EXHIBIT 4.1
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AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 2001-4,
as the Trust
MMCA AUTO RECEIVABLES TRUST,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of August 8, 2002
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TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS AND USAGE
Section 1.1 Definitions............................................................................1
Section 1.2 Business Day Certificate...............................................................1
ARTICLE II - TRUST PROPERTY 2
Section 2.1 Conveyance of Trust Property...........................................................2
Section 2.2 Representations and Warranties of the Seller as to the
Receivables............................................................................3
Section 2.3 Repurchase upon Breach.................................................................9
Section 2.4 Custody of Receivable Files............................................................9
Section 2.5 Duties of Servicer as Custodian.......................................................10
Section 2.6 Instructions; Authority to Act........................................................11
Section 2.7 Custodian's Indemnification...........................................................11
Section 2.8 Effective Period and Termination......................................................12
ARTICLE III - ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST PROPERTY
Section 3.1 Duties of Servicer....................................................................12
Section 3.2 Collection and Allocation of Receivable Payments......................................15
Section 3.3 Realization upon Receivables..........................................................18
Section 3.4 Physical Damage Insurance.............................................................18
Section 3.5 Maintenance of Security Interests in Financed Vehicles................................18
Section 3.6 Covenants of Servicer.................................................................19
Section 3.7 Purchase by Servicer upon Breach......................................................19
Section 3.8 Servicing Compensation................................................................19
Section 3.9 Servicer's Certificate................................................................20
Section 3.10 Annual Statement as to Compliance; Notice of Event of Servicing
Termination...........................................................................20
Section 3.11 Annual Independent Certified Public Accountants' Reports..............................21
Section 3.12 Access to Certain Documentation and Information Regarding
Receivables...........................................................................21
Section 3.13 Reports to the Commission.............................................................22
Section 3.14 Reports to Rating Agencies............................................................22
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 4.1 Accounts..............................................................................22
Section 4.2 Collections...........................................................................25
Section 4.3 Application of Collections............................................................26
Section 4.4 Advances..............................................................................27
Section 4.5 Additional Deposits...................................................................28
Section 4.6 Allocation of Total Available Funds...................................................28
Section 4.7 Reserve Account.......................................................................30
Section 4.8 Net Deposits..........................................................................32
Section 4.9 Statements to Noteholders and Certificateholders......................................32
Section 4.10 Control of Securities Accounts........................................................33
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND THE YIELD SUPPLEMENT ACCOUNT 33
Section 5.1 Yield Supplement Letter of Credit and the Yield Supplement
Account...............................................................................33
ARTICLE VI - THE SELLER 36
Section 6.1 Representations, Warranties and Covenants of Seller...................................36
Section 6.2 Liability of Seller; Indemnities......................................................37
Section 6.3 Merger or Consolidation of, or Assumption of the Obligations
of, Seller............................................................................38
Section 6.4 Limitation on Liability of Seller and Others..........................................39
Section 6.5 Seller May Own Notes or Certificates..................................................39
ARTICLE VII - THE SERVICER 39
Section 7.1 Representations and Warranties of Servicer............................................39
Section 7.2 Liability of Servicer; Indemnities....................................................40
Section 7.3 Merger or Consolidation of, or Assumption of the Obligations
of, Servicer..........................................................................42
Section 7.4 Limitation on Liability of Servicer and Others........................................42
Section 7.5 Servicer Not to Resign................................................................43
Section 7.6 Servicer May Own Notes or Certificates................................................43
ARTICLE VIII - SERVICING TERMINATION
Section 8.1 Events of Servicing Termination.......................................................43
Section 8.2 Indenture Trustee to Act; Appointment of Successor Servicer...........................45
Section 8.3 Effect of Servicing Transfer..........................................................46
Section 8.4 Notification to Noteholders and Certificateholders....................................46
Section 8.5 Waiver of Past Events of Servicing Termination........................................46
ARTICLE IX - TERMINATION
Section 9.1 Optional Purchase of All Receivables..................................................47
ARTICLE X - MISCELLANEOUS PROVISIONS
Section 10.1 Amendment.............................................................................48
Section 10.2 Protection of Title to Trust..........................................................49
Section 10.3 Representations of the Seller and the Purchaser.......................................51
Section 10.4 Governing Law.........................................................................51
Section 10.5 Notices...............................................................................51
Section 10.6 Severability of Provisions............................................................52
Section 10.7 Assignment............................................................................53
Section 10.8 Further Assurances....................................................................53
Section 10.9 No Waiver; Cumulative Remedies........................................................53
Section 10.10 Third-Party Beneficiaries.............................................................53
Section 10.11 Actions by Noteholder or Certificateholders...........................................53
Section 10.12 Counterparts..........................................................................54
Section 10.13 Agent for Service.....................................................................54
Section 10.14 No Bankruptcy Petition; Subordination; Claims Against Seller..........................54
Section 10.15 Limitation of Liability of Owner Trustee and Indenture Trustee........................55
SCHEDULES
SCHEDULE A Schedule of Receivables
SCHEDULE B Locations of Receivable Files
EXHIBITS
EXHIBIT A Form of Servicer's Certificate..........................................................Exhibit A
EXHIBIT B Form of Statement to Noteholders........................................................Exhibit B
EXHIBIT C Form of Statement to Certificateholders.................................................Exhibit C
EXHIBIT D Form of Yield Supplement Agreement..................................................... Exhibit D
AMENDED AND RESTATED SALE AND SERVICING AGREEMENT, dated as
of August 8, 2002 (this "Agreement"), amending and restating in its entirety
the SALE AND SERVICING AGREEMENT, dated as of December 1, 2001 (the "Sale and
Servicing Agreement"), by and among MMCA AUTO OWNER TRUST 2001-4, a Delaware
business trust (the "Trust"), MMCA AUTO RECEIVABLES TRUST, a Delaware business
trust (the "Seller"), and MITSUBISHI MOTORS CREDIT OF AMERICA, INC., a
Delaware corporation (the "Servicer").
WHEREAS, the Trust, the Seller and the Servicer have
heretofore executed and delivered a Sale and Servicing Agreement, dated as of
December 1, 2001 (the"Original Sale and Servicing Agreement");
WHEREAS, pursuant to Section 1.1 of the Original Sale and
Servicing Agreement, capitalized terms used but not otherwise defined therein
have the respective meanings set forth in Appendix A to the Indenture, dated
as of December 1, 2001, by and among the Issuer, the Seller and the Servicer
(the "Original Indenture");
WHEREAS, the Original Indenture and Appendix A thereto have
been amended and restated, effective the date hereof by the parties thereto;
WHEREAS, the Trust, the Seller and the Servicer desire to
amend and restate the Original Sale and Servicing Agreement pursuant to
Section 10.1(a) thereof to incorporate by reference the defined terms in
Appendix A to the amended and restated Indenture;
WHEREAS, all conditions precedent to the execution of this
Agreement have been complied with;
NOW, THEREFORE, the Trust, the Seller and the Servicer
hereby agree that effective on and as of the date hereof, the Sale and
Servicing Agreement is hereby amended and restated in its entirety 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 Amended and Restated
Indenture (the "Indenture"), dated as of August 8, 2002, between MMCA Auto
Owner Trust 2001-4, as issuer, and Bank of Tokyo-Mitsubishi Trust Company, as
indenture trustee (the "Indenture Trustee"), amending and restating in its
entirety the Indenture dated as of December 1, 2001, between the Issuer and
the Indenture Trustee. Appendix A also contains rules as to usage that shall
be applicable herein.
Section 1.2 Business Day Certificate. On the Closing Date
(with respect to the calendar year 2002) and thereafter, within 15 days prior
to the end of each succeeding calendar year while this Agreement remains in
effect, the Servicer shall deliver to the Indenture Trustee and to Wilmington
Trust Company, not in its individual capacity but solely as owner trustee (the
"Owner Trustee"), an Officer's Certificate specifying the days on which
banking institutions or trust companies in New York, New York, Wilmington,
Delaware or Los Angeles, California are authorized or obligated by law,
executive order or governmental decree to remain closed.
ARTICLE II - TRUST PROPERTY
Section 2.1 Conveyance of Trust Property. (a) In
consideration of the Trust's delivery to, or upon the written order of, the
Seller of authenticated Notes and Certificates, in authorized denominations in
aggregate principal amounts equal to the initial principal amount of the Notes
and the Initial Certificate Balance, respectively, the Seller hereby
irrevocably sells, transfers, assigns and otherwise conveys to the Trust,
without recourse (subject to the obligations herein), all right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and
under the following:
(i) the 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, investments in financial assets, and other property
deposited in or credited to any of the foregoing and all proceeds
thereof;
(viii) all of the Seller's rights under the Yield
Supplement Agreement and the Purchase Agreement, including the right
of the Seller to cause MMCA to repurchase Receivables from the
Seller;
(ix) all payments and proceeds with respect to the
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 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 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, 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 Seller and the Trust,
respectively (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 Seller and the Purchaser, respectively. (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 ten 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 98.48% of
the Pool Balance, constituting approximately 97.36% 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 1.35% of the Pool
Balance, constituting approximately 2.29% 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 0.15% of the Pool Balance,
constituting approximately 0.31% 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. Approximately 0.02% of the Pool Balance,
constituting approximately 0.03% of the total number of Receivables,
relate to other used automobiles and sports-utility vehicles.
(xxi) Origination. Each Receivable shall have an
origination date during or after January 27, 1999.
(xxii) Maturity of Receivables. Each Receivable
shall have, as of the Cutoff Date, not more than 66 remaining
Scheduled Payments due under the Receivable.
(xxiii) Weighted Average Maturity of Receivables.
As of the Cutoff Date, the weighted average number of Scheduled
Payments remaining until the maturity of the Receivables shall be not
more than 59 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 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 Final Payment
Receivables, as a percentage of the Initial Pool Balance as of the
Cutoff Date, shall be not greater than 40.92%.
(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 4.55%.
(xxxiv) Deferred Payment Receivables. As of the
Cutoff Date $315,249,584.28 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 $94,949,377.96 total
Principal Balance of Deferred Payment Receivables included in the
Receivables had a first payment that, as of the date of inception of
the Receivables, was deferred for a period of between 200 and 299
days. As of the Cutoff Date $9,867,395.87 total Principal Balance of
Deferred Payment Receivables included in the Receivables had a first
payment that, as of the date of inception of the Receivables, was
deferred for a period of between 100 and 199 days. As of the Cutoff
Date $2,587,992.03 total Principal Balance of Deferred Payment
Receivables included in the Receivables had a first payment that, as
of the date of inception of the Receivables, was deferred for a
period of 99 days or less. In no case will the first payment on a
Deferred Payment Receivable be due later than 480 days after the date
of inception of that Receivable.
(xxxv) Deferred Balloon Payment Receivables. As of
the Cutoff Date, $10,173,376.15 total principal balance of Deferred
Balloon Payment Receivables were originated with a deferral period of
90 days, and $7,887,002.26 total principal balance of Deferred
Balloon Payment Receivables were originated with a deferral period of
180 days.
(xxxvi) 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 recordkeeping. 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.
ARTICLE III - ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
Section 3.1 Duties of Servicer. (a) The Servicer, acting
alone and/or through subservicers as provided in this Section 3.1, shall
administer the Receivables with reasonable care. The Servicer's duties shall
include, but not be limited to, the collection and posting of all payments,
responding to inquiries by Obligors on the Receivables, or by federal, state,
or local governmental authorities, investigating delinquencies, reporting tax
information to Obligors, furnishing monthly and annual statements to the Owner
Trustee and the Indenture Trustee with respect to distributions, providing
collection and repossession services in the event of Obligor default,
coordinating or arranging inspection of Financed Vehicles relating to Final
Payment Receivables at the end of the related Contract term, refinancing or
selling Financed Vehicles relating to Final Payment Receivables at the end of
the related Contract term depending upon the options chosen by the Obligors
and making Advances pursuant to Sections 4.4(a) and (c). The Servicer shall
also administer and enforce all rights and responsibilities of the holder of
the Receivables provided for in the Dealer Agreements, to the extent that such
Dealer Agreements relate to the Receivables, the Financed Vehicles or the
Obligors. In performing its duties as Servicer hereunder, the Servicer will
exercise that degree of skill and attention that the Servicer exercises with
respect to all comparable motor vehicle receivables that it services for
itself or others. Subject to Section 3.2, the Servicer shall follow its
customary standards, policies, practices and procedures in performing its
duties hereunder as Servicer. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered to execute and
deliver, on behalf of itself, the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders, the Noteholders or any one or more of them,
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to
the Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided, however, that notwithstanding the foregoing, the Servicer
shall not, except pursuant to an order from a court of competent jurisdiction,
release an Obligor from payment of any unpaid amount under any Receivable or
waive the right to collect the unpaid balance (including accrued interest) of
any Receivable from the Obligor, except in connection with a de minimis
deficiency, Excess Wear and Tear, Excess Mileage or disposition fees which the
Servicer would not attempt to collect in accordance with its customary
procedures, in which event the Servicer shall indemnify the Trust for such
deficiency, Excess Wear and Tear, Excess Mileage or disposition fee. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Owner
Trustee shall thereupon be deemed to have automatically assigned such
Receivable to the Servicer, which assignment shall be solely for purposes of
collection. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce the Receivable,
the Owner Trustee shall, at the Servicer's expense and direction, take steps
to enforce the Receivable, including bringing suit in its name or the names of
the Indenture Trustee, the Certificateholders, the Noteholders or any of them.
The Owner Trustee shall execute and deliver to the Servicer any powers of
attorney and other documents as shall be prepared by the Servicer and
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer, at its expense,
shall obtain on behalf of the Trust or the Owner Trustee all licenses, if any,
required by the laws of any jurisdiction to be held by the Trust or the Owner
Trustee in connection with ownership of the Receivables, and shall make all
filings and pay all fees as may be required in connection therewith during the
term hereof.
The Servicer may enter into subservicing agreements with one
or more subservicers for the servicing and administration of certain of the
Receivables and may perform its duties as Servicer hereunder utilizing the
employees of MMSA. Notwithstanding anything to the contrary herein, the
Servicer shall remain fully liable hereunder for the performance of the duties
of Servicer, including such duties as may be performed by employees of MMSA or
by any subservicer. In addition, any subservicer shall be and shall remain,
for so long as it is acting as subservicer, an Eligible Servicer, and any fees
paid to such subservicer shall be paid by the Servicer and not out of the
proceeds of the Trust, and any such subservicer shall agree to service the
Receivables in a manner consistent with the terms of this Agreement.
(b) References in this Agreement to actions taken, to be
taken, permitted to be taken, or restrictions on actions permitted to be taken
by the Servicer in servicing the Receivables and other actions taken, to be
taken, permitted to be taken, or restrictions on actions to be taken with
respect to the Trust Property shall include actions taken, to be taken,
permitted to be taken, or restrictions on actions permitted to be taken by a
subservicer on behalf of the Servicer and references herein to payments
received by the Servicer shall include payments received by a subservicer,
irrespective of whether such payments are actually deposited in the Collection
Account by such subservicer. Any such subservicing agreement will contain
terms and provisions substantially identical to the terms and provisions of
this Agreement and such other terms and provisions as are not inconsistent
with this Agreement and as the Servicer and the subservicer have agreed.
(c) The Servicer shall be entitled to terminate any
subservicing agreement in accordance with the terms and conditions of such
subservicing agreement and without any limitation by virtue of this Agreement;
provided, however, that, in the event of termination of any subservicing
agreement by the Servicer, the Servicer shall either act directly as Servicer
of the related Receivables or enter into a subservicing agreement with a
successor subservicer which will be bound by the terms of the related
subservicing agreement.
(d) As a condition to the appointment of any subservicer,
the Servicer shall notify the Owner Trustee, the Indenture Trustee and the
Rating Agencies in writing before such assignment becomes effective and such
subservicer shall be required to execute and deliver an instrument in which it
agrees that, for so long as it acts as subservicer of the Receivables and the
other Trust Property being serviced by it, the covenants, conditions,
indemnities, duties, obligations and other terms and provisions of this
Agreement applicable to the Servicer hereunder shall be applicable to it as
subservicer, that it shall be required to perform its obligations as
subservicer for the benefit of the Trust as if it were Servicer hereunder
(subject, however, to the right of the Servicer to direct the performance of
such obligations in accordance with this Agreement) and that, notwithstanding
any provision of a subservicing agreement to the contrary, such subservicer
shall be directly liable to the Owner Trustee and the Trust (notwithstanding
any failure by the Servicer to perform its duties and obligations hereunder)
for the failure by such subservicer to perform its obligations hereunder or
under any subservicing agreement, and that (notwithstanding any failure by the
Servicer to perform its duties and obligations hereunder) the Owner Trustee
may enforce the provisions of this Agreement and any subservicing agreement
against the subservicer for the benefit of the Trust, without diminution of
such obligations or liabilities by virtue of any subservicing agreement, by
virtue of any indemnification provided thereunder or by virtue of the fact
that the Servicer is primarily responsible hereunder for the performance of
such duties and obligations, as if a subservicer alone were servicing and
administering, under this Agreement, the Receivables and the other Trust
Property being serviced by it under the subservicing agreement.
(e) Notwithstanding any subservicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between
the Servicer or a subservicer or reference to actions taken through such
Persons or otherwise, the Servicer shall remain obligated and liable to the
Trust and the Owner Trustee for the servicing and administering of the
Receivables and the other Trust Property in accordance with the provisions of
this Agreement (including for the deposit of payments received by a
subservicer, irrespective of whether such payments are actually remitted to
the Servicer or deposited in the Collection Account by such subservicer;
provided that if such amounts are so deposited, the Servicer shall have no
further obligation to do so) without diminution of such obligation or
liability by virtue of such subservicing agreements or arrangements or by
virtue of indemnification from a subservicer, to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Receivables and the other Trust Property. The Servicer shall
be entitled to enter into any agreement with a subservicer for indemnification
of the Servicer and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification.
(f) In the event the Servicer for any reason no longer shall
be acting as such (including by reason of the occurrence of an Event of
Servicing Termination), the successor Servicer may, in its discretion,
thereupon assume all of the rights and obligations of the outgoing Servicer
under a subservicing agreement. In such event, the successor Servicer shall be
deemed to have assumed all of the Servicer's interest therein and to have
replaced the outgoing Servicer as a party to such subservicing agreement to
the same extent as if such subservicing agreement had been assigned to the
successor Servicer, except that the outgoing Servicer shall not thereby be
relieved of any liability or obligation on the part of the outgoing Servicer
to the subservicer under such subservicing agreement. The outgoing Servicer
shall, upon request of the Indenture Trustee, but at the expense of the
outgoing Servicer, deliver to the successor Servicer all documents and records
relating to each such subservicing agreement and the Receivables and the other
Trust Property then being serviced thereunder and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the subservicing agreement to the successor
Servicer. In the event that the successor Servicer elects not to assume a
subservicing agreement, such subservicing agreement shall be immediately
cancellable by the successor Servicer upon written notice to the subservicer
and the outgoing Servicer, at its expense, shall cause the subservicer to
deliver to the successor Servicer all documents and records relating to the
Receivables and the other Trust Property being serviced thereunder and all
amounts held (or thereafter received) by such subservicer (together with an
accounting of such amounts) and shall otherwise use its best efforts to effect
the orderly and efficient transfer of servicing of the Receivables and the
other Trust Property being serviced by such subservicer to the successor
Servicer.
(g) The Servicer shall be required to provide a computer
tape or compact disk each month to Lewtan Technologies, Inc. containing
information relating to the Receivables, including the name, address and
telephone number of each Obligor and the balance on the Receivables. Lewtan
Technologies shall provide a copy of the tape or disk to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee
upon the written request of the Indenture Trustee. Lewtan Technologies, Inc.
shall be paid a fee for such services and shall be reimbursed for any expenses
incurred by it in connection with such services. The Servicer shall pay these
amounts from its monthly Servicing Fee.
Section 3.2 Collection and Allocation of Receivable
Payments. (a) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due and shall follow such collection procedures as
it follows with respect to all comparable motor vehicle receivables that it
services for itself or others. The Servicer shall allocate collections between
principal and interest in accordance with the customary servicing practices
and procedures it follows with respect to all comparable motor vehicle
receivables that it services for itself or others. The Servicer shall not
increase or decrease the number or amount of any Scheduled Payment, or the
Amount Financed under a Receivable or the APR of a Receivable, or extend,
rewrite or otherwise modify the payment terms of a Receivable; provided,
however, that:
(i) in the case of a Deferred Payment Receivable or
a Deferred Balloon Payment Receivable upon which the related Obligor
has made one or more partial pre-payments on or prior to the date on
which the first Scheduled Payment is due under the related Contract,
the Servicer may, at any time on or before 90 days after that first
Scheduled Payment is due, modify the terms of the Receivable
including by reducing the amount of each Scheduled Payment; provided,
that the Servicer may not change (x) the APR of such Receivable, and
(y) the date on which the final Scheduled Payment under the
Receivable is due from the date set forth in the related Contract as
the date on which such final Scheduled Payment shall be due (any such
Receivable, a "Modified Receivable"); and
(ii) the Servicer may extend the due date for one
or more payments due on a Receivable for credit-related reasons that
would be acceptable to the Servicer with respect to comparable motor
vehicle receivables that it services for itself and others and in
accordance with its customary standards, policies, practices and
procedures if the cumulative extensions with respect to any
Receivable shall not cause the term of such Receivable to extend
beyond October 31, 2008 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 ten days of receipt
of such request).
(e) If the Obligor under any 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 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 ten 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 and the
Seller, with a copy to the Rating Agencies, a certificate of a Servicing
Officer substantially in the form of Exhibit A hereto (a "Servicer's
Certificate") and attached to a Servicer's report containing all information
necessary to make the transfers and distributions pursuant to Sections 4.3,
4.4, 4.5, 4.6 and 4.7, together with the written statements to be furnished by
the Owner Trustee to Certificateholders pursuant to Section 4.9 and by the
Indenture Trustee to the Noteholders pursuant to Section 4.9 hereof and
Section 6.6 of the Indenture. Upon written request of the Owner Trustee or the
Indenture Trustee, the Servicer also shall separately identify (by account
number of the Receivable as it appears in the related Schedule of Receivables)
in a written notice to the Owner Trustee or the Indenture Trustee, as the case
may be, the Receivables to be repurchased by the Seller or to be purchased by
the Servicer, as the case may be, on the related Payment Date, and, also upon
written request of one of the foregoing parties, each Receivable which became
a Defaulted Receivable during the related Collection Period. The Servicer
shall deliver to the Rating Agencies any information, to the extent it is
available to the Servicer, that the Rating Agencies reasonably request in
order to monitor the Trust.
Section 3.10 Annual Statement as to Compliance; Notice of
Event of Servicing Termination. (a) The Servicer shall deliver to the Owner
Trustee and the Indenture Trustee, on or before March 31 of each year,
commencing March 31, 2002, an Officer's Certificate, stating that (i) a review
of the activities of the Servicer during the preceding calendar year (or such
shorter period, with respect to the first such Officer's Certificate) and of
its performance of its obligations under this Agreement has been made under
such officer's supervision and (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under
this Agreement throughout such year (or such shorter period with respect to
the first such Officer's Certificate), or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate shall be
delivered by the Indenture Trustee to each Noteholder, promptly following the
Indenture Trustee's receipt of such certificate, pursuant to Section 7.4 of
the Indenture. In addition, a copy of such certificate may be obtained by any
Certificateholder by a request in writing to the Owner Trustee or by any
Person certifying that it is a Note Owner by a request in writing to the
Indenture Trustee, in either case addressed to the applicable Corporate Trust
Office. Upon the telephone request of the Owner Trustee, the Indenture Trustee
shall promptly furnish the Owner Trustee a list of Noteholders as of the date
specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and the Rating Agencies, promptly upon having knowledge
thereof, but in no event later than five Business Days thereafter, written
notice in an Officer's Certificate of any event which constitutes or, with the
giving of notice or lapse of time or both, would become, an Event of Servicing
Termination under Section 8.1.
Section 3.11 Annual Independent Certified Public
Accountants' Reports. The Servicer shall cause a firm of independent certified
public accountants (who may also render other services to the Servicer, the
Seller or to MMCA) to deliver to the Owner Trustee and the Indenture Trustee
on or before March 31 of each year, commencing March 31, 2002, a report
addressed to the Board of Directors of the Servicer with respect to the
preceding calendar year (or such shorter period, with respect to the first
such report) to the effect that such firm has audited the financial statements
of the Servicer and issued its report thereon and that such audit (1) was made
in accordance with generally accepted auditing standards, (2) included tests
relating to motor vehicle loans serviced for others in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers
(the "Program"), to the extent the procedures in such Program are applicable
to the servicing obligations set forth in this Agreement, and (3) except as
described in the report, disclosed no exceptions or errors in the records
relating to automobile and sports-utility vehicle loans serviced for others
that such firm is required to report under the Program. Such report shall also
indicate that the firm is independent with respect to the Seller and the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants. A copy of such report shall be
delivered by the Indenture Trustee to each Noteholder, promptly following the
Indenture Trustee's receipt of such report, pursuant to Section 7.4 of the
Indenture. In addition, a copy of such report may be obtained by any
Certificateholder by a request in writing to the Owner Trustee, or by any
Person certifying that it is a Note Owner by a request in writing to the
Indenture Trustee, in either case addressed to the applicable Corporate Trust
Office.
Section 3.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide the Certificateholders, the
Indenture Trustee and the Noteholders with access to the Receivable Files in
the cases where the Certificateholders, the Indenture Trustee or the
Noteholders shall be required by applicable statutes or regulations to have
access to such documentation. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the
offices of the Servicer. Nothing in this Section 3.12 shall affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section 3.12. Any Certificateholder or
Noteholder, by its acceptance of a Certificate or Note, as the case may be,
shall be deemed to have agreed to keep any information obtained by it pursuant
to this Section confidential, except as may be required by applicable law.
Section 3.13 Reports to the Commission. The Servicer shall,
on behalf of the Trust, cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act , and
the rules and regulations of the Commission thereunder. The Seller shall, at
its expense, cooperate in any reasonable request made by the Servicer in
connection with such filings.
Section 3.14 Reports to Rating Agencies. The Servicer shall
deliver to each Rating Agency, at such address as each Rating Agency may
request, a copy of all reports or notices furnished or delivered pursuant to
this Article and a copy of any amendments, supplements or modifications to
this Agreement and any subservicing agreement and any other information
reasonably requested by such Rating Agency to monitor this transaction.
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 4.1 Accounts. (a) The Servicer shall, prior to the
Closing Date, establish and maintain a segregated trust account in the name of
the Indenture Trustee, at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of Bank
of Tokyo-Mitsubishi Trust Company), which shall be designated as the
"Collection Account." The Collection Account shall be held in trust for the
benefit of the Noteholders and the Certificateholders. The Collection Account
shall be under the sole dominion and control of the Indenture Trustee;
provided, that the Servicer may make deposits to and direct the Indenture
Trustee in writing to make withdrawals from the Collection Account in
accordance with the terms of this Agreement, the Indenture and the Trust
Agreement. All monies deposited from time to time in the Collection Account
shall be held by the Indenture Trustee as part of the Trust Property and all
deposits to and withdrawals therefrom shall be made only upon the terms and
conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant to
the first sentence of Section 4.2(a), all amounts held in the Collection
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the bank
or trust company then maintaining the Collection Account, in Permitted
Investments that mature not later than the Business Day immediately prior to
the Payment Date for the Collection Period to which such amounts relate and
such Permitted Investments shall be held to maturity. All interest and other
income (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be withdrawn from the Collection Account at the
written direction of the Servicer and shall be deposited in the Certificate
Distribution Account. In the event that the Collection Account is no longer to
be maintained at the corporate trust department of Bank of Tokyo-Mitsubishi
Trust Company, the Servicer shall, with the Indenture Trustee's or Owner
Trustee's assistance as necessary, cause the Collection Account to be moved to
a Qualified Institution or a Qualified Trust Institution within ten 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 ten 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 ten 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 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 ten 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 (f) 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 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(e) that would require
remittance of the Payaheads to the Payahead Account unless the Owner Trustee
or the Indenture Trustee has received written notice of such event or
circumstance from the Seller or the Servicer in an Officer's Certificate or
from the Holders of Notes 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 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 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 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(e) 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 and 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; and
(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.
(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 Note Payment Account, the Accrued Note
Interest for the Class A Notes;
(iii) to the Note Payment Account, the Accrued Note
Interest for the Class B Notes;
(iv) to the Note Payment Account, the Principal
Distribution Amount;
(v) to the Reserve Account, the amount, if any,
necessary to reinstate the balance in the Reserve Account up to the
Specified Reserve Balance; and
(vi) 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 ten 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 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
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 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 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;
(vi) 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;
(vii) the amounts of the Interest Carryover
Shortfall, if any, for the next Payment Date and the portion thereof
attributable to each Class of Notes;
(viii) the amount of the aggregate Realized Losses,
if any, with respect to the related Collection Period;
(ix) the balance of the Reserve Account on such
Payment Date, after giving effect to changes therein on such Payment
Date;
(x) 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
(xi) 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 (vii) above shall be expressed as a dollar
amount per $1,000 of original principal balance of a Certificate or Note, as
applicable.
Section 4.10 Control of Securities Accounts. Notwithstanding
anything else contained herein, the Trust agrees that each of the Collection
Account, the 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
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, together with the Payahead Account, the Collection
Account, the Note Payment Account and the Reserve Account, the "Trust
Accounts"). Amounts on deposit in the Yield Supplement Account will be used
for the payment of any Yield Supplement Amounts required to be paid on any
Payment Date pursuant to the Yield Supplement Agreement which MMCA has not
paid as of such Payment Date. The Yield Supplement Account shall be under the
sole dominion and control of the Indenture Trustee provided, that the Servicer
may make deposits to and direct the Indenture Trustee to make withdrawals from
the Yield Supplement Account in accordance with this Agreement and the Yield
Supplement Agreement. On the Closing Date, the Seller shall deposit an amount
equal to the Initial Yield Supplement Amount into the Yield Supplement Account
from the net proceeds of the sale of the Notes. 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 ten 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 business trust in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority, and legal right to acquire and own the
Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign business trust in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership
or lease of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and the other Basic Documents
to which it is a party and to carry out their terms. The Seller has full power
and authority to sell and assign the property to be sold and assigned to and
deposited with the Trust and has duly authorized such sale and assignment to
the Trust by all necessary corporate action; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it is a
party have been 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 Optional Purchase
Percentage (expressed as a seven-digit decimal) multiplied by the Initial Pool
Balance, the Servicer shall have the option to purchase the Owner Trust
Estate, other than the 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 fifteenth 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 or the Certificateholders 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.
(b) This Agreement may also be amended from time to time by
the Seller, the Servicer and the Trust with the consent of the Indenture
Trustee, the consent of 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 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 ss. 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 ten 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 Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee
and the Indenture Trustee:
(1) promptly after the execution and delivery of
each amendment to any financing statement, an Opinion of Counsel
either (A) stating that, in the opinion of such Counsel, all
financing statements and continuation statements have been 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 2002, an Opinion of Counsel,
dated as of a date during such 90-day period, either (A) stating
that, in the opinion of such Counsel, all financing statements and
continuation statements have been authorized and filed that are
necessary fully to preserve and protect the interest of the Trust and
the Indenture Trustee in the Receivables, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such
details are given, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to preserve and protect
such interest.
Each Opinion of Counsel referred to in clause (i)(1) or
(i)(2) above shall specify any action necessary (as of the date of such
opinion) to be taken in the following year to preserve and protect such
interest.
(j) The Seller shall, to the extent required by applicable
law, cause the Notes to be registered with the Commission pursuant to Section
12(b) or Section 12(g) of the Exchange Act within the time periods specified
in such sections.
Section 10.3 Representations of the Seller and the
Purchaser. The respective agreements, representations, warranties and other
statements by the Seller and the Purchaser set forth in or made pursuant to
this Agreement shall remain in full force and effect and will survive the
Closing.
Section 10.4 Governing Law. This Agreement shall be
construed in accordance with the laws of the State of New York without
reference to its conflict of laws provisions (other than section 5-1401 of the
general obligations law) and the obligations, rights, and remedies of the
parties hereunder shall be determined in accordance with such laws.
Section 10.5 Notices. All demands, notices, and
communications under this Agreement shall be in writing, personally delivered,
sent via facsimile, overnight courier or mailed by certified mail, return
receipt requested, and shall be deemed to have been duly given upon receipt,
(a) in the case of the Seller or the Servicer, to the agent
for service as specified in Section 10.13 hereof, or at such other address as
shall be designated by the Seller or the Servicer in a written notice to the
Owner Trustee and the Indenture Trustee;
(b) in the case of the Owner Trustee, at the Corporate Trust
Office of the Owner Trustee;
(c) in the case of the Indenture Trustee, at the Corporate
Trust Office of the Indenture Trustee;
(d) in the case of Moody's, at the following address:
Xxxxx'x Investors Service, Inc.
ABS Monitoring Department
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(e) in the case of S&P, at the following address:
Standard & Poor's
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(f) in the case of Fitch, at the following address:
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
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,
as Seller,
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Secretary & Treasurer
MMCA AUTO OWNER TRUST 2001-4
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By: /s/ Xxxxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Senior Financial Services
Officer
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Executive Vice President &
Treasurer
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, as Seller, and MMCA Auto Owner Trust 2001-__ (the
"Sale and Servicing Agreement") (all capitalized terms used herein without
definition have the respective meanings specified in the Sale and Servicing
Agreement), and further certifies that:
(a) The Servicer's report for the period from
__________ to ____________ attached to this certificate is complete
and accurate and contains all information required by Section 3.9 of
the Sale and Servicing Agreement; and
(b) As of the date hereof, no Event of Servicing
Termination or event that with notice or lapse of time or both would
become an Event of Servicing Termination has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature and the
corporate seal of the Company this ___ day of __________, _____.
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
By: ___________________________
Name:
Title:
EXHIBIT B
---------
FORM OF STATEMENT TO NOTEHOLDERS
----------------------------------------------------------------------------------------------------------------------
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Noteholders
MMCA Auto Owner Trust ___-__
July 1, ____ through June 30, _____
Per Original
Aggregate $1,000 Note or
Certificate
----------------------------------------------------------------------------------------------------------------------
I. A. Distribution of Note Principal
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
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
III. Yield Supplement Amount
IV. Total Servicing Fee
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
B. Note Pool Factors
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
C. Certificate Balance
D. Certificate Pool Factor
VI. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
VIII. Principal Balance of Deferred Receivables
IX. Interest Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
X. Principal Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
XI. Aggregate Realized Losses for This Collection Period
XII. Reserve Account Balance on Payment Date
XIII. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased
by Servicer
----------------------------------------------------------------------------------------------------------------------
EXHIBIT C
---------
FORM OF STATEMENT TO CERTIFICATEHOLDERS
----------------------------------------------------------------------------------------------------------------------
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Certificateholders
MMCA Auto Owner Trust ___-__
July 1, ____ through June 30, _____
Per Original
Aggregate $1,000 Note or
Certificate
----------------------------------------------------------------------------------------------------------------------
I. A. Distribution of Note Principal
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
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
III. Yield Supplement Amount
IV. Total Servicing Fee
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
B. Note Pool Factors
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
C. Certificate Balance
D. Certificate Pool Factor
VI. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
VIII. Principal Balance of Deferred Receivables
IX. Interest Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
X. Principal Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
XI. Aggregate Realized Losses for This Collection Period
XII. Reserve Account Balance on Payment Date
XIII. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased
by Servicer
----------------------------------------------------------------------------------------------------------------------
EXHIBIT D
---------
FORM OF YIELD SUPPLEMENT AGREEMENT
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re: MMCA Auto Owner Trust 2001-
Ladies and Gentlemen:
We hereby confirm arrangements made as of the date hereof with you to
be effective upon (i) receipt by us of the enclosed copy of this letter
agreement (as amended, supplemented or otherwise modified and in effect from
time to time, the "Yield Supplement Agreement"), executed by you, and (ii)
execution of the Purchase Agreement referred to below and payment of the
purchase price specified thereunder. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such terms in, or
incorporated by reference into, the Purchase Agreement, dated as of
__________, _____ (as amended, supplemented or otherwise modified and in
effect from time to time, the "Purchase Agreement"), between Mitsubishi Motors
Credit of America, Inc., as seller (the "Seller"), and MMCA Auto Receivables
Trust, as purchaser (the "Purchaser").
1. On or prior to the Determination Date preceding each Payment Date,
the Servicer shall notify the Purchaser and the Seller of the Yield Supplement
Amount for such Payment Date.
2. In consideration for the Purchaser entering into the Purchase
Agreement and the purchase price paid to the Seller for the Receivables under
the Purchase Agreement, we agree to make a payment of the Yield Supplement
Amount to the Purchaser, or to the pledgee of the assignee of the Purchaser
referred to in Section 5 hereof, on the Business Day prior to each Payment
Date.
3. All payments pursuant hereto shall be made by federal wire
transfer (same day) funds or in immediately available funds, to such account
as the Purchaser or the pledgee of the assignee of the Purchaser referred to
in Section 5 hereof, may designate in writing to the Seller, prior to the
relevant Payment Date.
4. Our agreements set forth in this Yield Supplement Agreement are
our primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense and
shall remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstances or condition
whatsoever.
5. Pursuant to the Sale and Servicing Agreement, the Purchaser will
sell, transfer, assign and convey its interest in this Yield Supplement
Agreement to MMCA Auto Owner Trust 2001-__ (the "Trust"), and the Seller
hereby acknowledges and consents to such sale, transfer, assignment and
conveyance. Concurrent with such sale, transfer, assignment and conveyance,
pursuant to the Indenture, the Trust will pledge its rights under this Yield
Supplement Agreement, along with certain other assets of the Trust, to Bank of
Tokyo-Mitsubishi Trust Company, as Indenture Trustee, to secure its
obligations under the Notes and the Indenture, and the Seller hereby
acknowledges and consents to such pledge. The Seller hereby agrees, for the
benefit of the Trust, that following such sale, transfer, assignment,
conveyance and pledge, this Yield Supplement Agreement shall not be amended,
modified or terminated without the consent of Wilmington Trust Company, as
Owner Trustee on behalf of the Trust, and, prior to the payment in full of the
Notes, the Indenture Trustee.
6. This Yield Supplement Agreement will be governed by, and construed
in accordance with, the laws of the State of New York.
7. Except as otherwise provided herein, all notices pursuant to this
Yield Supplement Agreement shall be in writing and shall be effective upon
receipt thereof. All notices shall be directed as set forth below, or to such
other address or to the attention of such other person as the relevant party
shall have designated for such purpose in a written notice.
If to the Purchaser:
-------------------
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Secretary/Treasurer
Telephone: (000) 000-0000
Facsimile: (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
Facsimile: (000) 000-0000
8. This Yield Supplement Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, all
of which shall be deemed to be one and the same document.
If the foregoing satisfactorily sets forth the terms and conditions
of our agreement, please indicate your acceptance thereof by signing in the
space provided below and returning to us the enclosed duplicate original of
this letter.
Very truly yours,
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.,
as Seller
By: ________________________________
Name:
Title:
Agreed and accepted as of the date first above written:
MMCA AUTO RECEIVABLES TRUST,
as Purchaser
By: ____________________________
Name:
Title:
