Exhibit 4.2
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SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 2002-2,
as the Trust
MMCA AUTO RECEIVABLES TRUST,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of June 1, 2002
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TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS AND USAGE.................................................................................1
Section 1.1 Definitions............................................................................1
Section 1.2 Business Day Certificate...............................................................1
ARTICLE II - TRUST PROPERTY.......................................................................................1
Section 2.1 Conveyance of Trust Property...........................................................1
Section 2.2 Representations and Warranties of the Seller as to the Receivables.....................6
Section 2.3 Repurchase upon Breach................................................................12
Section 2.4 Custody of Receivable Files...........................................................12
Section 2.5 Duties of Servicer as Custodian.......................................................13
Section 2.6 Instructions; Authority to Act........................................................14
Section 2.7 Custodian's Indemnification...........................................................14
Section 2.8 Effective Period and Termination......................................................14
ARTICLE III - ADMINISTRATION AND SERVICING OF RECEIVABLES AND TRUST PROPERTY...................................14
Section 3.1 Duties of Servicer....................................................................14
Section 3.2 Collection and Allocation of Receivable Payments......................................17
Section 3.3 Realization upon Receivables..........................................................19
Section 3.4 Physical Damage Insurance.............................................................20
Section 3.5 Maintenance of Security Interests in Financed Vehicles................................20
Section 3.6 Covenants of Servicer.................................................................20
Section 3.7 Purchase by Servicer upon Breach......................................................20
Section 3.8 Servicing Compensation................................................................21
Section 3.9 Servicer's Certificate................................................................21
Section 3.10 Annual Statement as to Compliance; Notice of Event of Servicing Termination...........21
Section 3.11 Annual Independent Certified Public Accountants' Reports..............................22
Section 3.12 Access to Certain Documentation and Information Regarding Receivables.................22
Section 3.13 Reports to the Commission.............................................................23
Section 3.14 Reports to Rating Agencies............................................................23
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS...................23
Section 4.1 Accounts..............................................................................23
Section 4.2 Collections...........................................................................27
Section 4.3 Application of Collections............................................................28
Section 4.4 Advances..............................................................................29
Section 4.5 Additional Deposits...................................................................30
Section 4.6 Allocation of Total Available Funds...................................................31
Section 4.7 Reserve Account.......................................................................32
Section 4.8 Net Deposits..........................................................................34
Section 4.9 Statements to Noteholders and Certificateholders......................................34
Section 4.10 Control of Securities Accounts........................................................35
Section 4.11 Pre-Funding Account...................................................................35
Section 4.12 Negative Carry Account................................................................36
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND THE YIELD SUPPLEMENT ACCOUNT...................................36
Section 5.1 Yield Supplement Letter of Credit and the Yield Supplement Account....................36
ARTICLE VI - THE SELLER..........................................................................................38
Section 6.1 Representations, Warranties and Covenants of Seller...................................38
Section 6.2 Liability of Seller; Indemnities......................................................40
Section 6.3 Merger or Consolidation of, or Assumption of the Obligations of, Seller...............41
Section 6.4 Limitation on Liability of Seller and Others..........................................41
Section 6.5 Seller May Own Notes or Certificates..................................................41
ARTICLE VII - THE SERVICER.......................................................................................42
Section 7.1 Representations and Warranties of Servicer............................................42
Section 7.2 Liability of Servicer; Indemnities....................................................43
Section 7.3 Merger or Consolidation of, or Assumption of the Obligations of, Servicer.............44
Section 7.4 Limitation on Liability of Servicer and Others........................................45
Section 7.5 Servicer Not to Resign................................................................45
Section 7.6 Servicer May Own Notes or Certificates................................................45
ARTICLE VIII - SERVICING TERMINATION.............................................................................46
Section 8.1 Events of Servicing Termination.......................................................46
Section 8.2 Indenture Trustee to Act; Appointment of Successor Servicer...........................47
Section 8.3 Effect of Servicing Transfer..........................................................48
Section 8.4 Notification to Noteholders and Certificateholders....................................48
Section 8.5 Waiver of Past Events of Servicing Termination........................................48
ARTICLE IX - TERMINATION.........................................................................................48
Section 9.1 Optional Purchase of All Receivables......................48Error! Bookmark not defined.
ARTICLE X - MISCELLANEOUS PROVISIONS.............................................................................49
Section 10.1 Amendment.............................................................................49
Section 10.2 Protection of Title to Trust..........................................................50
Section 10.3 Representations of the Seller and the Purchaser.......................................52
Section 10.4 Governing Law.........................................................................52
Section 10.5 Notices...............................................................................53
Section 10.6 Severability of Provisions............................................................53
Section 10.7 Assignment............................................................................54
Section 10.8 Further Assurances....................................................................54
Section 10.9 No Waiver; Cumulative Remedies........................................................54
Section 10.10 Third-Party Beneficiaries.............................................................54
Section 10.11 Actions by Noteholder or Certificateholders...........................................54
Section 10.12 Counterparts..........................................................................55
Section 10.13 Agent for Service.....................................................................55
Section 10.14 No Bankruptcy Petition; Subordination; Claims Against Seller..........................55
Section 10.15 Limitation of Liability of Owner Trustee and Indenture Trustee........................55
SCHEDULES
Schedule of Initial Receivables..........................................................................Schedule A
Locations of Receivable Files............................................................................Schedule B
EXHIBITS
Form of Servicer's Certificate............................................................................Exhibit A
Form of Statement to Noteholders..........................................................................Exhibit B
Form of Statement to Certificateholders...................................................................Exhibit C
Form of Yield Supplement Agreement....................................................................... Exhibit D
Form of Second-Tier Subsequent Assignment.................................................................Exhibit E
SALE AND SERVICING AGREEMENT, dated as of June 1, 2002 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), by and among MMCA AUTO OWNER TRUST 2002-2, a Delaware
business trust (the "Trust"), MMCA AUTO RECEIVABLES TRUST, a Delaware business
trust (the "Seller"), and MITSUBISHI MOTORS CREDIT OF AMERICA, INC., a
Delaware corporation (the "Servicer").
WHEREAS, the Trust desires to purchase portfolios of
receivables arising in connection with motor vehicle retail installment sale
contracts generated by Mitsubishi Motors Credit of America, Inc. in the
ordinary course of its business and sold to the Seller as of the date hereof
and from time to time hereafter;
WHEREAS, the Seller is willing to sell such receivables to
the Trust as of the date hereof and from time to time hereafter; and
WHEREAS, Mitsubishi Motors Credit of America, Inc. is
willing to service such receivables on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
ARTICLE I - DEFINITIONS AND USAGE
Section 1.1 Definitions. Except as otherwise specified herein or as
the context may otherwise require, capitalized terms used but not otherwise
defined herein are defined in Appendix A to the Indenture (the "Indenture"),
dated as of June 1, 2002, between MMCA Auto Owner Trust 2002-2, as issuer, and
Bank of Tokyo-Mitsubishi Trust Company, as indenture trustee (the "Indenture
Trustee"), which also contains rules as to usage that shall be applicable
herein.
Section 1.2 Business Day Certificate. On the Closing Date (with
respect to the calendar year 2002) and thereafter, within 15 days prior to the
end of each succeeding calendar year while this Agreement remains in effect,
the Servicer shall deliver to the Indenture Trustee and to Wilmington Trust
Company, not in its individual capacity but solely as owner trustee (the
"Owner Trustee"), an Officer's Certificate specifying the days on which
banking institutions or trust companies in New York, New York, Wilmington,
Delaware or Los Angeles, California are authorized or obligated by law,
executive order or governmental decree to remain closed.
ARTICLE II - TRUST PROPERTY
Section 2.1 Conveyance of Trust Property. (a) In consideration of the
Trust's delivery to, or upon the written order of, the Seller of authenticated
Notes and Certificates, in authorized denominations in aggregate principal
amounts equal to the initial principal amount of the Notes and the Initial
Certificate Balance, respectively, the Seller hereby irrevocably sells,
transfers, assigns and otherwise conveys to the Trust, without recourse
(subject to the obligations herein), all right, title and interest of the
Seller, whether now owned or hereafter acquired, in, to and under the
following:
(i) the Initial Receivables;
(ii) with respect to Initial Receivables that are Actuarial
Receivables, monies due thereunder after the Initial Cutoff Date
(including Payaheads) and, with respect to Initial Receivables that
are Simple Interest Receivables, monies received thereunder after the
Initial Cutoff Date;
(iii) the security interests in Financed Vehicles granted by
Obligors pursuant to the Initial Receivables and any other interest
of the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to the
Initial Receivables from claims on any physical damage, theft, credit
life or disability insurance policies covering the related Financed
Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to the
Initial Receivables from recourse to Dealers thereon pursuant to
Dealer Agreements;
(vi) all of the Seller's rights to the Receivable Files that
relate to the Initial Receivables;
(vii) the Trust Accounts and all amounts, securities,
financial assets, investments and other property deposited in or
credited to any of the foregoing and all proceeds thereof;
(viii) all of the Seller's rights under the Yield Supplement
Agreement and the Purchase Agreement, including the right of the
Seller to cause MMCA to repurchase Receivables from the Seller;
(ix) all payments and proceeds with respect to the Initial
Receivables held by MMCA;
(x) all property (including the right to receive Liquidation
Proceeds and Recoveries and Financed Vehicles and the proceeds
thereof acquired by the Seller pursuant to the terms of an Initial
Receivable that is a Final Payment Receivable), guarantees and other
collateral securing an Initial Receivable (other than an Initial
Receivable purchased by the Servicer or repurchased by the Seller);
(xi) all rebates of premiums and other amounts relating to
insurance policies and other items financed under the Initial
Receivables in effect as of the Initial Cutoff Date; and
(xii) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of
any of the foregoing.
(b) Subject to satisfaction of the conditions set forth in Section
2.1(d), in consideration of the Indenture Trustee's delivery on or prior to
any Subsequent Transfer Date to the Seller of the amount described in Section
4.11(a) to be delivered to the Seller, the Seller shall, pursuant to a
Second-Tier Subsequent Assignment, irrevocably sell, transfer, assign and
otherwise convey to the Trust, without recourse (subject to the obligations
herein), on each Subsequent Transfer Date, all right, title and interest of
the Seller, whether now owned or hereafter acquired, in, to and under the
following:
(i) the Subsequent Receivables listed on Schedule A to the
related Second-Tier Subsequent Assignment;
(ii) with respect to the Subsequent Receivables that are
Actuarial Receivables, monies due thereunder on or after the related
Subsequent Cutoff Date (including Payaheads) and, with respect to
Subsequent Receivables that are Simple Interest Receivables, monies
received thereunder on or after the related Subsequent Cutoff Date;
(iii) the security interests in Financed Vehicles granted by
Obligors pursuant to the Subsequent Receivables and any other
interest of the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to such
Subsequent Receivables from claims on any physical damage, theft,
credit life or disability insurance policies covering the related
Financed Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to such
Subsequent Receivables from recourse to Dealers thereon pursuant to
Dealer Agreements;
(vi) all of the Seller's rights to the Receivable Files that
relate to such Subsequent Receivables;
(vii) all payments and proceeds with respect to such
Subsequent Receivables held by the Servicer;
(viii) all property (including the right to receive
Liquidation Proceeds and Recoveries and Financed Vehicles and the
proceeds thereof acquired by the Seller pursuant to the terms of a
Subsequent Receivable that is a Final Payment Receivable), guarantees
and other collateral securing a Subsequent Receivable (other than a
Subsequent Receivable purchased by the Servicer or repurchased by the
Seller);
(ix) all of the Seller's rights under the related First-Tier
Subsequent Assignment;
(x) all rebates of premiums and other amounts relating to
insurance policies and other items financed under such Subsequent
Receivables in effect as of the related Subsequent Cutoff Date; and
(xi) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of
any of the foregoing.
(c) It is the intention of the Seller and the Trust that the transfer
of the Trust Property contemplated by Section 2.1(a) and any Second-Tier
Subsequent Assignments executed pursuant to Section 2.1(b) constitute sales of
the Trust Property from the Seller to the Trust, conveying good title to the
Trust Property free and clear of any liens and, in the event of the filing of
a bankruptcy petition by or against the Seller under any bankruptcy or similar
law, that the Trust Property shall not be part of the Seller's estate.
However, in the event that such transfer is deemed to be a pledge, the Seller
hereby grants to the Trust a first priority security interest in all of the
Seller's right, title and interest in, to and under the Trust Property, and
all proceeds thereof, to secure a loan deemed to have been made by the Trust
to the Seller in an amount equal to the sum of the initial principal amount of
the Notes plus accrued interest thereon and the Initial Certificate Balance.
(d) The Seller shall sell, transfer, assign and otherwise convey to
the Trust on any Subsequent Transfer Date the Subsequent Receivables and the
other property and rights related thereto described in Section 2.1(b) only
upon the satisfaction of each of the following conditions on or prior to such
Subsequent Transfer Date:
(i) the Seller shall have provided the Indenture Trustee,
the Owner Trustee and the Rating Agencies (A) written notification of
the addition of such Subsequent Receivables at least five Business
Days prior to the Subsequent Transfer Date and (B) on or prior to the
Subsequent Transfer Date, a statement listing the approximate
aggregate Principal Balance of such Subsequent Receivables as of the
related Subsequent Cutoff Date and any other information reasonably
requested by any of the foregoing;
(ii) the Seller shall have delivered to each of the Owner
Trustee and the Indenture Trustee a duly executed written assignment
in substantially the form of Exhibit E hereto (the "Second-Tier
Subsequent Assignment"), which shall include a Schedule A attached
thereto listing the related Subsequent Receivables;
(iii) the Seller shall, to the extent required by Section
4.2, have deposited in the Collection Account all collections in
respect of the Subsequent Receivables that are property of the Trust;
(iv) as of such Subsequent Transfer Date: (A) the Seller
shall not be insolvent and shall not become insolvent as a result of
the transfer of Subsequent Receivables on such Subsequent Transfer
Date, (B) the Seller shall not intend to incur or believe that it
would incur debts that would be beyond the Seller's ability to pay as
such debts matured, (C) such transfer shall not be made by the Seller
with actual intent to hinder, delay or defraud any Person and (D) the
assets of the Seller shall not constitute unreasonably small capital
to carry out its business as conducted;
(v) the applicable Subsequent Reserve Account Deposit for
such Subsequent Transfer Date shall have been made;
(vi) the applicable Subsequent Payahead Account Deposit for
such Subsequent Transfer Date shall have been made;
(vii) the applicable Subsequent Yield Supplement Account
Deposit for such Subsequent Transfer Date shall have been made;
(viii) the Receivables, including the Subsequent Receivables
to be conveyed to the Trust on the Subsequent Transfer Date, shall
meet the following criteria as of the related Subsequent Cutoff Date:
(A) the weighted average number of payments remaining until the
maturity of the Receivables will not be more than 66 payments; (B)
the aggregate principal balance of the Last Scheduled Payments as a
percentage of the Pool Balance will not be greater than 19.19%; (C)
if any Receivable is a Deferred Payment Receivable, the deferral
period will not extend for more than 450 days after origination of
that Receivable; (D) the weighted average FICO score of the obligors
on the Receivables will not be less than 654; (E) the aggregate
principal balance of the Receivables relating to new automobiles and
sports utility vehicles will be at least 97.43%, substantially all of
which will be manufactured or distributed by Mitsubishi Motors; (F)
the aggregate principal balance of the limited credit experience
Receivables as a percentage of the aggregate principal balance of the
Receivables will not be more than 7.37%; and (G) the weighted average
annual percentage rate of the Receivables will be at least 7.804%;
(ix) the Subsequent Receivables to be conveyed to the Trust
on the Subsequent Transfer Date will have a weighted average deferral
period, as of the related Subsequent Cutoff Date, that is less than
or substantially the same as the weighted average deferral period of
the Initial Receivables as of the Initial Cutoff Date;
(x) the Pre-Funding Period shall not have terminated prior
to the Subsequent Transfer Date;
(xi) each of the representations and warranties made by the
Seller pursuant to Sections 2.2 and 6.1 of this Agreement and by MMCA
pursuant to Section 3.2 of the Purchase Agreement, with respect to
the Seller, MMCA or the Subsequent Receivables, as applicable, shall
be true and correct as of the date as of which such representations
and warranties are made;
(xii) the Seller shall, at its own expense, on or prior to
the Subsequent Transfer Date, indicate in its computer files that the
Subsequent Receivables have been sold to the Trust pursuant to this
Agreement and the related Second-Tier Subsequent Assignment and
deliver to the Owner Trustee the related Schedule of Subsequent
Receivables certified by an officer of the Seller to be true, correct
and complete;
(xiii) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Trust in the
Trust Property and the first perfected security interest of the
Indenture Trustee in the Collateral;
(xiv) no selection procedures believed by the Seller to be
adverse to the interests of the Trust, the Noteholders or the
Certificateholders shall have been utilized in selecting the
Subsequent Receivables;
(xv) the addition of the Subsequent Receivables will not
result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(xvi) the Seller shall have delivered to the Owner Trustee,
the Indenture Trustee and the Rating Agencies an Opinion of Counsel
relating to the security interests of the Owner Trustee and the
Indenture Trustee in the Subsequent Receivables in substantially the
form of the Opinion of Counsel delivered the Owner Trustee, the
Indenture Trustee and the Rating Agencies regarding such matters on
the Closing Date;
(xvii) the Seller shall have delivered to the Owner Trustee
and the Indenture Trustee an Officer's Certificate confirming the
satisfaction of each condition specified in this Section 2.1(d)
(substantially in the form attached as Annex A to the form of
Second-Tier Subsequent Assignment attached hereto as Exhibit E);
(xviii) all the conditions to the transfer of the Subsequent
Receivables by MMCA to the Seller specified in Section 4.1(b) of the
Purchase Agreement shall be satisfied; and
(xix) the Servicer shall have provided to each of the Trust
and the Indenture Trustee the Officer's Certificate required to be
provided by the Servicer pursuant to Section 2.4.
(e) The sales, transfers, assignments and conveyances of the Trust
Property made under Section 2.1(a) shall not constitute and are not intended
to result in an assumption by the Trust of any obligation of the Seller to the
Obligors, the Dealers or any other Person in connection with the Receivables
and the other Trust Property or any agreement, document or instrument related
thereto.
Section 2.2 Representations and Warranties of the Seller as to the
Receivables. The Seller makes the following representations and warranties as
to the Receivables on which the Trust relies in accepting the Receivables.
Such representations and warranties speak as of the execution and delivery of
this Agreement in the case of the Initial Receivable and as of the applicable
Subsequent Transfer Date in the case of the Subsequent Receivables, except in
each case to the extent otherwise provided in the following representations
and warranties, but shall survive the sale, transfer and assignment of the
Receivables to the Trust and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(i) Characteristics of Receivables. Each Receivable (a)
shall have been originated (x) in the United States of America by a
Dealer for the consumer or commercial sale of a Financed Vehicle in
the ordinary course of such Dealer's business or (y) by MMCA in
connection with the refinancing of a motor vehicle retail installment
sale contract of the type described in subclause (x) above, shall
have been fully and properly executed by the parties thereto, shall
have been purchased by the Seller from MMCA, which in turn shall have
purchased such Receivable from such Dealer under an existing Dealer
Agreement with MMCA (unless such Receivable was originated by MMCA in
connection with a refinancing), and shall have been validly assigned
by such Dealer to MMCA in accordance with its terms (unless such
Receivable was originated by MMCA in connection with a refinancing),
which in turn shall have been validly assigned by MMCA to the Seller
in accordance with its terms, (b) shall have created or shall create
a valid, binding, subsisting and enforceable first priority security
interest in favor of MMCA on the related Financed Vehicle, which
security interest has been validly assigned by MMCA to the Seller,
which in turn shall be validly assigned by the Seller to the Trust
and by the Trust to the Indenture Trustee, (c) shall contain
customary and enforceable provisions such that the rights and
remedies of the holder thereof shall be adequate for realization
against the collateral of the benefits of the security, (d) in the
case of Standard Receivables, shall provide for monthly payments that
fully amortize the Amount Financed by maturity of the Receivable and
yield interest at the APR, (e) in the case of Balloon Payment
Receivables and Final Payment Receivables, shall provide for a series
of fixed level monthly payments and a larger payment due after such
level monthly payments that fully amortize the Amount Financed by
maturity and yield interest at the APR, (f) shall provide for, in the
event that such contract is prepaid, a prepayment that fully pays the
Principal Balance and all accrued and unpaid interest thereon, (g) is
a retail installment sale contract, (h) is secured by a new or used
automobile or sports-utility vehicle and (i) is an Actuarial
Receivable or a Simple Interest Receivable (and may also be a Balloon
Payment Receivable or a Final Payment Receivable).
(ii) Schedule of Receivables. The information set forth in
the related Schedule of Receivables shall be true and correct in all
material respects as of the opening of business on the related Cutoff
Date and no selection procedures believed to be adverse to the
Noteholders or the Certificateholders shall have been utilized in
selecting the Receivables from those receivables which meet the
criteria contained herein. The compact disk or other listing
regarding the Receivables made available to the Trust and its assigns
(which compact disk or other listing is required to be delivered as
specified herein) is true and correct in all respects.
(iii) Compliance with Law. Each Receivable and the sale of
the related Financed Vehicle shall have complied, at the time it was
originated or made, and shall comply on the Closing Date (with
respect to each Initial Receivable) or the related Subsequent
Transfer Date (with respect to each Subsequent Receivable) in all
material respects with all requirements of applicable Federal, state,
and local laws, and regulations thereunder, including, without
limitation, usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Fair
Credit Billing Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the
Federal Reserve Board's Regulations B and Z, the Soldiers' and
Sailors' Civil Relief Act of 1940, the Texas Consumer Credit Code,
and State adaptations of the Uniform Consumer Credit Code, and other
consumer credit laws and equal credit opportunity and disclosure
laws.
(iv) Binding Obligation. Each Receivable shall represent the
genuine, legal, valid and binding payment obligation in writing of
the Obligor, enforceable by the holder thereof in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general principles
of equity.
(v) No Government Obligor. None of the Receivables is due
from the United States of America or any state or from any agency,
department or instrumentality of the United States of America or any
state.
(vi) Security Interest in Financed Vehicle. Immediately
prior to the sale, assignment, and transfer thereof pursuant to the
Purchase Agreement, each Receivable shall be secured by a validly
perfected first priority security interest in the related Financed
Vehicle in favor of MMCA as secured party and, at such time as
enforcement of such security interest is sought, there shall exist a
valid, subsisting and enforceable first priority perfected security
interest in such Financed Vehicle for the benefit of the Trust
(subject to any statutory or other lien arising by operation of law
after the Closing Date (with respect to each Initial Receivable) or
the related Subsequent Transfer Date (with respect to each Subsequent
Receivable) which is prior to such security interest), or all
necessary and appropriate action with respect to such Receivables
shall have been taken to perfect a first priority security interest
in such Financed Vehicle for the benefit of the Trust.
(vii) Receivables in Force. No Receivable shall have been
satisfied, subordinated, or rescinded, nor shall any Financed Vehicle
have been released from the Lien granted by the related Receivable in
whole or in part, which security interest shall be assignable by MMCA
to the Seller and by the Seller to the Trust.
(viii) No Waiver. No provision of a Receivable shall have
been waived in such a manner that such Receivable fails to meet all
of the representations and warranties made by the Seller in this
Section 2.2 with respect thereto.
(ix) No Defenses. No right of rescission, setoff,
counterclaim, or defense shall have been asserted or threatened with
respect to any Receivable.
(x) No Liens. To the best of the Seller's knowledge, no
liens or claims shall have been filed for work, labor, or materials
relating to a Financed Vehicle that shall be liens prior to, or equal
or coordinate with, the security interest in the Financed Vehicle
granted by the Receivable.
(xi) No Default; Repossession. Except for payment defaults
continuing for a period of not more than 30 days or payment defaults
of 10% or less of a Scheduled Payment, in each case as of the related
Cutoff Date, or the failure of the Obligor to maintain satisfactory
physical damage insurance covering the Financed Vehicle, no default,
breach, violation, or event permitting acceleration under the terms
of any Receivable shall have occurred; no continuing condition that
with notice or the lapse of time or both would constitute a default,
breach, violation, or event permitting acceleration under the terms
of any Receivable shall have arisen; the Seller shall not have waived
any of the foregoing; and no Financed Vehicle shall have been
repossessed as of the related Cutoff Date.
(xii) Insurance. Each Contract shall require the related
Obligor to maintain physical damage insurance (which insurance shall
not be force placed insurance) covering the Financed Vehicle, in the
amount determined by MMCA in accordance with its customary
procedures.
(xiii) Title. It is the intention of the Seller that each
transfer and assignment of the Receivables herein contemplated
constitute a sale of such Receivables from the Seller to the Trust
and that the beneficial interest in, and title to, such Receivables
not be part of the Seller's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy
law. No Receivable has been sold, transferred, assigned, or pledged
by the Seller to any Person other than the Trust. Immediately prior
to each transfer and assignment of the Receivables herein
contemplated, the Seller had good and marketable title to such
Receivables free and clear of all Liens, encumbrances, security
interests, and rights of others and, immediately upon the transfer
thereof, the Trust shall have good and marketable title to such
Receivables, free and clear of all Liens, encumbrances, security
interests, and rights of others; and the transfer has been perfected
by all necessary action under the Relevant UCC.
(xiv) Valid Assignment. No Receivable shall have been
originated in, or shall be subject to the laws of, any jurisdiction
under which the sale, transfer, and assignment of such Receivable
under this Agreement or the Indenture or pursuant to transfers of the
Certificates shall be unlawful, void, or voidable. The Seller has not
entered into any agreement with any obligor that prohibits, restricts
or conditions the assignment of any portion of the Receivables.
(xv) All Filings Made. All filings (including, without
limitation, filings under the Relevant UCC) necessary in any
jurisdiction to give the Trust a first priority perfected security
interest in the Receivables, and to give the Indenture Trustee a
first priority perfected security interest therein, shall be made
within 10 days of the Closing Date (with respect to the Initial
Receivables) or 10 days of the related Subsequent Transfer Date (with
respect to the Subsequent Receivables).
(xvi) Chattel Paper. Each Receivable constitutes "chattel
paper" as defined in the Relevant UCC.
(xvii) One Original. There shall be only one original
executed copy of each Receivable in existence.
(xviii) Principal Balance. Each Receivable had an original
principal balance (net of unearned precomputed finance charges) of
not more than $60,000, and a remaining Principal Balance as of the
related Cutoff Date of not less than $100.
(xix) No Bankrupt Obligors. No Receivable was due from an
Obligor who, as of the related Cutoff Date, was the subject of a
proceeding under the Bankruptcy Code of the United States or was
bankrupt.
(xx) New and Used Vehicles. Approximately 97.43% of the
Initial Pool Balance, constituting approximately 95.52% of the total
number of the Initial Receivables, relate to new automobiles and
sports-utility vehicles, substantially all of which were manufactured
or distributed by Mitsubishi Motors. Approximately 2.41% of the
Initial Pool Balance, constituting approximately 4.07% of the total
number of Initial Receivables, relate to used automobiles and
sports-utility vehicle, substantially all of which were manufactured
or distributed by Mitsubishi Motors. Approximately 0.15% of the
Initial Pool Balance, constituting approximately 0.40% of the total
number of Initial Receivables, relate to program automobiles and
sports-utility vehicles, substantially all of which were manufactured
or distributed by Mitsubishi Motors. Approximately 0.01% of the
Initial Pool Balance, constituting approximately 0.01% of the total
number of Initial Receivables, relate to other used automobiles and
sports-utility vehicles.
(xxi) Origination. Each Receivable shall have an origination
date during or after January 27, 1999.
(xxii) Maturity of Receivables. Each Receivable shall have,
as of the related Cutoff Date, not more than 66 remaining Scheduled
Payments due under the Receivable.
(xxiii) Weighted Average Maturity of Receivables. As of the
Initial Cutoff Date, the weighted average number of Scheduled
Payments remaining until the maturity of the Initial Receivables
shall be not more than 66 Scheduled Payments. As of the related
Subsequent Cutoff Date, the weighted average number of Scheduled
Payments remaining until the maturity of any Subsequent Receivables
transferred to the Trust on the same Subsequent Transfer Date shall
be not more than 66 Scheduled Payments.
(xxiv) Weighted Average Deferral Period. With respect to
Subsequent Receivables transferred to the Issuer on the related
Subsequent Transfer Date, the weighted average deferral period will
be less than or substantially the same as the weighted average
deferral period of the Initial Receivables as of the Initial Cutoff
Date.
(xxv) Annual Percentage Rate. Each Receivable shall have an
APR of at least 0% and not more than 30%.
(xxvi) Scheduled Payments. No Receivable shall have a
payment of which more than 10% of such payment is more than 30 days
overdue as of the related Cutoff Date.
(xxvii) Location of Receivable Files. The Receivable Files
shall be kept at one or more of the locations listed in Schedule B
hereto.
(xxviii) Capped Receivables and Simple Interest Receivables.
Except to the extent that there has been no material adverse effect
on Noteholders or Certificateholders, each Capped Receivable has been
treated consistently by the Seller and the Servicer as a Simple
Interest Receivable and payments with respect to each Simple Interest
Receivable have been allocated consistently in accordance with the
Simple Interest Method.
(xxix) Agreement. The representations and warranties of the
Seller in Section 6.1 are true and correct.
(xxx) Other Data. The tabular data and the numerical data
relating to the characteristics of the Receivables contained in the
Prospectus (as defined in the Purchase Agreement) are true and
correct in all material respects.
(xxxi) Last Scheduled Payments. The aggregate principal
balance of the Last Scheduled Payments of Balloon Payment Receivables
and Final Payment Receivables that are Initial Receivables, as a
percentage of the Initial Pool Balance as of the Initial Cutoff Date,
shall be not greater than 19.19%. The aggregate principal balance of
the Last Scheduled Payments of Balloon Payment Receivables and Final
Payment Receivables that are Subsequent Receivables sold to the
Purchaser on a Subsequent Transfer Date, as of the related Subsequent
Cutoff Date, as a percentage of the aggregate principal balance of
all of such Subsequent Receivables as of such related Subsequent
Cutoff Date, shall be not greater than 19.19%.
(xxxii) Receivable Yield Supplement Amounts. An amount equal
to the sum of all projected Yield Supplement Amounts for all future
Payment Dates with respect to each Deferred Payment Receivable and
each Deferred Balloon Payment Receivable, assuming that no
prepayments are made on the Deferred Payment Receivable or the
Deferred Balloon Payment Receivable, as the case may be, has been
deposited to the Yield Supplement Account on or prior to the Closing
Date or the related Subsequent Transfer Date, as applicable.
(xxxiii) Prepaid Receivables. No Receivable shall have been
pre-paid by more than six monthly payments as of the related Cutoff
Date.
(xxxiv) Limited Credit Experience. The aggregate principal
balance of the Receivables on which the Obligor has limited credit
experience, as a percentage of the aggregate principal balance of all
Receivables, in each case as of the Cutoff Date, shall be not greater
than 7.37%.
(xxxv) Deferred Payment Receivables. As of the Initial
Cutoff Date, $78,078,438.91 total Principal Balance of Deferred
Payment Receivables included in the Initial Receivables had a first
payment that, as of the date of inception of the Receivable, was
deferred for 300 days or greater. As of the Initial Cutoff Date,
$112,584,829.52 total Principal Balance of Deferred Payment
Receivables included in the Initial Receivables had a first payment
that, as of the date of inception of the Receivable, was deferred for
a period of between 200 and 299 days. As of the Initial Cutoff Date
$29,443,760.83 total Principal Balance of Deferred Payment
Receivables included in the Initial Receivables had a first payment
that, as of the date of inception of the Receivable, was deferred for
a period of between 100 and 199 days. As of the Initial Cutoff Date
$14,244,082.54 total Principal Balance of Deferred Payment
Receivables included in the Initial Receivables had a first payment
that, as of the date of inception of the Receivable, was deferred for
a period of 99 days or less. In no case will the first payment on a
Deferred Payment Receivable be due later than 480 days after the date
of inception of that Receivable.
(xxxvi) Long Deferment Period Receivables. As of the Initial
Cutoff Date $78,078,438.91 total Principal Balance of Deferred
Payment Receivables included in the Initial Receivables were Long
Deferment Period Receivables.
(xxxvii) Deferred Balloon Payment Receivables. As of the
Initial Cutoff Date, $34,095,044.30 total principal balance of
Deferred Balloon Payment Receivables were originated with a deferral
period of 90 or 180 days.
(xxxviii) Modified Receivables. The APR of any Modified
Receivable is equal to the APR of the related Deferred Payment
Receivable. The date on which the final Scheduled Payment is due on a
Modified Receivable is not different than the date set forth in the
related Contract as the date on which the final Scheduled Payment
under such Receivable is due. No Deferred Payment Receivable became a
Modified Receivable after 90 days following the date the first
Scheduled Payment on the Receivable was due.
Section 2.3 Repurchase upon Breach. The Seller, the Servicer, or the
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement, the Indenture Trustee and MMCA promptly, in writing, upon the
discovery of any breach or failure to be true of the representations and
warranties made by the Seller pursuant to Section 2.2. If the breach or
failure shall not have been cured by the close of business on the last day of
the Collection Period which includes the 60th day after the date on which the
Seller becomes aware of, or receives written notice from the Owner Trustee or
the Servicer of, such breach or failure, and such breach or failure materially
and adversely affects the interest of the Trust in a Receivable, the Seller
shall repurchase from the Trust such Receivable, on the Payment Date
immediately following such Collection Period. In consideration of the
repurchase of a Receivable hereunder, the Seller shall remit the Purchase
Amount of such Receivable in the manner specified in Section 4.5(a). The sole
remedy of the Trust, the Owner Trustee, the Indenture Trustee, the Noteholders
and the Certificateholders with respect to a breach or failure to be true of
the representations and warranties made by the Seller pursuant to Section 2.2
shall be to require the Seller to repurchase Receivables pursuant to this
Section 2.3 and to enforce the obligation of MMCA to the Seller to repurchase
such Receivable pursuant to the Purchase Agreement. Neither the Owner Trustee
nor the Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase
of any Receivable pursuant to this Section 2.3 or the eligibility of any
Receivable for purposes of this Agreement.
Section 2.4 Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Trust, upon
the execution and delivery of this Agreement, hereby revocably appoints the
Servicer as its agent, and the Servicer hereby accepts such appointment, to
act as custodian on behalf of the Trust and the Indenture Trustee of the
following documents or instruments, which are hereby constructively delivered
to the Indenture Trustee, as pledgee of the Trust pursuant to the Indenture
(or, in the case of the Subsequent Receivables, will as of the applicable
Subsequent Transfer Date be constructively delivered to the Indenture Trustee,
as pledgee of the Trust pursuant to the Indenture), with respect to each
Receivable (collectively, a "Receivable File"):
(i) the single original of the Receivable;
(ii) the original credit application fully executed by the
Obligor or a photocopy thereof or a record thereof on a computer file
tape, microfiche or other electronic medium;
(iii) the original certificate of title or such other
documents that the Servicer or MMCA shall keep on file, in accordance
with its customary practices and procedures, evidencing the security
interest of MMCA in the Financed Vehicle;
(iv) documents evidencing the existence, at the time of
origination of the Receivable, of any insurance covering the Financed
Vehicle; and
(v) any and all other documents (including any computer
tape, microfiche or other electronic medium) that the Servicer or the
Seller shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor, or a Financed
Vehicle.
On the Closing Date (with respect to the Initial Receivables) and
each Subsequent Transfer Date (with respect to the related Subsequent
Receivables), the Servicer shall provide an Officer's Certificate to the Trust
and the Indenture Trustee confirming that the Servicer has received, on behalf
of the Trust and the Indenture Trustee, all the documents and instruments
necessary for the Servicer to act as the agent of the Trust and the Indenture
Trustee for the purposes set forth in this Section 2.4, including the
documents referred to herein, and the Trust, the Owner Trustee and the
Indenture Trustee are hereby authorized to rely on such Officer's Certificate.
Section 2.5 Duties of Servicer as Custodian.(a)Safekeeping. The
Servicer, in its capacity as custodian, shall hold the Receivable Files for
the benefit of the Trust and the Indenture Trustee and maintain such accurate
and complete accounts, records, and computer systems pertaining to each
Receivable File as shall enable the Servicer and the Trust to comply with the
terms and provisions of this Agreement, and the Indenture Trustee to comply
with the terms and conditions of the Indenture. In performing its duties as
custodian, the Servicer shall act with reasonable care, using that degree of
skill and attention that the Servicer exercises with respect to the receivable
files relating to all comparable motor vehicle receivables that the Servicer
services for itself or others. In accordance with its customary practices and
procedures with respect to its retail installment sale contracts, the Servicer
shall conduct, or cause to be conducted, periodic audits of the Receivable
Files held by it under this Agreement, and of the related accounts, records,
and computer systems, in such a manner as shall enable the Trust or the
Indenture Trustee to verify the accuracy of the Servicer's record keeping. The
Servicer shall promptly report to the Owner Trustee and the Indenture Trustee
any failure on its part to hold the Receivable Files and maintain its
accounts, records, and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed
to require an initial review or any periodic review by the Trust, the Owner
Trustee or the Indenture Trustee of the Receivable Files and none of the
Trust, the Owner Trustee and the Indenture Trustee shall be liable or
responsible for any action or failure to act by the Servicer in its capacity
as custodian hereunder.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B to this
Agreement, or at such other office as shall be specified to the Trust and the
Indenture Trustee by written notice not later than 90 days after any change in
location. The Servicer shall make available to the Trust and the Indenture
Trustee or its duly authorized representatives, attorneys, or auditors a list
of locations of the Receivable Files, and the related accounts, records, and
computer systems maintained by the Servicer at such times as the Trust or the
Indenture Trustee shall instruct.
(c) Release of Documents. Upon written instructions from the
Indenture Trustee, the Servicer shall release any document in the Receivable
Files to the Indenture Trustee, the Indenture Trustee's agent, or the
Indenture Trustee's designee, as the case may be, at such place or places as
the Indenture Trustee may designate, as soon thereafter as is practicable. Any
document so released shall be handled by the Indenture Trustee with due care
and returned to the Servicer for safekeeping as soon as the Indenture Trustee
or its agent or designee, as the case may be, shall have no further need
therefor.
(d) Title to Receivables. The Servicer agrees that, in respect of any
Receivable held by the Servicer as custodian hereunder, the Servicer will not
at any time have or in any way attempt to assert any interest in such
Receivable or the related Receivable File, other than for collecting or
enforcing the Receivable for the benefit of the Trust and that the entire
equitable interest in such Receivable and the related Receivable File shall at
all times be vested in the Trust.
Section 2.6 Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Responsible Officer
of the Indenture Trustee. A certified copy of excerpts of authorizing
resolutions of the Board of Directors of the Indenture Trustee shall
constitute conclusive evidence of the authority of any such Responsible
Officer to act and shall be considered in full force and effect until receipt
by the Servicer of written notice to the contrary given by the Indenture
Trustee.
Section 2.7 Custodian's Indemnification. The Servicer, in its
capacity as custodian, shall indemnify and hold harmless the Trust, the Owner
Trustee and the Indenture Trustee and each of their respective officers,
directors, employees and agents from and against any and all liabilities,
obligations, losses, compensatory damages, payments, costs or expenses
(including legal fees if any) of any kind whatsoever that may be imposed on,
incurred, or asserted against the Trust, the Owner Trustee and the Indenture
Trustee or any of their respective officers, directors, employees and agents
as the result of any act or omission by the Servicer relating to the
maintenance and custody of the Receivable Files; provided, however, that the
Servicer shall not be liable hereunder to the Owner Trustee to the extent, but
only to the extent, that such liabilities, obligations, losses, compensatory
damages, payments, costs or expenses result from the willful misfeasance, bad
faith, or negligence of the Owner Trustee and shall not be liable hereunder to
the Indenture Trustee to the extent, but only to the extent, that such
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses result from the willful misfeasance, bad faith, or negligence of the
Indenture Trustee.
Section 2.8 Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
and shall continue in full force and effect until terminated pursuant to this
Section 2.8. If the Servicer shall resign as Servicer under Section 7.5, or if
all of the rights and obligations of the Servicer shall have been terminated
under Section 8.1, the appointment of the Servicer as custodian hereunder may
be terminated by the Indenture Trustee or by the Holders of Notes evidencing
not less than 25% of the principal amount of the then Outstanding Notes or,
with the consent of Holders of Notes evidencing not less than 25% of the
principal amount of the then Outstanding Notes, by the Owner Trustee or by
Holders of Certificates evidencing not less than 25% of the Certificate
Balance, in the same manner as the Indenture Trustee or such Holders may
terminate the rights and obligations of the Servicer under Section 8.1. As
soon as practicable after any termination of such appointment, the Servicer
shall deliver, or cause to be delivered, the Receivable Files and the related
accounts and records maintained by the Servicer to the Indenture Trustee, the
Indenture Trustee's agent or the Indenture Trustee's designee at such place or
places as the Indenture Trustee may reasonably designate.
ARTICLE III - ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
Section 3.1 Duties of Servicer. (a) The Servicer, acting alone and/or
through subservicers as provided in this Section 3.1, shall administer the
Receivables with reasonable care. The Servicer's duties shall include, but not
be limited to, the collection and posting of all payments, responding to
inquiries by Obligors on the Receivables, or by federal, state, or local
governmental authorities, investigating delinquencies, reporting tax
information to Obligors, furnishing monthly and annual statements to the Owner
Trustee and the Indenture Trustee with respect to distributions, providing
collection and repossession services in the event of Obligor default,
coordinating or arranging inspection of Financed Vehicles relating to Final
Payment Receivables at the end of the related Contract term, refinancing or
selling Financed Vehicles relating to Final Payment Receivables at the end of
the related Contract term depending upon the options chosen by the Obligors
and making Advances pursuant to Sections 4.4(a) and (c). The Servicer shall
also administer and enforce all rights and responsibilities of the holder of
the Receivables provided for in the Dealer Agreements, to the extent that such
Dealer Agreements relate to the Receivables, the Financed Vehicles or the
Obligors. In performing its duties as Servicer hereunder, the Servicer will
exercise that degree of skill and attention that the Servicer exercises with
respect to all comparable motor vehicle receivables that it services for
itself or others. Subject to Section 3.2, the Servicer shall follow its
customary standards, policies, practices and procedures in performing its
duties hereunder as Servicer. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered to execute and
deliver, on behalf of itself, the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders, the Noteholders or any one or more of them,
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to
the Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided, however, that notwithstanding the foregoing, the Servicer
shall not, except pursuant to an order from a court of competent jurisdiction,
release an Obligor from payment of any unpaid amount under any Receivable or
waive the right to collect the unpaid balance (including accrued interest) of
any Receivable from the Obligor, except in connection with a de minimis
deficiency, Excess Wear and Tear, Excess Mileage or disposition fees which the
Servicer would not attempt to collect in accordance with its customary
procedures, in which event the Servicer shall indemnify the Trust for such
deficiency, Excess Wear and Tear, Excess Mileage or disposition fee. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Owner
Trustee shall thereupon be deemed to have automatically assigned such
Receivable to the Servicer, which assignment shall be solely for purposes of
collection. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce the Receivable,
the Owner Trustee shall, at the Servicer's expense and direction, take steps
to enforce the Receivable, including bringing suit in its name or the names of
the Indenture Trustee, the Certificateholders, the Noteholders or any of them.
The Owner Trustee shall execute and deliver to the Servicer any powers of
attorney and other documents as shall be prepared by the Servicer and
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer, at its expense,
shall obtain on behalf of the Trust or the Owner Trustee all licenses, if any,
required by the laws of any jurisdiction to be held by the Trust or the Owner
Trustee in connection with ownership of the Receivables, and shall make all
filings and pay all fees as may be required in connection therewith during the
term hereof.
The Servicer may enter into subservicing agreements with one or more
subservicers for the servicing and administration of certain of the
Receivables and may perform its duties as Servicer hereunder utilizing the
employees of MMSA. Notwithstanding anything to the contrary herein, the
Servicer shall remain fully liable hereunder for the performance of the duties
of Servicer, including such duties as may be performed by employees of MMSA or
by any subservicer. In addition, any subservicer shall be and shall remain,
for so long as it is acting as subservicer, an Eligible Servicer, and any fees
paid to such subservicer shall be paid by the Servicer and not out of the
proceeds of the Trust, and any such subservicer shall agree to service the
Receivables in a manner consistent with the terms of this Agreement.
(b) References in this Agreement to actions taken, to be taken,
permitted to be taken, or restrictions on actions permitted to be taken by the
Servicer in servicing the Receivables and other actions taken, to be taken,
permitted to be taken, or restrictions on actions to be taken with respect to
the Trust Property shall include actions taken, to be taken, permitted to be
taken, or restrictions on actions permitted to be taken by a subservicer on
behalf of the Servicer and references herein to payments received by the
Servicer shall include payments received by a subservicer, irrespective of
whether such payments are actually deposited in the Collection Account by such
subservicer. Any such subservicing agreement will contain terms and provisions
substantially identical to the terms and provisions of this Agreement and such
other terms and provisions as are not inconsistent with this Agreement and as
the Servicer and the subservicer have agreed.
(c) The Servicer shall be entitled to terminate any subservicing
agreement in accordance with the terms and conditions of such subservicing
agreement and without any limitation by virtue of this Agreement; provided,
however, that, in the event of termination of any subservicing agreement by
the Servicer, the Servicer shall either act directly as Servicer of the
related Receivables or enter into a subservicing agreement with a successor
subservicer which will be bound by the terms of the related subservicing
agreement.
(d) As a condition to the appointment of any subservicer, the
Servicer shall notify the Owner Trustee, the Indenture Trustee and the Rating
Agencies in writing before such assignment becomes effective and such
subservicer shall be required to execute and deliver an instrument in which it
agrees that, for so long as it acts as subservicer of the Receivables and the
other Trust Property being serviced by it, the covenants, conditions,
indemnities, duties, obligations and other terms and provisions of this
Agreement applicable to the Servicer hereunder shall be applicable to it as
subservicer, that it shall be required to perform its obligations as
subservicer for the benefit of the Trust as if it were Servicer hereunder
(subject, however, to the right of the Servicer to direct the performance of
such obligations in accordance with this Agreement) and that, notwithstanding
any provision of a subservicing agreement to the contrary, such subservicer
shall be directly liable to the Owner Trustee and the Trust (notwithstanding
any failure by the Servicer to perform its duties and obligations hereunder)
for the failure by such subservicer to perform its obligations hereunder or
under any subservicing agreement, and that (notwithstanding any failure by the
Servicer to perform its duties and obligations hereunder) the Owner Trustee
may enforce the provisions of this Agreement and any subservicing agreement
against the subservicer for the benefit of the Trust, without diminution of
such obligations or liabilities by virtue of any subservicing agreement, by
virtue of any indemnification provided thereunder or by virtue of the fact
that the Servicer is primarily responsible hereunder for the performance of
such duties and obligations, as if a subservicer alone were servicing and
administering, under this Agreement, the Receivables and the other Trust
Property being serviced by it under the subservicing agreement.
(e) Notwithstanding any subservicing agreement, any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
or a subservicer or reference to actions taken through such Persons or
otherwise, the Servicer shall remain obligated and liable to the Trust and the
Owner Trustee for the servicing and administering of the Receivables and the
other Trust Property in accordance with the provisions of this Agreement
(including for the deposit of payments received by a subservicer, irrespective
of whether such payments are actually remitted to the Servicer or deposited in
the Collection Account by such subservicer; provided that if such amounts are
so deposited, the Servicer shall have no further obligation to do so) without
diminution of such obligation or liability by virtue of such subservicing
agreements or arrangements or by virtue of indemnification from a subservicer,
to the same extent and under the same terms and conditions as if the Servicer
alone were servicing and administering the Receivables and the other Trust
Property. The Servicer shall be entitled to enter into any agreement with a
subservicer for indemnification of the Servicer and nothing contained in this
Agreement shall be deemed to limit or modify such indemnification.
(f) In the event the Servicer for any reason no longer shall be
acting as such (including by reason of the occurrence of an Event of Servicing
Termination), the successor Servicer may, in its discretion, thereupon assume
all of the rights and obligations of the outgoing Servicer under a
subservicing agreement. In such event, the successor Servicer shall be deemed
to have assumed all of the Servicer's interest therein and to have replaced
the outgoing Servicer as a party to such subservicing agreement to the same
extent as if such subservicing agreement had been assigned to the successor
Servicer, except that the outgoing Servicer shall not thereby be relieved of
any liability or obligation on the part of the outgoing Servicer to the
subservicer under such subservicing agreement. The outgoing Servicer shall,
upon request of the Indenture Trustee, but at the expense of the outgoing
Servicer, deliver to the successor Servicer all documents and records relating
to each such subservicing agreement and the Receivables and the other Trust
Property then being serviced thereunder and an accounting of amounts collected
and held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the subservicing agreement to the successor Servicer. In
the event that the successor Servicer elects not to assume a subservicing
agreement, such subservicing agreement shall be immediately cancellable by the
successor Servicer upon written notice to the subservicer and the outgoing
Servicer, at its expense, shall cause the subservicer to deliver to the
successor Servicer all documents and records relating to the Receivables and
the other Trust Property being serviced thereunder and all amounts held (or
thereafter received) by such subservicer (together with an accounting of such
amounts) and shall otherwise use its best efforts to effect the orderly and
efficient transfer of servicing of the Receivables and the other Trust
Property being serviced by such subservicer to the successor Servicer.
(g) The Servicer shall be required to provide a computer tape or
compact disk each month to Lewtan Technologies, Inc. containing information
relating to the Receivables, including the name, address and telephone number
of each Obligor and the balance on the Receivables. Lewtan Technologies shall
provide a copy of the tape or disk to the Indenture Trustee, the Indenture
Trustee's agent, or the Indenture Trustee's designee upon the written request
of the Indenture Trustee. Lewtan Technologies, Inc. shall be paid a fee for
such services and shall be reimbursed for any expenses incurred by it in
connection with such services. The Servicer shall pay these amounts from its
monthly Servicing Fee.
Section 3.2 Collection and Allocation of Receivable Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable motor vehicle receivables that it services for
itself or others. The Servicer shall allocate collections between principal
and interest in accordance with the customary servicing practices and
procedures it follows with respect to all comparable motor vehicle receivables
that it services for itself or others. The Servicer shall not increase or
decrease the number or amount of any Scheduled Payment, or the Amount Financed
under a Receivable or the APR of a Receivable, or extend, rewrite or otherwise
modify the payment terms of a Receivable; provided, however, that:
(i) in the case of a Deferred Payment Receivable or a
Deferred Balloon Payment Receivable upon which the related Obligor
has made one or more partial pre-payments on or prior to the date on
which the first Scheduled Payment is due under the related Contract,
the Servicer may, at any time on or before 90 days after that first
Scheduled Payment is due, modify the terms of the Receivable
including by reducing the amount of each Scheduled Payment; provided,
that the Servicer may not change (x) the APR of such Receivable, and
(y) the date on which the final Scheduled Payment under the
Receivable is due from the date set forth in the related Contract as
the date on which such final Scheduled Payment shall be due (any such
Receivable, a "Modified Receivable"); and
(ii) the Servicer may extend the due date for one or more
payments due on a Receivable for credit-related reasons that would be
acceptable to the Servicer with respect to comparable motor vehicle
receivables that it services for itself and others and in accordance
with its customary standards, policies, practices and procedures if
the cumulative extensions with respect to any Receivable shall not
cause the term of such Receivable to extend beyond June 2009 and that
such extensions, in the aggregate, do not exceed two months for each
12 months of the original term of the Receivable.
In the event that the Servicer fails to comply with the provisions of
the preceding sentence, the Servicer shall be required to purchase the
Receivable or Receivables affected thereby, for the Purchase Amount, in the
manner specified in Section 3.7, as of the close of the Collection Period in
which such failure occurs. The Servicer may, in its discretion, (but only in
accordance with its customary standards, policies, practices and procedures),
waive any late payment charge or any other fee that may be collected in the
ordinary course of servicing a Receivable.
(b) With respect to each Final Payment Receivable, the Servicer, in
accordance with its customary servicing standards, policies, practices and
procedures, shall contact the Obligor on or before the due date of the Last
Scheduled Payment specified in the related Contract. If, at such time, the
Obligor under the Final Payment Receivable has notified MMCA on behalf of the
Trust that it elects to sell the Financed Vehicle to MMCA on behalf of the
Trust in accordance with the terms of the Receivable, the Servicer shall, upon
delivery of the Financed Vehicle by the Obligor to MMCA on behalf of the
Trust, inspect the Financed Vehicle for Excess Wear and Tear and Excess
Mileage, and determine the necessity of any repairs. If the Servicer
determines that such Financed Vehicle requires repairs as a result of Excess
Wear and Tear, the Servicer shall require the Obligor to pay the estimated
cost of such repairs to the Servicer. If the Obligor disputes the Servicer's
estimate of the cost of such repairs, the Obligor may obtain, at the Obligor's
own expense, a professional appraisal of the Financed Vehicle's value by an
independent third-party appraiser acceptable to both the Obligor and the
Servicer, and the cost of repairs for Excess Wear and Tear as determined by
such appraisal shall be binding on the Obligor and the Servicer. The Servicer
shall, pursuant to the related Contract, offset (x) the cost of repairs for
Excess Wear and Tear as determined by the appraisal, any charges for Excess
Mileage and the disposition fee payable to the Servicer pursuant to the
related Contract, and the Principal Balance, accrued interest and any other
amounts owed by the Obligor on the Receivable against (y) the purchase price
otherwise due to the Obligor for the Financed Vehicle, and shall collect any
excess of (x) over (y) from the Obligor.
(c) In connection with an Obligor's transfer of a Financed Vehicle to
MMCA on behalf of the Trust in satisfaction of its obligation to pay the Last
Scheduled Payment under a Final Payment Receivable, pursuant to the terms of
the Contract related to such Last Scheduled Payment, the Servicer shall
require the Obligor to pay a disposition fee (which the Servicer will retain
as servicing compensation), whereupon the Servicer shall take possession of
the related Financed Vehicle and shall prepare such Financed Vehicle for sale
at auction or otherwise in accordance with the Servicer's customary servicing
standards, policies, practices and procedures.
(d) Proceeds received by the Servicer from the payment by an Obligor
of a Financed Vehicle of amounts attributable to Last Scheduled Payments and
other amounts (including Excess Wear and Tear and Excess Mileage) owed by the
Obligor and from the sale of a Financed Vehicle at auction or otherwise
constitute proceeds of Last Scheduled Payments and collections on the
Receivables, and shall be deposited into the Collection Account. Following the
sale of the Financed Vehicle, the Servicer, on behalf of the Trust, shall
deliver the related certificate of title to the purchaser of such Financed
Vehicle. Following the Servicer's receipt of proceeds from the sale of such
Financed Vehicle and amounts to be paid by the Obligor pursuant to
subparagraph (b) above, the Servicer shall record on its books and records the
termination of the Trust's ownership and security interest in the related
Final Payment Receivable (and shall deliver copies thereof to the Indenture
Trustee and the Owner Trustee upon written request within 10 days of receipt
of such request).
(e) If the Obligor under any Balloon Payment Receivable or Final
Payment Receivable has notified the Dealer that it desires to refinance the
amount that it owes on termination of the Receivable, MMCA will, in accordance
with its customary servicing standards, policies, practices and procedures,
make a decision to grant or deny credit, except for Contracts for which the
Obligors have the right to refinance without such an assessment, in which case
MMCA shall honor the Obligor's right to refinance. If credit is denied, the
Servicer shall require the Obligor to satisfy its obligation to pay the
remaining amounts owed in accordance with the terms of the Balloon Payment
Receivable or Final Payment Receivable. If credit is granted, MMCA shall
deposit an amount equal to the total amount owed by the Obligor on the
Receivable to the Collection Account. Upon deposit of such amount into the
Collection Account, the Trust's ownership and security interest in the related
Financed Vehicle shall terminate, and the Trust will assign all interest in,
to and under the Receivable and the related Financed Vehicle to MMCA. The
Servicer shall record such termination on its books and records (and shall
deliver copies thereof to the Indenture Trustee and the Owner Trustee upon
written request within 10 days of receipt of such request). If MMCA is no
longer the Servicer, the Trust or any Holder of the Certificates may make
arrangements for the successor Servicer or another party to provide
refinancing of Last Scheduled Payments to Obligors who desire to satisfy the
Last Scheduled Payment through refinancing and who meet such party's credit
criteria, and any reasonable costs and expenses of the successor Servicer or
such third party in determining whether to provide such refinancing shall be
payable from amounts, if any, which would otherwise be released from the
Reserve Account and paid to the Seller.
Section 3.3 Realization upon Receivables. (a) On behalf of the Trust,
the Servicer shall use reasonable efforts, in accordance with the standard of
care required by Section 3.1, to repossess or otherwise convert the ownership
of each Financed Vehicle securing a Defaulted Receivable. In taking such
action, the Servicer shall follow such customary and usual practices and
procedures as it shall deem necessary or advisable in its servicing of
comparable automotive receivables, and as are otherwise consistent with the
standard of care required under Section 3.1, which shall include the exercise
of any rights of recourse to Dealers under the Dealer Agreements. The Servicer
shall be entitled to recover all reasonable expenses incurred by it in the
course of repossessing and liquidating a Financed Vehicle into cash proceeds,
but only out of the cash proceeds of such Financed Vehicle and any deficiency
obtained from the Obligor. The foregoing shall be subject to the provision
that, in any case in which a Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair and/or repossession will increase the Liquidation
Proceeds (or Recoveries) of the related Receivable by an amount equal to or
greater than the amount of such expenses.
(b) If the Servicer elects to commence a legal proceeding to enforce
a Dealer Agreement, the act of commencement shall be deemed to be an automatic
assignment from the Trust to the Servicer of the rights of recourse under such
Dealer Agreement. If, however, in any enforcement suit or legal proceeding, it
is held that the Servicer may not enforce a Dealer Agreement on the grounds
that it is not a real party in interest or a Person entitled to enforce the
Dealer Agreement, the Owner Trustee, at the Servicer's expense and direction,
shall take such steps as the Servicer deems necessary to enforce the Dealer
Agreement, including bringing suit in its name or the names of the Indenture
Trustee, the Certificateholders, the Noteholders or any of them.
Section 3.4 Physical Damage Insurance. The Servicer shall follow its
customary servicing procedures to determine whether or not each Obligor shall
have maintained physical damage insurance covering the related Financed
Vehicle.
Section 3.5 Maintenance of Security Interests in Financed Vehicles.
The Servicer, in accordance with the standard of care required under Section
3.1, shall take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Trust hereby authorizes the Servicer, and the Servicer hereby agrees, to
take such steps as are necessary to re-perfect such security interest on
behalf of the Trust and the Indenture Trustee in the event the Servicer
receives notice of, or otherwise has actual knowledge of, the relocation of a
Financed Vehicle or for any other reason.
Section 3.6 Covenants of Servicer. The Servicer hereby makes the
following covenants:
(a) Security Interest to Remain in Force. The Financed Vehicle
securing each Receivable will not be released from the security interest
granted by the Receivable in whole or in part, except as contemplated herein.
(b) No Impairment. The Servicer will not (nor will it permit any
subservicer to) impair in any material respect the rights of the Trust, the
Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders in the Receivables or, subject to clause (c) below, otherwise
amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders or the Noteholders hereunder would be
materially adversely affected.
(c) Amendments. The Servicer will not increase or decrease the number
or amount of Scheduled Payments or the Amount Financed under a Receivable, or
extend, rewrite or otherwise modify the payment terms of a Receivable, except
pursuant to Section 3.2(a).
Section 3.7 Purchase by Servicer upon Breach. The Seller, the
Servicer or the Owner Trustee, as the case may be, shall inform the other
parties to this Agreement promptly, in writing, upon the discovery of any
breach of Section 3.2(a), 3.5 or 3.6. If the breach shall not have been cured
by the last day of the Collection Period which includes the 60th day after the
date on which the Servicer becomes aware of, or receives written notice of,
such breach, and such breach materially and adversely affects the interests of
the Trust in a Receivable, the Servicer shall purchase such Receivable or
Receivables on the immediately succeeding Payment Date; provided, however,
that with respect to a breach of Section 3.2(a), the Servicer shall repurchase
the affected Receivable from the Trust at the end of the Collection Period in
which such breach occurs. In consideration of the purchase of a Receivable
hereunder, the Servicer shall remit the Purchase Amount of such Receivable in
the manner specified in Section 4.5(a). Except as provided in Section 7.2, the
sole remedy of the Trust, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders against the Servicer with respect to a
breach pursuant to Section 3.2, 3.5 or 3.6 shall be to require the Servicer to
repurchase Receivables pursuant to this Section 3.7. Neither the Owner Trustee
nor the Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase
of any Receivable pursuant to this Section 3.7 or the eligibility of any
Receivable for purposes of this Agreement.
Section 3.8 Servicing Compensation. The "Servicing Fee" with respect
to a Collection Period shall be an amount equal to the product of one-twelfth
(1/12) of the sum of (x) 1% of the aggregate Principal Balance of all
Receivables other than Deferred Payment Receivables and Deferred Balloon
Payment Receivables and (y) 0.25% of the aggregate Principal Balance of
Deferred Payment Receivables and Deferred Balloon Payment Receivables, in each
case as of the first day of such Collection Period. As additional servicing
compensation, the Servicer shall also be entitled to earnings (net of losses
and investment expenses) on amounts on deposit in the Payahead Account,
disposition fees paid with respect to Final Payment Receivables and any
administrative fees and charges and all late payment fees actually collected
(from whatever source) on the Receivables other than fees paid in connection
with the extension or deferral of payments on a Receivable (the "Supplemental
Servicing Fee"). The Servicer shall be required to pay all expenses incurred
by it in connection with its activities hereunder (including fees and expenses
of the Owner Trustee and the Indenture Trustee (and any custodian appointed by
the Owner Trustee and the Indenture Trustee) and independent accountants, any
subservicer, taxes imposed on the Servicer or any subservicer (to the extent
not paid by such subservicer), expenses incurred in connection with
distributions and reports to the Certificateholders and the Noteholders, and
any fees and reimbursements for expenses paid to Lewtan Technologies, Inc.),
except expenses incurred in connection with realizing upon Receivables under
Section 3.3.
Section 3.9 Servicer's Certificate. On or before the Determination
Date immediately preceding each Payment Date, the Servicer shall deliver to
the Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller,
with a copy to the Rating Agencies, a certificate of a Servicing Officer
substantially in the form of Exhibit A hereto (a "Servicer's Certificate") and
attached to a Servicer's report containing all information necessary to make
the transfers and distributions pursuant to Sections 4.3, 4.4, 4.5, 4.6 and
4.7, together with the written statements to be furnished by the Owner Trustee
to Certificateholders pursuant to Section 4.9 and by the Indenture Trustee to
the Noteholders pursuant to Section 4.9 hereof and Section 6.6 of the
Indenture. Upon written request of the Owner Trustee or the Indenture Trustee,
the Servicer also shall separately identify (by account number of the
Receivable as it appears in the related Schedule of Receivables) in a written
notice to the Owner Trustee or the Indenture Trustee, as the case may be, the
Receivables to be repurchased by the Seller or to be purchased by the
Servicer, as the case may be, on the related Payment Date, and, also upon
written request of one of the foregoing parties, each Receivable which became
a Defaulted Receivable during the related Collection Period. The Servicer
shall deliver to the Rating Agencies any information, to the extent it is
available to the Servicer, that the Rating Agencies reasonably request in
order to monitor the Trust.
Section 3.10 Annual Statement as to Compliance; Notice of Event of
Servicing Termination. (a) The Servicer shall deliver to the Owner Trustee and
the Indenture Trustee, on or before March 31 of each year, commencing March
31, 2003, an Officer's Certificate, stating that (i) a review of the
activities of the Servicer during the preceding calendar year (or such shorter
period, with respect to the first such Officer's Certificate) and of its
performance of its obligations under this Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year (or such shorter period with respect to the
first such Officer's Certificate), or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate shall be
delivered by the Indenture Trustee to each Noteholder, promptly following the
Indenture Trustee's receipt of such certificate, pursuant to Section 7.4 of
the Indenture. In addition, a copy of such certificate may be obtained by any
Certificateholder by a request in writing to the Owner Trustee or by any
Person certifying that it is a Note Owner by a request in writing to the
Indenture Trustee, in either case addressed to the applicable Corporate Trust
Office. Upon the telephone request of the Owner Trustee, the Indenture Trustee
shall promptly furnish the Owner Trustee a list of Noteholders as of the date
specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly upon having knowledge thereof, but
in no event later than five Business Days thereafter, written notice in an
Officer's Certificate of any event which constitutes or, with the giving of
notice or lapse of time or both, would become, an Event of Servicing
Termination under Section 8.1.
Section 3.11 Annual Independent Certified Public Accountants'
Reports. The Servicer shall cause a firm of independent certified public
accountants (who may also render other services to the Servicer, the Seller or
to MMCA) to deliver to the Owner Trustee and the Indenture Trustee on or
before March 31 of each year, commencing March 31, 2003, a report addressed to
the Board of Directors of the Servicer with respect to the preceding calendar
year (or such shorter period, with respect to the first such report) to the
effect that such firm has audited the financial statements of the Servicer and
issued its report thereon and that such audit (1) was made in accordance with
generally accepted auditing standards, (2) included tests relating to motor
vehicle loans serviced for others in accordance with the requirements of the
Uniform Single Attestation Program for Mortgage Bankers (the "Program"), to
the extent the procedures in such Program are applicable to the servicing
obligations set forth in this Agreement, and (3) except as described in the
report, disclosed no exceptions or errors in the records relating to
automobile and sports-utility vehicle loans serviced for others that such firm
is required to report under the Program. Such report shall also indicate that
the firm is independent with respect to the Seller and the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants. A copy of such report shall be delivered by the
Indenture Trustee to each Noteholder, promptly following the Indenture
Trustee's receipt of such report, pursuant to Section 7.4 of the Indenture. In
addition, a copy of such report may be obtained by any Certificateholder by a
request in writing to the Owner Trustee, or by any Person certifying that it
is a Note Owner by a request in writing to the Indenture Trustee, in either
case addressed to the applicable Corporate Trust Office.
Section 3.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide the Certificateholders, the
Indenture Trustee and the Noteholders with access to the Receivable Files in
the cases where the Certificateholders, the Indenture Trustee or the
Noteholders shall be required by applicable statutes or regulations to have
access to such documentation. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the
offices of the Servicer. Nothing in this Section 3.12 shall affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section 3.12. Any Certificateholder or
Noteholder, by its acceptance of a Certificate or Note, as the case may be,
shall be deemed to have agreed to keep any information obtained by it pursuant
to this Section confidential, except as may be required by applicable law.
Section 3.13 Reports to the Commission. The Servicer shall, on behalf
of the Trust, cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Exchange Act , and the rules
and regulations of the Commission thereunder. The Seller shall, at its
expense, cooperate in any reasonable request made by the Servicer in
connection with such filings.
Section 3.14 Reports to Rating Agencies. The Servicer shall deliver
to each Rating Agency, at such address as each Rating Agency may request, a
copy of all reports or notices furnished or delivered pursuant to this Article
and a copy of any amendments, supplements or modifications to this Agreement
and any subservicing agreement and any other information reasonably requested
by such Rating Agency to monitor this transaction.
ARTICLE IV - DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 4.1 Accounts. (a) The Servicer shall, prior to the Closing
Date, establish and maintain a segregated trust account in the name of the
Indenture Trustee, at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company), which shall be designated as the "Collection
Account." The Collection Account shall be held in trust for the benefit of the
Noteholders and the Certificateholders. The Collection Account shall be under
the sole dominion and control of the Indenture Trustee; provided, that the
Servicer may make deposits to and direct the Indenture Trustee in writing to
make withdrawals from the Collection Account in accordance with the terms of
this Agreement, the Indenture and the Trust Agreement. All monies deposited
from time to time in the Collection Account shall be held by the Indenture
Trustee as part of the Trust Property and all deposits to and withdrawals
therefrom shall be made only upon the terms and conditions of the Basic
Documents.
If the Servicer is required to remit collections pursuant to the
first sentence of Section 4.2(a), all amounts held in the Collection Account
shall, to the extent permitted by applicable law, rules and regulations, be
invested, as directed in writing by the Servicer, by the bank or trust company
then maintaining the Collection Account, in Permitted Investments that mature
not later than the Business Day immediately prior to the Payment Date for the
Collection Period to which such amounts relate and such Permitted Investments
shall be held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Collection Account shall be
withdrawn from the Collection Account at the written direction of the Servicer
and shall be deposited in the Certificate Distribution Account. In the event
that the Collection Account is no longer to be maintained at the corporate
trust department of Bank of Tokyo-Mitsubishi Trust Company, the Servicer
shall, with the Indenture Trustee's or Owner Trustee's assistance as
necessary, cause the Collection Account to be moved to a Qualified Institution
or a Qualified Trust Institution within 10 Business Days (or such longer
period not to exceed 30 calendar days as to which each Rating Agency may
consent).
(b) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee, at a
Qualified Institution or Qualified Trust Institution (which shall initially be
the corporate trust department of Bank of Tokyo-Mitsubishi Trust Company),
which shall be designated as the "Pre-Funding Account." The Pre-Funding
Account shall be held in trust for the benefit of the Noteholders and the
Certificateholders. The Pre-Funding Account shall be under the sole dominion
and control of the Indenture Trustee; provided, that the Servicer may make
deposits to and direct the Indenture Trustee in writing to make withdrawals
from the Pre-Funding Account in accordance with the terms of this Agreement
and the other Basic Documents. All monies deposited from time to time in the
Pre-Funding Account shall be held by the Indenture Trustee as part of the
Trust Property and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
All amounts held in the Pre-Funding Account shall, to the extent
permitted by applicable law, rules and regulations, be invested, as directed
in writing by the Servicer, by the bank or trust company then maintaining the
Pre-Funding Account, in Permitted Investments that mature not later than the
Business Day immediately prior to each Payment Date and such Permitted
Investments shall be held until maturity. On the Business Day preceding each
Payment Date, the Servicer shall instruct the Indenture Trustee to withdraw
from the Pre-Funding Account for deposit to the Collection Account on such
date an amount equal to the Pre-Funding Account Investment Earnings, if any,
for the related Collection Period. In the event that the Pre-Funding Account
is no longer to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Pre-Funding
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
With respect to any amounts, securities, investments, financial
assets and other property deposited in or credited to the Pre-Funding Account:
(i) any such property that is a "financial asset" as defined
in Section 8-102(a)(9) of the Relevant UCC shall be physically
delivered to, or credited to an account in the name of, the Qualified
Institution or Qualified Trust Institution maintaining the
Pre-Funding Account, as applicable, in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the Indenture
Trustee with respect thereto;
(ii) any such property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one or
more depository institutions having the Required Rating and each such
deposit account shall be subject to the exclusive custody and control
of the Indenture Trustee, and the Indenture Trustee shall have sole
signature authority with respect thereto; and
(iii) except for any deposit accounts specified in clause
(ii) above, the Pre-Funding Account shall only be invested in
securities or in other assets which the Qualified Institution or
Qualified Trust Institution maintaining the Pre-Funding Account, as
applicable, agrees to treat as "financial assets" as defined in
Section 8-102(a)(9) of the Relevant UCC.
(c) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee, at a
Qualified Institution or Qualified Trust Institution (which shall initially be
the corporate trust department of Bank of Tokyo-Mitsubishi Trust Company),
which shall be designated as the "Negative Carry Account." The Negative Carry
Account shall be held in trust for the exclusive benefit of the Noteholders.
The Negative Carry Account shall be under the sole dominion and control of the
Indenture Trustee; provided, that the Servicer may make deposits to and direct
the Indenture Trustee in writing to make withdrawals from the Negative Carry
Account in accordance with the terms of this Agreement and the other Basic
Documents. All monies deposited from time to time in the Negative Carry
Account shall be held by the Indenture Trustee as part of the Trust Property
and all deposits to and withdrawals therefrom shall be made only upon the
terms and conditions of the Basic Documents.
All amounts held in the Negative Carry Account shall, to the extent
permitted by applicable law, rules and regulations, be invested, as directed
in writing by the Servicer, by the bank or trust company then maintaining the
Negative Carry Account, in Permitted Investments that mature not later than
the Business Day immediately prior to each Payment Date and such Permitted
Investments shall be held until maturity. All interest and other income (net
of losses and investment expenses) on funds on deposit in the Negative Carry
Account shall be withdrawn from the Negative Carry Account for deposit to the
Collection Account or release to the Seller at the time and in the manner
provided in Section 4.12. In the event that the Negative Carry Account is no
longer to be maintained at the corporate trust department of Bank of
Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Negative Carry
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
With respect to any amounts, securities, investments, financial
assets and other property deposited in or credited to the Negative Carry
Account:
(i) any such property that is a "financial asset" as defined
in Section 8-102(a)(9) of the Relevant UCC shall be physically
delivered to, or credited to an account in the name of, the Qualified
Institution or Qualified Trust Institution maintaining the Negative
Carry Account, as applicable, in accordance with such institution's
customary procedures such that such institution establishes a
"securities entitlement" in favor of the Indenture Trustee with
respect thereto;
(ii) any such property that is held in deposit accounts
shall be held solely in the name of the Indenture Trustee at one or
more depository institutions having the Required Rating and each such
deposit account shall be subject to the exclusive custody and control
of the Indenture Trustee and the Indenture Trustee shall have sole
signature authority with respect thereto; and
except for any deposit accounts specified in clause (ii) above, the
Negative Carry Account shall only be invested in securities or in other assets
which the Qualified Institution or Qualified Trust Institution maintaining the
Negative Carry Account, as applicable, agrees to treat as "financial assets"
as defined in Section 8-102(a)(9) of the Relevant UCC.
(d) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee at a
Qualified Institution or Qualified Trust Institution (which shall initially be
the corporate trust department of Bank of Tokyo-Mitsubishi Trust Company),
which shall be designated as the "Note Payment Account." The Note Payment
Account shall be held in trust for the exclusive benefit of the Noteholders.
The Note Payment Account shall be under the sole dominion and control of the
Indenture Trustee. All monies deposited from time to time in the Note Payment
Account pursuant to this Agreement and the Indenture shall be held by the
Indenture Trustee as part of the Trust Property and shall be applied as
provided in this Agreement and the Indenture. In the event that the Note
Payment Account is no longer to be maintained at the corporate trust
department of Bank of Tokyo-Mitsubishi Trust Company, the Servicer shall, with
the Indenture Trustee's assistance as necessary, cause the Note Payment
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(e) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Trust at a Qualified
Institution or Qualified Trust Institution (which shall initially be
Wilmington Trust Company), which shall be designated as the "Certificate
Distribution Account." Except as provided in the Trust Agreement, the
Certificate Distribution Account shall be held in trust for the benefit of the
Certificateholders. The Certificate Distribution Account shall be under the
sole dominion and control of the Owner Trustee; provided that the Indenture
Trustee may make deposits to such account in accordance with the directions of
the Servicer pursuant to this Agreement and the Indenture. All monies
deposited from time to time in the Certificate Distribution Account pursuant
to this Agreement and the Indenture shall be held by the Owner Trustee as part
of the Trust Property and shall be applied as provided in this Agreement and
the Trust Agreement. In the event that the Certificate Distribution Account is
no longer to be maintained at Wilmington Trust Company, the Servicer shall,
with the Owner Trustee's assistance as necessary, cause the Certificate
Distribution Account to be moved to a Qualified Institution or a Qualified
Trust Institution within 10 Business Days (or such longer period not to exceed
30 calendar days as to which each Rating Agency may consent) and shall
promptly notify the Indenture Trustee of the account number and location of
such account.
(f) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of the Indenture Trustee at a
Qualified Institution or Qualified Trust Institution (which shall initially be
the corporate trust department of Bank of Tokyo-Mitsubishi Trust Company),
which shall be designated as the "Payahead Account." The Payahead Account
shall be held in trust for the benefit of the Noteholders and the
Certificateholders. The Payahead Account shall be under the sole dominion and
control of the Indenture Trustee provided, that the Servicer may make deposits
to and direct the Indenture Trustee in writing to make withdrawals from the
Payahead Account in accordance with this Agreement and the Indenture. All
monies deposited from time to time in the Payahead Account shall be held by
the Indenture Trustee as part of the Trust Property and all deposits to and
withdrawals therefrom shall be made only upon the terms and conditions of the
Basic Documents.
On the Closing Date, the Seller shall deposit an amount equal to the
Initial Payahead Account Deposit into the Payahead Account from the net
proceeds of the sale of the Notes and the Certificates. On each Subsequent
Transfer Date, the Servicer shall instruct the Indenture Trustee to withdraw
from the Pre-Funding Account and deposit to the Payahead Account an amount
equal to the applicable Subsequent Payahead Account Deposit.
If the Servicer is required to remit collections pursuant to the
first sentence of Section 4.2(a), all amounts held in the Payahead Account
shall, to the extent permitted by applicable law, rules and regulations, be
invested, as directed in writing by the Servicer, by the bank or trust company
then maintaining the Payahead Account, in Permitted Investments that mature
not later than the Business Day immediately prior to the Payment Date for the
Collection Period to which such amounts relate and such Permitted Investments
shall be held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Payahead Account shall be
withdrawn from the Payahead Account at the direction of the Servicer and shall
be paid to the Servicer as additional servicing compensation. In the event
that the Payahead Account is no longer to be maintained at the corporate trust
department of Bank of Tokyo-Mitsubishi Trust Company, the Servicer shall, with
the Indenture Trustee's or Owner Trustee's assistance as necessary, cause the
Payahead Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent).
(g) Notwithstanding the provisions of clause (g) above, for so long
as (i) MMCA is the Servicer, (ii) the rating of MMCA's short-term unsecured
debt is at least "Prime-1" by Xxxxx'x, at least "A-1" by S&P and at least "F1"
by Fitch Ratings and (iii) no Events of Servicing Termination shall have
occurred (each, a "Monthly Remittance Condition"), Payaheads need not be
remitted to and deposited in the Payahead Account but instead may be remitted
to and held by the Servicer. So long as such Monthly Remittance Conditions are
met, the Servicer shall not be required to segregate or otherwise hold
separate any Payaheads remitted to the Servicer as aforesaid but shall be
required to remit Payaheads to the Collection Account in accordance with
Section 4.6(a)(i). At all times as such Monthly Remittance Conditions are not
met, the Servicer shall deposit in the Payahead Account the amount of any
Payaheads then held or received by it. Notwithstanding the foregoing, if a
Monthly Remittance Condition is not satisfied, the Servicer may utilize, with
respect to Payaheads, an alternative remittance schedule (which may include
the remittance schedule utilized by the Servicer before the Monthly Remittance
Condition became unsatisfied), if the Servicer provides to the Owner Trustee
and the Indenture Trustee written confirmation from the Rating Agencies that
such alternative remittance schedule will not result in the downgrading or
withdrawal by the Rating Agencies of the ratings then assigned to the Notes
and the Certificates. The Owner Trustee and the Indenture Trustee shall not be
deemed to have knowledge of any event or circumstance under clauses (ii) or
(iii) of the first sentence of this Section 4.1(h) that would require
remittance of the Payaheads to the Payahead Account unless the Owner Trustee
or the Indenture Trustee has received written notice of such event or
circumstance from the Seller or the Servicer in an Officer's Certificate or
from the Holders of Notes evidencing not less than 25% of the principal
balance of the then Outstanding Notes or from the Holders of Certificates
evidencing not less than 25% of the Certificate Balance or unless a
Responsible Officer in the Corporate Trust Office with knowledge hereof and
familiarity herewith has actual knowledge of such event or circumstance.
(h) The Servicer shall be permitted to remit to any Obligor, upon the
request of such Obligor, the Payahead Balance with respect to such Obligor's
Receivable or such lesser amount as is requested by such Obligor, in
accordance with the Servicer's customary standards, policies, practices and
procedures, to the extent that such amount is not then due on such Receivable.
Upon any such remittance, the Payahead Balance with respect to such Receivable
shall be reduced by the amount of such remittance.
Section 4.2 Collections. (a) Subject to the provisions of subsection
(b) below, the Servicer shall remit to the Collection Account (i) all payments
by or on behalf of the Obligors (including, subject to the next two sentences,
Payaheads on the Receivables, but excluding payments with respect to Purchased
Receivables and amounts included in the Supplemental Servicing Fee), including
amounts treated as collections on Balloon Payment Receivables and Final
Payment Receivables pursuant to Section 3.2(d) and (ii) all Liquidation
Proceeds and all Recoveries, received by the Servicer during any Collection
Period, as soon as practicable, but in no event after the close of business on
the second Business Day after receipt thereof. Collections of Payaheads shall
be deposited in the Collection Account, pursuant to the preceding sentence for
purposes of administrative convenience only, pending determination of the
amount to be deposited in the Payahead Account (or in the event that the
Monthly Remittance Conditions are satisfied, remitted to the Servicer pursuant
to Section 4.1(h)), which amount shall be deposited in the Payahead Account as
soon as practicable but in no event later than the Payment Date immediately
following collection, and such amounts shall not be transferred to the
Collection Account until due.
MMCA, for so long as it is acting as the Servicer, may make
remittances of collections on a less frequent basis than that specified in the
immediately preceding paragraph. It is understood that such less frequent
remittances may be made only on the specific terms and conditions set forth
below in this Section 4.2(a) and only for so long as such terms and conditions
are fulfilled. Accordingly, notwithstanding the provisions of the first
sentence of this Section 4.2(a), the Servicer shall remit collections received
during a Collection Period to the Collection Account in immediately available
funds on the Business Day prior to the related Payment Date but only for so
long as each Monthly Remittance Condition is satisfied. Notwithstanding the
foregoing, if a Monthly Remittance Condition is not satisfied, the Servicer
may utilize an alternative remittance schedule (which may include the
remittance schedule utilized by the Servicer before the Monthly Remittance
Condition became unsatisfied), if the Servicer provides to the Owner Trustee
and the Indenture Trustee written confirmation from the Rating Agencies that
such alternative remittance schedule will not result in the downgrading or
withdrawal by the Rating Agencies of the ratings then assigned to the Notes
and the Certificates. The Owner Trustee or the Indenture Trustee shall not be
deemed to have knowledge of any event or circumstance under clauses (ii) or
(iii) of the definition of Monthly Remittance Condition that would require
daily remittance by the Servicer to the Collection Account unless the Owner
Trustee or the Indenture Trustee has received notice of such event or
circumstance from the Seller or the Servicer in an Officer's Certificate or
written notice from the Holders of Notes evidencing not less than 25% of the
principal balance of the then outstanding Notes or from the Holders of
Certificates evidencing not less than 25% of the Certificate Balance or a
Responsible Officer in the Corporate Trust Office with knowledge hereof or
familiarity herewith has actual knowledge of such event or circumstance.
(b) In those cases where a subservicer is servicing a Receivable, the
Servicer shall cause the subservicer to remit to the Collection Account, as
soon as practicable, but in no event after the close of business on the second
Business Day after receipt thereof by the subservicer (but subject to the
provisions of Section 4.2(a)) the amounts referred to in Section 4.2(a) in
respect of a Receivable being serviced by the subservicer.
Section 4.3 Application of Collections. (a) For the purposes of this
Agreement, as of the close of business on the last day of each Collection
Period, all collections received pursuant to Section 4.2 for such Collection
Period for each Receivable (excluding the amounts actually collected with
respect to the Supplemental Servicing Fee and amounts collected with respect
to a Purchased Receivable) shall be applied by the Servicer, in the case of
(i) a Simple Interest Receivable that is a Standard Receivable, to interest
and principal on the Receivable in accordance with the Simple Interest Method,
(ii) a Simple Interest Receivable that is a Balloon Payment Receivable or a
Final Payment Receivable, to interest and principal in accordance with the
Simple Interest Method first, to accrued but unpaid interest, second, to the
Level Pay Balance of such Receivable, third, to the principal portion of the
Last Scheduled Payment to the extent a Last Scheduled Payment Advance has not
been made by the Servicer with respect to such Last Scheduled Payment and
fourth, to the extent of any unreimbursed Last Scheduled Payment Advance with
respect to such Simple Interest Receivable, to reimburse the Servicer for such
Last Scheduled Payment Advance and (iii) an Actuarial Receivable, first, to
the Scheduled Payment of such Actuarial Receivable, second to the extent of
any unreimbursed Actuarial Advances with respect to such Actuarial Receivable,
to reimburse the Servicer for any such Actuarial Advances, third, to the
extent of any unreimbursed Last Scheduled Payment Advance with respect to such
Actuarial Receivable, to reimburse the Servicer for such Last Scheduled
Payment Advance and fourth, to the extent that any amounts are remaining then
due to a prepayment of such Actuarial Receivable, if the sum of such remaining
amount and the previous Payahead Balance shall be sufficient to prepay the
Actuarial Receivable in full, and otherwise to the Payahead Account (or, if
all Monthly Remittance Conditions are satisfied, to the Servicer) as a
Payahead.
(b) All Liquidation Proceeds and any Recoveries, and any proceeds
realized upon the liquidation, sale or dissolution of the Owner Trust Estate
(or any part thereof) upon the occurrence of an Event of Default under the
Indenture shall, with respect to any Balloon Payment Receivable or Final
Payment Receivable be applied first to accrued but unpaid interest thereon,
second, to the Level Pay Balance of such Receivable and third, to the
principal portion of the related Last Scheduled Payment.
Section 4.4 Advances. (a) As of the close of business on the last day
of each Collection Period, if the payments during such Collection Period by or
on behalf of the Obligor on or in respect of an Actuarial Receivable (other
than a Purchased Receivable) after application under Section 4.3 shall be less
than the Scheduled Payment, the Payahead Balance of such Receivable shall be
applied by the Indenture Trustee to the extent of the shortfall, and such
Payahead Balance shall be reduced accordingly. Subject to the last sentence of
this Section 4.4(a), on each Payment Date the Servicer shall advance an amount
equal to the excess, if any, of the Scheduled Payment with respect to an
Actuarial Receivable over the sum of the (x) payments received on or in
respect of such Actuarial Receivable during the preceding Collection Period
and (y) the Payahead Balance with respect to such Actuarial Receivable (such
advance, an "Actuarial Advance"); provided that the Servicer shall make
Actuarial Advances with respect to the Last Scheduled Payment on Actuarial
Receivables that are Final Payment Receivables in accordance with Section
4.4(b). All applications of the Payahead Balance of a Receivable by the
Indenture Trustee and all Actuarial Advances by the Servicer pursuant to this
Section 4.4(a) shall be made based on the information set forth in the
Servicer's report attached to the Servicer's Certificate delivered pursuant to
Section 3.9. Notwithstanding anything in this Agreement to the contrary, no
successor to Mitsubishi Motors Credit of America, Inc. as Servicer shall be
required to make Actuarial Advances.
(b) As of the last day of the Collection Period in which the Last
Scheduled Payment with respect to a Final Payment Receivable is due, if the
payments during such Collection Period by or on behalf of the related Obligor
on or in respect of such Last Scheduled Payment after application under
Section 4.3(a) and, in the case of an Actuarial Receivable, the amounts, if
any, in the Payahead Account allocable to such Last Scheduled Payment, shall
be less than the amount of such Last Scheduled Payment, the Servicer shall
advance an amount equal to the shortfall by depositing such amount into the
Collection Account on the related Payment Date (such advance, a "Last
Scheduled Payment Advance"). Notwithstanding anything in this Agreement to the
contrary, no successor to Mitsubishi Motors Credit of America, Inc. as
Servicer shall be required to make Last Scheduled Payment Advances.
(c) (i) Upon either the written instructions of the Servicer or based
solely upon the information contained in the Servicer's Certificate delivered
on the related Determination Date pursuant to Section 3.9, the Indenture
Trustee shall release from amounts available in the Payahead Account, the
amounts required to be released from amounts available in the Payahead Account
pursuant to Sections 4.4(a) and (b) with respect to each Collection Period and
shall deposit such amounts in the Collection Account on the related Payment
Date pursuant to Section 4.5(a).
(ii) On each Payment Date, the Servicer shall deposit into
the Collection Account an amount equal to the aggregate amount of
Actuarial Advances required to be made with respect to related
Collection Period.
(d) On each Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Collection Account for distribution to the
Servicer, in immediately available funds, an amount equal to the sum of (i)
the aggregate amount of collections on Actuarial Receivables with respect to
which the Servicer has made Actuarial Advances in a prior Collection Period
that are allocable to the reimbursement of such Actuarial Advances pursuant to
Section 4.3(a) and (ii) the aggregate amount of Actuarial Advances that the
Servicer has not been reimbursed for pursuant to this Section 4.4(d) or
Section 4.5(b) with respect to Actuarial Receivables that became Defaulted
Receivables in the related Collection Period.
(e) On each Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Collection Account for distribution to the
Servicer, in immediately available funds, an amount equal to the sum of (i)
the aggregate amount of collections on Final Payment Receivables in the
related Collection Period that are allocable to the reimbursement of Last
Scheduled Payment Advances pursuant to Section 4.3(a) and (ii) the aggregate
amount of losses on Last Scheduled Payments that the Servicer has recorded in
its books and records during the related Collection Period to the extent such
losses are allocable to Last Scheduled Payments with respect to which the
Servicer has made Last Scheduled Payment Advances, but only to the extent such
Last Scheduled Payment Advances have not already been reimbursed pursuant to
this Section 4.4(e) or Section 4.5(b).
Section 4.5 Additional Deposits. (a) The Indenture Trustee shall
deposit in the Collection Account amounts required pursuant to Section 4.4(c).
The Servicer shall deposit in the Collection Account amounts required to be
advanced by the Servicer pursuant to Sections 4.4(a) and (b). The Seller and
the Servicer shall deposit or cause to be deposited in the Collection Account
the aggregate Purchase Amount with respect to Purchased Receivables pursuant
to Section 2.3, 3.7 or 9.1. The Indenture Trustee shall deposit in the
Collection Account any amounts received pursuant to the Yield Supplement
Agreement and any amounts received from the Letter of Credit Bank or the Yield
Supplement Account pursuant to Article V on the date of receipt thereof. All
such deposits with respect to a Collection Period shall be made in immediately
available funds no later than 10:00 a.m., New York City time, on the Payment
Date related to such Collection Period.
(b) The Indenture Trustee shall, on or prior to 10:00 a.m., New York
City time, on the Payment Date relating to each Collection Period make the
following withdrawals from the Reserve Account in the following order of
priority (in each case as set forth in the Servicer's Certificate for such
Payment Date): (i) an amount equal to the Reserve Account Advance Draw Amount,
if any, calculated by the Servicer pursuant to Section 4.6(b), and shall pay
such amount to the Servicer and (ii) an amount equal to the Reserve Account
TRP Draw Amount, if any, calculated by the Servicer pursuant to Section
4.6(b), and shall deposit to the Collection Account.
Section 4.6 Allocation of Total Available Funds. (a) On each Payment
Date, the Indenture Trustee shall cause to be made the following transfers and
distributions in immediately available funds in the amounts set forth in the
Servicer's Certificate for such Payment Date:
(i) To the Collection Account from the Payahead Account (if
the Monthly Remittance Conditions are not then satisfied) or
otherwise from amounts remitted by the Servicer pursuant to Section
4.1(h) an amount equal to the sum of:
(1) the aggregate portion of Payaheads constituting
Scheduled Payments with respect to the preceding Collection
Period and prepayments in full received during the preceding
Collection Period, as required by Sections 4.3 and 4.4(a);
and
(2) the Payahead Balance, if any, relating to any
Purchased Receivable;
(ii) From the Collection Account to the Payahead Account or,
if the Monthly Remittance Conditions are then satisfied, to the
Servicer, the aggregate Payaheads received during the preceding
Collection Period, as required by Section 4.3.
(b) On each Determination Date, the Servicer shall calculate the
Available Funds, the Total Servicing Fee, the Accrued Note Interest for each
Class of Notes, the Principal Distribution Amount, the Total Yield Supplement
Overcollateralization Amount, the Yield Supplement Amount, the Last Scheduled
Payment Principal Collections and the Negative Carry Amount, if any, in each
case with respect to the following Payment Date. In addition, on each
Determination Date the Servicer shall calculate the following amounts with
respect to such Payment Date:
(i) an amount equal to the lesser of (x) the amount, if any,
by which the aggregate amount payable to the Servicer out of the
Collection Account on such Payment Date as reimbursement for
Actuarial Advances pursuant to Section 4.4(d) and for Last Scheduled
Payment Advances pursuant to Section 4.4(e) exceeds the amount in the
Collection Account available for such purpose (without giving effect
to any deposits thereto from amounts in the Reserve Account but
giving effect to all other deposits to the Collection Account
required to be made on such Payment Date) and (y) the Reserve Account
Amount for such Payment Date (without giving effect to any deposits
of Total Available Funds but giving effect to all other deposits to
the Reserve Account on such Payment Date) (the "Reserve Account
Advance Draw Amount");
(ii) an amount equal to the lesser of (x) the amount, if
any, by which the Total Required Payment for such Payment Date
exceeds the Available Funds for such Payment Date and (y) an amount
equal to the Reserve Account Amount (without giving effect to any
deposits of Total Available Funds on such Payment Date) for such
Payment Date, less the Reserve Account Advance Draw Amount for such
Payment Date (the "Reserve Account TRP Draw Amount");
(iii) the Total Available Funds for such Payment Date; 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) with the same priority and ratably, in accordance with
the outstanding principal balance of the Class A Notes, to the Note
Payment Account, the Accrued Note Interest for the Class A Notes;
provided, that, if there are not sufficient funds available to pay the entire
amount of the Accrued Note Interest for the Class A Notes, the amounts
available shall be applied to the payment of such interest on the Class A
Notes on a pro rata basis;
(iii) to the Note Payment Account, the Accrued Note Interest
for the Class B Notes;
(iv) to the Note Payment Account, the Accrued Note Interest
for the Class C Notes;
(v) to the Note Payment Account, the Principal Distribution
Amount;
(vi) to the Reserve Account, the amount, if any, necessary
to reinstate the balance in the Reserve Account up to the Specified
Reserve Balance;
(vii) prior to the payment in full of the aggregate
principal balance of the Notes, to the Note Payment Account, any
remaining portion of the Total Available Funds; and
(viii) following the payment in full of the aggregate
principal balance of the Notes, to the Certificate Distribution
Account, any remaining portion of the Total Available Funds.
Notwithstanding the foregoing, following the occurrence and during
the continuation of an Event of Default which has resulted in an acceleration
of the Notes, on each Payment Date the Total Available Funds shall be
deposited in the Note Payment Account and applied in accordance with Section
2.8(f) of the Indenture.
Section 4.7 Reserve Account. (a) The Seller shall, prior to the
Closing Date, establish and maintain a segregated trust account in the name of
the Indenture Trustee at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of Bank
of Tokyo-Mitsubishi Trust Company), which shall be designated as the "Reserve
Account." The Reserve Account shall be under the sole dominion and control of
the Indenture Trustee; provided, that the Servicer may make deposits to the
Reserve Account in accordance with this Agreement and the Indenture. On the
Closing Date, the Seller will deposit the Reserve Account Initial Deposit into
the Reserve Account from the net proceeds of the sale of the Notes. On each
Subsequent Transfer Date, the Seller shall deposit to the Reserve Account an
amount equal to the applicable Subsequent Reserve Amount Deposit. It shall be
a condition to the purchase by the Trust of Subsequent Receivables from the
Seller with funds on deposit in the Pre-Funding Account that the Seller make
such deposit. The Reserve Account and all amounts, securities, investments,
financial assets and other property deposited in or credited to the Reserve
Account (the "Reserve Account Property") has been conveyed by the Seller to
the Trust pursuant to Section 2.1(a). Pursuant to the Indenture, the Trust
will pledge all of its right, title and interest in, to and under the Reserve
Account and the Reserve Account Property to the Indenture Trustee on behalf of
the Noteholders to secure its obligations under the Notes and the Indenture.
The Reserve Account Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing by
the Servicer, by the bank or trust company then maintaining the Reserve
Account, in Permitted Investments that mature not later than the Business Day
immediately preceding the next Payment Date, and such Permitted Investments
shall be held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Reserve Account shall, upon
the written direction of the Servicer, be paid to the Seller on any Payment
Date to the extent that funds on deposit therein, as certified by the
Servicer, exceed the Specified Reserve Balance. In the event the Reserve
Account is no longer to be maintained at the corporate trust department of
Bank of Tokyo-Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Reserve
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within 10 Business Days (or such longer period not to exceed 30
calendar days as to which each Rating Agency may consent). (b) With respect to
any Reserve Account Property:
(i) any Reserve Account Property that is a "financial asset"
as defined in Section 8-102(a)(9) of the Relevant UCC shall be
physically delivered to, or credited to an account in the name of,
the Qualified Institution or Qualified Trust Institution maintaining
the Reserve Account in accordance with such institution's customary
procedures such that such institution establishes a "securities
entitlement" in favor of the Indenture Trustee with respect thereto;
(ii) any Reserve Account Property that is held in deposit
accounts shall be held solely in the name of the Indenture Trustee at
one or more depository institutions having the Required Rating and
each such deposit account shall be subject to the exclusive custody
and control of the Indenture Trustee and the Indenture Trustee shall
have sole signature authority with respect thereto; and
(iii) except for any deposit accounts specified in clause
(ii) above, the Reserve Account shall only be invested in securities
or in other assets which the Qualified Institution or Qualified Trust
Institution maintaining the Reserve Account agrees to treat as
"financial assets" as defined in Section 8-102(a)(9) of the Relevant
UCC.
(c) If the amount on deposit in the Reserve Account on any Payment
Date (after giving effect to all deposits thereto or withdrawals therefrom on
such Payment Date) is greater than the Specified Reserve Balance for such
Payment Date, the Servicer shall instruct the Indenture Trustee to distribute
the amount of such excess to the Seller; provided that the Indenture Trustee
and the Owner Trustee hereby release, on each Payment Date, their security
interest in, to and under Reserve Account Property distributed to the Seller.
(d) Following the payment in full of the aggregate principal balance
of the Notes and the Certificate Balance and of all other amounts owing or to
be distributed hereunder or under the Indenture or the Trust Agreement to
Noteholders or Certificateholders and the termination of the Trust, any
remaining Reserve Account Property shall be distributed to the Seller.
Section 4.8 Net Deposits. As an administrative convenience only,
unless the Servicer is required to remit collections pursuant to the first
sentence of Section 4.2(a), the Seller and the Servicer may make any
remittance pursuant to this Article IV with respect to a Collection Period net
of distributions to be made to the Seller or the Servicer with respect to such
Collection Period. Nonetheless, such obligations shall remain separate
obligations, no party shall have a right of offset, and each such party shall
account for all of the above described remittances and distributions as if the
amounts were deposited and/or transferred separately.
Section 4.9 Statements to Noteholders and Certificateholders. On or
prior to each Payment Date, the Servicer shall provide to the Indenture
Trustee (with copies to the Rating Agencies 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;
(xi) the amount of Actuarial Advances and Last Scheduled
Payment Advances, if any, with respect to the related Collection
Period;
(xii) for each such Payment Date during the Pre-Funding
Period, (A) the amount, if any, withdrawn from the Pre-Funding
Account to purchase Subsequent Receivables during the related
Collection Period, (B) the Remaining Pre-Funded Amount, if any, (C)
the Negative Carry Amount, if any, for the related Collection Period,
and (D) the amount remaining on deposit in the Negative Carry
Account, if any, after all withdrawals, if any, made on such Payment
Date; and
(xiii) for the first Payment Date on or immediately
following the end of the Pre-Funding Period, the Remaining Pre-Funded
Amount, if any.
Each amount set forth on the Payment Date statement pursuant to
clauses (i), (ii), (iv) and (vii) above shall be expressed as a dollar amount
per $1,000 of original principal balance of a Certificate or Note, as
applicable.
Section 4.10 Control of Securities Accounts. Notwithstanding anything
else contained herein, the Trust agrees that each of the Collection Account,
the Pre-Funding Account, the Note Payment Account, the Reserve Account, the
Negative Carry Account and the Yield Supplement Account will only be
established at a Qualified Institution or Qualified Trust Institution that
agrees substantially as follows: (i) it will comply with "entitlement orders"
(as defined in Section 8-102(a)(8) of the Relevant UCC; i.e., orders directing
the transfer or redemption of any financial asset) relating to such accounts
issued by the Indenture Trustee without further consent by the Seller or the
Trust; (ii) until the termination of the Indenture, it will not enter into any
other agreement relating to any such account pursuant to which it agrees to
comply with entitlement orders of any Person other than the Indenture Trustee;
and (iii) all assets delivered or credited to it in connection with such
accounts and all investments thereof will be promptly credited to such
accounts.
Section 4.11 Pre-Funding Account. (a) On the Closing Date, the Seller
shall deposit in the Pre-Funding Account $239,740,801.35 from the net proceeds
of the sale of the Notes. On or prior to the Business Day immediately
preceding each Subsequent Transfer Date, the Servicer shall calculate the
following amounts: (i) the aggregate Principal Balance of the Subsequent
Receivables transferred to the Trust on such Subsequent Transfer Date, and
(ii) the Subsequent Payahead Account Deposit. The Servicer shall instruct the
Indenture Trustee to distribute the amount in clause (i) to the Seller and to
deposit the amount in clause (ii) to the Payahead Account on behalf of the
Seller on such Subsequent Transfer Date.
(b) If the Pre-Funding Account has not been reduced to zero on the
Payment Date on which the Pre-Funding Period ends (or, if the Pre-Funding
Period does not end on a Payment Date, on the first Payment Date following the
end of the Pre-Funding Period), after giving effect to any reductions in the
Pre-Funding Account on such date pursuant to paragraph (a), the Servicer shall
instruct the Indenture Trustee to withdraw from the Pre-Funding Account on
such Payment Date (or, if the Pre-Funding Period does not end on a Payment
Date, on the first Payment Date following the end of the Pre-Funding Period),
the amount remaining in the Pre-Funding Account at such time exclusive of the
Pre-Funding Account Investment Earnings, if any, for the related Collection
Period (such remaining amount being the "Remaining Pre-Funded Amount") and
deposit such amount in the Collection Account for inclusion in the Available
Funds for such Payment Date. The Pre-Funding Account Investment Earnings for
the related Collection Period (together with any other interest and other
income (net of losses and expenses) earned on amounts on deposit in the
Pre-Funding Account that are on deposit in the Pre-Funding Account) shall be
deposited to the Collection Account.
Section 4.12 Negative Carry Account. (a) On the Closing Date, the
Seller shall deposit the Negative Carry Account Initial Deposit into the
Negative Carry Account. On each Payment Date, the Servicer shall instruct the
Indenture Trustee to withdraw from the Negative Carry Account and deposit into
the Collection Account an amount equal to the lesser of (x) the amount, if
any, on deposit in the Negative Carry Account on such Payment Date and (y) the
Negative Carry Amount, if any, for such Payment Date. If the amount on deposit
in the Negative Carry Account on any Payment Date (after giving effect to the
withdrawal therefrom of the Negative Carry Amount, if any, for such Payment
Date) is greater than the Required Negative Carry Account Balance for such
Payment Date, the excess shall be released to the Seller on such Payment Date.
On the Payment Date on which the Pre-Funding Period ends (or, if the
Pre-Funding Period does not end on a Payment Date, on the first Payment Date
following the end of the Pre-Funding Period), the Servicer shall instruct the
Indenture Trustee to release to the Seller on such Payment Date all amounts
remaining on deposit in the Negative Carry Account after giving effect to any
withdrawals of the Negative Carry Amount on such Payment Date.
ARTICLE V - YIELD SUPPLEMENT LETTER OF CREDIT AND
THE YIELD SUPPLEMENT ACCOUNT
Section 5.1 Yield Supplement Letter of Credit and the Yield
Supplement Account. (a) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the Indenture
Trustee at a Qualified Institution or Qualified Trust Institution (which shall
initially be the corporate trust department of Bank of Tokyo-Mitsubishi Trust
Company), which shall be designated as the "Yield Supplement Account" (the
Yield Supplement Account, together with the Payahead Account, the Collection
Account, the Pre-Funding Account, the Note Payment Account, the Negative Carry
Account and the Reserve Account, the "Trust Accounts"). Amounts on deposit in
the Yield Supplement Account will be used for the payment of any Yield
Supplement Amounts required to be paid on any Payment Date pursuant to the
Yield Supplement Agreement which MMCA has not paid as of such Payment Date.
The Yield Supplement Account shall be under the sole dominion and control of
the Indenture Trustee provided, that the Servicer may make deposits to and
direct the Indenture Trustee to make withdrawals from the Yield Supplement
Account in accordance with this Agreement and the Yield Supplement Agreement.
On the Closing Date, the Seller shall deposit an amount equal to the Initial
Yield Supplement Amount into the Yield Supplement Account from the net
proceeds of the sale of the Notes. On each Subsequent Transfer Date, the
Seller shall deposit to the Yield Supplement Account an amount equal to the
applicable Subsequent Yield Supplement Account Deposit unless the Yield
Supplement Account has been replaced by a Yield Supplement Letter of Credit on
or prior to such Subsequent Transfer Date, in which case the Servicer shall
cause the amount available to be drawn under the Yield Supplement Letter of
Credit as of such Subsequent Transfer Date to be no less than the Specified
Yield Supplement Account Balance as of such Subsequent Transfer Date after
giving effect to the transfer to the Trust of the related Subsequent
Receivables. It shall be a condition to the sale of Subsequent Receivables
that are Deferred Payment Receivables to the Trust that the Seller make such
deposit. To the extent, on any Payment Date, the amount on deposit in the
Yield Supplement Account (after giving effect to any withdrawals to be made on
such Payment Date, but exclusive of net investment income) is greater than the
Specified Yield Supplement Account Balance for such Payment Date, then, in
such event, the Servicer shall instruct the Indenture Trustee in writing to
pay such excess amount to the Seller.
All amounts held in the Yield Supplement Account shall be invested,
as directed in writing by the Servicer, by the bank or trust company then
maintaining the Yield Supplement Account in Permitted Investments that mature
not later than the Business Day immediately preceding the next Payment Date
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Yield Supplement Account shall be withdrawn from the Yield Supplement
Account at the written direction of the Servicer and shall be paid to the
Seller. In the event that the Yield Supplement Account is no longer to be
maintained at the corporate trust department of Bank of Tokyo-Mitsubishi Trust
Company, the Servicer shall, with the Indenture Trustee's assistance as
necessary, cause the Yield Supplement Account to be moved to a Qualified
Institution or a Qualified Trust Institution within 10 Business Days (or such
longer period not to exceed 30 calendar days as to which each Rating Agency
may consent).
The Seller hereby sells, conveys and transfers to the Trust the Yield
Supplement Account, all funds and investments on deposit therein or credited
thereto and all proceeds thereof, subject, however, to the limitations set
forth below.
Pursuant to the Indenture, the Trust will pledge its rights under the
Yield Supplement Agreement (including its rights to amounts on deposit in the
Yield Supplement Account) to the Indenture Trustee to secure its obligations
under the Notes and the Indenture. Such sale, conveyance and transfer of the
Yield Supplement Account by the Seller to the Trust, and such pledge by the
Trust of its rights to amounts in the Yield Supplement Account to the
Indenture Trustee, shall be subject to the following limitations:
(i) All or a portion of the Yield Supplement Account may be
invested and reinvested in the manner specified in Section 5.1(a) in
accordance with written instructions from the Servicer. All such
investments shall be made in the name of the Indenture Trustee and
all income and gain realized thereon shall be solely for the benefit
of the Seller and shall be payable by the Indenture Trustee to the
Seller upon written direction of the Servicer as specified in Section
5.1(a);
(ii) If, with respect to any Collection Period, MMCA shall
have failed to make or cause to be made in full the remittance of the
Yield Supplement Amount on the date required by the Yield Supplement
Agreement, the Indenture Trustee not later than 10:00 a.m. (New York
City time) on the Payment Date, shall, upon the written direction of
the Servicer, withdraw from the Yield Supplement Account and deposit
into the Collection Account the amount of the shortfall between the
amount of funds that are required to be remitted by MMCA with respect
to the Yield Supplement Agreement as set forth in the Servicer's
Certificate and the amount of funds actually so remitted and to the
extent of any remaining shortfall, the Indenture Trustee shall
withdraw an amount equal thereto from the Reserve Account, and
deposit such amounts in the Collection Account; and
(iii) Upon termination of this Agreement in accordance with
Section 9.1 or (a) in the event that the Seller obtains a Yield
Supplement Letter of Credit or (b) the Seller otherwise satisfies the
requirements with respect to the Yield Supplement Agreement
established by the Rating Agencies, in either case as evidenced by
satisfaction of the Rating Agency Condition and an Officer's
Certificate of the Seller that all conditions to the liquidation of
the Yield Supplement Account have been satisfied, any amounts on
deposit in the Yield Supplement Account shall, upon written request
of the Seller, be paid to the Seller.
(b) If a Yield Supplement Letter of Credit has been obtained by MMCA,
and if, with respect to any Collection Period, MMCA shall have failed to make
or cause to be made in full the remittance of the Yield Supplement Amount,
upon written notice by the Servicer of such failure (which notice shall be
given no later than 10:00 a.m. (New York City time) on the Payment Date for
such Collection Period), the Indenture Trustee shall draw on the Yield
Supplement Letter of Credit in accordance with the terms thereof, in the
amount of the shortfall between the amount of funds with respect to the Yield
Supplement Amount that are required to be remitted by MMCA with respect to the
Yield Supplement Agreement as set forth in the Servicer's Certificate and the
amount of funds actually so remitted as set forth in the Servicer's
Certificate. Any such draw on the Yield Supplement Letter of Credit shall be
made after receipt of the related Servicer's Certificate on or before 11:00
a.m. (New York City time) on the Payment Date for such Collection Period. Upon
receipt of a request for a draw by the Indenture Trustee under the Yield
Supplement Letter of Credit, the Letter of Credit Bank is to promptly make a
payment to the Indenture Trustee in an amount equal to the Yield Supplement
Amount (minus payments made on the Yield Supplement Agreement), and the
Indenture Trustee shall deposit into the Collection Account pursuant to
Section 4.5(a) the amount received from the Letter of Credit Bank in respect
of such drawing. The Servicer shall include in each Servicer's Certificate, or
in an Officer's Certificate provided to the Indenture Trustee with each
Servicer's Certificate, the Stated Amount (as defined in the Yield Supplement
Letter of Credit) of the Yield Supplement Letter of Credit as of the close of
business on the last day of the Collection Period preceding the date of such
Servicer's Certificate. In the event that the rating of the Letter of Credit
Bank declines below the Required Rating, the Servicer shall promptly notify
the Indenture Trustee in writing of such decline, and upon receipt of such
notification, the Indenture Trustee shall, unless a suitable replacement
letter of credit shall have been delivered, promptly draw the full amount
available under the Yield Supplement Letter of Credit and deposit such amount
in the Yield Supplement Account.
ARTICLE VI - THE SELLER
Section 6.1 Representations, Warranties and Covenants of Seller. The
Seller makes the following representations, warranties and covenants on which
the Trust is deemed to have relied in acquiring the Trust Property. The
representations, warranties and covenants speak as of the Closing Date in the
case of the Initial Receivables and the other Trust Property related thereto,
and as of the related Subsequent Transfer Date in the case of the Subsequent
Receivables and the other Trust Property related thereto, and shall survive
the sale of the Trust Property to the Trust and the pledge thereof by the
Trust to the Indenture Trustee pursuant to the Indenture:
(a) Organization and Good Standing. The Seller has been duly
established and is validly existing as a business trust in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority, and legal right to acquire and own the
Receivables.
(b) Due Qualification. The Seller is duly qualified to do business as
a foreign business trust in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications.
(c) Power and Authority. The Seller has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their terms. The Seller has full power and
authority to sell and assign the property to be sold and assigned to and
deposited with the Trust and has duly authorized such sale and assignment to
the Trust by all necessary corporate action; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it is a
party have been, and the execution, delivery and performance of each
Second-Tier Subsequent Assignment has been or will be on or before the related
Subsequent Transfer Date, duly authorized by the Seller by all necessary
corporate action.
(d) Valid Sale; Binding Obligation. This Agreement effects a valid
sale, transfer and assignment of the Initial Receivables and the other Trust
Property related thereto conveyed by the Seller to the Trust hereunder and
this Agreement together with each Second-Tier Subsequent Assignment will
effect a valid sale, transfer and assignment of the related Subsequent
Receivables and the other Trust Property related thereto, in each case
enforceable against creditors of and purchasers from the Seller; and this
Agreement and the other Basic Documents to which the Seller is a party
constitute, and each Second-Tier Subsequent Assignment when executed and
delivered by the Seller will constitute, legal, valid, and binding obligations
of the Seller, enforceable against the Seller in accordance with their terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws and to general equitable principles.
(e) No Violation. The execution, delivery and performance by the
Seller of this Agreement and the other Basic Documents to which the Seller is
a party and the consummation of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof will not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the certificate of trust or amended and restated trust agreement of the
Seller, or conflict with, or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
any indenture, agreement, mortgage, deed of trust or other instrument to which
the Seller is a party or by which the Seller is bound or any of its properties
are subject, or result in the creation or imposition of any lien upon any of
its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument (other than this Agreement), or
violate any law, order, rule, or regulation, applicable to the Seller or its
properties, of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over the
Seller or any of its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the best knowledge of the Seller, threatened, before any
court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement, the Indenture, any
of the other Basic Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes, the Certificates or the consummation of any
of the transactions contemplated by this Agreement, the Indenture or any of
the other Basic Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement, the
Indenture, any of the other Basic Documents, the Notes or the Certificates, or
(iv) that may adversely affect the Federal or Applicable Tax State income,
excise, franchise or similar tax attributes of the Notes or the Certificates.
(g) Florida Securities and Investor Protection Act. In connection
with the offering of the Notes in the State of Florida, the Seller hereby
certifies that it has complied with all provisions of Section 517.075 of the
Florida Securities and Investor Protection Act.
Section 6.2 Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement, and hereby agrees
to the following:
(a) The Seller shall indemnify, defend, and hold harmless the Trust,
the Owner Trustee and the Indenture Trustee from and against any taxes that
may at any time be asserted against any such Person with respect to, and as of
the date of, the sale of the Receivables to the Trust or the issuance and
original sale of the Notes or the Certificates, including any sales, gross
receipts, general corporation, tangible personal property, privilege, or
license taxes (but, in the case of the Trust, not including any taxes asserted
with respect to ownership of the Receivables or Federal or other Applicable
Tax State income taxes arising out of the transactions contemplated by this
Agreement and the other Basic Documents) and costs and expenses in defending
against the same.
(b) The Seller shall indemnify, defend, and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith, or negligence
(other than errors in judgment) in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement and (ii) the Seller's violation of Federal or state
securities laws in connection with the registration or the sale of the Notes
or the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained herein and in the
Trust Agreement, in the case of the Owner Trustee, and in the Indenture, in
the case of the Indenture Trustee, except to the extent that such cost,
expense, loss, claim, damage or liability: (i) shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Owner Trustee or the Indenture Trustee, as applicable; (ii) in the case of the
Owner Trustee shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in Section 7.3 of the Trust Agreement
or (iii) in the case of the Indenture Trustee shall arise from the breach by
the Indenture Trustee of any of its representations and warranties set forth
in the Indenture.
(d) The Seller shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate.
(e) Indemnification under this Section 6.2 shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee and the
termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Seller shall have made any
indemnity payments pursuant to this Section 6.2 and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts
from others, such Person shall promptly repay such amounts to the Seller,
without interest.
Section 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Seller shall be a party or (iii) that may succeed by purchase and
assumption to all or substantially all of the business of the Seller, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Seller under this Agreement, will be the
successor to the Seller under this Agreement without the execution or filing
of any document or any further act on the part of any of the parties to this
Agreement; provided, however, that (x) the Seller shall have delivered to the
Owner Trustee and the Indenture Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such merger, conversion, consolidation or
succession and such agreement of assumption comply with this Section 6.3, and
(y) the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been authorized and filed that are necessary to fully preserve
and protect the interest of the Trust and the Indenture Trustee, respectively,
in the Receivables and the other Trust Property, and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to fully preserve and protect such interest. The
Seller shall provide notice of any merger, conversion, consolidation, or
succession pursuant to this Section 6.3 to the Rating Agencies.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (x) or (y) above
shall be conditions to the consummation of the transactions referred to in
clauses (i), (ii) or (iii) above.
Section 6.4 Limitation on Liability of Seller and Others. The Seller,
and any director or officer or employee or agent of the Seller, may rely in
good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear in,
prosecute, or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
Section 6.5 Seller May Own Notes or Certificates. The Seller, and any
Affiliate of the Seller, may in its individual or any other capacity become
the owner or pledgee of Notes not to exceed 20% (calculated on an aggregate
basis of the Seller and any Affiliates which are owners or pledgees of the
Notes) of the Outstanding Notes or Certificates with the same rights as it
would have if it were not the Seller or an Affiliate thereof, except as
otherwise expressly provided herein or in the other Basic Documents. Except as
set forth herein or in the other Basic Documents, Notes and Certificates so
owned by or pledged to the Seller or such controlling, controlled or commonly
controlled Person shall have an equal and proportionate benefit under the
provisions of this Agreement and the other Basic Documents, without
preference, priority, or distinction as among all of the Notes and
Certificates.
ARTICLE VII - THE SERVICER
Section 7.1 Representations and Warranties of Servicer. The Servicer
makes the following representations and warranties on which the Trust is
deemed to have relied in acquiring the Trust Property, and such
representations and warranties speak as of the Closing Date, in the case of
the Initial Receivables and the other Trust Property related thereto, and as
of the related Subsequent Transfer Date, in the case of the Subsequent
Receivables and the other Trustee Property related thereto, and shall survive
the sale of the Trust Property to the Trust and the pledge thereof by the
Trust pursuant to the Indenture:
(a) Organization and Good Standing. The Servicer has been duly
organized and is validly existing as a corporation in good standing under the
laws of the state of its incorporation, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority, and legal right to acquire, own, sell, and
service the Receivables and to hold the Receivable Files as custodian on
behalf of the Trustee.
(b) Due Qualification. The Servicer is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such qualifications.
(c) Power and Authority. The Servicer has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their terms, and the execution, delivery and
performance of this Agreement and the other Basic Documents to which it is a
party have been duly authorized by the Servicer by all necessary corporate
action.
(d) Binding Obligation. This Agreement and the other Basic Documents
to which it is a party constitute legal, valid, and binding obligations of the
Servicer, enforceable against the Servicer in accordance with their terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws and to general equitable principles. (e) No Violation. The execution,
delivery and performance by the Servicer of this Agreement and the other Basic
Documents to which it is a party, the consummation of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof and
thereof will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both)
a default under, the certificate of incorporation or bylaws of the Servicer,
or conflict with, or breach any of the terms or provisions of, or constitute
(with or without notice or lapse of time or both) a default under, any
indenture, agreement, mortgage, deed of trust or other instrument to which the
Servicer is a party or by which the Servicer is bound or to which any of its
properties are subject, or result in the creation or imposition of any lien
upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument (other than this
Agreement), or violate any law, order, rule, or regulation applicable to the
Servicer or its properties of any Federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having
jurisdiction over the Servicer or any of its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the Servicer's knowledge, threatened, before any court,
regulatory body, administrative agency, or tribunal or other governmental
instrumentality having jurisdiction over the Servicer or its properties: (a)
asserting the invalidity of this Agreement, the Indenture, any of the other
Basic Documents, the Notes, or the Certificates, (b) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the other
Basic Documents, (c) seeking any determination or ruling that might materially
and adversely affect the performance by the Servicer of its obligations under,
or the validity or enforceability of, this Agreement, the Indenture, any of
the other Basic Documents, the Notes or the Certificates, or (d) that may
adversely affect the Federal or Applicable Tax State income, excise, franchise
or similar tax attributes of the Notes or the Certificates.
Section 7.2 Liability of Servicer; Indemnities. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement, and hereby
agrees to the following:
(a) The Servicer shall defend, indemnify and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, arising out of or resulting
from the use, ownership or operation by the Servicer or any Affiliate thereof
of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee and the Indenture Trustee from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated herein or in the other Basic Documents, if any,
including, without limitation, any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, in the case of
the Trust, not including any taxes asserted with respect to, and as of the
date of, the sale of the Receivables to the Trust or the issuance and original
sale of the Notes and the Certificates and the issuance of the Certificates,
or asserted with respect to ownership of the Receivables, or Federal or other
Applicable Tax State income taxes arising out of the transactions contemplated
by this Agreement and the other Basic Documents) and costs and expenses in
defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that such
cost, expense, loss, claim, damage or liability arose out of, or was imposed
upon any such Person through, the negligence, willful misfeasance or bad faith
of the Servicer in the performance of its duties under this Agreement or any
other Basic Document to which it is a party (except for errors in judgment),
or by reason of reckless disregard of its obligations and duties under this
Agreement or any other Basic Document to which it is a party.
(d) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee, as applicable, from and against all costs,
expenses, losses, claims, damages and liabilities arising out of or incurred
in connection with the acceptance or performance of the trusts and duties
contained herein and in the other Basic Documents, if any, except to the
extent that such cost, expense, loss, claim, damage or liability: (a) shall be
due to the willful misfeasance, bad faith or negligence (except for errors in
judgment) of the Owner Trustee or the Indenture Trustee, as applicable; (b)
relates to any tax other than the taxes with respect to which either the
Seller or the Servicer shall be required to indemnify the Owner Trustee or the
Indenture Trustee, as applicable; (c) in the case of the Owner Trustee, shall
arise from the Owner Trustee's breach of any of its representations or
warranties set forth in Section 7.3 of the Trust Agreement or, in the case of
the Indenture Trustee, from the Indenture Trustee's breach of any of its
representations or warranties set forth in the Indenture; or (d) in the case
of the Indenture Trustee, shall arise out of or be incurred in connection with
the performance by the Indenture Trustee of the duties of successor Servicer
hereunder.
In addition to the foregoing indemnities, if the Owner Trustee or the
Indenture Trustee is entitled to indemnification by the Seller pursuant to
Section 6.2 and the Seller is unable for any reason to provide such
indemnification to the Owner Trustee or the Indenture Trustee, then the
Servicer shall be liable for any indemnification that the Owner Trustee or the
Indenture Trustee is entitled to under Section 6.2.
For purposes of this Section 7.2, in the event of the termination of
the rights and obligations of MMCA (or any successor thereto pursuant to
Section 8.2) as Servicer pursuant to Section 8.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to Section 8.2.
Indemnification under this Section 7.2 by MMCA (or any successor
thereto pursuant to Section 8.2) as Servicer, with respect to the period such
Person was (or was deemed to be) the Servicer, shall survive the termination
of such Person as Servicer or a resignation by such Person as Servicer as well
as the termination of this Agreement or the resignation or removal of the
Owner Trustee or the Indenture Trustee and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer shall have
made any indemnity payments pursuant to this Section and the recipient
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts to the Servicer, without interest.
Section 7.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (i) into which the Servicer may be merged
or consolidated, (ii) resulting from any merger, conversion, or consolidation
to which the Servicer shall be a party, or (iii) that may succeed by purchase
and assumption to all or substantially all of the business of the Servicer,
which Person in any of the foregoing cases is an Eligible Servicer and
executes an agreement of assumption to perform every obligation of the
Servicer under this Agreement, will be the successor to the Servicer under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement; provided, however, that
(x) the Servicer shall have delivered to the Owner Trustee and the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such merger, conversion, consolidation or succession and such agreement of
assumption comply with this Section 7.3, and (y) the Servicer shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been
authorized and filed that are necessary to fully preserve and protect the
interest of the Trust and the Indenture Trustee, respectively, in the
Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such Counsel, no such action shall be necessary to fully
preserve and protect such interests. The Servicer shall provide notice of any
merger, conversion, consolidation or succession pursuant to this Section 7.3
to the Rating Agencies. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement or assumption and compliance with clauses
(x) and (y) above shall be conditions to the consummation of the transactions
referred to in clauses (i), (ii) or (iii) above.
Section 7.4 Limitation on Liability of Servicer and Others. (a)
Neither the Servicer nor any of the directors or officers or employees or
agents of the Servicer shall be under any liability to the Trust, the
Noteholders or the Certificateholders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such Person
against any liability that would otherwise be imposed by reason of willful
misfeasance or bad faith in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement, or by reason of
negligence in the performance of its duties under this Agreement (except for
errors in judgment). The Servicer and any director, officer or employee or
agent of the Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person in respect of any matters
arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties to this Agreement and the interests
of the Noteholders and Certificateholders under this Agreement. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Servicer.
Section 7.5 Servicer Not to Resign. Subject to the provisions of
Section 7.3, the Servicer shall not resign from its obligations and duties
under this Agreement except upon a determination that the performance of its
duties is no longer permissible under applicable law. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Owner Trustee and the Indenture
Trustee. No such resignation shall become effective until the Indenture
Trustee or a successor Servicer shall have (i) assumed the responsibilities
and obligations of the Servicer in accordance with Section 8.2 and (ii) become
the Administrator under the Administration Agreement pursuant to Section 8
thereof.
Section 7.6 Servicer May Own Notes or Certificates. The Servicer, and
any Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Notes or Certificates with the same rights as
it would have if it were not the Servicer or an Affiliate thereof, except as
otherwise expressly provided herein or in the other Basic Documents. Except as
set forth herein or in the other Basic Documents, Notes and Certificates so
owned by or pledged to the Servicer or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Notes and
Certificates.
ARTICLE VIII - SERVICING TERMINATION
Section 8.1 Events of Servicing Termination. (a) The occurrence of
any one of the following events shall constitute an event of servicing
termination hereunder (each, an "Event of Servicing Termination"):
(i) Any failure by the Servicer to deliver to the Owner
Trustee or the Indenture Trustee the Servicer's Certificate for any
Collection Period, which shall continue beyond the earlier of three
Business Days from the date such Servicer's Certificate was due to be
delivered and the related Payment Date, or any failure by the
Servicer to make any required payment or deposit under this
Agreement, which shall continue unremedied for a period of five
Business Days following the due date therefor (or, in the case of a
payment or deposit to be made no later than a Payment Date, the
failure to make such payment or deposit by such Payment Date); or
(ii) Any failure on the part of the Servicer duly to observe
or to perform in any material respect any other covenant or agreement
set forth in the Notes, the Certificates, or in this Agreement, which
failure shall materially and adversely affect the rights of
Noteholders or Certificateholders and continue unremedied for a
period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer by the Owner Trustee or the Indenture Trustee or to the
Owner Trustee, the Indenture Trustee, the Seller and the Servicer by
the Holders of Notes or Certificates, as applicable, evidencing not
less than 25% of the principal balance of the then Notes Outstanding,
in the aggregate, or 25% of the Certificate Balance; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority of competent jurisdiction for the appointment
of a conservator, receiver, liquidator or trustee for the Seller or
the Servicer in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings, or for
the winding up or liquidation of its affairs, and any such decree or
order continues unstayed and in effect for a period of 60 consecutive
days; or
(iv) The consent by the Seller or the Servicer to the
appointment of a conservator, receiver, liquidator or trustee in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities, or similar proceedings of or relating to the Seller
or the Servicer or relating to substantially all of its property, the
admission in writing by the Servicer of its inability to pay its
debts generally as they become due, the filing by the Seller or the
Servicer of a petition to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, the making by the
Seller or the Servicer of an assignment for the benefit of its
creditors or the voluntary suspension by the Seller or the Servicer
of payment of its obligations; or
(v) The failure by the Servicer to be an Eligible Servicer;
then, and in each and every case and for so long as an Event of Servicing
Termination shall not have been remedied, either the Indenture Trustee, or the
Holders of Notes evidencing not less than 51% of the aggregate principal
amount of the Notes Outstanding, voting as a group, or if no Notes are
Outstanding, the Owner Trustee pursuant to the Trust Agreement by notice then
given in writing to the Servicer (with a copy to the Indenture Trustee and the
Owner Trustee if given by the Noteholders), may terminate all of the rights
and obligations of the Servicer under this Agreement. On or after the receipt
by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Notes, the
Certificates, or the Trust Property or otherwise, shall pass to and be vested
in the Indenture Trustee or a successor Servicer appointed under Section 8.2;
and, without limitation, the Indenture Trustee and the Owner Trustee shall be
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement of the Receivable Files, the certificates of title to
the Financed Vehicles, or otherwise. The Servicer shall cooperate with the
Indenture Trustee, the Owner Trustee and such successor Servicer in effecting
the termination of its responsibilities and rights as Servicer under this
Agreement, including the transfer to the Indenture Trustee or such successor
Servicer for administration of all cash amounts that are at the time held by
the Servicer for deposit or thereafter shall be received with respect to a
Receivable, all Receivable Files and all information or documents that the
Indenture Trustee or such successor Servicer may require. In addition, the
Servicer shall transfer its electronic records relating to the Receivables to
the successor Servicer in such electronic form as the successor Servicer may
reasonably request. All reasonable costs and expenses incurred by the
successor Servicer, including allowable compensation of employees and overhead
costs, in connection with the transfer of servicing shall be paid by the
outgoing Servicer (or by the initial Servicer if the outgoing Servicer is the
Indenture Trustee acting on an interim basis) upon presentation of reasonable
documentation of such costs and expenses.
(b) If any of the foregoing Events of Servicing Termination occur,
the Indenture Trustee and the Owner Trustee shall have no obligation to notify
Noteholders, Certificateholders or any other Person of such occurrence prior
to the continuance of such event through the end of any cure period specified
in Section 8.1(a).
Section 8.2 Indenture Trustee to Act; Appointment of Successor
Servicer. Upon the Servicer's resignation pursuant to Section 7.5 or upon the
Servicer's receipt of notice of termination as Servicer pursuant to Section
8.1(a), the Indenture Trustee (or an Affiliate of the Indenture Trustee that
is an Eligible Servicer appointed by the Indenture Trustee) shall be the
successor in all respects to the Servicer in its capacity as Servicer under
this Agreement (provided that neither the Indenture Trustee nor any other
successor Servicer shall have any obligation, but may elect, to make available
to an Obligor any refinancing of a Last Scheduled Payment in the manner
specified in the last sentence of Section 3.2(e) hereof), and shall be subject
to all the responsibilities, duties and liabilities relating thereto placed on
the Servicer by the terms and provisions of this Agreement. As compensation
therefor, the Indenture Trustee shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise) as the Servicer
would have been entitled to under this Agreement if no such notice of
termination or resignation had been given, except that all collections shall
be deposited in the Collection Account within two Business Days of receipt and
shall not be retained by the Servicer. Notwithstanding the above, the
Indenture Trustee may, if it shall be unwilling so to act, or shall, if it is
legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, an Eligible Servicer as the successor to the
terminated Servicer under this Agreement. In connection with such appointment,
the Indenture Trustee may make such arrangements for the compensation of such
successor Servicer out of payments on Receivables as it and such successor
shall agree, which, in no event, shall be greater than that payable to MMCA as
Servicer hereunder. The Indenture Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate
any such succession including, but not limited to, making arrangements in
respect of the last sentence of Section 3.2(e) of this Agreement. The
Indenture Trustee shall not be relieved of its duties as successor Servicer
under this Section 8.2 until a newly appointed Servicer shall have assumed the
responsibilities and obligations of the terminated Servicer under this
Agreement.
Section 8.3 Effect of Servicing Transfer. (a) After the transfer of
servicing hereunder, the Indenture Trustee or successor Servicer shall notify
Obligors to make directly to the successor Servicer payments that are due
under the Receivables after the effective date of such transfer.
(b) Except as provided in Section 8.2 after the transfer of servicing
hereunder, the outgoing Servicer shall have no further obligations with
respect to the administration, servicing, custody or collection of the
Receivables and the successor Servicer shall have all of such obligations,
except that the outgoing Servicer will transmit or cause to be transmitted
directly to the successor Servicer for its own account, promptly on receipt
and in the same form in which received, any amounts held by the outgoing
Servicer (properly endorsed where required for the successor Servicer to
collect any such items) received as payments upon or otherwise in connection
with the Receivables and the outgoing Servicer shall continue to cooperate
with the successor Servicer by providing information and in the enforcement of
the Dealer Agreements.
(c) Any successor Servicer shall provide the Seller with access to
the Receivable Files and to the successor Servicer's records (whether written
or automated) with respect to the Receivable Files. Such access shall be
afforded without charge, but only upon reasonable request and during normal
business hours at the offices of the successor Servicer. Nothing in this
Section 8.3 shall affect the obligation of the successor Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information as
a result of such obligation shall not constitute a breach of this Section 8.3.
Section 8.4 Notification to Noteholders and Certificateholders. Upon
any notice of an Event of Servicing Termination or upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII, the
Indenture Trustee shall give prompt written notice thereof to Noteholders, and
the Owner Trustee shall give prompt written notice thereof to
Certificateholders at their addresses of record and to the Rating Agencies.
Section 8.5 Waiver of Past Events of Servicing Termination. The
Holders of Notes evidencing not less than 51% of the Notes Outstanding or the
Holders of Certificates evidencing not less than 51% of the Certificate
Balance (in the case of an Event of Servicing Termination which does not
adversely affect the Indenture Trustee or the Noteholders) may, on behalf of
all Noteholders and Certificateholders, waive any Event of Servicing
Termination hereunder and its consequences, except an event resulting from the
failure to make any required deposits to, or payments from, any of the Trust
Accounts and the Certificate Distribution Account in accordance with this
Agreement. Upon any such waiver of a past Event of Servicing Termination, such
event shall cease to exist, and shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other event or impair any right arising therefrom, except to the extent
expressly so waived.
ARTICLE IX - TERMINATION
Section 9.1 Optional Purchase of All Receivables. (a) On each Payment
Date following the last day of a Collection Period as to which the Pool
Balance shall be less than or equal to the product of (i) the Optional
Purchase Percentage, and (ii) the Initial Pool Balance, the Servicer shall
have the option to purchase the Owner Trust Estate, other than the Trust
Accounts and the Certificate Distribution Account. To exercise such option,
the Servicer shall notify the Owner Trustee and the Indenture Trustee no later
than the 15th day of the month immediately preceding the month in which such
repurchase is to be effected and shall deposit an amount equal to the
aggregate Purchase Amount for the Receivables, plus the appraised value of any
other property held in the Trust other than in the Trust Accounts and the
Certificate Distribution Account, such value to be determined by an appraiser
mutually agreed upon by the Servicer, the Owner Trustee and the Indenture
Trustee, into the Collection Account on the Payment Date occurring in the
month in which such repurchase is to be effected. Upon such payment, the
Servicer shall succeed to and own all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to exercise
such option unless the amount to be deposited in the Collection Account
pursuant to the second preceding sentence is greater than or equal to the sum
of the outstanding principal balance of the Notes and all accrued but unpaid
interest (including any overdue interest) thereon and the Certificate Balance.
The Purchase Amount, any Negative Carry Amounts and any Yield Supplement
Amounts for such Payment Date, plus to the extent necessary all amounts in the
Reserve Account, shall be used to make payments in full to Noteholders and
Certificateholders in the manner set forth in Article IV.
(b) Unless otherwise required by the Rating Agencies as set forth in
writing delivered to the Owner Trustee and the Indenture Trustee, if at the
time the Servicer exercises its purchase option hereunder the Servicer's
long-term unsecured debt has a rating lower than investment grade by the
Rating Agencies, the Servicer shall deliver to the Owner Trustee and the
Indenture Trustee on such Payment Date a letter from an Independent investment
bank or an Independent public accountant to the effect that the price paid by
the Servicer for the Receivables at the time of transfer pursuant to such
purchase option represented a fair market price for such Receivables.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder,
and the Indenture Trustee will continue to carry out its obligations hereunder
with respect to the Certificateholders, including without limitation making
distributions from the Payahead Account and the Collection Account in
accordance with Section 4.6 and making withdrawals from the Reserve Account in
accordance with Sections 4.5(b) and 4.7.
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 Section 9-506(b) of the Relevant UCC, unless it shall
have given the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) The Seller and the Servicer shall give the Owner Trustee and the
Indenture Trustee at least 60 days' prior written notice of any change in its
jurisdiction of organization if, as a result of such relocation or change, the
applicable provisions of the Relevant UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of
any new financing statement and shall promptly file any such amendment,
continuation statement or any new financing statement. The Servicer shall at
all times maintain each office from which it shall service Receivables and its
jurisdiction of organization within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account, Payahead Account, the Reserve Account and the Yield Supplement
Account.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Trust, the Servicer's master computer records (including any back-up archives)
that refer to a Receivable shall indicate clearly the interest of the Trust
and the Indenture Trustee in such Receivable and that such Receivable is owned
by the Trust and has been pledged to the Indenture Trustee pursuant to the
Indenture. Indication of the Trust's and the Indenture Trustee's interest in a
Receivable shall be deleted from or modified on the Servicer's computer
systems when, and only when, the Receivable shall have been paid in full or
repurchased by the Seller or purchased by the Servicer.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in any
automobile or sports-utility vehicle receivables to any prospective purchaser,
lender, or other transferee, the Servicer shall give to such prospective
purchaser, lender, or other transferee computer tapes, compact disks, records,
or print-outs (including any restored from back-up archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Trust and has been
pledged to the Indenture Trustee unless such Receivable has been paid in full
or repurchased by the Seller or purchased by the Servicer.
(g) The Servicer shall permit the Owner Trustee, the Indenture
Trustee and their respective agents at any time during normal business hours
to inspect, audit, and make copies of and abstracts from the Servicer's
records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee and
the Indenture Trustee, within 10 Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedules of Receivables and to each
of the Servicer's Certificates furnished before such request indicating
removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of each
amendment to any financing statement, an Opinion of
Counsel either (A) stating that, in the opinion of such
Counsel, all financing statements and continuation
statements have been authorized and filed that are
necessary fully to preserve and protect the interest of
the Trust and the Indenture Trustee in the Receivables,
and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such
Counsel, no such action shall be necessary to preserve
and protect such interest; and
(2) within 90 days after the beginning of each calendar year
commencing in the year 2003, an Opinion of Counsel,
dated as of a date during such 90-day period, either (A)
stating that, in the opinion of such Counsel, all
financing statements and continuation statements have
been authorized and filed that are necessary fully to
preserve and protect the interest of the Trust and the
Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (B)
stating that, in the opinion of such Counsel, no such
action shall be necessary to preserve and protect such
interest.
Each Opinion of Counsel referred to in clause (i)(1) or (i)(2) above
shall specify any action necessary (as of the date of such opinion) to be
taken in the following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
Section 10.3 Representations of the Seller and the Purchaser. The
respective agreements, representations, warranties and other statements by the
Seller and the Purchaser set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the Closing.
Section 10.4 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York without reference to its
conflict of laws provisions (other than section 5-1401 of the general
obligations law) and the obligations, rights, and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 10.5 Notices. All demands, notices, and communications under
this Agreement shall be in writing, personally delivered, sent via facsimile,
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt,
(a) in the case of the Seller or the Servicer, to the agent for
service as specified in Section 10.13 hereof, or at such other address as
shall be designated by the Seller or the Servicer in a written notice to the
Owner Trustee and the Indenture Trustee;
(b) in the case of the Owner Trustee, at the Corporate Trust Office
of the Owner Trustee;
(c) in the case of the Indenture Trustee, at the Corporate Trust
Office of the Indenture Trustee;
(d) in the case of Moody's, at the following address:
Xxxxx'x Investors Service, Inc.
ABS Monitoring Department
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(e) in the case of S&P, at the following address:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
(f) in the case of Fitch Ratings, at the following address:
Fitch Ratings
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
Fax: (000) 000-0000
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 2002-2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ W. Xxxxx Xxxxxxxxxx
----------------------------------
Name: W. Xxxxx Xxxxxxxxxx
Title: Vice President
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By: /s/ C. A. Xxxxxxx
--------------------------------
Name: C. A. Xxxxxxx
Title: Executive Vice President and
General Manager
Accepted and agreed:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By: /s/ X. Xxxxxxxxx
----------------------
Name: X. Xxxxxxxxx
Title: Trust Officer
Schedule A
SCHEDULE OF INITIAL RECEIVABLES
Exhibit B to the Purchase Agreement
Incorporated by Reference Herein
Schedule B
LOCATIONS OF RECEIVABLES FILES
Corporate Xxxxxx
0000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
National Service Center
00000 Xxxxxx Xxxxxx, Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Exhibit A
[Form of Servicer's Certificate]
The undersigned certifies that he is a _____________________
of Mitsubishi Motors Credit of America, Inc., a corporation in good standing
under the laws of the state of its incorporation (the "Company"), and that as
such he is duly authorized to execute and deliver this certificate on behalf
of the Company pursuant to Section 3.9 of the Sale and Servicing Agreement,
dated as of __________, _____, by and among the Company, as Servicer, MMCA
Auto Receivables Trust, as Seller, and MMCA Auto Owner Trust ____-__ (the
"Sale and Servicing Agreement") (all capitalized terms used herein without
definition have the respective meanings specified in the Sale and Servicing
Agreement), and further certifies that:
(a) The Servicer's report for the period from
__________ to ____________ attached to this certificate is complete
and accurate and contains all information required by Section 3.9 of
the Sale and Servicing Agreement; and
(b) As of the date hereof, no Event of Servicing
Termination or event that with notice or lapse of time or both would
become an Event of Servicing Termination has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature and
the corporate seal of the Company this ___ day of __________, _____.
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC.
By: ___________________________
Name:
Title:
Exhibit B
FORM OF STATEMENT TO NOTEHOLDERS
-----------------------------------------------------------------------------
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Noteholders
MMCA Auto Owner Trust ___-__
July 1, ____ through June 30, _____
Per Original $1,000 Note
Aggregate or Certificate
I. A. Distribution of Note Principal
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6,. Class C
B. Distribution of Certificate Principal
II. Distribution of Note Interest
A. Class A-1
B. Class A-2
C. Class A-3
D. Class A-4
E. Class B
F. Class C
III. Yield Supplement Amount
IV. Total Servicing Fee
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Note Pool Factors
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
C. Certificate Balance
D. Certificate Pool Factor
VI. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
VIII. Principal Balance of Deferred Receivables
IX. Interest Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
X. Principal Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
XI. Aggregate Realized Losses for This Collection Period
XII. Reserve Account Balance on Payment Date
XIII. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased
by Servicer
Exhibit C
FORM OF STATEMENT TO CERTIFICATEHOLDERS
-----------------------------------------------------------------------------
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Certificateholders
MMCA Auto Owner Trust ___-__
July 1, ____ through June 30, _____
Per Original
Aggregate $1,000 Note or
Certificate
I. A. Distribution of Note Principal
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Distribution of Certificate Principal
II. Distribution of Note Interest
A. Class A-1
B. Class A-2
C. Class A-3
D. Class A-4
E. Class B
F. Class C
III. Yield Supplement Amount
IV. Total Servicing Fee
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
B. Note Pool Factors
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
C. Certificate Balance
D. Certificate Pool Factor
VI. A. Pool Balance at End of This Collection Period
B. Yield Supplement Overcollateralization Amount
C. Adjusted Principal Balance of Receivables Pool
VII. A. Level Pay Pool Balance
B. Last Scheduled Payment Pool Balance
VIII. Principal Balance of Deferred Receivables
IX. Interest Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
X. Principal Carryover Shortfall
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class B
6. Class C
XI. Aggregate Realized Losses for This Collection Period
XII. Reserve Account Balance on Payment Date
XIII. Amount of Advances for This Collection Period
A. Actuarial Advances
B. Last Scheduled Payment Advances
XIV. Purchase Amount of Receivables Repurchased by Seller or Purchased
by Servicer
Exhibit D
[Form of Yield Supplement Agreement]
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re: MMCA Auto Owner Trust 2002-2
Ladies and Gentlemen:
We hereby confirm arrangements made as of the date hereof
with you to be effective upon (i) receipt by us of the enclosed copy of this
letter agreement (as amended, supplemented or otherwise modified and in effect
from time to time, the "Yield Supplement Agreement"), executed by you, and
(ii) execution of the Purchase Agreement referred to below and payment of the
purchase price specified thereunder. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such terms in, or
incorporated by reference into, the Purchase Agreement, dated as of June 1,
2002 (as amended, supplemented or otherwise modified and in effect from time
to time, the "Purchase Agreement"), between Mitsubishi Motors Credit of
America, Inc., as seller (the "Seller"), and MMCA Auto Receivables Trust, as
purchaser (the "Purchaser").
1. On or prior to the Determination Date preceding each
Payment Date, the Servicer shall notify the Purchaser and the Seller of the
Yield Supplement Amount for such Payment Date.
2. In consideration for the Purchaser entering into the
Purchase Agreement and the purchase price paid to the Seller for the
Receivables under the Purchase Agreement, we agree to make a payment of the
Yield Supplement Amount to the Purchaser, or to the pledgee of the assignee of
the Purchaser referred to in Section 5 hereof, on the Business Day prior to
each Payment Date.
3. All payments pursuant hereto shall be made by federal
wire transfer (same day) funds or in immediately available funds, to such
account as the Purchaser or the pledgee of the assignee of the Purchaser
referred to in Section 5 hereof, may designate in writing to the Seller, prior
to the relevant Payment Date.
4. Our agreements set forth in this Yield Supplement
Agreement are our primary obligations and such obligations are irrevocable,
absolute and unconditional, shall not be subject to any counterclaim, setoff
or defense and shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstances
or condition whatsoever.
5. Pursuant to the Sale and Servicing Agreement, the
Purchaser will sell, transfer, assign and convey its interest in this Yield
Supplement Agreement to MMCA Auto Owner Trust 2002-2 (the "Trust"), and the
Seller hereby acknowledges and consents to such sale, transfer, assignment and
conveyance. Concurrent with such sale, transfer, assignment and conveyance,
pursuant to the Indenture, the Trust will pledge its rights under this Yield
Supplement Agreement, along with certain other assets of the Trust, to Bank of
Tokyo-Mitsubishi Trust Company, as Indenture Trustee, to secure its
obligations under the Notes and the Indenture, and the Seller hereby
acknowledges and consents to such pledge. The Seller hereby agrees, for the
benefit of the Trust, that following such sale, transfer, assignment,
conveyance and pledge, this Yield Supplement Agreement shall not be amended,
modified or terminated without the consent of Wilmington Trust Company, as
Owner Trustee on behalf of the Trust, and, prior to the payment in full of the
Notes, the Indenture Trustee.
6. This Yield Supplement Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
7. Except as otherwise provided herein, all notices pursuant
to this Yield Supplement Agreement shall be in writing and shall be effective
upon receipt thereof. All notices shall be directed as set forth below, or to
such other address or to the attention of such other person as the relevant
party shall have designated for such purpose in a written notice.
If to the Purchaser:
MMCA Auto Receivables Trust
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Secretary/Treasurer
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Seller:
Mitsubishi Motors Credit of America, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Executive Vice President and Treasurer
Telephone: (000) 000-0000
Fax: (000) 000-0000
8. This Yield Supplement Agreement may be executed in one or
more counterparts and by the different parties hereto on separate
counterparts, all of which shall be deemed to be one and the same document.
If the foregoing satisfactorily sets forth the terms and
conditions of our agreement, please indicate your acceptance thereof by
signing in the space provided below and returning to us the enclosed duplicate
original of this letter.
Very truly yours,
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.,
as Seller
By: ________________________________
Name:
Title:
Agreed and accepted as of the date first above written:
MMCA AUTO RECEIVABLES TRUST,
as Purchaser
By: ____________________________
Name:
Title:
Exhibit E
[Form of Second-Tier Subsequent Assignment]
Dated:__________, _____
For value received, in accordance with and subject to the
Sale and Servicing Agreement, dated as of June 1, 2002 (the "Sale and
Servicing Agreement"), among MMCA Auto Owner Trust 2002-2 (the "Trust"), MMCA
Auto Receivables Trust, as the Seller (the "Seller"), and Mitsubishi Motors
Credit of America, Inc., as the Servicer (the "Servicer"), the Seller hereby
irrevocably sells, transfers, assigns and otherwise conveys to the Trust,
without recourse (subject to the obligations herein), all right, title and
interest of the Seller, whether now owned or hereafter acquired, in, to and
under the following:
(i) the Subsequent Receivables listed on Schedule A hereto;
(ii) with respect to the Subsequent Receivables that are Actuarial
Receivables, monies due thereunder on or after __________, _____ (the
"Subsequent Cutoff Date") (including Payaheads), and, with respect to
Subsequent Receivables that are Simple Interest Receivables, monies
received thereunder on or after the Subsequent Cutoff Date;
(iii) the security interests in Financed Vehicles granted by Obligors
pursuant to such Subsequent Receivables and any other interest of the
Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to such Subsequent
Receivables from claims on any physical damage, theft, credit life or
disability insurance policies covering the related Financed Vehicles
or related Obligors;
(v) all rights to receive proceeds with respect to such Subsequent
Receivables from recourse to Dealers thereon pursuant to Dealer
Agreements;
(vi) all of the Seller's rights to the Receivable Files that relate to
such Subsequent Receivables;
(vii) all payments and proceeds with respect to such Subsequent Receivables
held by the Servicer;
(viii) all property (including the right to receive Liquidation Proceeds and
Recoveries and Financed Vehicles and the proceeds thereof acquired by
the Seller pursuant to the terms of a Subsequent Receivable that is a
Final Payment Receivable), guarantees and other collateral securing a
Subsequent Receivable (other than a Subsequent Receivable purchased
by the Servicer or repurchased by the Seller);
(ix) all of the Seller's rights under the related First-Tier Subsequent
Assignment;
(x) all rebates of premiums and other amounts relating to insurance
policies and other items financed under such Subsequent Receivables
in effect as of the Subsequent Cutoff Date; and
(xi) all present and future claims, demands, causes of action and choses
in action in respect of any or all of the foregoing and all payments
on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing.
The Seller hereby represents that as of the Subsequent
Cutoff Date, the aggregate Principal Balance of the Subsequent Receivables was
$______________.
The foregoing sale, transfer, assignment and conveyance
shall not constitute and is not intended to result in an assumption by the
Trust of any obligation of the Seller to the Obligors, the Dealers or any
other Person with respect the Subsequent Receivables set forth in Schedule A
attached hereto and the other Trust Property related thereto or any agreement,
document or instrument related thereto.
In the event that the foregoing sale, transfer, assignment
and conveyance is deemed to be a pledge, the Seller hereby grants to the Trust
a first priority security interest in all of the Seller's right to and
interest in the Subsequent Receivables and other property described in clauses
(i) through (xi) above to secure a loan deemed to have been made by the Trust
to the Seller in an amount equal to the sum of the initial principal amount of
the Notes plus accrued interest thereon and the Initial Certificate Balance.
This Second-Tier Subsequent Assignment shall be construed in
accordance with the laws of the State of New York and the obligations of the
Seller under this Second-Tier Subsequent Assignment shall be determined in
accordance with such laws.
This Second-Tier Subsequent Assignment is made pursuant to
and upon the representations, warranties and agreements on the part of the
Seller contained in the Sale and Servicing Agreement and is to be governed in
all respects by the Sale and Servicing Agreement. Capitalized terms used but
not otherwise defined herein shall have the meanings assigned to them in the
Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Second-Tier Subsequent Assignment to be duly executed as of the day
hereinabove set forth.
MMCA AUTO RECEIVABLES TRUST
By: _________________________________
Name:
Title:
Schedule A (to Exhibit E)
SCHEDULE OF SUBSEQUENT RECEIVABLES PROVIDED TO THE
INDENTURE TRUSTEE ON THE SUBSEQUENT CLOSING DATE, WHICH
MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE
Annex A (to Exhibit E)
OFFICER'S CERTIFICATE
The undersigned officer of MMCA Auto Receivables Trust (the
"Company"), does hereby certify, pursuant to Section 2.1(d)(xvii) of the Sale
and Servicing Agreement, dated as of June 1, 2002 among MMCA Auto Owner Trust
2002-2 (the "Trust"), MMCA Auto Receivables Trust, as the Seller, and
Mitsubishi Motors Credit of America, Inc., as the Servicer (as amended,
supplemented or otherwise modified as of the date hereof, the "Agreement")
that all of the conditions to the transfer to the Trust of the Subsequent
Receivables listed on Schedule A to the Second-Tier Subsequent Assignment
delivered herewith and the other property and rights related to such
Subsequent Receivable, as described in Section 2.1(d) of the Agreement, have
been satisfied on or prior to the related Subsequent Transfer Date.
Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Agreement.
IN WITNESS WHEREOF, the undersigned have caused this
certificate to be duly executed this ____ day of __________, ____.
By: ____________________________
Name:
Title:
