Exhibit 4.2
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SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 2002-5,
as the Trust
MMCA AUTO RECEIVABLES TRUST II,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of December 1, 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.....................3
Section 2.3 Repurchase upon Breach.................................................................8
Section 2.4 Custody of Receivable Files............................................................8
Section 2.5 Duties of Servicer as Custodian........................................................9
Section 2.6 Instructions; Authority to Act........................................................10
Section 2.7 Custodian's Indemnification...........................................................10
Section 2.8 Effective Period and Termination......................................................10
Section 2.9 Authorization to File Financing Statements............................................11
ARTICLE III - ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST PROPERTY...................................11
Section 3.1 Duties of Servicer....................................................................11
Section 3.2 Collection and Allocation of Receivable Payments......................................14
Section 3.3 Realization upon Receivables..........................................................16
Section 3.4 Physical Damage Insurance.............................................................16
Section 3.5 Maintenance of Security Interests in Financed Vehicles................................16
Section 3.6 Covenants of Servicer.................................................................16
Section 3.7 Purchase by Servicer upon Breach......................................................17
Section 3.8 Servicing Compensation................................................................17
Section 3.9 Servicer's Certificate................................................................18
Section 3.10 Annual Statement as to Compliance; Notice of Event of Servicing Termination...........18
Section 3.11 Annual Independent Certified Public Accountants' Reports..............................18
Section 3.12 Access to Certain Documentation and Information Regarding Receivables.................19
Section 3.13 Reports to the Commission.............................................................19
Section 3.14 Reports to Rating Agencies............................................................19
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS...................19
Section 4.1 Accounts..............................................................................19
Section 4.2 Collections...........................................................................22
Section 4.3 Application of Collections............................................................23
Section 4.4 Advances..............................................................................23
Section 4.5 Additional Deposits...................................................................25
Section 4.6 Allocation of Total Available Funds...................................................25
Section 4.7 Reserve Account.......................................................................28
Section 4.8 Net Deposits..........................................................................29
Section 4.9 Statements to Noteholders and Certificateholders......................................29
Section 4.10 Control of Securities Accounts........................................................30
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND THE YIELD SUPPLEMENT ACCOUNT...................................31
Section 5.1 Yield Supplement Letter of Credit and the Yield Supplement Account....................31
ARTICLE VI - THE SELLER..........................................................................................33
Section 6.1 Representations, Warranties and Covenants of Seller...................................33
Section 6.2 Liability of Seller; Indemnities......................................................34
Section 6.3 Merger or Consolidation of, or Assumption of the Obligations of, Seller...............35
Section 6.4 Limitation on Liability of Seller and Others..........................................36
Section 6.5 Seller May Own Notes or Certificates..................................................36
ARTICLE VII - THE SERVICER.......................................................................................36
Section 7.1 Representations and Warranties of Servicer............................................36
Section 7.2 Liability of Servicer; Indemnities....................................................37
Section 7.3 Merger or Consolidation of, or Assumption of the Obligations of, Servicer.............38
Section 7.4 Limitation on Liability of Servicer and Others........................................39
Section 7.5 Servicer Not to Resign................................................................39
Section 7.6 Servicer May Own Notes or Certificates................................................40
ARTICLE VIII - SERVICING TERMINATION.............................................................................40
Section 8.1 Events of Servicing Termination.......................................................40
Section 8.2 Indenture Trustee to Act; Appointment of Successor Servicer...........................41
Section 8.3 Effect of Servicing Transfer..........................................................42
Section 8.4 Notification to Noteholders and Certificateholders....................................42
Section 8.5 Waiver of Past Events of Servicing Termination........................................42
ARTICLE IX - TERMINATION.........................................................................................43
Section 9.1 Optional Purchase of All Receivables..................................................43
ARTICLE X - MISCELLANEOUS PROVISIONS.............................................................................44
Section 10.1 Amendment.............................................................................44
Section 10.2 Protection of Title to Trust..........................................................45
Section 10.3 Representations of the Seller and the Trust...........................................47
Section 10.4 Governing Law.........................................................................47
Section 10.5 Notices...............................................................................47
Section 10.6 Severability of Provisions............................................................48
Section 10.7 Assignment............................................................................49
Section 10.8 Further Assurances....................................................................49
Section 10.9 No Waiver; Cumulative Remedies........................................................49
Section 10.10 Third-Party Beneficiaries.............................................................49
Section 10.11 Actions by Noteholder or Certificateholders...........................................49
Section 10.12 Counterparts..........................................................................49
Section 10.13 Agent for Service.....................................................................50
Section 10.14 No Bankruptcy Petition; Subordination; Claims Against Seller..........................50
Section 10.15 Limitation of Liability of Owner Trustee and Indenture Trustee........................50
SCHEDULES
Schedule of 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
SALE AND SERVICING AGREEMENT, dated as of December 1, 2002 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), by and among MMCA AUTO OWNER TRUST 2002-5, a Delaware
statutory trust (the "Trust"), MMCA AUTO RECEIVABLES TRUST II, a Delaware
statutory trust (the "Seller"), and MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
a Delaware corporation (the "Servicer").
WHEREAS, the Trust desires to purchase portfolios of receivables
arising in connection with motor vehicle retail installment sale contracts
generated by Mitsubishi Motors Credit of America, Inc. in the ordinary course
of its business and sold to the Seller as of the date hereof;
WHEREAS, the Seller is willing to sell such receivables to the Trust
as of the date hereof; and
WHEREAS, Mitsubishi Motors Credit of America, Inc. is willing to
service such receivables on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I - DEFINITIONS 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 December 1, 2002, between MMCA Auto Owner Trust 2002-5, 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 2003) 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 Receivables;
(ii) with respect to Receivables that are Actuarial Receivables,
monies due thereunder after the Cutoff Date (including Payaheads) and, with
respect to Receivables that are Simple Interest Receivables, monies received
thereunder after the Cutoff Date;
(iii) the security interests in Financed Vehicles granted by Obligors
pursuant to the Receivables and any other interest of the Seller in such
Financed Vehicles;
(iv) all rights to receive proceeds with respect to the Receivables
from claims on any physical damage, theft, credit life or disability insurance
policies covering the related Financed Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to the Receivables
from recourse to Dealers thereon pursuant to Dealer Agreements;
(vi) all of the Seller's rights to the Receivable Files that relate
to the Receivables;
(vii) the Trust Accounts and all amounts, securities, financial
assets, investments and other property deposited in or credited to any of the
foregoing and all proceeds thereof;
(viii) all of the Seller's rights under the Yield Supplement
Agreement and the Purchase Agreement, including the right of the Seller to
cause MMCA to repurchase Receivables from the Seller;
(ix) all payments and proceeds with respect to the Receivables held
by MMCA;
(x) all property (including the right to receive Liquidation Proceeds
and Recoveries and Financed Vehicles and the proceeds thereof acquired by the
Seller pursuant to the terms of a Final Payment Receivable), guarantees and
other collateral securing a Receivable (other than a Receivable purchased by
the Servicer or repurchased by the Seller);
(xi) all rebates of premiums and other amounts relating to insurance
policies and other items financed under the Receivables in effect as of the
Cutoff Date; and
(xii) all present and future claims, demands, causes of action and
choses in action in respect of any or all of the foregoing and all payments on
or under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion thereof,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards,
rights to payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time constitute all
or part of or are included in the proceeds of any of the foregoing.
(b) It is the intention of the Seller and the Trust that the transfer
of the Trust Property contemplated by Section 2.1(a) constitutes a sale 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.
(c) 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, 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 Cutoff Date and no selection
procedures believed to be adverse to the Noteholders or the Certificateholders
shall have been utilized in selecting the Receivables from those receivables
which meet the criteria contained herein. The compact disk or other listing
regarding the Receivables made available to the Trust and its assigns (which
compact disk or other listing is required to be delivered as specified herein)
is true and correct in all respects.
(iii) Compliance with Law. Each Receivable and the sale of the
related Financed Vehicle shall have complied, at the time it was originated or
made, and shall comply on the Closing Date in all material respects with all
requirements of applicable Federal, state, and local laws, and regulations
thereunder, including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Credit Billing Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the
Federal Reserve Board's Regulations B and Z, the Soldiers' and Sailors' Civil
Relief Act of 1940, the Texas Consumer Credit Code, and State adaptations of
the Uniform Consumer Credit Code, and other consumer credit laws and equal
credit opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall represent the genuine,
legal, valid and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity.
(v) No Government Obligor. None of the Receivables is due from the
United States of America or any state or from any agency, department or
instrumentality of the United States of America or any state.
(vi) Security Interest in Financed Vehicle. Immediately prior to the
sale, assignment, and transfer thereof 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 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 Cutoff Date, or the failure of the
Obligor to maintain satisfactory physical damage insurance covering the
Financed Vehicle, no default, breach, violation, or event permitting
acceleration under the terms of any Receivable shall have occurred; no
continuing condition that with notice or the lapse of time or both would
constitute a default, breach, violation, or event permitting acceleration
under the terms of any Receivable shall have arisen; the Seller shall not have
waived any of the foregoing; and no Financed Vehicle shall have been
repossessed as of the Cutoff Date. (xii) Insurance. Each Contract shall
require the related Obligor to maintain physical damage insurance (which
insurance shall not be force placed insurance) covering the Financed Vehicle,
in the amount determined by MMCA in accordance with its customary procedures.
(xiii) Title. It is the intention of the Seller that each transfer
and assignment of the Receivables herein contemplated constitute a sale of
such Receivables from the Seller to the Trust and that the beneficial interest
in, and title to, such Receivables not be part of the Seller's estate in the
event of the filing of a bankruptcy petition by or against the Seller under
any bankruptcy law. No Receivable has been sold, transferred, assigned, or
pledged by the Seller to any Person other than the Trust. Immediately prior to
each transfer and assignment of the Receivables herein contemplated, the
Seller had good and marketable title to such Receivables free and clear of all
Liens, encumbrances, security interests, and rights of others and, immediately
upon the transfer thereof, the Trust shall have good and marketable title to
such Receivables, free and clear of all Liens, encumbrances, security
interests, and rights of others; and the transfer has been perfected by all
necessary action under the Relevant UCC.
(xiv) Valid Assignment. No Receivable shall have been originated in,
or shall be subject to the laws of, any jurisdiction under which the sale,
transfer, and assignment of such Receivable under this Agreement or the
Indenture or pursuant to transfers of the Certificates shall be unlawful,
void, or voidable. The Seller has not entered into any agreement with any
obligor that prohibits, restricts or conditions the assignment of any portion
of the Receivables.
(xv) All Filings Made. All filings (including, without limitation,
filings under the Relevant UCC) necessary in any jurisdiction to give the
Trust a first priority perfected security interest in the Receivables, and to
give the Indenture Trustee a first priority perfected security interest
therein, shall be made within 10 days of the Closing Date.
(xvi) Chattel Paper. Each Receivable constitutes "chattel paper" as
defined in the Relevant UCC.
(xvii) One Original. There shall be only one original executed copy
of each Receivable in existence.
(xviii) Principal Balance. Each Receivable had an original principal
balance (net of unearned precomputed finance charges) of not more than
$60,000, and a remaining Principal Balance as of the Cutoff Date of not less
than $100.
(xix) No Bankrupt Obligors. No Receivable was due from an Obligor
who, as of the Cutoff Date, was the subject of a proceeding under the
Bankruptcy Code of the United States or was bankrupt.
(xx) New and Used Vehicles. Approximately 99.03% of the Pool Balance,
constituting approximately 98.19% of the total number of the Receivables,
relate to new automobiles and sports-utility vehicles, substantially all of
which were manufactured or distributed by Mitsubishi Motors. Approximately
0.58% of the Pool Balance, constituting approximately 0.96% of the total
number of Receivables, relate to used automobiles and sports-utility vehicle,
substantially all of which were manufactured or distributed by Mitsubishi
Motors. Approximately 0.39% of the Pool Balance, constituting approximately
0.85% of the total number of Receivables, relate to program automobiles and
sports-utility vehicles, substantially all of which were manufactured or
distributed by Mitsubishi Motors.
(xxi) Origination. Each Receivable shall have an origination date
during or after January 1999.
(xxii) Maturity of Receivables. Each Receivable shall have, as of the
Cutoff Date, not more than 72 remaining Scheduled Payments due under the
Receivable.
(xxiii) Weighted Average Number of Payments. As of the Cutoff Date,
the weighted average number of Scheduled Payments remaining until the maturity
of the Receivables shall be not more than 72 Scheduled Payments.
(xxiv) Annual Percentage Rate. Each Receivable shall have an APR of
at least 0% and not more than 30%.
(xxv) Scheduled Payments. No Receivable shall have a payment of which
more than 10% of such payment is more than 30 days overdue as of the Cutoff
Date.
(xxvi) Location of Receivable Files. The Seller has in its possession
all original copies of the Receivable Files. The Receivable Files do not have
any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Trust. All financing
statements filed or to be filed against the Seller in favor of the Trust in
connection herewith describing the Receivables contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the Trust."
The Receivable Files shall be kept at one or more of the locations listed in
Schedule B hereto.
(xxvii) Capped Receivables and Simple Interest Receivables. Except to
the extent that there has been no material adverse effect on Noteholders or
Certificateholders, each Capped Receivable has been treated consistently by
the Seller and the Servicer as a Simple Interest Receivable and payments with
respect to each Simple Interest Receivable have been allocated consistently in
accordance with the Simple Interest Method.
(xxviii) Agreement. The representations and warranties of the Seller
in Section 6.1 are true and correct.
(xxix) Other Data. The tabular data and the numerical data relating
to the characteristics of the Receivables contained in the Prospectus (as
defined in the Purchase Agreement) are true and correct in all material
respects.
(xxx) Last Scheduled Payments. The aggregate Principal Balance of the
Last Scheduled Payments of Balloon Payment Receivables and Final Payment
Receivables, as a percentage of the aggregate Principal Balance of the
Receivables as of the Cutoff Date, shall be not greater than 1.29%.
(xxxi) Receivable Yield Supplement Amounts. An amount equal to the
sum of all projected Yield Supplement Amounts for all future Payment Dates
with respect to each Deferred Payment Receivable 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.
(xxxii) Prepaid Receivables. No Receivable shall have been pre-paid
by more than six monthly payments as of the Cutoff Date.
(xxxiii) Limited Credit Experience. The aggregate principal balance
of the Receivables on which the Obligor has limited credit experience, as a
percentage of the aggregate principal balance of all Receivables, in each case
as of the Cutoff Date, shall be not greater than 3.83%.
(xxxiv) Deferred Payment Receivables. As of the Cutoff Date,
$167,847,542.55 total Principal Balance of Deferred Payment Receivables
included in the Receivables had a first payment that, as of the date of
inception of the Receivable, was deferred for 300 days or greater. As of the
Cutoff Date, $49,131,304.40 total Principal Balance of Deferred Payment
Receivables included in the Receivables had a first payment that, as of the
date of inception of the Receivable, was deferred for a period of between 200
and 299 days. As of the Cutoff Date $19,210,877.78 total Principal Balance of
Deferred Payment Receivables included in the Receivables had a first payment
that, as of the date of inception of the Receivable, was deferred for a period
of between 100 and 199 days. As of the Cutoff Date $3,010,029.99 total
Principal Balance of Deferred Payment Receivables included in the Receivables
had a first payment that, as of the date of inception of the Receivable, was
deferred for a period of 99 days or less. In no case will the first payment on
a Deferred Payment Receivable be due later than 450 days after the date of
inception of that Receivable.
(xxxv) Long Deferment Period Receivables. As of the Cutoff Date
$167,847,542.55 total Principal Balance of Deferred Payment Receivables
included in the Receivables were Long Deferment Period Receivables.
(xxxvi) Deferred Balloon Payment Receivables. As of the Cutoff Date,
$3,010,029.99 total principal balance of Deferred Balloon Payment Receivables
were originated with a deferral period of 90 days, and $19,210,877.78 total
principal balance of Deferred Balloon Payment Receivables were originated with
a deferral period of 180 days.
(xxxvii) 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,
with respect to each Receivable (collectively, a "Receivable File"):
(i) the single original of the Receivable;
(ii) the original credit application fully executed by the Obligor or
a photocopy thereof or a record thereof on a computer file tape, microfiche or
other electronic medium;
(iii) the original certificate of title or such other documents that
the Servicer or MMCA shall keep on file, in accordance with its customary
practices and procedures, evidencing the security interest of MMCA in the
Financed Vehicle;
(iv) documents evidencing the existence, at the time of origination
of the Receivable, of any insurance covering the Financed Vehicle; and
(v) any and all other documents (including any computer tape,
microfiche or other electronic medium) that the Servicer or the Seller shall
keep on file, in accordance with its customary procedures, relating to a
Receivable, an Obligor, or a Financed Vehicle.
On the Closing Date, the Servicer shall provide an Officer's
Certificate to the Trust and the Indenture Trustee confirming that the
Servicer has received, on behalf of the Trust and the Indenture Trustee, all
the documents and instruments necessary for the Servicer to act as the agent
of the Trust and the Indenture Trustee for the purposes set forth in this
Section 2.4, including the documents referred to herein, and the Trust, the
Owner Trustee and the Indenture Trustee are hereby authorized to rely on such
Officer's Certificate.
Section 2.5 Duties of Servicer as Custodian (a)Safekeeping. The
Servicer, in its capacity as custodian, shall hold the Receivable Files for
the benefit of the Trust and the Indenture Trustee and maintain such accurate
and complete accounts, records, and computer systems pertaining to each
Receivable File as shall enable the Servicer and the Trust to comply with the
terms and provisions of this Agreement, and the Indenture Trustee to comply
with the terms and conditions of the Indenture. In performing its duties as
custodian, the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the receivable
files relating to all comparable motor vehicle receivables that the Servicer
services for itself or others. In accordance with its customary practices and
procedures with respect to its retail installment sale contracts, the Servicer
shall conduct, or cause to be conducted, periodic audits of the Receivable
Files held by it under this Agreement, and of the related accounts, records,
and computer systems, in such a manner as shall enable the Trust or the
Indenture Trustee to verify the accuracy of the Servicer's 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 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.
Section 2.9 Authorization to File Financing Statements. The Seller
hereby authorizes the filing of any financing statements or continuation
statements, and amendments to financing statements, in any jurisdictions and
with any filing offices as the Trust may determine, in its sole discretion,
are necessary or advisable to perfect the security interest granted to the
Trust in connection herewith. Such financing statements may describe the
Collateral in the same manner as described in any security agreement or pledge
agreement entered into by the parties in connection herewith or may contain an
indication or description of Collateral that describes such property in any
other manner as the Trust may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to the Trust in connection herewith including, without
limitation, describing such property as "all assets" or "all personal
property."
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 the subservicer shall be paid by the Servicer and not out of the
proceeds of the Trust, and any 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 subservicing agreement shall contain no terms and provisions
inconsistent with this Agreement.
(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.
(d) The Servicer shall notify the Owner Trustee, the Indenture
Trustee and the Rating Agencies of any appointment of a subservicer.
(e) Notwithstanding any subservicing agreement, 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 by a
subservicer, 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 servicer (including by reason of the occurrence of an Event of
Servicing Termination), the successor Servicer may, in its discretion,
thereupon assume all of the rights and obligations of the outgoing Servicer
under any subservicing agreement then in effect. 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, Inc.
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
July 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 June 30 of each year, commencing in June
2003, an Officer's Certificate, stating that (i) a review of the activities of
the Servicer during the 12 months (or such shorter period, with respect to the
first such Officer's Certificate) ended the preceding March 31 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 June 30 of each year, commencing in June 2003, a report addressed to
the Board of Directors of the Servicer with respect to the 12 months (or such
shorter period, with respect to the first such report) ended the preceding
March 31 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 "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).
(c) 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.
(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 "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.
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).
(e) Notwithstanding the provisions of clause (d) 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.
(f) 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(e)), which amount shall be deposited in the Payahead Account as
soon as practicable but in no event later than the Payment Date immediately
following collection, and such 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, 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 in respect of the Class A Notes by the
Trust 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 in
respect of the Class A Notes;
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) with the same priority and ratably, in accordance with the
outstanding principal balance of the Class B Notes and the amount of any Swap
Termination Payments due and payable in respect of the Class B Notes by the
Trust to the Swap Counterparty;
(1) to the Note Payment Account, the Accrued Note Interest for the
Class B Notes; and
(2) to the Swap Counterparty, any Swap Termination Payments in
respect of the Class B Notes;
provided, that, if any amounts allocable to the Class B 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;
(v) with the same priority and ratably, in accordance with the
outstanding principal balance of the Class C Notes and the amount of any Swap
Termination Payments due and payable in respect of the Class C Notes by the
Trust to the Swap Counterparty;
(1) to the Note Payment Account, the Accrued Note Interest for the
Class C Notes; and
(2) to the Swap Counterparty, any Swap Termination Payments in
respect of the Class C Notes;
provided, that, if any amounts allocable to the Class C 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;
(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. 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; and
(xiii) the amount of Actuarial Advances and Last Scheduled Payment
Advances, if any, with respect to the related Collection Period.
Each amount set forth on the Payment Date statement pursuant to
clauses (i), (ii), (iv) and (ix) 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 Note Payment Account, the Reserve 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.
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 (Account No. 00000000), together with the Payahead
Account (Account No. 00000000), the Collection Account (Account No. 00000000),
the Note Payment Account (Account No. 00000000) and the Reserve Account
(Account No. 00000000), 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. 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, 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 statutory trust in good standing
under the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority, and legal right to acquire and own the
Receivables.
(b) Due Qualification. The Seller is duly qualified to do business as
a foreign business trust in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications.
(c) Power and Authority. The Seller has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their terms. The Seller has full power and
authority to sell and assign the property to be sold and assigned to and
deposited with the Trust and has duly authorized such sale and assignment to
the Trust by all necessary corporate action; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it is a
party have been duly authorized by the Seller by all necessary corporate
action.
(d) Valid Sale; Binding Obligation. This Agreement effects a valid
sale, transfer and assignment of the Receivables and the other Trust Property
related thereto conveyed by the Seller to the Trust hereunder, in each case
enforceable against creditors of and purchasers from the Seller; and this
Agreement and the other Basic Documents to which the Seller is a party
constitute legal, valid, and binding obligations of the Seller, enforceable
against the Seller in accordance with their terms, subject, as to
enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and to
general equitable principles.
(e) No Violation. The execution, delivery and performance by the
Seller of this Agreement and the other Basic Documents to which the Seller is
a party and the consummation of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof will not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the certificate of trust or amended and restated trust agreement of the
Seller, or conflict with, or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
any indenture, agreement, mortgage, deed of trust or other instrument to which
the Seller is a party or by which the Seller is bound or any of its properties
are subject, or result in the creation or imposition of any lien upon any of
its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument (other than this Agreement), or
violate any law, order, rule, or regulation, applicable to the Seller or its
properties, of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over the
Seller or any of its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the best knowledge of the Seller, threatened, before any
court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement, the Indenture, any
of the other Basic Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes, the Certificates or the consummation of any
of the transactions contemplated by this Agreement, the Indenture or any of
the other Basic Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement, the
Indenture, any of the other Basic Documents, the Notes or the Certificates, or
(iv) that may adversely affect the Federal or Applicable Tax State income,
excise, franchise or similar tax attributes of the Notes or the Certificates.
(g) Florida Securities and Investor Protection Act. In connection
with the offering of the Notes in the State of Florida, the Seller hereby
certifies that it has complied with all provisions of Section 517.075 of the
Florida Securities and Investor Protection Act.
Section 6.2 Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement, and hereby agrees
to the following:
(a) The Seller shall indemnify, defend, and hold harmless the Trust,
the Owner Trustee and the Indenture Trustee from and against any taxes that
may at any time be asserted against any such Person with respect to, and as of
the date of, the sale of the Receivables to the Trust or the issuance and
original sale of the Notes or the Certificates, including any sales, gross
receipts, general corporation, tangible personal property, privilege, or
license taxes (but, in the case of the Trust, not including any taxes asserted
with respect to ownership of the Receivables or Federal or other Applicable
Tax State income taxes arising out of the transactions contemplated by this
Agreement and the other Basic Documents) and costs and expenses in defending
against the same.
(b) The Seller shall indemnify, defend, and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith, or negligence
(other than errors in judgment) in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement and (ii) the Seller's violation of Federal or state
securities laws in connection with the registration or the sale of the Notes
or the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained herein and in the
Trust Agreement, in the case of the Owner Trustee, and in the Indenture, in
the case of the Indenture Trustee, except to the extent that such cost,
expense, loss, claim, damage or liability: (i) shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Owner Trustee or the Indenture Trustee, as applicable; (ii) in the case of the
Owner Trustee shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in Section 7.3 of the Trust Agreement
or (iii) in the case of the Indenture Trustee shall arise from the breach by
the Indenture Trustee of any of its representations and warranties set forth
in the Indenture.
(d) The Seller shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate.
(e) Indemnification under this Section 6.2 shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee and the
termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Seller shall have made any
indemnity payments pursuant to this Section 6.2 and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts
from others, such Person shall promptly repay such amounts to the Seller,
without interest.
Section 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Seller shall be a party or (iii) that may succeed by purchase and
assumption to all or substantially all of the business of the Seller, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Seller under this Agreement, will be the
successor to the Seller under this Agreement without the execution or filing
of any document or any further act on the part of any of the parties to this
Agreement; provided, however, that (x) the Seller shall have delivered to the
Owner Trustee and the Indenture Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such merger, conversion, consolidation or
succession and such agreement of assumption comply with this Section 6.3, and
(y) the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been 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, 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 aggregate Principal Balance as of the Cutoff
Date, 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 and any Yield Supplement Amounts for such Payment
Date, plus to the extent necessary all amounts in the Reserve Account, shall
be used to make payments in full to Noteholders and Certificateholders in the
manner set forth in Article IV.
(b) Unless otherwise required by the Rating Agencies as set forth in
writing delivered to the Owner Trustee and the Indenture Trustee, if at the
time the Servicer exercises its purchase option hereunder the Servicer's
long-term unsecured debt has a rating lower than investment grade by the
Rating Agencies, the Servicer shall deliver to the Owner Trustee and the
Indenture Trustee on such Payment Date a letter from an Independent investment
bank or an Independent public accountant to the effect that the price paid by
the Servicer for the Receivables at the time of transfer pursuant to such
purchase option represented a fair market price for such Receivables.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder,
and the Indenture Trustee will continue to carry out its obligations hereunder
with respect to the Certificateholders, including without limitation making
distributions from the Payahead Account and the Collection Account in
accordance with Section 4.6 and making withdrawals from the Reserve Account in
accordance with Sections 4.5(b) and 4.7.
ARTICLE X - MISCELLANEOUS PROVISIONS
Section 10.1 Amendment. (a) This Agreement may be amended by the
Seller, the Servicer and the Trust with the consent of the Indenture Trustee
(which consent may not be unreasonably withheld), but without the consent of
any of the Noteholders, the Certificateholders or 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 Trust 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 Trust 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 the consent of the Holders of Certificates
evidencing not less than 51% of the Certificate Balance for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, or change the allocation or priority of,
collections of payments on Receivables or distributions that shall be required
to be made on any Note or Certificate or change the Note Interest Rate or the
Specified Reserve Balance, without the consent of all adversely affected
Noteholders or Certificateholders, (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the Holders
of all Notes and Certificates affected thereby or (c) adversely affect the
rating of any Class of Notes by the Rating Agencies without the consent, as
applicable, of Noteholders evidencing not less than 66 2/3% of the Notes of
such Class Outstanding.
(c) Prior to the execution of any amendment or consent pursuant to
Section 10.1(b), the Servicer shall provide written notification of the
substance of such amendment or consent to each Rating Agency.
(d) Promptly after the execution of any amendment or consent pursuant
to this Section 10.1, the Owner Trustee shall mail a copy to the Swap
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 Trust. The
respective agreements, representations, warranties and other statements by the
Seller and the Trust 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: (212)
438-2649
(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:
Xxxxxx Xxxxxxx Capital Services Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx, Fixed Income
Derivatives - Transaction Management Manager
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.
IN WITNESS WHEREOF, the parties have caused this Sale and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
MMCA AUTO RECEIVABLES TRUST II,
as Seller
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Secretary & Treasurer
MMCA AUTO OWNER TRUST 2002-5
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Financial Services Officer
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By: /s/ C.A. Xxxxxxx
----------------------------------
Name: C. A. Xxxxxxx
Title: Executive Vice President
and General Manager
Accepted and agreed:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By: /s/ X. Xxxxxxxxx
------------------------------
Name: X. Xxxxxxxxx
Title: Trust Officer
Schedule A
SCHEDULE OF RECEIVABLES
Exhibit B to the Purchase Agreement
Incorporated by Reference Herein
Schedule B
LOCATIONS OF RECEIVABLES FILES
Corporate Xxxxxx
0000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
National Service Center
00000 Xxxxxx Xxxxxx, Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Exhibit A
[Form of Servicer's Certificate]
The undersigned certifies that he is a _____________________ of
Mitsubishi Motors Credit of America, Inc., a corporation in good standing
under the laws of the state of its incorporation (the "Company"), and that as
such he is duly authorized to execute and deliver this certificate on behalf
of the Company pursuant to Section 3.9 of the Sale and Servicing Agreement,
dated as of __________, _____, by and among the Company, as Servicer, MMCA
Auto Receivables Trust II, 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 ___-__
_________ through __________
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. Net Swap Payments
VI. 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
VII. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VIII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
IX. Principal Balance of Deferred Receivables
X. 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
XI. 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
XII. Aggregate Realized Losses for This Collection Period
XIII. Reserve Account Balance on Payment Date
XIV. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XV. 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 ___-__
_________ through __________
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. Net Swap Payments
VI. 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
VII. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VIII. A. Level Pay Pool Balance B. Last Scheduled Payment Pool Balance
IX. Principal Balance of Deferred Receivables
X. 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
XI. 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
XII. Aggregate Realized Losses for This Collection Period
XIII. Reserve Account Balance on Payment Date
XIV. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XV. Purchase Amount of Receivables Repurchased by Seller or Purchased by
Servicer
Exhibit D
[Form of Yield Supplement Agreement]
MMCA Auto Receivables Trust II
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re:
MMCA Auto Owner Trust 2002-5
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, dated as of December 1, 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 II, as purchaser (the
"Purchaser"), 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
Indenture, dated as of December 1, 2002 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Indenture"), between
MMCA Auto
Owner Trust 2002-5, as issuer (the "Trust"), and Bank of Tokyo-Mitsubishi
Trust Company, as indenture trustee (the "Indenture Trustee").
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 2002-5 (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 II
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 II,
as Purchaser
By: ____________________________
Name:
Title:
