a) and (c). The Servicer shall also administer and enforce all rights
and responsibilities of the holder of the Receivables provided for in the
Dealer Agreements, to the extent that such Dealer Agreements relate to the
Receivables, the Financed Vehicles or the Obligors. In performing its
duties as Servicer hereunder, the Servicer will exercise that degree of
skill and attention that the Servicer exercises with respect to all
comparable motor vehicle receivables that it services for itself or others.
Subject to Section 3.2, the Servicer shall follow its customary standards,
policies, practices and procedures in performing its duties hereunder as
Servicer. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered to execute and deliver, on behalf of
itself, the Trust, the Owner Trustee, the Indenture Trustee, the
Certificateholders, the Noteholders or any one or more of them, any and all
instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the
Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided, however, that notwithstanding the foregoing, the
Servicer shall not, except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under
any Receivable or waive the right to collect the unpaid balance (including
accrued interest) of any Receivable from the Obligor, except in connection
with a de minimis deficiency, Excess Wear and Tear, Excess Mileage or
disposition fees which the Servicer would not attempt to collect in
accordance with its customary procedures, in which event the Servicer shall
indemnify the Trust for such deficiency, Excess Wear and Tear, Excess
Mileage or disposition fee. If the Servicer shall commence a legal
proceeding to enforce a Receivable, the Owner Trustee shall thereupon be
deemed to have automatically assigned such Receivable to the Servicer,
which assignment shall be solely for purposes of collection. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may
not enforce a Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce the Receivable, the Owner Trustee
shall, at the Servicer's expense and direction, take steps to enforce the
Receivable, including bringing suit in its name or the names of the
Indenture Trustee, the Certificateholders, the Noteholders or any of them.
The Owner Trustee shall execute and deliver to the Servicer any powers of
attorney and other documents as shall be prepared by the Servicer and
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer, at its
expense, shall obtain on behalf of the Trust or the Owner Trustee all
licenses, if any, required by the laws of any jurisdiction to be held by
the Trust or the Owner Trustee in connection with ownership of the
Receivables, and shall make all filings and pay all fees as may be required
in connection therewith during the term hereof.
The Servicer may enter into subservicing agreements with
one or more subservicers for the servicing and administration of certain of
the Receivables and may perform its duties as Servicer hereunder utilizing
the employees of MMSA. Notwithstanding anything to the contrary herein, the
Servicer shall remain fully liable hereunder for the performance of the
duties of Servicer, including such duties as may be performed by employees
of MMSA or by any subservicer. In addition, any subservicer shall be and
shall remain, for so long as it is acting as subservicer, an Eligible
Servicer, and any fees paid to such subservicer shall be paid by the
Servicer and not out of the proceeds of the Trust, and any such subservicer
shall agree to service the Receivables in a manner consistent with the
terms of this Agreement.
(b) References in this Agreement to actions taken, to be taken, permitted
to be taken, or restrictions on actions permitted to be taken by the
Servicer in servicing the Receivables and other actions taken, to be taken,
permitted to be taken, or restrictions on actions to be taken with respect
to the Trust Property shall include actions taken, to be taken, permitted
to be taken, or restrictions on actions permitted to be taken by a
subservicer on behalf of the Servicer and references herein to payments
received by the Servicer shall include payments received by a subservicer,
irrespective of whether such payments are actually deposited in the
Collection Account by such subservicer. Any such subservicing agreement
will contain terms and provisions substantially identical to the terms and
provisions of this Agreement and such other terms and provisions as are not
inconsistent with this Agreement and as the Servicer and the subservicer
have agreed.
(c) The Servicer shall be entitled to terminate any subservicing agreement
in accordance with the terms and conditions of such subservicing agreement
and without any limitation by virtue of this Agreement; provided, however,
that, in the event of termination of any subservicing agreement by the
Servicer, the Servicer shall either act directly as Servicer of the related
Receivables or enter into a subservicing agreement with a successor
subservicer which will be bound by the terms of the related subservicing
agreement.
(d) As a condition to the appointment of any subservicer, the Servicer
shall notify the Owner Trustee, the Indenture Trustee and the Rating
Agencies in writing before such assignment becomes effective and such
subservicer shall be required to execute and deliver an instrument in which
it agrees that, for so long as it acts as subservicer of the Receivables
and the other Trust Property being serviced by it, the covenants,
conditions, indemnities, duties, obligations and other terms and provisions
of this Agreement applicable to the Servicer hereunder shall be applicable
to it as subservicer, that it shall be required to perform its obligations
as subservicer for the benefit of the Trust as if it were Servicer
hereunder (subject, however, to the right of the Servicer to direct the
performance of such obligations in accordance with this Agreement) and
that, notwithstanding any provision of a subservicing agreement to the
contrary, such subservicer shall be directly liable to the Owner Trustee
and the Trust (notwithstanding any failure by the Servicer to perform its
duties and obligations hereunder) for the failure by such subservicer to
perform its obligations hereunder or under any subservicing agreement, and
that (notwithstanding any failure by the Servicer to perform its duties and
obligations hereunder) the Owner Trustee may enforce the provisions of this
Agreement and any subservicing agreement against the subservicer for the
benefit of the Trust, without diminution of such obligations or liabilities
by virtue of any subservicing agreement, by virtue of any indemnification
provided thereunder or by virtue of the fact that the Servicer is primarily
responsible hereunder for the performance of such duties and obligations,
as if a subservicer alone were servicing and administering, under this
Agreement, the Receivables and the other Trust Property being serviced by
it under the subservicing agreement.
(e) Notwithstanding any subservicing agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer
or a subservicer or reference to actions taken through such Persons or
otherwise, the Servicer shall remain obligated and liable to the Trust and
the Owner Trustee for the servicing and administering of the Receivables
and the other Trust Property in accordance with the provisions of this
Agreement (including for the deposit of payments received by a subservicer,
irrespective of whether such payments are actually remitted to the Servicer
or deposited in the Collection Account by such subservicer; provided that
if such amounts are so deposited, the Servicer shall have no further
obligation to do so) without diminution of such obligation or liability by
virtue of such subservicing agreements or arrangements or by virtue of
indemnification from a subservicer, to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and
administering the Receivables and the other Trust Property. The Servicer
shall be entitled to enter into any agreement with a subservicer for
indemnification of the Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
(f) In the event the Servicer for any reason no longer shall be acting as
such (including by reason of the occurrence of an Event of Servicing
Termination), the successor Servicer may, in its discretion, thereupon
assume all of the rights and obligations of the outgoing Servicer under a
subservicing agreement. In such event, the successor Servicer shall be
deemed to have assumed all of the Servicer's interest therein and to have
replaced the outgoing Servicer as a party to such subservicing agreement to
the same extent as if such subservicing agreement had been assigned to the
successor Servicer, except that the outgoing Servicer shall not thereby be
relieved of any liability or obligation on the part of the outgoing
Servicer to the subservicer under such subservicing agreement. The outgoing
Servicer shall, upon request of the Indenture Trustee, but at the expense
of the outgoing Servicer, deliver to the successor Servicer all documents
and records relating to each such subservicing agreement and the
Receivables and the other Trust Property then being serviced thereunder and
an accounting of amounts collected and held by it and otherwise use its
best efforts to effect the orderly and efficient transfer of the
subservicing agreement to the successor Servicer. In the event that the
successor Servicer elects not to assume a subservicing agreement, such
subservicing agreement shall be immediately cancellable by the successor
Servicer upon written notice to the subservicer and the outgoing Servicer,
at its expense, shall cause the subservicer to deliver to the successor
Servicer all documents and records relating to the Receivables and the
other Trust Property being serviced thereunder and all amounts held (or
thereafter received) by such subservicer (together with an accounting of
such amounts) and shall otherwise use its best efforts to effect the
orderly and efficient transfer of servicing of the Receivables and the
other Trust Property being serviced by such subservicer to the successor
Servicer.
(g) The Servicer shall be required to provide a computer tape or compact
disk each month to Lewtan Technologies, Inc. containing information
relating to the Receivables, including the name, address and telephone
number of each Obligor and the balance on the Receivables. Lewtan
Technologies shall provide a copy of the tape or disk to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee
upon the written request of the Indenture Trustee. Lewtan Technologies,
Inc. shall be paid a fee for such services and shall be reimbursed for any
expenses incurred by it in connection with such services. The Servicer
shall pay these amounts from its monthly Servicing Fee.
Section 3.2 Collection and Allocation of Receivable Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same
shall become due and shall follow such collection procedures as it follows
with respect to all comparable motor vehicle receivables that it services
for itself or others. The Servicer shall allocate collections between
principal and interest in accordance with the customary servicing practices
and procedures it follows with respect to all comparable motor vehicle
receivables that it services for itself or others. The Servicer shall not
increase or decrease the number or amount of any Scheduled Payment, or the
Amount Financed under a Receivable or the APR of a Receivable, or extend,
rewrite or otherwise modify the payment terms of a Receivable; provided,
however, that:
(i) in the case of a Deferred Payment Receivable or a Deferred Balloon
Payment Receivable upon which the related Obligor has made one or
more partial pre-payments on or prior to the date on which the
first Scheduled Payment is due under the related Contract, the
Servicer may, at any time on or before 90 days after that first
Scheduled Payment is due, modify the terms of the Receivable
including by reducing the amount of each Scheduled Payment;
provided, that the Servicer may not change (x) the APR of such
Receivable, and (y) the date on which the final Scheduled Payment
under the Receivable is due from the date set forth in the related
Contract as the date on which such final Scheduled Payment shall
be due (any such Receivable, a "Modified Receivable"); and
(ii) the Servicer may extend the due date for one or more payments due
on a Receivable for credit-related reasons that would be
acceptable to the Servicer with respect to comparable motor
vehicle receivables that it services for itself and others and in
accordance with its customary standards, policies, practices and
procedures if the cumulative extensions with respect to any
Receivable shall not cause the term of such Receivable to extend
beyond June 2009 and that such extensions, in the aggregate, do
not exceed two months for each 12 months of the original term of
the Receivable.
In the event that the Servicer fails to comply with the
provisions of the preceding sentence, the Servicer shall be required to
purchase the Receivable or Receivables affected thereby, for the Purchase
Amount, in the manner specified in Section 3.7, as of the close of the
Collection Period in which such failure occurs. The Servicer may, in its
discretion, (but only in accordance with its customary standards, policies,
practices and procedures), waive any late payment charge or any other fee
that may be collected in the ordinary course of servicing a Receivable.
(b) With respect to each Final Payment Receivable, the Servicer, in
accordance with its customary servicing standards, policies, practices and
procedures, shall contact the Obligor on or before the due date of the Last
Scheduled Payment specified in the related Contract. If, at such time, the
Obligor under the Final Payment Receivable has notified MMCA on behalf of
the Trust that it elects to sell the Financed Vehicle to MMCA on behalf of
the Trust in accordance with the terms of the Receivable, the Servicer
shall, upon delivery of the Financed Vehicle by the Obligor to MMCA on
behalf of the Trust, inspect the Financed Vehicle for Excess Wear and Tear
and Excess Mileage, and determine the necessity of any repairs. If the
Servicer determines that such Financed Vehicle requires repairs as a result
of Excess Wear and Tear, the Servicer shall require the Obligor to pay the
estimated cost of such repairs to the Servicer. If the Obligor disputes the
Servicer's estimate of the cost of such repairs, the Obligor may obtain, at
the Obligor's own expense, a professional appraisal of the Financed
Vehicle's value by an independent third-party appraiser acceptable to both
the Obligor and the Servicer, and the cost of repairs for Excess Wear and
Tear as determined by such appraisal shall be binding on the Obligor and
the Servicer. The Servicer shall, pursuant to the related Contract, offset
(x) the cost of repairs for Excess Wear and Tear as determined by the
appraisal, any charges for Excess Mileage and the disposition fee payable
to the Servicer pursuant to the related Contract, and the Principal
Balance, accrued interest and any other amounts owed by the Obligor on the
Receivable against (y) the purchase price otherwise due to the Obligor for
the Financed Vehicle, and shall collect any excess of (x) over (y) from the
Obligor.
(c) In connection with an Obligor's transfer of a Financed Vehicle to MMCA
on behalf of the Trust in satisfaction of its obligation to pay the Last
Scheduled Payment under a Final Payment Receivable, pursuant to the terms
of the Contract related to such Last Scheduled Payment, the Servicer shall
require the Obligor to pay a disposition fee (which the Servicer will
retain as servicing compensation), whereupon the Servicer shall take
possession of the related Financed Vehicle and shall prepare such Financed
Vehicle for sale at auction or otherwise in accordance with the Servicer's
customary servicing standards, policies, practices and procedures.
(d) Proceeds received by the Servicer from the payment by an Obligor of a
Financed Vehicle of amounts attributable to Last Scheduled Payments and
other amounts (including Excess Wear and Tear and Excess Mileage) owed by
the Obligor and from the sale of a Financed Vehicle at auction or otherwise
constitute proceeds of Last Scheduled Payments and collections on the
Receivables, and shall be deposited into the Collection Account. Following
the sale of the Financed Vehicle, the Servicer, on behalf of the Trust,
shall deliver the related certificate of title to the purchaser of such
Financed Vehicle. Following the Servicer's receipt of proceeds from the
sale of such Financed Vehicle and amounts to be paid by the Obligor
pursuant to subparagraph (b) above, the Servicer shall record on its books
and records the termination of the Trust's ownership and security interest
in the related Final Payment Receivable (and shall deliver copies thereof
to the Indenture Trustee and the Owner Trustee upon written request within
10 days of receipt of such request).
(e) If the Obligor under any Balloon Payment Receivable or Final Payment
Receivable has notified the Dealer that it desires to refinance the amount
that it owes on termination of the Receivable, MMCA will, in accordance
with its customary servicing standards, policies, practices and procedures,
make a decision to grant or deny credit, except for Contracts for which the
Obligors have the right to refinance without such an assessment, in which
case MMCA shall honor the Obligor's right to refinance. If credit is
denied, the Servicer shall require the Obligor to satisfy its obligation to
pay the remaining amounts owed in accordance with the terms of the Balloon
Payment Receivable or Final Payment Receivable. If credit is granted, MMCA
shall deposit an amount equal to the total amount owed by the Obligor on
the Receivable to the Collection Account. Upon deposit of such amount into
the Collection Account, the Trust's ownership and security interest in the
related Financed Vehicle shall terminate, and the Trust will assign all
interest in, to and under the Receivable and the related Financed Vehicle
to MMCA. The Servicer shall record such termination on its books and
records (and shall deliver copies thereof to the Indenture Trustee and the
Owner Trustee upon written request within 10 days of receipt of such
request). If MMCA is no longer the Servicer, the Trust or any Holder of the
Certificates may make arrangements for the successor Servicer or another
party to provide refinancing of Last Scheduled Payments to Obligors who
desire to satisfy the Last Scheduled Payment through refinancing and who
meet such party's credit criteria, and any reasonable costs and expenses of
the successor Servicer or such third party in determining whether to
provide such refinancing shall be payable from amounts, if any, which would
otherwise be released from the Reserve Account and paid to the Seller.
Section 3.3 Realization upon Receivables. (a) On behalf of the Trust, the
Servicer shall use reasonable efforts, in accordance with the standard of
care required by Section 3.1, to repossess or otherwise convert the
ownership of each Financed Vehicle securing a Defaulted Receivable. In
taking such action, the Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of comparable automotive receivables, and as are otherwise
consistent with the standard of care required under Section 3.1, which
shall include the exercise of any rights of recourse to Dealers under the
Dealer Agreements. The Servicer shall be entitled to recover all reasonable
expenses incurred by it in the course of repossessing and liquidating a
Financed Vehicle into cash proceeds, but only out of the cash proceeds of
such Financed Vehicle and any deficiency obtained from the Obligor. The
foregoing shall be subject to the provision that, in any case in which a
Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds (or Recoveries) of the
related Receivable by an amount equal to or greater than the amount of such
expenses.
(b) If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement, the act of commencement shall be deemed to be an
automatic assignment from the Trust to the Servicer of the rights of
recourse under such Dealer Agreement. If, however, in any enforcement suit
or legal proceeding, it is held that the Servicer may not enforce a Dealer
Agreement on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer Agreement, the Owner Trustee, at the
Servicer's expense and direction, shall take such steps as the Servicer
deems necessary to enforce the Dealer Agreement, including bringing suit in
its name or the names of the Indenture Trustee, the Certificateholders, the
Noteholders or any of them.
Section 3.4 Physical Damage Insurance. The Servicer shall follow its
customary servicing procedures to determine whether or not each Obligor
shall have maintained physical damage insurance covering the related
Financed Vehicle.
Section 3.5 Maintenance of Security Interests in Financed Vehicles. The
Servicer, in accordance with the standard of care required under Section
3.1, shall take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed
Vehicle. The Trust hereby authorizes the Servicer, and the Servicer hereby
agrees, to take such steps as are necessary to re-perfect such security
interest on behalf of the Trust and the Indenture Trustee in the event the
Servicer receives notice of, or otherwise has actual knowledge of, the
relocation of a Financed Vehicle or for any other reason.
Section 3.6 Covenants of Servicer. The Servicer hereby makes the
following covenants:
(a) Security Interest to Remain in Force. The Financed Vehicle securing
each Receivable will not be released from the security interest granted by
the Receivable in whole or in part, except as contemplated herein.
(b) No Impairment. The Servicer will not (nor will it permit any
subservicer to) impair in any material respect the rights of the Trust, the
Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders in the Receivables or, subject to clause (c) below, otherwise
amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders or the Noteholders hereunder would be
materially adversely affected.
(c) Amendments. The Servicer will not increase or decrease the number or
amount of Scheduled Payments or the Amount Financed under a Receivable, or
extend, rewrite or otherwise modify the payment terms of a Receivable,
except pursuant to Section 3.2(a).
Section 3.7 Purchase by Servicer upon Breach. The Seller, the Servicer or
the Owner Trustee, as the case may be, shall inform the other parties to
this Agreement promptly, in writing, upon the discovery of any breach of
Section 3.2(a), 3.5 or 3.6. If the breach shall not have been cured by the
last day of the Collection Period which includes the 60th day after the
date on which the Servicer becomes aware of, or receives written notice of,
such breach, and such breach materially and adversely affects the interests
of the Trust in a Receivable, the Servicer shall purchase such Receivable
or Receivables on the immediately succeeding Payment Date; provided,
however, that with respect to a breach of Section 3.2(a), the Servicer
shall repurchase the affected Receivable from the Trust at the end of the
Collection Period in which such breach occurs. In consideration of the
purchase of a Receivable hereunder, the Servicer shall remit the Purchase
Amount of such Receivable in the manner specified in Section 4.5(a). Except
as provided in Section 7.2, the sole remedy of the Trust, the Owner
Trustee, the Indenture Trustee, the Certificateholders or the Noteholders
against the Servicer with respect to a breach pursuant to Section 3.2, 3.5
or 3.6 shall be to require the Servicer to repurchase Receivables pursuant
to this Section 3.7. Neither the Owner Trustee nor the Indenture Trustee
shall have any duty to conduct an affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section 3.7 or the eligibility of any Receivable for
purposes of this Agreement.
Section 3.8 Servicing Compensation. The "Servicing Fee" with respect to a
Collection Period shall be an amount equal to the product of one-twelfth
(1/12) of the sum of (x) 1% of the aggregate Principal Balance of all
Receivables other than Deferred Payment Receivables and Deferred Balloon
Payment Receivables and (y) 0.25% of the aggregate Principal Balance of
Deferred Payment Receivables and Deferred Balloon Payment Receivables, in
each case as of the first day of such Collection Period. As additional
servicing compensation, the Servicer shall also be entitled to earnings
(net of losses and investment expenses) on amounts on deposit in the
Payahead Account, disposition fees paid with respect to Final Payment
Receivables and any administrative fees and charges and all late payment
fees actually collected (from whatever source) on the Receivables other
than fees paid in connection with the extension or deferral of payments on
a Receivable (the "Supplemental Servicing Fee"). The Servicer shall be
required to pay all expenses incurred by it in connection with its
activities hereunder (including fees and expenses of the Owner Trustee and
the Indenture Trustee (and any custodian appointed by the Owner Trustee and
the Indenture Trustee) and independent accountants, any subservicer, taxes
imposed on the Servicer or any subservicer (to the extent not paid by such
subservicer), expenses incurred in connection with distributions and
reports to the Certificateholders and the Noteholders, and any fees and
reimbursements for expenses paid to Lewtan Technologies, Inc.), except
expenses incurred in connection with realizing upon Receivables under
Section 3.3.
Section 3.9 Servicer's Certificate. On or before the Determination Date
immediately preceding each Payment Date, the Servicer shall deliver to the
Owner Trustee, each Paying Agent, the Indenture Trustee, the Swap
Counterparty and the Seller, with a copy to the Rating Agencies, a
certificate of a Servicing Officer substantially in the form of Exhibit A
hereto (a "Servicer's Certificate") and attached to a Servicer's report
containing all information necessary to make the transfers and
distributions pursuant to Sections 4.3, 4.4, 4.5, 4.6 and 4.7, together
with the written statements to be furnished by the Owner Trustee to
Certificateholders pursuant to Section 4.9 and by the Indenture Trustee to
the Noteholders pursuant to Section 4.9 hereof and Section 6.6 of the
Indenture. Upon written request of the Owner Trustee or the Indenture
Trustee, the Servicer also shall separately identify (by account number of
the Receivable as it appears in the related Schedule of Receivables) in a
written notice to the Owner Trustee or the Indenture Trustee, as the case
may be, the Receivables to be repurchased by the Seller or to be purchased
by the Servicer, as the case may be, on the related Payment Date, and, also
upon written request of one of the foregoing parties, each Receivable which
became a Defaulted Receivable during the related Collection Period. The
Servicer shall deliver to the Rating Agencies any information, to the
extent it is available to the Servicer, that the Rating Agencies reasonably
request in order to monitor the Trust.
Section 3.10 Annual Statement as to Compliance; Notice of Event of
Servicing Termination. (a) The Servicer shall deliver to the Owner Trustee
and the Indenture Trustee, on or before March 31 of each year, commencing
March 31, 2003, an Officer's Certificate, stating that (i) a review of the
activities of the Servicer during the preceding calendar year (or such
shorter period, with respect to the first such Officer's Certificate) and
of its performance of its obligations under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such year (or such shorter
period with respect to the first such Officer's Certificate), or, if there
has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof.
A copy of such certificate shall be delivered by the Indenture Trustee to
each Noteholder, promptly following the Indenture Trustee's receipt of such
certificate, pursuant to Section 7.4 of the Indenture. In addition, a copy
of such certificate may be obtained by any Certificateholder by a request
in writing to the Owner Trustee or by any Person certifying that it is a
Note Owner by a request in writing to the Indenture Trustee, in either case
addressed to the applicable Corporate Trust Office. Upon the telephone
request of the Owner Trustee, the Indenture Trustee shall promptly furnish
the Owner Trustee a list of Noteholders as of the date specified by the
Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and the Rating Agencies, promptly upon having knowledge thereof, but in no
event later than five Business Days thereafter, written notice in an
Officer's Certificate of any event which constitutes or, with the giving of
notice or lapse of time or both, would become, an Event of Servicing
Termination under Section 8.1.
Section 3.11 Annual Independent Certified Public Accountants' Reports. The
Servicer shall cause a firm of independent certified public accountants
(who may also render other services to the Servicer, the Seller or to MMCA)
to deliver to the Owner Trustee and the Indenture Trustee on or before
March 31 of each year, commencing March 31, 2003, a report addressed to the
Board of Directors of the Servicer with respect to the preceding calendar
year (or such shorter period, with respect to the first such report) to the
effect that such firm has audited the financial statements of the Servicer
and issued its report thereon and that such audit (1) was made in
accordance with generally accepted auditing standards, (2) included tests
relating to motor vehicle loans serviced for others in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers
(the "Program"), to the extent the procedures in such Program are
applicable to the servicing obligations set forth in this Agreement, and
(3) except as described in the report, disclosed no exceptions or errors in
the records relating to automobile and sports-utility vehicle loans
serviced for others that such firm is required to report under the Program.
Such report shall also indicate that the firm is independent with respect
to the Seller and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants. A copy of such report shall be delivered by the Indenture
Trustee to each Noteholder, promptly following the Indenture Trustee's
receipt of such report, pursuant to Section 7.4 of the Indenture. In
addition, a copy of such report may be obtained by any Certificateholder by
a request in writing to the Owner Trustee, or by any Person certifying that
it is a Note Owner by a request in writing to the Indenture Trustee, in
either case addressed to the applicable Corporate Trust Office.
Section 3.12 Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide the Certificateholders, the
Indenture Trustee and the Noteholders with access to the Receivable Files
in the cases where the Certificateholders, the Indenture Trustee or the
Noteholders shall be required by applicable statutes or regulations to have
access to such documentation. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the
offices of the Servicer. Nothing in this Section 3.12 shall affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation
shall not constitute a breach of this Section 3.12. Any Certificateholder
or Noteholder, by its acceptance of a Certificate or Note, as the case may
be, shall be deemed to have agreed to keep any information obtained by it
pursuant to this Section confidential, except as may be required by
applicable law.
Section 3.13 Reports to the Commission. The Servicer shall, on behalf of
the Trust, cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Exchange Act , and the
rules and regulations of the Commission thereunder. The Seller shall, at
its expense, cooperate in any reasonable request made by the Servicer in
connection with such filings.
Section 3.14 Reports to Rating Agencies. The Servicer shall deliver to each
Rating Agency, at such address as each Rating Agency may request, a copy of
all reports or notices furnished or delivered pursuant to this Article and
a copy of any amendments, supplements or modifications to this Agreement
and any subservicing agreement and any other information reasonably
requested by such Rating Agency to monitor this transaction.
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 4.1 Accounts. (a) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the
Indenture Trustee, at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of
Bank of Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Collection Account." The Collection Account shall be held in trust for the
benefit of the Noteholders and the Certificateholders. The Collection
Account shall be under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Collection
Account in accordance with the terms of this Agreement, the Indenture and
the Trust Agreement. All monies deposited from time to time in the
Collection Account shall be held by the Indenture Trustee as part of the
Trust Property and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant
to the first sentence of Section 4.2(a), all amounts held in the Collection
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
bank or trust company then maintaining the Collection Account, in Permitted
Investments that mature not later than the Business Day immediately prior
to the Payment Date for the Collection Period to which such amounts relate
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Collection Account shall be withdrawn from the Collection Account at
the written direction of the Servicer and shall be deposited in the
Certificate Distribution Account. In the event that the Collection Account
is no longer to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Collection
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(b) The Servicer shall, prior to the Closing Date, establish and maintain a
segregated trust account in the name of the Indenture Trustee, at a
Qualified Institution or Qualified Trust Institution (which shall initially
be the corporate trust department of Bank of Tokyo-Mitsubishi Trust
Company), which shall be designated as the "Pre-Funding Account." The
Pre-Funding Account shall be held in trust for the benefit of the
Noteholders and the Certificateholders. The Pre-Funding Account shall be
under the sole dominion and control of the Indenture Trustee; provided,
that the Servicer may make deposits to and direct the Indenture Trustee in
writing to make withdrawals from the Pre-Funding Account in accordance with
the terms of this Agreement and the other Basic Documents. All monies
deposited from time to time in the Pre-Funding Account shall be held by the
Indenture Trustee as part of the Trust Property and all deposits to and
withdrawals therefrom shall be made only upon the terms and conditions of
the Basic Documents.
All amounts held in the Pre-Funding Account shall, to the
extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Pre-Funding Account, in Permitted Investments that mature
not later than the Business Day immediately prior to each Payment Date and
such Permitted Investments shall be held until maturity. On the Business
Day preceding each Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account for deposit to the
Collection Account on such date an amount equal to the Pre-Funding Account
Investment Earnings, if any, for the related Collection Period. In the
event that the Pre-Funding Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance
as necessary, cause the Pre-Funding Account to be moved to a Qualified
Institution or a Qualified Trust Institution within 10 Business Days (or
such longer period not to exceed thirty calendar days as to which each
Rating Agency may consent).
With respect to any amounts, securities, investments,
financial assets and other property deposited in or credited to the
Pre-Funding Account:
(i) any such property that is a "financial asset" as defined in
Section 8-102(a)(9) of the Relevant UCC shall be physically
delivered to, or credited to an account in the name of, the
Qualified Institution or Qualified Trust Institution maintaining
the Pre-Funding Account, as applicable, in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any such property that is held in deposit accounts shall be held
solely in the name of the Indenture Trustee at one or more
depository institutions having the Required Rating and each such
deposit account shall be subject to the exclusive custody and
control of the Indenture Trustee, and the Indenture Trustee shall
have sole signature authority with respect thereto; and
except for any deposit accounts specified in clause (ii)
above, the Pre-Funding Account shall only be invested in securities or in
other assets which the Qualified Institution or Qualified Trust Institution
maintaining the Pre-Funding Account, as applicable, agrees to treat as
"financial assets" as defined in Section 8-102(a)(9) of the Relevant UCC.
(c) The Servicer shall, prior to the Closing Date, establish and maintain a
segregated trust account in the name of the Indenture Trustee, at a
Qualified Institution or Qualified Trust Institution (which shall initially
be the corporate trust department of Bank of Tokyo-Mitsubishi Trust
Company), which shall be designated as the "Negative Carry Account." The
Negative Carry Account shall be held in trust for the exclusive benefit of
the Noteholders. The Negative Carry Account shall be under the sole
dominion and control of the Indenture Trustee; provided, that the Servicer
may make deposits to and direct the Indenture Trustee in writing to make
withdrawals from the Negative Carry Account in accordance with the terms of
this Agreement and the other Basic Documents. All monies deposited from
time to time in the Negative Carry Account shall be held by the Indenture
Trustee as part of the Trust Property and all deposits to and withdrawals
therefrom shall be made only upon the terms and conditions of the Basic
Documents.
All amounts held in the Negative Carry Account shall, to
the extent permitted by applicable law, rules and regulations, be invested,
as directed in writing by the Servicer, by the bank or trust company then
maintaining the Negative Carry Account, in Permitted Investments that
mature not later than the Business Day immediately prior to each Payment
Date and such Permitted Investments shall be held until maturity. All
interest and other income (net of losses and investment expenses) on funds
on deposit in the Negative Carry Account shall be withdrawn from the
Negative Carry Account for deposit to the Collection Account or release to
the Seller at the time and in the manner provided in Section 4.12. In the
event that the Negative Carry Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance
as necessary, cause the Negative Carry Account to be moved to a Qualified
Institution or a Qualified Trust Institution within 10 Business Days (or
such longer period not to exceed 30 calendar days as to which each Rating
Agency may consent).
With respect to any amounts, securities, investments,
financial assets and other property deposited in or credited to the
Negative Carry Account:
(i) any such property that is a "financial asset" as defined in
Section 8-102(a)(9) of the Relevant UCC shall be physically
delivered to, or credited to an account in the name of, the
Qualified Institution or Qualified Trust Institution maintaining
the Negative Carry Account, as applicable, in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any such property that is held in deposit accounts shall be held
solely in the name of the Indenture Trustee at one or more
depository institutions having the Required Rating and each such
deposit account shall be subject to the exclusive custody and
control of the Indenture Trustee and the Indenture Trustee shall
have sole signature authority with respect thereto; and
except for any deposit accounts specified in clause (ii)
above, the Negative Carry Account shall only be invested in securities or
in other assets which the Qualified Institution or Qualified Trust
Institution maintaining the Negative Carry Account, as applicable, agrees
to treat as "financial assets" as defined in Section 8-102(a)(9) of the
Relevant UCC.
(d) The Servicer shall, prior to the Closing Date, establish and maintain a
segregated trust account in the name of the Indenture Trustee at a
Qualified Institution or Qualified Trust Institution (which shall initially
be the corporate trust department of Bank of Tokyo-Mitsubishi Trust
Company), which shall be designated as the "Note Payment Account." The Note
Payment Account shall be held in trust for the exclusive benefit of the
Noteholders. The Note Payment Account shall be under the sole dominion and
control of the Indenture Trustee. All monies deposited from time to time in
the Note Payment Account pursuant to this Agreement and the Indenture shall
be held by the Indenture Trustee as part of the Trust Property and shall be
applied as provided in this Agreement and the Indenture. In the event that
the Note Payment Account is no longer to be maintained at the corporate
trust department of Bank of Tokyo-Mitsubishi Trust Company, the Servicer
shall, with the Indenture Trustee's assistance as necessary, cause the Note
Payment Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(e) The Servicer shall, prior to the Closing Date, establish and maintain a
segregated trust account in the name of the Trust at a Qualified
Institution or Qualified Trust Institution (which shall initially be
Wilmington Trust Company), which shall be designated as the "Certificate
Distribution Account." Except as provided in the Trust Agreement, the
Certificate Distribution Account shall be held in trust for the benefit of
the Certificateholders. The Certificate Distribution Account shall be under
the sole dominion and control of the Owner Trustee; provided that the
Indenture Trustee may make deposits to such account in accordance with the
directions of the Servicer pursuant to this Agreement and the Indenture.
All monies deposited from time to time in the Certificate Distribution
Account pursuant to this Agreement and the Indenture shall be held by the
Owner Trustee as part of the Trust Property and shall be applied as
provided in this Agreement and the Trust Agreement. In the event that the
Certificate Distribution Account is no longer to be maintained at
Wilmington Trust Company, the Servicer shall, with the Owner Trustee's
assistance as necessary, cause the Certificate Distribution Account to be
moved to a Qualified Institution or a Qualified Trust Institution within 10
Business Days (or such longer period not to exceed 30 calendar days as to
which each Rating Agency may consent) and shall promptly notify the
Indenture Trustee of the account number and location of such account.
(f) The Servicer shall, prior to the Closing Date, establish and maintain a
segregated trust account in the name of the Indenture Trustee at a
Qualified Institution or Qualified Trust Institution (which shall initially
be the corporate trust department of Bank of Tokyo-Mitsubishi Trust
Company), which shall be designated as the "Payahead Account." The Payahead
Account shall be held in trust for the benefit of the Noteholders and the
Certificateholders. The Payahead Account shall be under the sole dominion
and control of the Indenture Trustee provided, that the Servicer may make
deposits to and direct the Indenture Trustee in writing to make withdrawals
from the Payahead Account in accordance with this Agreement and the
Indenture. All monies deposited from time to time in the Payahead Account
shall be held by the Indenture Trustee as part of the Trust Property and
all deposits to and withdrawals therefrom shall be made only upon the terms
and conditions of the Basic Documents.
On the Closing Date, the Seller shall deposit an amount
equal to the Initial Payahead Account Deposit into the Payahead Account
from the net proceeds of the sale of the Notes and the Certificates. On
each Subsequent Transfer Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account and deposit to the
Payahead Account an amount equal to the applicable Subsequent Payahead
Account Deposit.
If the Servicer is required to remit collections pursuant
to the first sentence of Section 4.2(a), all amounts held in the Payahead
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
bank or trust company then maintaining the Payahead Account, in Permitted
Investments that mature not later than the Business Day immediately prior
to the Payment Date for the Collection Period to which such amounts relate
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Payahead Account shall be withdrawn from the Payahead Account at the
direction of the Servicer and shall be paid to the Servicer as additional
servicing compensation. In the event that the Payahead Account is no longer
to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Payahead
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(g) Notwithstanding the provisions of clause (g) above, for so long as (i)
MMCA is the Servicer, (ii) the rating of MMCA's short-term unsecured debt
is at least "Prime-1" by Xxxxx'x, at least "A-1" by S&P and at least "F1"
by Fitch Ratings and (iii) no Events of Servicing Termination shall have
occurred (each, a "Monthly Remittance Condition"), Payaheads need not be
remitted to and deposited in the Payahead Account but instead may be
remitted to and held by the Servicer. So long as such Monthly Remittance
Conditions are met, the Servicer shall not be required to segregate or
otherwise hold separate any Payaheads remitted to the Servicer as aforesaid
but shall be required to remit Payaheads to the Collection Account in
accordance with Section 4.6(a)(i). At all times as such Monthly Remittance
Conditions are not met, the Servicer shall deposit in the Payahead Account
the amount of any Payaheads then held or received by it. Notwithstanding
the foregoing, if a Monthly Remittance Condition is not satisfied, the
Servicer may utilize, with respect to Payaheads, an alternative remittance
schedule (which may include the remittance schedule utilized by the
Servicer before the Monthly Remittance Condition became unsatisfied), if
the Servicer provides to the Owner Trustee and the Indenture Trustee
written confirmation from the Rating Agencies that such alternative
remittance schedule will not result in the downgrading or withdrawal by the
Rating Agencies of the ratings then assigned to the Notes and the
Certificates. The Owner Trustee and the Indenture Trustee shall not be
deemed to have knowledge of any event or circumstance under clauses (ii) or
(iii) of the first sentence of this Section 4.1(h) that would require
remittance of the Payaheads to the Payahead Account unless the Owner
Trustee or the Indenture Trustee has received written notice of such event
or circumstance from the Seller or the Servicer in an Officer's Certificate
or from the Holders of Notes evidencing not less than 25% of the principal
balance of the then Outstanding Notes or from the Holders of Certificates
evidencing not less than 25% of the Certificate Balance or unless a
Responsible Officer in the Corporate Trust Office with knowledge hereof and
familiarity herewith has actual knowledge of such event or circumstance.
(h) The Servicer shall be permitted to remit to any Obligor, upon the
request of such Obligor, the Payahead Balance with respect to such
Obligor's Receivable or such lesser amount as is requested by such Obligor,
in accordance with the Servicer's customary standards, policies, practices
and procedures, to the extent that such amount is not then due on such
Receivable. Upon any such remittance, the Payahead Balance with respect to
such Receivable shall be reduced by the amount of such remittance.
Section 4.2 Collections. (a) Subject to the provisions of subsection (b)
below, the Servicer shall remit to the Collection Account (i) all payments
by or on behalf of the Obligors (including, subject to the next two
sentences, Payaheads on the Receivables, but excluding payments with
respect to Purchased Receivables and amounts included in the Supplemental
Servicing Fee), including amounts treated as collections on Balloon Payment
Receivables and Final Payment Receivables pursuant to Section 3.2(d) and
(ii) all Liquidation Proceeds and all Recoveries, received by the Servicer
during any Collection Period, as soon as practicable, but in no event after
the close of business on the second Business Day after receipt thereof.
Collections of Payaheads shall be deposited in the Collection Account,
pursuant to the preceding sentence for purposes of administrative
convenience only, pending determination of the amount to be deposited in
the Payahead Account (or in the event that the Monthly Remittance
Conditions are satisfied, remitted to the Servicer pursuant to Section
4.1(h)), which amount shall be deposited in the Payahead Account as soon as
practicable but in no event later than the Payment Date immediately
following collection, and such amounts shall not be transferred to the
Collection Account until due.
MMCA, for so long as it is acting as the Servicer, may
make remittances of collections on a less frequent basis than that
specified in the immediately preceding paragraph. It is understood that
such less frequent remittances may be made only on the specific terms and
conditions set forth below in this Section 4.2(a) and only for so long as
such terms and conditions are fulfilled. Accordingly, notwithstanding the
provisions of the first sentence of this Section 4.2(a), the Servicer shall
remit collections received during a Collection Period to the Collection
Account in immediately available funds on the Business Day prior to the
related Payment Date but only for so long as each Monthly Remittance
Condition is satisfied. Notwithstanding the foregoing, if a Monthly
Remittance Condition is not satisfied, the Servicer may utilize an
alternative remittance schedule (which may include the remittance schedule
utilized by the Servicer before the Monthly Remittance Condition became
unsatisfied), if the Servicer provides to the Owner Trustee and the
Indenture Trustee written confirmation from the Rating Agencies that such
alternative remittance schedule will not result in the downgrading or
withdrawal by the Rating Agencies of the ratings then assigned to the Notes
and the Certificates. The Owner Trustee or the Indenture Trustee shall not
be deemed to have knowledge of any event or circumstance under clauses (ii)
or (iii) of the definition of Monthly Remittance Condition that would
require daily remittance by the Servicer to the Collection Account unless
the Owner Trustee or the Indenture Trustee has received notice of such
event or circumstance from the Seller or the Servicer in an Officer's
Certificate or written notice from the Holders of Notes evidencing not less
than 25% of the principal balance of the then outstanding Notes or from the
Holders of Certificates evidencing not less than 25% of the Certificate
Balance or a Responsible Officer in the Corporate Trust Office with
knowledge hereof or familiarity herewith has actual knowledge of such event
or circumstance.
(b) In those cases where a subservicer is servicing a Receivable, the
Servicer shall cause the subservicer to remit to the Collection Account, as
soon as practicable, but in no event after the close of business on the
second Business Day after receipt thereof by the subservicer (but subject
to the provisions of Section 4.2(a)) the amounts referred to in Section
4.2(a) in respect of a Receivable being serviced by the subservicer.
Section 4.3 Application of Collections. (a) For the purposes of this
Agreement, as of the close of business on the last day of each Collection
Period, all collections received pursuant to Section 4.2 for such
Collection Period for each Receivable (excluding the amounts actually
collected with respect to the Supplemental Servicing Fee and amounts
collected with respect to a Purchased Receivable) shall be applied by the
Servicer, in the case of (i) a Simple Interest Receivable that is a
Standard Receivable, to interest and principal on the Receivable in
accordance with the Simple Interest Method, (ii) a Simple Interest
Receivable that is a Balloon Payment Receivable or a Final Payment
Receivable, to interest and principal in accordance with the Simple
Interest Method first, to accrued but unpaid interest, second, to the Level
Pay Balance of such Receivable, third, to the principal portion of the Last
Scheduled Payment to the extent a Last Scheduled Payment Advance has not
been made by the Servicer with respect to such Last Scheduled Payment and
fourth, to the extent of any unreimbursed Last Scheduled Payment Advance
with respect to such Simple Interest Receivable, to reimburse the Servicer
for such Last Scheduled Payment Advance and (iii) an Actuarial Receivable,
first, to the Scheduled Payment of such Actuarial Receivable, second to the
extent of any unreimbursed Actuarial Advances with respect to such
Actuarial Receivable, to reimburse the Servicer for any such Actuarial
Advances, third, to the extent of any unreimbursed Last Scheduled Payment
Advance with respect to such Actuarial Receivable, to reimburse the
Servicer for such Last Scheduled Payment Advance and fourth, to the extent
that any amounts are remaining then due to a prepayment of such Actuarial
Receivable, if the sum of such remaining amount and the previous Payahead
Balance shall be sufficient to prepay the Actuarial Receivable in full, and
otherwise to the Payahead Account (or, if all Monthly Remittance Conditions
are satisfied, to the Servicer) as a Payahead.
(b) All Liquidation Proceeds and any Recoveries, and any proceeds realized
upon the liquidation, sale or dissolution of the Owner Trust Estate (or any
part thereof) upon the occurrence of an Event of Default under the
Indenture shall, with respect to any Balloon Payment Receivable or Final
Payment Receivable be applied first to accrued but unpaid interest thereon,
second, to the Level Pay Balance of such Receivable and third, to the
principal portion of the related Last Scheduled Payment.
Section 4.4 Advances. (a) As of the close of business on the last day of
each Collection Period, if the payments during such Collection Period by or
on behalf of the Obligor on or in respect of an Actuarial Receivable (other
than a Purchased Receivable) after application under Section 4.3 shall be
less than the Scheduled Payment, the Payahead Balance of such Receivable
shall be applied by the Indenture Trustee to the extent of the shortfall,
and such Payahead Balance shall be reduced accordingly. Subject to the last
sentence of this Section 4.4(a), on each Payment Date the Servicer shall
advance an amount equal to the excess, if any, of the Scheduled Payment
with respect to an Actuarial Receivable over the sum of the (x) payments
received on or in respect of such Actuarial Receivable during the preceding
Collection Period and (y) the Payahead Balance with respect to such
Actuarial Receivable (such advance, an "Actuarial Advance"); provided that
the Servicer shall make Actuarial Advances with respect to the Last
Scheduled Payment on Actuarial Receivables that are Final Payment
Receivables in accordance with Section 4.4(b). All applications of the
Payahead Balance of a Receivable by the Indenture Trustee and all Actuarial
Advances by the Servicer pursuant to this Section 4.4(a) shall be made
based on the information set forth in the Servicer's report attached to the
Servicer's Certificate delivered pursuant to Section 3.9. Notwithstanding
anything in this Agreement to the contrary, no successor to Mitsubishi
Motors Credit of America, Inc. as Servicer shall be required to make
Actuarial Advances.
(b) As of the last day of the Collection Period in which the Last Scheduled
Payment with respect to a Final Payment Receivable is due, if the payments
during such Collection Period by or on behalf of the related Obligor on or
in respect of such Last Scheduled Payment after application under Section
4.3(a) and, in the case of an Actuarial Receivable, the amounts, if any, in
the Payahead Account allocable to such Last Scheduled Payment, shall be
less than the amount of such Last Scheduled Payment, the Servicer shall
advance an amount equal to the shortfall by depositing such amount into the
Collection Account on the related Payment Date (such advance, a "Last
Scheduled Payment Advance"). Notwithstanding anything in this Agreement to
the contrary, no successor to Mitsubishi Motors Credit of America, Inc. as
Servicer shall be required to make Last Scheduled Payment Advances.
(c) (i) Upon either the written instructions of the Servicer or based
solely upon the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 3.9, the
Indenture Trustee shall release from amounts available in the Payahead
Account, the amounts required to be released from amounts available in the
Payahead Account pursuant to Sections 4.4(a) and (b) with respect to each
Collection Period and shall deposit such amounts in the Collection Account
on the related Payment Date pursuant to Section 4.5(a).
(ii) On each Payment Date, the Servicer shall deposit into the
Collection Account an amount equal to the aggregate amount of
Actuarial Advances required to be made with respect to related
Collection Period.
(d) On each Payment Date, the Servicer shall instruct the Indenture Trustee
to withdraw from the Collection Account for distribution to the Servicer,
in immediately available funds, an amount equal to the sum of (i) the
aggregate amount of collections on Actuarial Receivables with respect to
which the Servicer has made Actuarial Advances in a prior Collection Period
that are allocable to the reimbursement of such Actuarial Advances pursuant
to Section 4.3(a) and (ii) the aggregate amount of Actuarial Advances that
the Servicer has not been reimbursed for pursuant to this Section 4.4(d) or
Section 4.5(b) with respect to Actuarial Receivables that became Defaulted
Receivables in the related Collection Period.
(e) On each Payment Date, the Servicer shall instruct the Indenture Trustee
to withdraw from the Collection Account for distribution to the Servicer,
in immediately available funds, an amount equal to the sum of (i) the
aggregate amount of collections on Final Payment Receivables in the related
Collection Period that are allocable to the reimbursement of Last Scheduled
Payment Advances pursuant to Section 4.3(a) and (ii) the aggregate amount
of losses on Last Scheduled Payments that the Servicer has recorded in its
books and records during the related Collection Period to the extent such
losses are allocable to Last Scheduled Payments with respect to which the
Servicer has made Last Scheduled Payment Advances, but only to the extent
such Last Scheduled Payment Advances have not already been reimbursed
pursuant to this Section 4.4(e) or Section 4.5(b).
Section 4.5 Additional Deposits. (a) The Indenture Trustee shall deposit in
the Collection Account amounts required pursuant to Section 4.4(c). The
Servicer shall deposit in the Collection Account amounts required to be
advanced by the Servicer pursuant to Sections 4.4(a) and (b). The Seller
and the Servicer shall deposit or cause to be deposited in the Collection
Account the aggregate Purchase Amount with respect to Purchased Receivables
pursuant to Section 2.3, 3.7 or 9.1. The Indenture Trustee shall deposit in
the Collection Account any amounts received pursuant to the Yield
Supplement Agreement and any amounts received from the Letter of Credit
Bank or the Yield Supplement Account pursuant to Article V on the date of
receipt thereof. All such deposits with respect to a Collection Period
shall be made in immediately available funds no later than 10:00 a.m., New
York City time, on the Payment Date related to such Collection Period.
(b) The Indenture Trustee shall, on or prior to 10:00 a.m., New York City
time, on the Payment Date relating to each Collection Period make the
following withdrawals from the Reserve Account in the following order of
priority (in each case as set forth in the Servicer's Certificate for such
Payment Date): (i) an amount equal to the Reserve Account Advance Draw
Amount, if any, calculated by the Servicer pursuant to Section 4.6(b), and
shall pay such amount to the Servicer and (ii) an amount equal to the
Reserve Account TRP Draw Amount, if any, calculated by the Servicer
pursuant to Section 4.6(b), and shall deposit to the Collection Account.
Section 4.6 Allocation of Total Available Funds. (a) On each Payment Date,
the Indenture Trustee shall cause to be made the following transfers and
distributions in immediately available funds in the amounts set forth in
the Servicer's Certificate for such Payment Date:
(i) To the Collection Account from the Payahead Account (if the
Monthly Remittance Conditions are not then satisfied) or otherwise
from amounts remitted by the Servicer pursuant to Section 4.1(h)
an amount equal to the sum of:
(1) the aggregate portion of Payaheads constituting Scheduled
Payments with respect to the preceding Collection Period
and prepayments in full received during the preceding
Collection Period, as required by Sections 4.3 and
4.4(a); and
(2) the Payahead Balance, if any, relating to any Purchased
Receivable;
(ii) From the Collection Account to the Payahead Account or, if the
Monthly Remittance Conditions are then satisfied, to the Servicer,
the aggregate Payaheads received during the preceding Collection
Period, as required by Section 4.3.
(b) On each Determination Date, the Servicer shall calculate the Available
Funds, the Total Servicing Fee, the Accrued Note Interest for each Class of
Notes, the Principal Distribution Amount, the Total Yield Supplement
Overcollateralization Amount, the Yield Supplement Amount, the Last
Scheduled Payment Principal Collections and the Negative Carry Amount, if
any, in each case with respect to the following Payment Date. In addition,
on each Determination Date the Servicer shall calculate the following
amounts with respect to such Payment Date:
(i) an amount equal to the lesser of (x) the amount, if any, by which
the aggregate amount payable to the Servicer out of the Collection
Account on such Payment Date as reimbursement for Actuarial
Advances pursuant to Section 4.4(d) and for Last Scheduled Payment
Advances pursuant to Section 4.4(e) exceeds the amount in the
Collection Account available for such purpose (without giving
effect to any deposits thereto from amounts in the Reserve Account
but giving effect to all other deposits to the Collection Account
required to be made on such Payment Date) and (y) the Reserve
Account Amount for such Payment Date (without giving effect to any
deposits of Total Available Funds but giving effect to all other
deposits to the Reserve Account on such Payment Date) (the
"Reserve Account Advance Draw Amount");
(ii) an amount equal to the lesser of (x) the amount, if any, by which
the Total Required Payment for such Payment Date exceeds the
Available Funds for such Payment Date and (y) an amount equal to
the Reserve Account Amount (without giving effect to any deposits
of Total Available Funds on such Payment Date) for such Payment
Date, less the Reserve Account Advance Draw Amount for such
Payment Date (the "Reserve Account TRP Draw Amount");
(iii) the Total Available Funds for such Payment Date;
(iv) the Reserve Account Amount with respect to such Payment Date after
giving effect to the Reserve Account Advance Draw Amount and the
Reserve Account TRP Draw Amount for such Payment Date, and the
difference, if any, between the Reserve Account Amount and the
Specified Reserve Balance for such Payment Date; and
(v) any Net Swap Payments, any Net Swap Receipts and any Swap
Termination Payments.
(c) On each Payment Date, the Servicer shall instruct the Indenture Trustee
(based on the information contained in the Servicer's Certificate delivered
on the related Determination Date pursuant to Section 3.9) to withdraw the
Total Available Funds on deposit in the Collection Account for the related
Collection Period and make the following payments and deposits for such
Payment Date in the following order of priority:
(i) to the Servicer, the Total Servicing Fee;
(ii) to the Swap Counterparty, the amount of any Net Swap Payments then
due under the Interest Rate Swap Agreement (exclusive of Swap
Termination Payments);
(iii) with the same priority and ratably, in accordance with the
outstanding principal balance of the Class A Notes and the amount
of any Swap Termination Payments due and payable by the Issuer to
the Swap Counterparty,
(1) to the Note Payment Account, the Accrued Note Interest for the
Class A Notes; and
(2) to the Swap Counterparty, any Swap Termination Payments;
provided, that, if any amounts allocable to the Class A Notes are not
needed to pay interest due on such Notes, such amounts shall be applied to
pay the portion, if any, of any Swap Termination Payments remaining unpaid,
pro rata based on the amount of the Swap Termination Payments, and
provided, further, that if there are not sufficient funds available to pay
the entire amount of the Accrued Note Interest for the Class A Notes, the
amounts available shall be applied to the payment of such interest on the
Class A Notes on a pro rata basis;
(iv) to the Note Payment Account, the Accrued Note Interest for the
Class B Notes;
(v) to the Note Payment Account, the Accrued Note Interest for the
Class C Notes;
(vi) to the Note Payment Account, the Principal Distribution Amount;
(vii) to the Reserve Account, the amount, if any, necessary to reinstate
the balance in the Reserve Account up to the Specified Reserve
Balance;
(viii) prior to the payment in full of the aggregate principal balance of
the Notes, to the Note Payment Account, any remaining portion of
the Total Available Funds; and
(ix) following the payment in full of the aggregate principal balance
of the Notes, to the Certificate Distribution Account, any
remaining portion of the Total Available Funds.
Notwithstanding the foregoing, following the occurrence
and during the continuation of an Event of Default which has resulted in an
acceleration of the Notes, on each Payment Date the Total Available Funds
shall be deposited in the Note Payment Account and applied in accordance
with Section 2.8(f) of the Indenture.
Section 4.7 Reserve Account. (a) The Seller shall, prior to the Closing
Date, establish and maintain a segregated trust account in the name of the
Indenture Trustee at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Reserve
Account." The Reserve Account shall be under the sole dominion and control
of the Indenture Trustee; provided, that the Servicer may make deposits to
the Reserve Account in accordance with this Agreement and the Indenture. On
the Closing Date, the Seller will deposit the Reserve Account Initial
Deposit into the Reserve Account from the net proceeds of the sale of the
Notes. On each Subsequent Transfer Date, the Seller shall deposit to the
Reserve Account an amount equal to the applicable Subsequent Reserve Amount
Deposit. It shall be a condition to the purchase by the Trust of Subsequent
Receivables from the Seller with funds on deposit in the Pre-Funding
Account that the Seller make such deposit. The Reserve Account and all
amounts, securities, investments, financial assets and other property
deposited in or credited to the Reserve Account (the "Reserve Account
Property") has been conveyed by the Seller to the Trust pursuant to Section
2.1(a). Pursuant to the Indenture, the Trust will pledge all of its right,
title and interest in, to and under the Reserve Account and the Reserve
Account Property to the Indenture Trustee on behalf of the Noteholders to
secure its obligations under the Notes and the Indenture.
The Reserve Account Property shall, to the extent
permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Reserve Account, in Permitted Investments that mature not
later than the Business Day immediately preceding the next Payment Date,
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Reserve Account shall, upon the written direction of the Servicer, be
paid to the Seller on any Payment Date to the extent that funds on deposit
therein, as certified by the Servicer, exceed the Specified Reserve
Balance. In the event the Reserve Account is no longer to be maintained at
the corporate trust department of Bank of Tokyo-Mitsubishi Trust Company,
the Servicer shall, with the Indenture Trustee's or Owner Trustee's
assistance as necessary, cause the Reserve Account to be moved to a
Qualified Institution or a Qualified Trust Institution within 10 Business
Days (or such longer period not to exceed 30 calendar days as to which each
Rating Agency may consent).
(b) With respect to any Reserve Account Property:
(i) any Reserve Account Property that is a "financial asset" as
defined in Section 8-102(a)(9) of the Relevant UCC shall be
physically delivered to, or credited to an account in the name of,
the Qualified Institution or Qualified Trust Institution
maintaining the Reserve Account in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any Reserve Account Property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one
or more depository institutions having the Required Rating and
each such deposit account shall be subject to the exclusive
custody and control of the Indenture Trustee and the Indenture
Trustee shall have sole signature authority with respect thereto;
and
(iii) except for any deposit accounts specified in clause (ii) above,
the Reserve Account shall only be invested in securities or in
other assets which the Qualified Institution or Qualified Trust
Institution maintaining the Reserve Account agrees to treat as
"financial assets" as defined in Section 8-102(a)(9) of the
Relevant UCC.
(c) If the amount on deposit in the Reserve Account on any Payment Date
(after giving effect to all deposits thereto or withdrawals therefrom on
such Payment Date) is greater than the Specified Reserve Balance for such
Payment Date, the Servicer shall instruct the Indenture Trustee to
distribute the amount of such excess to the Seller; provided that the
Indenture Trustee and the Owner Trustee hereby release, on each Payment
Date, their security interest in, to and under Reserve Account Property
distributed to the Seller.
(d) Following the payment in full of the aggregate principal balance of the
Notes and the Certificate Balance and of all other amounts owing or to be
distributed hereunder or under the Indenture or the Trust Agreement to
Noteholders or Certificateholders and the termination of the Trust, any
remaining Reserve Account Property shall be distributed to the Seller.
Section 4.8 Net Deposits. As an administrative convenience only, unless the
Servicer is required to remit collections pursuant to the first sentence of
Section 4.2(a), the Seller and the Servicer may make any remittance
pursuant to this Article IV with respect to a Collection Period net of
distributions to be made to the Seller or the Servicer with respect to such
Collection Period. Nonetheless, such obligations shall remain separate
obligations, no party shall have a right of offset, and each such party
shall account for all of the above described remittances and distributions
as if the amounts were deposited and/or transferred separately.
Section 4.9 Statements to Noteholders and Certificateholders. On or prior
to each Payment Date, the Servicer shall provide to the Indenture Trustee
(with copies to the Rating Agencies, the Swap Counterparty and each Paying
Agent) for the Indenture Trustee to forward to each Noteholder of record as
of the most recent Record Date and to the Owner Trustee (with copies to the
Rating Agencies and to each Paying Agent) for the Owner Trustee to forward
to each Certificateholder of record as of the most recent Record Date a
statement in substantially the forms of Exhibits B and C, respectively,
setting forth at least the following information as to the Notes and the
Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal paid to
each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to interest paid to each
Class of Notes;
(iii) the Yield Supplement Amount;
(iv) the amount of the Total Servicing Fee with respect to the related
Collection Period;
(v) the amount of the Net Swap Payments or Net Swap Receipts, if any,
due on that Payment Date;
(vi) the amount of any Swap Termination Payments due on that Payment Date;
(vii) the aggregate outstanding principal balance of each Class of
Notes, the applicable Note Pool Factor, the Certificate Balance
and the Certificate Pool Factor as of the close of business on the
last day of the preceding Collection Period, after giving effect
to payments allocated to principal reported under clause (i)
above;
(viii) the Pool Balance, the Level Pay Pool Balance and the Last
Scheduled Payment Pool Balance, in each case as of the close of
business on the last day of the related Collection Period;
(ix) the amounts of the Interest Carryover Shortfall, if any, for the
next Payment Date and the portion thereof attributable to each
Class of Notes;
(x) the amount of the aggregate Realized Losses, if any, with respect
to the related Collection Period;
(xi) the balance of the Reserve Account on such Payment Date, after
giving effect to changes therein on such Payment Date;
(xii) the aggregate Purchase Amount of Receivables repurchased by the
Seller or purchased by the Servicer, if any, with respect to the
related Collection Period;
(xiii) the amount of Actuarial Advances and Last Scheduled Payment
Advances, if any, with respect to the related Collection Period;
(xiv) for each such Payment Date during the Pre-Funding Period, (A) the
amount, if any, withdrawn from the Pre-Funding Account to purchase
Subsequent Receivables during the related Collection Period, (B)
the Remaining Pre-Funded Amount, if any, (C) the Negative Carry
Amount, if any, for the related Collection Period, and (D) the
amount remaining on deposit in the Negative Carry Account, if any,
after all withdrawals, if any, made on such Payment Date; and
(xv) for the first Payment Date on or immediately following the end of
the Pre-Funding Period, the Remaining Pre-Funded Amount, if any.
Each amount set forth on the Payment Date statement
pursuant to clauses (i), (ii), (iv) and (vii) above shall be expressed as a
dollar amount per $1,000 of original principal balance of a Certificate or
Note, as applicable.
Section 4.10 Control of Securities Accounts. Notwithstanding anything else
contained herein, the Trust agrees that each of the Collection Account, the
Pre-Funding Account, the Note Payment Account, the Reserve Account, the
Negative Carry Account and the Yield Supplement Account will only be
established at a Qualified Institution or Qualified Trust Institution that
agrees substantially as follows: (i) it will comply with "entitlement
orders" (as defined in Section 8-102(a)(8) of the Relevant UCC; i.e.,
orders directing the transfer or redemption of any financial asset)
relating to such accounts issued by the Indenture Trustee without further
consent by the Seller or the Trust; (ii) until the termination of the
Indenture, it will not enter into any other agreement relating to any such
account pursuant to which it agrees to comply with entitlement orders of
any Person other than the Indenture Trustee; and (iii) all assets delivered
or credited to it in connection with such accounts and all investments
thereof will be promptly credited to such accounts.
Section 4.11 Pre-Funding Account. (a) On the Closing Date, the Seller shall
deposit in the Pre-Funding Account $[ ] from the net proceeds of the sale
of the Notes. On or prior to the Business Day immediately preceding each
Subsequent Transfer Date, the Servicer shall calculate the following
amounts: (i) the aggregate Principal Balance of the Subsequent Receivables
transferred to the Trust on such Subsequent Transfer Date, and (ii) the
Subsequent Payahead Account Deposit. The Servicer shall instruct the
Indenture Trustee to distribute the amount in clause (i) to the Seller and
to deposit the amount in clause (ii) to the Payahead Account on behalf of
the Seller on such Subsequent Transfer Date.
(b) If the Pre-Funding Account has not been reduced to zero on the Payment
Date on which the Pre-Funding Period ends (or, if the Pre-Funding Period
does not end on a Payment Date, on the first Payment Date following the end
of the Pre-Funding Period), after giving effect to any reductions in the
Pre-Funding Account on such date pursuant to paragraph (a), the Servicer
shall instruct the Indenture Trustee to withdraw from the Pre-Funding
Account on such Payment Date (or, if the Pre-Funding Period does not end on
a Payment Date, on the first Payment Date following the end of the
Pre-Funding Period), the amount remaining in the Pre-Funding Account at
such time exclusive of the Pre-Funding Account Investment Earnings, if any,
for the related Collection Period (such remaining amount being the
"Remaining Pre-Funded Amount") and deposit such amount in the Collection
Account for inclusion in the Available Funds for such Payment Date. The
Pre-Funding Account Investment Earnings for the related Collection Period
(together with any other interest and other income (net of losses and
expenses) earned on amounts on deposit in the Pre-Funding Account that are
on deposit in the Pre-Funding Account) shall be deposited to the Collection
Account.
Section 4.12 Negative Carry Account. (a) On the Closing Date, the Seller
shall deposit the Negative Carry Account Initial Deposit into the Negative
Carry Account. On each Payment Date, the Servicer shall instruct the
Indenture Trustee to withdraw from the Negative Carry Account and deposit
into the Collection Account an amount equal to the lesser of (x) the
amount, if any, on deposit in the Negative Carry Account on such Payment
Date and (y) the Negative Carry Amount, if any, for such Payment Date. If
the amount on deposit in the Negative Carry Account on any Payment Date
(after giving effect to the withdrawal therefrom of the Negative Carry
Amount, if any, for such Payment Date) is greater than the Required
Negative Carry Account Balance for such Payment Date, the excess shall be
released to the Seller on such Payment Date. On the Payment Date on which
the Pre-Funding Period ends (or, if the Pre-Funding Period does not end on
a Payment Date, on the first Payment Date following the end of the
Pre-Funding Period), the Servicer shall instruct the Indenture Trustee to
release to the Seller on such Payment Date all amounts remaining on deposit
in the Negative Carry Account after giving effect to any withdrawals of the
Negative Carry Amount on such Payment Date.
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND
THE YIELD SUPPLEMENT ACCOUNT
Section 5.1 Yield Supplement Letter of Credit and the Yield Supplement
Account. (a) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee at
a Qualified Institution or Qualified Trust Institution (which shall
initially be the corporate trust department of Bank of Tokyo-Mitsubishi
Trust Company), which shall be designated as the "Yield Supplement Account"
(the Yield Supplement Account, together with the Payahead Account, the
Collection Account, the Pre-Funding Account, he Note Payment Account, the
Negative Carry Account and the Reserve Account, the "Trust Accounts").
Amounts on deposit in the Yield Supplement Account will be used for the
payment of any Yield Supplement Amounts required to be paid on any Payment
Date pursuant to the Yield Supplement Agreement which MMCA has not paid as
of such Payment Date. The Yield Supplement Account shall be under the sole
dominion and control of the Indenture Trustee provided, that the Servicer
may make deposits to and direct the Indenture Trustee to make withdrawals
from the Yield Supplement Account in accordance with this Agreement and the
Yield Supplement Agreement. On the Closing Date, the Seller shall deposit
an amount equal to the Initial Yield Supplement Amount into the Yield
Supplement Account from the net proceeds of the sale of the Notes. On each
Subsequent Transfer Date, the Seller shall deposit to the Yield Supplement
Account an amount equal to the applicable Subsequent Yield Supplement
Account Deposit unless the Yield Supplement Account has been replaced by a
Yield Supplement Letter of Credit on or prior to such Subsequent Transfer
Date, in which case the Servicer shall cause the amount available to be
drawn under the Yield Supplement Letter of Credit as of such Subsequent
Transfer Date to be no less than the Specified Yield Supplement Account
Balance as of such Subsequent Transfer Date after giving effect to the
transfer to the Trust of the related Subsequent Receivables. It shall be a
condition to the sale of Subsequent Receivables that are Deferred Payment
Receivables to the Trust that the Seller make such deposit. To the extent,
on any Payment Date, the amount on deposit in the Yield Supplement Account
(after giving effect to any withdrawals to be made on such Payment Date,
but exclusive of net investment income) is greater than the Specified Yield
Supplement Account Balance for such Payment Date, then, in such event, the
Servicer shall instruct the Indenture Trustee in writing to pay such excess
amount to the Seller.
All amounts held in the Yield Supplement Account shall be
invested, as directed in writing by the Servicer, by the bank or trust
company then maintaining the Yield Supplement Account in Permitted
Investments that mature not later than the Business Day immediately
preceding the next Payment Date and such Permitted Investments shall be
held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Yield Supplement Account
shall be withdrawn from the Yield Supplement Account at the written
direction of the Servicer and shall be paid to the Seller. In the event
that the Yield Supplement Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo-Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's assistance as necessary, cause
the Yield Supplement Account to be moved to a Qualified Institution or a
Qualified Trust Institution within 10 Business Days (or such longer period
not to exceed 30 calendar days as to which each Rating Agency may consent).
The Seller hereby sells, conveys and transfers to the
Trust the Yield Supplement Account, all funds and investments on deposit
therein or credited thereto and all proceeds thereof, subject, however, to
the limitations set forth below.
Pursuant to the Indenture, the Trust will pledge its
rights under the Yield Supplement Agreement (including its rights to
amounts on deposit in the Yield Supplement Account) to the Indenture
Trustee to secure its obligations under the Notes and the Indenture. Such
sale, conveyance and transfer of the Yield Supplement Account by the Seller
to the Trust, and such pledge by the Trust of its rights to amounts in the
Yield Supplement Account to the Indenture Trustee, shall be subject to the
following limitations:
(i) All or a portion of the Yield Supplement Account may be invested
and reinvested in the manner specified in Section 5.1(a) in
accordance with written instructions from the Servicer. All such
investments shall be made in the name of the Indenture Trustee and
all income and gain realized thereon shall be solely for the
benefit of the Seller and shall be payable by the Indenture
Trustee to the Seller upon written direction of the Servicer as
specified in Section 5.1(a);
(ii) If, with respect to any Collection Period, MMCA shall have failed
to make or cause to be made in full the remittance of the Yield
Supplement Amount on the date required by the Yield Supplement
Agreement, the Indenture Trustee not later than 10:00 a.m. (New
York City time) on the Payment Date, shall, upon the written
direction of the Servicer, withdraw from the Yield Supplement
Account and deposit into the Collection Account the amount of the
shortfall between the amount of funds that are required to be
remitted by MMCA with respect to the Yield Supplement Agreement as
set forth in the Servicer's Certificate and the amount of funds
actually so remitted and to the extent of any remaining shortfall,
the Indenture Trustee shall withdraw an amount equal thereto from
the Reserve Account, and deposit such amounts in the Collection
Account; and
(iii) Upon termination of this Agreement in accordance with Section 9.1
or (a) in the event that the Seller obtains a Yield Supplement
Letter of Credit or (b) the Seller otherwise satisfies the
requirements with respect to the Yield Supplement Agreement
established by the Rating Agencies, in either case as evidenced by
satisfaction of the Rating Agency Condition and an Officer's
Certificate of the Seller that all conditions to the liquidation
of the Yield Supplement Account have been satisfied, any amounts
on deposit in the Yield Supplement Account shall, upon written
request of the Seller, be paid to the Seller.
(b) If a Yield Supplement Letter of Credit has been obtained by MMCA, and
if, with respect to any Collection Period, MMCA shall have failed to make
or cause to be made in full the remittance of the Yield Supplement Amount,
upon written notice by the Servicer of such failure (which notice shall be
given no later than 10:00 a.m. (New York City time) on the Payment Date for
such Collection Period), the Indenture Trustee shall draw on the Yield
Supplement Letter of Credit in accordance with the terms thereof, in the
amount of the shortfall between the amount of funds with respect to the
Yield Supplement Amount that are required to be remitted by MMCA with
respect to the Yield Supplement Agreement as set forth in the Servicer's
Certificate and the amount of funds actually so remitted as set forth in
the Servicer's Certificate. Any such draw on the Yield Supplement Letter of
Credit shall be made after receipt of the related Servicer's Certificate on
or before 11:00 a.m. (New York City time) on the Payment Date for such
Collection Period. Upon receipt of a request for a draw by the Indenture
Trustee under the Yield Supplement Letter of Credit, the Letter of Credit
Bank is to promptly make a payment to the Indenture Trustee in an amount
equal to the Yield Supplement Amount (minus payments made on the Yield
Supplement Agreement), and the Indenture Trustee shall deposit into the
Collection Account pursuant to Section 4.5(a) the amount received from the
Letter of Credit Bank in respect of such drawing. The Servicer shall
include in each Servicer's Certificate, or in an Officer's Certificate
provided to the Indenture Trustee with each Servicer's Certificate, the
Stated Amount (as defined in the Yield Supplement Letter of Credit) of the
Yield Supplement Letter of Credit as of the close of business on the last
day of the Collection Period preceding the date of such Servicer's
Certificate. In the event that the rating of the Letter of Credit Bank
declines below the Required Rating, the Servicer shall promptly notify the
Indenture Trustee in writing of such decline, and upon receipt of such
notification, the Indenture Trustee shall, unless a suitable replacement
letter of credit shall have been delivered, promptly draw the full amount
available under the Yield Supplement Letter of Credit and deposit such
amount in the Yield Supplement Account.
ARTICLE VI - THE SELLER
Section 6.1 Representations, Warranties and Covenants of Seller. The Seller
makes the following representations, warranties and covenants on which the
Trust is deemed to have relied in acquiring the Trust Property. The
representations, warranties and covenants speak as of the Closing Date in
the case of the Initial Receivables and the other Trust Property related
thereto, and as of the related Subsequent Transfer Date in the case of the
Subsequent Receivables and the other Trust Property related thereto, and
shall survive the sale of the Trust Property to the Trust and the pledge
thereof by the Trust to the Indenture Trustee pursuant to the Indenture:
(a) Organization and Good Standing. The Seller has been duly established
and is validly existing as a business trust in good standing under the laws
of the State of Delaware, with power and authority to own its properties
and to conduct its business as such properties shall be currently owned and
such business is presently conducted, and had at all relevant times, and
shall have, power, authority, and legal right to acquire and own the
Receivables.
(b) Due Qualification. The Seller is duly qualified to do business as a
foreign business trust in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Seller has the power and authority to execute
and deliver this Agreement and the other Basic Documents to which it is a
party and to carry out their terms. The Seller has full power and authority
to sell and assign the property to be sold and assigned to and deposited
with the Trust and has duly authorized such sale and assignment to the
Trust by all necessary corporate action; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it is
a party have been, and the execution, delivery and performance of each
Second-Tier Subsequent Assignment has been or will be on or before the
related Subsequent Transfer Date, duly authorized by the Seller by all
necessary corporate action.
(d) Valid Sale; Binding Obligation. This Agreement effects a valid sale,
transfer and assignment of the Initial Receivables and the other Trust
Property related thereto conveyed by the Seller to the Trust hereunder and
this Agreement together with each Second-Tier Subsequent Assignment will
effect a valid sale, transfer and assignment of the related Subsequent
Receivables and the other Trust Property related thereto, in each case
enforceable against creditors of and purchasers from the Seller; and this
Agreement and the other Basic Documents to which the Seller is a party
constitute, and each Second-Tier Subsequent Assignment when executed and
delivered by the Seller will constitute, legal, valid, and binding
obligations of the Seller, enforceable against the Seller in accordance
with their terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.
(e) No Violation. The execution, delivery and performance by the Seller of
this Agreement and the other Basic Documents to which the Seller is a party
and the consummation of the transactions contemplated hereby and thereby
and the fulfillment of the terms hereof and thereof will not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, the
certificate of trust or amended and restated trust agreement of the Seller,
or conflict with, or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time or both) a default
under, any indenture, agreement, mortgage, deed of trust or other
instrument to which the Seller is a party or by which the Seller is bound
or any of its properties are subject, or result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other instrument
(other than this Agreement), or violate any law, order, rule, or
regulation, applicable to the Seller or its properties, of any federal or
state regulatory body, any court, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or any of
its properties.
(f) No Proceedings. There are no proceedings or investigations pending, or,
to the best knowledge of the Seller, threatened, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties: (i)
asserting the invalidity of this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes, the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the
other Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement,
the Indenture, any of the other Basic Documents, the Notes or the
Certificates, or (iv) that may adversely affect the Federal or Applicable
Tax State income, excise, franchise or similar tax attributes of the Notes
or the Certificates.
(g) Florida Securities and Investor Protection Act. In connection with the
offering of the Notes in the State of Florida, the Seller hereby certifies
that it has complied with all provisions of Section 517.075 of the Florida
Securities and Investor Protection Act.
Section 6.2 Liability of Seller; Indemnities. The Seller shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement, and hereby agrees to the
following:
(a) The Seller shall indemnify, defend, and hold harmless the Trust, the
Owner Trustee and the Indenture Trustee from and against any taxes that may
at any time be asserted against any such Person with respect to, and as of
the date of, the sale of the Receivables to the Trust or the issuance and
original sale of the Notes or the Certificates, including any sales, gross
receipts, general corporation, tangible personal property, privilege, or
license taxes (but, in the case of the Trust, not including any taxes
asserted with respect to ownership of the Receivables or Federal or other
Applicable Tax State income taxes arising out of the transactions
contemplated by this Agreement and the other Basic Documents) and costs and
expenses in defending against the same.
(b) The Seller shall indemnify, defend, and hold harmless the Trust, the
Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred
by reason of (i) the Seller's willful misfeasance, bad faith, or negligence
(other than errors in judgment) in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement and (ii) the Seller's violation of Federal or state
securities laws in connection with the registration or the sale of the
Notes or the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner Trustee
and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained herein and in
the Trust Agreement, in the case of the Owner Trustee, and in the
Indenture, in the case of the Indenture Trustee, except to the extent that
such cost, expense, loss, claim, damage or liability: (i) shall be due to
the willful misfeasance, bad faith or negligence (except for errors in
judgment) of the Owner Trustee or the Indenture Trustee, as applicable;
(ii) in the case of the Owner Trustee shall arise from the breach by the
Owner Trustee of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement or (iii) in the case of the Indenture
Trustee shall arise from the breach by the Indenture Trustee of any of its
representations and warranties set forth in the Indenture.
(d) The Seller shall pay any and all taxes levied or assessed upon all
or any part of the Owner Trust Estate.
(e) Indemnification under this Section 6.2 shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination
of this Agreement and shall include reasonable fees and expenses of counsel
and expenses of litigation. If the Seller shall have made any indemnity
payments pursuant to this Section 6.2 and the Person to or on behalf of
whom such payments are made thereafter shall collect any of such amounts
from others, such Person shall promptly repay such amounts to the Seller,
without interest.
Section 6.3 Merger or Consolidation of, or Assumption of the Obligations
of, Seller. Any Person (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation
to which the Seller shall be a party or (iii) that may succeed by purchase
and assumption to all or substantially all of the business of the Seller,
which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Seller under this Agreement,
will be the successor to the Seller under this Agreement without the
execution or filing of any document or any further act on the part of any
of the parties to this Agreement; provided, however, that (x) the Seller
shall have delivered to the Owner Trustee and the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
merger, conversion, consolidation or succession and such agreement of
assumption comply with this Section 6.3, and (y) the Seller shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto
have been authorized and filed that are necessary to fully preserve and
protect the interest of the Trust and the Indenture Trustee, respectively,
in the Receivables and the other Trust Property, and reciting the details
of such filings, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to fully preserve and protect such interest.
The Seller shall provide notice of any merger, conversion, consolidation,
or succession pursuant to this Section 6.3 to the Rating Agencies.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (x) or (y)
above shall be conditions to the consummation of the transactions referred
to in clauses (i), (ii) or (iii) above.
Section 6.4 Limitation on Liability of Seller and Others. The Seller, and
any director or officer or employee or agent of the Seller, may rely in
good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear
in, prosecute, or defend any legal action that shall not be incidental to
its obligations under this Agreement, and that in its opinion may involve
it in any expense or liability.
Section 6.5 Seller May Own Notes or Certificates. The Seller, and any
Affiliate of the Seller, may in its individual or any other capacity become
the owner or pledgee of Notes not to exceed 20% (calculated on an aggregate
basis of the Seller and any Affiliates which are owners or pledgees of the
Notes) of the Outstanding Notes or Certificates with the same rights as it
would have if it were not the Seller or an Affiliate thereof, except as
otherwise expressly provided herein or in the other Basic Documents. Except
as set forth herein or in the other Basic Documents, Notes and Certificates
so owned by or pledged to the Seller or such controlling, controlled or
commonly controlled Person shall have an equal and proportionate benefit
under the provisions of this Agreement and the other Basic Documents,
without preference, priority, or distinction as among all of the Notes and
Certificates.
ARTICLE VII - THE SERVICER
Section 7.1 Representations and Warranties of Servicer. The Servicer makes
the following representations and warranties on which the Trust is deemed
to have relied in acquiring the Trust Property, and such representations
and warranties speak as of the Closing Date, in the case of the Initial
Receivables and the other Trust Property related thereto, and as of the
related Subsequent Transfer Date, in the case of the Subsequent Receivables
and the other Trustee Property related thereto, and shall survive the sale
of the Trust Property to the Trust and the pledge thereof by the Trust
pursuant to the Indenture:
(a) Organization and Good Standing. The Servicer has been duly organized
and is validly existing as a corporation in good standing under the laws of
the state of its incorporation, with power and authority to own its
properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and had at all
relevant times, and shall have, power, authority, and legal right to
acquire, own, sell, and service the Receivables and to hold the Receivable
Files as custodian on behalf of the Trustee.
(b) Due Qualification. The Servicer is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such
qualifications.
(c) Power and Authority. The Servicer has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which
it is a party and to carry out their terms, and the execution, delivery and
performance of this Agreement and the other Basic Documents to which it is
a party have been duly authorized by the Servicer by all necessary
corporate action.
(d) Binding Obligation. This Agreement and the other Basic Documents to
which it is a party constitute legal, valid, and binding obligations of the
Servicer, enforceable against the Servicer in accordance with their terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other
similar laws and to general equitable principles.
(e) No Violation. The execution, delivery and performance by the Servicer
of this Agreement and the other Basic Documents to which it is a party, the
consummation of the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the certificate
of incorporation or bylaws of the Servicer, or conflict with, or breach any
of the terms or provisions of, or constitute (with or without notice or
lapse of time or both) a default under, any indenture, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party or by
which the Servicer is bound or to which any of its properties are subject,
or result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument (other than this Agreement), or
violate any law, order, rule, or regulation applicable to the Servicer or
its properties of any Federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having
jurisdiction over the Servicer or any of its properties.
(f) No Proceedings. There are no proceedings or investigations pending, or,
to the Servicer's knowledge, threatened, before any court, regulatory body,
administrative agency, or tribunal or other governmental instrumentality
having jurisdiction over the Servicer or its properties: (a) asserting the
invalidity of this Agreement, the Indenture, any of the other Basic
Documents, the Notes, or the Certificates, (b) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the
other Basic Documents, (c) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement,
the Indenture, any of the other Basic Documents, the Notes or the
Certificates, or (d) that may adversely affect the Federal or Applicable
Tax State income, excise, franchise or similar tax attributes of the Notes
or the Certificates.
Section 7.2 Liability of Servicer; Indemnities. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement, and hereby
agrees to the following:
(a) The Servicer shall defend, indemnify and hold harmless the Trust, the
Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, arising out of or
resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Trust, the
Owner Trustee and the Indenture Trustee from and against any taxes that may
at any time be asserted against any such Person with respect to the
transactions contemplated herein or in the other Basic Documents, if any,
including, without limitation, any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but,
in the case of the Trust, not including any taxes asserted with respect to,
and as of the date of, the sale of the Receivables to the Trust or the
issuance and original sale of the Notes and the Certificates and the
issuance of the Certificates, or asserted with respect to ownership of the
Receivables, or Federal or other Applicable Tax State income taxes arising
out of the transactions contemplated by this Agreement and the other Basic
Documents) and costs and expenses in defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the Trust, the
Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that such
cost, expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance
or bad faith of the Servicer in the performance of its duties under this
Agreement or any other Basic Document to which it is a party (except for
errors in judgment), or by reason of reckless disregard of its obligations
and duties under this Agreement or any other Basic Document to which it is
a party.
(d) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee, as applicable, from and against all
costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties contained herein and in the other Basic Documents, if any, except to
the extent that such cost, expense, loss, claim, damage or liability: (a)
shall be due to the willful misfeasance, bad faith or negligence (except
for errors in judgment) of the Owner Trustee or the Indenture Trustee, as
applicable; (b) relates to any tax other than the taxes with respect to
which either the Seller or the Servicer shall be required to indemnify the
Owner Trustee or the Indenture Trustee, as applicable; (c) in the case of
the Owner Trustee, shall arise from the Owner Trustee's breach of any of
its representations or warranties set forth in Section 7.3 of the Trust
Agreement or, in the case of the Indenture Trustee, from the Indenture
Trustee's breach of any of its representations or warranties set forth in
the Indenture; or (d) in the case of the Indenture Trustee, shall arise out
of or be incurred in connection with the performance by the Indenture
Trustee of the duties of successor Servicer hereunder.
In addition to the foregoing indemnities, if the Owner
Trustee or the Indenture Trustee is entitled to indemnification by the
Seller pursuant to Section 6.2 and the Seller is unable for any reason to
provide such indemnification to the Owner Trustee or the Indenture Trustee,
then the Servicer shall be liable for any indemnification that the Owner
Trustee or the Indenture Trustee is entitled to under Section 6.2.
For purposes of this Section 7.2, in the event of the
termination of the rights and obligations of MMCA (or any successor thereto
pursuant to Section 8.2) as Servicer pursuant to Section 8.1, or a
resignation by such Servicer pursuant to this Agreement, such Servicer
shall be deemed to be the Servicer pending appointment of a successor
Servicer (other than the Indenture Trustee) pursuant to Section 8.2.
Indemnification under this Section 7.2 by MMCA (or any
successor thereto pursuant to Section 8.2) as Servicer, with respect to the
period such Person was (or was deemed to be) the Servicer, shall survive
the termination of such Person as Servicer or a resignation by such Person
as Servicer as well as the termination of this Agreement or the resignation
or removal of the Owner Trustee or the Indenture Trustee and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section
and the recipient thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts to the Servicer, without
interest.
Section 7.3 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation
to which the Servicer shall be a party, or (iii) that may succeed by
purchase and assumption to all or substantially all of the business of the
Servicer, which Person in any of the foregoing cases is an Eligible
Servicer and executes an agreement of assumption to perform every
obligation of the Servicer under this Agreement, will be the successor to
the Servicer under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties to this
Agreement; provided, however, that (x) the Servicer shall have delivered to
the Owner Trustee and the Indenture Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such merger, conversion, consolidation
or succession and such agreement of assumption comply with this Section
7.3, and (y) the Servicer shall have delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation
statements and amendments thereto have been authorized and filed that are
necessary to fully preserve and protect the interest of the Trust and the
Indenture Trustee, respectively, in the Receivables, and reciting the
details of such filings, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to fully preserve and protect
such interests. The Servicer shall provide notice of any merger,
conversion, consolidation or succession pursuant to this Section 7.3 to the
Rating Agencies. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement or assumption and compliance with
clauses (x) and (y) above shall be conditions to the consummation of the
transactions referred to in clauses (i), (ii) or (iii) above.
Section 7.4 Limitation on Liability of Servicer and Others. (a) Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability
that would otherwise be imposed by reason of willful misfeasance or bad
faith in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement, or by reason of negligence in
the performance of its duties under this Agreement (except for errors in
judgment). The Servicer and any director, officer or employee or agent of
the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person in respect of any matters
arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Receivables in
accordance with this Agreement, and that in its opinion may involve it in
any expense or liability; provided, however, that the Servicer may
undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties to this
Agreement and the interests of the Noteholders and Certificateholders under
this Agreement. In such event, the legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and
liabilities of the Servicer.
Section 7.5 Servicer Not to Resign. Subject to the provisions of Section
7.3, the Servicer shall not resign from its obligations and duties under
this Agreement except upon a determination that the performance of its
duties is no longer permissible under applicable law. Any such
determination permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered to the Owner Trustee and
the Indenture Trustee. No such resignation shall become effective until the
Indenture Trustee or a successor Servicer shall have (i) assumed the
responsibilities and obligations of the Servicer in accordance with Section
8.2 and (ii) become the Administrator under the Administration Agreement
pursuant to Section 8 thereof.
Section 7.6 Servicer May Own Notes or Certificates. The Servicer, and any
Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Notes or Certificates with the same rights
as it would have if it were not the Servicer or an Affiliate thereof,
except as otherwise expressly provided herein or in the other Basic
Documents. Except as set forth herein or in the other Basic Documents,
Notes and Certificates so owned by or pledged to the Servicer or such
Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority or distinction
as among all of the Notes and Certificates.
ARTICLE VIII - SERVICING TERMINATION
Section 8.1 Events of Servicing Termination. (a) The occurrence of any one
of the following events shall constitute an event of servicing termination
hereunder (each, an "Event of Servicing Termination"):
(i) Any failure by the Servicer to deliver to the Owner Trustee or the
Indenture Trustee the Servicer's Certificate for any Collection
Period, which shall continue beyond the earlier of three Business
Days from the date such Servicer's Certificate was due to be
delivered and the related Payment Date, or any failure by the
Servicer to make any required payment or deposit under this
Agreement, which shall continue unremedied for a period of five
Business Days following the due date therefor (or, in the case of
a payment or deposit to be made no later than a Payment Date, the
failure to make such payment or deposit by such Payment Date); or
(ii) Any failure on the part of the Servicer duly to observe or to
perform in any material respect any other covenant or agreement
set forth in the Notes, the Certificates, or in this Agreement,
which failure shall materially and adversely affect the rights of
Noteholders or Certificateholders and continue unremedied for a
period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given
to the Servicer by the Owner Trustee or the Indenture Trustee or
to the Owner Trustee, the Indenture Trustee, the Seller and the
Servicer by the Holders of Notes or Certificates, as applicable,
evidencing not less than 25% of the principal balance of the then
Notes Outstanding, in the aggregate, or 25% of the Certificate
Balance; or
(iii) The entry of a decree or order by a court or agency or supervisory
authority of competent jurisdiction for the appointment of a
conservator, receiver, liquidator or trustee for the Seller or the
Servicer in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings, or
for the winding up or liquidation of its affairs, and any such
decree or order continues unstayed and in effect for a period of
60 consecutive days; or
(iv) The consent by the Seller or the Servicer to the appointment of a
conservator, receiver, liquidator or trustee in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings of or relating to the Seller
or the Servicer or relating to substantially all of its property,
the admission in writing by the Servicer of its inability to pay
its debts generally as they become due, the filing by the Seller
or the Servicer of a petition to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, the making by
the Seller or the Servicer of an assignment for the benefit of its
creditors or the voluntary suspension by the Seller or the
Servicer of payment of its obligations; or
(v) The failure by the Servicer to be an Eligible Servicer;
then, and in each and every case and for so long as an Event of Servicing
Termination shall not have been remedied, either the Indenture Trustee, or
the Holders of Notes evidencing not less than 51% of the aggregate
principal amount of the Notes Outstanding, voting as a group, or if no
Notes are Outstanding, the Owner Trustee pursuant to the Trust Agreement by
notice then given in writing to the Servicer (with a copy to the Indenture
Trustee and the Owner Trustee if given by the Noteholders), may terminate
all of the rights and obligations of the Servicer under this Agreement. On
or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Notes, the Certificates, or the Trust Property or otherwise, shall pass to
and be vested in the Indenture Trustee or a successor Servicer appointed
under Section 8.2; and, without limitation, the Indenture Trustee and the
Owner Trustee shall be authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivable Files, the certificates of title to the Financed Vehicles, or
otherwise. The Servicer shall cooperate with the Indenture Trustee, the
Owner Trustee and such successor Servicer in effecting the termination of
its responsibilities and rights as Servicer under this Agreement, including
the transfer to the Indenture Trustee or such successor Servicer for
administration of all cash amounts that are at the time held by the
Servicer for deposit or thereafter shall be received with respect to a
Receivable, all Receivable Files and all information or documents that the
Indenture Trustee or such successor Servicer may require. In addition, the
Servicer shall transfer its electronic records relating to the Receivables
to the successor Servicer in such electronic form as the successor Servicer
may reasonably request. All reasonable costs and expenses incurred by the
successor Servicer, including allowable compensation of employees and
overhead costs, in connection with the transfer of servicing shall be paid
by the outgoing Servicer (or by the initial Servicer if the outgoing
Servicer is the Indenture Trustee acting on an interim basis) upon
presentation of reasonable documentation of such costs and expenses.
(b) If any of the foregoing Events of Servicing Termination occur, the
Indenture Trustee and the Owner Trustee shall have no obligation to notify
Noteholders, Certificateholders or any other Person of such occurrence
prior to the continuance of such event through the end of any cure period
specified in Section 8.1(a).
Section 8.2 Indenture Trustee to Act; Appointment of Successor Servicer.
Upon the Servicer's resignation pursuant to Section 7.5 or upon the
Servicer's receipt of notice of termination as Servicer pursuant to Section
8.1(a), the Indenture Trustee (or an Affiliate of the Indenture Trustee
that is an Eligible Servicer appointed by the Indenture Trustee) shall be
the successor in all respects to the Servicer in its capacity as Servicer
under this Agreement (provided that neither the Indenture Trustee nor any
other successor Servicer shall have any obligation, but may elect, to make
available to an Obligor any refinancing of a Last Scheduled Payment in the
manner specified in the last sentence of Section 3.2(e) hereof), and shall
be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions of this
Agreement. As compensation therefor, the Indenture Trustee shall be
entitled to such compensation (whether payable out of the Collection
Account or otherwise) as the Servicer would have been entitled to under
this Agreement if no such notice of termination or resignation had been
given, except that all collections shall be deposited in the Collection
Account within two Business Days of receipt and shall not be retained by
the Servicer. Notwithstanding the above, the Indenture Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint, or petition a court of competent jurisdiction to appoint, an
Eligible Servicer as the successor to the terminated Servicer under this
Agreement. In connection with such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor Servicer out
of payments on Receivables as it and such successor shall agree, which, in
no event, shall be greater than that payable to MMCA as Servicer hereunder.
The Indenture Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such
succession including, but not limited to, making arrangements in respect of
the last sentence of Section 3.2(e) of this Agreement. The Indenture
Trustee shall not be relieved of its duties as successor Servicer under
this Section 8.2 until a newly appointed Servicer shall have assumed the
responsibilities and obligations of the terminated Servicer under this
Agreement.
Section 8.3 Effect of Servicing Transfer. (a) After the transfer of
servicing hereunder, the Indenture Trustee or successor Servicer shall
notify Obligors to make directly to the successor Servicer payments that
are due under the Receivables after the effective date of such transfer.
(b) Except as provided in Section 8.2 after the transfer of servicing
hereunder, the outgoing Servicer shall have no further obligations with
respect to the administration, servicing, custody or collection of the
Receivables and the successor Servicer shall have all of such obligations,
except that the outgoing Servicer will transmit or cause to be transmitted
directly to the successor Servicer for its own account, promptly on receipt
and in the same form in which received, any amounts held by the outgoing
Servicer (properly endorsed where required for the successor Servicer to
collect any such items) received as payments upon or otherwise in
connection with the Receivables and the outgoing Servicer shall continue to
cooperate with the successor Servicer by providing information and in the
enforcement of the Dealer Agreements.
(c) Any successor Servicer shall provide the Seller with access to the
Receivable Files and to the successor Servicer's records (whether written
or automated) with respect to the Receivable Files. Such access shall be
afforded without charge, but only upon reasonable request and during normal
business hours at the offices of the successor Servicer. Nothing in this
Section 8.3 shall affect the obligation of the successor Servicer to
observe any applicable law prohibiting disclosure of information regarding
the Obligors, and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of
this Section 8.3.
Section 8.4 Notification to Noteholders and Certificateholders. Upon any
notice of an Event of Servicing Termination or upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII,
the Indenture Trustee shall give prompt written notice thereof to
Noteholders, and the Owner Trustee shall give prompt written notice thereof
to Certificateholders at their addresses of record and to the Rating
Agencies.
Section 8.5 Waiver of Past Events of Servicing Termination. The Holders of
Notes evidencing not less than 51% of the Notes Outstanding or the Holders
of Certificates evidencing not less than 51% of the Certificate Balance (in
the case of an Event of Servicing Termination which does not adversely
affect the Indenture Trustee or the Noteholders) may, on behalf of all
Noteholders and Certificateholders, waive any Event of Servicing
Termination hereunder and its consequences, except an event resulting from
the failure to make any required deposits to, or payments from, any of the
Trust Accounts and the Certificate Distribution Account in accordance with
this Agreement. Upon any such waiver of a past Event of Servicing
Termination, such event shall cease to exist, and shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other event or impair any right arising
therefrom, except to the extent expressly so waived.
ARTICLE IX - TERMINATION
Section 9.1 Optional Purchase of All Receivables. (a) On each Payment Date
following the last day of a Collection Period as to which the Pool Balance
shall be less than or equal to the product of (i) the Optional Purchase
Percentage, and (ii) the Initial Pool Balance, the Servicer shall have the
option to purchase the Owner Trust Estate, other than the Trust Accounts
and the Certificate Distribution Account. To exercise such option, the
Servicer shall notify the Owner Trustee and the Indenture Trustee no later
than the 15th day of the month immediately preceding the month in which
such repurchase is to be effected and shall deposit an amount equal to the
aggregate Purchase Amount for the Receivables, plus the appraised value of
any other property held in the Trust other than in the Trust Accounts and
the Certificate Distribution Account, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Trustee, into the Collection Account on the Payment Date
occurring in the month in which such repurchase is to be effected. Upon
such payment, the Servicer shall succeed to and own all interests in and to
the Trust. Notwithstanding the foregoing, the Servicer shall not be
permitted to exercise such option unless the amount to be deposited in the
Collection Account pursuant to the second preceding sentence is greater
than or equal to the sum of the outstanding principal balance of the Notes
and all accrued but unpaid interest (including any overdue interest)
thereon and the Certificate Balance. The Purchase Amount, any Negative
Carry Amounts and any Yield Supplement Amounts for such Payment Date, plus
to the extent necessary all amounts in the Reserve Account, shall be used
to make payments in full to Noteholders and Certificateholders in the
manner set forth in Article IV.
(b) Unless otherwise required by the Rating Agencies as set forth in
writing delivered to the Owner Trustee and the Indenture Trustee, if at the
time the Servicer exercises its purchase option hereunder the Servicer's
long-term unsecured debt has a rating lower than investment grade by the
Rating Agencies, the Servicer shall deliver to the Owner Trustee and the
Indenture Trustee on such Payment Date a letter from an Independent
investment bank or an Independent public accountant to the effect that the
price paid by the Servicer for the Receivables at the time of transfer
pursuant to such purchase option represented a fair market price for such
Receivables.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder,
and the Indenture Trustee will continue to carry out its obligations
hereunder with respect to the Certificateholders, including without
limitation making distributions from the Payahead Account and the
Collection Account in accordance with Section 4.6 and making withdrawals
from the Reserve Account in accordance with Sections 4.5(b) and 4.7.
(d) In the event that (i) the Servicer does not exercise its option to
purchase the Owner Trust Estate, other than the Trust Accounts and the
Certificate Distribution Account, pursuant to Section 9.1(a) and (ii) the
amount on deposit in the Reserve Account is equal to or greater than the
Specified Reserve Balance for such Payment Date, then any remaining Reserve
Account Property shall be deposited in the Note Payment Account and applied
in accordance with Section 2.8(f) of the Indenture.
ARTICLE X - MISCELLANEOUS PROVISIONS
Section 10.1 Amendment. (a) This Agreement may be amended by the Seller,
the Servicer and the Trust with the consent of the Indenture Trustee (which
consent may not be unreasonably withheld), but without the consent of any
of the Noteholders, the Certificateholders or the Swap Counterparty to add,
change or eliminate any other provisions with respect to matters or
questions arising under this Agreement as may be necessary or advisable in
order to: (i) cure any ambiguity, to revise, correct or supplement any
provisions herein, (ii) enable the Trust to avoid becoming a member of
MMCA's consolidated group under GAAP or (iii) enable the Transferor or any
Affiliate of the Transferor or any of their Affiliates to otherwise comply
with or obtain more favorable treatment under any law or regulation or any
accounting rule or principle; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee
and the Indenture Trustee materially and adversely affect the interests of
any Noteholder or Certificateholder; provided, further, that no such
amendment shall be inconsistent with the derecognition by MMCA of the
Receivables under GAAP or cause the Trust to become a member of MMCA's
consolidated group under GAAP; and provided, further, that (x) such action
shall not materially adversely affect the rights or obligations of the Swap
Counterparty under the Interest Rate Swap Agreement or modify the
obligations of, or impair the ability of, the Issuer to fully perform any
of its obligations under the Interest Rate Swap Agreement or (y) the Swap
Counterparty shall have consented thereto.
(b) This Agreement may also be amended from time to time by the Seller, the
Servicer and the Trust with the consent of (i) the Indenture Trustee, (ii)
the Swap Counterparty, to the extent such amendment adversely affects the
rights or obligations of the Swap Counterparty under the Interest Rate Swap
Agreement, or modifies the obligations of, or impairs the ability of the
Issuer to fully perform any of its obligations under, the Interest Rate
Swap Agreement (which consent may not be unreasonably withheld), (iii) the
Holders of Notes evidencing not less than 51% of Outstanding Amount of all
of the Notes, voting as a group, and (iv) the Holders of Certificates
evidencing not less than 51% of the Certificate Balance for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement, or of modifying in any manner the rights
of the Noteholders or the Certificateholders; provided, however, that no
such amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, or change the allocation or priority of,
collections of payments on Receivables or distributions that shall be
required to be made on any Note or Certificate or change the Note Interest
Rate or the Specified Reserve Balance, without the consent of all adversely
affected Noteholders or Certificateholders, (b) reduce the aforesaid
percentage required to consent to any such amendment, without the consent
of the Holders of all Notes and Certificates affected thereby or (c)
adversely affect the rating of any Class of Notes by the Rating Agencies
without the consent, as applicable, of Noteholders evidencing not less than
66 2/3% of the Notes of such Class Outstanding.
(c) Prior to the execution of any amendment or consent pursuant to Section
10.1(b), the Servicer shall provide written notification of the substance
of such amendment or consent to each Rating Agency.
(d) Promptly after the execution of any amendment or consent pursuant to
this Section 10.1, the Owner Trustee shall mail a copy to the Swap
Counterparty and shall furnish written notification of the substance of
such amendment or consent to each Certificateholder, the Indenture Trustee
and each of the Rating Agencies. It shall not be necessary for the consent
of Noteholders or the Certificateholders pursuant to this Section 10.1 to
approve the particular form of any proposed amendment or consent, but it
shall be sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents (and any other consents of
Noteholders and Certificateholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by Noteholders and
Certificateholders shall be subject to such reasonable requirements as the
Owner Trustee and the Indenture Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely
upon (i) an Opinion of Counsel stating that the execution of such amendment
(A) is authorized or permitted by this Agreement, (B) will not materially
adversely affect the Federal or any Applicable Tax State income or
franchise taxation of any Outstanding Note or Certificate or any Holder
thereof, and (C) will not cause the Trust to be taxable as a corporation
for Federal or any Applicable Tax State income or franchise tax purposes
and (ii) an Officer's Certificate of the Servicer that all conditions to
the execution of such amendment have been complied with. The Owner Trustee
or the Indenture Trustee may, but shall not be obligated to, enter into any
such amendment which affects such Owner Trustee's or Indenture Trustee's
own rights, duties or immunities under this Agreement or otherwise.
Section 10.2 Protection of Title to Trust. (a) The Seller or Servicer, or
both, shall authorize and file such financing statements and cause to be
authorized and filed such continuation statements, all in such manner and
in such places as may be required by law fully to preserve, maintain, and
protect the interest of the Trust and the Indenture Trustee for the benefit
of the Noteholders in the Receivables and in the proceeds thereof. The
Seller or Servicer, or both, shall deliver (or cause to be delivered) to
the Owner Trustee and the Indenture Trustee file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) Neither the Seller nor the Servicer shall change its name, identity, or
corporate structure in any manner that would, could, or might make any
financing statement or continuation statement filed by the Seller or the
Servicer in accordance with paragraph (a) above seriously misleading within
the meaning of Section 9-506(b) of the Relevant UCC, unless it shall have
given the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice thereof and shall have promptly filed appropriate amendments
to all previously filed financing statements or continuation statements.
(c) The Seller and the Servicer shall give the Owner Trustee and the
Indenture Trustee at least 60 days' prior written notice of any change in
its jurisdiction of organization if, as a result of such relocation or
change, the applicable provisions of the Relevant UCC would require the
filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any
such amendment, continuation statement or any new financing statement. The
Servicer shall at all times maintain each office from which it shall
service Receivables and its jurisdiction of organization within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to
know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account, Payahead Account, the Reserve Account and the Yield Supplement
Account.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the
Trust, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of
the Trust and the Indenture Trustee in such Receivable and that such
Receivable is owned by the Trust and has been pledged to the Indenture
Trustee pursuant to the Indenture. Indication of the Trust's and the
Indenture Trustee's interest in a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the
Receivable shall have been paid in full or repurchased by the Seller or
purchased by the Servicer.
(f) If at any time the Seller or the Servicer shall propose to sell, grant
a security interest in, or otherwise transfer any interest in any
automobile or sports-utility vehicle receivables to any prospective
purchaser, lender, or other transferee, the Servicer shall give to such
prospective purchaser, lender, or other transferee computer tapes, compact
disks, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and
is owned by the Trust and has been pledged to the Indenture Trustee unless
such Receivable has been paid in full or repurchased by the Seller or
purchased by the Servicer.
(g) The Servicer shall permit the Owner Trustee, the Indenture Trustee and
their respective agents at any time during normal business hours to
inspect, audit, and make copies of and abstracts from the Servicer's
records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee and the
Indenture Trustee, within 10 Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust,
together with a reconciliation of such list to the Schedules of Receivables
and to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of each
amendment to any financing statement, an Opinion of
Counsel either (A) stating that, in the opinion of such
Counsel, all financing statements and continuation
statements have been authorized and filed that are
necessary fully to preserve and protect the interest of
the Trust and the Indenture Trustee in the Receivables,
and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to preserve
and protect such interest; and
(2) within 90 days after the beginning of each calendar year
commencing in the year 2003, an Opinion of Counsel, dated
as of a date during such 90-day period, either (A)
stating that, in the opinion of such Counsel, all
financing statements and continuation statements have
been authorized and filed that are necessary fully to
preserve and protect the interest of the Trust and the
Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating
that, in the opinion of such Counsel, no such action
shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i)(1) or
(i)(2) above shall specify any action necessary (as of the date of such
opinion) to be taken in the following year to preserve and protect such
interest.
(j) The Seller shall, to the extent required by applicable law, cause the
Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
Section 10.3 Representations of the Seller and the Purchaser. The
respective agreements, representations, warranties and other statements by
the Seller and the Purchaser set forth in or made pursuant to this
Agreement shall remain in full force and effect and will survive the
Closing.
Section 10.4 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York without reference to its conflict of
laws provisions (other than section 5-1401 of the general obligations law)
and the obligations, rights, and remedies of the parties hereunder shall be
determined in accordance with such laws.
Section 10.5 Notices. All demands, notices, and communications under this
Agreement shall be in writing, personally delivered, sent via facsimile,
overnight courier or mailed by certified mail, return receipt requested,
and shall be deemed to have been duly given upon receipt,
(a) in the case of the Seller or the Servicer, to the agent for service as
specified in Section 10.13 hereof, or at such other address as shall be
designated by the Seller or the Servicer in a written notice to the Owner
Trustee and the Indenture Trustee;
(b) in the case of the Owner Trustee, at the Corporate Trust Office of the
Owner Trustee;
(c) in the case of the Indenture Trustee, at the Corporate Trust Office of
the Indenture Trustee;
(d) in the case of Moody's, at the following address:
Xxxxx'x Investors Service, Inc.
ABS Monitoring Department
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(e) in the case of S&P, at the following address:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(f) in the case of Fitch Ratings, at the following address:
Fitch Ratings
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
Fax: (000) 000-0000
(g) in the case of the initial Swap Counterparty,
at the following address:
Xxxxxxx Xxxxx Capital Services Inc.
Xxxxxxx Xxxxx World Headquarters
4 World Financial Center
New York, New York 10080
Attention: Swap Group
Fax: (000) 000-0000
with a copy to:
CICG Counsel
Xxxxxxx Xxxxx World Headquarters
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Any notice required or permitted to be mailed to a
Noteholder or Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Note Register or the
Certificate Register, as applicable. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Noteholder or Certificateholder shall
receive such notice.
Section 10.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Agreement and shall in
no way affect the validity or enforceability of the other provisions of
this Agreement or of the Notes, the Certificates, or the rights of the
Holders thereof.
Section 10.7 Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Sections 7.3 and 8.2 and as provided in the
provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without
the prior written consent of the Owner Trustee, the Indenture Trustee, the
Holders of Notes evidencing not less than 66 2/3% of the Outstanding Amount
of the Notes and the Holders of Certificates evidencing not less than 66
2/3% of the Certificate Balance and any such assignment without the
required consents shall be null and void.
Section 10.8 Further Assurances. The Seller and the Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Owner Trustee
or the Indenture Trustee more fully to effect the purposes of this
Agreement, including, without limitation, the execution of any financing
statements or continuation statements relating to the Receivables for
filing under the provisions of the Relevant UCC of any applicable
jurisdiction.
Section 10.9 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Owner Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers
and privileges therein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
Section 10.10 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Noteholders, the
Certificateholders, and their respective successors and permitted assigns.
Except as otherwise provided in this Article X, no other Person will have
any right or obligation hereunder. The parties hereto hereby acknowledge
and consent to the pledge of this Agreement by the Trust to the Indenture
Trustee for the benefit of Noteholders pursuant to the Indenture.
Section 10.11 Actions by Noteholder or Certificateholders. (a) Wherever in
this Agreement a provision is made that an action may be taken or a notice,
demand, or instruction given by Noteholders or Certificateholders, such
action, notice, or instruction may be taken or given by any Noteholder or
Certificateholder, as applicable, unless such provision requires a specific
percentage of Noteholders or Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent, waiver,
or other act by a Noteholder or Certificateholder shall bind such
Noteholder or Certificateholder and every subsequent Holder of such Note or
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or omitted to be
done by the Owner Trustee, the Indenture Trustee or the Servicer in
reliance thereon, whether or not notation of such action is made upon such
Note or Certificate.
Section 10.12 Counterparts. For the purpose of facilitating the execution
of this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and all of which counterparts shall
constitute but one and the same instrument.
Section 10.13 Agent for Service. The agent for service of the Seller and
the Servicer in respect of this Agreement shall be Executive Vice President
and Treasurer, Mitsubishi Motors Credit of America, Inc., 0000 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, mailing address: X.X. Xxx 0000,
Xxxxxxx, Xxxxxxxxxx 00000-0000.
Section 10.14 No Bankruptcy Petition; Subordination; Claims Against Seller.
The Owner Trustee, the Indenture Trustee, the Trust and the Servicer each
covenants and agrees that:
(a) prior to the date which is one year and one day after the payment in
full of all securities issued by the Seller or by a trust for which the
Seller was the depositor which securities were rated by any nationally
recognized statistical rating organization, it will not institute against,
or join any other Person in instituting against, the Seller any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings under any federal or state bankruptcy or similar law;
(b) any claim that it may have at any time against the Subtrust Assets of
any Subtrust unrelated to the Receivables, and any claim that it may have
at any time against the Seller that it may seek to enforce against the
Subtrust Assets of any Subtrust unrelated to the Receivables, shall be
subordinate to the payment in full, including post-petition interest, in
the event that the Seller becomes a debtor or debtor in possession in a
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect or otherwise subject to any
insolvency, reorganization, liquidation, rehabilitation or other similar
proceedings, of the claims of the holders of any Securities related to such
unrelated Subtrust and the holders of any other notes, bonds, contracts or
other obligations that are related to such unrelated Subtrust; and
(c) it hereby irrevocably makes the election afforded by Title 00 Xxxxxx
Xxxxxx Code Section 1111(b)(1)(A)(i) to secured creditors to receive the
treatment afforded by Title 00 Xxxxxx Xxxxxx Code Section 1111(b)(2) with
respect to any secured claim that it may have at any time against the
Seller. The obligations of the Seller under this Agreement are limited to
the related Subtrust and the related Subtrust Assets. This Section 10.13
shall survive the resignation or removal of the Owner Trustee under the
Trust Agreement or the Indenture Trustee under the Indenture or the
termination of such Agreement.
Section 10.15 Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Wilmington Trust Company, not in
its individual capacity but solely in its capacity as Owner Trustee of the
Trust and in no event shall Wilmington Trust Company in its individual
capacity or, except as expressly provided in the Trust Agreement, as Owner
Trustee of the Trust, have any liability for the representations,
warranties, covenants, agreements or other obligations of the Trust
hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the
assets of the Trust. For all purposes of this Agreement, in the performance
of its duties or obligations hereunder or in the performance of any duties
or obligations of the Trust hereunder, the Owner Trustee shall be subject
to, and entitled to the benefits of, the terms and provisions of Articles
VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bank of Tokyo-Mitsubishi Trust Company, not
in its individual capacity but solely as Indenture Trustee, and in no event
shall Bank of Tokyo-Mitsubishi Trust Company have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Trust hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Trust.
WITNESS WHEREOF, the parties have caused this Sale and
Servicing Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
MMCA AUTO RECEIVABLES TRUST,
as Seller
By: _____________________________
Name:
Title:
MMCA AUTO OWNER TRUST 2002-2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By: _____________________________
Name:
Title:
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By: _____________________________
Name:
Title:
Accepted and agreed:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By: _____________________________
Name:
Title:
Schedule A
SCHEDULE OF INITIAL RECEIVABLES
Exhibit B to the Purchase Agreement
Incorporated by Reference Herein
Schedule B
LOCATIONS OF RECEIVABLES FILES
Corporate Xxxxxx
0000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
National Service Center
00000 Xxxxxx Xxxxxx, Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Exhibit A
[Form of Servicer's Certificate]
The undersigned certifies that he is a
_____________________ of Mitsubishi Motors Credit of America, Inc., a
corporation in good standing under the laws of the state of its
incorporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 3.9 of the Sale and Servicing Agreement, dated as of __________,
_____, by and among the Company, as Servicer, MMCA Auto Receivables Trust,
as Seller, and MMCA Auto Owner Trust ____-__ (the "Sale and Servicing
Agreement") (all capitalized terms used herein without definition have the
respective meanings specified in the Sale and Servicing Agreement), and
further certifies that:
(a) The Servicer's report for the period from
__________ to ____________ attached to this certificate is
complete and accurate and contains all information required by
Section 3.9 of the Sale and Servicing Agreement; and
(b) As of the date hereof, no Event of Servicing
Termination or event that with notice or lapse of time or both
would become an Event of Servicing Termination has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature
and the corporate seal of the Company this ___ day of __________, _____.
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC.
By: ___________________________
Name:
Title:
Exhibit B
FORM OF STATEMENT TO NOTEHOLDERS
------------------------------------------------------------------------------
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Noteholders
MMCA Auto Owner Trust ___-__
July 1, ____ through June 30, _____
Per Original
Aggregate $1,000 Note or
Certificate
I. A. Distribution of Note Principal
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Distribution of Certificate Principal
II. Distribution of Note Interest
A. Class A-1
B. Class A-2
C. Class A-3
D. Class A-4
E. Class B
F. Class C
III. Yield Supplement Amount
IV. Total Servicing Fee
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Note Pool Factors
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
C. Certificate Balance
D. Certificate Pool Factor
VI. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
VIII. Principal Balance of Deferred Receivables
IX. Interest Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
X. Principal Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
XI. Aggregate Realized Losses for This Collection Period
XII. Reserve Account Balance on Payment Date
XIII. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased
by Servicer
Exhibit C
FORM OF STATEMENT TO CERTIFICATEHOLDERS
------------------------------------------------------------------------------
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Certificateholders
MMCA Auto Owner Trust ___-__
July 1, ____ through June 30, _____
Per Original
Aggregate $1,000 Note or
Certificate
I. A. Distribution of Note Principal
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Distribution of Certificate Principal
II. Distribution of Note Interest
A. Class A-1
B. Class A-2
C. Class A-3
D. Class A-4
E. Class B
F. Class C
III. Yield Supplement Amount
IV. Total Servicing Fee
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Note Pool Factors
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
C. Certificate Balance
D. Certificate Pool Factor
VI. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
VIII. Principal Balance of Deferred Receivables
IX. Interest Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
X. Principal Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
XI. Aggregate Realized Losses for This Collection Period
XII. Reserve Account Balance on Payment Date
XIII. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased
by Servicer
Exhibit D
[Form of Yield Supplement Agreement]
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re: MMCA Auto Owner Trust 2002-2
Ladies and Gentlemen:
We hereby confirm arrangements made as of the date hereof
with you to be effective upon (i) receipt by us of the enclosed copy of
this letter agreement (as amended, supplemented or otherwise modified and
in effect from time to time, the "Yield Supplement Agreement"), executed by
you, and (ii) execution of the Purchase Agreement referred to below and
payment of the purchase price specified thereunder. Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to such
terms in, or incorporated by reference into, the Purchase Agreement, dated
as of June 3, 2002 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Purchase Agreement"), between Mitsubishi
Motors Credit of America, Inc., as seller (the "Seller"), and MMCA Auto
Receivables Trust, as purchaser (the "Purchaser").
1. On or prior to the Determination Date preceding each
Payment Date, the Servicer shall notify the Purchaser and the Seller of the
Yield Supplement Amount for such Payment Date.
2. In consideration for the Purchaser entering into the
Purchase Agreement and the purchase price paid to the Seller for the
Receivables under the Purchase Agreement, we agree to make a payment of the
Yield Supplement Amount to the Purchaser, or to the pledgee of the assignee
of the Purchaser referred to in Section 5 hereof, on the Business Day prior
to each Payment Date.
3. All payments pursuant hereto shall be made by federal
wire transfer (same day) funds or in immediately available funds, to such
account as the Purchaser or the pledgee of the assignee of the Purchaser
referred to in Section 5 hereof, may designate in writing to the Seller,
prior to the relevant Payment Date.
4. Our agreements set forth in this Yield Supplement
Agreement are our primary obligations and such obligations are irrevocable,
absolute and unconditional, shall not be subject to any counterclaim,
setoff or defense and shall remain in full force and effect without regard
to, and shall not be released, discharged or in any way affected by, any
circumstances or condition whatsoever.
5. Pursuant to the Sale and Servicing Agreement, the
Purchaser will sell, transfer, assign and convey its interest in this Yield
Supplement Agreement to MMCA Auto Owner Trust 2002-2 (the "Trust"), and the
Seller hereby acknowledges and consents to such sale, transfer, assignment
and conveyance. Concurrent with such sale, transfer, assignment and
conveyance, pursuant to the Indenture, the Trust will pledge its rights
under this Yield Supplement Agreement, along with certain other assets of
the Trust, to Bank of Tokyo-Mitsubishi Trust Company, as Indenture Trustee,
to secure its obligations under the Notes and the Indenture, and the Seller
hereby acknowledges and consents to such pledge. The Seller hereby agrees,
for the benefit of the Trust, that following such sale, transfer,
assignment, conveyance and pledge, this Yield Supplement Agreement shall
not be amended, modified or terminated without the consent of Wilmington
Trust Company, as Owner Trustee on behalf of the Trust, and, prior to the
payment in full of the Notes, the Indenture Trustee.
6. This Yield Supplement Agreement will be governed by,
and construed in accordance with, the laws of the State of New York.
7. Except as otherwise provided herein, all notices
pursuant to this Yield Supplement Agreement shall be in writing and shall
be effective upon receipt thereof. All notices shall be directed as set
forth below, or to such other address or to the attention of such other
person as the relevant party shall have designated for such purpose in a
written notice.
If to the Purchaser:
-------------------
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Secretary/Treasurer
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Seller:
----------------
Mitsubishi Motors Credit of America, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Executive Vice President and Treasurer
Telephone: (000) 000-0000
Fax: (000) 000-0000
8. This Yield Supplement Agreement may be executed in one
or more counterparts and by the different parties hereto on separate
counterparts, all of which shall be deemed to be one and the same document.
If the foregoing satisfactorily sets forth the terms and
conditions of our agreement, please indicate your acceptance thereof by
signing in the space provided below and returning to us the enclosed
duplicate original of this letter.
Very truly yours,
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.,
as Seller
By: ______________________________
Name:
Title:
Agreed and accepted as of the date first above written:
MMCA AUTO RECEIVABLES TRUST,
as Purchaser
By: ____________________________
Name:
Title:
Exhibit E
[Form of Second-Tier Subsequent Assignment]
Dated:__________, _____
For value received, in accordance with and subject to the
Sale and Servicing Agreement, dated as of June 3, 2002 (the "Sale and
Servicing Agreement"), among MMCA Auto Owner Trust 2002-2 (the "Trust"),
MMCA Auto Receivables Trust, as the Seller (the "Seller"), and Mitsubishi
Motors Credit of America, Inc., as the Servicer (the "Servicer"), the
Seller hereby irrevocably sells, transfers, assigns and otherwise conveys
to the Trust, without recourse (subject to the obligations herein), all
right, title and interest of the Seller, whether now owned or hereafter
acquired, in, to and under the following:
(i) the Subsequent Receivables listed on Schedule A hereto;
(ii) with respect to the Subsequent Receivables that are Actuarial
Receivables, monies due thereunder on or after __________, _____
(the "Subsequent Cutoff Date") (including Payaheads), and, with
respect to Subsequent Receivables that are Simple Interest
Receivables, monies received thereunder on or after the Subsequent
Cutoff Date;
(iii) the security interests in Financed Vehicles granted by Obligors
pursuant to such Subsequent Receivables and any other interest of
the Trust in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to such Subsequent
Receivables from claims on any physical damage, theft, credit life
or disability insurance policies covering the related Financed
Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to such Subsequent
Receivables from recourse to Dealers thereon pursuant to Dealer
Agreements;
(vi) all of the Seller's rights to the Receivable Files that relate to
such Subsequent Receivables;
(vii) all payments and proceeds with respect to such Subsequent
Receivables held by the Servicer;
(viii) all property (including the right to receive Liquidation Proceeds
and Recoveries and Financed Vehicles and the proceeds thereof
acquired by the Seller pursuant to the terms of a Subsequent
Receivable that is a Final Payment Receivable), guarantees and
other collateral securing a Subsequent Receivable (other than a
Subsequent Receivable purchased by the Servicer or repurchased by
the Seller);
(ix) all of the Seller's rights under the related First-Tier Subsequent
Assignment;
(x) all rebates of premiums and other amounts relating to insurance
policies and other items financed under such Subsequent
Receivables in effect as of the Subsequent Cutoff Date; and
(xi) all present and future claims, demands, causes of action and
choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards,
rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which
at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
The Seller hereby represents that as of the Subsequent
Cutoff Date, the aggregate Principal Balance of the Subsequent Receivables
was $______________.
The foregoing sale, transfer, assignment and conveyance
shall not constitute and is not intended to result in an assumption by the
Trust of any obligation of the Seller to the Obligors, the Dealers or any
other Person with respect the Subsequent Receivables set forth in Schedule
A attached hereto and the other Trust Property related thereto or any
agreement, document or instrument related thereto.
In the event that the foregoing sale, transfer,
assignment and conveyance is deemed to be a pledge, the Seller hereby
grants to the Trust a first priority security interest in all of the
Seller's right to and interest in the Subsequent Receivables and other
property described in clauses (i) through (xi) above to secure a loan
deemed to have been made by the Trust to the Seller in an amount equal to
the sum of the initial principal amount of the Notes plus accrued interest
thereon and the Initial Certificate Balance.
This Second-Tier Subsequent Assignment shall be construed
in accordance with the laws of the State of New York and the obligations of
the Seller under this Second-Tier Subsequent Assignment shall be determined
in accordance with such laws.
This Second-Tier Subsequent Assignment is made pursuant
to and upon the representations, warranties and agreements on the part of
the Seller contained in the Sale and Servicing Agreement and is to be
governed in all respects by the Sale and Servicing Agreement. Capitalized
terms used but not otherwise defined herein shall have the meanings
assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Second-Tier Subsequent Assignment to be duly executed as of the day
hereinabove set forth.
MMCA AUTO RECEIVABLES TRUST
By: ______________________________
Name:
Title:
Schedule A (to Exhibit E)
SCHEDULE OF SUBSEQUENT RECEIVABLES PROVIDED TO THE
INDENTURE TRUSTEE ON THE SUBSEQUENT CLOSING DATE, WHICH
MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE
Annex A (to Exhibit E)
OFFICER'S CERTIFICATE
The undersigned officer of MMCA Auto Receivables Trust
(the "Company"), does hereby certify, pursuant to Section 2.1(d)(xvii) of
the Sale and Servicing Agreement, dated as of June 3, 2002 among MMCA Auto
Owner Trust 2002-2 (the "Trust"), MMCA Auto Receivables Trust, as the
Seller, and Mitsubishi Motors Credit of America, Inc., as the Servicer (as
amended, supplemented or otherwise modified as of the date hereof, the
"Agreement") that all of the conditions to the transfer to the Trust of the
Subsequent Receivables listed on Schedule A to the Second-Tier Subsequent
Assignment delivered herewith and the other property and rights related to
such Subsequent Receivable, as described in Section 2.1(d) of the
Agreement, have been satisfied on or prior to the related Subsequent
Transfer Date.
Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Agreement.
IN WITNESS WHEREOF, the undersigned have caused this
certificate to be duly executed this ____ day of __________, ____.
By: ____________________________
Name:
Title:
