REGISTRATION NO. 333-85685
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MMCA AUTO OWNER TRUST 1999-2
(Issuer with respect to the Notes)
MMCA AUTO RECEIVABLES TRUST
(Originator of the Trust described herein)
(Exact name of registrant as specified in its charter)
DELAWARE 9999 33-0869011
(State or other jurisdiction (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
of incorporation or organization) CLASSIFICATION CODE NO.) IDENTIFICATION
NO.)
SUSAN M. TYNER
6363 KATELLA AVENUE
CYPRESS, CALIFORNIA 90630-5205
(714) 236-1614
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
-----------
SUSAN M. TYNER
6363 KATELLA AVENUE
CYPRESS, CALIFORNIA 90630-5205
(714) 236-1614
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------
Copies to:
SUSAN M. CURTIS, ESQ. DALE W. LUM, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP BROWN & WOOD LLP
919 THIRD AVENUE 555 CALIFORNIA STREET
NEW YORK, NEW YORK 10022 SAN FRANCISCO, CALIFORNIA 94104
Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. |_|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration number of the earlier effective registration statement for
the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE FEE(1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
% Class A-1 Asset Backed
Notes........................ $326,000,000 100% $326,000,000 $90,628
% Class A-2 Asset Backed
Notes........................ $210,000,000 100% $210,000,000 $58,380
% Class A-3 Asset Backed
Notes........................ $142,000,000 100% $142,000,000 $39,476
% Class B Asset Backed
Notes........................ $62,000,000 100% $62,000,000 $17,236
==========================================================================================================
(1) $278 of the Registration Fee previously has been paid.
</TABLE>
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may determine.
[FLAG]
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Subject to Completion
Preliminary Prospectus Dated October 18, 1999
$740,000,000
MMCA AUTO OWNER TRUST 1999-2
$326,000,000 % CLASS A-1 ASSET BACKED NOTES
$210,000,000 % CLASS A-2 ASSET BACKED NOTES
$142,000,000 % CLASS A-3 ASSET BACKED NOTES
$62,000,000 % CLASS B ASSET BACKED NOTES
MMCA AUTO RECEIVABLES TRUST
SELLER
[INSERT GRAPHIC]
SERVICER
<TABLE>
<CAPTION>
Underwriting Discounts
Price* and Commissions Net Proceeds to Seller
---------------------------- ----------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A-1 Notes $326,000,000 ( %) $_______ ( %) $_________ ( %)
Class A-2 Notes $210,000,000 ( %) $_______ ( %) $_________ ( %)
Class A-3 Notes $142,000,000 ( %) $_______ ( %) $_________ ( %)
Class B Notes $62,000,000 ( %) $_______ ( %) $_________ ( %)
Total $740,000,000 $_______ $_________
</TABLE>
- --------------------------
* The price of the notes will also include any interest accrued on
the notes from the date on which the notes are issued.
Interest on and principal of the notes will be payable monthly, on the 15th
or the first business day after the 15th.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
THE NOTES REPRESENT OBLIGATIONS OF THE TRUST AND ARE BACKED ONLY BY THE
ASSETS OF THE TRUST. THE NOTES DO NOT REPRESENT OBLIGATIONS OF OR INTERESTS
IN MMCA AUTO RECEIVABLES TRUST, MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
OR ANY OF THEIR AFFILIATES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
UNDERWRITERS OF THE CLASS A NOTES
CREDIT SUISSE FIRST BOSTON
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
UNDERWRITERS OF THE CLASS B NOTES
CREDIT SUISSE FIRST BOSTON
The date of this Prospectus is October , 1999
TABLE OF CONTENTS
Page
----
IMPORTANT NOTICE
ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS.............................................................iii
SUMMARY OF TERMS...........................................................1
RISK FACTORS...............................................................5
THE TRUST.................................................................12
Limited Purposes and Limited Assets.......................................12
Capitalization of the Trust...............................................13
The Owner Trustee.........................................................13
PROPERTY OF THE TRUST.....................................................13
MMCA'S CONTRACT PORTFOLIO.................................................14
Types of Contracts Included in MMCA's Contract
Portfolio...............................................................14
Underwriting Standards....................................................14
Servicing and Collection Procedures.......................................15
Physical Damage Insurance on MMCA's Contracts.............................15
Delinquency, Credit Loss and Returned Vehicle Loss
Experience of MMCA's Contracts..........................................15
THE RECEIVABLES POOL......................................................18
Selection Criteria........................................................19
Payment Methods...........................................................24
Balloon Payment Receivables...............................................25
Defaulted Receivables.....................................................26
Maturity and Prepayment Considerations....................................27
HOW NOTEHOLDERS CAN COMPUTE THEIR
PORTION OF THE AMOUNT OUTSTANDING
ON THE NOTES............................................................36
USE OF PROCEEDS...........................................................36
MMCA AUTO RECEIVABLES TRUST...............................................36
THE SERVICER..............................................................37
TERMS OF THE NOTES........................................................37
Principal Amount and Interest Rates.......................................37
Interest Payments.........................................................37
Principal Payments........................................................38
Mandatory Prepayment......................................................39
Optional Redemption.......................................................39
The Indenture Trustee.....................................................40
The Yield Supplement Agreement............................................40
The Yield Supplement Account..............................................40
The Trust's Bank Accounts.................................................41
Indenture Cash Flows......................................................42
The Negative Carry Account................................................44
The Reserve Account and Supplemental Reserve
Account.................................................................44
Subordination of the Class B Notes........................................46
Subordination of the Certificates.........................................46
Advances by the Servicer of Amounts Payable on the
Receivables.............................................................46
Deposit of Collections on the Receivables to Collection
Account.................................................................47
Statements to Noteholders.................................................47
Book Entry Registration...................................................49
Issuance of Definitive Notes Upon the Occurrence of
Various Circumstances...................................................52
Terms of the Indenture....................................................53
THE SALE AND SERVICING AGREEMENT AND
THE TRUST AGREEMENT.....................................................60
Sale and Assignment.......................................................60
The Pre-Funding Period....................................................62
Mandatory Repurchase of Receivables.......................................63
Servicing Procedures......................................................63
Servicing Compensation....................................................65
Evidence to be Provided as to Servicer's Compliance
with its Servicing Obligations..........................................65
Resignation by the Servicer...............................................66
Consequences of Merger, Conversion, Consolidation or
Similar Actions by Servicer.............................................66
Limits on Servicer's Liability............................................66
Limits on Servicer's Obligations in Connection with
Legal Actions...........................................................66
Events of Servicing Termination...........................................66
Rights of Indenture Trustee and Noteholders Upon an
Event of Servicing Termination Under the Sale and
Servicing Agreement.....................................................67
Requirements for Amendments of the Sale and
Servicing Agreement and the Trust Agreement.............................67
Requirements for Termination of the Trust.................................68
Actions to be Taken by Indenture Trustee Upon
Termination of the Trust................................................69
The Administration Agreement..............................................69
SOME IMPORTANT LEGAL ASPECTS OF THE
RECEIVABLES.............................................................69
Bankruptcy Considerations.................................................69
Trust's Rights in the Receivables.........................................69
Security Interests in Vehicles............................................70
Repossession..............................................................71
Notice of Sale; Redemption Rights.........................................71
Deficiency Judgments and Excess Proceeds..................................72
Obligor's Right to Excess Proceeds Upon Sale of a
Financed Vehicle........................................................72
Consumer Protection Laws..................................................72
Other Limitations.........................................................73
FEDERAL INCOME TAX CONSEQUENCES...........................................73
Tax Treatment of the Notes and the Trust under
Federal Income Tax Law..................................................74
Federal Tax Consequences of Waivers of Events of
Default and Amendments of Notes by
Noteholders.............................................................76
Information Reporting and Backup Withholding of
Taxes by Indenture Trustee..............................................76
Tax Consequences to Foreign Investors.....................................77
STATE TAX CONSEQUENCES....................................................78
ERISA CONSIDERATIONS......................................................78
Special ERISA Considerations for Employee Benefit
Plans...................................................................79
Special ERISA Considerations Applicable to Insurance
Company General Accounts..................................................80
General Investment Considerations for Employee
Benefit Plans...........................................................80
UNDERWRITING..............................................................81
LEGAL OPINIONS............................................................82
REPORTS TO NOTEHOLDERS....................................................82
WHERE YOU CAN FIND MORE
INFORMATION...............................................................82
GLOSSARY..................................................................83
IMPORTANT NOTICE
ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
You should rely only on information on the notes provided in this
prospectus. We have not authorized anyone to provide you with different
information.
We include cross-references to sections where you can find additional
information. Check the table of contents to locate these sections.
You can find a glossary of capitalized terms used in this prospectus
beginning on page 83 in this prospectus.
SUMMARY OF TERMS
This summary does not contain all of the information that you should
consider in making your investment decision. To understand all of the terms
of this offering, you should read carefully this prospectus in
its entirety.
The Trust: MMCA Auto Owner Trust 1999-2
Seller of the Receivables to
the Trust: MMCA Auto Receivables Trust
Seller's Address: 6363 Katella Avenue, Cypress, CA
90630-5205
Seller's Telephone Number: (714) 236-1614
Servicer of the Receivables: Mitsubishi Motors Credit of America, Inc.
Indenture Trustee: Bank of Tokyo-Mitsubishi Trust Company
Owner Trustee: Wilmington Trust Company
The Trust Property: The trust property will include:
o the receivables, which are
motor vehicle retail
installment sale contracts
originated by Mitsubishi Motors
Credit of America, Inc.;
o the security interests in the
motor vehicles financed by the
receivables;
o the pre-funding account;
o the payahead account;
o the reserve account;
o the supplemental reserve account;
o the yield supplement account; and
o the negative carry account
<TABLE>
<CAPTION>
THE TERMS OF THE NOTES
Class A-1 Notes Class A-2 Notes Class A-3 Notes Class B Notes
<S> <C> <C> <C> <C>
Principal Amount: $326,000,000 $210,000,000 $142,000,000 $62,000,000
Interest Rate Per Annum: % % % %
Interest Accrual Method: 30/360 30/360 30/360 30/360
Payment Dates: monthly (15th) monthly (15th) monthly (15th) monthly (15th)
First Payment Date: November 15, 1999 November 15, 1999 November 15, 1999 November 15, 1999
Final Payment Date:
June 2002 August 2003 May 2004 April 2006
Anticipated Ratings
(Moody's/S&P):* Aaa/AAA Aaa/AAA Aaa/AAA A2/A
- ----------------
* It is a condition to the offering of the notes that these ratings be
obtained. However, Moody's or S&P in its discretion may lower or withdraw
its rating in the future.
</TABLE>
THE RECEIVABLES
The trust will own two types of receivables:
o receivables that provide for equal monthly
payments over their term; and
o receivables that provide for equal monthly payments plus a
substantially larger final balloon payment.
The principal balance of the receivables as of October 1, 1999 was
$597,789,058.71.
The principal balance of the balloon payments as of October 1, 1999 was
$150,966,931.64.
MART expects to sell additional receivables having a principal balance of
approximately $202,210,941.29 to the trust during a pre-funding period that
begins on the date that the notes are issued and ends no later than March
31, 2000. As of the date any additional receivables are sold to the trust,
the total principal balance of balloon payments under those additional
receivables as a percentage of the total principal balance of those
additional receivables as of that date will not exceed 26%.
PAYMENT SOURCES
On each payment date, the trust will pay the amounts owed by the trust from
the following sources:
o collections on the receivables during the prior month;
o amounts withdrawn from the reserve account and the supplemental
reserve account;
o amounts withdrawn from the yield supplement account and the negative
carry account; and
o advances by the servicer of amounts due on the receivables but not
paid during the prior month.
PRIORITY OF DISTRIBUTIONS
On each payment date, the trust will pay the amounts owed by the trust in
the following order:
(1) payment to the servicer of amounts advanced by the servicer on
previous payment dates;
(2) payment of the servicing fee equal to 1/12th of 1.00% of the total
principal balance of the receivables on the first day of the prior
month;
(3) payment of the interest payable on the class A notes;
(4) payment of the interest payable on the class B notes;
(5) payment of the principal payable on the Class A notes;
(6) payment of the principal payable on the Class B notes; and
(7) any required deposits to the reserve account and the supplemental
reserve account.
If a default under the indenture occurs, the order of the payments will
change. Following a default, the trust will continue to pay the servicer
and the interest on the class A notes in the same order, but will then pay
principal of the class A notes before paying interest on the class B notes.
After the principal of all of the class A notes is paid in full, the trust
will pay interest on and principal of the class B notes.
For further information on the priority of distributions, see "Terms of the
Notes-Indenture Cash Flows" in this prospectus.
PRIORITY OF INTEREST PAYMENTS
On each payment date, the trust will pay interest on the class A notes
ratably based upon the total amount of interest due on each class of the
class A notes. Interest on the class B notes is subordinate to interest on
the class A notes. Interest on the class B notes will not be paid on any
payment date until interest on the class A notes has been paid in full.
However, if an event of default occurs, interest on the class B notes will
not be paid until the principal of the class A notes has been paid in full.
PRIORITY OF PRINCIPAL PAYMENTS
On each payment date, the amount required to be paid as principal of the
notes will equal the sum of:
o the principal scheduled to be paid on the receivables
during the prior month;
o the full prepayments on all receivables received
during the prior month;
o partial prepayments on simple interest receivables
received during the prior month; and
o the entire principal balance of receivables that
became defaulted during the prior month.
The trust will distribute principal of the notes on each payment date in
the following order:
(1) to the class A-1 notes until the class A-1 notes are paid in full;
(2) to the class A-2 notes until the class A-2 notes are paid in full;
(3) to the class A-3 notes until the class A-3 notes
are paid in full; and
(4) to the class B notes until the class B notes are paid in full.
If a default under the indenture occurs, the order of priority for
principal payments will change and the trust will pay principal of all
classes of the class A notes ratably, in proportion to the principal
balance of each class, until all of the class A notes are paid in full.
Principal of the class B notes will not be paid until principal of all of
the class A notes has been paid in full.
CERTIFICATES
In addition to the notes, the trust will issue $60,000,000 of certificates.
The trust will not make any distributions on the certificates on any
payment date until the interest and principal payable on the notes on that
payment date have been paid. The certificates are not being offered by this
prospectus.
CREDIT ENHANCEMENT
The credit enhancement for the notes will be as follows:
o the subordination of the certificates; and
o the reserve account, the supplemental reserve account
and the yield supplement account.
The credit enhancement for the notes is intended to protect you against
losses or delays in payments on your notes by absorbing losses on the
receivables and other shortfalls in cash flows.
RESERVE ACCOUNT AND SUPPLEMENTAL RESERVE ACCOUNT
On each payment date, the trust will use funds in the supplemental reserve
account and the reserve account to pay the following amounts if collections
on the receivables are insufficient to pay those amounts:
(1) first, the amounts due to the servicer; and
(2) then, the interest and principal due on the notes.
On each payment date, the total amount on deposit in the reserve account
and the supplemental reserve account will equal the lesser of (1) 2.75% of
the principal balances of the receivables as of the dates on which the
trust acquired them and (2) the principal balance of the notes.
YIELD SUPPLEMENT ACCOUNT
On each payment date, the trust will use funds in the yield supplement
account to cover any shortfall between:
o the weighted average interest rate on the notes plus 3
percentage points; and
o the interest rate on each receivable.
For purposes of calculating this shortfall, the interest rate on a
receivable will be zero if no interest payment on that receivable was due
in the prior month.
OPTIONAL REDEMPTION
The servicer can purchase all of the remaining receivables once their total
principal balance is 10% or less of their principal balances as of the
dates the receivables were sold to the trust. If the servicer purchases the
receivables, the indenture trustee will redeem the notes for the unpaid
principal amount plus the accrued and unpaid interest on the notes.
TAX STATUS
In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, for federal
income and Delaware and California income and franchise tax purposes:
o the notes will be treated as debt; and
o the trust will not be classified as an association or
a publicly traded partnership taxable as a
corporation.
If you purchase a note, you agree to treat it as debt for tax purposes.
ERISA CONSIDERATIONS
The notes are generally eligible for purchase by employee benefit plans
that are subject to the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986, as amended.
However, fiduciaries of employee benefit plans, including those investing
plan assets, should review the matters discussed under "ERISA
Considerations" in this prospectus and should consult with their legal
advisors before purchasing the notes.
RISK FACTORS
You should consider the following risk factors in deciding whether
to purchase notes.
ABSENCE OF SECONDARY MARKET The underwriters for the notes may assist in
FOR NOTES COULD LIMIT YOUR resales of the notes but they are not required
ABILITY TO RESELL NOTES to do so. A secondary market for the notes may
not develop. If a secondary market for the
notes does develop, it may not continue or it
may not be sufficiently liquid to allow you
to resell any of your notes. Consequently,
you must be prepared to hold your notes until
the respective final maturity dates for the
notes.
INTERESTS OF OTHER PERSONS IN Another person could acquire an interest in a
RECEIVABLES AND VEHICLES receivable that is superior to the trust's
COULD REDUCE THE FUNDS interest in the receivable because the servicer
AVAILABLE TO MAKE PAYMENTS will not segregate or mark the receivables as
ON THE NOTES belonging to the trust. See "Some Important
Legal Aspects of the Receivables-Trust's
Rights in the Receivables." If another person
acquires an interest in a receivable that is
superior to the trust's interest in the
receivable, the collections on that
receivable will not be available to make
payments on the notes.
Another person could acquire an interest in a
vehicle financed by a receivable that is
superior to the trust's interest in the
vehicle because the servicer will not amend
the certificate of title or ownership to
identify the trust as the new secured party.
See "Some Important Legal Aspects of the
Receivables- Security Interests in Vehicles."
If another person acquires an interest in a
vehicle that is superior to the trust's
interest in the vehicle, the proceeds from
the sale of the vehicle will not be available
to make payments on the notes.
BANKRUPTCY OF MMCA COULD If MMCA enters a bankruptcy proceeding, you could
RESULT IN LOSSES OR DELAYS experience losses or delays in the payments on
IN PAYMENTS ON THE NOTES your notes. MMCA will sell the receivables to
MART, and MART will transfer the receivables
to the trust. However, if MMCA enters a
bankruptcy proceeding, the court in the
bankruptcy proceeding could conclude that the
sale of the receivables by MMCA to MART was
not a "true sale" and that MMCA still owns
the receivables. The court could also
conclude that MMCA and MART should be
consolidated for bankruptcy purposes. If the
court were to reach either of these
conclusions, you could experience losses or
delays in payments on your notes because:
o the indenture trustee will not be able to
exercise remedies against MMCA on your
behalf without permission from the court;
o the court may require the indenture
trustee to accept property in exchange
for the receivables that is of less value
than the receivables;
o tax or other government liens on MMCA's
property that arose before the transfer
of the receivables to the trust will be
paid from the collections on the
receivables before the collections are
used to make payments on your notes; and
o the indenture trustee may not have a
perfected security interest in one or
more of the vehicles securing the
receivables or cash collections held by
MMCA at the time that a bankruptcy
proceeding begins.
MART has taken steps in structuring the
transactions described in this prospectus to
minimize the risk that a court would conclude
that the sale of the receivables to MART was
not a "true sale" or that MMCA and MART
should be consolidated for bankruptcy
purposes. See "MMCA Auto Receivables Trust"
and "Some Important Legal Aspects of the
Receivables-Bankruptcy Considerations."
RISK THAT YOU MAY BE POTENTIAL PREPAYMENT OF NOTES DUE TO PREPAYMENT
REQUIRED TO REINVEST YOUR OF RECEIVABLES. Prepayments on the receivables
PRINCIPAL IN THE NOTES by the related obligors and purchases of the
AT A LOWER RATE OF RETURN receivables by MART and the servicer due to
BECAUSE OF PREPAYMENTS breaches of representations, warranties and
ON THE NOTES covenants by MART and the servicer will
accelerate the payment of principal of your
notes. The extent of this prepayment cannot
be fully predicted. You will bear the risk
that you will have to reinvest the principal
of your notes earlier than you expected at a
rate of interest that is less than the rate
of interest on your notes.
The obligors on the receivables may prepay
the receivables voluntarily at any time. The
receivables are required to be prepaid upon
the sale, insured loss or other disposition
of the related vehicle. In addition, if MMCA
breaches certain of its representations and
warranties with respect to any receivables,
MMCA will be required to repurchase those
receivables from MART, and MART will be
required to repurchase those receivables from
the trust. MMCA will also be required to
purchase receivables from the trust if it
breaches its servicing obligations with
respect to those receivables. MMCA will be
entitled to purchase all of the remaining
receivables from the trust once the aggregate
principal balance of the receivables is 10%
or less of the principal balances of the
receivables as of the dates on which they
were sold to the trust.
POTENTIAL PREPAYMENT OF NOTES DUE TO AN
INCENTIVE PROGRAM OFFERED BY MMCA. Obligors
on receivables that provide for a balloon
payment can return the related vehicle at the
end of the term of the receivable instead of
paying the balloon payment. MMCA will sell
each returned vehicle on behalf of the trust
but expects the amount realized from the sale
of the vehicle to be less than the related
balloon payment. To reduce losses from
obligors returning their vehicles at the end
of the term of their receivables instead of
paying the balloon payments, MMCA and its
affiliates offer incentives for the obligors
to prepay their receivables and return the
related vehicles early if they purchase
another vehicle manufactured by Mitsubishi
Motors Corporation or one of its affiliates.
The incentives may encourage a higher level
of prepayments on the receivables resulting
in a higher level of prepayments on the notes
than would otherwise be the case. See "The
Receivables Pool-Maturity and Prepayment
Considerations."
POTENTIAL PREPAYMENTS ON If the aggregate principal balance of the
NOTES DUE TO FAILURE TO receivables and related amounts transferred to
TRANSFER A SUFFICIENT NUMBER the trust during the pre-funding period is
OF ADDITIONAL RECEIVABLES TO less than the amount deposited to the pre-funding
THE TRUST account on the date of the issuance of the
notes, the notes will be prepaid in the
amount of the shortfall. See "Terms of the
Notes--Mandatory Prepayment."
MART's ability to apply the entire
pre-funding account balance to the transfer
of receivables to the trust during the
pre-funding period depends on the
manufacture, distribution, sale and financing
of motor vehicles by Mitsubishi Motors
Corporation and its affiliates. MART will not
be able to transfer receivables to the trust
during the pre-funding period unless MMCA
originates those receivables. MMCA mostly
finances vehicles manufactured by Mitsubishi
Motors Corporation and its affiliates. If
Mitsubishi Motors Corporation and its
affiliates temporarily or permanently stop
manufacturing, distributing, selling or
financing motor vehicles, then MMCA's ability
to originate receivables for sale to MART
will be adversely affected.
POTENTIAL LOSS OR The addition of receivables during the
PREPAYMENTS ON NOTES DUE pre-funding period may change the overall
TO CHANGES IN POOL characteristics of the pool of receivables.
CHARACTERISTICS This change may increase the risk of losses
or delays in payments on your notes or
prepayments on your notes. The credit
criteria MMCA uses to originate the
receivables to be transferred by MART to the
trust during the pre-funding period may
differ from the credit criteria used by MMCA
in originating the receivables transferred to
the trust on the date that the notes are
issued. Any changes in those credit criteria
may result in a higher rate of delinquencies
and losses on the receivables or a higher
rate of prepayment than would otherwise be
the case, affecting the timing and amount of
payment of principal and interest on your
notes.
POTENTIAL LOSS ON NOTES DUE You may suffer a loss on your notes if the
TO LIMITED ASSETS OF THE assets of the trust are insufficient to pay
TRUST the principal amount of the notes in full. The
source of funds for payments on the notes
will be the assets of the trust. The assets
of the trust are limited to the receivables
and the funds on deposit in the trust's bank
accounts. The notes will not be insured or
guaranteed by MMCA, including in its capacity
as servicer, or by MART, the indenture
trustee, the owner trustee or any other
person or entity. Consequently, you must rely
for payment of the notes solely upon
collections on the receivables and funds on
deposit in the trust's bank accounts. See
"Terms of the Notes--The Reserve Account and
Supplemental Reserve Account."
CLASS B NOTES ARE SUBJECT You may suffer a loss on your class B notes
TO GREATER CREDIT RISK because payments of interest on and principal
BECAUSE THE CLASS B of the class B notes are subordinated to payments
NOTES ARE SUBORDINATE of interest and principal of the class A notes.
TO THE CLASS A NOTES
Interest payments on the class B notes on
each payment date will be subordinated to
servicing fees due to the servicer and
interest payments on the class A notes. Also,
if a default under the indenture occurs,
interest payments on the class B notes will
be subordinated to the payment of principal
of the class A notes.
POTENTIAL LOSS ON NOTES DUE Principal payments on the class B notes will
TO NATURE OF OBLIGORS be fully subordinated to principal payments
on the class A notes. No principal will be
paid on the class B notes until principal of
all of the class A notes has been paid in
full. You may experience losses on the class
B notes if the protection provided to the
class B notes by the subordination of the
certificates and the funds on deposit in the
reserve account, the supplemental reserve
account, the negative carry account and the
yield supplement account are insufficient to
protect the class B notes from losses on the
receivables. The obligors on the receivables
to be transferred by MMCA to MART and by MART
to the trust will include a higher percentage
of borrowers with limited credit experience
than is included in MMCA's combined portfolio
of receivables. As a result, the credit loss,
repossession, delinquency and default rates
on the receivables may be higher than the
historical credit loss, repossession,
delinquency and default rates on MMCA's
combined portfolio of receivables. You may
experience delays in payments or losses on
your notes if (i) the credit loss,
repossession, delinquency or default rates on
such receivables are higher than expected by
MMCA and (ii) the protection provided to the
class A notes by the subordination of the
class B notes, and provided to all of the
notes by the certificates to be issued by the
trust and the funds on deposit in the reserve
account and certain other trust accounts, are
insufficient to protect you against such
delays or losses. See "MMCA's Contract
Portfolio-Delinquency, Credit Loss and
Returned Vehicle Loss Experience of MMCA's
Contracts" for information concerning MMCA's
combined portfolio of receivables.
POTENTIAL LOSS ON NOTES DUE The receivables to be transferred to the trust
TO RECEIVABLES WITH NO will include receivables that do not require
PAYMENTS FOR AN INITIAL any payments to be made by obligors for
PERIOD up to 216 days after origination of the
receivable. The term of receivables with deferred
payments will be extended by the deferral
period and the vehicles will incur wear and
tear during this period. As a result, the
value of the related vehicles under the
deferred payment receivables will decrease
before the first payment of a receivable is
due in an amount that is larger than it would
have decreased without a deferral period. The
severity of the credit losses on these
receivables may be higher than the severity
of the credit losses on MMCA's combined
portfolio of receivables. You may experience
delays in payments or losses on your notes if
(i) the severity of credit losses on such
receivables are higher than expected by MMCA
and (ii) the protection provided to the class
A notes by the subordination of the class B
notes, and provided to all of the notes by
the certificates to be issued by the trust
and the funds on deposit in the reserve
account and certain other trust accounts, are
insufficient to protect you against such
delays or losses. See "MMCA's Contract
Portfolio-Delinquency, Credit Loss and
Returned Vehicle Loss Experience of MMCA's
Contracts" for information concerning MMCA's
combined portfolio of receivables.
POTENTIAL LOSS ON NOTES IN The obligors on balloon payment receivables will
CONNECTION WITH SALES OF not have to pay the balloon payment if
VEHICLES they return the related vehicle to MMCA at the
end of the term of the receivable. MMCA will
sell the returned vehicle on behalf of the
trust and the trust will use the proceeds
from the sale to make payments on the notes.
You may experience delays in payments or
losses on your notes if (i) the proceeds from
the sale of the returned vehicles are less
than the amount of the balloon payments and
(ii) the protection provided to the class A
notes by the subordination of the class B
notes, and provided to all of the notes by
the certificates to be issued by the trust
and the funds on deposit in the reserve
account and certain other trust accounts, are
insufficient to protect you against such
delays or losses. See "MMCA's Contract
Portfolio-Delinquency, Credit Loss and
Returned Vehicle Loss Experience of MMCA's
Contracts" for information concerning MMCA's
combined portfolio of receivables.
MMCA expects the proceeds from the sale of a
returned vehicle to be less than the balloon
payment because MMCA sets the balloon
payments higher than its estimate of the end
of term value of the vehicle in order to
stimulate sales of a particular model. See
"The Receivables Pool--Balloon Payment
Receivables."
POTENTIAL LOSS ON NOTES IF The obligor under a balloon payment receivable
MMCA DOES NOT REFINANCE also has the option to refinance the balloon
BALLOON RECEIVABLES payment with MMCA, subject to the satisfaction
of various conditions. MMCA will be obligated to
provide that financing to the extent it
offers vehicle financing. No successor to
MMCA as servicer will be obligated to provide
that refinancing. If at any time MMCA no
longer makes refinancing available, MART may
contract with third parties to do so. If a
refinancing option is not available, more
obligors may return their vehicles on the
date the related balloon payment is due
instead of refinancing the balloon payment,
and consequently more motor vehicles may be
sold by MMCA on behalf of the trust for
prices less than the related balloon
payments.
LACK OF HISTORICAL DATA Balloon payment receivables have matured in
REGARDING THE RETURN RATES large volumes only in recent years. MMCA
OF VEHICLES FINANCED BY therefore does not have extensive historical
BALLOON RECEIVABLES information regarding (a) the percentage of
motor vehicles that will be returned to MMCA
upon the maturity of balloon payment receivables
or (b) MMCA's loss experience upon resale of
those returned motor vehicles. MMCA expects
that, in the aggregate, the amounts received
by MMCA from the sale of those vehicles will
be less than the principal amounts of the
balloon payments because MMCA sets balloon
payments higher than its estimate of the
projected end of term value of the vehicle in
order to stimulate sales of particular
models.
POTENTIAL LOSS ON NOTES DUE Economic conditions in the states where the
GEOGRAPHIC CONCENTRATION OF obligors under the TO receivables reside may
RECEIVABLES affect the delinquency, loan loss and
repossession experience of the trust with
respect to the receivables. Based on the
principal balance of the original pool of
receivables as of the date as of which the
receivables were acquired by the trust,
11.12% of the receivables relate to obligors
with a billing address in California, 22.39%
relate to obligors with a billing address in
Texas and 9.75% relate to obligors with a
billing address in Florida. Accordingly,
adverse economic conditions or other factors
affecting California, Texas or Florida could
have an especially significant effect on the
delinquency, loan loss or repossession
experience of the trust and may adversely
affect the timing and amount of payment of
principal and interest on your notes.
RISKS IN CONNECTION WITH AN If a default occurs under the indenture and the
EVENT OF DEFAULT UNDER maturity dates of the notes are accelerated,
INDENTURE the indenture trustee may sell the
receivables and prepay the notes in advance
of their respective maturity dates. You may
not be able to reinvest the principal repaid
to you earlier than expected at a rate of
return that is equal to or greater than the
rate of return on your notes. You also may
not be paid the principal amount of your
notes in full if the assets of the trust are
insufficient to pay the aggregate principal
amount of the notes.
In addition, the acceleration of the maturity
dates will change the order of priority for
the payment of principal of the different
classes of notes. After the occurrence of an
event of default under the indenture,
distributions to the class B noteholders
become fully subordinated to the class A
noteholders. No interest on or principal of
the class B notes will be paid after an event
of default has occurred until the full
principal balance of each class of the class
A notes has been paid in full. See "Terms of
the Notes--Principal Payable."
POTENTIAL DELAYS IN PAYMENTS The payment of principal and interest on the
ON NOTES DUE TO POTENTIAL notes could be delayed if MMCA, in its capacity
COMPUTER PROGRAM PROBLEMS as servicer, or the indenture trustee
BEGINNING IN THE YEAR 2000 experience problems in their computer programs
relating to the year 2000. Many existing
computer programs use only two digits to
identify a year. These programs could fail or
produce erroneous results during the
transition from the year 1999 to the year
2000 and afterwards. MMCA has evaluated the
impact of preparing its systems for the year
2000. It has identified areas of potential
impact and has implemented conversion
efforts. It believes its mission-critical
applications, including its systems for
operations, collections on the receivables
and servicing the receivables, are year 2000
compliant.
If MMCA, in its capacity as the servicer,
does not have a computer system that is year
2000 compliant by the year 2000, MMCA's
ability to service the receivables may be
materially and adversely affected. If the
indenture trustee does not have a computer
system that is year 2000 compliant by the
year 2000, the indenture trustee's ability to
make distributions on the notes may be
materially and adversely affected.
THE TRUST
LIMITED PURPOSES AND LIMITED ASSETS
MMCA Auto Owner Trust 1999-2 is a business trust formed under the
laws of the State of Delaware under a trust agreement between MART and
Wilmington Trust Company, as owner trustee. The trust's principal offices
are in the State of Delaware in care of the owner trustee, at Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001. The trust
will not engage in any activity other than:
o acquiring, holding and managing the assets of the trust,
including the receivables, and the proceeds of those assets;
o issuing the notes and the certificates;
o making payments on the notes and the certificates; and
o engaging in other activities that are necessary, suitable or
convenient to accomplish any of the other purposes listed
above or that are in any way connected with those
activities.
The trust will be capitalized through the issuance of $740,000,000
of notes and $60,000,000 of certificates. The certificates will entitle
certificateholders to receive distributions of amounts not required to make
payments on the notes or to pay expenses of the trust. The certificates
will be subordinated to the notes to the extent described in this
prospectus. The principal amount of the certificates will be reduced on
each payment date by principal payments made on the certificates. The
certificates are not being offered hereby and will be retained by MART or
an affiliate. It is not anticipated that the trust will have any need for
additional capital resources.
On the Closing Date, the trust will purchase from MART retail
installment contracts originated by MMCA in connection with the financing
of automobiles and light-duty trucks. The purchase will be made under a
sale and servicing agreement in exchange for the proceeds of the notes and
the issuance to MART or an affiliate of the certificates. The trust will
also purchase additional receivables from MART during the Pre-Funding
Period with proceeds from the sale of the notes.
MMCA or a successor will service the receivables, either directly
or through subservicers. The servicer will be paid the servicing fee and
will be reimbursed for any advances that are due and payable to it out of
collections from the receivables prior to distributions to noteholders.
Some other expenses of the trust will be paid by the servicer or by MART as
provided in the sale and servicing agreement. See "The Sale and Servicing
Agreement and the Trust Agreement--Servicing Procedures," "--Servicing
Compensation" and "Terms of the Notes--Indenture Cash Flows."
The servicer, either directly or through subservicers, will hold
the receivables and the certificates of title or ownership relating to the
financed vehicles as custodian for the indenture trustee and the trust.
However, the receivables will not be marked or stamped to indicate that
they have been sold to the trust, and the certificates of title or
ownership for the financed vehicles will not be endorsed or otherwise
amended to identify the trust as the new secured party. Under those
circumstances, the trust's security interest in the receivables and the
financed vehicles may be defeated or may not be perfected in some
jurisdictions. See "Some Important Legal Aspects of the Receivables."
If the protection provided to the noteholders by the subordination
of the certificates and by amounts on deposit in the supplemental reserve
account, the reserve account, the negative carry account and the yield
supplement account is insufficient, the noteholders would have to look for
payment of the notes principally to the receivables that have not
defaulted, the proceeds from the repossession and sale of financed vehicles
which secure defaulted receivables and the proceeds from any recourse
against dealers. In that event, factors such as the trust's not having
perfected security interests in the financed vehicles in all states may
affect the trust's ability to repossess and sell the financed vehicles, and
thus may reduce the proceeds to be distributed to noteholders. Losses on
the receivables or other shortfalls in the proceeds to be distributed to
the noteholders, after withdrawals from the trust accounts, will be
allocated first to the Class B notes because payments on the Class B notes
are subordinate to the payments on the Class A notes. See "Terms of the
Notes--Indenture Cash Flows" and "Some Important Legal Aspects of the
Receivables."
CAPITALIZATION OF THE TRUST
The following table illustrates the capitalization of the trust as
of the Closing Date, after the issuance of the notes and certificates and
the sale of the notes has taken place:
Class A-1 notes...............................................$ 326,000,000
Class A-2 notes............................................... 210,000,000
Class A-3 notes............................................... 142,000,000
Class B notes................................................. 62,000,000
Certificates.................................................. 60,000,000
----------------
Total.................................................$ 800,000,000
================
================
Because the trust will have no operating history upon its
establishment and will not engage in any business other than acquiring and
holding the receivables and related assets and issuing and distributing
payments on the notes and the certificates, no historical or pro forma
financial statements or ratios of earnings to fixed charges with respect to
the trust have been included in this prospectus.
THE OWNER TRUSTEE
Wilmington Trust Company is the owner trustee under the trust
agreement. The owner trustee's Corporate Trust Office is located at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.
MART, the servicer and their individual affiliates may have other banking
relationships with the owner trustee and its affiliates in the ordinary
course of their businesses.
PROPERTY OF THE TRUST
Under the indenture, the notes will be secured by the property of
the trust, which will include:
o a pool of motor vehicle retail installment sale contracts
originated during or after May 1996 and rights and
obligations thereunder;
o all monies due under Actuarial Receivables on or after the
related Cutoff Date and all monies received under Simple
Interest Receivables on or after the related Cutoff Date;
o amounts and property held in or credited to the collection
account, the note payment account, the payahead account, the
reserve account, the negative carry account and the
supplemental reserve account;
o MART's rights in the yield supplement account and the
pre-funding account;
o MART's security interests in the financed vehicles;
o MART's rights to receive proceeds from claims on insurance
policies covering the financed vehicles or the obligors;
o MART's rights of recourse against the dealers under the
dealer agreements relating to the receivables;
o all of the trust's rights under the sale and servicing
agreement and the purchase agreement, including its right to
cause MMCA and MART to repurchase receivables from the
trust;
o all of MART's rights under the yield supplement agreement; and
o all proceeds of the foregoing.
MMCA'S CONTRACT PORTFOLIO
TYPES OF CONTRACTS INCLUDED IN MMCA'S CONTRACT PORTFOLIO
MMCA purchases retail installment contracts relating to new
automobiles and light-duty trucks manufactured or distributed by Mitsubishi
Motors and contracts relating to used automobiles and light-duty trucks
manufactured or distributed by Mitsubishi Motors or other motor vehicle
manufacturers. MMCA applies the same underwriting standards to its
purchases of receivables whether or not the related vehicle was
manufactured by Mitsubishi Motors.
MMCA purchases contracts from dealers that regularly sell contracts
to MMCA and also to other finance providers. MMCA purchases the contracts
from the dealers subject to the terms of a dealer agreement with each
dealer. Each dealer agreement requires the dealer to repurchase any
contract that it sold to MMCA for the outstanding principal balance if the
dealer breaches certain of the representations and warranties set forth in
the agreement. Those representations and warranties typically relate to the
origination of the contract and the security interest in the related
automobile or light-duty truck and not to the creditworthiness of the
obligor under the contract.
UNDERWRITING STANDARDS
MMCA's underwriting standards emphasize each prospective obligor's
ability to pay and creditworthiness as well as the asset value of the
automobile or light-duty truck that secures the related contract.
Before purchasing a contract, MMCA reviews credit applications from
applicants that include information about each applicant's income,
residential status, monthly mortgage or rent payments, credit obligations,
bank accounts and other personal information. MMCA also reviews a credit
report from an independent credit bureau which MMCA reviews to determine
the applicant's current credit status and past credit performance. If
necessary, MMCA verifies the employment or the income of an applicant.
MMCA uses a credit scoring system and considers other factors to
reach each credit decision. In November 1996, MMCA introduced a new credit
scoring system for all contracts, replacing the one that had been used
since June 1994. The new credit scoring system first assigns the
application to one of three credit segments: prime, non-prime and limited
credit experience. Each segment considers different credit application and
credit bureau report characteristics or assigns different weighting to some
characteristics that are considered by all segments. This segmentation is
based solely upon the information in the applicant's credit bureau report.
The new credit scoring system identifies those aspects of an applicant's
credit report and credit application and the proposed financing arrangement
that, based upon the specific performance experience of MMCA's portfolio,
are most predictive of the probability that the applicant will pay MMCA as
agreed. MMCA considers attributes other than the credit score in its credit
decision process. These factors include the ratio of income to debt, an
applicant's equity in the automobile or light-duty truck, satisfactory
existing account relationships, excellent recent reported credit history
and availability of an acceptable guarantor. MMCA management sets limits on
the percentage of credit decisions that approve credit to applicants
scoring below company credit score minimums and deny credit to applicants
scoring above those minimums. Where the obligor of a contract is a business
entity, MMCA reviews credit applications that include information about
bank accounts, credit references and financial results of the business
entity. In addition, MMCA obtains and reviews any published credit reports
on the business entity. In some cases, MMCA may require an individual to
guarantee the business' obligation under the contract.
After considering the relevant information, MMCA assesses the
degree of credit risk of a particular application and the decision to grant
or deny credit for a contract is made at the appropriate management level.
The application, if approved, is assigned to one of three credit tiers
reflecting its degree of credit risk. The interest rate for the customer's
account is determined by the credit tier, with the more risky accounts
receiving a higher interest rate.
SERVICING AND COLLECTION PROCEDURES
MMCA measures delinquency by the number of days elapsed from the
date a payment is due under a contract, after giving effect to any
extension of that date by MMCA. MMCA considers a payment to be past due or
delinquent when the obligor fails to make at least 90% of a scheduled
payment by the date the payment is due. MMCA generally begins collection
activities with respect to delinquent contracts through telephone contact
based upon the credit risk initially assigned to each obligor. Obligors
considered to be weaker credits are generally contacted by telephone when
the contract becomes 12 days delinquent. Obligors considered strong credits
with lesser risk are generally contacted when the contract becomes 20 days
delinquent. Computer generated delinquency notices are mailed to all
delinquent obligors on the 12th day of delinquency. MMCA also uses an
automated system of monitoring delinquency, which categorizes delinquent
accounts into different priorities of collection activity, based on the
level of delinquency of each account. Subject to some limitations, MMCA as
servicer is able to extend the dates on which payments on receivables are
due. See "The Sale and Servicing Agreement and the Trust
Agreement--Servicing Procedures."
MMCA's collectors are assigned to specific delinquent obligors and
attempt to contact each one by telephone or by letter based on the length
of delinquency and the history of the account. Repossession procedures
typically begin when a contract becomes between 60 to 75 days delinquent.
Repossession is carried out according to applicable state law and specific
procedures adopted by MMCA.
If the financed vehicle securing a delinquent contract is
repossessed, MMCA charges off the related delinquent contract on the date
on which the proceeds from the sale of the financed vehicle are applied to
the contract balance and the deficiency is determined. If the financed
vehicle cannot be repossessed, MMCA charges off the delinquent contract on
the date on which it determines that it will be unable to recover the
financed vehicle from the obligor. Any deficiencies remaining after
repossession and sale of the related vehicle or after the full charge off
of the related contract are pursued by MMCA to the extent practicable and
legally permitted. MMCA does not charge off losses on sales of financed
vehicles with respect to Balloon Payment Receivables, because those losses
are not credit losses. However, MMCA does charge off losses for the
amortizing monthly installments and the Balloon Payments for Balloon
Payment Receivables. Furthermore, MMCA does not charge off collection
expenses but does charge off repossession and disposition expenses.
Obligors are contacted, and when warranted by individual circumstances,
repayment schedules are established and monitored until the deficiencies
are either paid in full or become impractical to pursue.
PHYSICAL DAMAGE INSURANCE ON MMCA'S CONTRACTS
Each contract requires the obligor to obtain physical damage
insurance covering loss or damage to the related vehicle. The dealer
agreements require that the dealers provide MMCA with written confirmation
that there is physical damage insurance acceptable to MMCA covering each
vehicle at the time that MMCA purchased the related contract from the
dealers. MMCA tracks the ongoing status of insurance by the obligors, and
attempts to cause the obligors to reinstate the insurance if it is allowed
to lapse; nevertheless, there is no assurance that each vehicle will
continue to be covered by physical damage insurance for the entire term
during which the related contract is outstanding.
DELINQUENCY, CREDIT LOSS AND RETURNED VEHICLE LOSS EXPERIENCE OF MMCA'S
CONTRACTS
MMCA's credit scoring system for contracts assigns contracts to one
of three credit segments: prime, non-prime and limited credit experience.
See "--Underwriting Standards." The trust property includes every limited
credit experience contract in MMCA's portfolio as of the Cutoff Date that
is not scheduled to mature in 1999 and satisfies the selection criteria set
forth under "The Receivables Pool--Selection Criteria."
The following two tables set forth information concerning MMCA's
combined portfolio of contracts, including contracts previously sold which
MMCA continues to service. The delinquency, credit loss and returned
vehicle loss experience by the trust may be different than the delinquency,
credit loss and returned vehicle loss experience of MMCA's combined
portfolio, as reflected in the following two tables, because the
distribution among the three credit segments of the receivables transferred
to the trust on the Closing Date and during the Pre-Funding Period is and
will be different than the distribution among the three credit segments of
the contracts in MMCA's combined portfolio.
The trust property includes every limited experience contract in
MMCA's portfolio as of October 1, 1999 that is not scheduled to mature in
1999 which satisfies the eligibility criteria for inclusion in the trust.
Limited credit experience receivables were 12.52% of the receivables as of
October 1, 1999, representing 8.94% of the aggregate principal balance of
the receivables in the trust. By contrast, as of October 1, 1999, limited
credit experience contracts were 3.575% of the contracts in MMCA's combined
portfolio, representing 3.325% of the aggregate principal balance of the
contracts in MMCA's combined portfolio.
<TABLE>
<CAPTION>
DELINQUENCY EXPERIENCE (1)
As of August 31, As of December 31,
---------------- ------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Number of Contracts Outstanding at End of Period....... 129,929 126,714 127,475 120,961 120,008
Delinquencies as a Percent of Contracts Outstanding (2)
30-59 Days........................................ 2.64% 3.30% 3.81% 4.45% 5.18%
60-89 Days........................................ 0.61% 0.98% 1.08% 1.58% 1.70%
90 Days or More................................... 0.16% 0.33% 0.29% 0.52% 0.55%
Repossessions as a Percent of Contracts
Outstanding (2)(3).................................. 0.64% 0.65% 0.79% 0.96% 1.43%
- -----------
</TABLE>
(1) The information in the table includes contracts for new and used
automobiles and light-duty trucks owned by MMCA or previously sold
by MMCA which MMCA continues to service. Delinquency numbers are
net of bankrupt accounts and repossessions.
(2) The period of delinquency is based on the number of days more than
10% of a payment is contractually past due after giving effect to
any extension by MMCA. The percent represents delinquent dollars as
a percent of dollars outstanding. MMCA's ability, in its capacity
as servicer, to extend the dates on which payments on receivables
are due is subject to certain limitations. See "The Sale and
Servicing Agreement and the Trust Agreement-Servicing Procedures."
(3) Repossessions means the vehicle has been repossessed but the sale
proceeds have not yet been applied to the contract balance.
<TABLE>
<CAPTION>
NET CREDIT LOSS AND REPOSSESSION EXPERIENCE (1)
(DOLLARS IN THOUSANDS)
Eight Months Ended
August 31, Year Ended December 31,
------------------ -----------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Amount Outstanding (2).......................$1,924,124 $1,878,323 $1,879,226 $1,729,312 $1,650,226
Average Amount Outstanding (3)...............$1,903,447 $1,765,490 $1,805,701 $1,737,477 $1,553,958
Number of Contracts Outstanding.............. 129,929 126,714 127,475 120,961 120,008
Average Number of Contracts Outstanding (3).. 128,809 121,790 123,663 122,652 114,938
Charge-offs (4)..............................$ 30,207 $ 35,831 $ 51,325 $ 72,986 $ 84,574
Recoveries (5)...............................$ 5,896 $ 6,720 $ 9,490 $ 13,089 $ 7,365
Net Losses...................................$ 24,311 $ 29,111 $ 41,835 $ 59,897 $ 77,209
Number of Repossessions (6).................. 2,922 3,209 4,796 7,338 6,682
Number of Repossessions as a Percent of the
Average Number of Contracts Outstanding
(7)....................................... 3.40% 3.95% 3.88% 5.98% 5.81%
Net Losses as a Percent of Average Amount
Outstanding (7)........................... 1.92% 2.47% 2.32% 3.45% 4.97%
</TABLE>
- -----------
(1) The information in the table includes contracts for new and used
automobiles and light-duty trucks owned by MMCA or previously sold
by MMCA which MMCA continues to service.
(2) Amount outstanding is the remaining principal balance of the
contracts, including the principal portion of balloon payments plus
any outstanding fees and charges and any accrued and unpaid
interest.
(3) Averages are computed by taking a simple average of the average for
the months outstanding for each period presented.
(4) Charge-offs represent the total aggregate amount due on contracts
that is determined to be uncollectible in the period, less proceeds
from disposition of related vehicles, other than recoveries
described in Note (5). The calculation of charge-offs for the
contracts in the combined portfolio includes both earned but unpaid
finance charges and Balloon Payments.
(5) Recoveries generally consist of amounts received on contracts
following the time at which the contract is charged off net of
collection expenses.
(6) Number of Repossessions means the number of repossessed automobiles
and light-duty trucks in a given period.
(7) Annualized rate. The eight-month period ended August 31, 1999 is
not necessarily indicative of a full year's actual results. MMCA's
credit loss experience is dependent upon the number of
repossessions, the amount outstanding at the time of repossession,
and the resale value of repossessed vehicles. Losses and
delinquencies are affected by, among other things, general and
regional economic conditions and the supply of and demand for
automobiles and light-duty trucks.
<TABLE>
<CAPTION>
CONTRACTS PROVIDING FOR BALLOON PAYMENTS: LOSS EXPERIENCE ON RETURNED VEHICLES (1)
For Contracts Scheduled to For Contracts Scheduled
Terminate in the Eight Months to Terminate in the
Ended August 31, Year Ended December 31,
---------------- -----------------------
1999 1998 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total Number of Final Payment Receivables... 19,103 13,031 19,723 10,734 1,025
Total Number of Vehicles Returned to MMCA
through August 31, 1999.................. 4,517 3,420 4,750 2,921 418
Return Ratio (2)............................ 23.65% 26.25% 24.08% 27.21% 40.78%
Total Losses on Returned Vehicles Sold
through August 31, 1999 (3).............. $4,885,056 $5,868,943 $ 7,608,392 $5,831,829 $ 726,684
Total Number of Returned Vehicles Sold
through August 31, 1999.................. 3,930 3,396 4,704 2,912 417
Average Loss per Returned Vehicle Sold
through August 31, 1999 (3).............. $ 1,243 $ 1,728 $ 1,617 $ 2,003 $ 1,743
</TABLE>
- -----------
(1) The information in the table includes automobiles and light-duty
trucks returned upon the expiration of the related contracts and
automobiles and light-duty trucks returned under MMCA's program
that offers attractive terms to owners of automobiles and
light-duty trucks to prepay their accounts in connection with their
respective purchases of a new automobile or light-duty truck.
(2) The number of vehicles returned to MMCA through August 31, 1999 as
a percentage of the number of Balloon Payment Receivables scheduled
to terminate in the period indicated.
(3) Losses are calculated without deduction for auction or other
disposition expenses on resale.
The percentage of Balloon Payment Receivables to be included in the
trust property that are assigned to the prime, non-prime and limited credit
experience credit segments is different from the corresponding percentages
for the combined portfolio. No assurance can be given that the performance
of the Balloon Payment Receivables will be similar to the information set
forth in the preceding table.
MMCA's loss experience on returned automobiles and light-duty
trucks depends on:
o the number of automobiles and light-duty trucks
returned;
o any programs offered by MMCA that permit the early
return of automobiles and light-duty trucks;
o the amount of the related receivables outstanding at
the time the automobiles and light-duty trucks are
returned; and
o the resale value of the returned automobiles and
light-duty trucks.
THE RECEIVABLES POOL
The trust will purchase from MART receivables which consist of a
pool of retail installment sale contracts secured by new and used
automobiles and light-duty trucks. The property to be purchased by the
trust includes rights to receive payments made with respect to the
receivables, as well as security interests in the vehicles and any proceeds
of the sale of the vehicles. MART will purchase the receivables from MMCA
under a purchase agreement and will simultaneously sell the receivables to
the trust under a sale and servicing agreement. Each agreement will provide
for some of the receivables to be sold on the Closing Date. Each of those
agreements will also provide for receivables sales during the Pre-Funding
Period. The receivables sold will be selected from those owned by MMCA
based on the criteria specified in the sale and servicing agreement and
described in this prospectus.
The receivables to be purchased by the trust on the Closing Date
have an aggregate principal balance of $597,789,058.71, calculated as of
the initial Cutoff Date. Balloon Payments comprised $150,966,931.64 of the
aggregate principal balance of those receivables. None of the receivables
included in the trust will have a final scheduled maturity later than
October 31, 2005.
The principal balance of the receivables in the trust on any date
will equal the aggregate principal balance of the receivables in the trust
at the end of the preceding calendar month, or with respect to any date
during October 1999, the principal balance of the receivables in the trust
as of the initial Cutoff Date, less the sum of the following amounts
received after the end of the preceding month through that date:
o for Simple Interest Receivables, the principal payments
received from obligors;
o for Actuarial Receivables, the principal payments received
from obligors that were due during that month;
o amounts to be remitted by the servicer or MART as the
purchase price for receivables they are required to
repurchase from the trust;
o advances made by the servicer; and
o the principal balance of receivables which defaulted during
that month.
SELECTION CRITERIA
The receivables will be purchased by MMCA from dealers in the
ordinary course of business in accordance with MMCA's underwriting
standards. The receivables were selected and will be selected from MMCA's
portfolio by several criteria, including:
o each receivable is secured by a new or used automobile or
light-duty truck;
o each receivable has an annual percentage rate of at least 0%
and not more than 30%;
o each receivable had a remaining maturity of not more than 60
months from the date the first payment is due under the
receivable;
o each receivable had an original principal balance, net of
unearned precomputed finance charges, of not more than
$60,000 and a remaining principal balance of not less than
$100 as of the related Cutoff Date;
o no receivable was more than 30 days delinquent with respect
to more than 10% of a payment as of the related Cutoff Date;
o no receivable had been pre-paid by more than six monthly
payments as of the related Cutoff Date;
o no financed vehicle had been repossessed as of the related
Cutoff Date;
o each receivable is an installment sale contract;
o each receivable is an Actuarial Receivable or a Simple
Interest Receivable, and may also be a Balloon Payment
Receivable;
o each receivable was originated during or after May 1996;
o if the first payment on a receivable was deferred, the first
payment on that receivable shall be due not later than 216
days after the date of origination of that receivable;
o no receivable was due from an obligor who, as of the related
Cutoff Date, was the subject of a proceeding under the
United States Bankruptcy Code; and
o each receivable was originated in the United States by a
dealer for the consumer or commercial sale of a financed
vehicle in the ordinary course of that dealer's business.
In addition, during the Pre-Funding Period, MART will transfer
separate groups of receivables to the trust. Each group of receivables
transferred to the trust during the Pre-Funding Period will have the
following characteristics:
o the weighted average remaining maturity of the receivables
in that group will not be more than 53 months after the date
that group of receivables was transferred to the trust;
o the aggregate Balloon Payments of the receivables in that
group as a percentage of the aggregate principal balance of
the receivables in that group will not be more than 26%;
o if the first payment on a receivable in that group was
deferred, the deferral period shall not extend for more than
216 days after origination of that receivable;
o the aggregate principal balance of the limited credit
experience receivables in that group as a percentage of the
aggregate principal balance of the receivables in that group
will be not more than 9%; and
o the aggregate principal balance of the receivables that
allow a deferred first payment in that group as a percentage
of the aggregate principal balance of the receivables in
that group will be not more than 8%.
The receivables transferred to the trust on the Closing Date will
be approximately 75% of the sum of the initial principal amount of the
notes and the initial principal amount of the certificates. The receivables
transferred to the trust during the Pre-Funding Period will have no
required characteristics except for the criteria described in the preceding
paragraph and in "The Sale and Servicing Agreement and the Trust
Agreement-Sale and Assignment." Following each transfer, the aggregate
characteristics of the entire pool of receivables, including the
composition of the receivables, the geographic distribution of the
receivables and the distribution by the annual percentage rate of the
receivables described in the following tables, may vary from those of the
receivables transferred to the trust on the Closing Date. Following the end
of the Pre-Funding Period, MART will file a report with the Securities and
Exchange Commission on Form 8-K containing information comparable to that
contained in the tables set forth below regarding the aggregate
characteristics of the entire pool of receivables.
CHARACTERISTICS OF THE INITIAL RECEIVABLES SOLD TO THE TRUST ON THE CLOSING DATE
The following tables set forth
o the composition of the initial receivables sold to the trust
on the Closing Date, calculated as of the Cutoff Date; and
o the geographic distribution and distribution by annual
percentage rate of the principal balance of the initial
receivables sold to the trust on the Closing Date,
calculated as of the Cutoff Date.
The receivables transferred to the trust on the Closing Date, calculated as
of the Cutoff Date, contained Balloon Payment Receivables of approximately
25.25% of the principal balance of those receivables. A Balloon Payment
receivable may be either a Simple Interest Receivable or an Actuarial
Receivable. See "--Balloon Payment Receivables."
<TABLE>
<CAPTION>
COMPOSITION OF THE INITIAL RECEIVABLES AS OF THE CUTOFF DATE
<S> <C>
Balance of Receivables Pool............................................. $597,789,058.71
Level Pay Balance of Receivables Pool................................... $446,822,127.07
Balloon Payment Balance of Receivables Pool............................. $150,966,931.64
Number of Receivables................................................... 31,328
Average Principal Balance............................................... $19,081.62
(Range)......................................................... $132.61 to $53,146.40
Average Original Amount Financed........................................ $20,425.12
(Range)......................................................... $2,856.59 to
$53,146.40
Average Level Pay Balance............................................... $14,262.71
(Range)......................................................... $132.61 to $53,146.40
Average Balloon Payment Principal Balance(1)............................ $10,883.64
(Range)......................................................... $2,550.33 to
$25,680.56
Average Balloon Payment Principal Balance as a Percentage of the
Average Principal 48.65%
Balance of the Balloon Payment Receivables.........................
Weighted Average Annual Percentage Rate................................. 7.39%
(Range)......................................................... 0.00% to 23.95%
Weighted Average Original Term to Maturity.............................. 52.68 months
(Range).........................................................12 months to 66 months
Weighted Average Remaining Term to Maturity............................. 48.33 months
(Range)......................................................... 3 months to 66 months
- -----------
</TABLE>
(1) Based on Balloon Payment Receivables balances only.
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF THE INITIAL RECEIVABLES AS OF THE CUTOFF DATE
PERCENTAGE OF PERCENTAGE OF
PRINCIPAL BALANCE OF PRINCIPAL BALANCE OF
STATE(1) RECEIVABLES POOL STATE RECEIVABLES POOL
- ----- ---------------- ----- ----------------
<S> <C> <C> <C>
Alabama....................... 2.58% Montana.................. 0.02%
Alaska........................ 0.11 Nebraska................. 0.24
Arizona....................... 0.67 Nevada................... 0.16
Arkansas...................... 1.24 New Hampshire............ 0.17
California.................... 11.12 New Jersey............... 2.07
Colorado...................... 0.49 New Mexico............... 0.41
Connecticut................... 2.26 New York................. 4.96
Delaware...................... 0.47 North Carolina........... 1.31
District of Columbia.......... 0.16 North Dakota............. 0.02
Florida....................... 9.75 Ohio..................... 0.91
Georgia....................... 5.36 Oklahoma................. 0.80
Hawaii........................ 0.03 Oregon................... 0.27
Idaho......................... 0.08 Pennsylvania............. 1.71
Illinois...................... 5.58 Puerto Rico.............. 0.01
Indiana....................... 0.72 Rhode Island............. 0.14
Iowa.......................... 0.36 South Carolina........... 3.00
Kansas........................ 0.32 South Dakota............. 0.02
Kentucky...................... 0.54 Tennessee................ 1.36
Louisiana..................... 5.34 Texas.................... 22.39
Maine......................... 0.11 Utah..................... 0.17
Maryland...................... 3.95 Vermont.................. 0.05
Massachusetts................. 0.91 Virginia................. 2.77
Michigan...................... 0.50 Washington............... 0.35
Minnesota..................... 0.78 West Virginia............ 0.08
Mississippi................... 1.78 Wisconsin................ 0.38
Missouri...................... 0.96 Wyoming.................. 0.02
Military................. 0.06
--------------------
Total 100%
====================
- -----------
(1) Geographic distribution is based on the current billing
addresses of the obligors.
(2) Percentages may not add to 100% due to rounding.
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION BY ANNUAL PERCENTAGE RATE OF THE INITIAL RECEIVABLES AS OF THE CUTOFF DATE
PERCENTAGE
PRINCIPAL OF PRINCIPAL
BALANCE OF BALANCE OF
NUMBER OF RECEIVABLES RECEIVABLES
ANNUAL PERCENTAGE RATE RANGE (%) RECEIVABLES POOL(1) POOL(2)
- -------------------------------- ----------- ------- -------
<C> <C> <C> <C>
0.00 to 0.99........................................ 3,765 $67,702,417.03 11.33%
1.00 to 1.99........................................ 360 6,527,957.25 1.09
2.00 to 2.99........................................ 1,159 18,384,942.68 3.08
3.00 to 3.99........................................ 450 7,400,822.76 1.24
4.00 to 4.99........................................ 3,280 63,610,051.86 10.64
5.00 to 5.99........................................ 3,307 67,595,372.40 11.31
6.00 to 6.99........................................ 3,900 84,703,284.87 14.17
7.00 to 7.99........................................ 2,860 60,989,293.99 10.20
8.00 to 8.99........................................ 2,319 51,826,790.75 8.67
9.00 to 9.99........................................ 1,703 35,741,511.96 5.98
10.00 to 10.99...................................... 1,973 38,182,969.04 6.39
11.00 to 11.99...................................... 1,332 22,696,005.76 3.80
12.00 to 12.99...................................... 809 15,029,476.93 2.51
13.00 to 13.99...................................... 818 11,809,283.34 1.98
14.00 to 14.99...................................... 794 14,051,745.75 2.35
15.00 to 15.99...................................... 461 7,279,029.17 1.22
16.00 to 16.99...................................... 417 6,183,997.40 1.03
17.00 to 17.99...................................... 403 5,424,697.01 0.91
18.00 to 18.99...................................... 400 4,728,022.51 0.79
19.00 to 19.99...................................... 289 2,686,097.97 0.45
20.00 to 20.99...................................... 253 2,286,142.09 0.38
21.00 to 21.99...................................... 151 1,705,128.91 0.29
22.00 to 22.99...................................... 93 918,371.53 0.15
23.00 to 23.99...................................... 32 325,645.75 0.05
------------ --------------- ------------
Total............................................... 31,328 $597,789,058.71 100%
============ =============== ============
- -----------
</TABLE>
(1) Remaining principal balance for Simple Interest
Receivables, and the present value of scheduled
remaining payments for Actuarial Receivables
discounted at a rate equal to the annual percentage
rate with respect to such receivables.
(2) Percentage may not add to 100% due to rounding.
Based on the principal balance of the initial receivables as of
October 1, 1999:
o approximately 86.31% of the total number of receivables, or
approximately 93.09% of the principal balance of the
receivables pool, relate to new automobiles and light-duty
trucks, substantially all of which were manufactured or
distributed by Mitsubishi Motors;
o approximately 7.99% of the total number of receivables, or
approximately 3.46% of the principal balance of the
receivables pool, relate to program automobiles and
light-duty trucks, substantially all of which were
manufactured or distributed by Mitsubishi Motors; and
o approximately 3.27% of the total number of receivables, or
approximately 2.01% of the principal balance of the
receivables pool, relate to used automobiles and light-duty
trucks, substantially all of which were manufactured or
distributed by Mitsubishi Motors and approximately 2.43% of
the total number of receivables, or approximately 1.44% of
the principal balance of the receivables pool, relate to
other used automobiles and light-duty trucks.
Program automobiles and light-duty trucks are vehicles which dealers have
acquired under a remarketing program administered by MMCA. This program
allows dealers to offer to purchasers of program automobiles and light-duty
trucks the same rate of interest and terms offered to new car buyers.
Program vehicles are primarily automobiles returned to MMCA by rental car
companies, but also include off-lease MMCA company and employee lease
vehicles and MMCA pool cars.
PAYMENT METHODS
Approximately 5.78% of the principal balance of the receivables
transferred to the trust on the Closing Date, calculated as of the Cutoff
Date, was attributable to Actuarial Receivables, excluding Actuarial
Receivables based on the Rule of 78's. An Actuarial Receivable provides for
the amortization of the loan over a series of fixed level monthly
installments. Each monthly installment is deemed to consist of an amount of
interest equal to one-twelfth of the stated annual percentage rate of the
loan multiplied by the scheduled principal balance. The remainder of the
scheduled payment is applied to principal. No adjustment is typically made
in the event of early or late payments, although in the case of a late
payment the obligor may be subject to a late payment charge.
Approximately 94.04% of the principal balance of the receivables
transferred to the trust on the Closing Date, calculated as of the Cutoff
Date, was attributable to Simple Interest Receivables. A Simple Interest
Receivable, like an Actuarial Receivable, also provides for the
amortization of the loan over a series of fixed level monthly installments.
However, unlike the monthly payment under an Actuarial Receivable, each
monthly payment under a Simple Interest Receivable consists of an
installment of interest which is equal to the principal balance of the
receivable actually outstanding, as opposed to scheduled, at the time of
calculation multiplied by the stated annual percentage rate and further
multiplied by the period elapsed, as a fraction of a calendar year, since
the preceding payment of interest was made. As payments are received under
a Simple Interest Receivable, the amount received is applied first to
interest accrued to the date of payment and the balance is applied to
reduce the unpaid principal balance. Accordingly, if an obligor pays a
fixed monthly installment before the date on which the installment is due,
the interest portion of the payment will be less than it would have been
had the payment been made as scheduled, and the principal portion of the
payment will be correspondingly greater. Conversely, if an obligor pays a
fixed monthly installment after the date on which it is due, the interest
portion of the payment will be greater than it would have been had the
payment been made when due and the principal portion of the payment will be
correspondingly less. In either case, the obligor pays a fixed monthly
installment until the final scheduled payment date, at which time the
amount of the final installment is increased or decreased as necessary to
repay the then outstanding principal balance. In the case of a Balloon
Payment Receivable that is also a Simple Interest Receivable, the remaining
principal balance on the due date of the receivable may be greater or less
than the scheduled Balloon Payment on the receivable. In November 1996,
MMCA began phasing out Actuarial Receivables in favor of Simple Interest
Receivables.
The remainder of the initial receivables transferred to the trust
on the Closing Date were either Actuarial Receivables which provide for a
refund of a portion of the interest paid if the receivable is prepaid in
full or Simple Interest Receivables that are subject to a cap on the
aggregate amount of the interest to be paid over the term of the
receivable. The refund upon prepayment in full of these Actuarial
Receivables is determined in accordance with the "Rule of 78's" and the
excess, if any, of the amount that would be due using the Rule of 78's
method over the actuarial method will not be used to make payments due to
noteholders but instead will be paid to the servicer. If the obligor on a
capped receivable consistently makes scheduled payments after the date on
which the scheduled payments are due, the amount of interest accrued over
the term of the loan will be less than would be the case in the absence of
the cap. If, as a result of those delinquencies, the aggregate amount of
interest paid under the receivable reaches the lifetime cap, no further
interest will accrue and each scheduled payment due thereafter will be
applied to the reduction of principal.
Approximately 25.25% of the principal balance of the receivables
transferred to the trust on the Closing Date, calculated as of the initial
Cutoff Date, was attributable to Balloon Payment Receivables. A Balloon
Payment receivable may be either a Simple Interest Receivable or an
Actuarial Receivable. See "-Balloon Payment Receivables" below.
Approximately 7.23% of the principal balance of the receivables
transferred to the trust on the Closing Date, calculated as of the initial
Cutoff Date, was attributable to receivables that allow a deferred first
payment. The obligor on a receivable with a deferred first payment is not
required to make any payments of interest or principal for as long as 216
days from the day of origination of the receivable. On and after the date
the first payment is due, the obligor is required to make monthly payments
on interest and principal under the receivable. The effect of the deferment
of the first payment is to increase the term of the receivable for the
period of the deferment.
BALLOON PAYMENT RECEIVABLES
Balloon Payment Receivables provide for the loan to amortize over a
series of equal monthly installments, but also provide for a substantially
larger final scheduled payment of principal together with one month's
interest. This final payment is known as a "Balloon Payment" and is due at
the end of the term of the receivable. MMCA sets the Balloon Payment for a
particular model of vehicle at the time the contract is entered into. The
net amount actually due from an obligor at the end of term of a Balloon
Payment Receivable may be greater or less than the Balloon Payment as a
result of:
o in the case of a Simple Interest Receivable, early or late
payments by the obligor during the term of the receivable
and the application of day counting conventions; and
o in the case of a Simple Interest Receivable or an Actuarial
Receivable, additional fees and charges that may be owed by
the obligor with respect to the contract or the financed
vehicle, including charges for excess wear and tear and
excess mileage on the financed vehicle.
Obligors may prepay the receivables in full at any time.
Prepayments may also result from liquidations due to default, the receipt
of insurance proceeds after destruction or theft of the financed vehicle
and purchases of the receivable by MART or the servicer as a result of
uncured breaches of representations and warranties in the sale and
servicing agreement. See "-- Maturity and Prepayment Considerations."
Upon maturity of a Balloon Payment Receivable, the related obligor
may satisfy the amount it owes by:
o paying the remaining principal amount of the receivable, all
accrued and unpaid interest, plus any fees, charges, and
other amounts then owing;
o refinancing the net amount then due, which may be greater or
less than the Balloon Payment, subject to several
conditions; or
o selling the related financed vehicle to MMCA or its assignee
for an amount equal to the Balloon Payment, as reduced by
charges for excess wear and tear and excess mileage and by a
disposition fee payable to the servicer, and paying any
excess of the total amount owed under the receivable over
the Balloon Payment to MMCA.
If the obligor sells the financed vehicle to MMCA, acting on behalf
of the trust, it is anticipated that the trust will not receive the full
amount of the Balloon Payment upon the subsequent sale of the financed
vehicle. MMCA sets the Balloon Payment for a particular model at the time
of origination of the related contract by reference to its estimate of the
wholesale market value of the model at the end of the contract's term.
However, in connection with sales incentive programs for particular models,
MMCA may increase the Balloon Payments to levels above its estimate of the
wholesale market values at the end of their respective contract terms, in
order to stimulate sales of particular models by reducing the amount of the
monthly installments which would be owed by obligors.
If there is a total loss of the automobile or light-duty truck
caused by its theft or physical damage, MMCA does not require the obligor
under a receivable providing for a Balloon Payment Receivable to pay the
difference between the amount owed in respect of the receivable as of the
date of the total loss and insurance proceeds, including payment by the
obligor of any applicable deductible, received with respect to the financed
vehicle. MMCA will instead reduce the principal amount of the Balloon
Payment by that amount.
If the full amount owed by an obligor under a Balloon Payment
Receivable is not collected, the shortfall will reduce the Available Funds
available to pay the Total Required Payment and to make any required
transfers from the collection account to the reserve account and the
supplemental reserve account which may reduce the amount available to pay
interest on and principal of the notes. None of MMCA, the servicer, MART or
the trust will have any recourse to the obligor for any shortfall, nor will
MMCA, the servicer or MART be obligated to pay any shortfall to the trust.
DEFAULTED RECEIVABLES
A receivable, other than a receivable which has been purchased from
the trust by MART or the servicer, will be considered to have defaulted if:
o the related financed vehicle has been repossessed and liquidated;
o more than 10% of a scheduled payment is 120 or more days
past due as of the end of the month in which the payment was
due and the servicer has not repossessed the related
financed vehicle; or
o the servicer has determined, in accordance with its
customary standards, policies and procedures, that eventual
payment in full, excluding charges for excess wear and tear
or excess mileage, of the receivable is unlikely and has
either repossessed and liquidated the related financed
vehicle or repossessed and held the related financed vehicle
in its repossession inventory for a period which may not
exceed 90 days.
MATURITY AND PREPAYMENT CONSIDERATIONS
The weighted average life of the notes will generally be influenced
by the rate of payment of principal balances of the receivables. This
payment may be in the form of scheduled payments or prepayments.
Prepayments in full on Actuarial Receivables and Simple Interest
Receivables and partial prepayments on Simple Interest Receivables
generally will have the effect of reducing the weighted average life of the
notes. Delinquencies by obligors under Simple Interest Receivables and
extensions and payment deferrals on any type of receivable generally will
have the effect of increasing the weighted average life of the notes.
"Prepayments" for these purposes includes the following circumstances:
o Prepayments in full and partial prepayments. The obligors
may prepay the receivables in full or in part.
o Mandatory prepayments. An obligor may be required to prepay
a receivable because of, among other things, the sale,
insured loss or other disposition of the related vehicle or
the receivable becoming defaulted.
o Repurchases of the receivables by MART or the servicer. MART
or the servicer may be required to repurchase a receivable
from the trust if certain breaches of representations and
warranties occur that materially and adversely affect the
receivable.
In light of the above considerations, there can be no assurance as
to the amount of principal payments that will be made on the notes on each
payment date. The amount will depend, in part, on the amount of principal
collected on the receivables during the preceding calendar month. Any
reinvestment risks resulting from a faster or slower incidence of
prepayment of receivables will be borne entirely by the noteholders.
In addition, if MMCA or any affiliate of MMCA decides to implement
a program that encourages prepayments, prepayments may increase. MMCA
currently maintains a program that offers attractive terms to obligors to
prepay their accounts and return their vehicles early if they purchase a
new vehicle manufactured by Mitsubishi Motors or an affiliate. While this
program may encourage prepayments, the effect on prepayments of the program
and other programs like it cannot be predicted.
Prepayments on the receivables can be measured relative to a
prepayment standard or model. This prospectus uses the Absolute Prepayment
Model ("ABS"). ABS assumes that a certain percentage of the receivables in
a pool will be repaid each month. It also assumes that all the receivables
are the same size and amortize at the same rate. The final assumption is
that each receivable will either be paid as scheduled or be prepaid in full
in any given month. For example, in a pool of receivables originally
containing 10,000 receivables, a 1% ABS rate means that 100 receivables
prepay each month. ABS does not purport to be an historical description of
prepayment experience or a prediction of the anticipated rate of prepayment
of any pool of receivables, including the receivables purchased by the
trust.
Approximately 25.25% of the principal balance of the receivables
transferred to the trust on the Closing Date, calculated as of the Cutoff
Date, consists of Balloon Payments. Accordingly, a portion of the principal
amount of the notes is expected to be paid from Balloon Payments. All of
the Balloon Payments are due between January 4, 2000 and October 11, 2004
and significant payments of principal are likely to be made during that
period. The average principal balance of those Balloon Payments is
approximately $10,883.64, which is approximately 48.65% of the average
principal balance of those receivables.
The tables relating to ABS captioned "Projected Class A-1 Note
Amortization", "Projected Class A-2 Note Amortization", "Projected Class
A-3 Note Amortization" and "Projected Class B Note Amortization" assume
that:
o the Yield Supplement Amount is deposited into the collection
account each period;
o the Negative Carry Amount is deposited into the collection
account each period;
o the amount deposited into the pre-funding account on the
Closing Date is applied in its entirety to the purchase of
contracts transferred to the trust during the Pre-Funding
Period and to make the related deposits to the reserve
account, the yield supplement account and the payahead
account;
o the receivables prepay in full at the specified constant
percentage of ABS monthly, with no defaults, losses or
repurchases;
o if the first payment on a receivable is deferred, no
prepayments are made on that receivable on that receivable
prior to the date the first payment on that receivable is
due;
o each scheduled monthly payment on the receivables is made on
the last day of each month, and each month has 30 days;
o payments on the notes are made on each payment date, which
is assumed to be the 15th day of each applicable month;
o the first date on which receivables will be transferred to
the trust is the Closing Date;
o the servicer exercises its option to purchase the
receivables; and
o MMCA's program to manage end-of-term risks and mitigate
returned vehicle losses by offering attractive terms to
obligors to prepay their receivables and return their
vehicle early, if they purchase a new Mitsubishi Motor
vehicle, does not extend to the receivables.
The ABS tables indicate the percent of the initial principal
balance of each class of the notes projected to be outstanding after each
of the payment dates.
For purposes of creating the ABS tables, the receivables have been
aggregated into different hypothetical pools.
The receivables to be transferred to the trust on the Closing Date
have been divided into five hypothetical pools made up of receivables that
have equal scheduled monthly payments that fully amortize those
receivables. These hypothetical pools have the following characteristics:
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
LEVEL Aggregate Weighted Original Term Remaining Term
PAYMENT Principal Average Annual to Maturity to Maturity
POOL Balance Percentage Rate (in months) (in months)
- ---- ------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
1 .................. $ 11,677,049.73 5.913% 35 18
2 .................. $ 25,189,180.11 7.508% 40 32
3 .................. $ 170,768,888.24 4.785% 48 44
4 .................. $ 195,974,154.49 9.201% 59 56
5(1) ................ $ 43,212,854.50 7.317% 64 64
</TABLE>
- -----------
(1) Includes receivables with no payments due for an
initial period of six months. Thereafter, receivables
amortize over 58 months.
The receivables to be transferred to the trust on the Closing Date
also have been divided into four hypothetical pools made up of balloon
payment receivables. These hypothetical pools have the following
characteristics:
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
BALLOON Aggregate Weighted Original Term Remaining Term to
PAYMENT Principal Average Annual to Maturity Maturity
POOL Balance Percentage Rate (in months) (in months)
- ---- ------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
1 .................. $ 10,991,611.81 6.927% 45 16
2 .................. $ 8,028,788.98 7.517% 40 32
3 .................. $ 75,251,449.01 7.082% 48 43
4 .................. $ 56,695,081.84 9.751% 57 55
</TABLE>
The ABS tables also assume that the additional receivables to be
transferred to the trust during the Pre-Funding Period occur in two groups.
The first group, with an assumed aggregate principal balance of
$126,381,838.31, are assumed to be transferred to the trust on December 1,
1999. The second group, with an assumed aggregate principal balance of
$75,829,102.98, are assumed to be transferred to the trust on February 1,
2000.
The receivables to be transferred to the trust on December 1, 1999
have been divided into five hypothetical pools made up of receivables that
have equal monthly payments that fully amortize those receivables. These
hypothetical pools have the following characteristics:
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
LEVEL Aggregate Weighted Original Term Remaining Term
PAYMENT Principal Average Annual to Maturity to Maturity
POOL Balance Percentage Rate (in months) (in months)
- ---- ------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
1 .................. $ 2,468,708.64 5.913% 35 35
2 .................. $ 5,325,381.66 7.508% 40 40
3 .................. $ 36,103,180.05 4.785% 48 48
4 .................. $ 41,431,962.56 9.201% 59 59
5(1) ................ $ 9,135,864.75 7.317% 64 64
</TABLE>
- -----------
(1) Includes receivables with no payments due for an
initial period of six months. Thereafter, receivables
amortize over 58 months.
The receivables to be transferred to the trust during the
Pre-Funding Period also have been divided into four hypothetical pools made
up of balloon payment receivables. These hypothetical pools have the
following characteristics:
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
BALLOON Aggregate Weighted Original Term Remaining Term to
PAYMENT Principal Average Annual to Maturity Maturity
POOL Balance Percentage Rate (in months) (in months)
- ---- ------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
1 .................. $ 2,323,796.46 6.927% 45 45
2 .................. $ 1,697,409.97 7.517% 40 40
3 .................. $ 15,909,318.38 7.082% 48 48
4 .................. $ 11,986,215.84 9.751%
</TABLE>
The receivables to be transferred to the trust on February 1, 2000
have been divided into five hypothetical pools made up of receivables that
have equal monthly payments that fully amortize those receivables. These
hypothetical pools have the following characteristics:
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
LEVEL Aggregate Weighted Original Term Remaining Term
PAYMENT Principal Average Annual to Maturity to Maturity
POOL Balance Percentage Rate (in months) (in months)
- ---- ------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
1 .................. $ 1,481,225.18 5.913% 35 35
2 .................. $ 3,195,228.99 7.508% 40 40
3 .................. $ 21,661,908.03 4.785% 48 48
4 .................. $ 24,859,177.54 9.201% 59 59
5(1) ................ $ 5,481,518.85 7.317% 64 64
</TABLE>
- -----------
(1) Includes receivables with no payments due for an
initial period of six months. Thereafter, receivables
amortize over 58 months.
The receivables to be transferred to the trust during the
Pre-Funding Period also have been divided into four hypothetical pools made
up of balloon payment receivables. These hypothetical pools have the
following characteristics:
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
BALLOON Aggregate Weighted Original Term Remaining Term to
PAYMENT Principal Average Annual to Maturity Maturity
POOL Balance Percentage Rate (in months) (in months)
- ---- ------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
1 .................. $ 1,394,277.88 6.927% 45 45
2 .................. $ 1,018,445.98 7.517% 40 40
3 .................. $ 9,545,591.03 7.082% 48 48
4 .................. $ 7,191,729.50 9.751% 57 57
</TABLE>
The actual characteristics and performance of the receivables in the
trust will differ from the assumptions used in constructing the ABS tables.
The assumptions used are hypothetical and have been provided only to give a
general sense of how the principal cash flow might behave under varying
prepayment scenarios. It is very unlikely that the receivables will prepay
at the same level of ABS. Moreover, the diverse terms of receivables within
each of the hypothetical pools could produce slower or faster principal
distributions than indicated in the ABS tables. In addition, the
characteristics of the receivables transferred to the trust on the Closing
Date are expected to be different from the receivables transferred to the
trust during the Pre-Funding Period. Any difference between those
assumptions and the actual characteristics and performance of the
receivables, or actual prepayment experience, will affect the percentages
of initial balances outstanding over time, as well as collections of
interest and principal of receivables. See "-Selection Criteria."
THE ABS TABLES HAVE BEEN PREPARED BASED ON THE ASSUMPTIONS DESCRIBED
ABOVE AND SHOULD BE READ IN CONJUNCTION THEREWITH.
<TABLE>
<CAPTION>
PROJECTED CLASS A-1 NOTE AMORTIZATION
PERCENT OF INITIAL NOTE PRINCIPAL AMOUNT
CLASS A-1 NOTE BALANCE (%)
----------------------------------------------------
PAYMENT DATE 0.0% ABS 1.0% ABS 1.3% ABS 1.5% ABS 2.0% ABS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Closing Date 100 100 100 100 100
November 15, 1999 98 96 95 95 94
December 15, 1999 95 92 91 90 88
January 15, 2000 92 87 85 84 81
February 15, 2000 90 82 80 78 74
March 15, 2000 86 77 74 72 66
April 15, 2000 83 72 68 65 59
May 15, 2000 80 66 62 59 51
June 15, 2000 77 61 56 52 43
July 15, 2000 73 55 50 46 36
August 15, 2000 70 50 44 40 28
September 15, 2000 66 45 38 33 21
October 15, 2000 63 39 32 27 14
November 15, 2000 59 34 26 21 6
December 15, 2000 56 29 20 15 0
January 15, 2001 52 24 15 9 0
February 15, 2001 45 16 7 1 0
March 15, 2001 42 11 2 0 0
April 15, 2001 38 6 0 0 0
May 15, 2001 34 1 0 0 0
June 15, 2001 31 0 0 0 0
July 15, 2001 27 0 0 0 0
August 15, 2001 24 0 0 0 0
September 15, 2001 20 0 0 0 0
October 15, 2001 17 0 0 0 0
November 15, 2001 13 0 0 0 0
December 15, 2001 10 0 0 0 0
January 15, 2002 6 0 0 0 0
February 15, 2002 3 0 0 0 0
March 15, 2002 0 0 0 0 0
--------- --------- --------- ---------- -----------
Weighted Average Life (yrs)....... 1.26 0.83 0.75 0.70 0.60
</TABLE>
<TABLE>
<CAPTION>
PROJECTED CLASS A-2 NOTE AMORTIZATION
PERCENT OF INITIAL NOTE PRINCIPAL AMOUNT
CLASS A-2 NOTE BALANCE (%)
PAYMENT DATE 0.0% ABS 1.0% ABS 1.3% ABS 1.5% ABS 2.0% ABS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Closing Date 100 100 100 100 100
November 15, 1999 100 100 100 100 100
December 15, 1999 100 100 100 100 100
January 15, 2000 100 100 100 100 100
February 15, 2000 100 100 100 100 100
March 15, 2000 100 100 100 100 100
April 15, 2000 100 100 100 100 100
May 15, 2000 100 100 100 100 100
June 15, 2000 100 100 100 100 100
July 15, 2000 100 100 100 100 100
August 15, 2000 100 100 100 100 100
September 15, 2000 100 100 100 100 100
October 15, 2000 100 100 100 100 100
November 15, 2000 100 100 100 100 100
December 15, 2000 100 100 100 100 99
January 15, 2001 100 100 100 100 88
February 15, 2001 100 100 100 100 77
March 15, 2001 100 100 100 92 67
April 15, 2001 100 100 94 84 57
May 15, 2001 100 100 86 76 48
June 15, 2001 100 95 79 67 39
July 15, 2001 100 88 71 59 30
August 15, 2001 100 81 63 51 21
September 15, 2001 100 74 56 44 12
October 15, 2001 100 67 49 36 4
November 15, 2001 100 60 42 29 0
December 15, 2001 100 54 35 22 0
January 15, 2002 100 47 28 14 0
February 15, 2002 100 41 21 8 0
March 15, 2002 98 34 14 1 0
April 15, 2002 93 28 8 0 0
May 15, 2002 87 22 1 0 0
June 15, 2002 77 13 0 0 0
July 15, 2002 72 7 0 0 0
August 15, 2002 66 2 0 0 0
September 15, 2002 61 0 0 0 0
October 15, 2002 56 0 0 0 0
November 15, 2002 50 0 0 0 0
December 15, 2002 45 0 0 0 0
January 15, 2003 39 0 0 0 0
February 15, 2003 33 0 0 0 0
March 15, 2003 28 0 0 0 0
April 15, 2003 21 0 0 0 0
May 15, 2003 0 0 0 0 0
--------- --------- --------- ---------- ----------
Weighted Average Life (yrs)....... 3.07 2.23 2.00 1.87 1.58
</TABLE>
<TABLE>
<CAPTION>
PROJECTED CLASS A-3 NOTE AMORTIZATION
PERCENT OF INITIAL NOTE PRINCIPAL AMOUNT
CLASS A-3 NOTE BALANCE (%)
PAYMENT DATE 0.0% ABS 1.0% ABS 1.3% ABS 1.5% ABS 2.0% ABS
- ------------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Closing Date 100 100 100 100 100
November 15, 1999 100 100 100 100 100
December 15, 1999 100 100 100 100 100
January 15, 2000 100 100 100 100 100
February 15, 2000 100 100 100 100 100
March 15, 2000 100 100 100 100 100
April 15, 2000 100 100 100 100 100
May 15, 2000 100 100 100 100 100
June 15, 2000 100 100 100 100 100
July 15, 2000 100 100 100 100 100
August 15, 2000 100 100 100 100 100
September 15, 2000 100 100 100 100 100
October 15, 2000 100 100 100 100 100
November 15, 2000 100 100 100 100 100
December 15, 2000 100 100 100 100 100
January 15, 2001 100 100 100 100 100
February 15, 2001 100 100 100 100 100
March 15, 2001 100 100 100 100 100
April 15, 2001 100 100 100 100 100
May 15, 2001 100 100 100 100 100
June 15, 2001 100 100 100 100 100
July 15, 2001 100 100 100 100 100
August 15, 2001 100 100 100 100 100
September 15, 2001 100 100 100 100 100
October 15, 2001 100 100 100 100 100
November 15, 2001 100 100 100 100 94
December 15, 2001 100 100 100 100 83
January 15, 2002 100 100 100 100 71
February 15, 2002 100 100 100 100 60
March 15, 2002 100 100 100 100 50
April 15, 2002 100 100 100 91 40
May 15, 2002 100 100 100 82 30
June 15, 2002 100 100 90 70 19
July 15, 2002 100 100 81 61 10
August 15, 2002 100 100 73 53 1
September 15, 2002 100 95 65 44 0
October 15, 2002 100 86 57 36 0
November 15, 2002 100 79 49 29 0
December 15, 2002 100 71 41 21 0
January 15, 2003 100 63 34 14 0
February 15, 2003 100 56 27 7 0
March 15, 2003 100 49 20 0 0
April 15, 2003 100 41 12 0 0
May 15, 2003 71 5 0 0 0
June 15, 2003 62 0 0 0 0
July 15, 2003 56 0 0 0 0
August 15, 2003 51 0 0 0 0
September 15, 2003 44 0 0 0 0
October 15, 2003 39 0 0 0 0
November 15, 2003 32 0 0 0 0
December 15, 2003 15 0 0 0 0
January 15, 2004 11 0 0 0 0
February 15, 2004 0 0 0 0 0
--------- --------- --------- ---------- ----------
Weighted Average Life (yrs)....... 3.86 3.33 3.09 2.89 2.43
</TABLE>
<TABLE>
<CAPTION>
PROJECTED CLASS B NOTE AMORTIZATION
PERCENT OF INITIAL NOTE PRINCIPAL AMOUNT
CLASS B NOTE BALANCE (%)
PAYMENT DATE 0.0% ABS 1.0% ABS 1.3% ABS 1.5% ABS 2.0% ABS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Closing Date 100 100 100 100 100
November 15, 1999 100 100 100 100 100
December 15, 1999 100 100 100 100 100
January 15, 2000 100 100 100 100 100
February 15, 2000 100 100 100 100 100
March 15, 2000 100 100 100 100 100
April 15, 2000 100 100 100 100 100
May 15, 2000 100 100 100 100 100
June 15, 2000 100 100 100 100 100
July 15, 2000 100 100 100 100 100
August 15, 2000 100 100 100 100 100
September 15, 2000 100 100 100 100 100
October 15, 2000 100 100 100 100 100
November 15, 2000 100 100 100 100 100
December 15, 2000 100 100 100 100 100
January 15, 2001 100 100 100 100 100
February 15, 2001 100 100 100 100 100
March 15, 2001 100 100 100 100 100
April 15, 2001 100 100 100 100 100
May 15, 2001 100 100 100 100 100
June 15, 2001 100 100 100 100 100
July 15, 2001 100 100 100 100 100
August 15, 2001 100 100 100 100 100
September 15, 2001 100 100 100 100 100
October 15, 2001 100 100 100 100 100
November 15, 2001 100 100 100 100 100
December 15, 2001 100 100 100 100 100
January 15, 2002 100 100 100 100 100
February 15, 2002 100 100 100 100 100
March 15, 2002 100 100 100 100 100
April 15, 2002 100 100 100 100 100
May 15, 2002 100 100 100 100 100
June 15, 2002 100 100 100 100 100
July 15, 2002 100 100 100 100 100
August 15, 2002 100 100 100 100 100
September 15, 2002 100 100 100 100 84
October 15, 2002 100 100 100 100 66
November 15, 2002 100 100 100 100 48
December 15, 2002 100 100 100 100 0
January 15, 2003 100 100 100 100 0
February 15, 2003 100 100 100 100 0
March 15, 2003 100 100 100 100 0
April 15, 2003 100 100 100 84 0
May 15, 2003 100 100 64 33 0
June 15, 2003 100 96 51 0 0
July 15, 2003 100 85 41 0 0
August 15, 2003 100 75 0 0 0
September 15, 2003 100 64 0 0 0
October 15, 2003 100 54 0 0 0
November 15, 2003 100 44 0 0 0
December 15, 2003 100 0 0 0 0
January 15, 2004 100 0 0 0 0
February 15, 2004 97 0 0 0 0
March 15, 2004 87 0 0 0 0
April 15, 2004 76 0 0 0 0
May 15, 2004 0 0 0 0 0
--------- --------- --------- ---------- ----------
Weighted Average Life (yrs)....... 4.51 3.98 3.68 3.56 3.04
</TABLE>
HOW NOTEHOLDERS CAN COMPUTE THEIR PORTION OF THE AMOUNT
OUTSTANDING ON THE NOTES
The servicer's monthly report will give the noteholders, a factor
that can be used to compute the portion of the principal amount outstanding
on the notes.
How the Servicer Computes the Factor For Each Class of Notes. The
servicer will compute a separate factor for each class of notes prior to
each distribution for that class. This factor will be a seven-digit decimal
which the servicer will compute prior to each distribution with respect to
that class of notes indicating the remaining outstanding principal amount
of that class of notes, as of the applicable payment date. The servicer
will compute the factor after giving effect to payments to be made on that
payment date, as a fraction of the initial outstanding principal amount of
that class of notes.
Portion of the Outstanding Amount of the Notes. For each note, the
portion outstanding is the product of:
o the original denomination of the note; and
o the factor relating to that class of notes computed by the
servicer in the manner described above.
The Factors Described Above Will Decline as the Trust Makes Payments
on the Securities.
Each of the factors described above will initially be 1.0000000.
They will decline as the principal amount of the applicable class of notes
is reduced by scheduled payments, prepayments, liquidations of the
receivables and prepayment arising from application of funds in the
pre-funding account. The addition of receivables to the trust will not
change any of these factors.
USE OF PROCEEDS
The net proceeds from the sale of the notes will be applied:
o to the purchase of the receivables;
o to make the required deposit into the pre-funding account;
o to make the required deposit into the negative carry account;
o to make the required deposit into the payahead account;
o to make the required deposit into the yield supplement account;
and
o to make the required deposit into the reserve account.
MMCA AUTO RECEIVABLES TRUST
MART was established as a business trust in the State of Delaware
on May 19, 1999. MMCA is the sole beneficial owner of MART. MART was
established for limited purposes, which include purchasing receivables from
MMCA, transferring the receivables to third parties and any activities
related to those purposes. MART's principal executive offices are located
at 6363 Katella Avenue, Cypress, California 90630-5205. MART's telephone
number is (714) 236-1614.
In structuring these transactions MART has taken steps intended to
ensure that the voluntary or involuntary application for relief by MMCA
under the United States Bankruptcy Code or similar state laws will not
cause the assets and liabilities of MART to be consolidated with those of
MMCA. These steps include the maintenance of MART as a separate,
limited-purpose entity. The trust agreement by which MART was formed and
which governs MART's activities restricts the nature of MART's business and
MART's ability to commence a voluntary case or proceeding under any
insolvency law without the unanimous vote of all of its managers. However,
there can be no assurance that the activities of MART would not result in a
court concluding that its assets and liabilities should be consolidated
with those of MMCA in an insolvency proceeding.
MART's counsel has advised that it would not be a proper exercise
by a court of its equitable discretion to disregard the separate existence
of MART and consolidate its assets and liabilities with the assets and
liabilities of MMCA if MMCA filed for bankruptcy protection. MART's counsel
has assumed that MART will follow various procedures in the conduct of its
affairs, including maintaining records and books of account separate from
those of MMCA, refraining from commingling its assets with those of MMCA
and refraining from holding itself out as having agreed to pay, or being
liable for, the debts of MMCA. MART intends to follow and has represented
to that counsel that it will follow these and other procedures related to
maintaining its separate legal identity. However, if MART does not follow
those procedures, a court could conclude that the assets and liabilities of
MART should be consolidated with those of MMCA. If a court were to reach
that conclusion, or if a filing were made under any insolvency law by or
against MART, or if an attempt were made to litigate any of the foregoing
issues, delays in payments on the notes or reductions in the amounts of the
payments could result.
THE SERVICER
MMCA is a Delaware corporation which primarily provides retail and
wholesale financing, retail leasing and other financial services to
authorized Mitsubishi Motors automobile and light-duty truck dealers and
their customers in the United States. MMCA was incorporated in August 1990
and commenced operations in March 1991.
MMCA is a wholly-owned subsidiary of MMSA, a California corporation
which is engaged in the wholesale distribution of automobiles and
light-duty trucks throughout the United States manufactured by Mitsubishi
Motors Corporation and its affiliates. MMSA is a subsidiary of Mitsubishi
Motors Corporation, a Japanese corporation that is a worldwide manufacturer
and distributor of motor vehicles and light-duty trucks. Mitsubishi Motors
Corporation owns 97.20% of the stock of MMSA. Mitsubishi Corporation, a
Japanese corporation that is a worldwide general trading company, owns
2.00% of the stock of MMSA. Mitsubishi International Corporation, a New
York corporation that is a worldwide trading company and a wholly-owned
subsidiary of Mitsubishi Corporation, owns 0.80% of the stock of MMSA.
MMCA's national headquarters is located at 6363 Katella Avenue,
Cypress, CA 90630-5205. Its telephone number is (714) 236-1500.
TERMS OF THE NOTES
PRINCIPAL AMOUNT AND INTEREST RATES
The trust will issue $740,000,000 aggregate principal amount of
asset-backed notes under an indenture to be dated as of October 1, 1999,
between the trust and Bank of Tokyo-Mitsubishi Trust Company, in its
capacity as indenture trustee.
The notes will be issued in four classes:
o $326,000,000 aggregate principal amount of %
Class A-1 notes;
o $210,000,000 aggregate principal amount of %
Class A-2 notes;
o $142,000,000 aggregate principal amount of %
Class A-3 notes; and
o $62,000,000 aggregate principal amount of %
Class B notes.
A form of the indenture has been filed as an exhibit to the
registration statement of which this prospectus forms a part. The following
summary does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the notes, the indenture, the trust agreement
and the sale and servicing agreement.
INTEREST PAYMENTS
The notes will bear interest at the following annual rates:
o the Class A-1 notes: %;
o the Class A-2 notes: %;
o the Class A-3 notes: %; and
o the Class B notes: %.
Interest on the outstanding principal amount of each class of notes
will accrue at the applicable interest rate and will be payable to the
applicable noteholders on the 15th of each month. If the 15th of the month
is not a business day, the payment will be made on the next following
business day. The first payment will be made on November 15, 1999. Payments
will be made to noteholders as of each record date. The record date will be
the business day preceding each payment date. However, if notes in fully
registered, certificated form are issued, the record date will become the
15th day of the preceding month, or if that day is not a business day, the
preceding business day.
Calculation of interest. Interest will accrue during each interest
period and will be calculated on the notes on the basis of a 360-day year
of twelve 30-day months. Interest accrued as of any payment date but not
paid on that payment date will be due on the next payment date, together
with interest on that amount at the applicable interest rate, to the extent
lawful.
Interest Periods. Interest payable on the notes on each payment
date will accrue from the 15th of the month preceding the payment date
through the 14th of the month of the payment date. For the first payment
date, interest will accrue from the Closing Date through November 14, 1999.
Priority of Interest Payments. Funds to make interest payments on
the notes will generally come from the Available Funds remaining after the
payment of the servicing fee for the related month plus any portion of the
servicing fee that remains unpaid from prior months. If the Available Funds
remaining are insufficient, the interest will be paid from amounts on
deposit in the supplemental reserve account. If those funds are
insufficient also, interest will then be paid from amounts on deposit in
the reserve account.
Interest payments on all of the Class A notes will have the same
priority of payment and will be paid ratably based upon the total amount of
interest due on each class of the Class A notes. Interest on the Class B
notes is subordinate to interest on the Class A notes. No interest will be
paid on the Class B notes on any payment date until interest on the Class A
notes has been paid in full. If the amount available for interest payments
is less than the amount of interest payable on the Class A notes on any
payment date, each class of the Class A notes will receive its ratable
share of the aggregate amount available to pay interest on the Class A
notes and no interest will be paid on the Class B notes. Additionally, if a
default under the indenture occurs, interest payments on the Class B notes
also will be subordinated to the payment of principal of the Class A notes.
Events of Default Under the Indenture. An event of default under
the indenture will occur if the full amount of interest due on all classes
of notes is not paid within five days after the payment date on which the
interest is due. No distributions will be made on the certificates on any
payment date until the interest and principal payable on the notes on that
payment date are paid in full.
PRINCIPAL PAYMENTS
On each payment date, principal payments will be made to the
noteholders in an amount equal in the aggregate to the Principal
Distribution Amount for that payment date, subject to several limitations.
Certificateholders will not be entitled to receive payments of principal
until all classes of notes have been paid in full. See "--Indenture Cash
Flows" and "--The Reserve Account and Supplemental Reserve Account."
On each payment date the Principal Distribution Amount will be
paid:
o to the holders of the Class A-1 notes, until the Class A-1
notes have been paid in full;
o after the Class A-1 notes are paid in full, to the holders
of the Class A-2 notes, until the Class A-2 notes have been
paid in full;
o after the Class A-2 notes are paid in full, to the holders
of the Class A-3 notes, until the Class A-3 notes have been
paid in full; and
o after the Class A-3 notes are paid in full, to the holders
of the Class B notes, until the Class B notes have been paid
in full.
Events of Default Under the Indenture. Payments on the notes may be
accelerated upon an event of default under the indenture. If this occurs,
the order of priority for principal payments on the notes will change.
Amounts available to pay principal of the Class A notes will be paid to the
holders of each class of Class A notes in proportion to the principal
balance of that class to the sum of the principal balances of all of the
Class A notes, until all of the Class A notes are paid in full. See
"-Indenture Cash Flows-Monthly Withdrawals From the Note Payment Account On
and After an Acceleration of the Maturity Dates of the Notes." Principal of
the Class B notes will be paid only after the payment of the following:
o amounts due to the servicer;
o interest due on the Class A notes;
o principal in full of all of the Class A notes; and
o interest due on the Class B notes.
The noteholders will be paid in full before any distributions may be made
on the certificates.
Scheduled Final Payment Dates. Any outstanding principal balance of
each class of notes will be payable in full on the final payment date in
the months specified below:
o for the Class A-1 notes, June 2002;
o for the Class A-2 notes, August 2003;
o for the Class A-3 notes, May 2004; and
o for the Class B notes, April 2006.
The actual date on which the aggregate outstanding principal amount
of any class of notes is paid may be earlier or later than these dates due
to a variety of factors, including those described under "Risk
Factors--Risk that You May Be Required to Reinvest Your Principal in the
Notes at a Lower Rate of Return Because of Prepayments on the Notes" and
"The Receivables Pool--Maturity and Prepayment Considerations."
MANDATORY PREPAYMENT
On the payment date on or immediately following the last day of the
Pre-Funding Period, any funds remaining in the pre-funding account, after
giving effect to the purchase of all receivables purchased during the Pre-
Funding Period, exclusive of any net earnings from the investment of funds
on deposit in the pre-funding account, will be applied to pay principal of
the notes then outstanding in the same sequence and proportions that would
apply if the remaining funds were a part of the Principal Distribution
Amount. Although the pre-funding account will be funded in an amount that
MART anticipates will allow the trust to acquire receivables during the
Pre-Funding Period in an aggregate principal amount approximately equal to
the amount on deposit in the pre-funding account, it is unlikely that the
aggregate principal amount of those receivables will exactly equal the
amount on deposit in the pre-funding account, and it is likely that at
least a nominal amount of principal will be prepaid to the noteholders at
the end of the Pre-Funding Period.
OPTIONAL REDEMPTION
All of the outstanding notes and certificates will be redeemed on
any payment date on which the servicer exercises its option to purchase the
receivables. The servicer may purchase the receivables on any payment date
on which the principal balance of the receivables pool as of the end of the
preceding calendar month is 10% or less of the Initial Pool Balance. The
redemption price will be equal to the unpaid principal amount of the notes
plus accrued and unpaid interest on the notes, together with the unpaid
principal amount of the certificates.
THE INDENTURE TRUSTEE
Bank of Tokyo-Mitsubishi Trust Company, a New York banking
corporation, will be the indenture trustee. The indenture trustee's
Corporate Trust Office is located at 1251 Avenue of the Americas, New York,
New York 10020-1104. MART, the servicer, and their respective affiliates
may have other banking relationships with the indenture trustee and its
affiliates in the ordinary course of their businesses.
THE YIELD SUPPLEMENT AGREEMENT
Simultaneously with the sale and assignment of the receivables by
MMCA to MART, MMCA and MART will enter into the yield supplement agreement.
The yield supplement agreement will obligate MMCA to pay any Yield
Supplement Amount to the trust on the business day before each payment
date.
THE YIELD SUPPLEMENT ACCOUNT
Payments of the Yield Supplement Amount due under the yield
supplement agreement will be secured by funds on deposit in the yield
supplement account. The yield supplement account has been established
because (1) some of the receivables in the trust will not have any payments
due from the related obligors until some time after the first payment date
of the notes and (2) some of the receivables owned by the trust will have
an annual percentage rate which is lower than the minimum annual percentage
rate MART and MMCA have agreed is required to cover interest on the notes,
the 1% servicing fee and anticipated losses on defaulted receivables. This
minimum annual percentage rate has been set at the weighted average
interest rate on the notes plus 3 percentage points. However, if MMCA
either obtains a letter of credit securing timely payment to the indenture
trustee of amounts due from MMCA under the yield supplement agreement or
otherwise satisfies several other conditions satisfactory to each of
Moody's and S&P, then subject to the delivery of certain tax opinions the
yield supplement account may be terminated. Any letter of credit related to
the yield supplement agreement will be issued by a bank that has a debt
rating sufficient to maintain the rating of each class of notes at the
initial level at which it was rated by each of Moody's and S&P. If the
rating of the letter of credit bank that issues the letter of credit is
reduced below either of those ratings, the indenture trustee will be
required to obtain a suitable replacement letter of credit, to obtain funds
in the required amount for deposit in the yield supplement account or to
draw the full amount available under the letter of credit and deposit those
funds in the yield supplement account.
On each payment date, after giving effect to payments on that date,
the amount required to be on deposit in the yield supplement account or to
be available under an acceptable letter of credit will be an amount equal
to the sum of all projected Yield Supplement Amounts for all future payment
dates, which will be determined assuming that future scheduled payments on
the receivables are made on the dates they are scheduled. The amount on
deposit in the yield supplement account will decrease as payments are made
from that account with respect to the Yield Supplement Amounts and funds in
excess of the maximum required balance are released to MART.
MART Will Make Deposits into the Yield Supplement Account upon each
Transfer of Receivables to the Trust. MART will make an initial deposit to
the yield supplement account on the Closing Date, in the amount specified
in the sale and servicing agreement. On each subsequent date on which
receivables are transferred to the trust, the indenture trustee will make
an additional deposit to the yield supplement account from funds on deposit
in the pre-funding account that otherwise would be distributable to MART as
payment for the receivables sold to the trust on that date, unless the
yield supplement account has been replaced by an acceptable letter of
credit on or before that date.
THE TRUST'S BANK ACCOUNTS
The servicer will establish and maintain the following trust
accounts:
o a collection account into which payments made on receivables
and advances made by the servicer will be deposited;
o a pre-funding account into which $202,210,941.29 will be
deposited on the Closing Date;
o a note payment account into which amounts released from the
collection account for distribution to noteholders will be
deposited and from which all payments to noteholders will be
made;
o a certificate distribution account into which amounts
released from the collection account for distribution to
certificateholders will be deposited and from which all
distributions to certificateholders will be made; and
o a payahead account into which early payments by obligors of
less than the remaining balance of Actuarial Receivables
will be deposited until the time as the payment on such
receivables falls due or until those funds are applied to
shortfalls in the scheduled payments with respect to those
receivables.
The servicer will establish the pre-funding account, the payahead
account, the reserve account, the supplemental reserve account and the
yield supplement account in the name of the indenture trustee for the
benefit of the noteholders and the certificateholders. The servicer will
establish the note payment account and the negative carry account in the
name of the indenture trustee for the exclusive benefit of the noteholders.
The servicer will establish the certificate distribution account in the
name of the owner trustee for the exclusive benefit of the
certificateholders.
On the Closing Date, MART will deposit to the payahead account the
early payments with respect to Actuarial Receivables which were received
during the period from October 1, 1999 to the day preceding the Closing
Date. On each date during the Pre-Funding Period on which receivables are
transferred to the trust, the indenture trustee will withdraw from the
pre-funding account and deposit to the payahead account any early payments
with respect to Actuarial Receivables transferred to the trust on that date
which were received before the related date of transfer.
Funds in the collection account, the pre-funding account, the
payahead account, the reserve account, the supplemental reserve account,
the negative carry account and the yield supplement account will be
invested in the types of investments permitted by the sale and servicing
agreement, which generally will be limited to investments acceptable to
each of Moody's and S&P as being consistent with the ratings of the notes.
Investments permitted by the sale and servicing agreement will be limited
to obligations or securities that mature not later than the business day
immediately preceding the next payment date or the date on which payment is
due, in the case of early payments with respect to Actuarial Receivables on
deposit in the payahead account. Any earnings, net of losses and investment
expenses, on amounts on deposit in the collection account will be paid to
the certificateholders. Any earnings, net of losses and investment
expenses, on amounts on deposit in the payahead account will be paid to the
servicer as additional servicing compensation and will not be available to
pay noteholders. Any earnings, net of losses and investment expenses on,
and any amounts released from, the reserve account, the supplemental
reserve account, the negative carry account and the yield supplement
account will be distributed to MART and will not be available to pay
noteholders. However, earnings on amounts on deposit in the reserve
account, the supplemental reserve account and the negative carry account
will be distributed to MART only to the extent that the amounts on deposit
in those accounts exceed the required balances of those accounts.
INDENTURE CASH FLOWS
Deposits to the Collection Account; Calculations Made by the
Servicer; Notice to the Indenture Trustee. On or before each payment date,
the servicer will cause all payments on the receivables and all proceeds of
the receivables in the collection account received by the servicer during
the prior calendar month to be deposited into the collection account, other
than amounts payable to the servicer for advances. On or before the seventh
business day, but no later than the tenth calendar day of each month, the
servicer will calculate the following for the payment date occurring in
that month:
o the Available Funds;
o the Total Available Funds;
o the servicing fee for that payment date plus any portion of
the servicing fee that remains unpaid from prior payment
dates;
o the Accrued Note Interest;
o the Scheduled Principal;
o the Principal Distribution Amount;
o the Negative Carry Amount; and
o the Yield Supplement Amount.
On or before each payment date, the servicer will deliver to the indenture
trustee a certificate setting forth the deposits to and withdrawals from
the collection account, the supplemental reserve account and the reserve
account to be made on that payment date.
Withdrawals from the Supplemental Reserve Account and the Reserve
Account to Reimburse Advances. On each payment date, the indenture trustee
will withdraw from the supplemental reserve account and pay to the servicer
an amount equal to the lesser of:
o the amount on deposit in the supplemental reserve account on
that payment date, calculated before giving effect to any
deposits or withdrawals on or relating to that payment date;
and
o the amount of advances due to be reimbursed on that payment
date but not reimbursed from funds on deposit in the
collection account.
If the amount on deposit in the supplemental reserve account is
insufficient to fully reimburse the servicer for advances due to be
reimbursed on the applicable payment date, the indenture trustee will
withdraw from the reserve account and pay to the servicer an amount equal
to the lesser of:
o the amount on deposit in the reserve account on that date,
calculated before giving effect to any deposits or
withdrawals from the reserve account on or relating to that
payment date; and
o the amount, if any, of advances due to be reimbursed on that
payment date but not reimbursed from funds on deposit in the
collection account or the supplemental reserve account.
Withdrawals from the Supplemental Reserve Account and the Reserve
Account to pay the Total Required Payment. If on any payment date the Total
Required Payment is greater than the Available Funds, the indenture trustee
will withdraw from the supplemental reserve account and deposit in the
collection account an amount equal to the lesser of:
o the amount on deposit in the supplemental reserve account on
that payment date, calculated after any reimbursement of
advances but before any deposits or other withdrawals from
the supplemental reserve account relating to that payment
date; and
o the amount, if any, by which the Total Required Payment
exceeds the Available Funds for that payment date.
If the amount on deposit in the supplemental reserve account is
insufficient to make up a shortfall in the Available Funds to pay the Total
Required Payment, the indenture trustee will withdraw from the reserve
account and deposit in the collection account an amount equal to the lesser
of:
o the amount on deposit in the reserve account on that payment
date, calculated after any reimbursement of advances but
before any deposits or other withdrawals relating to that
payment date; and
o the amount, if any, by which the Total Required Payment for
that payment date exceeds the sum of the Available Funds and
amounts withdrawn from the supplemental reserve account to
pay the Total Required Payment.
The Available Funds on any payment date will exclude all payments
and proceeds of any receivables the purchase amount of which has been
included in the Available Funds for a prior calendar month.
Monthly Withdrawals from Collection Account. On each payment date,
the indenture trustee will withdraw the Total Available Funds for the
preceding calendar month from the collection account and make deposits,
distributions and payments in the amounts and in the order of priority
specified below:
o to the servicer, the servicing fee due on that payment date,
together with any portion of the servicing fee that remains
unpaid from prior payment dates;
o to the note payment account, the Accrued Note Interest for
each class of notes;
o to the note payment account, the Principal Distribution
Amount;
o to the reserve account, the amount required to bring the
amount in the reserve account up to the Specified Reserve
Balance;
o to the supplemental reserve account, the amount required to
bring the amount in the supplemental reserve account up to
the Maximum Supplemental Reserve Amount; and
o to the certificate distribution account, any remaining Total
Available Funds.
On each payment date, the amount on deposit in the certificate
distribution account will be distributed to the certificateholders.
Notwithstanding the foregoing, following an acceleration of the
maturity dates of the notes following the occurrence of an event of default
under the indenture, the Total Available Funds will be deposited in the
note payment account for distribution in the order of priority set forth
under "--Monthly Withdrawals From the Note Payment Account On and After an
Acceleration of the Maturity Dates of the Notes."
Monthly Withdrawals From the Note Payment Account. On each payment
date, unless the maturity dates of the notes have been accelerated
following the occurrence of an event of default under the indenture, all
amounts on deposit in the note payment account will be paid in the
following order of priority:
o to the Class A noteholders, the Accrued Note Interest on the
applicable class of the Class A notes;
o to the Class B noteholders, the Accrued Note Interest on the
Class B notes;
o to the Class A-1 noteholders, the Principal Distribution
Amount until the Class A-1 notes have been paid in full;
o following payment in full of the Class A-1 notes, to the
Class A-2 noteholders, the Principal Distribution Amount
until the Class A-2 notes have been paid in full;
o following payment in full of the Class A-2 notes, to the
Class A-3 noteholders, the Principal Distribution Amount
until the Class A-3 notes have been paid in full; and
o following payment in full of the Class A-3 notes, to the
Class B noteholders, the Principal Distribution Amount until
the Class B notes have been paid in full.
Monthly Withdrawals From the Note Payment Account On and After an
Acceleration of the Maturity Dates of the Notes. On each payment date
occurring on or after the acceleration of the maturity dates of the notes
following the occurrence of an event of default under the indenture, all
amounts on deposit in the note payment account will be paid in the
following order of priority:
o to the indenture trustee, amounts due as compensation or
indemnity payments pursuant to the terms of the indenture;
o to the servicer, the amounts accrued and unpaid in respect
of the servicing fee plus any portion of the servicing fee
that remains unpaid from prior payment dates;
o to the noteholders of all classes of the Class A notes,
without priority or preference of any kind, the Accrued Note
Interest on each class of the Class A notes pro rata in
proportion to the respective amount of interest due to each
of the Class A notes;
o to the noteholders of all classes of the Class A notes
without priority or preference of any kind, all unpaid
principal of the Class A notes pro rata in proportion to the
respective principal balances of each class of the Class A
notes until each class of the Class A notes has been paid in
full;
o to the noteholders of the Class B notes, the Accrued Note
Interest on the Class B notes;
o to the noteholders of the Class B notes, unpaid principal of
the Class B notes until the Class B notes have been paid in
full; and
o to the certificate distribution account, any amount
remaining in the note payment account after each class of
notes has been paid in full.
THE NEGATIVE CARRY ACCOUNT
On the Closing Date, MART will make an initial deposit of $ into
the negative carry account. That amount is equal to the Maximum Negative
Carry Amount as of the Closing Date.
During the Pre-Funding Period, the amounts on deposit in the
pre-funding account will earn interest at a rate that is less than the
weighted average interest rate on the notes. The amount on deposit in the
negative carry account is intended to cover that shortfall. On each payment
date during the Pre-Funding Period, the indenture trustee will withdraw the
Negative Carry Amount for that payment date from the negative carry account
and deposit that amount to the collection account as a part of the funds
available to pay interest on notes.
THE RESERVE ACCOUNT AND SUPPLEMENTAL RESERVE ACCOUNT
On the Closing Date, MART will make an initial deposit to the
reserve account of cash or investments permitted by the sale and servicing
agreement having a value of $896,683.59. That amount is equal to 0.15% of
the principal balance of the initial receivables pool as of the Cutoff
Date. On each subsequent date on which receivables are transferred to the
trust, cash or investments permitted by the sale and servicing agreement
having a value approximately equal to 0.15% of the aggregate principal
balance as of the related Cutoff Date of the receivables transferred on
that date will be withdrawn from the pre-funding account and deposited in
the reserve account.
On or before each payment date, the indenture trustee will make the
following payments and deposits from funds in the supplemental reserve
account:
o to the servicer, an amount equal to any shortfall between
the aggregate amount of advances that are due and payable to
the servicer on that payment date and the aggregate amount
of the collections on the receivables that are paid to the
servicer on that payment date as reimbursement for those
advances; and
o to the collection account, an amount equal to any shortfall
between the Total Required Payment for that payment date and
the Available Funds allocable to pay the Total
Required Payment.
If there are insufficient funds in the supplemental reserve account
on a particular payment date, the indenture trustee will make up any
shortfall with funds in the reserve account which will be applied in the
same order of priority.
The reserve account and the supplemental reserve account will be
funded on each payment date with the Available Funds remaining after
payment of interest and principal of the notes on that payment date, in the
following order of priority:
o to the reserve account, an amount, equal to the excess, if
any, of the Specified Reserve Balance for that payment date
over the amount on deposit in the reserve account; and
o to the supplemental reserve account, an amount equal to the
excess, if any, of the Maximum Supplemental Reserve Amount
for that payment date over the amount on deposit in the
supplemental reserve account.
If amounts on deposit in the reserve account and the supplemental
reserve account on any date exceed the required balances in those accounts,
after giving effect to withdrawals on that payment date, the excess will be
withdrawn and paid to MART. The noteholders will not have any rights in, or
claims to, any of those amounts paid to MART.
Amounts in the reserve account and the supplemental reserve account
are intended to enhance the likelihood of receipt by noteholders of amounts
due them and to decrease the likelihood that the noteholders will
experience losses. If the amount withdrawn from the reserve account and the
supplemental reserve account on any payment date to reimburse the servicer
for advances and to cover shortfalls in Available Funds exceeds the amount
on deposit in the reserve account and the supplemental reserve account, a
shortfall in the amounts distributed to the noteholders could result. In
addition, depletion of the reserve account and the supplemental reserve
account ultimately could result in losses to noteholders, as noteholders
will have no recourse to the assets of MART as a source of payment. Losses
on the receivables or other shortfalls in the proceeds to be distributed to
the noteholders, after withdrawals from the trust accounts, will be
allocated first to the Class B notes because payments on the Class B notes
are subordinate to the payments on the Class A notes.
The servicer may request each of Moody's and S&P to approve a
reduction in the Specified Reserve Balance or the Maximum Supplemental
Reserve Amount or a change in the manner in which the reserve account or
the supplemental reserve account is funded. If each of Moody's and S&P
confirms that the requested action will not result in the qualification,
reduction or withdrawal of its then-current rating of any class of notes,
then the required balance of the account will be reduced and the indenture
will be amended without the consent of any noteholders to reflect the
change in the required balances of the accounts. A reduction in the
Specified Reserve Balance will also require the delivery of several tax
opinions to the effect that, among other things, the reduction will not
adversely affect the characterization of the notes for federal income tax
purposes.
SUBORDINATION OF THE CLASS B NOTES
The rights of the Class B noteholders to be paid interest and
principal are subordinated to the rights of the Class A noteholders to be
paid interest and, in some cases principal. Interest on the Class B notes
is paid on each payment date after servicing fees due to the servicer and
interest due on the Class A notes. However, if an event of default under
the indenture occurs, interest on the Class B notes also will be
subordinated to the payment of principal of the class A notes.
Principal of the Class B notes will be subordinated to the
servicing fees, interest on Class A notes, interest on the Class B notes,
and the payment of principal of the Class A notes. No principal will be
paid on the Class B notes until the principal of the Class A notes has been
paid in full.
SUBORDINATION OF THE CERTIFICATES
The rights of certificateholders to receive distributions are
subordinated to the rights of noteholders to receive payments of interest
and principal. Funds on deposit in the collection account will be applied
to the reimbursement of advances made by the servicer, the payment to the
servicer of Rule of 78's payments and the servicing fee plus any portion of
the servicing fee that remains unpaid from prior payment dates, the Accrued
Note Interest on the notes and principal payable on the notes on each
payment date and to making the required deposits to the reserve account and
the supplemental reserve account before distributions on the certificates.
In addition, following the occurrence of an event of default under the
indenture that has resulted in an acceleration of the notes, the
noteholders will be entitled to be paid in full before the
certificateholders are entitled to any distributions. The foregoing
subordination of the certificates is intended to enhance the likelihood of
receipt by noteholders of amounts due them and to decrease the likelihood
that the noteholders will experience losses. See "--Indenture Cash Flows."
ADVANCES BY THE SERVICER OF AMOUNTS PAYABLE ON THE RECEIVABLES
If the monthly collection of interest and principal of an Actuarial
Receivable and amounts in the payahead account allocable to that receivable
are less than the scheduled payment due, the servicer will make an advance
of the remaining amount on the related payment date.
The servicer will be reimbursed for each of these advances:
o on each subsequent payment date from any payments made by or
on behalf of the related obligor to the extent those
payments are allocable to the reimbursement of the advance;
and
o on the payment date following the calendar month in which
the related receivable becomes defaulted, out of collections
on other receivables.
In addition, the servicer will make an advance for any portion of a
Balloon Payment for the calendar month in which the Balloon Payment becomes
due if the entire scheduled payment has not been received by the servicer,
including amounts in the payahead account allocable to the Balloon Payment.
The servicer will be reimbursed for any advance relating to a
Balloon Payment on each payment date following the payment date on which
the advance was made:
o out of payments by or on behalf of the related obligor to
the extent those payments are allocable to the reimbursement
of the advance; and
o out of collections on other receivables to the extent of any
losses allocable to the Balloon Payment that the servicer
has recorded in its books and records during the preceding
calendar month, but only to the extent the Balloon Payment
and the advance have not otherwise been
reimbursed.
If MMCA is replaced in its capacity as servicer, the successor
servicer will not be required to make advances. In the absence of advances
by the servicer, noteholders must rely for payment of the notes upon the
following:
o payments on the receivables, including sales proceeds of
financed vehicles returned to the servicer for sale;
o payments under the yield supplement agreement and the yield
supplement account;
o withdrawals from the negative carry account; and
o available amounts on deposit in the reserve account and the
supplemental reserve account.
See "--Indenture Cash Flows" and "--The Reserve Account and Supplemental
Reserve Account."
DEPOSIT OF COLLECTIONS ON THE RECEIVABLES TO COLLECTION ACCOUNT
The servicer will deposit the payments and proceeds on the
receivables, other than extension or deferral fees collected on the
receivables that are payable to the servicer under the sale and servicing
agreement, into the collection account not later than two business days
after receipt unless (a) the servicer has a rating acceptable to each of
Moody's and S&P with respect to its short-term indebtedness, MMCA is the
servicer, and no events of servicing termination have occurred or (b) the
trust shall have received written notice from each of Moody's and S&P that
no outstanding rating on any class of notes would be lowered or withdrawn
as a result, in which case those amounts will be paid into the collection
account on the business day before each payment date. MART and the servicer
will also deposit into the collection account on each payment date the
purchase amount of each receivable required to be repurchased or purchased
by either of them pursuant to an obligation that arose during the related
calendar month. The servicer will be entitled to be reimbursed for the
amounts previously deposited in the collection account but later determined
to have resulted from mistaken deposits or posting or checks returned
unpaid for insufficient funds or other reasons from amounts otherwise
payable into the collection account or amounts on deposit in the collection
account.
In those cases where a subservicer is servicing a receivable under
a subservicing agreement, the servicer will cause the subservicer to remit
to the collection account the amounts collected by that subservicer on or
with respect to the receivables being serviced by it, within the period
after receipt, and subject to the limitations, described above.
As an administrative convenience, unless the servicer is required
to remit collections within two business days of receipt, the servicer will
be permitted to make the deposit of collections and purchase amounts for or
with respect to the related calendar month, net of distributions to be made
to the servicer, with respect to the related calendar month. The servicer,
however, will account to the indenture trustee and the noteholders as if
all deposits, distributions and transfers were made individually.
STATEMENTS TO NOTEHOLDERS
On or prior to each payment date, the servicer will prepare and
provide to the indenture trustee a statement to be delivered to the
noteholders. Each of those statements to be delivered to noteholders will
include the following information as to the notes with respect to that
payment date and the preceding calendar month:
(1) the amount of the payment allocable to principal of each
class of notes;
(2) the amount of the payment allocable to interest on or with
respect to each class of notes;
(3) the Yield Supplement Amount;
(4) the amount of the servicing fee due on that payment date
plus any portion of the servicing fee that remains unpaid
from prior payment dates;
(5) the aggregate outstanding principal amount of each class of
the notes and the applicable note pool factor, after giving
effect to payments on that payment date;
(6) the principal balance of the receivables pool, the principal
balance of the receivables pool exclusive of the aggregate
principal balance of Balloon Payments and the aggregate
principal balance of the Balloon Payments calculated as of
the close of business on the last day of the preceding
calendar month;
(7) the cumulative amount of interest due but not paid to the
noteholders of each class on that payment date and on prior
payment dates plus interest on such overdue interest at the
applicable note interest rate, to the extent permitted by
law;
(8) the cumulative amount of principal due but not paid to the
noteholders of each class on that payment date and on prior
payment dates;
(9) with respect to receivables that became defaulted during the
related calendar month, the aggregate amount of the excess
of the principal balance of those contracts, including any
principal of a Balloon Payment, over the net proceeds from
the liquidation of those contracts;
(10) the balance of the reserve account on that payment date,
after giving effect to changes in the balance on that
payment date;
(11) the balance of the supplemental reserve account on that
payment date, after giving effect to changes in the balance
on that payment date;
(12) the advances by the servicer, if any;
(13) the aggregate purchase amount of receivables repurchased by
MART or purchased by the servicer during the preceding
calendar month;
(14) for each payment date during the Pre-Funding Period and the
payment date that is on or immediately following the end of
the Pre-Funding Period, (A) the amount, if any, withdrawn
from the pre-funding account to purchase receivables during
the preceding calendar month, (B) the remaining amount on
deposit in the pre-funding account, if any, (C) the Negative
Carry Amount, if any, for the preceding calendar month, and
(D) the amount remaining on deposit in the negative carry
account after all withdrawals made on that payment date; and
(15) for the payment date on or immediately following the end of
the Pre-Funding Period, the remaining amount on deposit in
the pre-funding account, if any, that has not been used to
fund the purchase of receivables after March 31, 2000 and is
being passed through as payments of principal of the notes.
Each amount set forth in clauses (1), (2), (3), (4), (7) and (8) of this
paragraph will be expressed in the aggregate and as a dollar amount per
$1,000 of original denomination of the notes or class of notes, as
applicable. Copies of those statements may be obtained by the beneficial
owners of the notes by a request in writing addressed to the indenture
trustee.
Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the indenture
trustee will furnish to each person who at any time during that calendar
year was a noteholder a statement prepared for the purposes of that
noteholder's preparation of federal income tax returns. See "Federal Income
Tax Consequences" and "--Book Entry Registration."
BOOK ENTRY REGISTRATION
Beneficial owners of notes may hold their notes through DTC in the
United States or through Cedelbank, societe anonyme or Euroclear in Europe
if they are participants of those systems, or indirectly through
organizations that are participants in those systems.
The notes of each class will be offered for purchase in minimum
denominations of $1,000 and integral multiples of $1,000. They will be
represented initially by one or more physical notes registered in the name
of Cede & Co. as nominee of The Depository Trust Company. No person
acquiring a beneficial ownership interest in the notes will receive a
definitive note registered in that person's name unless definitive notes
are issued under the limited circumstances described in this prospectus.
Unless and until definitive notes are issued, all references to actions by
noteholders refer to actions taken by DTC upon instructions from its
participating organizations. All references to payments, notices, reports
and statements to noteholders will refer to payments, notices, reports and
statements to DTC or Cede & Co., as the registered holder of the notes, for
payment or distribution to beneficial owners of the notes in accordance
with DTC's procedures. See "--Book Entry Registration" and "--Issuance of
Definitive Notes Upon the Occurrence of Various Circumstances."
DTC is a limited purpose trust company organized under the laws of
the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
a "clearing agency" registered under Section 17A of the Securities Exchange
Act of 1934, as amended. DTC was created to hold securities for its direct
participants and to facilitate the clearance and settlement of securities
transactions between those direct participants through electronic
book-entries, thereby eliminating the need for physical movement of
securities. Direct DTC participants include securities brokers and dealers,
banks, trust companies and clearing corporations, and may include other
organizations. Indirect participation in the DTC system is also available
to others such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a direct participant. The
deposit of notes with DTC and their registration in the name of Cede & Co.
does not change their beneficial ownership. DTC does not know the actual
beneficial owners of the notes; DTC's records reflect only the identity of
the direct participants to whose accounts the notes are credited, which may
or may not be the beneficial owners. The DTC participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Beneficial owners of notes will receive all payments of principal
and interest on the notes through direct or indirect participants. DTC will
forward those payments to its direct participants which thereafter will
forward them to indirect participants or beneficial owners of notes. Under
a book-entry format, beneficial owners of notes may experience some delay
in their receipt of payments, since those payments will be forwarded to
Cede & Co. as nominee of DTC. Beneficial owners of notes will not be
recognized by the indenture trustee as noteholders, as that term is used in
the indenture. Beneficial owners of notes can exercise the rights of
noteholders only indirectly through DTC and its direct and indirect
participants. Because DTC can act only on behalf of direct participants,
who in turn act on behalf of indirect participants, and on behalf of
various banks, trust companies and other persons approved by it, the
absence of physical notes may limit the ability of a beneficial owner of a
note to pledge the notes to persons or entities that do not participate in
the DTC system.
Communications by DTC to direct participants, by direct
participants to indirect participants and by any participants to beneficial
owners of the notes will be governed by arrangements between them, subject
to any applicable statutory or regulatory requirements. Payments by DTC
participants to beneficial owners of the notes will be governed by standing
instructions and customary practices, as is the case with securities held
for the accounts of customers in bearer form or registered in "street
name." They will be the responsibility of the DTC participant and not of
DTC, the indenture trustee, the owner trustee, MART or the servicer,
subject to any applicable statutory or regulatory requirements. Payment of
principal and interest to DTC is the responsibility of the indenture
trustee, disbursement of those payments to direct participants shall be the
responsibility of DTC and disbursement of those payments to beneficial
owners shall be the responsibility of the direct participants.
Purchases of notes under the DTC system must be made by or through
direct participants, which will receive a credit for the notes on DTC's
records. Each actual beneficial owner's interest in the notes is in turn to
be recorded on the applicable DTC participant's records. Beneficial owners
of notes will not receive written confirmation from DTC of their purchase,
but those beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of
their holdings, from the DTC participant through which the beneficial owner
entered into the transaction. Transfers of ownership interests in the notes
are to be accomplished by entries made on the books of DTC participants
acting on behalf of beneficial owners of notes. Beneficial owners of notes
will not receive physical notes representing their ownership interest in
notes, except if the use of the book-entry system for the notes is
discontinued.
Neither DTC nor Cede & Co. will comment or vote with respect to the
notes. DTC has advised MART that it will take any action permitted to be
taken by a noteholder under the indenture only at the direction of one or
more direct participants to whose accounts with DTC the notes are credited.
Additionally, DTC has advised MART that the indenture requires that with
respect to any action that may be taken only by noteholders representing a
specified percentage of the aggregate outstanding principal amount of the
notes, DTC will take that action only at the direction of and on behalf of
direct participants whose holdings include undivided interests that satisfy
that specified percentage. Under its usual procedures, DTC will mail an
"omnibus proxy" to the indenture trustee as soon as possible after any
applicable record date with respect to a consent or vote. The omnibus proxy
will assign Cede & Co.'s consenting or voting rights to those direct
participants to whose accounts the notes will be credited on that record
date, who will be identified on a listing attached to the omnibus proxy.
DTC may discontinue providing its services as securities depository
with respect to the notes at any time by giving reasonable notice to the
indenture trustee. Under those circumstances, if a successor securities
depository is not obtained, definitive notes are required to be printed and
delivered. MART may decide to discontinue use of the system of book-entry
transfers through DTC or a successor securities depository. In that event,
definitive notes will be delivered to noteholders. See "--Issuance of
Definitive Notes Upon the Occurrence of Various Circumstances."
Cedelbank and Euroclear will hold omnibus positions on behalf of
the Cedelbank customers and the Euroclear participants, respectively. This
will be done through customers' securities accounts in Cedelbank's and
Euroclear's names on the books of their respective depositaries which in
turn will hold those positions in customers' securities accounts in the
depositaries' names on the books of DTC.
Transfers within DTC between direct participants will occur in
accordance with DTC rules. Transfers between Cedelbank customers and
Euroclear participants will occur in the ordinary way in accordance with
their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or
indirectly through DTC, through Cedelbank or Euroclear will be effected in
DTC in accordance with DTC rules through the relevant European
international clearing system through its depositary; however, those
cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in that
system in accordance with its rules and procedures and within its
established deadlines, which are based on European time. The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its depositary to take
action to effect final settlement on its behalf by delivering or receiving
securities in DTC, and making or receiving payment in accordance with
normal procedures for same-day funds settlement applicable to DTC.
Cedelbank customers and Euroclear participants may not deliver instructions
directly to the depositaries.
Because of time-zone differences, credits of securities in
Cedelbank or Euroclear as a result of a transaction with a DTC participant
will be made during the subsequent securities settlement processing day,
dated the business day following the DTC settlement date, and those credits
or any transactions in the securities settled during that processing day
will be reported to the relevant customer of or participant in Cedelbank or
Euroclear on that business day. Cash received in Cedelbank or Euroclear as
a result of sales of securities by or through a customer of or participant
in Cedelbank or Euroclear to a DTC participant will be received with value
on the DTC settlement date but will be available in the relevant Cedelbank
or Euroclear cash account only as of the business day following settlement
in DTC.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that MART believes to be reliable,
but MART takes no responsibility for the accuracy of the information.
Cedelbank is incorporated under the laws of Luxembourg as a
professional depository. Cedelbank holds securities for its customers and
facilitates the clearance and settlement of securities transactions between
Cedelbank customers through electronic book-entry changes in accounts of
Cedelbank customers, thereby eliminating the need for physical movement of
certificates. Transactions may be settled by Cedelbank in any of 36
currencies, including United States dollars. Cedelbank provides to its
Cedelbank customers, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Cedelbank interfaces with
domestic markets in several countries. As a professional depository,
Cedelbank is subject in Luxembourg to regulation and supervision by the
Commission for the Supervision of the Financial Sector. Cedelbank customers
are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations and may include any
of the underwriters of any trust securities. Indirect access to Cedelbank
is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Cedelbank customer, either directly or indirectly.
The Euroclear system was created in 1968 to hold securities for
participants of the Euroclear system and to clear and settle transactions
between Euroclear participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers
of securities and cash. Transactions may now be settled in any of 34
currencies, including United States dollars. The Euroclear system includes
various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries generally similar to
the arrangements for cross-market transfers with DTC described above. The
Euroclear system is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York, under contract with Euroclear Clearance
System, S.C., a Belgian cooperative corporation. All operations are
conducted by Morgan Guaranty's Belgium office, and all Euroclear securities
clearance accounts and Euroclear cash accounts are accounts with Morgan
Guaranty's Belgium office, not Euroclear Clearance System, which
establishes policy for the Euroclear system on behalf of Euroclear
participants, which include banks, central banks, securities brokers and
dealers and other professional financial intermediaries and may include the
underwriters. Indirect access to the Euroclear system is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear participant, either directly or indirectly.
Morgan Guaranty's Belgium office is the Belgian branch of a New
York banking corporation which is a member bank of the Federal Reserve
System. As such, it is regulated and examined by the Board of Governors of
the Federal Reserve System and the New York State Banking Department, as
well as the Belgian Banking Commission.
The Terms and Conditions Governing Use of Euroclear and the related
Operating Procedures of the Euroclear system and applicable Belgian law
govern the securities clearance accounts and cash accounts maintained with
Morgan Guaranty's Belgium office, transfers of securities and cash within
the Euroclear system, withdrawal of securities and cash from the Euroclear
system, and receipts of payments with respect to securities in the
Euroclear system. All securities in the Euroclear system are held on a
fungible basis without attribution of specific securities to specific
securities clearance accounts. Morgan Guaranty's Belgium office, as the
operator of Euroclear, acts under the Terms and Conditions only on behalf
of Euroclear participants and has no record of or relationship with persons
holding through those organizations.
Payments on notes held through Cedelbank or Euroclear will be
credited to the cash accounts of customers of or participants in Cedelbank
or Euroclear in accordance with the relevant system's rules and procedures,
to the extent received by its depositary. Those payments will be subject to
tax reporting in accordance with relevant United States tax laws and
regulations. See "Federal Income Tax Consequences."
Cedelbank or Morgan Guaranty's Belgium office, as operator of
Euroclear, as the case may be, will take any other action permitted to be
taken by a noteholder under the related agreement on behalf of a Cedelbank
customer or Euroclear participant only in accordance with its relevant
rules and procedures and subject to its depositary's ability to effect
those actions on its behalf through DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of notes among participants of
DTC, Cedelbank and Euroclear, they are under no obligation to perform or
continue to perform those procedures and those procedures may be
discontinued at any time.
DTC management is aware that some computer applications, systems,
and the like for processing that are dependent upon calendar dates,
including dates before, on, and after January 1, 2000, may encounter "Year
2000 problems." DTC has informed its participants and other members of the
financial community that is has developed and is implementing a program so
that its systems, as the same relate to the timely payment of distributions
(including principal and income payments) to securityholders, book-entry
deliveries, and settlement of trades within DTC, continue to function
appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. Additionally, DTC's plan
includes a testing phase, which is expected to be completed within
appropriate time frames.
However, DTC's ability to perform properly its services is also
dependent upon other parties, including but not limited to issuers and
their agents, as well as third party vendors from whom DTC licenses
software and hardware, and third party vendors on whom DTC relies for
information of the provision of services, including telecommunication and
electrical utility service providers, among others. DTC has informed its
participants and other members of the financial community that it is
contacting (and will continue to contact) third party vendors from whom DTC
acquires services to: (i) impress upon them the importance of such services
being Year 2000 compliant and (ii) determine the extent of their efforts
for Year 2000 remediation (and, as appropriate, testing) of their services.
In addition, DTC is in the process of developing such contingency plans as
it deems appropriate.
According to DTC, the foregoing information with respect to DTC has
been provided for informational purposes only and is not intended to serve
as a representation, warranty, or contract modification of any kind.
ISSUANCE OF DEFINITIVE NOTES UPON THE OCCURRENCE OF VARIOUS CIRCUMSTANCES
The notes of each class will be issued in fully registered,
certificated form to noteholders or their nominees, rather than to DTC or
its nominee or a successor clearing agency, only if:
o the trust, the administrator or the servicer advises the
indenture trustee in writing that DTC or its successor is no
longer willing or able to discharge properly its
responsibilities as depository with respect to the notes and
the indenture trustee or the administrator is unable to
locate a qualified successor;
o the administrator, at its option, elects to terminate the
book-entry system through DTC or its successor; or
o after the occurrence of an event of default under the
indenture or an event of servicing termination under the
sale and servicing agreement, the beneficial owners of the
notes representing at least 51% of the aggregate outstanding
principal amount of the notes advise the indenture trustee
and DTC or its successor in writing that the continuation of
a book-entry system through DTC or its successor is no
longer in the best interest of the beneficial owners of the
notes.
Upon the occurrence of any of these events, DTC is required to
notify all of its direct participants and the indenture trustee of the
availability through DTC of notes in fully registered, certificated form.
Upon surrender by DTC of the physical certificates representing the notes
and receipt by the indenture trustee of instructions for re-registration,
the indenture trustee will reissue the notes in fully registered,
certificated form, and thereafter the indenture trustee will recognize the
holders of those notes as noteholders.
Payments of principal of and interest on the notes in fully
registered, certificated form will be made by the indenture trustee
directly to noteholders in accordance with the procedures set forth in this
prospectus and in the indenture. Payments of principal and interest on each
payment date will be made to noteholders in whose names the notes in fully
registered, certificated form were registered at the close of business on
the preceding record date. Those payments will be made by check mailed to
the address of that noteholder as it appears on the register maintained by
the indenture trustee. The final payment on any note in fully registered,
certificated form, however, will be made only upon presentation and
surrender of the note in that form at the office or agency specified in the
notice of final payment mailed to noteholders.
Notes in fully registered, certificated form will be transferable
and exchangeable at the offices of the indenture trustee. No service charge
will be imposed for any registration of transfer or exchange, but the
indenture trustee may require payment of a sum sufficient to cover any tax
or other governmental charge imposed in connection therewith.
TERMS OF THE INDENTURE
Events of Default Under the Indenture. The events of default under
the indenture consist of:
o a default for five days or more in the payment of interest
on any note when it becomes due and payable;
o a default in the payment of principal of, or any installment
of principal of, any note when it becomes due and payable
including, with respect to each class of notes, on the final
payment date of such class; or
o certain events of bankruptcy, insolvency, receivership or
liquidation of the trust. (Indenture, Section 5.1).
Under the Trust Indenture Act of 1939, the indenture trustee may be
deemed to have a conflict of interest and be required to resign as trustee
for either the Class A notes or the Class B notes if a default occurs under
the indenture. In these circumstances, the indenture will provide for a
successor trustee to be appointed for one or both of the Class A notes and
Class B notes, in order that there be separate trustees for each of the
Class A notes and the Class B notes.
If an indenture trustee relating to any class of notes resigns, its
resignation will become effective only after a successor indenture trustee
for that class of notes is appointed and the successor accepts the
appointment.
Noteholders holding at least a majority of the aggregate principal
amount of the notes outstanding may waive any past default or event of
default under the indenture prior to the declaration of the acceleration of
the maturity of the notes. Notwithstanding that, they may not waive a
default in payment of principal of or interest on any of the notes or of
any covenant or provision in the indenture which cannot be modified or
amended without unanimous consent of the noteholders. (Indenture, Section
5.12). Any waivers could be treated, for federal income tax purposes, as a
constructive exchange of the notes by the noteholders for deemed new notes
upon which gain or loss would be recognized.
Remedies Following an Event of Default Under the Indenture. If an
event of default under the indenture should occur and be continuing, the
indenture trustee or the holders of a majority of the aggregate outstanding
principal amount of the notes, voting as a group, may declare the principal
of the notes to be immediately due and payable. The declaration may be
rescinded by the holders of a majority of the aggregate principal amount of
the notes before a judgment or decree for payment of the amount due has
been obtained by the indenture trustee if:
o the trust has deposited with the indenture trustee an amount
sufficient to pay (x) all interest on and principal of the
notes as if the event of default under the indenture giving
rise to the declaration had not occurred and (y) all amounts
advanced by the indenture trustee and its costs and
expenses; and
o all events of default under the indenture, other than the
nonpayment of principal of the notes that has become due
solely by that acceleration, have been cured or waived.
(Indenture, Section 5.2).
Any rescission could be treated, for federal income tax purposes, as a
constructive exchange of the notes by the noteholders for deemed new notes
upon which gain or loss would be recognized.
If the notes have been declared due and payable following an event
of default under the indenture, the indenture trustee may institute
proceedings to collect amounts due, exercise remedies as a secured party,
including foreclosure or sale of the trust property, or elect to maintain
the trust property and continue to apply proceeds from the trust property
as if there had been no declaration of acceleration. The indenture trustee
may not, however, sell the trust property following an event of default
under the indenture, other than a default in the payment of any principal
or a default for five days or more in the payment of any interest on the
notes, unless:
o 100% of the noteholders consent;
o the proceeds of the sale will be sufficient to pay in full
the principal of and the accrued interest on all of the then
outstanding notes; or
o the indenture trustee determines that the trust property
would not be sufficient on an ongoing basis to make all
payments on the notes as those payments would have become
due if those obligations had not been declared due and
payable, and the indenture trustee obtains the consent of
holders of 66 2/3% of the aggregate principal amount of the
outstanding notes, voting as a group, to the sale.
The indenture trustee may, but need not, obtain and rely upon an opinion of
an independent accountant or investment banking firm as to whether the
trust property will suffice to pay interest on and principal of the notes
on an ongoing basis. (Indenture, Sections 5.4 and 5.5).
If the trust property is sold after an event of default under the
indenture has occurred under the circumstances described in the preceding
paragraph pursuant to the direction of the indenture trustee or the
noteholders, the proceeds of that sale will be distributed:
o first, to the indenture trustee for amounts due as
compensation or indemnity payments under the indenture;
o second, to the servicer for amounts due in respect of
accrued and unpaid servicing fees and unreimbursed advances;
o third, to the Class A noteholders pro rata for interest
which is due and unpaid;
o fourth, to the Class A noteholders pro rata for principal
which is due and unpaid;
o fifth, to the Class B noteholders for interest which is due
and unpaid; and
o sixth, to the Class B noteholders for principal which is due
and unpaid.
Any remaining amounts will be distributed to the certificateholders
for amounts due and unpaid in accordance with the terms of the trust
agreement and the sale and servicing agreement.
(Indenture, Section 5.4).
If an event of default occurs under the indenture and is continuing
with respect to the notes, the indenture trustee will not be required to
exercise any of its rights or powers at the request or direction of any of
the noteholders if it reasonably believes it will not be adequately
indemnified against the costs, expenses and liabilities which might be
incurred by it in complying with that request. (Indenture, Sections 6.1 and
6.2). The holders of at least a majority of the aggregate principal amount
of the outstanding notes, voting as a group, will have the right to direct
the time, method and place of conducting any proceeding or any remedy
available to the indenture trustee with respect to the notes or exercising
any trust power conferred on the indenture trustee.
A noteholder will not have the right to institute any proceeding
with respect to the indenture unless:
o the noteholder has given written notice to the indenture
trustee of a continuing event of default under the
indenture;
o the holders of not less than 25% of the aggregate principal
amount of the outstanding notes have made a written request
of the indenture trustee to institute a proceeding in its
own name as indenture trustee;
o the noteholder has offered the indenture trustee reasonable
indemnity;
o the indenture trustee has for 60 days failed to institute
the requested proceeding; and
o no direction inconsistent with that written request has been
given to the indenture trustee during that 60-day period by
the holders of a majority of the aggregate principal amount
of the outstanding notes. (Indenture, Section 5.6).
Neither the indenture trustee nor the owner trustee in their
respective individual capacities, nor any holder of a certificate, nor any
of their respective owners, beneficiaries, agents, officers, directors,
employees, successors or assigns will, in the absence of an express
agreement to the contrary, be personally liable for the payment of interest
on or principal of the notes or for the agreements of the trust and the
owner trustee, in its capacity as trustee, contained in the indenture.
Covenants by the Trust under the Indenture. The trust will not,
among other things:
o sell, transfer, exchange or otherwise dispose of any of the
assets of the trust, except as expressly permitted by the
indenture, the sale and servicing agreement, the trust
agreement or related documents;
o claim any credit on or make any deduction from the principal
or interest payable in respect of the notes, other than
amounts withheld under the Internal Revenue Code of 1986, as
amended, or applicable state law, or assert any claim
against any present or former holder of notes because of the
payment of taxes levied or assessed upon the trust;
o dissolve or liquidate in whole or in part;
o permit the validity or effectiveness of the indenture to be
impaired;
o permit any person to be released from any covenants or
obligations with respect to the notes under the indenture
except as may be expressly permitted by the indenture;
o permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance to be created on or extend to
or otherwise arise upon or burden any assets of the trust,
or any interest in those assets or their proceeds;
o permit the lien of the indenture not to constitute a valid,
first priority security interest in the trust property,
other than with respect to any such tax, mechanics or other
lien; (Indenture, Section 3.8)
o engage in any activities other than financing, acquiring,
owning, pledging and managing the contracts as contemplated
by the indenture, the sale and servicing agreement, the
trust agreement and other related documents and incidental
activities; (Indenture, Section 3.12)
o incur, assume or guarantee any indebtedness other than
indebtedness incurred pursuant to the notes, or otherwise in
accordance with the indenture, the sale and servicing
agreement, the trust agreement and other related documents;
(Indenture, Section 3.13)
o make any payments to certificateholders in respect of their
certificates for any calendar month unless the Total
Required Payment and any deposits required to be made to the
reserve account and the supplemental reserve account have
been provided for; or (Indenture, Section 2.8)
o fail to or fail to cause the servicer to deliver to the
indenture trustee on or before each payment date the
disbursement and payment instructions as required pursuant
to the indenture. (Sale and Servicing Agreement, Section
4.11)
Replacement of Indenture Trustee. Noteholders holding not less than
a majority of the aggregate principal amount of the outstanding notes, may
remove the indenture trustee without cause by so notifying the indenture
trustee and the trust, and following that removal the trust may appoint a
successor indenture trustee. Any successor indenture trustee must at all
times satisfy the requirements of Section 310(a) of the Trust Indenture Act
of 1939, as amended, and must have a combined capital and surplus of at
least $50,000,000 and a long-term debt rating of investment grade by each
of Moody's and S&P or otherwise acceptable to each of Moody's and S&P.
(Indenture, Sections 6.8 and 6.11)
The indenture trustee may resign at any time by so notifying the
trust and the noteholders. The trust will be required to remove the
indenture trustee if the indenture trustee:
o ceases to be eligible to continue as the indenture trustee;
o is adjudged to be bankrupt or insolvent;
o comes under the charge of a receiver or other public
officer; or
o otherwise becomes incapable of acting.
Upon the resignation or required removal of the indenture trustee,
the trust will be required promptly to appoint a successor indenture
trustee. (Indenture, Section 6.8)
Duties of Indenture Trustee Under the Indenture. The indenture
trustee:
o will perform the duties and only the duties as are
specifically set forth in the indenture;
o may in the absence of bad faith, rely on certificates or
opinions furnished to the indenture trustee which conform to
the requirements of the indenture and on the truth of the
statements and the correctness of the opinions expressed in
those certificates or opinions; and
o will examine any of those certificates and opinions which
are specifically required to be furnished to the indenture
trustee by the indenture to determine whether or not they
conform to the requirements of the indenture.
However, upon the continuance of an event of default under the
indenture, the indenture trustee will be required to exercise the rights
and powers vested in it by the indenture and use the same degree of care
and skill in the exercise of those rights and powers as a prudent person
would exercise or use under the circumstances in the conduct of that
person's own affairs. (Indenture, Section 6.1).
Compensation and Indemnity of the Indenture Trustee under the
Indenture. The trust will:
o pay to the indenture trustee from time to time reasonable
compensation for its services;
o reimburse the indenture trustee for all expenses, advances
and disbursements reasonably incurred; and
o indemnify the indenture trustee for, and hold it harmless
against, any and all losses, liability or expense, including
attorneys' fees, incurred by it in connection with the
performance of its duties.
The indenture trustee will not be indemnified against any loss,
liability or expense incurred by it through its own willful misconduct,
negligence or bad faith, although the indenture trustee will not be liable:
o for any error of judgment made by it in good faith unless it
is proved that the indenture trustee was negligent in
ascertaining the pertinent facts;
o with respect to any action it takes or omits to take in good
faith in accordance with a direction received by it from
noteholders in accordance with the terms of the indenture;
and
o for interest on any money received by it except as the
indenture trustee and the trust may agree in writing.
The indenture trustee will not be deemed to have knowledge of any
event of default under the indenture unless an officer of the indenture
trustee has actual knowledge or has received written notice of the event of
default in accordance with the provisions of the indenture. (Indenture,
Sections 6.1 and 6.7)
Indenture Trustee's Access to Noteholder Lists. If notes are issued
in fully registered, certificated form and the indenture trustee is not the
registrar for the notes, the trust will furnish or cause to be furnished to
the indenture trustee a list of the names and addresses of the noteholders:
o as of each record date, within five days after the record
date; and
o as of not more than 10 days before that list is furnished,
within 30 days after receipt by the trust of a written
request for that list. (Indenture, Section 7.1)
Annual Compliance Statement to be Provided by Trust to Indenture
Trustee. The trust will be required to file annually with the indenture
trustee a written statement as to the fulfillment of its obligations under
the indenture. (Indenture, Section 3.9).
Requirements for Satisfaction and Discharge of Indenture. The
indenture will be discharged with respect to the collateral securing the
notes upon the delivery to the indenture trustee for cancellation of all
the notes or, with several limitations, including receipt of various
opinions with respect to tax matters, upon deposit with the indenture
trustee of funds sufficient for the payment in full of all of the notes,
including interest and any fees due and payable to the owner trustee or the
indenture trustee. (Indenture, Section 4.1).
Requirements for Modification of Indenture. Without the consent of
the noteholders, the owner trustee, on behalf of the trust, and the
indenture trustee, upon request by the trust, may execute a supplemental
indenture for the purpose of, among other things, adding to the covenants
of the trust, curing any ambiguity, correcting or supplementing any
provision which may be inconsistent with any other provision or making any
other provision with respect to matters or questions arising under the
indenture which will not be inconsistent with other provisions of the
indenture; provided that:
o the action will not, (1) as evidenced by an opinion of
counsel materially adversely affect the interests of any
noteholder and (2) as confirmed by each of Moody's and S&P
rating any class of notes, cause the then-current rating
assigned to any class of notes to be withdrawn, reduced or
qualified, and
o an opinion of counsel as to various tax matters is
delivered. (Indenture, Section 9.1).
The owner trustee, on behalf of the trust, and the indenture
trustee, upon request by the trust, may also enter into supplemental
indentures, with the consent of not less than a majority of the aggregate
principal amount of the outstanding notes, voting as a group, and with
prior written notice to each of Moody's and S&P, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of the indenture or of modifying in any manner the rights of
noteholders; provided, that:
o the action will not, (1) as evidenced by an opinion of
counsel, materially adversely affect the interests of any
noteholder and (2) as confirmed by each of Moody's and S&P,
cause the then-current rating assigned to any of the
affected class of notes to be withdrawn, reduced or
qualified, and
o an opinion of counsel as to various tax matters is
delivered. (Indenture, Section 9.1).
Any opinion of counsel referred to in this paragraph or the preceding one
may be rendered by internal counsel to MART or the servicer.
Without the consent of the holder of each outstanding note affected
thereby, however, no supplemental indenture may:
o change the final payment date for any class of notes or the
date on which any installment of principal of or interest on
any note is due or reduce the principal amount of any note,
the specified interest rate of any note or the redemption
price of any note, change the provisions of the indenture
relating to the application of collections on, or the
proceeds of the sale of, the trust property to payment of
principal of or interest on the notes, or change any place
of payment where, or the coin or currency in which, any note
or any interest on the notes is payable;
o impair the right to institute suit for the enforcement of
various provisions of the indenture regarding payment;
o reduce the percentage of the aggregate outstanding principal
amount of the notes the consent of the holders of which is
required for any supplemental indenture or for any waiver of
compliance with various provisions of the indenture, or of
various defaults under the indenture, and their consequences
as provided for in the indenture;
o modify or alter the provisions of the indenture regarding
the voting of notes held by the trust, MART, the servicer or
an affiliate of any of them;
o reduce the percentage of the aggregate outstanding principal
amount of the notes the consent of the holders of which is
required to direct the indenture trustee to sell or
liquidate the trust property if the proceeds of that sale
would be insufficient to pay the principal amount and
accrued but unpaid interest on the notes and the
certificates;
o modify any provision of the indenture specifying a
percentage of the aggregate principal amount of the notes
necessary to amend the indenture, the sale and servicing
agreement, the trust agreement or any other related
documents except to increase any percentage specified in the
indenture or to provide that various additional provisions
of the indenture, the sale and servicing agreement, the
trust agreement or any other related documents cannot be
modified or waived without the consent of the holder of each
outstanding note affected by the modification;
o modify any provisions of the indenture in a manner as to
affect the calculation of the amount of any payment of
interest or principal due on any note on any payment date or
to affect the rights of the holders of notes to the benefit
of any provisions for the mandatory prepayment of the notes
contained in the indenture; or
o permit the creation of any lien ranking prior to or on a
parity with the lien of the indenture with respect to any of
the trust property or, except as otherwise permitted or
contemplated in the indenture, terminate the lien of the
indenture on any of that collateral or deprive the holder of
any note of the security afforded by the lien of the
indenture. (Indenture, Section 9.2).
The trust agreement will require the owner trustee to give the
certificateholders 30 days' written notice of any proposed supplemental
indenture if it materially adversely affects the certificateholders or if
any noteholders' consent to the proposed supplemental indenture is required
and provides that the owner trustee will not enter into the amendment
unless certificateholders holding a majority of the certificate balance
including, for this purpose, certificates held by MART or any affiliate of
MART, consent in writing. (Trust Agreement, Section 4.1).
THE SALE AND SERVICING AGREEMENT AND THE TRUST AGREEMENT
We have summarized below some of the important terms of the sale
and servicing agreement and the trust agreement. We will file copies of
those agreements with the Securities and Exchange Commission after we issue
the notes and the certificates. This summary is not a complete description
of all of the provisions of those agreements and is subject to those
agreements in their entirety.
SALE AND ASSIGNMENT
Concurrent with the issuance of the notes, and pursuant to the
purchase agreement, MMCA will sell and assign to MART, without recourse,
its entire right, title and interest in, to and under the initial
receivables to be purchased by the trust on the Closing Date, including its
security interests in the related financed vehicles. At the time of
issuance of the notes, MART, pursuant to the sale and servicing agreement,
will sell and assign to the trust, without recourse, MART's entire interest
in the initial receivables, including its security interests in the related
financed vehicles. Each of the initial receivables conveyed by MART to the
trust will be identified in a schedule attached to the sale and servicing
agreement. The initial receivables will be sold and assigned by MMCA to
MART and sold and assigned by MART to the trust as of the Cutoff Date. The
owner trustee will, concurrently with the sale and assignment of the
receivables, execute, authenticate and deliver the certificates. The net
proceeds received from the sale of the notes on the Closing Date will be
applied to the purchase of the receivables and to the deposits required to
be made to the reserve account, the pre-funding account, the negative carry
account, the payahead account and the yield supplement account.
It is anticipated that additional receivables will be conveyed to
the trust monthly on dates specified by MART occurring during the
Pre-Funding Period. MART will designate as a Cutoff Date the date as of
which particular additional receivables are conveyed to the trust. On or
before each transfer of additional receivables to the trust during the
Pre-Funding Period, MMCA will sell and assign to MART, without recourse,
its entire right, title and interest in, to and under the additional
receivables to be transferred by MART to the trust on that date, including
MMCA's security interests in the related financed vehicles. On each of
those dates, subject to the conditions described below, MART will sell and
assign to the trust, without recourse, MART's entire interest in the
additional receivables sold on that date designated by MART as of the
related Cutoff Date.
Upon the conveyance of receivables to the trust during the
Pre-Funding Period:
(1) the principal balance of the receivables pool will increase
in an amount equal to the aggregate principal balance of the
receivables as of the related Cutoff Date;
(2) an amount equal to 0.15% of the aggregate principal balance
of the receivables sold on that date will be withdrawn from
the pre-funding account and deposited in the reserve
account;
(3) an amount equal to any early payments with respect to
Actuarial Receivables which were received before the related
Cutoff Date will be withdrawn from the pre-funding account
and transferred to the payahead account;
(4) an amount equal to the projected Yield Supplement Amounts
for all future payment dates for the receivables conveyed to
the trust on that date will be withdrawn from the
pre-funding account and deposited in the yield supplement
account unless the yield supplement account has been
replaced by an acceptable letter of credit on or before that
date; and
(5) an amount equal to the excess of the aggregate principal
balance of the receivables transferred to the trust on that
date over the sum of the amounts described in clauses (2),
(3) and (4) of this paragraph will be withdrawn from the
pre-funding account and paid to MART.
Any conveyance of receivables during the Pre-Funding Period is
subject to the satisfaction, on or before the date of conveyance, of the
following conditions precedent, among others:
o each of the receivables transferred to the trust on that
date must satisfy the eligibility criteria specified in the
sale and servicing agreement (see "The Receivables
Pool--Selection Criteria");
o MART must not have selected those receivables in a manner
that it believes is adverse to the interests of the trust,
the noteholders or the certificateholders;
o the applicable reserve account deposit for that date must
have been made;
o the applicable payahead account deposit for that date must
have been made;
o the applicable yield supplement account deposit for that
date must have been made;
o MART must have executed and delivered to the trust, with a
copy to the indenture trustee, a written assignment
conveying those receivables to the trust, including a
schedule identifying the receivables;
o MART must have delivered various opinions of counsel to the
owner trustee, the indenture trustee, the representative of
the underwriters, and each of Moody's and S&P with respect
to the transfer of those receivables; and
o the owner trustee, the indenture trustee and each of Moody's
and S&P must have received written notification from MART of
the addition of all receivables transferred to the trust on
that date.
In addition, each group of receivables transferred to the trust
during the Pre-Funding Period will have the following characteristics:
o the weighted average remaining maturity of the receivables
in that group will not be more than 53 months after the date
that the group of receivables was transferred to the trust;
o the aggregate Balloon Payments of the receivables in that
group as a percentage of the aggregate principal balance of
the receivables in that group will not be more than 26%;
o the aggregate principal balance of the limited credit
experience receivables in that group as a percentage of the
aggregate principal balance of the receivables in that group
will be not more than 9%; and
o the aggregate principal balance of the receivables that
allow a deferred first payment in that group as a percentage
of the aggregate principal balance of the receivables in
that group will be not more than 8%.
Except for the criteria described in the two preceding paragraphs,
there will be no required characteristics of receivables transferred to the
trust after the Closing Date. Therefore, following the transfer of
receivables to the trust on any date during the Pre-Funding Period, the
aggregate characteristics of the entire pool of receivables may vary from
those of the receivables transferred to the trust on the Closing Date. See
"Risk Factors" and "The Receivables Pool."
In the purchase agreement, MMCA will represent and warrant to MART,
and in the sale and servicing agreement, MART will represent and warrant to
the trust, among other things, that:
o the information provided in the schedule of receivables
transferred to the trust on the Closing Date attached to the
sale and servicing agreement and each schedule of
receivables transferred to the trust on any date during the
Pre-Funding Period attached to the related assignment is and
will be correct in all material respects;
o MMCA shall have determined whether or not the obligor on
each contract has maintained physical damage insurance,
which shall not be force-placed insurance, covering the
financed vehicle in accordance with its normal requirements;
o on any date that receivables are transferred to the trust,
the receivables are free and clear of all security
interests, liens, charges, and encumbrances and no setoffs,
defenses, or counterclaims against it have been asserted or
threatened;
o on any date that receivables are transferred to the trust,
each of the receivables is or will be secured by a perfected
first priority security interest in the financed vehicle in
favor of MMCA; and
o each receivable, at the time it was originated, complied,
and complies or will comply in all material respects with
applicable federal and state laws, including consumer
credit, truth in lending, equal credit opportunity and
disclosure laws.
The noteholders, the trust, the indenture trustee, the
certificateholders and the owner trustee will have no recourse against MMCA
or MART for breach of any of the foregoing representations and warranties
with respect to a receivable other than the right to require MMCA and MART
to repurchase the receivable. See "--Mandatory Repurchase of Receivables."
The owner trustee, the indenture trustee, the trust and the servicer will
covenant in the sale and servicing agreement not to institute or join in
the institution of any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other similar proceeding against MART for a
period of one year and a day after any securities rated by Moody's or S&P
were issued by MART or by a trust for which MART was the depositor.
To assure uniform quality in servicing the contracts and to reduce
administrative costs, the trust will appoint the servicer as initial
custodian of the contracts. The servicer, in its capacity as custodian,
will hold the receivables and all documents and instruments relating to the
contracts, either directly or through subservicers, on behalf of the
indenture trustee and the trust. The contracts will not be stamped or
otherwise marked to reflect the sale and assignment of the receivables to
the trust and will not be segregated from other receivables held by the
servicer or the subservicers. However, Uniform Commercial Code financing
statements reflecting the sale and assignment of the receivables by MMCA to
MART and by MART to the trust will be filed, and the servicer's accounting
records and computer systems will be marked to reflect that sale and
assignment. See "The Trust" and "Some Important Legal Aspects of the
Receivables."
THE PRE-FUNDING PERIOD
The trust will pay the purchase price for receivables to be
transferred to the trust during the Pre-Funding Period with funds on
deposit in the pre-funding account. MART will deposit an amount equal to
$202,210,941.29 in the pre-funding account on the Closing Date. MART
expects to sell receivables to the trust after the Closing Date with an
aggregate principal balance approximately equal to $202,210,941.29. Before
being used to purchase receivables or to pay holders of the notes as
described under "Terms of the Notes-Mandatory Prepayment," funds on deposit
in the pre-funding account will be invested in investments as permitted by
the sale and servicing agreement. The net earnings from the investment of
funds on deposit in the pre-funding account will be transferred to the
collection account on a monthly basis on the business day preceding each
payment date.
The Pre-Funding Period is expected to begin on the Closing Date and
to end on March 31, 2000, but will end earlier if:
o the amount of funds on deposit in the pre-funding account is
reduced to less than $100,000 because of purchases of
additional receivables;
o there is an event of default under the indenture;
o there is an event of servicing termination under the sale
and servicing agreement; or
o MART or the servicer becomes subject to various insolvency
events.
Any funds remaining on deposit in the pre-funding account at the
end of the Pre-Funding Period will be payable to the noteholders as
described under "Terms of the Notes-Mandatory Prepayment."
MANDATORY REPURCHASE OF RECEIVABLES
In the event of a breach or failure to be true of any
representation or warranty with respect to the receivables described in
"--Sale and Assignment," which breach or failure materially and adversely
affects the interest of the trust in a receivable, MART, unless that breach
or failure has been cured by the last day of the calendar month which
includes the 60th day after the date on which MART becomes aware of, or
receives written notice from the owner trustee or the servicer of, the
breach or failure, will be required to repurchase the receivable from the
trust, and MMCA will be required to repurchase the receivable from MART.
The purchase amount will be payable on the payment date immediately
following that calendar month. The obligation of MART to repurchase a
receivable will not be conditioned on performance by MMCA of its obligation
to repurchase a receivable. The repurchase obligation will constitute the
sole remedy available to the noteholders, the trust, the indenture trustee,
the certificateholders or the owner trustee against MART and MMCA for any
uncured breach or failure.
The purchase amount of a receivable to be purchased on any payment
date will equal the sum of (a) the outstanding principal balance of the
receivable as of the first day of the preceding calendar month and (b) the
accrued and unpaid interest on the principal balance at the annual
percentage rate of the receivable from the date a payment was last made on
the receivable through the date on which payment was due for that
receivable in the preceding calendar month. This calculation will be made
after giving effect to the receipt of monies collected on the contract in
the preceding calendar month.
SERVICING PROCEDURES
The servicer will make reasonable efforts to collect all payments
due with respect to the receivables in a manner consistent with the sale
and servicing agreement and will exercise the degree of skill and care that
the servicer exercises with respect to comparable motor vehicle receivables
owned and/or serviced by the servicer for itself or others.
Although it has no current plans to do so, the servicer may enter
into subservicing agreements with servicers that are eligible under the
sale and servicing agreement for the subservicing of receivables. Any
subservicing agreements will contain provisions substantially identical to
those contained in the sale and servicing agreement and may contain other
provisions that are not inconsistent with the terms of the sale and
servicing agreement. The servicer may terminate a subservicing agreement
and either service the related receivables directly or enter into a new
subservicing agreement for the receivables with another subservicer,
provided that any subservicer must be eligible to act as servicer.
Notwithstanding any subservicing agreement, the servicer will remain
obligated and liable to the trust and the owner trustee for servicing and
administering the receivables in accordance with the sale and servicing
agreement as if the servicer alone were servicing the receivables. All
references in this prospectus to actions required or permitted to be taken,
or restrictions on actions to be taken, by the servicer apply equally to
actions by a subservicer. References in this prospectus to amounts received
by the servicer include amounts received by a subservicer.
To be eligible to act as a servicer or subservicer under the sale
and servicing agreement, a person must, at the time of its appointment as
servicer or as a subservicer:
o have a net worth of not less than $50,000,000;
o be servicing a portfolio of motor vehicle retail installment
sale contracts and/or motor vehicle loans;
o be legally qualified, and have the capacity, to service the
receivables;
o have demonstrated the ability professionally and competently
to service a portfolio of motor vehicle retail installment
sale contracts and/or motor vehicle loans similar to the
receivables in accordance with standards of skill and care
that are consistent with prudent industry standards; and
o be qualified and entitled to use under a license or other
written agreement, and agree to maintain the confidentiality
of, the software which the servicer or any subservicer uses
in connection with performing its duties and
responsibilities under the sale and servicing agreement or
the related subservicing agreement or obtain the right to
use, or develop at its own expense, software which is
adequate to perform its duties and responsibilities under
the sale and servicing agreement or the related subservicing
agreement.
The servicer will covenant in the sale and servicing agreement
that:
(1) 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 by
the sale and servicing agreement;
(2) the servicer will not and will not permit any subservicer to
impair in any material respect the rights of the trust, the
indenture trustee, the noteholders, the owner trustee or the
certificateholders in the receivables or otherwise amend or
alter the terms of a contract if, as a result of that
amendment or alteration, the interests of the trust, the
noteholders, the indenture trustee, the owner trustee, or
the certificateholders under the sale and servicing
agreement would be materially adversely affected; and
(3) the servicer will not increase or decrease the number or
amount of scheduled payments or the amount financed under a
contract, or extend, rewrite or otherwise modify the payment
terms of a contract; provided, however, that the servicer
may extend any contract for credit-related reasons that
would be acceptable to the servicer with respect to
comparable motor vehicle receivables that it services for
itself or others in accordance with its customary standards
if the cumulative extensions with respect to any contract
shall not cause the term of that contract to extend beyond
October 1, 2005; provided further, that the extensions, in
the aggregate, do not exceed two months for each twelve
months of the original term of the contract.
If the servicer breaches any covenant described in the preceding
paragraph that materially and adversely affects a receivable, the servicer
will be required to purchase the receivable from the trust. That purchase
obligation is the sole remedy against the servicer for any uncured breach,
except for the indemnities of the servicer specified in the sale and
servicing agreement. The servicer's obligation to purchase a receivable in
the case of a breach does not apply if the breach has been cured by the
last day of the calendar month which includes the 60th day after the date
on which the servicer becomes aware of, or receives written notice of, the
breach.
The sale and servicing agreement will generally require the
servicer to charge off a receivable in conformity with its normal practice.
It will also generally require the servicer to follow its normal collection
practices and procedures that are consistent with the standard of care
required by the sale and servicing agreement to realize upon any
receivable. Currently, MMCA charges off a receivable at the time that the
related financed vehicle has been repossessed and sold, or at the time as
MMCA determines that it will not recover the financed vehicle. The servicer
may sell the financed vehicle securing the receivable at judicial sale, if
any, or take any other action permitted by law. See "Some Important Legal
Aspects of the Receivables." The net proceeds of the sale will be deposited
in the collection account at the time and in the manner described above.
The sale and servicing agreement will also require the servicer to
make advances, for which the servicer will be reimbursed in the manner
described under "Terms of the Notes--Advances by the Servicer of Amounts
Payable on the Receivables."
The sale and servicing agreement will provide that the servicer
will defend and indemnify the trust, the indenture trustee, the owner
trustee, the noteholders, the certificateholders and MART against any and
all costs, expenses, losses, damages, claims, and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, arising
out of or resulting from the use, ownership or operation by the servicer or
any of its affiliates of any financed vehicle, or in respect of any
negligence, willful misfeasance or bad faith of the servicer in the
performance of its duties-other than errors in judgment-or by reason of
reckless disregard of its obligations and duties, under the sale and
servicing agreement or under any of the documents to which it is a party.
The servicer's obligations to indemnify the trust, the indenture trustee,
the owner trustee, the noteholders, MART and the certificateholders for the
servicer's actions or omissions will survive the removal of the servicer,
but will not apply to any action or omission of a successor servicer.
SERVICING COMPENSATION
The servicer will be entitled to receive a servicing fee for
servicing the receivables each calendar month, in an amount equal to the
product of one-twelfth of 1.00% and the principal balance of the
receivables pool as of the first day of the calendar month. The servicer
will also be entitled to receive, as additional servicing compensation,
earnings, net of losses and investment expenses, on amounts on deposit in
the payahead account, Rule of 78's payments, all disposition fees paid with
respect to receivables providing for Balloon Payments, all administrative
fees and charges, and all late payment fees paid with respect to the
receivables, other than fees paid in connection with extension or deferral
of payments on a receivable, which will be deposited in the collection
account. The servicing fee, together with any portion of the servicing fee
that remains unpaid from prior payment dates, will be paid to the servicer
on each payment date.
The servicing fee and the additional servicing compensation will
compensate the servicer for performing the functions of a third party
servicer of contracts and for administering the receivables on behalf of
the noteholders and the certificateholders, including collecting payments,
accounting for collections, furnishing monthly and annual statements to the
indenture trustee and the owner trustee with respect to distributions,
responding to inquiries of obligors, investigating delinquencies, and
providing collection and repossession services in cases of obligor default.
In addition, the servicing fee and the additional servicing compensation
will further compensate the servicer for various taxes, accounting fees,
outside auditor fees, data processing costs, and other costs incurred by
the servicer under the sale and servicing agreement in connection with
administering and servicing the receivables.
EVIDENCE TO BE PROVIDED AS TO SERVICER'S COMPLIANCE WITH ITS SERVICING
OBLIGATIONS
The sale and servicing agreement will provide that a firm of
independent certified public accountants, who may provide audit and other
services to the servicer, MART or MMCA, will furnish to the indenture
trustee and the owner trustee, on or before March 31 of each year,
beginning March 31, 2000, a report of examination as to compliance by the
servicer during the 12 months-or shorter period in the case of the first
report-ended the preceding December 31 with various standards relating to
the servicing of the receivables.
The sale and servicing agreement will also provide for delivery to
the indenture trustee and the owner trustee, on or before March 31 of each
year, beginning March 31, 2000, of a certificate signed by an officer of
the servicer stating that to the best of that officer's knowledge the
servicer has fulfilled its obligations under the sale and servicing
agreement throughout the 12 months ended the preceding December 31 or, if
there has been a default in the fulfillment of any such obligation,
describing each of those defaults.
Beneficial owners of the notes may obtain copies of those
statements and certificates by written request addressed to the indenture
trustee.
RESIGNATION BY THE SERVICER
The sale and servicing agreement will provide that the servicer may
not resign from its obligations and duties as servicer, except upon a
determination that the servicer's performance of its duties is no longer
permissible under applicable law. No resignation of the servicer will
become effective until the indenture trustee or a successor servicer has
assumed the servicer's servicing obligations and duties under the sale and
servicing agreement and becomes the administrator under the administration
agreement.
CONSEQUENCES OF MERGER, CONVERSION, CONSOLIDATION OR SIMILAR ACTIONS BY
SERVICER
Any legal successor to the servicer, whether by merger,
consolidation or purchase and assumption of all or substantially all of the
business of the servicer, will become the servicer under the sale and
servicing agreement, provided that any such successor must be eligible to
be servicer under the sale and servicing agreement.
LIMITS ON SERVICER'S LIABILITY
The sale and servicing agreement will provide that the servicer
will be liable only to the extent of the obligations specifically
undertaken by it under the sale and servicing agreement and will have no
other obligations or liabilities under the sale and servicing agreement.
LIMITS ON SERVICER'S OBLIGATIONS IN CONNECTION WITH LEGAL ACTIONS
The sale and servicing agreement will also provide that the
servicer will be under no obligation to appear in, prosecute or defend any
legal action that is not incidental to the servicer's responsibilities
under the sale and servicing agreement and that, in its opinion, may cause
it to incur any expense or liability. The servicer may, however, at its
expense undertake any reasonable action that it may deem necessary or
desirable in respect of the interests of the noteholders and the
certificateholders under the sale and servicing agreement.
EVENTS OF SERVICING TERMINATION
The following events will constitute events of servicing
termination under the sale and servicing agreement:
o any failure by the servicer to deliver to the owner trustee
or the indenture trustee the monthly certificate detailing
the collections and distributions for any calendar month,
which failure continues beyond the earlier of three business
days from the date the servicer's certificate was due to be
delivered and the related payment date;
o any failure by the servicer to deliver to the collection
account or any other account, any required payment or
deposit under the sale and servicing agreement, which
failure continues unremedied for five business days, or, in
the case of a payment or deposit to be made no later than a
payment date, the failure to make the payment or deposit by
the payment date;
o any failure by the servicer duly to observe or perform in
any material respect any other covenant or agreement in the
notes, the certificates or the sale and servicing agreement,
which failure materially and adversely affects the rights of
noteholders or certificateholders and which continues
unremedied for 30 days after written notice of the failure
is given to the servicer by the indenture trustee or the
owner trustee, or to MART, the servicer, the owner trustee
and the indenture trustee by the holders of notes or
certificates, as applicable, evidencing not less than 25% in
aggregate principal amount of the outstanding notes;
o various events of bankruptcy, receivership, insolvency,
readjustment of debt, marshalling of assets and liabilities,
or similar proceedings with respect to MART or the servicer
and various actions by MART or the servicer indicating its
insolvency or reorganization pursuant to bankruptcy,
receivership, conservatorship, insolvency, or similar
proceedings; and
o failure of the servicer to be eligible to act as servicer
under the sale and servicing agreement.
If one of the events of servicing termination occurs and is not
remedied, either the indenture trustee or the holders of notes evidencing
not less than 51% of the aggregate principal amount of the outstanding
notes will have the right to remove the servicer. If the servicer is
removed, either the indenture trustee will act as successor servicer or the
indenture trustee will appoint a successor servicer.
The holders of notes evidencing not less than 51% of the aggregate
principal amount of the outstanding notes or the holders of certificates
evidencing not less than 51% of the certificate balance, in the case of any
default which does not adversely affect the indenture trustee or the
noteholders may, on behalf of all noteholders and certificateholders, as
applicable, waive any event of servicing termination under the sale and
servicing agreement except an event resulting from the failure to make any
required deposit to or payment from any account. For purposes of the
foregoing, any notes or certificates owned by MART, the servicer, or any
affiliate will not be considered to be outstanding.
The indenture trustee will have no obligation to notify noteholders
of any event which, with lapse of time to cure, would become an event of
servicing termination under the sale and servicing agreement, until after
the expiration of any applicable cure period, subject to the obligation of
the indenture trustee to deliver to each noteholder a copy of any
certificate received by the indenture trustee from the servicer under the
sale and servicing agreement notifying the indenture trustee 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 the sale and
servicing agreement. See "--Rights of Indenture Trustee and Noteholders
Upon an Event of Servicing Termination Under the Sale and Servicing
Agreement."
RIGHTS OF INDENTURE TRUSTEE AND NOTEHOLDERS UPON AN EVENT OF SERVICING
TERMINATION UNDER THE SALE AND SERVICING AGREEMENT
As long as an event of servicing termination under the sale and
servicing agreement remains unremedied, the indenture trustee or the
holders of notes evidencing not less than a majority of the aggregate
principal amount of the outstanding notes may terminate the servicer's
rights and obligations under the sale and servicing agreement. Thereafter,
the indenture trustee or a servicer meeting the requisite eligibility
standards, which may be an affiliate of the indenture trustee, appointed by
the indenture trustee will succeed to all the responsibilities, duties, and
liabilities of the original servicer. The successor servicer will then be
entitled to the compensation payable to the servicer. If the indenture
trustee is unwilling or legally unable so to act, the indenture trustee may
appoint, or petition a court of competent jurisdiction to appoint, a person
eligible to act as servicer as successor to the outgoing servicer under the
sale and servicing agreement. In no event may the servicing compensation to
be paid to that successor be greater than the servicing compensation
payable to the servicer under the sale and servicing agreement. In the
event of the bankruptcy of the servicer, the bankruptcy trustee or the
servicer, as debtor in possession, may have the power to prevent a
termination of the servicer's rights and obligations under the sale and
servicing agreement.
REQUIREMENTS FOR AMENDMENTS OF THE SALE AND SERVICING AGREEMENT AND THE
TRUST AGREEMENT
Both the sale and servicing agreement and the trust agreement may
be amended by the parties without the consent of the noteholders or the
certificateholders, to cure any ambiguity, to correct or supplement any
provision of either agreement which may be inconsistent with any other
provision of that agreement, and to add, change or eliminate any other
provisions of either agreement which are not inconsistent with the
provisions of that agreement; provided that the action will not, as
evidenced by an opinion of counsel-which may be given by internal counsel
to MART or the servicer-to the indenture trustee and the owner trustee,
materially and adversely affect the interest of any noteholder or
certificateholder or, with respect to the trust agreement, have adverse tax
consequences.
The sale and servicing agreement may be amended by the parties for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, the sale and servicing agreement or
for the purpose of modifying the rights of noteholders or
certificateholders, with the consent of the indenture trustee, the holders
of notes evidencing not less than 51% of the aggregate principal amount of
then outstanding notes, voting as a group, and the holders of certificates
evidencing not less than 51% of the certificate balance.
The trust agreement may be amended by the parties for the purpose
of adding any provisions to or changing in any manner, or eliminating any
of the provisions of the trust agreement, or for the purpose of modifying
the rights of noteholders or certificateholders, with the consent of the
indenture trustee, MART, the holders of notes evidencing not less than a
majority of the aggregate principal amount of the then outstanding notes,
voting as a group, and the holders of certificates evidencing not less than
a majority of the certificate balance.
However, no amendment of either agreement may:
o 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 are required to be made on any note or
certificate, or change any interest rate of any note, the
Specified Reserve Balance or the Maximum Supplemental
Reserve Amount, without the consent of all adversely
affected noteholders or certificateholders;
o reduce the aforesaid percentage of the notes and the
certificates which is required to consent to any amendment,
without the consent of all noteholders or certificateholders
affected by the amendment; or
o with respect to any amendment to the sale and servicing
agreement or the trust agreement, adversely affect the
ratings of any class of notes by Moody's and S&P without the
consent of holders of notes evidencing not less than 66 2/3%
of the aggregate principal amount of the then outstanding
notes of that class.
Additionally, with respect to an amendment of the trust agreement,
an opinion of counsel to the effect that the amendment will not have
specified adverse tax consequences will be furnished to the indenture
trustee and the owner trustee. See "Terms of the Notes--Book Entry
Registration."
REQUIREMENTS FOR TERMINATION OF THE TRUST
The trust will terminate and be of no further force and effect upon
the earlier of:
o payment to noteholders and certificateholders of all amounts
required to be paid to them pursuant to the indenture, the
trust agreement and the sale and servicing agreement; and
o the payment date following the month which is one year after
the maturity or other liquidation of the last receivable and
the disposition of any amounts received upon liquidation of
any property remaining in the trust in accordance with the
terms and priorities set forth in the indenture, the trust
agreement and the sale and servicing agreement.
In order to avoid excessive administrative expense, the servicer
will be permitted, at its option, if the principal balance of the
receivables pool as of the close of business on the last day of a calendar
month has declined to 10% or less of the Initial Pool Balance, to purchase
from the trust, on any payment date occurring in a subsequent calendar
month, all remaining receivables in the trust at a purchase price equal to
the outstanding principal amount of the notes and the certificates, in each
case plus accrued and unpaid interest thereon. The exercise of this right
will effect early retirement of the notes and the certificates.
ACTIONS TO BE TAKEN BY INDENTURE TRUSTEE UPON TERMINATION OF THE TRUST
The indenture trustee will give written notice of termination of
the trust to each noteholder of record. The final distribution to any
noteholder will be made only upon surrender and cancellation of that
holder's note, whether a note in fully registered, certificated form or one
or more physical notes representing the notes, at the office or agency of
the indenture trustee specified in the notice of termination. Any funds
remaining in the trust, after the indenture trustee has taken various
measures to locate a noteholder and the measures have failed, will be
distributed to MART or as otherwise provided in the sale and servicing
agreement and the trust agreement.
THE ADMINISTRATION AGREEMENT
MMCA, in its capacity as administrator, will enter into an
administration agreement with the trust and the indenture trustee. Under
the administration agreement, the administrator will agree to provide the
notices and to perform other administrative obligations required by the
indenture. As compensation for the performance of the administrator's
obligations under the administration agreement and as reimbursement for its
expenses relating to the administration agreement, the administrator will
be entitled to a monthly administration fee to be paid by the servicer.
SOME IMPORTANT LEGAL ASPECTS OF THE RECEIVABLES
BANKRUPTCY CONSIDERATIONS
MMCA and MART intend that each transfer of receivables by MMCA to
MART be structured such that the receivables and the related proceeds would
not be part of MMCA's bankruptcy estate under Section 541 of the United
States Bankruptcy Code should MMCA become the subject of a bankruptcy case
after the transfers of the receivables to MART. This is known as a "true
sale." Legal counsel has advised MART that if MMCA were to become the
subject of a voluntary or involuntary case under the United States
Bankruptcy Code, the receivables and their proceeds would not be part of
MMCA's bankruptcy estate under Section 541 of the United States Bankruptcy
Code.
In Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th Cir.
1993), cert. denied, 114 S. Ct. 554 (1993), the United States Court of
Appeals for the 10th Circuit suggested that even where a transfer of
accounts from a seller to a buyer constitutes a "true sale," the accounts
would nevertheless constitute property of the seller's estate in a
bankruptcy of the seller. If MMCA ever becomes subject to a bankruptcy
proceeding and the court follows the Octagon court's reasoning, you could
experience losses or delays in payments on your notes. Counsel to MART has
advised MART that the reasoning of the Octagon case appears to be
inconsistent with other precedent. In addition, the Permanent Editorial
Board of the Uniform Commercial Code has issued PEB Commentary No. 14,
which characterizes the Octagon court's interpretation of Article 9 of the
Uniform Commercial Code as erroneous. That commentary states that nothing
in Article 9 is intended to prevent the transfer of ownership of accounts
or chattel paper.
TRUST'S RIGHTS IN THE RECEIVABLES
The receivables are "chattel paper" as defined in the Uniform
Commercial Code. Under the Uniform Commercial Code, for most purposes, a
sale of chattel paper is treated in a manner similar to a transaction
creating a security interest in chattel paper. Following transfers of the
receivables, MMCA and MART will cause financing statements to be filed with
the appropriate governmental authorities to perfect the interest of MART
and the trust, as the case may be, in the receivables.
Under the sale and servicing agreement, the servicer will hold the
receivables, either directly or through subservicers, as custodian for the
indenture trustee and the trust following the sale and assignment of the
receivables to the trust on any date. MART will take the action as is
required to perfect the rights of the indenture trustee and the trust in
the receivables. The receivables will not be stamped, or otherwise marked,
to indicate that they have been sold to the trust. If, through inadvertence
or otherwise, another party purchases or takes a security interest in the
receivables for new value in the ordinary course of business and takes
possession of the receivables without actual knowledge of the trust's
interest, the purchaser or secured party will acquire an interest in the
receivables superior to the interest of the trust.
The servicer will be obligated to take those actions which are
necessary to protect and perfect the trust's interest in the receivables
and their proceeds.
SECURITY INTERESTS IN VEHICLES
In all states in which the receivables have been originated, retail
installment sale contracts evidence the credit sale of automobiles and
light-duty trucks by dealers to obligors; the contracts also constitute
personal property security agreements and include grants of security
interests in the financed vehicles under the Uniform Commercial Code.
Perfection of security interests in the financed vehicles is generally
governed by the motor vehicle registration laws of the state in which the
vehicle is located. In most states in which the receivables have been
originated, a security interest in a vehicle is perfected by notation of
the secured party's lien on the vehicle's certificate of title, including
California and Texas, the states in which the largest number of obligors
are located.
MMCA will assign its security interests in the financed vehicles
securing the related receivables to MART and MART will subsequently assign
its security interests in the financed vehicles to the trust. However,
because of the administrative burden and expense, the servicer, MART and
the trust will not amend any certificate of title to identify the trust as
the new secured party on the certificates of title relating to the financed
vehicles. Also, the servicer will continue to hold any certificates of
title relating to the financed vehicles in its possession as custodian for
the trust.
In most states, assignments together with a perfected security
interest in the chattel paper are an effective conveyance of a security
interest in the vehicles subject to the chattel paper without amendment of
any lien noted on a vehicle's certificate of title, and the assignee
succeeds to the assignor's rights as secured party. In the absence of fraud
or forgery by the vehicle owner or the servicer or administrative error by
state or local agencies, the notation of MMCA's lien on the certificates of
title will be sufficient to protect the trust against the rights of
subsequent purchasers of a financed vehicle or subsequent lenders who take
a security interest in a financed vehicle. If there are any financed
vehicles as to which MMCA failed to obtain a perfected security interest,
its security interest would be subordinate to, among others, subsequent
purchasers of the financed vehicles and holders of perfected security
interests. Such a failure would constitute a breach of MMCA's warranties
under the purchase agreement and of MART's warranties under the sale and
servicing agreement and would create an obligation of MMCA and of MART to
purchase the related receivable if such breach materially adversely affects
the interest of the trust in the receivable. By not identifying the trust
as the secured party on the certificate of title, the trust's interest in
the chattel paper may not have the benefit of the security interest in the
financed vehicle in all states or such security interest could be defeated
through fraud or negligence. MART will assign its rights under the purchase
agreement to the trust. If the trust does not have a perfected security
interest in a financed vehicle, its ability to realize on such financed
vehicle in the event of a default may be adversely affected.
Under the laws of most states, a perfected security interest in a
vehicle would continue for four months after a vehicle is moved to a state
other than the state in which it is initially registered and thereafter
until the vehicle owner re-registers the vehicle in the new state. A
majority of states, including California, generally require surrender of a
certificate of title to re-register a vehicle. Accordingly, a secured party
must surrender possession if it holds the certificate of title to the
vehicle, or, in the case of vehicles registered in states providing for the
notation of a lien on the certificate of title but not possession by the
secured party, the secured party would receive notice of surrender if the
security interest is noted on the certificate of title. Thus, the secured
party would have the opportunity to re- perfect its security interest in
the vehicle in the state of relocation. In states that do not require a
certificate of title for registration of a motor vehicle, re-registration
could defeat perfection. In the ordinary course of servicing receivables,
MMCA takes steps to effect re-perfection upon receipt of notice of
re-registration or information from the obligor as to relocation.
Similarly, when an obligor sells a vehicle, MMCA must either surrender
possession of the certificate of title or it will receive notice as a
result of its lien noted on the certificate of title and, as such, will
have an opportunity to require satisfaction of the receivable before
release of the lien. The servicer will be obligated to take appropriate
steps, at the servicer's expense, to maintain perfection of security
interests in the financed vehicles.
Under the laws of most states, including California and Texas,
liens for repairs performed on a motor vehicle and liens for certain unpaid
taxes take priority over even a perfected security interest in a financed
vehicle. The Internal Revenue Code of 1986, as amended, also grants
priority to certain federal tax liens over the lien of a secured party.
Federal law and the laws of some states permit the confiscation of motor
vehicles under certain circumstances if used in unlawful activities, which
may result in the loss of a secured party's perfected security interest in
the confiscated motor vehicle. With respect to each trust, MMCA will
represent to MART and MART will represent to the trust that the trust's
security interest in each financed vehicle is or will be prior to all other
present liens (other than tax liens and liens that arise by operation of
law) and security interests in, the financed vehicle. However, liens for
repairs or taxes, or the confiscation of a financed vehicle, could arise or
occur at any time during the term of a receivable. No notice will be given
to the trustee, certificateholders, and the indenture trustee or
noteholders in the event such a lien arises or confiscation occurs. Neither
MART nor the servicer will have any obligation to repurchase a receivable
as to which any of the aforementioned occurrences result in the trust
losing the priority of its security interest or its security interest in
such financed vehicle after the date a receivable is sold to the trust.
REPOSSESSION
In the event of default by a purchaser of a financed vehicle, the
holder of the retail installment sale contract has all the remedies of a
secured party under the Uniform Commercial Code, except where specifically
limited by other state laws. Under the Uniform Commercial Code, remedies of
a secured party include the right to repossession by self-help, unless
repossession would constitute a breach of the peace. Unless a vehicle is
voluntarily surrendered, self-help repossession is the method employed by
MMCA in the majority of instances in which a default occurs and is
accomplished simply by retaking possession of the financed vehicle. In
cases where the obligor objects or raises a defense to repossession, or if
otherwise required by applicable state law, a court order must be obtained
from the appropriate state court, and the vehicle must then be repossessed
in accordance with that order.
NOTICE OF SALE; REDEMPTION RIGHTS
In the event of default by an obligor, some jurisdictions require
that the obligor be notified of the default and be given a time period
within which the obligor may cure the default prior to repossession.
Generally, this right of reinstatement may be exercised on a limited number
of occasions in any one-year period.
The Uniform Commercial Code and other state laws require the
secured party to provide a defaulting obligor with reasonable notice of the
date, time, and place of any public sale and/or the date after which any
private sale of the collateral may be held. The obligor has the right to
redeem the collateral prior to actual sale by paying the secured party the
unpaid principal balance of the obligation plus reasonable expenses for
repossessing, holding, and preparing the collateral for disposition and
arranging for the sale, plus, in some jurisdictions, reasonable attorneys'
fees, or, in some states, by payment of delinquent installments or the
unpaid balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of a repossessed vehicle generally will be
applied first to the expenses of resale and repossession and then to the
satisfaction of the indebtedness of the obligor on the related receivable.
While some states impose prohibitions or limitations on deficiency
judgments, if the net proceeds from resale do not cover the full amount of
the indebtedness, a deficiency judgment can be sought in those states that
do not prohibit or limit such judgments. However, the deficiency judgment
would be a personal judgment against a defaulting obligor, who can be
expected to have very limited capital or income available following
repossession. Therefore, in many cases, it may not be useful to seek a
deficiency judgment or, if one is obtained, it may be settled at a
significant discount or not paid at all. MMCA generally seeks to recover
any deficiency existing after repossession and sale of a financed vehicle.
OBLIGOR'S RIGHT TO EXCESS PROCEEDS UPON SALE OF A FINANCED VEHICLE
Occasionally, after resale of a financed vehicle and payment of all
expenses and indebtedness, there is a surplus of funds. In that case, the
Uniform Commercial Code requires the lender to remit the surplus to any
holder of any lien with respect to the vehicle sold or if no such
lienholder exists or there are remaining funds, the Uniform Commercial Code
requires the lender to remit the surplus to the former obligor.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related
regulations impose substantial requirements upon lenders and servicers
involved in consumer finance. These laws include the Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Federal Trade Commission Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B and
Z, state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code, and state motor vehicle retail installment sales
acts, retail installment sales acts, and other similar laws. Also, state
laws impose finance charge ceilings and other restrictions on consumer
transactions and require contract disclosures in addition to those required
under federal law. Such requirements impose specific statutory liabilities
upon creditors who fail to comply with their provisions. In some cases,
this liability could affect an assignee's ability to enforce consumer
finance contracts such as the receivables.
The so-called holder-in-due-course rule of the Federal Trade
Commission, also known as the FTC rule, the provisions of which are
generally duplicated by the Uniform Consumer Credit Code, other state
statutes, or the common law in some states, has the effect of subjecting a
seller, and certain related lenders and their assignees, in a consumer
credit transaction and any assignee of the seller to all claims and
defenses which the buyer in a transaction could assert against the seller
of the goods. Liability under the FTC rule is limited to the amounts paid
by the buyer, and may result in the inability of the holder of the contract
to collect all or a portion of the balance remaining due from the buyer
under that contract. Most of the receivables will be subject to the
requirements of the FTC rule. Accordingly, the trust, as holder of the
related receivables, will be subject to any claims or defenses that a
purchaser of a financed vehicle may assert against the seller of the
financed vehicle. Such claims are limited to a maximum liability equal to
the amounts paid by the obligor on the receivable.
Under most state motor vehicle dealer licensing laws, sellers of
motor vehicles are required to be licensed to sell motor vehicles at retail
sale. Furthermore, Federal Odometer Regulations promulgated under the Motor
Vehicle Information and Cost Savings Act require that all sellers of new
and used vehicles furnish a written statement signed by the seller
certifying the accuracy of the odometer reading. If a seller is not
properly licensed or if an Odometer Disclosure Statement was not provided
to the purchaser of the related financed vehicle, the obligor may be able
to assert a defense against the seller of the vehicle. If an obligor were
successful in asserting one of these claims or defenses, it would
constitute a breach of MMCA's and MART's representations and warranties
under the purchase agreement and the sale and servicing agreement and would
create an obligation of MMCA and MART to repurchase the receivable unless
the breach is cured. See "The Sale and Servicing Agreement and the Trust
Agreement -- Sale and Assignment."
Courts have imposed general equitable principles on secured parties
pursuing repossession of collateral or litigation involving deficiency
balances. These equitable principles may have the effect of relieving an
obligor from some or all of the legal consequences of a default.
In several cases, obligors have asserted that the self-help
remedies of secured parties under the Uniform Commercial Code and related
laws violate the due process protections provided under the 14th Amendment
to the Constitution of the United States. Courts have generally upheld the
notice provisions of the Uniform Commercial Code and related laws as
reasonable or have found that the repossession and resale by the creditor
do not involve sufficient state action to afford constitutional protection
to consumers.
MMCA and MART will warrant that each receivable complies with all
requirements of law in all material respects. Accordingly, if an obligor
has a claim against the trust for violation of any law and such claim
materially and adversely affects the trust's interest in a receivable, the
violation would constitute a breach of warranty and would create an
obligation of MMCA and MART to repurchase the affected receivable unless
the breach is cured. See "The Sale and Servicing Agreement and the Trust
Agreement -- Mandatory Repurchase of Receivables."
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency
judgments, numerous other statutory provisions, including the United States
Bankruptcy Code and related state laws, may interfere with or affect the
ability of a lender to realize upon collateral or enforce a deficiency
judgment. For example, in a Chapter 13 proceeding under the United States
Bankruptcy Code, a court may prevent a lender from repossessing a motor
vehicle, and, as part of the rehabilitation plan, reduce the amount of the
secured indebtedness to the market value of the motor vehicle at the time
of bankruptcy, as determined by the court, leaving the lender as a general
unsecured creditor for the remainder of the indebtedness. A bankruptcy
court may also reduce the monthly payments due under a contract or change
the rate of interest and time of repayment of the indebtedness.
FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a summary of some of the United States federal
income tax consequences of the purchase, ownership and disposition of the
notes. This discussion is based upon current provisions of the tax code,
existing and proposed Treasury regulations under the tax code, current
administrative rulings, judicial decisions and other applicable authorities
in effect as of the date of this prospectus, all of which are subject to
change, possibly with retroactive effect. There can be no assurance that
the IRS will not challenge the conclusions reached in this prospectus, and
no ruling from the IRS has been or will be sought on any of the issues
discussed below.
This summary does not purport to deal with all aspects of federal
income taxation that may be relevant to beneficial owners of notes in light
of their personal investment circumstances nor, except for some limited
discussions of particular topics, to some types of beneficial owners of
notes subject to special treatment under the federal income tax laws (e.g.,
financial institutions, broker-dealers, life insurance companies and
tax-exempt organizations). This information is directed to beneficial
owners who hold the notes as "capital assets" within the meaning of Section
1221 of the tax code.
TAX TREATMENT OF THE NOTES AND THE TRUST UNDER FEDERAL INCOME TAX LAW
Tax Status of the Notes and the Trust. On the Closing Date,
Skadden, Arps, Slate, Meagher & Flom LLP will render its opinion that for
federal income tax purposes under existing law, subject to customary
assumptions and qualifications:
o the notes will be treated as debt; and
o the trust will not be classified as an association or a
publicly traded partnership taxable as a corporation.
MART, the owner trustee and the indenture trustee have agreed, and the
noteholders will agree by their purchase of notes, to treat the notes for
federal, state and local income and franchise tax purposes as indebtedness
of the trust.
Stated Interest. Stated interest on the notes will be taxable as
ordinary income for federal income tax purposes when received or accrued in
accordance with a beneficial owner's method of tax accounting.
Original Issue Discount. A note will be treated as issued with
original issue discount or "OID" if the excess of the note's "stated
redemption price at maturity" over the issue price equals or exceeds a de
minimis amount equal to 1/4 of 1 percent of the note's stated redemption
price at maturity multiplied by the number of complete years to its
maturity based on the anticipated weighted average life of a note.
In general, OID, if any, will equal the difference between the
stated redemption price at maturity of a note and its issue price. A holder
of a note must include OID in gross income as ordinary interest income as
it accrues under a method taking into account an economic accrual of the
discount. In general, OID must be included in income in advance of the
receipt of the cash representing that income. The amount of OID on a note
will be considered to be zero if it is less than a de minimis amount
determined as described above.
The issue price of a note will generally be the initial offering
price at which a substantial amount of the notes are sold. The trust
intends to treat the issue price as including, in addition, the amount paid
by the noteholder for accrued interest that relates to a period prior to
the Closing Date. The stated redemption price at maturity generally will
equal the principal amount of the Note.
The holder of a note issued with OID must include in gross income
for each taxable year the OID accrued for each day during its taxable year
on which it holds the note. The daily portions are determined by
calculating the OID for the accrual period and then allocating to each day
a pro rata portion of the OID that accrued during the accrual period. The
trust intends to report OID on the basis of an accrual period that
corresponds to the interval between payment dates.
OID on the notes will be computed by taking into account the
anticipated rate of prepayments assumed in pricing the notes, which will be
1.30% ABS. The amount of OID that will accrue during an accrual period will
equal:
o the present value of all payments remaining to be made on
the note as of the close of the accrual period, plus the
payments during the accrual period of amounts included in
the stated redemption price of the note, minus
o the "adjusted issue price" of the note at the beginning of
the accrual period.
The adjusted issue price of a note is the sum of its issue price
plus prior accruals of OID, reduced by the total payments made with respect
to the note in all prior periods, other than qualified stated interest
payments. The present value of the remaining payments is determined on the
basis of three factors:
o the original yield to maturity of the note, determined on
the basis of compounding at the end of each accrual period
and properly adjusted for the length of the accrual period,
o events which have occurred before the end of the accrual
period and
o the assumption that the remaining payments will be made in
accordance with the original assumption.
The effect of this method is to increase the rate at which a
noteholder includes OID in income to take into account prepayments on the
receivables at a rate that exceeds the anticipated rate of prepayments, and
to decrease (but not below zero) for any period the rate at which a
noteholder includes OID in income to take into account prepayments with
respect to the receivables at a rate that is slower than the anticipated
rate of prepayments. Although OID will be reported to noteholders based on
the anticipated rate of prepayments, no representation is made to
noteholders that receivables will be prepaid at that rate or at any other
rate.
A holder of a note that acquires the note for an amount that
exceeds its stated redemption price will not include any OID in gross
income. A holder of a note which acquires the notes for an amount that is
less than its stated redemption price will be required to include OID in
gross income, but a subsequent holder who purchases a note for an amount
that exceeds its adjusted issue price will be entitled, as will an initial
holder who pays more than a note's issue price, to reduce the amount of OID
included in income in each period by the amount of OID multiplied by a
fraction, the numerator of which is:
o the purchaser's adjusted basis in the note immediately after
purchase thereof minus
o the adjusted issue price of the note;
and the denominator of which is:
o all amounts remaining to be paid on the note after the
purchase date, other than qualified stated interest, minus
o the adjusted issue price of the note.
Total Accrual Election. As an alternative to separately accruing
stated interest, OID, de minimis OID, market discount, de minimis market
discount, unstated interest, premium, and acquisition premium, a holder of
a note may elect to include all income that accrues on the note using the
constant yield method. If a noteholder makes this election, income on a
note will be calculated as though:
o the issue price of the note were equal to the noteholder's
adjusted basis in the note immediately after its acquisition
by the noteholder;
o the note were issued on the noteholder's acquisition date;
and
o none of the interest payments on the note were "qualified
stated interest."
A noteholder may make this election for a note that has premium or market
discount, respectively, only if the noteholder makes, or has previously
made, an election to amortize bond premium or to include market discount in
income currently. See "--Market Discount" and "--Amortizable Bond Premium."
Market Discount. The notes, whether or not issued with OID, will be
subject to the market discount rules of the tax code. In general, these
rules provide that if the beneficial owner purchases a note at a discount
(if the discount exceeds a de minimis amount specified in the tax code)
from its stated redemption price at maturity or, if the notes were issued
with OID, its adjusted issue price, and thereafter (1) recognizes gain upon
a disposition, or (2) receives payments of principal, the lesser of (x) the
gain or principal payment or (y) the accrued market discount will be taxed
as ordinary interest income and not as capital gain. Generally, the accrued
market discount will be the total market discount on the note multiplied by
a fraction equal to:
o the number of days the beneficial owner held the note,
divided by
o the number of days from the date the beneficial owner
acquired the note until its maturity date.
The beneficial owner may elect, however, to determine accrued market
discount under the constant yield method.
Limitations imposed by the tax code which are intended to match
deductions with the taxation of income may defer deductions for interest on
indebtedness incurred or continued, or short-sale expenses incurred, to
purchase or carry a note with market discount. A beneficial owner of a note
may elect to include market discount in gross income as it accrues and, if
it makes this election, is exempt from this rule. This election will apply
to all debt instruments acquired by the taxpayer on or after the first day
of the first taxable year to which the election applies. The adjusted basis
of a note subject to the election will be increased to reflect market
discount included in gross income, thereby reducing any gain or increasing
any loss on a sale or other taxable disposition.
Amortizable Bond Premium. In general, if a beneficial owner of a
note purchases a note at a premium-that is, an amount in excess of the
amount payable upon the maturity of that note-that beneficial owner will be
considered to have purchased the note with "amortizable bond premium" equal
to the amount of the excess. The beneficial owner of a note may elect to
amortize bond premium as an offset to interest income, and not as a
separate deduction item, as it accrues under a constant yield method over
the remaining term of the note. That beneficial owner's tax basis in the
note will be reduced by the amount of the amortized bond premium. Any
election will apply to all debt instruments, other than instruments the
interest on which is excludible from gross income, held by that beneficial
owner at the beginning of the first taxable year for which the election
applies or later acquired, and cannot be revoked without the consent of the
IRS. Bond premium on a note held by a beneficial owner who does not elect
to amortize the premium will decrease the gain or increase the loss
otherwise recognized on the disposition of the note.
Disposition of Notes. A beneficial owner of a note's adjusted tax
basis will be its cost, increased by the amount of any OID, market discount
and gain previously included in income with respect to the note, and
reduced by the amount of any payment on the note that is not qualified
stated interest and the amount of bond premium previously amortized with
respect to the note. A beneficial owner will generally recognize gain or
loss on the sale or retirement of a note equal to the difference between
the amount realized on the sale or retirement and the tax basis of the
note. The gain or loss will be capital gain or loss-except to the extent
attributable to OID not previously accrued, accrued but unpaid interest, or
as described above under "--Market Discount"-and will be long-term capital
gain or loss if the note was held for more than one year. In addition, if
the prepayable obligation rules apply, any OID that has not accrued at the
time of the payment in full of a note will be treated as ordinary income.
FEDERAL TAX CONSEQUENCES OF WAIVERS OF EVENTS OF DEFAULT AND AMENDMENTS OF
NOTES BY NOTEHOLDERS
The indenture permits the noteholders to waive an event of default
under the indenture or rescind an acceleration of the notes in some
circumstances upon a vote of the requisite percentage of noteholders. Any
waiver or rescission under the indenture, or any amendment of the terms of
the notes, could be treated for federal income tax purposes as a
constructive exchange by a noteholder of the notes for new notes, upon
which gain or loss would be recognized.
INFORMATION REPORTING AND BACKUP WITHHOLDING OF TAXES BY INDENTURE TRUSTEE
The indenture trustee will be required to report annually to the
IRS, and to each beneficial owner of a note, the amount of interest paid on
the notes and the amount withheld for federal income taxes for each
calendar year, except as to exempt recipients which are generally
corporations, tax-exempt organizations, qualified pension and
profit-sharing trusts, individual retirement accounts, or nonresident
aliens who provide certification as to their status. Each beneficial owner
of note, other than beneficial owners who are not subject to the reporting
requirements will be required to provide, under penalties of perjury, a
certificate containing the beneficial owner's name, address, correct
federal taxpayer identification number-which includes a social security
number-and a statement that the beneficial owner is not subject to backup
withholding. Should a non-exempt beneficial owner fail to provide the
required certification or should the IRS notify the indenture trustee or
the trust that the beneficial owner has provided an incorrect federal
taxpayer identification number or is otherwise subject to backup
withholding, the indenture trustee will be required to withhold, or cause
to be withheld, 31% of the interest otherwise payable to the beneficial
owner, and remit the withheld amounts to the IRS as a credit against the
beneficial owner's federal income tax liability.
TAX CONSEQUENCES TO FOREIGN INVESTORS
The following information describes the U.S. federal income tax
treatment of investors that are not U.S. persons, which are any persons
other than:
o citizens or residents of the United States;
o corporations, partnerships or other entities treated as
corporations or partnerships for United States federal
income tax purposes organized in or under the laws of the
United States, any state or the District of Columbia,
unless, in the case of a partnership or entity treated as a
partnership, Treasury regulations provide otherwise;
o estates the income of which is includible in gross income
for U.S. federal income tax purposes, regardless of source;
or
o trusts if a U.S. court is able to exercise primary
supervision over the administration of the trusts and one or
more U.S. persons has authority to control all substantial
decisions of the trust.
Interest paid or accrued to a non-U.S. person that is not
effectively connected with the conduct of a trade or business within the
United States by the non-U.S. person will generally be considered
"portfolio interest" and generally will not be subject to U.S. federal
income tax and withholding tax, as long as the non-U.S. person:
o is not actually or constructively a "10 percent shareholder"
of the trust or a "controlled foreign corporation" with
respect to which the trust is a "related person" within the
meaning of the tax code, and
o provides an appropriate statement, signed under penalties of
perjury, certifying that the beneficial owner of a note is a
non-U.S. person and providing that non-U.S. person's name
and address.
If the information provided in this statement changes, the
non-U.S. person must so inform the indenture trustee within 30 days of the
change. The statement generally must be provided in the year a payment
occurs or in either of the two preceding years. If the interest were not
portfolio interest, then it would be subject to U.S. federal income and
withholding tax at a rate of 30 percent unless reduced or eliminated under
an applicable income tax treaty.
Any capital gain realized on the sale or other taxable disposition
of a note by a non-U.S. person will be exempt from U.S. federal income and
withholding tax, provided that:
o the gain is not effectively connected with the conduct of a
trade or business in the United States by the non-U.S.
person, and
o in the case of an individual non-U.S. person, the non-U.S.
person is not present in the United States for 183 days or
more in the taxable year and several other requirements are
met.
If the interest, gain or income on a note held by a non-U.S. person
is effectively connected with the conduct of a trade or business in the
United States by the non-U.S. person, the beneficial owner of a note,
although exempt from the withholding tax previously discussed if a duly
executed Form 4224 is furnished, generally will be subject to U.S. federal
income tax on the interest, gain or income at regular federal income tax
rates. In addition, if the non-U.S. person is a foreign corporation, it may
be subject to a branch profits tax under the tax code equal to 30 percent
of its "effectively connected earnings and profits" for the taxable year,
as adjusted for specified items, unless it qualified for a lower rate under
an applicable tax treaty.
Recent Treasury regulations could affect the procedures to be
followed by a non-U.S. person in complying with the United States federal
withholding, backup withholding, and information reporting rules. The
regulations will generally be effective for payments made after December
31, 2000. Prospective investors are advised to consult their own tax
advisors regarding the effect, if any, of the regulations on the purchase,
ownership and disposition of the notes.
STATE TAX CONSEQUENCES
Set forth below is a summary of some of the state income tax
consequences of the purchase, ownership and disposition of the notes.
Because of the variation in each state's income tax laws, it is impossible
to predict tax consequences to noteholders in all states. Noteholders are
urged to consult their tax advisors with respect to state tax consequences
arising out of the purchase, ownership and disposition of the notes.
The trust has been organized as a Delaware business trust, and MART
and the servicer are headquartered in the State of California. In the
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, assuming that the
notes are treated as debt for federal income tax purposes:
o the notes will be treated as debt for Delaware and
California income and franchise tax purposes,
o the trust will not be subject to Delaware or California
income or franchise taxes at the entity level, and
o noteholders not otherwise subject to taxation in California
or Delaware, respectively, would not become subject to
taxation in California or Delaware, respectively, solely
because of a noteholder's ownership of a note.
THE FEDERAL AND STATE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
NOTEHOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF
ACQUIRING, HOLDING AND DISPOSING OF NOTES, INCLUDING THE TAX CONSEQUENCES
UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF
CHANGES IN FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended,
and the tax code impose restrictions on:
o employee benefit plans (as defined in Section 3(3) of
ERISA);
o plans described in Section 4975(e)(1) of the tax code,
including individual retirement accounts or Keogh Plans;
o any entities whose underlying assets include plan assets by
reason of a plan's investment in those entities; and
o persons who have specified relationships to one of the
benefit plans described in the preceding clauses, who are
called "Parties-in-Interest" under ERISA and "Disqualified
Persons" under the tax code.
In addition, the general account of an insurance company may be
deemed to include assets of employee benefit plans investing in its general
account and the insurance company might be treated as a Party-in-Interest
with respect to an employee benefit plan by virtue of that type of
investment. ERISA also imposes duties on persons who are fiduciaries of
employee benefit plans subject to ERISA.
ERISA and the tax code prohibit some transactions between a
employee benefit plan and Parties-in-Interest or Disqualified Persons with
respect to that employee benefit plan. A violation of these prohibited
transaction rules may give rise to the imposition of an excise tax under
the tax code or the imposition of a civil penalty under ERISA on all
parties to the transaction, other than the employee benefit plan but
including the person who caused the employee benefit plan to engage in the
transaction, and may give rise to the obligation to correct the prohibited
transaction, unless a statutory, regulatory or administrative exemption is
available.
SPECIAL ERISA CONSIDERATIONS FOR EMPLOYEE BENEFIT PLANS
If assets of the trust were deemed to be assets of an employee
benefit plan for purposes of ERISA and the tax code, some transactions
involving the trust might be deemed to constitute prohibited transactions.
Under a regulation issued by the United States Department of Labor relating
to assets of employee benefit plans, the assets of the trust would be
treated as plan assets of an employee benefit plan that invested in the
trust for purposes of ERISA and the tax code if the employee benefit plan
acquires an "Equity Interest" in the trust and none of the exceptions
contained in the regulation is applicable.
Under this regulation, a security is treated as Equity Interest
only if it is not treated as a debt security under applicable local law or
it has substantial equity features. Although there is very little direct
guidance from the Department of Labor on this point, because the notes (1)
are expected to be treated as indebtedness under local law and will, in the
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, be treated as debt,
rather than equity, for federal tax purposes (see "Federal Income Tax
Consequences"), and (2) should not be deemed to have any "substantial
equity features," the notes should not be treated as an Equity Interest for
purposes of the plan assets regulation. This conclusion is based, in part,
upon the traditional debt features of the notes, including the reasonable
expectation of purchasers of the notes that the notes will be repaid when
due, as well as the absence of conversion rights, warrants and other
typical equity features.
Whether or not the notes are treated as an Equity Interest, if an
employee benefit plan acquires the notes, a prohibited transaction could
arise if the trust, the owner trustee, the indenture trustee, any holder of
the certificates or any of their respective affiliates, is or becomes a
Party in Interest or a Disqualified Person with respect to that employee
benefit plan. These prohibited transactions may, however, be eligible for
an exemption from the liabilities that would otherwise be applicable under
ERISA and the tax code. The availability of one or more of these exemptions
will generally depend on the type of employee benefit plan fiduciary making
the decision to acquire a note. Included among these exemptions are:
o Prohibited Transaction Class Exemption 90-1, regarding
investments by insurance company pooled separate accounts;
o Prohibited Transaction Class Exemption 91-38, regarding
investments by bank collective investment funds;
o Prohibited Transaction Class Exemption 84-14, regarding
transactions effected by "qualified professional asset
managers;"
o Prohibited Transaction Class Exemption 95-60, regarding
investments by insurance company general accounts; and
o Prohibited Transaction Class Exemption 96-23, regarding
investments effected by "in-house asset managers."
A violation of the prohibited transaction rules may result in the
imposition of an excise tax and other liabilities under ERISA and the tax
code unless one or more statutory, regulatory or administrative exemptions
is available. Each benefit plan and each government plan subject to a
federal, state or local law substantially similar to ERISA, by its
acceptance of a note, will be deemed to represent that an exemption applies
to its acquisition, holding and disposition of the note.
SPECIAL ERISA CONSIDERATIONS APPLICABLE TO INSURANCE COMPANY GENERAL ACCOUNTS
Investors should note that special rules are applicable to the
assets of insurance company general accounts under ERISA and Section 4975
of the tax code. The Department of Labor is required to issue final
regulations with respect to insurance policies issued on or before December
31, 1998 that are supported by an insurer's general account. The
regulations are to provide guidance on which assets held by the insurer
constitute "plan assets" for purposes of the fiduciary responsibility
provisions of ERISA and Section 4975 of the tax code. These rules also
provide that, until the date that is 18 months after the regulations become
final, no person will be subject to liability under the fiduciary
responsibility and prohibited transaction provisions of ERISA and Section
4975 of the tax code on the basis of a claim that the assets of the general
account of an insurance company constitute the assets of any plan. This
exception does not apply to actions intended to avoid the application of
the regulation or to actions brought by the Secretary of Labor relating to
specified breaches of fiduciary duties that also constitute breaches of
state or federal criminal law. The plan asset status of insurance company
separate accounts is unaffected by these new rules and separate account
assets continue to be treated as the assets of any plan invested in the
separate account. Insurance companies should consult with their counsel
regarding the potential impact of these new rules on their purchase of
notes.
As of the date of this prospectus, the Department of Labor has
issued only proposed regulations. If the regulations are adopted
substantially in the form in which proposed, the regulations may not exempt
the assets of insurance company general accounts from treatment as "plan
assets" of plans holding policies issued after December 31, 1998. The
proposed regulations should not, however, adversely affect the
applicability of Prohibited Transaction Class Exemption 95-60 to purchases
of notes.
GENERAL INVESTMENT CONSIDERATIONS FOR EMPLOYEE BENEFIT PLANS
Prior to making an investment in the notes, prospective benefit
plan investors should consult with their legal advisors concerning the
impact of ERISA and the tax code and the potential consequences of that
investment with respect to their specific circumstances. In this regard,
each employee benefit plan fiduciary should take into account, among other
considerations:
o whether the fiduciary has the authority to make the
investment;
o the composition of the benefit plan's portfolio with respect
to diversification by type of asset;
o the benefit plan's funding objectives;
o the tax effects of the investment; and
o whether under the general fiduciary standards of investment
prudence and diversification an investment in the notes is
appropriate for the benefit plan, taking into account the
overall investment policy of the benefit plan and the
composition of the benefit plan's investment portfolio.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
agreement, MART has agreed to sell to each of the underwriters named below
in this paragraph, and each of the underwriters, for whom Credit Suisse
First Boston Corporation is acting as representative, has severally agreed
to purchase from MART, the principal amount of the notes set forth opposite
its name below:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT AMOUNT AMOUNT AMOUNT
OF CLASS A-1 OF CLASS A-2 OF CLASS A-3 OF CLASS B
UNDERWRITERS NOTES NOTES NOTES NOTES
- ------------ ------------ ------------ ------------ -----------
Credit Suisse First Boston
<S> <C> <C> <C> <C>
Corporation.......................... $ $ $ $62,000,000
J. P. Morgan Securities Inc.......... 0
Salomon Smith Barney Inc............. 0
------------ ------------ ------------ -----------
Total................................ $326,000,000 $210,000,000 $142,000,000 $62,000,000
============ ============ ============ ===========
</TABLE>
In the underwriting agreement, the several underwriters have agreed,
subject to the terms and conditions set forth in the underwriting
agreement, to purchase all the notes offered hereby if any of the notes are
purchased. In the event of a default under the underwriting agreement by
any underwriter, the underwriting agreement provides that, in some
circumstances, purchase commitments of the non-defaulting underwriters may
be increased or the underwriting agreement may be terminated.
The underwriting discounts and commissions of the underwriters, the
selling concessions that the underwriters may allow to some dealers and the
discounts that some dealers may reallow to some other dealers, each
expressed as a percentage of the principal amount of the Class A-1 notes,
the Class A-2 notes, the Class A-3 notes and the Class B notes, will be as
follows:
<TABLE>
<CAPTION>
UNDERWRITING
DISCOUNTS AND NET PROCEEDS SELLING
COMMISSIONS TO THE SELLER CONCESSIONS REALLOWANCE
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Class A-1 notes................ % % % %
Class A-2 notes................ % % % %
Class A-3 notes................ % % % %
Class B notes.................. % % % %
Total for all of the
notes.................... $ $
</TABLE>
The transaction expenses payable by MART are estimated to be $ .
The representative of the underwriters has informed MART that it
does not expect discretionary sales by the underwriters to exceed 5% of the
principal amount of the notes being offered hereby.
The underwriters may engage in over-allotment, stabilizing
transactions, syndicate covering transactions and penalty bids in
accordance with Regulation M of the Securities Exchange Act of 1934, as
amended. Over- allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position. Stabilizing transactions
permit bids to purchase the underlying security so long as the stabilizing
bids do not exceed a specified maximum. Syndicate covering transactions
involve purchases of the securities in the open market after the
distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the underwriters to reclaim a selling
concession from a syndicate member when the securities originally sold by
such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the
securities to be higher than it would be in the absence of such
transactions.
The closing of the sale of the notes is conditioned on the issuance
of the certificates.
The indenture trustee may, from time to time, invest the funds in
the trust accounts in investments permitted by the sale and servicing
agreement acquired from the underwriters.
In the ordinary course of business, the underwriters and their
affiliates have engaged and may engage in investment banking and commercial
banking transactions with the servicer and its affiliates.
MMCA and MART have agreed to indemnify the underwriters against
specified liabilities, including liabilities under the Securities Act of
1933, as amended, or to contribute to payments the underwriters may be
required to make in respect thereof.
Upon receipt of a request by an investor who has received an
electronic prospectus from an underwriter or a request by the investor's
representative within the period during which there is an obligation to
deliver a prospectus, MART or the underwriters will promptly deliver, or
cause to be delivered, without charge, a paper copy of the prospectus.
LEGAL OPINIONS
The validity of the notes and federal income tax matters will be
passed upon for MART by Skadden, Arps, Slate, Meagher & Flom LLP, New York,
New York. Brown & Wood LLP, San Francisco, California, will act as counsel
to the underwriters.
REPORTS TO NOTEHOLDERS
Unless and until definitive notes are issued under the limited
circumstances described under "Terms of the Notes-Issuance of Definitive
Notes Upon the Occurrence of Various Circumstances," all notices, reports
and statements to noteholders, including any monthly and annual reports
concerning the trust and the receivables, will be prepared by the servicer
and sent on behalf of the trust only to DTC or Cede & Co. as nominee of DTC
and registered holder of the notes. See "Terms of the Notes-Principal
Amount and Interest Rates," "-Book Entry Registration" and "-Issuance of
Definitive Notes Upon the Occurrence of Various Circumstances." Those
notices, reports and statements will not contain audited financial
statements with respect to the trust. The servicer also does not intend to
send any financial reports of the servicer or MART to noteholders.
WHERE YOU CAN FIND MORE INFORMATION
MART, as originator of the trust, filed with the Securities and
Exchange Commission a registration statement under the Securities Act of
1933 relating to the notes. This prospectus is part of the registration
statement, but the registration statement includes additional information,
including forms of some of the agreements discussed in this prospectus.
The servicer, on behalf of MART in its capacity as originator of the
trust, will file or cause to be filed with the Securities and Exchange
Commission periodic reports with respect to the trust as may be required
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission.
You may read and copy any notices, reports, statements or other
information the servicer files or causes to be filed at the Securities and
Exchange Commission's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can request copies of these documents, upon
payment of a duplicating fee, by writing to the Securities and Exchange
Commission. Please call the Securities and Exchange Commission at (800)
SEC-0330 for further information on the operation of the public reference
rooms. Our filings with the Securities and Exchange Commission are also
available to the public without charge on the Securities and Exchange
Commission's Internet site (http://www.sec.gov), which contains reports,
proxy and information statements, and other information regarding issuers
that file publicly with the Securities and Exchange Commission.
GLOSSARY
"Accrued Note Interest" means, with respect to any payment date and
each class of notes, the sum of the Monthly Accrued Note Interest and the
Interest Carryover Shortfall for the class for that payment date.
"Actuarial Receivables" means receivables which provide for
amortization of the loan over a series of fixed level monthly installments.
Each monthly installment, including the monthly installment representing
the final payment on the receivable, consists of an amount of interest
equal to 1/12 of the annual percentage rate of the loan multiplied by the
scheduled principal balance of the receivable, and an amount of principal
equal to the remainder of the monthly installment.
"Available Funds" means, with respect to a payment date:
(1) an amount equal to the sum of the following amounts with
respect to the preceding calendar month:
o all collections on the contracts, including amounts withdrawn
from the payahead account;
o the proceeds of sale by the trust of any financed vehicle
sold by the trust upon termination of a Balloon Payment
Receivable;
o all proceeds of the liquidation of receivables which became
defaulted receivables during the preceding calendar month,
net of expenses incurred by the servicer in connection with
such liquidation and any amounts required by law to be
remitted to the obligor on any defaulted receivable;
o any recoveries in respect of contracts that became defaulted
in prior calendar months;
o all extension and deferral fees paid with respect to the
contracts;
o the purchase amount of each receivable purchased from the
trust during or before the preceding calendar month, net of
applicable expenses;
o all advances made by the servicer;
o the Yield Supplement Amount for that payment date;
o the Negative Carry Amount for that payment date;
o partial prepayments of any refunded item included in the
principal balance of a contract, such as extended warranty
protection plan costs, or physical damage, credit life,
disability insurance premiums, or any partial prepayment
which causes a reduction in the obligor's periodic payment to
an amount below the scheduled payment as of the related
cutoff date;
o the net earnings on funds on deposit in the pre-funding
account to the extent deposited to the collection account on
that payment date by the indenture trustee; and
o with respect to the payment date on or immediately following
the last day of the Pre-Funding Period, any funds remaining
in the pre-funding account, calculated after giving effect to
the purchase of all receivables purchased by the trust during
the Pre-funding Period,
minus
(2) the aggregate amount of the funds described in clause (1)
above that are used in the related calendar month to
reimburse servicer advances that are due and payable on that
payment date.
"Balloon Payment" means, with respect to a Balloon Payment
Receivable, the final payment which is due at the end of the term of the
receivable.
"Balloon Payment Receivable" means a receivable that provides for
the amortization of the entire amount financed under the receivable to one
substantially larger final payment which is due at the end of the term of
the receivable.
"Closing Date" means October __ , 1999.
"Cutoff Date" means, (A) with respect to receivables transferred to
the trust on the Closing Date, October 1, 1999, and (B) with respect to
receivables transferred to the trust after the Closing Date and during the
Pre- Funding Period, the date, which will be on or before the date of
transfer, as of which the trust will be entitled to collections of the
receivables transferred on that date.
"Initial Pool Balance" means the sum of (a) the principal balance of
the receivables pool as of October 1, 1999, plus (b) the aggregate
principal balance of all contracts transferred to the trust after that
date, calculated as of their respective Cutoff Dates.
"Interest Carryover Shortfall" means, with respect to any payment
date and any class of notes, the excess of the sum of the Monthly Accrued
Note Interest for the preceding payment date and any outstanding Interest
Carryover Shortfall from the close of business on the preceding payment
date, over the amount in respect of interest that is actually deposited in
the note payment account on the preceding payment date with respect to that
class, plus interest on the excess, to the extent permitted by law, at the
applicable note interest rate for the related interest period.
"Maximum Negative Carry Amount" means, as of any date of
determination, the product of (1) the Weighted Average Rate as of such date
minus 2.50%, multiplied by (2) the product of the Note Percentage as of
such date and the pre-funded amount as of such date after giving effect to
any withdrawals from the pre-funding account on such date, multiplied by
(3) the percentage equivalent of a fraction, the numerator of which is the
actual number of days until the expected end of the Pre-Funding Period and
the denominator of which is 360.
"Maximum Supplemental Reserve Amount" with respect to any payment
date will be an amount equal to the lesser of:
(1) the sum of (x) $ , which is 2.00% of the aggregate principal
balance of the receivables sold to the trust on the Closing
Date, calculated as of the Cutoff Date, and (y) 2.00% of the
principal balances of the receivables transferred to the
trust after the Closing Date, but on or before that payment
date, calculated as of the related Cutoff Dates; and
(2) an amount equal to (x) the outstanding principal amount of
the notes on that payment date, after giving effect to any
principal payment made on that payment date less (y) the
amount on deposit in the reserve account on that payment
date, after giving effect to all deposits and withdrawals
from the reserve account on that payment date.
"MART" means MMCA Auto Receivables Trust.
"Mitsubishi Motors" means Mitsubishi Motors Corporation and its
affiliates.
"MMCA" means Mitsubishi Motors Credit of America, Inc.
"MMSA" means Mitsubishi Motor Sales of America, Inc.
"Monthly Accrued Note Interest" means, with respect to any payment
date and (a) any class of notes, interest accrued for the related interest
period at the applicable interest rate for that class on the aggregate
principal balance of the notes of that class as of the immediately
preceding payment date, after giving effect to all payments of principal to
noteholders on or before that preceding payment date, or, in the case of
the first payment date, the initial principal amount of the notes; and (b)
the notes collectively, the sum of Monthly Accrued Note Interest for each
class.
"Negative Carry Amount" will be calculated by the servicer for any
payment date as the difference (if positive) between (1) the product of (a)
the Monthly Accrued Note Interest for that payment date, multiplied by (b)
the Pre-Funded Percentage as of the immediately preceding payment date, or
in the case of the first payment date, the Closing Date, minus (2) the net
investment earnings on the pre-funded amount for the related collection
period (or in the case of the first payment date, from the Closing Date
until October 31, 1999).
"Note Percentage" means, as of any payment date, the percentage
equivalent of a fraction, the numerator of which is the aggregate principal
amount of the notes as of that payment date, and the denominator of which
is an amount equal to the sum of the aggregate principal amount of the
notes as of that payment date and aggregate principal amount of the
certificates as of that payment date, in each case after giving effect to
any payment of principal of that payment date.
"Pre-Funded Percentage" means, as of any date of determination, the
percentage equivalent of a fraction, the numerator of which is the
pre-funded amount and the denominator of which is the sum of the principal
balance of the receivables pool and the pre-funded amount, in each case as
of that date after taking into account all withdrawals from the pre-funding
account and all transfers of contracts transferred to the trust after the
Closing Date on or before that date.
"Pre-Funding Period" means a period beginning on the Closing Date
and ending on the earliest of (a) the last day of the collection period on
which the pre-funded amount (after giving effect to any transfers therefrom
in connection with the transfer of receivables to the trust after the
Closing Date and on or before such date) is less than $100,000, (b) the
date on which an event of default or an event of servicing termination
occurs, (c) the date on which an insolvency event occurs with respect to
the seller or the servicer and (d) the close of business on March 31, 2000.
"Principal Carryover Shortfall" means, as of the close of business
on any payment date, the excess of the Principal Distribution Amount and
any outstanding Principal Carryover Shortfall from the preceding payment
date over the amount in respect of principal that is actually deposited in
the note payment account on that payment date.
"Principal Distribution Amount" means, with respect to any payment
date, the sum of:
o the Scheduled Principal for that payment date, including, in
the case of a Balloon Payment Receivable, the amount owed by
an obligor with respect to a Balloon Payment;
o any outstanding Principal Carryover Shortfall as of the close
of business on the preceding payment date; and
o with respect to the payment date on or immediately following
the end of the Pre-Funding Period, any funds remaining in the
pre-funding account, after giving effect to the purchase of
all contracts transferred to the trust after the Closing
Date, including any purchase on the last day of the Pre-
Funding Period, exclusive of any net earnings from the
investment of funds on deposit in the pre- funding account.
However, the Principal Distribution Amount shall not exceed the outstanding
aggregate principal balance of the notes; and provided further, that, on
the final payment date for each class of notes, the principal required to
be deposited in the note payment account will include the amount necessary,
after giving effect to the other amounts to be deposited in the note
payment account on that payment date and allocable to principal, to reduce
the outstanding principal amount of that class of notes to zero.
"Required Negative Carry Account Balance" means, as of any payment
date, an amount equal to the lesser of (x) the initial deposit into the
negative carry account minus all previous withdrawals of the Negative Carry
Amount from the negative carry account, including any withdrawals of the
Negative Carry Amount from that account on that payment date and (y) the
Maximum Negative Carry Amount as of that payment date. If the amount on
deposit in the negative carry account on any payment date, after giving
effect to the withdrawal of the Negative Carry Amount, if any, for that
payment date, is greater than the Required Negative Carry Account Balance,
the excess will be released to MART. All amounts remaining on deposit in
the negative carry account on the payment date on or immediately following
the last day of the Pre-Funding Period, after giving effect to all
withdrawals from that account on that payment date for deposit to the
collection account on that payment date, will be released to MART.
"Scheduled Principal" means, with respect to any payment date, the
sum of:
(1) (A) collections of principal of Simple Interest Receivables
received during the related calendar month, including
collections of principal attributable to Balloon Payment
Receivables-unless an advance has previously been made with
respect to the Balloon Payment-and charges for excess wear
and tear and excess mileage and (B) advances made on that
payment date with respect to Balloon Payments on Simple
Interest Receivables that are Balloon Payment Receivables;
(2) the principal portion of each scheduled payment, including a
Balloon Payment Receivable, due on any Actuarial Receivable
during the related calendar month;
(3) without duplication of amounts taken into account under (1)
or (2), the outstanding principal balance of (A) contracts
prepaid in full during the related calendar month, and (B)
contracts which became defaulted during the related calendar
month;
(4) the purchase amount of each contract that was repurchased by
MART or purchased by the servicer during that calendar month,
to the extent attributable to principal;
(5) the proceeds of any other sale of a receivable to the extent
allocable to principal; and
(6) partial prepayments attributable to any refunded item
included in the amount financed, such as extended warranty
protection plan costs or physical damage, credit life,
disability insurance premiums, or any partial prepayment
which causes a reduction in the obligor's periodic payment to
be below the scheduled payment as of the related Cutoff Date;
provided, however, that in calculating the Scheduled Principal, (A) all
payments and proceeds, including liquidation proceeds, of any purchased
contracts the purchase amount of which has been included in Scheduled
Principal in a prior collection period, which shall be paid to MART or the
servicer, as applicable, and (B) all amounts released from the pre-funding
account will be excluded.
"Simple Interest Receivables" are receivables that provide for the
amortization of the amount financed under each receivable over a series of
fixed level monthly installments. However, unlike the monthly installment
under an Actuarial Receivable, each monthly installment consists of an
amount of interest which is calculated on the basis of the outstanding
principal balance of the receivable multiplied by the stated annual
percentage rate and further multiplied by the period elapsed, as a fraction
of a calendar year, since the preceding payment of interest was made. As
payments are received under a Simple Interest Receivable, the amount
received is applied first to interest accrued to the date of payment and
the balance is applied to reduce the unpaid principal balance.
"Specified Reserve Balance" means, with respect to any payment date,
an amount equal to the lesser of:
(1) the sum of (x) $ , which is 0.75% of the aggregate principal
balance of the contracts transferred to the trust on October
, 1999, calculated as of October 1, 1999, and (y) 0.75% of
the principal balances of contracts transferred to the trust
after that date on or before that payment date, calculated as
of the related Cutoff Dates; and
(2) the outstanding principal amount of the notes on that payment
date, after giving effect to any principal payment made on
that payment date.
"Total Available Funds" for a payment date is an amount equal to the
Available Funds for that payment date plus the amounts, if any, deposited
by the indenture trustee to the collection account from the supplemental
reserve account and the reserve account on that payment date.
"Total Required Payment" means, with respect to any payment date,
the sum of (i) the total due and unpaid servicing fee, (ii) the Accrued
Note Interest and (iii) the Principal Distribution Amount with respect to
that payment date.
"Weighted Average Rate" means, with respect to any date of
determination, a per annum rate equal to (1) the sum of (a) the product of
(x) the outstanding principal amount of the Class A-1 notes on that date
and (y) the Class A-1 rate, plus (b) the product of (x) the outstanding
principal amount of the Class A-2 notes on that date and (y) the Class A-2
rate, plus (c) the product of (x) the outstanding principal amount of the
Class A-3 notes on that date and (y) the Class A-3 rate, plus (d) the
product of (x) the outstanding principal amount of the Class B notes on
that date and (y) the Class B rate, divided by (2) the outstanding
principal amount of the notes on that date.
"Yield Supplement Amount" with respect to any payment date will be
determined by aggregating with respect to all of the receivables the
amount, calculated by the servicer with respect to each receivable, other
than (i) a defaulted receivable that has defaulted or a receivable
purchased by the servicer or repurchased by MART for the calendar months
after the calendar month in which the receivable became defaulted or was
purchased or repurchased, as the case may be, or (ii) any receivable sold
by the indenture trustee following an event of default under the indenture
for calendar months after the calendar month in which the receivable is
sold by the indenture trustee, equal to the product of (x) one-twelfth
times (y) an amount equal to the difference, if positive, between (1)
interest on that receivable's principal balance as of the first day of the
related calendar month at a rate equal to the sum of (A) the Weighted
Average Rate as of the first day of the related calendar month and (B)
3.00%, which percentage represents the servicing rate plus 2.00%, and (2)
interest on that receivable's principal balance as of the first day of the
related calendar month at the annual percentage rate on the contract. For
purposes of the definition of "Yield Supplement Amount," the annual
percentage rate on a contract will be deemed to be zero until the payment
date following the first date on which a payment under the contract is due.
On that payment date and on each following payment date, the annual
percentage rate on a contract will be the rate specified in the contract.
PROSPECTUS
$740,000,000
MMCA AUTO OWNER TRUST 1999-2
$326,000,000 % CLASS A-1 ASSET BACKED NOTES
$210,000,000 % CLASS A-2 ASSET BACKED NOTES
$142,000,000 % CLASS A-3 ASSET BACKED NOTES
$62,000,000 % CLASS B ASSET BACKED NOTES
MMCA AUTO RECEIVABLES TRUST
SELLER
[INSERT GRAPHIC]
SERVICER
UNDERWRITERS OF THE CLASS A NOTES
CREDIT SUISSE FIRST BOSTON
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
UNDERWRITERS OF THE CLASS B NOTES
CREDIT SUISSE FIRST BOSTON
You should rely only on the information contained in or incorporated
by reference in this prospectus. We have not authorized anyone to provide
you with different information.
We are not offering the notes in any state where the offer of the
notes is not permitted.
We do not claim the accuracy of the information in this prospectus
as of any date other than the date stated on the cover of this prospectus.
Dealers will deliver a prospectus when acting as underwriters of the
notes and with respect to their unsold allotments or subscriptions. In
addition, all dealers that effect transactions in the notes, whether or not
participating in the offering of the notes, will be required to deliver a
prospectus until , 2000.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration Fee......................................... $ 205,720
Printing and Engraving................................... $ 84,000
Trustee's Fee............................................ $ 20,000
Legal Fees and Expenses.................................. $ 250,000
Blue Sky Fees and Expenses............................... $ 10,000
Accountant's Fees and Expenses........................... $ 94,000
Rating Agency Fees....................................... $ 228,487
Miscellaneous Fees and Expenses.......................... $ 5,000
-------------
Total Expenses .......................................... $ 897,207
=============
ITEM 14. INDEMNIFICATION OF TRUSTEES AND BENEFICIAL OWNERS
Section 3817 of the Delaware Code provides as follows:
(a) Subject to such standards and restrictions, if any, as are set
forth in the governing instrument of a business trust, a business
trust shall have the power to indemnify and hold harmless any trustee
or beneficial owner or other person from and against any and all
claims and demands whatsoever.
(b) The absence of a provision for indemnity in the governing
instrument of a business trust shall not be construed to deprive any
trustee or beneficial owner or other person of any right to indemnity
which is otherwise available to such person under the laws of this
State.
Clause (b) of Section 5.7 of the Amended and Restated Trust Agreement,
dated as of October 1, 1999, between Mitsubishi Motors Credit of America,
Inc. and Chase Manhattan Bank Delaware provides as follows:
(b) Subject to the terms of this Agreement, the Beneficial Owner shall
hold harmless the Trustee, its officers, directors, employees,
shareholders and agents (collectively the "Indemnified Persons" or
individually an "Indemnified Person"), against any and all losses,
liabilities, claims, actions, suits, costs, damages, expenses and
liabilities, joint or several (including, but not limited to, any
investigation, reasonable legal and other expenses (including expenses
of investigation) of any kind and nature whatsoever incurred in
connection with, and any amount paid in settlement of any action,
suit, proceeding or claim) (collectively, "Losses") which such
Indemnified Persons may become subject to or liable for by reason of
Trustee's acting as trustee under this Agreement. Notwithstanding the
foregoing, the Beneficial Owner shall not be liable to any Indemnified
Person, and shall not be required to indemnify the Trustee under this
Agreement, for any Losses arising out of the negligence, bad faith or
wilful misconduct of such Indemnified Person or any other Indemnified
Person.
Section 3.8 of the Amended and Restated Trust Agreement provides as
follows:
No person shall be personally liable to MMCA Auto Receivables Trust or
the Beneficial Owner for any breach of its duties as a Manager;
provided, however, that the foregoing shall not eliminate or limit the
liability of a Manager for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the
law.
Section 3.10 of the Amended and Restated Trust Agreement provides as
follows:
No Authorized Officer shall be personally liable to MMCA Auto
Receivables Trust or the Beneficial Owner for any breach of its duties
as an Authorized Officer; provided, however, that the foregoing shall
not eliminate or limit the liability of an Authorized Officer of MMCA
Auto Receivables Trust for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the
law.
"Agreement" means the Amended and Restated Trust Agreement, dated as
of October 1, 1999, between Mitsubishi Motors Credit of America, Inc. and
Chase Manhattan Bank Delaware.
"Authorized Officer" means officers appointed by the Board of Managers
or Chief Executive Receivables Trust as may be appropriate for the conduct
of the trust's business, subject to the supervision and control of the
Board of Managers and Chief Executive Officer.
"Beneficial Owner" means Mitsubishi Motors Credit of America, Inc., in
its capacity as the exclusive beneficial owner of MMCA Auto Receivables
Trust and its successors and assigns in such capacity.
"Manager" means a person appointed by the Beneficial Owner to serve as
a member of the Board of Managers of the MMCA Auto Receivables Trust.
"Trustee" means Chase Manhattan Bank Delaware, as trustee under the
Agreement, and its permitted successors and assigns in such capacity.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Not applicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
Number Description
------ -----------
1.1 Form of Underwriting Agreement
3.1 Form of Amended and Restated Trust Agreement of MART
4.1 Form of Amended and Restated Trust Agreement of the Trust
between MART and the Owner Trustee
4.2 Form of Sale and Servicing Agreement among MART the Servicer
and the Trust
4.3 Form of Indenture between the Trust and the Indenture
Trustee
4.4 Form of Administration Agreement among the Trust, the
Administrator and the Indenture Trustee
4.5 Form of Note (contained in Exhibit 4.3)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP re
Legality
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP re Tax
Matters
10.1 Form of Purchase Agreement between Mitsubishi Motors Credit
of America, Inc. and MART
10.2 Form of Yield Supplement Agreement
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(contained in Exhibit 5.1)
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(contained in Exhibit 8.1)
24 Powers of Attorney*
24.1 Board Resolutions of MART
25 Form T-1 of Indenture Trustee
- -----------
* Previously filed.
(b) Financial Statement Schedules
Not applicable.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes as follows:
(a) To provide to the underwriters at the closing specified in the
underwriting agreement, certificates in such denominations and registered
in such names as required by the underwriters to permit prompt delivery to
each purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. If a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(c) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as amended
shall be deemed to be part of this Registration Statement as of the time it
was declared effective.
(d) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City
of Cypress, State of California, on October 14, 1999.
MMCA AUTO RECEIVABLES TRUST
By: /s/ Hiroshi Yajima*
-----------------------------
Hiroshi Yajima
Manager and President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
/s/ Hiroshi Yajima* Manager and President October 14, 1999
- ---------------------------- (principal executive
Hiroshi Yajima officer)
/s/ Hideyuki Kitamura* Secretary and Treasurer October 14, 1999
- ---------------------------- (principal financial
Hideyuki Kitamura officer and principal
accounting officer)
/s/ John Maynard* Manager October 14, 1999
- ----------------------------
John Maynard
/s/ Kenzo Yamada* Manager October 14, 1999
- ----------------------------
Kenzo Yamada
/s/ Charles A. Tredway* Manager October 14, 1999
- ----------------------------
Charles A. Tredway
/s/ Yasuhiro Hagihara Manager October 14, 1999
- ----------------------------
Yasuhiro Hagihara
*By: /s/ J. Sean Plater
- ----------------------------
J. Sean Plater
Attorney-in -fact
INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
1.1 Form of Underwriting Agreement
3.1 Form of Amended and Restated Trust Agreement of
MART between MMCA and the MART Trustee
4.1 Form of Amended and Restated Trust Agreement of
the Trust between between MART and the Owner
Trustee
4.2 Form of Sale and Servicing Agreement among MART,
the Servicer and the Trust
4.3 Form of Indenture between the Trust and the
Indenture Trustee
4.4 Form of Administration Agreement among the
Trust, the Administrator and the Indenture
Trustee
4.5 Form of Note (contained in Exhibit 4.3)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom
LLP re Legality 8.1Opinion of Skadden, Arps,
Slate, Meagher & Flom LLP re Tax Matters
8.1 Opinion of Skadden, Arps, Slate, Meagher &
Flom LLP re Tax Matters
10.1 Form of Purchase Agreement between Mitsubishi
Motors Credit of America, Inc. and MART
10.2 Form of Yield Supplement Agreement
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom
LLP (contained in Exhibit 5.1)
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom
LLP (contained in Exhibit 8.1)
24 Powers of Attorney*
24.1 Board Resolutions of MART
25 Form T-1 of Indenture Trustee
- -----------
* Previously filed.
Exhibit 1.1
$740,000,000
MMCA AUTO OWNER TRUST 1999-2
$326,000,000 ___% CLASS A-1 ASSET BACKED NOTES
$210,000,000 ___% CLASS A-2 ASSET BACKED NOTES
$142,000,000 ___% CLASS A-3 ASSET BACKED NOTES
$62,000,000 ___% CLASS B ASSET BACKED NOTES
MMCA AUTO RECEIVABLES TRUST
UNDERWRITING AGREEMENT
October ____, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
As Representative of the Several Underwriters
Eleven Madison Avenue
New York, NY 10010
Dear Sirs:
1. Introductory. MMCA Auto Receivables Trust (the "Seller"), a
Delaware business trust established pursuant to the Amended and Restated
Trust Agreement dated as of October 1, 1999 (the "Seller Trust Agreement")
between Mitsubishi Motors Credit of America, Inc. ("MMCA") and Chase
Manhattan Bank Delaware, as trustee (the "Seller Trustee"), proposes,
subject to the terms and conditions stated herein, to cause MMCA Auto Owner
Trust 1999-2 (the "Trust") to issue and sell to you $326,000,000 aggregate
principal amount of ____% Class A-1 Asset Backed Notes (the "Class A-1
Notes"), $210,000,000 aggregate principal amount of ____% Class A-2 Asset
Backed Notes (the "Class A-2 Notes"), $142,000,000 aggregate principal
amount of ____% Class A-3 Asset Backed Notes (the "Class A-3 Notes"), and
$62,000,000 aggregate principal amount of ____% Class B Asset Backed Notes
(the "Class B Notes" and together with the Class A-1 Notes, the Class A-2
Notes and the Class A-3 Notes, the "Notes"). The Notes will be issued
pursuant to the Indenture dated as of October 1, 1999 (the "Indenture"),
between the Trust and Bank of Tokyo-Mitsubishi Trust Company (the "Inden-
ture Trustee").
Concurrently with the issuance and sale of the Notes as contemplated
herein, the Trust will issue $60,000,000 aggregate principal amount of
certificates of beneficial interest (the "Certificates"), each representing
an interest in the Trust Property. The Seller will retain the Certifi-
cates. The Certificates will be issued pursuant to the Amended and Restated
Trust Agreement, dated as of October 1, 1999 (the "Trust Agreement"),
between the Seller and Wilmington Trust Company, as Owner Trustee. The
Certificates will be subordinated to the Notes.
The assets of the Trust will include, among other things, (i) a pool
of motor vehicle retail installment sale contracts secured by new and used
automobiles and light-duty trucks to be conveyed to the trust on the
Closing Date (the "Initial Receivables") and from time to time thereafter
during the Pre-Funding Period (the "Subsequent Receivables" and together
with the Initial Receivables, the "Receivables"), (ii) with respect to
Actuarial Receivables, certain monies due thereunder on or after the
related Cutoff Date, and (iii) with respect to Simple Interest
Receivables, certain monies due or received thereunder on or after the
related Cutoff Date. The Receivables will be sold to the Trust by the
Seller and will be serviced for the Trust by MMCA (in such capacity, the
"Servicer"). Capitalized terms used but not defined herein have the
meanings ascribed thereto in the Sale and Servicing Agreement to be dated
as of October 1, 1999 (the "Sale and Servicing Agreement"), among the
Trust, the Seller and the Servicer or, if not defined therein, in the
Indenture, the Trust Agreement or the Purchase Agreement, as the case may
be. "Basic Documents" means, collectively, Basic Documents, as defined
in the Trust Agreement and Basic Documents, as defined in the Indenture.
"Transfer Date" means, with respect to an Initial Receivable, the Closing
Date, and with respect to a Subsequent Receivable, the related Subse-
quent Transfer Date. The Seller hereby agrees with the several
Underwriters named in Schedule A hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Seller. The Seller
represents and warrants to, and agrees with, the several Underwriters
that:
(a) A registration statement on Form S-1 (No. 333-
85685) relating to the Notes, including a form of prospec-
tus, has been filed with the Securities and Exchange Commis-
sion (the "Commission") and either (i) has been declared
effective under the Securities Act of 1933, as amended (the
"Act"), and is not proposed to be amended or (ii) is pro-
posed to be amended by amendment or post-effective amend-
ment. If the Seller does not propose to amend the registra-
tion statement and if any post-effective amendment to the
registration statement has been filed with the Commission
prior to the execution and delivery of this Agreement, the
most recent post-effective amendment has been declared
effective by the Commission or has become effective upon
filing pursuant to Rule 462(c) under the Act ("Rule
462(c)"). For purposes of this Agreement, "Effective Time"
means (i) if the Seller has advised Credit Suisse First
Boston Corporation, as representative of the Underwriters
(in such capacity, the "Representative"), that it does not
propose to amend the registration statement, the date and
time as of which the registration statement, or the most
recent post-effective amendment thereto (if any) filed prior
to the execution and delivery of this Agreement, was de-
clared effective by the Commission or has become effective
upon filing pursuant to Rule 462(c), or (ii) if the Seller
has advised the Representative that it proposes to file an
amendment or post-effective amendment to the registration
statement, the date and time as of which the registration
statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the
Commission. "Effective Date" means the date of the Effec-
tive Time. The registration statement, as amended at the
Effective Time, including all information (if any) deemed to
be a part of the registration statement as of the Effective
Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the
Act, is hereinafter referred to as the "Registration State-
ment". The form of prospectus relating to the Notes, as
first filed with the Commission pursuant to and in accor-
dance with Rule 424(b) under the Act ("Rule 424(b)") or, if
no such filing is required, as included in the Registration
Statement, is hereinafter referred to as the "Prospectus".
No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(b) If the Effective Time is prior to the execution
and delivery of this Agreement: (i) on the Effective Date,
the Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of the
Commission (the "Rules and Regulations") and did not include
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) on the
date of this Agreement, the Registration Statement conforms,
and at the time of filing of the Prospectus pursuant to Rule
424(b), the Registration Statement and the Prospectus will
conform, in all respects to the requirements of the Act and
the Rules and Regulations, and neither of such documents
includes, or will include, any untrue statement of a mate-
rial fact or omits, or will omit, to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time is
subsequent to the execution and delivery of this Agreement:
(i) on the Effective Date, the Registration Statement and
the Prospectus will conform in all respects to the require-
ments of the Act and the Rules and Regulations, (ii) neither
of such documents will include any untrue statement of a
material fact or will omit to state any material fact re-
quired to be stated therein or necessary to make the state-
ments therein not misleading and (iii) no additional regis-
tration statement related to the Notes pursuant to
Rule 462(b) has been or will be filed. The two preceding
sentences do not apply to statements in or omissions from
the Registration Statement or the Prospectus based upon
written information furnished to the Seller by any Under-
writer through the Representative specifically for use
therein, it being understood and agreed that the only such
information is that described as such in Section 7(b).
(c) The Seller has been duly formed and is validly
existing as a business trust under the Delaware Business
Trust Act, 12 Del.C. section3801 et. seq. (the "Delaware
Trust Act"), with power and authority to own its properties
and conduct its business as described in the Prospectus, and
the Seller is duly qualified to do business and is in good
standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires
such qualification.
(d) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required to be obtained or made by the Seller or the
Trust for the consummation of the transactions contemplated
by this Agreement and the Basic Documents in connection with
the issuance of the Notes and the Certificates and the sale
by the Seller of the Notes, except such as have been ob-
tained and made under the Act, such as may be required under
state securities laws and the filing of any financing state-
ments required to perfect the Seller's, the Trust's and the
Indenture Trustee's interest in the Receivables, which
financing statements have been filed in the appropriate
offices prior to the Closing Date (as such term is defined
in Section 3).
(e) The Seller is not in violation of the Seller Trust
Agreement or other organizational documents or in default in
the performance or observance of any obligation, agreement,
covenant or condition contained in any agreement or instru-
ment to which it is a party or by which it or its properties
are bound which could have a material adverse effect on the
transactions contemplated herein or in the Basic Documents.
The execution, delivery and performance of this Agreement
and the Basic Documents, and the issuance of the Notes and
the Certificates and the sale by the Seller of the Notes and
compliance with the terms and provisions hereof and thereof
will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any stat-
ute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having
jurisdiction over the Seller or any of its properties, or
any agreement or instrument to which the Seller is a party
or by which the Seller is bound or to which any of the
properties of the Seller or any such subsidiary is subject,
or the Seller Trust Agreement or other organizational docu-
ments of the Seller, and the Seller has full power and
authority to authorize and issue the Notes and the Certifi-
cates and to sell the Notes as contemplated by this Agree-
ment, the Indenture and the Trust Agreement, to enter into
this Agreement and the Basic Documents and to consummate the
transactions contemplated hereby and thereby.
(f) On the Closing Date, the Seller will have directed
the Owner Trustee to authenticate and execute the Certifi-
cates and, when delivered and paid for pursuant to the Sale
and Servicing Agreement and the Trust Agreement, the Certif-
icates will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding
obligations of the Trust, entitled to the benefits provided
in the Trust Agreement and enforceable in accordance with
their terms.
(g) On the Closing Date, the Seller will have directed
the Owner Trustee to execute the Notes and directed the
Indenture Trustee to authenticate and deliver the Notes and,
when authenticated, delivered and paid for pursuant to the
Indenture and this Agreement, the Notes will have been duly
executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the
Trust, entitled to the benefits provided in the Indenture
and enforceable in accordance with its terms.
(h) The Seller possesses adequate certificates, au-
thorities and permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now
operated by it and has not received any notice of proceed-
ings relating to the revocation or modification of any such
certificate, authority or permit that, if determined ad-
versely to the Seller, would individually or in the aggre-
gate have a material adverse effect on the Seller.
(i) Except as disclosed in the Prospectus, there are
no pending actions, suits or proceedings against or affect-
ing the Seller or any of its properties that, if determined
adversely to the Seller, would individually or in the aggre-
gate have a material adverse effect on the condition (finan-
cial or other), business or results of operations of the
Seller, or would materially and adversely affect the ability
of the Seller to perform its obligations under this Agree-
ment or the other Basic Documents to which it is a party, or
which are otherwise material in the context of the issuance
and sale of the Notes or the issuance of the Certificates or
the sale of the Notes; and no such actions, suits or pro-
ceedings are threatened or, to the Seller's knowledge,
contemplated.
(j) As of the Closing Date, the representations and
warranties of the Seller contained in the Basic Documents
will be true and correct.
(k) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (i) there has been no
material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Seller, whether or not arising in the
ordinary course of business and (ii) there have been no
transactions entered into by the Seller, other than those in
the ordinary course of business, which are material with
respect to the Seller.
(l) Each of the Basic Documents to which the Seller is
a party has been duly authorized by the Seller and, when
duly executed and delivered by the Seller and the other
parties thereto, will constitute a valid and binding agree-
ment of the Seller, enforceable against the Seller in accor-
dance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting en-
forcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(m) This Agreement has been duly authorized, executed
and delivered by the Seller.
(n) The Seller has authorized the conveyance of the
Receivables to the Trust, and, as of the Closing Date, the
Seller has directed the Trust to execute and issue the Notes
and the Certificates and to sell the Notes.
(o) The Seller's assignment and delivery of the Re-
ceivables to the Trust on the related Transfer Dates will
vest in the Trust all of the Seller's right, title and
interest therein, subject to no prior lien, mortgage, secu-
rity interest, pledge, adverse claim, charge or other encum-
brance.
(p) The Trust's assignment of the Receivables to the
Indenture Trustee pursuant to the Indenture will vest in the
Indenture Trustee, for the benefit of the Noteholders, a
first priority perfected security interest therein, subject
to no prior lien, mortgage, security interest, pledge,
adverse claim, charge or other encumbrance except for any
tax lien, mechanics lien or other lien or encumbrance that
attaches by operation of law.
(q) The Computer Tapes of the Receivables created as
of the related Transfer Dates and made available to the
Representative by the Servicer are or will be, as applica-
ble, complete and accurate as of the date thereof and in-
clude or will include, as applicable, an identifying de-
scription of the Receivables that are listed on Schedule A
to the Sale and Servicing Agreement.
(r) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of
this Agreement, the Basic Documents, the Notes and the
Certificates and any other agreements contemplated herein or
therein shall have been paid or will be paid by the Seller
at or prior to the Closing Date to the extent then due.
(s) The consummation of the transactions contemplated
by this Agreement and the Basic Documents, and the fulfill-
ment of the terms hereof and thereof, will not conflict with
or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation of
any lien, charge or encumbrance upon any of the property or
assets of the Seller pursuant to the terms of, any inden-
ture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or similar agreement or instrument
under which the Seller is a debtor or guarantor.
(t) The Seller is not and, after giving effect to the
issuance of the Notes and Certificates and the offering and
sale of the Notes and the application of the proceeds
thereof as described in the Prospectus, will not be required
to be registered as an "investment company" as defined in
the Investment Company Act of 1940 (the "Investment Company
Act").
3. Purchase, Sale and Delivery of Notes. On the basis of the
representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Seller agrees to sell to
the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Seller, at a purchase price of, in the case of (i)
the Class A-1 Notes, _______% of the principal amount thereof; (ii) the
Class A-2 Notes, _______% of the principal amount thereof; (iii) the Class
A-3 Notes, _______% of the principal amount thereof; and (iv) the Class B
Notes, _______% of the principal amount thereof, the respective principal
amounts of each Class of the Notes set forth opposite the names of the
Underwriters in Schedule A hereto.
The Seller will deliver against payment of the purchase price, the
Notes of each Class in the form of one or more permanent global
securities in definitive form (the "Global Notes") deposited with the
Indenture Trustee as custodian for The Depository Trust Company ("DTC")
and registered in the name of Cede & Co., as nominee for DTC. Interests in
any permanent Global Notes will be held only in book-entry form through
DTC, except in the limited circumstances described in the Prospectus.
Payment for the Notes shall be made by the Underwriters in Federal (same
day) funds by official check or checks or wire transfer to an account in
New York previously designated to Credit Suisse First Boston Corporation
by the Seller at a bank acceptable to Credit Suisse First Boston
Corporation, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
919 Third Avenue, New York, New York 10022 at 10:00 a.m., New York time,
on October 28, 1999, or at such other time not later than seven full
business days thereafter as Credit Suisse First Boston Corporation and the
Seller determine, such time being herein referred to as the "Closing
Date", against delivery to the Indenture Trustee as custodian for DTC of
the Global Notes representing all of the Notes. The Global Notes will be
made available for checking at the above office of Skadden, Arps, Slate,
Meagher & Flom LLP at least 24 hours prior to the Closing Date.
The Seller will deliver the Certificates to the above office of
Skadden, Arps, Slate, Meagher & Flom LLP on the Closing Date. The
certificate for the Certificates so to be delivered will be in definitive
form, in authorized denominations and registered in the name of the Seller
and will be made available for checking at the above office of Skadden,
Arps, Slate, Meagher & Flom LLP at least 24 hours prior to the Closing
Date.
Pursuant to Rule 15c6-1(d) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the parties hereto have agreed that the
Closing Date will be not later than October ___, 1999, unless otherwise
agreed to as described above.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Notes for sale to the public (which may
include selected dealers) as set forth in the Prospectus.
5. Certain Agreements of the Seller. The Seller agrees with the
several Underwriters:
(a) If the Effective Time is prior to the execution
and delivery of this Agreement, the Seller will file the
Prospectus with the Commission pursuant to and in accordance
with subparagraph (1) (or, if applicable and if consented to
by Credit Suisse First Boston Corporation, subparagraph (4))
of Rule 424(b) not later than the earlier of (i) the second
business day following the execution and delivery of this
Agreement or (ii) the fifteenth business day after the
Effective Date. The Seller will advise the Representative
promptly of any such filing pursuant to Rule 424(b).
(b) The Seller will advise the Representative promptly
of any proposal to amend or supplement the registration
statement as filed or the related prospectus, or the Regis-
tration Statement or the Prospectus, and will not effect
such amendment or supplementation without the Representa-
tive's consent; and the Seller will also advise the Repre-
sentative promptly of the effectiveness of the Registration
Statement (if its Effective Time is subsequent to the execu-
tion and delivery of this Agreement) and of any amendment or
supplementation of the Registration Statement or the Pro-
spectus and of the institution by the Commission of any stop
order proceedings in respect of the Registration Statement
and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lift-
ing, if issued.
(c) If, at any time when a prospectus relating to the
Notes is required to be delivered under the Act in connec-
tion with sales by any Underwriter or dealer, any event
occurs as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
if it is necessary at any time to amend the Prospectus to
comply with the Act, the Seller will promptly notify the
Representative of such event and will promptly prepare and
file with the Commission (subject to the Representative's
prior review pursuant to Section 5(b)), at its own expense,
an amendment or supplement which will correct such statement
or omission, or an amendment which will effect such compli-
ance. Neither the Representative's consent to, nor the
Underwriters', delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth
in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Seller will cause
the Trust to make generally available to the Noteholders an
earnings statement of the Trust covering a period of at
least 12 months beginning after the Effective Date which
will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability
Date" means the 90th day after the end of the Trust's fourth
fiscal quarter following the fiscal quarter that includes
such Effective Date.
(e) The Seller will furnish to the Representative
copies of the Registration Statement (two of which will be
signed and will include all exhibits), each related prelimi-
nary prospectus, and, so long as delivery of a prospectus
relating to the Notes is required under the Act in connec-
tion with sales by any Underwriter or dealer, the Prospectus
and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as the
Representative requests. The Prospectus shall be so fur-
nished on or prior to 3:00 p.m., New York time, on the
business day following the later of the execution and deliv-
ery of this Agreement or the Effective Time. All other such
documents shall be so furnished as soon as available. The
Seller will pay the expenses of printing and distributing to
the Underwriters all such documents.
(f) The Seller will arrange for the qualification of
the Notes for offering and sale and the determination of
their eligibility for investment under the laws of such
jurisdictions as the Representative designates and will
continue such qualifications in effect so long as required
for the distribution of the Notes.
(g) For a period from the date of this Agreement until
the retirement of the Notes (i) the Seller will furnish to
the Representative and, upon request, to each of the other
Underwriters, copies of each certificate and the annual
statements of compliance delivered to the Indenture Trustee
pursuant to Section 3.9 of the Indenture and Sections 3.9
and 3.10 of the Sale and Servicing Agreement and the annual
independent certified public accountant's servicing reports
furnished to the Indenture Trustee pursuant to Section 3.11
of the Sale and Servicing Agreement, by first-class mail as
soon as practicable after such statements and reports are
furnished to the Indenture Trustee, and (ii) such other
forms of periodic certificates or reports as may be deliv-
ered to the Indenture Trustee, the Owner Trustee or the
Noteholders under the Indenture, the Trust Agreement, the
Sale and Servicing Agreement or the other Basic Documents.
(h) So long as any Note is outstanding, the Seller
will furnish to the Representative by first-class mail as
soon as practicable, (i) all documents distributed, or
caused to be distributed, by the Seller to the Noteholders,
(ii) all documents filed, or caused to be filed, by the
Seller with the Commission pursuant to the Exchange Act, any
order of the Commission thereunder and (iii) such other
information in the possession of the Seller concerning the
Trust as the Representative from time to time may reasonably
request.
(i) The Seller will pay all expenses incident to the
performance of its obligations under this Agreement and will
reimburse the Underwriters (if and to the extent incurred by
them) for any filing fees and other expenses (including fees
and disbursements of counsel) incurred by them in connection
with qualification of the Notes for sale and determination
of their eligibility for investment under the laws of such
jurisdictions as the Representative designates and the
printing of memoranda relating thereto, for any fees charged
by investment rating agencies for the rating of the Notes,
for any travel expenses of the Seller's officers and employ-
ees and any other expenses of the Seller in connection with
attending or hosting meetings with prospective purchasers of
the Notes and for expenses incurred in distributing the
preliminary prospectuses and the Prospectus (including any
amendments and supplements thereto).
(j) To the extent, if any, that the rating provided
with respect to the Notes by Moody's Investors Service, Inc.
("Moody's") and Standard & Poor's, a Division of The McGraw-
Hill Companies, Inc. ("Standard & Poor's" and, together with
Moody's, the "Rating Agencies") is conditional upon the
furnishing of documents or the taking of any other action by
the Seller, the Seller shall furnish such documents and take
any such other action.
(k) On or before the related Transfer Date, the Seller
shall cause the computer records of the Seller and MMCA
relating to the Receivables to be marked to show the Trust's
absolute ownership of the Receivables, and from and after
the related Transfer Date neither the Seller nor MMCA shall
take any action inconsistent with the Trust's ownership of
such Receivables, other than as permitted by the Sale and
Servicing Agreement.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Notes on the
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Seller herein, to the accuracy of the
statements of Seller officers made pursuant to the provisions hereof, to
the performance by the Seller of its obligations hereunder and to the
following additional conditions precedent:
(a) The Representative shall have received a letter,
dated the date of delivery thereof (which, if the Effective
Time is prior to the execution and delivery of this Agree-
ment, shall be on or prior to the date of this Agreement or,
if the Effective Time is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registra-
tion statement to be filed shortly prior to such Effective
Time), of Ernst & Young LLP, in form and substance satisfac-
tory to the Representative and counsel for the Underwriters,
confirming that they are independent public accountants
within the meaning of the Act and the applicable Rules and
Regulations and stating in effect that (i) they have per-
formed certain specified procedures as a result of which
they determined that certain information of an accounting,
financial or statistical nature (which is limited to ac-
counting, financial or statistical information derived from
the general accounting records of the Trust, MMCA and the
Seller) set forth in the Registration Statement and the
Prospectus (and any supplements thereto), agrees with the
accounting records of the Trust, MMCA and the Seller, ex-
cluding any questions of legal interpretation, and (ii) they
have performed certain specified procedures with respect to
the Receivables.
For purposes of this subsection, (i) if the Effective
Time is subsequent to the execution and delivery of this
Agreement, "Registration Statement" shall mean the registra-
tion statement as proposed to be amended by the amendment or
post-effective amendment to be filed shortly prior to the
Effective Time, including all information (if any) deemed to
be a part of the initial registration statement as of such
time pursuant to Rule 430A(b), and (ii) "Prospectus" shall
mean the prospectus included in the Registration Statement.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be
deemed included in the Registration Statement for purposes
of this subsection.
(b) If the Effective Time is not prior to the execu-
tion and delivery of this Agreement, the Effective Time
shall have occurred not later than [5:00 p.m.], New York
time, on the date of this Agreement or such later date as
shall have been consented to by the Representative. If the
Effective Time is prior to the execution and delivery of
this Agreement, the Prospectus shall have been filed with
the Commission in accordance with the Rules and Regulations
and Section 5(a). Prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the
Seller or the Representative, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or
any development or event involving a prospective change, in
the condition (financial or other), business, properties or
results of operations or retail motor vehicle financing
business or light-duty truck financing business of the
Trust, the Seller, Mitsubishi Motor Sales of America, Inc.
("MMSA"), Mitsubishi Motors Corporation ("MMC") or MMCA
which, in the judgment of a majority in interest of the
Underwriters (including the Representative), materially
impairs the investment quality of each Class of the Notes or
makes it impractical or inadvisable to proceed with comple-
tion of the public offering or the sale of and payment for
each Class of the Notes; (ii) any suspension or limitation
of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on
such exchange; (iii) any banking moratorium declared by
Federal, California or New York authorities; or (iv) any
outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Con-
gress or any substantial national or international calamity
or emergency if, in the judgement of a majority in interest
of the Underwriters (including the Representative), the
effect of any such outbreak, escalation, declaration, calam-
ity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale
of and payment for each Class of the Notes.
(d) The Representative shall have received an opinion
of (A) J. Sean Plater, Esq., Director of Legal Affairs of
the Seller, and (B) Richards, Layton & Finger, special
Delaware counsel to Seller, in each case dated the Closing
Date and satisfactory in form and substance to the Represen-
tative and counsel for the Underwriters, and, in the aggre-
gate to the effect that:
(i) the Seller has been duly formed and is val-
idly existing as a business trust under the Delaware
Trust Act, with full power and authority to own its
properties and conduct its business as described in the
Prospectus; the Seller is duly qualified to do business
and is in good standing in each jurisdiction in which
its ownership or lease of property or the conduct of
its business requires such qualification; and the
Seller has full power and authority under the Delaware
Trust Act and under the Seller Trust Agreement to enter
into and perform its obligations under this Agreement
and the Basic Documents to which it is a party, to
direct the Indenture Trustee and the Owner Trustee to
execute the Notes and the Certificates, respectively,
to consummate the transactions contemplated hereby and
thereby, and had at all times, and now has, the power,
authority and legal right to acquire, own and sell the
Receivables;
(ii) MMCA has been duly incorporated and is an
existing corporation in good standing under the laws of
the State of Delaware, with corporate power and author-
ity to own its properties and conduct its business as
described in the Prospectus; MMCA is duly qualified to
do business and is in good standing in each jurisdic-
tion in which its ownership or lease of property or the
conduct of its business requires such qualification;
and MMCA has full power and authority to enter into and
perform its obligations under this Agreement, the Note
Indemnification Agreement dated the date hereof (the
"Note Indemnification Agreement") between MMCA and the
Representative, acting on behalf of itself and as
Representative of the several Underwriters, and the
Basic Documents to which it is a party and to consum-
mate the transactions contemplated hereby and thereby,
and had at all times, and now has, the power, authority
and legal right to acquire, own, sell and service the
Receivables;
(iii) Each of the direction by the Seller to
the Owner Trustee to execute the Notes and the direc-
tion by the Seller to the Indenture Trustee to authen-
ticate and deliver the Notes has been duly authorized
by the Seller and, when the Notes have been duly exe-
cuted by the Owner Trustee and, when authenticated and
delivered by the Indenture Trustee in accordance with
the terms of the Indenture and delivered to and paid
for by the Underwriters pursuant to this Agreement, the
Notes will be duly and validly issued and outstanding
and will be entitled to the benefits of the Indenture;
(iv) the direction by the Seller to the Owner
Trustee to authenticate and execute the Certificates
has been duly authorized by the Seller and, when the
Certificates have been duly executed, authenticated and
delivered by the Owner Trustee in accordance with the
terms of the Trust Agreement and the Certificates have
been delivered to and paid for by the Seller pursuant
to the Sale and Servicing Agreement and the Trust
Agreement, the Certificates will be duly and validly
issued and outstanding and will be entitled to the
benefits of the Trust Agreement;
(v) the Note Indemnification Agreement, the
Assignment dated the date hereof from MMCA to the
Seller and each Basic Document to which MMCA is a party
has been duly authorized, executed and delivered by
MMCA;
(vi) no consent, approval, authorization or order
of, or filing with any governmental agency or body or
any court is required for the execution, delivery and
performance by the Seller of this Agreement and the
Basic Documents to which it is a party, for the execu-
tion, delivery and performance by MMCA of the Note
Indemnification Agreement and the Basic Documents to
which it is a party or for the consummation of the
transactions contemplated by this Agreement, the Basic
Documents or the Note Indemnification Agreement, except
for (i) the filing of Uniform Commercial Code financing
statements in California with respect to the transfer
of the Receivables to the Seller pursuant to the Pur-
chase Agreement and the transfer of the Trust Property
to the Trust pursuant to the Sale and Servicing Agree-
ment and the filing of a Uniform Commercial Code fi-
nancing statement in Delaware with respect to the grant
by the Trust of a security interest in the Trust Prop-
erty to the Indenture Trustee pursuant to the Inden-
ture, which financing statements will be filed in the
appropriate offices within 10 days of the Closing Date;
(ii) such as have been obtained and made under the Act;
and (iii) such as may be required under state securi-
ties laws;
(vii) the execution, delivery and performance
of this Agreement and the Basic Documents by the
Seller, the execution, delivery and performance of the
Note Indemnification Agreement and the Basic Documents
by MMCA and the consummation of any other of the trans-
actions contemplated herein, in the Note Indemnifica-
tion Agreement or the Basic Documents will not conflict
with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of MMCA
or the Seller pursuant to the terms of the Certificate
of Incorporation or the By-Laws of MMCA or the docu-
ments of organization of the Seller, or any statute,
rule, regulation or order of any governmental agency or
body, or any court having jurisdiction over MMCA or the
Seller or their respective properties, or any agreement
or instrument known to such counsel after due investi-
gation to which MMCA or the Seller is a party or by
which MMCA or the Seller or any of their respective
properties is bound;
(viii) such counsel has no reason to believe
that any part of the Registration Statement or any
amendment thereto, as of its effective date or as of
such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading or that the Prospec-
tus or any amendment or supplement thereto, as of its
issue date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state
any material fact required to be stated therein or
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading; the descriptions in the Registra-
tion Statement and the Prospectus of statutes, legal
and governmental proceedings and contracts and other
documents are accurate and fairly present the informa-
tion required to be shown; and such counsel does not
know of any legal or governmental proceedings required
to be described in the Registration Statement or the
Prospectus which are not described as required or of
any contracts or documents of a character required to
be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registra-
tion Statement which are not described and filed as
required; it being understood that such counsel need
express no opinion as to the financial statements or
other financial data contained in the Registration
Statement or the Prospectus;
(ix) there are no actions, proceedings or investi-
gations pending to which the Seller or MMCA is a party
or, to the best knowledge of such counsel, after due
inquiry, threatened before any court, administrative
agency or other tribunal having jurisdiction over MMCA
or the Seller, (i) that are required to be disclosed in
the Registration Statement, (ii) asserting the invalid-
ity of this Agreement, the Note Indemnification Agree-
ment, any Basic Document, the Notes or the Certifi-
cates, (iii) seeking to prevent the issuance of the
Notes or the Certificates or the consummation of any of
the transactions contemplated by this Agreement or the
Basic Documents, (iv) which might materially and ad-
versely affect the performance by the Seller or MMCA of
its obligations under, or the validity or
enforceability of, this Agreement, the Note Indemnifi-
cation Agreement, any Basic Document, the Notes or the
Certificates, or (v) seeking adversely to affect the
federal income tax attributes of the Notes as described
in the Prospectus under the heading " FEDERAL INCOME
TAX CONSEQUENCES";
(x) the statements in the Registration Statement
under the heading "SOME IMPORTANT LEGAL ASPECTS OF THE
RECEIVABLES", to the extent they constitute statements
of matters of law or legal conclusions with respect
thereto, are correct in all material respects;
(xi) each of MMCA and the Seller has obtained all
necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license
or approval would render any Receivable unenforceable
by MMCA, the Seller, the Trust, the Owner Trustee or
the Indenture Trustee;
(xii) this Agreement and each Basic Document
to which the Seller is a party has been duly autho-
rized, executed and delivered by the Seller;
(xiii) such counsel is familiar with MMCA's
standard operating procedures relating to MMCA's acqui-
sition of a perfected first priority security interest
in the vehicles financed by MMCA pursuant to retail
installment sale contracts in the ordinary course of
MMCA's business; assuming that MMCA's standard proce-
dures are followed with respect to the perfection of
security interests in the Financed Vehicles (and such
counsel has no reason to believe that MMCA has not or
will not continue to follow its standard procedures in
connection with the perfection of security interests in
the Financed Vehicles), MMCA has acquired or will
acquire a perfected first priority security interest in
the Financed Vehicles;
(xiv) the Receivables are chattel paper as
defined in the UCC; and
(xv) immediately prior to the sale of Receivables
by MMCA to the Seller pursuant to the Purchase Agree-
ment and the Assignment, MMCA was the sole owner of all
right, title and interest in, to and under the Receiv-
ables and the other property to be transferred by it to
the Seller. Immediately prior to the sale of Receiv-
ables by the Seller to the Trust pursuant to the Sale
and Servicing Agreement, the Seller was the sole owner
of all right, title and interest in, to and under the
Receivables and the other property to be sold by it to
the Trust.
(e) The Representative shall have received an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel
to the Seller, dated the Closing Date, and satisfactory in
form and substance to the Representative and counsel for the
Underwriters, to the effect that:
(i) each Initial Receivable is a motor vehicle
retail installment sales contract that constitutes
"chattel paper" as defined in Section 9-105 of the UCC
in effect in the States of New York, Delaware and
California;
(ii) the provisions of the Sale and Servicing
Agreement are effective to create, in favor of the
Owner Trustee, a valid security interest (as such term
is defined in Section 1-201 of the New York UCC) in the
Seller's rights in the Initial Receivables and proceeds
thereof, which security interest, if characterized as a
transfer for security, will secure payment of the
Notes;
(iii) the Financing Statement is in appropri-
ate form for filing in the relevant filing office under
the New York UCC. Upon the filing of the Financing
Statement in the relevant filing office, the security
interest in favor of the Owner Trustee in the Initial
Receivables and proceeds thereof will be perfected, and
no other security interest of any other creditor of the
Seller will be equal or prior to the security interest
of the Owner Trustee in the Initial Receivables and
proceeds thereof;
(iv) the provisions of the Indenture are effective
to create in favor of the Indenture Trustee, a valid
security interest (as such term is defined in Section
1-201 of the Relevant UCC) in the Initial Receivables
and proceeds thereof to secure payment of the Notes;
(v) assuming that each of the direction by the
Seller to the Owner Trustee to execute the Notes and
the direction by the Seller to the Indenture Trustee to
authenticate and deliver the Notes has been duly autho-
rized by the Seller, when the Notes have been duly
executed by the Owner Trustee and authenticated and
delivered by the Indenture Trustee in accordance with
the terms of the Indenture and delivered to and paid
for by the Underwriters pursuant to this Agreement, the
Notes will be duly and validly issued and outstanding
and will be entitled to the benefits of the Indenture
(vi) assuming that the direction by the Seller to
the Owner Trustee to execute, authenticate and deliver
the Certificates has been duly authorized by the
Seller, when the Certificates have been duly executed,
authenticated and delivered by the Owner Trustee in
accordance with the terms of the Trust Agreement and
the Certificates have been delivered to and paid for by
the Seller pursuant to the Sale and Servicing Agreement
and the Trust Agreement, the Certificates will be duly
and validly issued and outstanding and will be entitled
to the benefits of the Trust Agreement;
(vii) the statements in the Prospectus under
the caption "SOME IMPORTANT LEGAL ASPECTS OF THE RE-
CEIVABLES", to the extent they constitute matters of
law or legal conclusions, are correct in all material
respects;
(viii) the Trust Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act");
(ix) the Indenture has been duly qualified under
the Trust Indenture Act;
(x) no authorization, approval or consent of any
court or governmental agency or authority is necessary
under the Federal law of the United States or the laws
of the State of New York in connection with the execu-
tion, delivery and performance by the Seller of this
Agreement and the Basic Documents to which it is a
party, the execution, delivery and performance by MMCA
of the Note Indemnification Agreement and the Basic
Documents to which it is a party or for the consumma-
tion of the transactions contemplated by this Agree-
ment, the Note Indemnification Agreement or the Basic
Documents, except such as may be required under state
securities laws and such as have been obtained and made
under the Act;
(xi) the Registration Statement was declared
effective under the Act as of the date specified in
such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein
or was included in the Registration Statement, and, to
the best of the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or
are pending or contemplated under the Act, and the
Registration Statement and the Prospectus, and each
amendment or supplement thereof, as of their respective
effective or issue dates, complies as to form in all
material respects with the requirements of the Act and
the Rules and Regulations; such counsel has no reason
to believe that any part of the Registration Statement
or any amendment thereto, as of its effective date or
as of such Closing Date, contained any untrue statement
of a material fact or omitted to state any material
fact required to be stated therein or necessary to make
the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, as
of its issue date or as of such Closing Date, contained
any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; and to the
best knowledge of such counsel, such counsel does not
know of any contracts or documents of a character
required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described and
filed as required; it being understood that such coun-
sel need express no opinion as to the financial state-
ments or other financial data contained in the Regis-
tration Statement or the Prospectus;
(xii) each of the Trust Agreement, the Sale
and Servicing Agreement, the Administration Agreement,
the Yield Supplement Agreement and the Assignment
constitutes the legal, valid and binding agreement of
the Seller and MMCA, in each case as to those documents
to which it is a party, enforceable against the Seller
and MMCA in accordance with their terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time
in effect, and subject, as to enforceability, to gen-
eral principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity
or at law) except, as applicable, that such counsel
need not express an opinion with respect to indemnifi-
cation or contribution provisions which may be deemed
to be in violation of the public policy underlying any
law or regulation;
(xiii) assuming due authorization, execution
and delivery by the Indenture Trustee and the Owner
Trustee, the Indenture constitutes the legal, valid and
binding agreement of the Trust, enforceable against the
Trust in accordance with its terms (subject to applica-
ble bankruptcy, insolvency, fraudulent transfer, reor-
ganization, moratorium and other similar laws affecting
creditors' rights generally from time to time in ef-
fect, and subject, as to enforceability, to general
principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity
or at law) except, as applicable, that such counsel
need not express an opinion with respect to indemnifi-
cation or contribution provisions which may be deemed
to be in violation of the public policy underlying any
law or regulation;
(xiv) neither the Trust nor the Seller is and,
after giving effect to the issuance of the Notes and
the Certificates and the sale of the Notes and the
application of the proceeds thereof, as described in
the Prospectus, neither the Trust nor the Seller will
be, an "investment company" as defined in the Invest-
ment Company Act of 1940, as amended;
(xv) the Notes, the Certificates, the Purchase
Agreement, the Administration Agreement, the Sale and
Servicing Agreement, the Yield Supplement Agreement,
the Trust Agreement, this Agreement and the Indenture
each conform in all material respects with the descrip-
tions thereof contained in the Registration Statement
and the Prospectus; and
(xvi) the Trust Agreement is the legal, valid
and binding agreement of the Seller, enforceable
against the Seller, in accordance with its terms under
the law of the State of Delaware.
(f) The Representative shall have received an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, special tax
counsel for the Seller, dated the Closing Date and satisfac-
tory in form and substance to the Representative and counsel
for the Underwriters, to the effect that for federal income
tax purposes (i) the Notes will be characterized as indebt-
edness of the Trust, (ii) the Trust will not be classified
as an association (or publicly traded partnership) taxable
as a corporation and (iii) the statements set forth in the
Prospectus under the headings "SUMMARY OF TERMS ERISA Con-
siderations", "ERISA CONSIDERATIONS", "SUMMARY OF TERMS Tax
Status", "FEDERAL INCOME TAX CONSEQUENCES" and "TERMS OF THE
NOTES Terms of the Indenture " (last sentence of second
paragraph under "Events of Default Under the Indenture" and
last sentence of first paragraph under "Remedies Following
an Event of Default" only) to the extent such statements
constitute matters of law or legal conclusions with respect
thereto, are correct in all material respects.
(g) The Representative shall have received an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, special tax
counsel for the Seller, dated the Closing Date and satisfac-
tory in form and substance to the Representative and counsel
for the Underwriters, to the effect that (i) for California
state franchise and income tax purposes (A) the Trust will
not be taxable as a corporation and (B) the Notes will be
treated as indebtedness, (ii) the Notes will be character-
ized as indebtedness for Delaware state income tax purposes,
(iii) the Trust will not be subject to Delaware state fran-
chise or income tax as a separate entity and (iv) the state-
ments set forth in the Prospectus under the headings "SUM-
MARY OF TERMS-Tax Status" and " STATE TAX CONSEQUENCES", to
the extent such statements constitute matters of law or
legal conclusions with respect thereto, are correct in all
material respects.
(h) The Representative shall have received from Brown
& Wood LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the valid-
ity of the Notes, the Registration Statement, the Prospectus
and other related matters as the Representative may require,
and the Seller shall have furnished to such counsel such
documents as it may request for the purpose of enabling it
to pass upon such matters.
(i) The Representative shall have received a certifi-
cate, dated the Closing Date, of the Chairman of the Board,
the President or any Vice-President and a principal finan-
cial or accounting officer, or equivalent officer or offi-
cers, of each of the Seller and MMCA in which such officers,
to the best of their knowledge after reasonable investiga-
tion, shall state that: the representations and warranties
of the Seller in this Agreement are true and correct; the
representations of MMCA in the Note Indemnification Agree-
ment are true and correct; the Seller or MMCA, as applica-
ble, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereun-
der at or prior to the Closing Date; the representations and
warranties of the Seller or MMCA, as applicable, in the
Basic Documents are true and correct as of the dates speci-
fied in such agreements; the Seller or MMCA, as applicable,
has complied with all agreements and satisfied all condi-
tions on its part to be performed or satisfied under such
agreements at or prior to the Closing Date; no stop order
suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; and,
subsequent to the date of the Prospectus, there has been no
material adverse change, nor any development or event in-
volving a prospective material adverse change, in the condi-
tion (financial or otherwise), business, properties or
results of operations of the Seller or MMCA or their respec-
tive businesses except as set forth in or contemplated by
the Prospectus or as described in such certificate.
(j) The Representative shall have received an opinion
of Pryor, Cashman, Sherman & Flynn, counsel to the Indenture
Trustee, dated the Closing Date and satisfactory in form and
substance to the Representative and counsel for the Under-
writers, to the effect that:
(i) the Indenture Trustee is a banking corpora-
tion duly incorporated and validly existing under the
laws of the State of New York;
(ii) the Indenture Trustee has the full corporate
trust power to accept the office of indenture trustee
under the Indenture and to enter into and perform its
obligations under the Indenture, the Sale and Servicing
Agreement and the Administration Agreement;
(iii) the execution and delivery of the Inden-
ture and the Administration Agreement and the accep-
tance of the Sale and Servicing Agreement and the
performance by the Indenture Trustee of its obligations
under the Indenture, the Sale and Servicing Agreement
and the Administration Agreement have been duly autho-
rized by all necessary corporate action of the Inden-
ture Trustee and each has been duly executed and deliv-
ered on behalf of the Indenture Trustee;
(iv) the Indenture, the Sale and Servicing Agree-
ment and the Administration Agreement constitute valid
and binding obligations of the Indenture Trustee en-
forceable against the Indenture Trustee in accordance
with their terms under the laws of the State of New
York and the federal law of the United States;
(v) the execution and delivery by the Indenture
Trustee of the Indenture and the Administration Agree-
ment and the acceptance of the Sale and Servicing
Agreement do not require any consent, approval or
authorization of, or any registration or filing with,
any New York or United States federal governmental
authority, other than the qualification of the Inden-
ture Trustee under the Trust Indenture Act;
(vi) each of the Notes has been duly authenticated
and delivered by the Indenture Trustee;
(vii) neither the consummation by the Inden-
ture Trustee of the transactions contemplated in the
Sale and Servicing Agreement, the Indenture or the
Administration Agreement nor the fulfillment of the
terms thereof by the Indenture Trustee will conflict
with, result in a breach or violation of, or constitute
a default under any law or the charter, By-laws or
other organizational documents of the Indenture Trustee
or the terms of any indenture or other agreement or
instrument known to such counsel and to which the
Indenture Trustee or any of its subsidiaries is a party
or is bound or any judgment, order or decree known to
such counsel to be applicable to the Indenture Trustee
or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or
arbitrator having jurisdiction over the Indenture
Trustee or any of its subsidiaries;
(viii) to such counsel's knowledge there is no
action, suit or proceeding pending or threatened
against the Indenture Trustee (as trustee under the
Indenture or in its individual capacity) before or by
any governmental authority that if adversely decided,
would materially adversely affect the ability of the
Indenture Trustee to perform its obligations under the
Indenture, the Sale and Servicing Agreement or the
Administration Agreement; and
(ix) the execution, delivery and performance by
the Indenture Trustee of the Sale and Servicing Agree-
ment, the Indenture and the Administration Agreement
will not subject any of the property or assets of the
Trust or any portion thereof, to any lien created by or
arising with respect to the Indenture Trustee that are
unrelated to the transactions contemplated in such
Agreements.
(k) The Representative shall have received an opinion
of Richards, Layton & Finger P.A., counsel to the Owner
Trustee, dated the Closing Date and satisfactory in form and
substance to the Representative and counsel for the Under-
writers, to the effect that:
(i) the Owner Trustee has been duly incorporated
and is validly existing as a banking corporation in
good standing under the laws of the State of Delaware;
(ii) the Owner Trustee has full corporate trust
power and authority to enter into and perform its
obligations under the Trust Agreement and, on behalf of
the Trust, under the other Basic Documents to which it
is a party and has duly authorized, executed and deliv-
ered such Basic Documents and such Basic Documents
constitute the legal, valid and binding agreement of
the Owner Trustee, enforceable in accordance with their
terms, except that certain of such obligations may be
enforceable solely against the Trust Property (subject
to applicable bankruptcy, insolvency, fraudulent trans-
fer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time
in effect, and subject, as to enforceability, to gen-
eral principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity
or at law);
(iii) the Certificates have been duly exe-
cuted, authenticated and delivered by the Owner Trustee
as owner trustee and authenticating agent; each of the
Notes has been duly executed by the Owner Trustee, on
behalf of the Trust;
(iv) the execution and delivery by the Owner
Trustee of the Trust Agreement and, on behalf of the
Trust, of the other Basic Documents to which it is a
party and the performance by the Owner Trustee of its
obligations thereunder do not conflict with, result in
a breach or violation of, or constitute a default under
the Articles of Association or By-laws of the Owner
Trustee; and
(v) the execution, delivery and performance by
the Owner Trustee of the Trust Agreement and, on behalf
of the Trust, of the other Basic Documents to which it
is a party do not require any consent, approval or
authorization of, or any registration or filing with,
any Delaware or United States federal governmental
authority having jurisdiction over the trust power of
the owner Trustee, other than those consents, approvals
or authorizations as have been obtained and the filing
of the Certificate of Trust with the Secretary of State
of the State of Delaware.
(l) The Representative shall have received an opinion
of Richards, Layton & Finger, P.A., special Delaware counsel
to the Trust, dated the Closing Date and satisfactory in
form and substance to the Representative and counsel for the
Underwriters, to the effect that:
(i) the Trust has been duly formed and is validly
existing as a business trust under the Delaware Trust
Act;
(ii) the Trust has the power and authority under
the Delaware Trust Act and the Trust Agreement, and the
Trust Agreement authorizes the Owner Trustee, to exe-
cute, deliver and perform its obligations under the
Sale and Servicing Agreement, the Indenture, the Admin-
istration Agreement, the Note Depository Agreement, the
Notes and the Certificates;
(iii) to the extent that Article 9 of the UCC
as in effect in the State of Delaware (the "Delaware
UCC") is applicable (without regard to conflict of laws
principles), and assuming that the security interest
created by the Indenture in the Receivables has been
duly created and has attached, upon the filing of a
financing statement with the Secretary of State of
Delaware the Indenture Trustee will have a perfected
security interest in the Trust's rights in such Receiv-
ables and the proceeds thereof, and such security
interest will be prior to any other security interest
granted by the Trust that is perfected solely by the
filing of financing statements under the Delaware UCC,
excluding purchase money security interests under
section9-312(4) of the Delaware UCC and temporarily
perfected security interests in proceeds under
section9-306(3) of the Delaware UCC;
(iv) no re-filing or other action is necessary
under the Delaware UCC in order to maintain the perfec-
tion of such security interest except for the filing of
continuation statements at five year intervals;
(v) assuming that the Notes have been duly exe-
cuted by the Owner Trustee on behalf of the Trust, and
assuming that the Notes have been duly authenticated
by the Indenture Trustee, when the Notes have been
delivered in accordance with the Indenture, the Notes
will be validly issued and entitled to the benefits of
the Indenture;
(vi) assuming that the Certificates have been duly
authorized, executed and authenticated by the Owner
Trustee on behalf of the Trust, when the Certificates
have been issued and delivered in accordance with the
instructions of the Seller, the Certificates will be
validly issued and entitled to the benefits of the
Trust Agreement; and
(vii) under 12 Del. C. section 3805(b), no
creditor of any Certificateholder (including creditors
of the Seller in its capacity as Certificateholder)
shall have any right to obtain possession of, or other-
wise exercise legal or equitable remedies with respect
to, the property of the Trust except in accordance with
the terms of the Trust Agreement.
(viii) The Representative shall have received
an opinion of Pryor Cashman Sherman & Flynn LLP, coun-
sel to the Seller Trustee, dated the Closing Date and
satisfactory in form and substance to the Representa-
tive and counsel for the Underwriters, to the effect
that:
(ix) the Seller Trustee has been duly incorporated
and is validly existing as a banking corporation in
good standing under the laws of the State of Delaware;
(x) the Seller Trustee has full corporate trust
power and authority to enter into and perform its
obligations under the Seller Trust Agreement and has
duly authorized, executed and delivered the Seller
Trust Agreement and the Seller Trust Agreement consti-
tutes the legal, valid and binding agreement of the
Seller Trustee, enforceable in accordance with its
terms;
(xi) the execution and delivery by the Seller
Trustee of the Seller Trust Agreement and the perfor-
mance by the Seller Trustee of its obligations thereun-
der do not conflict with, result in a breach or viola-
tion of, or constitute a default under the Articles of
Association or By-laws of the Seller Trustee; and
(xii) the execution, delivery and performance
by the Seller Trustee of the Seller Trust Agreement do
not require any consent, approval or authorization of,
or any registration or filing with, any Delaware or
United States federal governmental authority having
jurisdiction over the trust power of the Seller
Trustee, other than those consents, approvals or autho-
rizations as have been obtained.
(m) The Representative shall have received an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the
Seller, dated the Closing Date and satisfactory in form and
substance to the Representative and counsel for the Under-
writers, (i) with respect to the characterization of the
transfer of the Receivables by MMCA to the Seller and from
the Seller to the Trust and (ii) to the effect that should
MMCA become the debtor in a case under the Bankruptcy Code,
and the Seller would not otherwise properly be a debtor in a
case under the Bankruptcy Code, and if the matter were
properly briefed and presented to a court exercising bank-
ruptcy jurisdiction, the court, exercising reasonable judg-
ment after full consideration of all relevant factors,
should not order, over the objection of the
Certificateholders or the Noteholders, the substantive
consolidation of the assets and liabilities of the Seller
with those of MMCA and such opinion shall be in substan-
tially the form previously discussed with the Representative
and counsel for the Underwriters and in any event satisfac-
tory in form and in substance to the Representative and
counsel for the Underwriters.
(n) The Representative shall have received evidence
satisfactory to it and its counsel that, within 10 days of
the Closing Date, UCC-1 financing statements have been or
are being filed in the office of the Secretary of State of
the state of (i) California reflecting the transfer of the
interest of MMCA in the Receivables and the proceeds thereof
to the Seller and the transfer of the interest of the Seller
in the Receivables and the proceeds thereof to the Trust and
(ii) Delaware reflecting the grant of the security interest
by the Trust in the Receivables and the proceeds thereof to
the Indenture Trustee.
(o) The Representative shall have received an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel
to the Seller, dated the Closing Date and satisfactory in
form and substance to the Representative and the counsel for
the Underwriters to the effect that (i) the provisions of
the Indenture are effective to create a valid security
interest in favor of the Indenture Trustee, to secure pay-
ment of the Notes, in all "securities entitlements" (as
defined in Section 8-102(a)(17) of the New York UCC) with
respect to "financial assets" (as defined in Section 8-
102(a)(9) of the New York UCC) now or hereafter credited to
the Reserve Account (such securities entitlements, the
"Securities Entitlements"), (ii) the provisions of the
control agreement for purposes of Article 8 of the New York
UCC are effective to perfect the security interest of the
Indenture Trustee in the Securities Entitlements and (iii)
no security interest of any other creditor of the Trust will
be prior to the security interest of the Indenture Trustee
in such Securities Entitlements.
(p) The Class A-1, Class A-2 and Class A-3 Notes shall
have been rated at least "___" and "___" by Moody's and
Standard & Poor's, respectively, and the Class B Notes shall
have been rated at least "___" and "___" by Moody's and
Standard & Poor's, respectively.
(q) The Representative shall have received a letter,
dated the Closing Date, of Ernst & Young LLP which meets the
requirements of subsection (a) of this Section, except that
the specified date referred to in such subsection will be a
date not more than five days prior to such Closing Date for
purposes of this subsection.
(r) On or prior to the Closing Date, the Certificates
shall have been issued to the Seller.
(s) The Representative shall have received from
Skadden, Arps, Slate, Meagher & Flom LLP and each other
counsel for the Seller, a letter dated the Closing Date to
the effect that the Underwriters may rely upon each opinion
rendered by such counsel to either Standard & Poor's or
Moody's in connection with the rating of any Class of the
Notes, as if each such opinion were addressed to the Under-
writers.
(t) The Representative shall receive from Skadden,
Arps, Slate, Meagher & Flom LLP, and each other counsel for
the Seller, reliance letters with respect to each Opinion of
Counsel required to be delivered to either Standard & Poor's
or Moody's in connection with each transfer to the Trust of
Subsequent Receivables.
The Seller will furnish the Representative with such conformed
copies of such opinions, certificates, letters and documents as the
Representative reasonably requests.
The Representative may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder.
7. Indemnification and Contribution.
(a) The Seller will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading and will reimburse each Underwriter for any legal
or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the
Seller will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Seller by any Underwriter through the
Representative specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter
consists of the information described as such in subsection (b) below; and
provided, further, that with respect to any untrue statement or omission
or alleged untrue statement or omission made in any preliminary
prospectus, the indemnity agreement contained in this subsection (a) shall
not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased the Notes
concerned, to the extent that the untrue statement or omission or alleged
untrue statement or omission was eliminated or remedied in the Prospectus,
which Prospectus was required to be delivered by such Underwriter under
the Act to such person and was not so delivered if the Seller had
previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Seller against any losses, claims, damages or
liabilities to which the Seller may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Seller by such Underwriter
through the Representative specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Seller in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter
consists of the following information in the Prospectus furnished on
behalf of each Underwriter: [the last paragraph at the bottom of the cover
page concerning the terms of the offering by the Underwriters, the legend
concerning overallotments and stabilizing, the concession and reallowance
figures appearing in the third paragraph under the caption "Underwriting"
and the information contained in the [fourth] paragraph under the caption
"Underwriting".]
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemni-
fied party otherwise than under subsection (a) or (b) above. In case any
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party if indemnity could have
been sought hereunder by such indemnified party unless such settlement (i)
includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of
the losses, claims, damages or liabilities referred to in subsection (a)
or (b) above (i) in such proportion as is appropriate to reflect the
relative benefits received by the Seller on the one hand and the
Underwriters on the other from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Seller on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Seller on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Seller bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Seller or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject
of this subsection (d). Notwithstanding the provisions of this subsec-
tion (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Seller under this Section shall be in
addition to any liability which the Seller may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section shall be in addition to
any liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each director of the
Seller, to each officer of the Seller who has signed the Registration
Statement and to each person, if any, who controls the Seller within the
meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Notes hereunder on the Closing
Date and the aggregate principal amount of Notes that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed
10% of the total principal amount of Notes that the Underwriters are
obligated to purchase on such Closing Date, the Representative may make
arrangements satisfactory to the Seller for the purchase of such Notes by
other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Notes that such
defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate
principal amount of Notes with respect to which such default or defaults
occur exceeds 10% of the total principal amount of Notes that the
Underwriters are obligated to purchase on such Closing Date and
arrangements satisfactory to the Representative and the Seller for the
purchase of such Notes by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Seller, except as provided in
Section 9. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and
other statements of the Seller or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as
to the results thereof, made by or on behalf of any Underwriter or the
Seller or any of their respective representatives, officers or directors
or any controlling person, and will survive delivery of and payment for
the Notes. If this Agreement is terminated pursuant to Section 8 or if for
any reason the purchase of the Notes by the Underwriters is not
consummated, the Seller shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Seller and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Notes have been purchased hereunder the
representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Notes by the
Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (ii), (iii) or (iv) of Section
6(c), the Seller will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred
by them in connection with the offering of the Notes.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representative at Eleven Madison Avenue, 23rd Floor, New
York, New York 10010, Attention: Investment Banking Department
Transactions Advisory Group, or, if sent to the Seller, will be mailed,
delivered or sent by facsimile and confirmed to it at P.O. Box 6038,
Cypress, California 90630-5205, Attention: Secretary/Treasurer, Telecopy:
(714) 236-1300; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telecopied and
confirmed to such Underwriter.
11. No Bankruptcy Petition. Each Underwriter agrees that, 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.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7,
and no other person will have any right or obligation hereunder.
13. Representation of Underwriters. The Representative will act for
the several Underwriters in connection with this financing, and any action
under this Agreement taken by the Representative will be binding upon all
the Underwriters.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all such
counterparts shall together constitute one and the same Agreement.
15. Applicable Law; Submission to Jurisdiction.
(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
(b) The Seller hereby submits to the nonexclusive jurisdiction of
the Federal and state courts in the Borough of Manhattan in The City of
New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to the Seller one
of the counterparts hereof, whereupon it will become a binding agreement
between the Seller and the several Underwriters in accordance with its
terms.
Very truly yours,
MMCA AUTO RECEIVABLES TRUST
By:________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By:____________________________________
Name:
Title:
Acting on behalf of itself and as the
Representative of the several Underwriters.
SCHEDULE A
Amount of Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3 Class B
Underwriter Notes Notes Notes Notes
---------------- ---------- ---------- ---------- ----------
Credit Suisse First
Boston Corporation $ ________ $ ________ $ ________ $ ________
J.P. Morgan Securities
Inc. $ ________ $ ________ $ ________ $ ________
Salomon Smith Barney
Inc. $ ________ $ ________ $ ________ $ ________
Total $ ________ $ ________ $ ________ $ ________
=========== ========== ========== ==========
EXHIBIT 3.1
- ------------------------------------------------------------------------------
AMENDED AND RESTATED TRUST AGREEMENT
dated as of October 1, 1999
between
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Beneficial Owner,
and
CHASE MANHATTAN BANK DELAWARE,
as Trustee
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................1
Section 1.2 Other Definitional Provisions..............................5
ARTICLE II
ORGANIZATION
Section 2.1 Name and Office............................................5
Section 2.2 Purposes and Powers........................................5
Section 2.3 Confirmation of Appointment of the Trustee.................7
Section 2.4 Initial Assets.............................................7
Section 2.5 Declaration of Trust.......................................7
Section 2.6 Situs of Trust.............................................7
Section 2.7 Title to Trust Property....................................8
Section 2.8 Representations and Warranties of MMCA.....................8
Section 2.9 Conduct of Business by MART................................9
ARTICLE III
MANAGEMENT OF MART; THE BOARD OF MANAGERS; OFFICERS
Section 3.1 General Management of MART................................11
Section 3.2 Appointment and Term......................................11
Section 3.3 Number; Independent Managers..............................11
Section 3.4 Resignation...............................................15
Section 3.5 Removal of Managers.......................................15
Section 3.6 Filling of Vacancies......................................15
Section 3.7 Managers' Compensation....................................15
Section 3.8 Liability of Managers.....................................15
Section 3.9 Officers..................................................15
Section 3.10Liability of Authorized Officers..........................18
ARTICLE IV
THE SUBTRUSTS
Section 4.1 Beneficial Ownership......................................18
Section 4.2 Subtrusts.................................................18
ARTICLE V
THE TRUSTEE
Section 5.1 Duties of the Trustee.....................................20
Section 5.2 Acceptance of Trusts and Duties...........................21
Section 5.3 Action upon Instruction by the Board of Managers or
Authorized Officers; Rights of the Trustee................23
Section 5.4 Furnishing of Documents...................................25
Section 5.5 Representations and Warranties of the Trustee.............25
Section 5.6 Reliance; Advice of Counsel...............................26
Section 5.7 Compensation and Indemnity................................27
Section 5.8 Resignation or Removal of the Trustee.....................28
Section 5.9 Merger or Consolidation of the Trustee....................29
Section 5.10Appointment of Co-Trustee or Separate Trustee.............29
Section 5.11Eligibility Requirements for the Trustee..................31
ARTICLE VI
TERMINATION OF TRUST AGREEMENT
Section 6.1 Termination of Trust Agreement...........................31
ARTICLE VII
AMENDMENTS
Section 7.1 Amendments................................................32
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Direction of the Trustee..................................32
Section 8.2 Limitations on Rights of Others...........................32
Section 8.3 Notices...................................................33
Section 8.4 Severability of Provisions................................34
Section 8.5 Counterparts..............................................34
Section 8.6 Successors and Assigns....................................34
Section 8.7 No Petition...............................................34
Section 8.8 Headings..................................................34
Section 8.9 Governing Law.............................................34
EXHIBITS
Exhibit A Form of Certificate of Trust........................ A-1
Exhibit B Form of Notice to Trustee Pursuant to Section 3.9(l) B-1
AMENDED AND RESTATED TRUST AGREEMENT, dated and effective as of
October 1, 1999 (as the same may be further amended and restated, amended,
supplemented or otherwise modified and in effect from time to time in
accordance with the terms hereof, this "Agreement"), between MITSUBISHI
MOTORS CREDIT OF AMERICA, INC., a Delaware corporation ("MMCA"), as
beneficial owner under this Agreement (in such capacity, together with any
successor or assign, the "Beneficial Owner"), and CHASE MANHATTAN BANK
DELAWARE, a Delaware banking corporation ("Chase Manhattan Bank Delaware"),
as trustee under this Agreement (in such capacity, or permitted assign, the
"Trustee");
WHEREAS, MMCA and the Trustee entered into a trust agreement,
dated and effective as of May 19, 1999 (the "Original Agreement"), pursuant
to which (i) MMCA Auto Receivables Trust, a Delaware business trust
("MART"), was created and (ii) Chase Manhattan Bank Delaware was appointed
as Trustee; and
WHEREAS, MMCA and the Trustee intend to amend and restate, on
the terms and conditions set forth herein, the Original Agreement to more
fully set forth the terms of MART and the rights and obligations of the
parties hereto.
NOW, THEREFORE, in consideration of the foregoing, other good
and valuable consideration, and the mutual terms and covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For all purposes of this
Agreement, the following terms shall have the meanings set forth below:
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with such specified Person. For purposes of this
definition, "control" when used with respect to any specified Person shall
mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" shall have the meaning set forth in the
preamble hereto.
"Authorized Officer" shall have the meaning set forth in
Section 3.10(d).
"Beneficial Owner" shall mean MMCA in its capacity as the
exclusive
beneficial owner of MART and its successors and assigns in such
capacity.
"Board of Managers" shall have the meaning set forth in
Section 3.1.
"Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions or trust companies in New York, New
York, Wilmington, Delaware or Los Angeles, California shall be authorized
or obligated by law, regulation or executive order to be closed.
"Business Trust Statute" shall have the meaning set forth
in Section 2.5.
"Certificate of Trust" shall mean the Certificate of Trust in
substantially the form of Exhibit A hereto filed for MART pursuant to
Section 3810(a) of the Business Trust Statute.
"Certificates" shall have the meaning set forth in Section
2.2(d).
"Chief Accounting Officer" shall have the meaning set forth
in Section 3.10(c).
"Chief Executive Officer" shall have the meaning set forth
in Section 3.10(a).
"Chief Financial Officer" shall have the meaning set forth
in Section 3.10(b).
"Commission" shall mean the Securities and Exchange
Commission.
"Contracts" shall have the meaning set forth in Section
2.2(a).
"Corporate Trust Office" shall mean, with respect to the Trustee,
the principal corporate trust office of the Trustee located at 1201 Market
Street, Wilmington, DE 19801, or at such other address as the Trustee may
designate from time to time by notice to the Board of Managers, or the
principal corporate trust office of any successor Trustee (the address of
which the successor Trustee will notify the Board of Managers).
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Indemnified Person" and "Indemnified Persons" shall have
the meanings set forth in Section 5.7(b).
"Indentures" shall have the meaning set forth in Section
2.2(e).
"Independent Manager" shall have the meaning set forth in
Section 3.4(c).
"Insolvency Event" shall mean, with respect to any Person, (i)
the making of a general assignment for the benefit of creditors, (ii) the
filing of a voluntary petition in bankruptcy, (iii) being adjudged a
bankrupt or insolvent, or having had entered against such Person an order
for relief in any bankruptcy or insolvency proceeding, (iv) the filing by
such Person of a petition or answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any statute, law or regulation, (v) the filing by such Person of an answer
or other pleading admitting or failing to contest the material allegations
of a petition filed against such Person in any proceeding specified in
clause (vii) below, (vi) seeking, consenting to or acquiescing in the
appointment of a trustee, receiver or liquidator of such Person or of all
or any substantial part of the assets of such Person or (vii) the failure
to obtain dismissal within 60 days of the commencement of any proceeding
against such Person seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute,
law or regulation, or the entry of any order appointing a trustee,
liquidator or receiver of such Person or of such Person's assets or any
substantial portion thereof.
"Manager" shall have the meaning set forth in Section 3.2.
"MART" shall mean MMCA Auto Receivables Trust, a business trust
established pursuant to this Agreement and the Business Trust Statute, and
its successors
and assigns.
"MART Assets" shall mean, as of any date of determination, all
right, title and interest of MART in, to and under the Contracts and any
related property, Certificates representing beneficial interests therein
and all other property acquired by MART from MMCA or any other Person from
time to time as of such date of determination and all proceeds thereof.
"MMCA" shall mean Mitsubishi Motors Credit of America, Inc., a
Delaware corporation, and its successor and assigns.
"Opinion of Counsel" shall mean a written opinion of counsel of
MART, who may be an employee of MART or any Affiliate of MART or outside
counsel to MART or any Affiliate of MART.
"Original Agreement" shall have the meaning set forth in
the recitals of this Agreement.
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, limited liability partnership, trust,
unincorporated organization, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Pooling Agreements" shall have the meaning set forth in
Section 2.2(c).
"Rating Agency" shall mean any nationally recognized
statistical rating organization.
"Responsible Officer" shall mean, with respect to the Trustee,
any officer within the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Agreement and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Secretary of State" shall mean the Secretary of State of
the State of Delaware.
"Securities" shall have the meaning set forth in Section
2.2(f).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Subtrust" shall have the meaning set forth in Section
4.2(a).
"Subtrust Assets" shall have the meaning set forth in
Section 4.2(a).
"Subtrust Designation Certificate" shall have the meaning
set forth in Section 4.2(c).
"Trustee" shall mean Chase Manhattan Bank Delaware, a Delaware
banking corporation, acting not in its individual capacity but solely as
trustee under this Agreement, and its permitted successors and assigns in
such capacity.
"Trusts" shall have the meaning set forth on Section 2.2(c).
Section 1.2 Other Definitional Provisions.
(a) All terms in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(b) The words "hereof", "herein", "hereunder", and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement; Section and
Exhibit references contained in this Agreement are references to Sections
and Exhibits in or to this Agreement unless otherwise specified; and the
term "including" shall mean "including without limitation".
(c) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(d) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
ORGANIZATION
Section 2.1 Name and Office. The trust created hereby shall be
known as "MMCA Auto Receivables Trust" or "MART", in which name the Board
of Managers may conduct the business of MART, make and execute contracts
and other instruments on behalf of MART and sue and be sued. The office of
MART shall be at the address for MART set forth in Section 8.3 or at such
other address as an Authorized Officer may designate by written notice to
the Trustee from time to time.
Section 2.2 Purposes and Powers. The purpose of MART is to
engage solely in any or all of the following activities, all in accordance
with the terms of this Agreement:
(a) to acquire from time to time all right, title and interest
in and to installment sale contracts, receivables or leases arising out of
or relating to the sale, lease or financing of new or used motor vehicles
(including automobiles and light and heavy duty trucks), monies due
thereunder, security interests in the motor vehicles or equipment financed
thereby, proceeds from claims on insurance policies related thereto and
related rights (collectively, the "Contracts").
(b) to acquire, own, hold, service, sell, assign, pledge and
otherwise deal with the Contracts, collateral securing the Contracts,
related insurance policies, agreements with motor vehicle dealers or
equipment dealers or lessors or other originators or servicer of Contracts and
any proceeds or further rights associated with any of the foregoing;
(c) to transfer Contracts to trusts (collectively, the
"Trusts") pursuant to one or more pooling agreements, sale and servicing
agreements or other agreements (collectively, the "Pooling Agreements") to
be entered into by and among, among others, MART, the trustees named
therein and any entities acting as servicers of the Contracts;
(d) to authorize, sell and deliver any class of certificates or
other securities issued by the Trusts under the related Pooling Agreements
(collectively, the "Certificates");
(e) to enter into one or more indentures or other agreements
(collectively, the "Indentures") with the trustees named therein,
providing, among other things, for the issuance of the Securities referred
to in clause (f) below and the pledging of the pools of Contracts or
Certificates of any class issued by one or more Trusts;
(f) to authorize, issue, sell and deliver one or more series
and classes of certificates, bonds, notes or other evidence of indebtedness
or other securities secured or collateralized by one or more pools of
Contracts or by Certificates (collectively, the "Securities"), provided
that MART shall have no liability under any Securities except to the extent
of the one or more pools of Contracts or Certificates securing or
collateralizing such Securities;
(g) to hold and enjoy all of the rights and privileges of any
class of any series of Certificates issued by the Trusts to MART under the
related Pooling Agreements and to hold and enjoy all of the rights and
privileges of any class of any series of Securities issued under the
related Indentures, including any class of Securities or Certificates which
may be subordinate to any other class of Securities or Certificates,
respectively;
(h) to perform its obligations under the Pooling Agreements and
Indentures; and
(i) to enter into all such other agreements, to engage in all
such other activities and to exercise all such other powers permitted to
business trusts under the Business Trust Statute that are incidental to or
connected with the foregoing business or purposes or necessary or desirable
to accomplish the foregoing.
Section 2.3 Confirmation of Appointment of the Trustee. The
Beneficial Owner hereby confirms the appointment of Chase Manhattan Bank
Delaware as Trustee, effective as of the date of the Original Agreement.
Effective as of the date hereof, the Trustee shall have all rights, powers
and duties set forth herein and in the Business Trust Statute with respect
to accomplishing the purposes of MART.
Section 2.4 Initial Assets. Pursuant to the Original Agreement,
MMCA, as Beneficial Owner, granted, assigned, transferred, conveyed and set
over to MART, as of the date thereof, the sum of $100. The Trustee, on
behalf of MART, has acknowledged receipt in trust from the Beneficial
Owner, as of the date thereof, of the foregoing contribution, which
constituted the initial assets of MART.
Section 2.5 Declaration of Trust. The Trustee hereby declares
that, subject to the terms and conditions of this Agreement, it shall hold
all assets of MART conveyed or to be conveyed to MART, including all monies
and proceeds of such assets, in trust for the benefit of the Beneficial
Owner. It is the intention of the parties hereto that (i) MART constitutes
a business trust under Chapter 38 of Title 12 of the Delaware Code, 12
Delaware Code ss. 3801 et seq. (the "Business Trust Statute") and that this
document constitute the governing instrument of MART and (ii) solely for
income and franchise tax purposes, MART shall be treated (a) if it has a
single beneficial owner, as a non-entity, and if has more than one
beneficial owner, as a partnership, with the assets of the partnership
being the assets held by MART and the partners of the partnership being the
beneficial owners. The parties agree that, unless otherwise required by the
appropriate tax authorities, MART will file or cause to be filed annual or
other necessary returns, reports and other forms consistent with the
characterization of MART either as a non-entity or as a partnership for
such tax purposes. Effective as of the date hereof, the Trustee shall have
the rights, powers and duties set forth herein and in the Business Trust
Statute with respect to accomplishing the purposes of MART.
Section 2.6 Situs of Trust. MART shall be located and
administered in the State of Delaware. Any bank accounts maintained by the
Trustee on behalf of MART shall be located in the State of California, the
State of Delaware or the State of New York. Payments will be received by
MART only in California, Delaware or New York, and payments will be made by
MART only from California, Delaware or New York.
Section 2.7 Title to Trust Property. Legal title to all assets
of MART shall at all times be vested in MART as a separate legal entity,
except where applicable law in any jurisdiction requires title to any part
of the assets of MART to be vested in the trustee or trustees, in which
case title shall be deemed to be vested in the Trustee, a co-trustee and/or
a separate trustee, as the case may be.
Section 2.8 Representations and Warranties of MMCA. MMCA, as
Beneficial Owner, hereby represents and warrants to the Trustee that:
(a) Organization, etc. The Beneficial Owner has been duly
incorporated and is validly existing as a corporation 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 are currently owned
and such business is presently conducted;
(b) Due Qualification. The Beneficial Owner 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 requires such
qualifications;
(c) Due Authorization and Binding Obligation. This Agreement
has been duly authorized, executed and delivered by the Beneficial Owner,
and is the valid, binding and enforceable obligation of the Beneficial
Owner except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights or by general equity principles;
(d) No Violation. The execution, delivery and performance by
the Beneficial Owner of this Agreement and the consummation of the
transactions contemplated hereby and the fulfillment of the terms hereof
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
Beneficial Owner, 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 Beneficial Owner is a party or by which the
Beneficial Owner 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, or violate any law, order, rule, or regulation,
applicable to the Beneficial Owner or any of its properties, of any federal
or state regulatory body, any court, administrative agency, or other
governmental instrumentality having jurisdiction over the Beneficial Owner
or any of its properties; and
(e) No Proceedings. There are no proceedings or investigations
pending or, to the Beneficial Owner's best knowledge, threatened before any
governmental authorities (i) asserting the invalidity of this Agreement,
(ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) seeking any determination or ruling
that might materially and adversely affect the performance by the
Beneficial Owner of its obligations under, or the validity and
enforceability of, this Agreement.
Section 2.9 Conduct of Business by MART. (a) The business and
affairs of MART shall be operated in such a manner as the Board of Managers
deems reasonable and necessary or appropriate to preserve the limited
liability of the Beneficial Owner, the separateness of MART from the
business of the Beneficial Owner or any Affiliate of the Beneficial Owner,
and until one year and one day after all Securities and Certificates are
paid in full, the special purpose, bankruptcy remote status of MART. To the
extent permitted by law, until one year and one day after all Securities
and Certificates are paid in full, the Board of Managers shall make
decisions with respect to the business and daily operations of MART
independent of, and not dictated by, the Beneficial Owner or any Affiliate
of the Beneficial Owner.
(b) MART shall at all times:
(i) maintain books and records separate from those
of any other Person;
(ii) maintain its accounts separate from those of any
other Person;
(iii) conduct its business solely in its own name;
(iv) maintain financial statements separate from those of
any other Person, separately identifying its own assets, liabilities
and financial affairs;
(v) pay its indebtedness and other liabilities out
of its own funds and assets;
(vi) observe all business trust formalities
required by law and this Agreement;
(vii) maintain an arm's-length relationship with
each of its Affiliates;
(viii) pay the salaries of its own employees and officers
and maintain a sufficient number of employees in light of its
contemplated business operations;
(ix) allocate fairly and reasonably any overhead for
office space or other expenses incurred by any Affiliate on behalf of
MART;
(x) use stationery, invoices, checks and other business
forms separate from those of any other Person;
(xi) correct any known misunderstanding regarding its
identity separate from that of any other Person; and
(xii) maintain adequate capital in light of its
contemplated business operations.
(c) MART shall not do any of the following until one year and
one day after all Securities and Certificates are paid in full:
(i) seek to have its indebtedness or other obligations
guaranteed by, or secured by a pledge of the assets of, the
Beneficial Owner or any Affiliate of the Beneficial Owner (except for
MART);
(ii) commingle its bank accounts or other assets with
those of any other Person;
(iii) acquire any obligations or securities of the
Beneficial Owner;
(iv) operate or purport to operate as an integrated,
single economic unit with respect to any other Person; or
(v) seek or obtain credit or incur any obligation to any
third party based upon the assets of the Beneficial Owner or any
Affiliate of the Beneficial Owner (except for MART) or induce any
such third party to reasonably rely on the creditworthiness of the
Beneficial Owner or any Affiliate of the Beneficial Owner (except for
MART), or suggest in any way that its assets are directly available
to pay the claims of creditors of the Beneficial Owner or any
Affiliate of the Beneficial Owner (except for MART).
(d) Notwithstanding any provision in this Agreement to the
contrary, MMCA may pay the fees and expenses and indemnify (i) the Trustee
pursuant to this Agreement and (ii) any underwriter, placement agent,
initial purchaser for resale or other Person performing similar functions
in connection with the issuance of any Securities or Certificates.
ARTICLE III
MANAGEMENT OF MART; THE BOARD OF MANAGERS; OFFICERS
Section 3.1 General Management of MART. (a) The business,
properties and affairs of MART shall be managed by the Board of Managers
(the "Board of Managers") which, without limiting the generality of the
foregoing, shall have the power to appoint officers of MART, to appoint and
direct agents, to grant general or limited authority to officers, employees
and agents of MART, and to make, execute and deliver contracts and other
instruments and documents in the name and on behalf of MART, including the
documentation referred to in Section 3.1(b).
(b) The Board of Managers shall have the power and authority to
execute, deliver and file with the Commission in the name of and on behalf
of MART one or more registration statements in connection with the offering
of Securities or Certificates by MART or any Affiliate of MART. The Board of
Managers shall also have the power and authority to execute, deliver and file
with the Commission in the name of and on behalf of MART such other
documentation that is required to be executed, delivered and filed with the
Commission from time to time under the Securities Act or the Exchange Act in
connection with the offering of Securities or Certificates by MART or any
Affiliate of MART.
Section 3.2 Appointment and Term. The Beneficial Owner shall be
entitled to appoint from time to time persons to serve as the managers
(each, a "Manager") on the Board of Managers. Managers shall serve until
their respective successors are appointed by the Beneficial Owner or until
their earlier death, resignation, retirement or removal.
Section 3.3 Number. The number of Managers which shall
constitute the whole Board of Managers shall be five. The number may be
increased or reduced from time to time by amendment of this Agreement.
Section 3.4 Standard of Care; Independent Managers. (a) A
Manager shall owe such fiduciary duties of loyalty and due care to MART as
is required of a director of a Delaware corporation under applicable
Delaware law. Every Manager shall discharge his or her duties in good
faith, with the care an ordinary prudent person in a like position would
exercise under similar circumstances, and in a manner her or she reasonably
believes to be in the best interest of MART.
(b) The Board of Managers of MART shall include at least two
Independent Managers until one year and one day after all Securities and
Certificates are paid in full. So long as any Securities or Certificates
rated by any Rating Agency are outstanding, this Section 3.4(b) and
Sections 3.4(c) and (d) shall not be amended without the prior written
consent of each of the Independent Managers. When voting on matters subject
to the vote of the Board of Managers, including those matters specified in
Section 3.4(d), (i) notwithstanding that MART is not then subject to an
Insolvency Event, the Independent Managers shall take into account the
interests of the creditors of MART as well as the interests of MART and
(ii) if MART is then subject to an Insolvency Event, in any action
requiring the vote of the Independent Managers pursuant to Section 3.4(d),
the Independent Managers and each other Manager shall owe their fiduciary
duties to MART and the creditors of MART. Except as provided in Section
3.4(d), any action permitted or required to be taken by the Board of
Managers may be taken by a simple majority of the members of the Board of
Managers. The actions set forth in Section 3.4(d) shall be the only actions
by the Board of Managers that shall require the affirmative vote of 100% of
the Board of Managers or the vote of the majority that includes at least
two Independent Managers.
(c) The following terms shall have the meanings set forth below
(which other than the definition of "Independent Manager" set forth in
clause (i) below shall be solely for purposes of this Section 3.4(c)):
(i) An "Independent Manager" shall be an individual who:
(A) is not and has not been employed by MMCA or any of its
subsidiaries or affiliates as a director, officer or employee within
the five years immediately prior to such individual's appointment as
an Independent Manager; (B) is not and has not been affiliated with
either a significant customer of MMCA or any of its subsidiaries or
affiliates within the five years immediately prior to such
individual's appointment as an Independent Manager or a significant
supplier of MMCA or any of its subsidiaries within the five years
immediately prior to such individual's appointment as an Independent
Manager; (C) is not and has not been affiliated with a company of
which MMCA or any of its subsidiaries and affiliates is a significant
customer or significant supplier within the five years immediately
prior to such individual's appointment as an Independent Manager; (D)
does not have and has not had significant personal services
contract(s) with MMCA or any of its subsidiaries or affiliates within
the five years immediately prior to such individual's appointment as
an Independent Manager; (E) is not affiliated with a tax-exempt
entity that receives significant contributions from MMCA or any of
its subsidiaries or affiliates within the five years immediately
prior to such individual's appointment as an Independent Manager; (F)
is not the beneficial owner at the time of such individual's
appointment as an Independent Manager, or at any time thereafter
while serving as an Independent Manager, of such number of shares of
any class of common stock of MMCA the value of which constitutes more
than 3% of such individual's net worth; (G) is not a spouse, parent,
sibling or child of any person described by clauses (A) through (F);
and (H) is not and was not a major creditor of MMCA or any of its
subsidiaries or affiliates within the five years prior to such
appointment as an Independent Manager.
(ii) An "affiliate" of a person, or a person "affiliated
with," a specified person, shall mean a person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the specified person.
(iii) The term "control" (including the terms
"controlling," "controlled by" and "under common control with") shall
mean the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person,
whether through the ownership or voting securities, by contract, or
otherwise; provided, however, that a person shall not be deemed to
control another person solely because he or she is a director of such
other person.
(iv) The term "person" shall mean any individual,
partnership, firm, corporation, association, trust, unincorporated
organization or other entity, as well as any syndicate or group deemed to
be a person pursuant to Section 13(d)(3) of the Exchange Act.
(v) A "subsidiary" of MMCA shall mean any corporation a
majority of the voting stock of which is owned, directly or
indirectly through one or more other subsidiaries, by MMCA.
(vi) A "significant customer of MMCA or any of its
subsidiaries or affiliates" shall mean a customer from which MMCA and
any of its subsidiaries or affiliates collectively in the last fiscal
year of MMCA received payments in consideration for the products and
services of MMCA and its subsidiaries and affiliates which are in
excess of 1% of the consolidated gross revenues of MMCA and its
subsidiaries during such fiscal year.
(vii) A "significant supplier of MMCA or any of its
subsidiaries or affiliates" shall mean a supplier to which MMCA and
any of its subsidiaries or affiliates collectively in the last fiscal
year of MMCA made payments in consideration for the supplier's
products and services in excess of 3% of the consolidated gross
revenues of MMCA and its subsidiaries during such fiscal year.
(viii) MMCA or any of its subsidiaries and affiliates
shall be deemed a "significant customer" of a company if MMCA and any
of its subsidiaries and affiliates collectively were the direct
source during such company's last fiscal year in excess of 3% of the
gross revenues which such company received from the sale of its
products and services during such fiscal year.
(ix) MMCA or any of its subsidiaries and affiliates shall
be deemed a "significant supplier" of a company if MMCA and any of
its subsidiaries or affiliates collectively received in such
company's fiscal year payments from such company in excess of 3% of
the gross revenues which such company received during such fiscal
year for the sale of its products and services.
(x) A person shall be deemed to have "significant
personal services contract(s) with MMCA or any of its subsidiaries or
affiliates" if the fees and other compensation received by the person
pursuant to personal services contract(s) with MMCA and any of its
subsidiaries or affiliates exceeded or would exceed 3% of his or her
gross revenues during the last calendar year.
(xi) A tax-exempt entity shall be deemed to receive
"significant contributions from MMCA or any of its subsidiaries or
affiliates" if such tax-exempt entity received during its last fiscal
year, or expects to receive during its current fiscal year,
contributions from MMCA or its subsidiaries or affiliates in excess of
the lesser of (i) 3% of the consolidated gross revenues of MMCA and
its subsidiaries during such fiscal year and (ii) 1% of the
contributions received by the tax-exempt entity during such fiscal
year.
(xii) A person shall be deemed to be a "major creditor of
MMCA or any of its subsidiaries or affiliates" if it is a financial
institution which MMCA, such subsidiary or such affiliate owes
outstanding indebtedness for borrowed money in a sum exceeding more
than 5% of MMCA's total consolidated assets.
(d) Notwithstanding any other provision of this Agreement and
any provision of law that otherwise so empowers MART, MART shall not,
without the affirmative vote of a majority of the members of the Board of
Managers, including each Independent Manager, do any of the following:
(i) engage in any business or activity other than
those set forth in Section 2.2;
(ii) incur any indebtedness, or assume or guaranty any
indebtedness of any other person, other than (A) indebtedness
incurred to MMCA or any Affiliate of MART in connection with the
acquisition of Contracts from time to time and the other businesses
and activities set forth in Section 2.2, which indebtedness will be
subordinate to any Certificates and any Securities and will only be
payable to the extent MART has available cash to pay such
indebtedness; (B) indebtedness incurred in connection with Securities
or Certificates issued in compliance with a Pooling Agreement or an
Indenture; (C) salaries, fees and expenses to its professional
advisors and counsel, Managers, officers and employees; (D)
indebtedness where the person to whom the indebtedness is owing has
delivered to MART an undertaking that it will not institute against,
or join any other person in instituting against, MART any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or
other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after all Securities and Certificates
are paid in full, or look to property or assets of MART in respect of
such obligations and that such obligations shall not constitute a
claim against MART in the event that MART's assets are insufficient
to pay in full such obligations; and (E) other indebtedness not
exceeding $5,000 at any one time outstanding, on account of
incidentals or services supplied or furnished to MART; or
(iii) engage in or take any other action that would
constitute an Insolvency Event.
Section 3.5 Resignation. Any Manager may resign at any time
upon written notice of resignation to the Trustee and the Beneficial Owner.
Any resignation shall be effective immediately unless a date certain is
specified for it to take effect, in which event it shall be effective upon
such date, and acceptance of any resignation shall not be necessary to make
it effective, irrespective of whether the resignation is tendered subject
to such acceptance.
Section 3.6 Removal of Managers. Any Manager may be
removed, either for or without cause, by the Beneficial Owner.
Section 3.7 Filling of Vacancies. In the case of any increase
in the number of Managers, or of any vacancy in the Board of Managers, the
additional Manager shall be appointed by the Beneficial Owner.
Section 3.8 Managers' Compensation. Any or all Managers may
receive such reasonable compensation for their services, whether in the
form of salary or otherwise, with expenses, if any, as the Board of
Managers may from time to time determine.
Section 3.9 Liability of Managers. No person shall be
personally liable to MART or the Beneficial Owner for any breach of its
duties as a Manager; provided, however, that the foregoing shall not
eliminate or limit the liability of a Manager for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation
of the law.
Section 3.10 Officers. (a) The Board of Managers, by a simple
majority, shall appoint a chief executive officer of MART (the "Chief
Executive Officer"). The Chief Executive Officer shall be the chief
executive officer of MART. The Chief Executive Officer shall have general
authority to exercise all the powers necessary for the chief executive
officer of MART. The Chief Executive Officer shall also be the chief
operating officer of MART. The Chief Executive Officer shall implement the
general directives, plans and policies of MART within the scope of the
authority delegated to the Chief Executive Officer by the Board of
Managers. The Chief Executive Officer shall have the primary responsibility
for (i) maintaining the separate status of MART from any Affiliate of MART,
(ii) overseeing the proper segregation of the assets of MART from the
assets of third parties who may have general authority to execute bonds,
deeds and contracts in the name and on behalf of MART, (iii) employing or
appointing such employees, agents and officers as may be required to carry
on the operation of the business of MART, and (iv) supervising the proper
segregation of the Subtrust Assets allocated to each Subtrust from the
Subtrust Assets allocated to any other Subtrust in accordance with Section
4.2. In the absence of the Chief Executive Officer, the duties of the Chief
Executive Officer shall be performed and the authority of the Chief
Executive Officer shall be exercised by such officer as may have been
designated by the most senior officer of MART who has made any such
designation, with the right reserved to the Board of Managers to make the
designation or supersede any designation so made.
(b) The Board of Managers, by a simple majority, or the Chief
Executive Officer shall appoint a chief financial officer of MART (the
"Chief Financial Officer"). The Chief Financial Officer shall be the chief
financial officer of MART. Except as otherwise provided by the Board of
Managers or the Chief Executive Officer, the Chief Financial Officer shall
perform all necessary acts and duties in connection with the administration
of the financial affairs of MART and shall generally perform all the duties
usually appertaining to the office of the chief financial officer of a
business. In the absence of the Chief Financial Officer, the duties of the
Chief Financial Officer shall be performed and the authority of the Chief
Financial Officer shall be exercised by such officer as may be designated
by the Chief Executive Officer, with the right reserved to the Board of
Managers to make the designation or supersede any designation so made.
(c) The Board of Managers, by a simple majority, or the Chief
Executive Officer shall appoint a chief accounting officer of MART (the
"Chief Accounting Officer"). The Chief Accounting Officer shall be the
chief accounting officer of MART. Except as otherwise provided by the Board
of Managers or the Chief Executive Officer, the Chief Accounting Officer
shall perform all necessary acts and duties usually appertaining to the
office of the chief accounting officer of a business. In the absence of the
Chief Accounting Officer, the duties of the Chief Accounting Officer shall
be performed and the authority of the Chief Accounting Officer shall be
exercised by such officer as may be designated by the Chief Executive
Officer, with the right reserved to the Board of Managers to make the
designation or supersede any designation so made.
(d) The Board of Managers, by a simple majority, or the Chief
Executive Officer may, from time to time, appoint other officers of MART as
may be necessary or appropriate for the conduct of MART's business, subject
to the supervision and control of the Board of Managers and the Chief
Executive Officer (each such officer together with the Chief Executive
Officer, the Chief Financial Officer and the Chief Accounting Officer, an
"Authorized Officer"). Any Authorized Officers so designated shall have
such authority and perform such duties as the Board of Managers or the
Chief Executive Officer may, from time to time, delegate to them. Either
the Board of Managers or the Chief Executive Officer may assign titles to
particular officers in addition to the Chief Financial Officer and the
Chief Accounting Officer.
(e) The Chief Executive Officer shall have authority to fix the
compensation of the employees, agents and officers of MART. The Chief
Executive Officer shall also have the authority to appoint, suspend or
remove any other Authorized Officer, employee or agent of MART.
(f) All Authorized Officers appointed by the Board of Managers
or the Chief Executive Officer shall hold office until their respective
successors are appointed or until their earlier resignation or removal. All
Authorized Officers shall hold office at the pleasure of the Board of
Managers. If any vacancy shall occur in any office, the Board of Managers
or the Chief Executive Officer may appoint a successor to fill such
vacancy.
(g) The Chief Executive Officer may be removed at any time,
either for or without cause, by a simple majority of the Board of Managers.
Any of the other Authorized Officers may be removed at any time, either for
or without cause, by a simple majority of the Board of Managers or the
Chief Executive Officer.
(h) Any Authorized Officer may resign at any time upon written
notice of resignation to MART. Any resignation shall be effective
immediately unless a date certain is specified for it to take effect, in
which event it shall be effective upon such date, and acceptance of any
resignation shall not be necessary to make it effective, irrespective of
whether the resignation is tendered subject to such acceptance.
(i) Any Authorized Officer may hold two or more offices the
duties of which can be consistently performed by the same Person.
(j) In addition to the foregoing specifically enumerated duties
and authority, the Authorized Officers shall perform such other duties and
may exercise such further authority as the Board of Managers or the Chief
Executive Officer may determine from time to time or may be assigned to
them from time to time by any superior officer.
(k) Except as fixed or controlled by the Board of Managers,
compensation of all officers and employees shall be fixed by the Chief
Executive Officer or by other Authorized Officers exercising authority
granted to them.
(l) On or prior to the date of this Agreement, an Authorized
Officer shall provide a written notice to the Trustee in substantially the
form attached hereto as Exhibit B setting forth the name and title of each
officer of MART who shall be an Authorized Officer for purposes of this
Agreement. An Authorized Officer shall also provide prompt written notice
to the Trustee if any additional Person shall be appointed an Authorized
Officer for purposes of this Agreement or if any Person shall no longer be
an Authorized Officer for purposes of this Agreement because of such
officer's resignation, removal or otherwise. The Trustee shall be entitled
to rely upon, and shall be protected in relying upon, any written notice
delivered to the Trustee pursuant to this Section 3.10(l).
Section 3.11 Liability of Authorized Officers. No Authorized
Officer shall be personally liable to MART or the Beneficial Owner for any
breach of its duties as an Authorized Officer; provided, however, that the
foregoing shall not eliminate or limit the liability of an Authorized
Officer of MART for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law.
ARTICLE IV
THE SUBTRUSTS
Section 4.1 Beneficial Ownership. The Beneficial Owner
shall be the exclusive beneficial owner of MART and each Subtrust.
Section 4.2 Subtrusts. (a) The MART Assets, immediately upon
the acquisition thereof by MART, shall be allocated to, and identified only
with, a Subtrust under this Agreement (each such subtrust, a "Subtrust",
and the assets allocated to each such Subtrust, "Subtrust Assets"). Each
Subtrust shall be a separate series of MART pursuant to Section 3806(b)(2)
of the Business Trust Statute. The Board of Managers shall cause an
Authorized Officer to account for and record separately all Subtrust Assets
and the proceeds thereof allocated to any Subtrust from the Subtrust Assets
and the proceeds thereof allocated to any other Subtrust. The Board of
Managers shall cause an Authorized Officer to maintain separate and
distinct records for the Subtrust Assets related to each Subtrust and to
hold and account for the Subtrust Assets related to each Subtrust
separately from the Subtrust Assets related to any other Subtrust. Except
to the extent required by law or specified in this Agreement, the debts,
liabilities and expenses incurred, contracted for or otherwise existing
with respect to any Subtrust shall be enforceable against the assets of
such Subtrust only, and not against the assets of MART generally or of any
other Subtrust, and, except to the extent required by law or specified in
this Agreement, none of the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to MART
generally shall be enforceable against the assets of any Subtrust.
(b) Notice of the limitation on interseries liabilities between
Subtrusts applicable to each Subtrust and the Subtrust Assets has been set
forth in the Certificate of Trust as filed in the office of the Secretary
of State pursuant to the Business Trust Statute and the Original Agreement.
It is the express intent of the parties hereto that effective upon the
giving of such notice in the Certificate of Trust, the statutory provisions
of Section 3804 of the Business Trust Statute relating to limitations on
interseries liabilities (and the statutory effect under Section 3804 of the
Business Trust Statute of setting forth such notice in the Certificate of
Trust) became applicable to MART, the Trustee, the Beneficial Owner and the
Subtrust Assets related to each Subtrust. The limitation on interseries
liabilities is included in the Certificate of Trust as filed with the
Secretary of State in the form attached hereto as Exhibit A.
(c) Any Security and every note, bond, contract or other
undertaking issued by or on behalf of any Subtrust shall include a
recitation limiting the obligation represented thereby to the related
Subtrust and the related Subtrust Assets. Any such Security, note, bond,
contract or undertaking, whether secured or unsecured, shall also include
an acknowledgment and agreement by the holder thereof to the effect that
any claim that such holder may have at any time against any MART Assets
that are allocated to an unrelated Subtrust, and any claim that such holder
may have at any time against MART that such holder may seek to enforce
against any MART Assets that are allocated to an unrelated Subtrust, shall
be subordinate to the payment in full, including post-petition interest, in
the event that MART becomes subject to an Insolvency Event, of the claims
of the holders of any Securities or Certificates that are related to such
unrelated Subtrust and the holders of any other notes, bonds, contracts or
other obligations that are related to such unrelated Subtrust. Any Security
and every note, bond, contract or other undertaking issued by or on behalf
of any Subtrust shall include a recitation that each holder or owner of
such Security, note, bond, contract or other undertaking shall, by
acceptance of such Security, note, bond, contract or other undertaking (or,
in the case of an owner, a beneficial interest in such Security, note,
bond, contract or other undertaking), irrevocably makes the election
afforded by Title 11 United States Code Section 1111(b)(1)(A)(i) to secured
creditors to receive the treatment afforded by Title 11 United States Code
Section 1111(b)(2) with respect to any secured claim that such holder or
owner may have at any time against the seller.
(d) The Subtrust to which any MART Assets shall be allocated
shall be specified in a certificate (each, a "Subtrust Designation
Certificate") executed by an Authorized Officer and delivered to the
Trustee not less than one Business Day prior to the acquisition of the
applicable MART Assets. Each Subtrust Designation Certificate shall include
the following:
(i) a designation of the Subtrust to which the MART
Assets are to be allocated, which shall be in form and substance
sufficient to allow the Trustee to differentiate between the Subtrust
to which the MART Assets are to be allocated and any other Subtrust;
(ii) the date on which the MART Assets to be allocated to
such Subtrust are to be transferred to MART and allocated to such
Subtrust; and
(iii) a list of the MART Assets to be allocated to the
Subtrust, which shall identify the MART Assets in such a manner as
may be reasonably required by the Trustee to differentiate between
such MART Assets allocated to such Subtrust and any other MART
Assets.
ARTICLE V
THE TRUSTEE
Section 5.1 Duties of the Trustee. (a) The Trustee is
authorized and directed to execute and deliver this Agreement and each
certificate or other document attached as an exhibit to or contemplated by
this Agreement to which MART is to be a party, in such form as the
Beneficial Owner, the Board of Managers or any Authorized Officer shall
approve, such approval in the case of this Agreement to be evidenced by the
signature of an authorized officer of the Beneficial Owner on the signature
page hereto. Neither the Board of Managers nor any Authorized Officer shall
direct the Trustee to take or refrain from taking any action if such action
or inaction would be contrary to any obligation of MART or the Trustee
under this Agreement, and the Trustee shall not be obligated to follow any
such direction, if given. The Trustee shall perform such duties, and only
such duties, as are specifically set forth in this Agreement. No implied
covenants or obligations on the part of the Trustee shall be read into this
Agreement.
(b) In addition to the foregoing, the Trustee is authorized
(but shall not be obligated) to take all actions required of MART pursuant
to this Agreement. The Trustee is further authorized from time to time to
take such action on behalf of MART as is permitted by this Agreement and
which any Authorized Officer recommends with respect to the Trust
Agreement, except to the extent that this Agreement expressly requires the
consent of the Board of Managers for such action.
(c) It shall be the duty of the Trustee to discharge (or cause
to be discharged) all of its responsibilities pursuant to the terms of this
Agreement. Notwithstanding the foregoing, the Trustee shall be deemed to
have discharged its duties and responsibilities hereunder to the extent the
Board of Managers or an Authorized Officer is required hereunder to perform
any act or to discharge such duty of the Trustee or MART hereunder, and the
Trustee shall not be held liable for the default or failure of the Board of
Managers or an Authorized Officer, as the case may be, to carry out its
obligations hereunder. The Trustee shall have no obligation to administer,
service or collect the Contracts or to maintain, monitor or otherwise
supervise the administration, servicing or collection of the Contracts.
(d) In the absence of bad faith on its part, the Trustee may
conclusively rely upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Agreement in determining the
truth of the statements and the correctness of the opinions contained
therein; provided, however, that the Trustee shall have examined such
certificates or opinions so as to determine compliance of the same with the
requirements of this Agreement.
(e) Neither the Board of Managers nor any Authorized Officer
shall direct the Trustee to take any action that is inconsistent with
Section 2.2 or the terms of this Agreement.
(f) The Trustee shall not be required (i) to keep itself
informed as to the performance or observance by the Board of Managers or
any Authorized Officer of any obligations of the Board of Managers or any
Authorized Officer under this Agreement or any other document or agreement
to which the Trust is a party referred to or provided for herein or (ii) to
inspect the properties or books or records of the Board of Managers or any
Authorized Officer maintained on behalf of the Trust.
(g) Neither the Board of Managers nor any Authorized Officer
shall, without the prior written consent of the Trustee, enter into any
agreement or other instrument on behalf of the Trust that obligates the
Trustee to take any action or perform any service or that creates on behalf
of the Trustee any other duty or obligation.
Section 5.2 Acceptance of Trusts and Duties. Except as
otherwise provided in this Article V, in accepting the trusts hereby
created, the Trustee acts solely as trustee hereunder and not in its
individual capacity. All Persons having any claim against the Trustee by
reason of the transactions contemplated by this Agreement shall not be
entitled to payment or satisfaction thereof from the Trustee in its
individual capacity, except in the manner and to the extent provided by
this Section 5.2. The Trustee accepts the trusts hereby created and agrees
to perform its duties hereunder with respect to such trusts but only upon
the terms of this Agreement. The Trustee shall not be liable or accountable
hereunder under any circumstances, except (i) for its own negligent action,
its own negligent failure to act or its own willful misconduct or (ii) in
the case of the inaccuracy of any representation or warranty contained in
Section 5.5 and expressly made by the Trustee in its individual capacity.
In particular, but not by way of limitation (and subject to the exceptions
set forth in the preceding sentence):
(a) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
the Board of Managers or an Authorized Officer pursuant to Section 5.3;
(b) no provision of this Agreement shall require the Trustee to
expend or risk funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder, if the Trustee shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
or provided to it;
(c) the Trustee shall not be responsible for or in respect of and
makes no representation as to the validity or sufficiency of any provision
of this Agreement or for the due execution hereof by MMCA or for the form,
character, genuineness, sufficiency, value or validity of any MART Assets
or for or in respect of the validity or sufficiency of any agreement or
other document to which MART is a party, and in no event shall the Trustee
assume or incur any liability, duty or obligation to the Board of Managers,
other than as expressly provided for herein;
(d) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement, at the request, order or direction of the Board
of Managers or an Authorized Officer, unless the Beneficial Owner has
offered to the Trustee security or indemnity satisfactory to it against the
fees, costs, expenses and liabilities that may be incurred by the Trustee
therein or thereby;
(f) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its own negligent action or
willful misconduct in the performance of any such act; and
(g) in no event shall the Trustee be liable for the acts or
omissions of the Board of Managers or an Authorized Officer or be
responsible for performing or monitoring the performance of the Board of
Managers or any Authorized Officer.
Every provision of this Agreement relating to the Trustee shall
be subject to the provisions of this Section 5.2.
Section 5.3 Action upon Instruction by the Board of Managers or
Authorized Officers; Rights of the Trustee. (a) Notwithstanding the
foregoing, and in accordance with Section 5.2(d), the Trustee shall not be
required to take any action or refrain from taking action hereunder if the
Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the part of
the Trustee or is contrary to the terms of this Agreement or is otherwise
contrary to law.
(b) Whenever the Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement, or
is unsure as to the application, intent, interpretation or meaning of any
provision of this Agreement, the Trustee may request an Opinion of Counsel
(at the expense of MART) as to such application, intent, interpretation or
meaning, or may give notice (in such form as shall be appropriate under the
circumstances) to the Board of Managers requesting instruction as to the
course of action to be adopted, and, to the extent the Trustee acts in good
faith in accordance with such Opinion of Counsel or any such instruction
received from the Board of Managers or an Authorized Officer, as the case
may be, the Trustee shall not be liable on account of such action to any
Person. If the Trustee shall not have received an Opinion of Counsel or
appropriate instructions within ten days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances), it may, but shall be under no duty
to, take or refrain from taking such action which is consistent, in its
view, with this Agreement, and the Trustee shall have no liability to any
Person for any such action or inaction.
(c) The Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose
of, or otherwise deal with the MART Assets, or to otherwise take or refrain
from taking any action under, or in connection with, any document
contemplated hereby to which the Trustee or MART is a party, except as
expressly provided by the terms of this Agreement or in any document or
written instruction received by the Trustee pursuant to this Section 5.3;
and no implied duties or obligations shall be read into this Agreement
against the Trustee. The Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or
to otherwise perfect or maintain the perfection of any security interest or
lien granted to it pursuant to any agreement or other document to which it
is a party in its capacity as Trustee. The Trustee nevertheless agrees that
it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any lien on any part of the MART Assets that results
from actions by, or claims against, the Trustee in its individual capacity
that are not related to the ownership or the administration of the MART
Assets.
(d) The Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any MART Assets except (i) in accordance with
powers granted to and the authority conferred upon the Trustee pursuant to
this Agreement and (ii) pursuant to any document or instruction delivered
to the Trustee in accordance with this Agreement.
(e) Except in accordance with the written instructions
furnished by an Authorized Officer and except as provided herein, the
Trustee shall have no duty (i) to see to any recording or filing of any
document, (ii) to see to the payment or discharge of any tax, assessment or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of MART, (iii) to confirm
or verify any financial statements of MART or any statements or reports of
the Board of Managers or an Authorized Officer or (iv) to inspect MART's
books and records at any time.
(f) The Trustee shall not be required to take any action under
this Agreement unless the Trustee shall have been indemnified by the Beneficial
Owner, in manner and form satisfactory to the Trustee, against any
liability, cost or expense (including counsel fees and disbursements) which
may be incurred in connection therewith; and, if the Board of Managers or
an Authorized Officer shall have directed the Trustee to take any such
action or refrain from taking any action, the Beneficial Owner shall
furnish such indemnity as shall be required and, in addition, the
Beneficial Owner shall pay the reasonable compensation of the Trustee for
the services performed or to be performed by it pursuant to such direction.
(g) The Trustee shall manage the business and affairs of MART
in accordance with the terms of the Business Trust Statute; provided,
however, that the Trustee undertakes to perform only such duties as are
specifically set forth in this Agreement and as it may be directed from
time to time by the Board of Managers or an Authorized Officer.
(h) The Trustee may fully rely upon and shall have no liability
in connection with calculations or instructions forwarded to the Trustee by
the Board of Managers or an Authorized Officer. The Trustee shall not have
any obligations to furnish information to any Person if it has not received
such information as it may need from the Board of Managers or an Authorized
Officer.
(i) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation, at the request, order or direction of the
Board of Managers or an Authorized Officer unless the Beneficial Owner has
offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities that may be incurred by the Trustee
(including the reasonable fees and expenses of its counsel) therein or
thereby, including such advances as the Trustee shall request.
(j) In no event whatsoever shall the Trustee be liable for any
representation, warranty, covenant, agreement, indebtedness or other
obligation of MART or any Subtrust.
(k) Prior to taking any action under this Agreement, the
Trustee shall be entitled to receive written instructions of an Authorized
Officer pursuant to this Section 5.3.
(l) The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the instructions of an
Authorized Officer.
(m) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or document.
Section 5.4 Furnishing of Documents. The Trustee shall furnish
to the Board of Managers or an Authorized Officer, promptly upon receipt of
a written request therefor, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and any other
instruments furnished to the Trustee by others.
Section 5.5 Representations and Warranties of the
Trustee. (a) Chase Manhattan Bank Delaware hereby represents and warrants to
the Beneficial Owner that:
(i) it is a banking corporation duly organized, validly
existing and in good standing under the laws of Delaware and has its
principal place of business in the State of Delaware;
(ii) it has full power, authority and legal right to
execute, deliver and perform this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of this Agreement;
(iii) the execution, delivery and performance by it of
this Agreement (A) shall not violate any provision of any law or
regulation of the State of Delaware governing the corporate powers of
the Trustee or any order, writ, judgment or decree of any court,
arbitrator or governmental authority of the State of Delaware
applicable to the Trustee or any of its assets, (B) shall not violate
any provision of the organizational documents of the Trustee, and (C)
shall not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation
or imposition of any lien on any properties of the Trustee pursuant
to the provisions of any mortgage, indenture, contract, agreement or
other undertaking to which it is a party, which violation, default or
lien could reasonably be expected to have a materially adverse effect
on the Trustee's performance or ability to perform its duties as
trustee under this Agreement or on the transactions contemplated in
this Agreement;
(iv) the execution, delivery and performance by the
Trustee of this Agreement shall not require the authorization,
consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action in respect of,
any governmental authority or agency regulating the banking and
corporate trust activities of the Trustee (other than as may have
been made or received, as the case may be, and other than the filing
of the Certificate of Trust with the Secretary of State); and
(v) this Agreement has been duly executed and delivered by
the Trustee and constitutes the legal, valid and binding agreement of
the Trustee, enforceable against the Trustee in accordance with its
terms, except as enforceability may be limited by insolvency,
receivership, reorganization, or other similar laws affecting the
enforcement of creditors' rights in general and by general principles
of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
Section 5.6 Reliance; Advice of Counsel. (a) The Trustee shall
incur no liability to any Person in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion,
bond or other document or paper believed by it to be genuine and believed
by it to be signed by the proper party or parties and need not investigate
any fact or matter in any such document. The Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of
any corporate party as conclusive evidence that such resolution has been
duly adopted by such body and that the same is in full force and effect. As
to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president, the
treasurer or the secretary or other authorized officers of the relevant
party, as to such fact or matter, and such certificate shall constitute
full protection to the Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement,
the Trustee: (i) may, at the expense of MART, act directly or through its
agents, attorneys, custodians or nominees pursuant to agreements entered
into with any of them, and the Trustee shall not be liable for the conduct
or misconduct of such agents, attorneys, custodians or nominees if such
agents, attorneys, custodians or nominees shall have been selected by the
Trustee with reasonable care and (ii) may, at the expense of MART, consult
with counsel, accountants and other skilled professionals to be selected
with reasonable care and employed by it. The Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in accordance
with any Opinion of Counsel or advice of such accountants or other such
skilled professionals stating that such action or omission is not contrary
to this Agreement.
Section 5.7 Compensation and Indemnity.
(a) The Trustee shall receive as compensation for its services
hereunder such fees as shall be separately agreed upon from time to time
between the Beneficial Owner and the Trustee. The Trustee shall be entitled
at all times to be reimbursed by the Beneficial Owner for its reasonable
expenses hereunder, including the reasonable expenses and disbursements of
such agents, custodians, nominees, representatives, experts and counsel as
the Trustee may employ in connection with the exercise and performance of
its rights and its duties hereunder.
(b) Subject to the terms of this Agreement, the Beneficial Owner
shall hold harmless the Trustee, its officers, directors, employees,
shareholders and agents (collectively the "Indemnified Persons" or
individually an "Indemnified Person"), against any and all losses,
liabilities, claims, actions, suits, costs, damages, expenses and
liabilities, joint or several (including, but not limited to, any
investigation, reasonable legal and other expenses (including expenses of
investigation) of any kind and nature whatsoever incurred in connection
with, and any amount paid in settlement of any action, suit, proceeding or
claim) (collectively, "Losses") which such Indemnified Persons may become
subject to or liable for by reason of Trustee's acting as trustee under
this Agreement. Notwithstanding the foregoing, the Beneficial Owner shall
not be liable to any Indemnified Person, and shall not be required to
indemnify the Trustee under this Agreement, for any Losses arising out of
the negligence, bad faith or wilful misconduct of such Indemnified Person
or any other Indemnified Person.
Section 5.8 Resignation or Removal of the Trustee. (a) The
Trustee shall not resign without the consent of the Board of Managers
unless (i) the Trustee shall cease to be eligible in accordance with the
provisions of Section 5.11, (ii) the Trustee shall be incapable of acting
or it shall be illegal for the Trustee to act, or (iii) the Trustee shall
have given at least 60 days' prior written notice to the Board of Managers.
(b) The Board of Managers may remove the Trustee (and shall
remove the Trustee in the case of the occurrence of an event described in
clause (i) or (iv)):
(i) if the Trustee shall cease to be eligible in
accordance with the provisions of Section 5.11 and shall fail to
resign after a written request therefor;
(ii) if the Trustee shall be adjudged bankrupt or
insolvent;
(iii) if a receiver or other public officer shall be
appointed or take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation;
(iv) if the Trustee shall otherwise be incapable of
acting or it shall be illegal for the Trustee to act; or
(v) at its discretion.
(c) If the Trustee is removed or if a vacancy exists in the
office of trustee for any reason, the Board of Managers shall promptly
appoint a successor Trustee by written instrument, in duplicate (one copy
of which instrument shall be delivered to the outgoing trustee so removed,
one copy to the successor Trustee). All costs associated with the
resignation or removal of the Trustee and the appointment of a successor
Trustee shall be general expenses of MART. If a successor Trustee shall not
have been appointed within 30 days of such resignation or removal, the
outgoing Trustee may petition a court of competent jurisdiction for the
appointment of a successor Trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor Trustee pursuant to any of the provisions of this Section
5.8 shall not become effective until a written acceptance of appointment is
delivered by the successor Trustee. Any successor Trustee appointed
pursuant to this Section 5.8 shall be eligible to act in such capacity in
accordance with Section 5.11 and, following compliance with the preceding
sentence, shall become fully vested with all the rights, powers, duties and
obligations of the outgoing Trustee under this Agreement, with like effect
as if originally named as trustee.
(e) The outgoing Trustee shall upon payment of its fees and
expenses deliver to the successor Trustee all books, records, accounts,
documents, statements and monies held by it under this Agreement. The
outgoing Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required to fully and certainly vest and
confirm in the successor Trustee all such rights, powers, duties and
obligations. The outgoing Trustee shall cooperate with the successor
Trustee to ensure that the successor Trustee has all books, records,
accounts, documents, statements, monies held by it under this Agreement and
any other relevant information in the possession of the outgoing Trustee
relating to the MART Assets.
(f) Upon the appointment and acceptance of a successor Trustee
pursuant to this Section 5.8, such successor Trustee shall file an
amendment to the Certificate of Trust with the Secretary of State
identifying the name and principal place of business of such successor
Trustee in the State of Delaware.
Section 5.9 Merger or Consolidation of the Trustee. Any
corporation or other Person which may be merged, converted or consolidated
with Chase Manhattan Bank Delaware or any corporation resulting from any
merger, conversion or consolidation to which Chase Manhattan Bank Delaware
shall be a party, or any corporation or other Person succeeding to all or
substantially all of the corporate trust business of Chase Manhattan Bank
Delaware, shall be deemed the successor of such Trustee hereunder;
provided, however, that such corporation shall be eligible in accordance
with the provisions of Section 5.11, and without the execution or filing of
any instrument or any further act on the part of any of the parties hereto;
provided, that such corporation shall file an amendment to the Certificate
of Trust with the Secretary of State as provided in Section 5.8(e).
Section 5.10 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provision of this Agreement, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any
MART Assets may then be located, the Beneficial Owner hereby grants the
Trustee the authority and power to execute and deliver all instruments to
appoint one or more Persons to act as co-trustee, jointly with the Trustee,
or as separate trustee or trustees, of all or any part of MART and the MART
Assets, and to vest in such Person, in such capacity, such title to MART,
or any MART Assets and, subject to the other provisions of this Section
5.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee
under this Agreement shall be required to be eligible in accordance with
the provisions of Section 5.11; provided, however, that no co-trustee or
separate trustee under this Agreement may be a Manager or any Affiliate
thereof.
(b) Each co-trustee and separate trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred upon and exercised or
performed by the Trustee and such co-trustee or separate trustee
jointly (it being understood that such co-trustee or separate trustee
is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the MART Assets or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such co-trustee or separate trustee, but solely at the
direction of the Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Board of Managers and the Trustee acting
jointly may at any time accept the resignation of or remove any
co-trustee or separate trustee appointed with respect to such MART
Assets.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then co-trustees and
separate trustees, as effectively as if given to each of them. Every
instrument appointing any co-trustee or separate trustee shall refer to
this Agreement and the conditions of this Article V. Each co-trustee and
separate trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Each such instrument shall be filed with the Trustee.
(d) Any co-trustee or separate trustee may at any time appoint the
Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any co-trustee or
separate trustee shall die, become incapable of acting, resign or be
removed or it shall become illegal for such co-trustee or separate trustee
to act, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor Trustee.
Section 5.11 Eligibility Requirements for the Trustee. The
Trustee shall at all times: (a) be a corporation or a banking association
organized under the laws of the United States of America or any state
thereof; (b) have its principal place of business in the State of Delaware;
provided, however, that this clause (b) shall be inapplicable if another
trustee or co-trustee of MART having its principal place of business in
Delaware shall have been appointed; (c) be authorized to exercise corporate
trust powers; (d) be qualified to act as the trustee in those states in
which an Authorized Officer has notified the Trustee in writing that the
MART Assets are located (or have appointed a co-trustee or separate trustee
to act as the trustee in such state); and (e) have, or be a wholly owned
subsidiary of an entity which has, a combined capital and surplus of not
less than $50,000,000.
ARTICLE VI
TERMINATION OF TRUST AGREEMENT
Section 6.1 Termination of Trust Agreement. (a) In accordance
with Section 3808(c) of the Business Trust Statute, MART shall have
perpetual existence. So long as no Securities or Certificates are
outstanding, this Agreement may also terminate and MART may dissolve at the
express written direction of the Board of Managers.
(b) Notwithstanding the foregoing, the compensation and
indemnification provisions of Section 5.7 shall survive the termination of
this Agreement and the dissolution of MART.
(c) Upon termination of MART, the Trustee shall file with the
Secretary of State a certificate of cancellation meeting the requirements
of Section 3810(d) of the Business Trust Statute.
ARTICLE VII
AMENDMENTS
Section 7.1 Amendments. (a) This Agreement may be amended by
the Beneficial Owner and the Trustee at any time; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel addressed to
the Trustee, materially adversely effect the characterization of MART for
federal income tax purposes.
(b) Notwithstanding Section 7.1(a), this Agreement may be
amended at any time by the Trustee (acting at the direction of the Board of
Managers) and the Beneficial Owner to the extent reasonably necessary for
MART and the Subtrusts to obtain the intended characterization for federal
and state income tax purposes.
(c) Notwithstanding Sections 7.1(a) and (b), Sections 3.4 (b),
(c) and (d), Section 6.1(a) and this Section 7.1(c) shall not be amended,
supplemented or otherwise modified or rescinded or affected in any way
until one year and one day after all Securities and Certificates are paid
in full without the unanimous vote of the Board of Managers, including the
affirmative vote of each Independent Manager.
(d) In executing any amendment permitted by this Section 7.1 or
the modification thereby of MART, the Trustee shall be entitled to receive
and shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent to the execution and delivery
of such amendment by the Trustee have been satisfied. The Trustee may, but
shall not be obligated to, enter into any such amendment that affects the
Trustee's own rights, duties, liabilities or immunities under this
Agreement or otherwise.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Direction of the Trustee. Notwithstanding anything
herein to the contrary, the Trustee shall take no action with respect to
entering into, disposing of or making any payment or distribution with
respect to any MART Assets except in accordance with the procedures set
forth herein.
Section 8.2 Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Trustee and the Beneficial
Owner and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy
or claim in MART or the MART Assets or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
Section 8.3 Notices. All demands, notices and communications
upon or to the Beneficial Owner, the Trustee or MART shall be in writing,
personally delivered, sent by telecopier, overnight courier or mailed by
certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt at the respective addresses listed below, or at
such other address as shall be designated by such Person in a written
notice to the other parties to this Agreement from time to time.
(i) In the case of the Beneficial Owner:
Mitsubishi Motors Credit of America, Inc.
6363 Katella Avenue
Cypress, CA 90630-5205
Attention: [ ]
Telephone: (714) 236-1500
Facsimile: (714) 236-1300
(ii) In the case of the Trustee:
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, DE 19801-[ ]
Attention: Corporate Trust Department
Telephone: (302) 428-3372
Facsimile: (302) 984-4903
(iii) In the case of MART:
MMCA Auto Receivables Trust
c/o Mitsubishi Motors Credit of America, Inc.
6363 Katella Avenue
Cypress, CA 90630-5205
Attention: [ ]
Telephone: (714) 236-1614
with a copy to the Trustee at the address set forth in
clause (ii) above.
Section 8.4 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 covenants, agreements,
provisions and terms of this Agreement.
Section 8.5 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 may be executed and delivered by facsimile and shall be deemed
to be an original, and all of which counterparts shall constitute but one
and the same instrument.
Section 8.6 Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the Beneficial Owner and the Trustee
and their respective successors and permitted assigns.
Section 8.7 No Petition. Each of the Trustee and the Beneficial
Owner, by entering into this Agreement, hereby covenants and agrees that it
will not at any time institute against MART, or join in any institution
against MART of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law in connection with any obligations relating to
this Agreement or any Securities or Certificates.
Section 8.8 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section 8.9 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE OBLIGATIONS,
RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT THAT, PURSUANT TO SECTION
3809 OF TITLE 12 OF THE DELAWARE CODE, THE DOCTRINE OF MERGER SHALL NOT BE
APPLICABLE TO MART.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day
and year first above written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely as Trustee
By:___________________________________
Name:
Title:
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC.,
as Beneficial Owner
By:___________________________________
Name:
Title:
EXHIBIT A
Form of Certificate of Trust
THIS Certificate of Trust of MMCA Auto Receivables Trust (the "Trust")
is being duly executed and filed by the undersigned, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. C. ss.3801 et
seq.) (the "Act").
1. Name. The name of the business formed hereby is MMCA
Auto Receivables Trust.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware are Chase Manhattan Bank
Delaware, 1201 Market Street, Wilmington, DE 19801, Attention: Corporate
Trust Department.
3. Series Trust. The Trust shall be a series trust and the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable against
the assets of such series only, and not against the assets of the Trust
generally.
4. Effective Date. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Trust in accordance with Section 3810 of the Act.
CHASE MANHATTAN BANK DELAWARE, not on
its individual capacity but solely as trustee
By: ___________________________________
Name:
Title:
EXHIBIT B
MMCA AUTO RECEIVABLES TRUST
Chase Manhattan Bank Delaware
1201 North Market Street
Attention: Corporate Trust Department
October 1, 1999
Ladies and Gentlemen:
Reference is hereby made to the Amended and Restated Trust
Agreement, dated as of October 1, 1999 (the "Trust Agreement"), between
Mitsubishi Motors Credit of America, Inc., as beneficial owner, and Chase
Manhattan Bank, as trustee. Capitalized terms used but not defined in this
notice have the meanings assigned to them pursuant to Section 1.1 of the
Trust Agreement.
Notice is hereby given pursuant to Section 3.9(l) of the Trust
Agreement that each of the persons named on Schedule A hereto has been duly
appointed and is duly qualified as an officer of MMCA Auto Receivables
Trust as of the date of this notice, holding the office or offices set
forth opposite his or her name. Each of such persons shall be an Authorized
Officer for purposes of the Trust Agreement. The signature of each of such
persons set forth opposite such person's name is a specimen of such
person's genuine signature.
MMCA AUTO RECEIVABLES TRUST
By:________________________________
Name:
Title:
SCHEDULE A
Name Office Signature
- -------------------- --------------------- ----------------------
EXHIBIT 4.1
===============================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
between
MMCA AUTO RECEIVABLES TRUST,
as Depositor,
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of October 1, 1999
===============================================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.1 Capitalized Terms...............................................1
SECTION 1.2 Other Definitional Provisions...................................4
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1 Name............................................................5
SECTION 2.2 Office..........................................................5
SECTION 2.3 Purposes and Powers.............................................5
SECTION 2.4 Appointment of Owner Trustee. ..................................6
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate..............6
SECTION 2.6 Declaration of Trust............................................7
SECTION 2.7 Title to Trust Property.........................................7
SECTION 2.8 Situs of Trust..................................................7
SECTION 2.9 Representations and Warranties of the Depositor.................7
SECTION 2.10 Federal Income Tax Matters......................................9
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 Initial Ownership...............................................9
SECTION 3.2 The Certificates................................................9
SECTION 3.3 Authentication of Certificates.................................10
SECTION 3.4 Registration of Certificates; Transfer and Exchange of
Certificates...................................................10
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates..............17
SECTION 3.6 Persons Deemed Owners of Certificate...........................17
SECTION 3.7 Access to List of Certificateholders' Names and Addresses......17
SECTION 3.8 Maintenance of Office or Agency................................18
SECTION 3.9 Appointment of Paying Agent....................................18
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Certificateholders with Respect to
Certain Matters................................................19
SECTION 4.2 Action by Certificateholders with Respect to Certain Matters...19
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy........20
SECTION 4.4 Restrictions on Certificateholders' Power......................20
SECTION 4.5 Majority Control...............................................20
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Certificate Distribution Account. ............20
SECTION 5.2 Application of Trust Funds.....................................21
SECTION 5.3 Method of Payment..............................................21
SECTION 5.4 No Segregation of Monies; No Interest..........................22
SECTION 5.5 Accounting and Reports to the Certificateholders,
the Internal Revenue Service and Others........................22
SECTION 5.6 Signature on Returns; Tax Matters Partner......................23
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1 General Authority..............................................23
SECTION 6.2 General Duties.................................................23
SECTION 6.3 Action upon Instruction........................................24
SECTION 6.4 No Duties Except as Specified in this Agreement or
in Instructions................................................25
SECTION 6.5 No Action Except Under Specified Documents or Instructions.....25
SECTION 6.6 Restrictions...................................................25
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties................................26
SECTION 7.2 Furnishing of Documents........................................27
SECTION 7.3 Representations and Warranties.................................27
SECTION 7.4 Reliance; Advice of Counsel....................................28
SECTION 7.5 Not Acting in Individual Capacity..............................28
SECTION 7.6 Owner Trustee Not Liable for Certificates or Receivables.......29
SECTION 7.7 Owner Trustee May Own Certificates and Notes...................29
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1 Owner Trustee's Fees and Expenses..............................29
SECTION 8.2 Indemnification................................................30
SECTION 8.3 Payments to the Owner Trustee..................................30
ARTICLE IX
TERMINATION
SECTION 9.1 Termination of Trust Agreement.................................30
SECTION 9.2 Prepayment of the Certificates.................................32
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner Trustee.....................33
SECTION 10.2 Resignation or Removal of Owner Trustee........................33
SECTION 10.3 Successor Owner Trustee........................................34
SECTION 10.4 Merger or Consolidation of Owner Trustee.......................35
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee..................35
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Supplements and Amendments.....................................36
SECTION 11.2 No Legal Title to Owner Trust Estate in Certificateholders.....38
SECTION 11.3 Limitation on Rights of Others.................................38
SECTION 11.4 Notices........................................................39
SECTION 11.5 Severability...................................................39
SECTION 11.6 Separate Counterparts..........................................39
SECTION 11.7 Successors and Assigns.........................................39
SECTION 11.8 Covenants of the Depositor.....................................39
SECTION 11.9 No Petition; Subordination; Claims Against Depositor...........40
SECTION 11.10 No Recourse....................................................40
SECTION 11.11 Headings.......................................................41
SECTION 11.12 Governing Law..................................................41
</TABLE>
EXHIBITS
EXHIBIT A Form of Certificate
EXHIBIT B Form of Certificate of Trust
EXHIBIT C Form of Rule 144A Transferor Certificate
EXHIBIT D Form of Investment Letter -- Qualified Institutional Buyer
EXHIBIT E Form of Investment Letter -- Institutional Accredited Investor
AMENDED AND RESTATED TRUST AGREEMENT, dated as of October 1,
1999 (as the same may be further amended, supplemented or otherwise
modified and in effect from time to time, this "Agreement"), between MMCA
AUTO RECEIVABLES TRUST, a Delaware business trust, as depositor (the
"Depositor"), having its principal executive office at 6363 Katella Avenue,
Cypress, California 90630-5205; and WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as trustee under this agreement (in such capacity,
together with any successor or permitted assign, the "Owner Trustee"),
having its principal corporate trust office at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001.
WHEREAS, the parties hereto intend to amend and restate that
certain Trust Agreement, dated as of October 1, 1999 between the Depositor
and the Owner Trustee, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Depositor and
the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Capitalized Terms. For all purposes of this
Agreement, the following terms shall have the meanings set forth below:
"Agreement" shall have the meaning specified in the recitals
hereto.
"Basic Documents" shall mean this Agreement, the Certificate
of Trust, the Indenture, the Assignments (as defined in the Purchase
Agreement), the Sale and Servicing Agreement, the Purchase Agreement, the
Administration Agreement, the Note Depository Agreement, the Yield
Supplement Agreement, the Control Agreement and other documents and
certificates delivered in connection therewith as the same may from time to
time be amended, supplemented or otherwise modified and in effect.
"Business Trust Statute" shall mean Chapter 38 of Title 12
of the Delaware Code, 12 Del. Code ss. 3801 et seq., as the same may be
amended, supplemented or otherwise modified and in effect from time to
time.
"Certificate" shall mean a physical certificate evidencing
the beneficial interest of a Certificateholder in the property of the
Trust, substantially in the form of Exhibit A attached hereto. Such
certificate shall entitle the Holder thereof to distributions pursuant to
this Agreement from collections and other proceeds in respect of the Owner
Trust Estate; provided, however, that the Owner Trust Estate has been
pledged to the Indenture Trustee to secure payment of the Notes and that
the rights of Certificateholders to receive distributions on the
Certificates are subordinated to the rights of the Noteholders as described
in the Sale and Servicing Agreement and the Indenture.
"Certificate Distribution Account" shall have the meaning
assigned to such term in Section 5.1.
"Certificate of Trust" shall mean the Certificate of Trust
in the form of Exhibit B filed for the Trust pursuant to Section 3810(a) of
the Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall
mean the register mentioned and the registrar appointed pursuant to Section
3.4.
"Certificateholder" shall mean a Holder of a Certificate.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the
Owner Trustee, the principal corporate trust office of the Owner Trustee
located at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001; or at such other address as the Owner Trustee may
designate by notice to the Certificateholders and the Depositor, or the
principal corporate trust office of any successor Owner Trustee (the
address of which the successor Owner Trustee will notify the
Certificateholders and the Depositor).
"Depositor" shall mean MMCA Auto Receivables Trust, a
Delaware business trust.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Expenses" shall have the meaning assigned to such term in
Section 8.2.
"Holder" shall mean a Person in whose name a Certificate is
registered in the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to
such term in Section 8.2.
"Indenture" shall mean the Indenture, dated as of October 1,
1999, between the Trust and Bank of Tokyo - Mitsubishi Trust Company, a New
York banking corporation, as indenture trustee, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Initial Certificate Balance" shall mean $60,000,000.
"MMCA" shall mean Mitsubishi Motors Credit of America, Inc.,
a Delaware corporation, and its successors and assigns.
"Owner Trust Estate" shall mean all right, title and
interest of the Trust in, to and under the property and rights assigned to
the Trust pursuant to Article II of the Sale and
Servicing Agreement.
"Owner Trustee" shall mean Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity but solely as
owner trustee under this Agreement, and any successor Owner Trustee
hereunder.
"Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9 and shall initially be Wilmington
Trust Company.
"Prepayment Date" shall mean the Payment Date specified by
the Servicer pursuant to Section 9.2(a).
"Prepayment Price" shall mean an amount equal to the
Certificate Balance as of the applicable Prepayment Date.
"Qualified Institutional Buyer" has the meaning specified in
Rule 144A.
"Record Date" shall mean, with respect to any Payment Date
for any Certificate, the fifteenth (15th) day of the preceding month,
unless such fifteenth (15th) day is not a Business Day, in which case the
immediately preceding Business Day.
"Rule 144A" shall have the meaning assigned to such term in
Section 3.4(d)(i).
"Rule 144A Information" shall have the meaning assigned to
such term in Section 3.4(e).
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement, dated as of October 1, 1999 and among the Trust, the
Depositor, as seller, and MMCA, as servicer, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Secretary of State" shall mean the Secretary of State of the
State of Delaware.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Transfer" shall have the meaning assigned to such term in
Section 3.2.
"Treasury Regulations" shall mean regulations, including
proposed or temporary regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other
successor Treasury Regulations.
"Trust" shall mean the trust established by this Agreement.
"Void Transfer" shall have the meaning assigned to such term
in Section 3.2.
SECTION 1.2 Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined
have the meanings assigned to them in the Sale and Servicing Agreement or,
if not defined therein, in the Indenture.
(b) All terms in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or
other documents made or delivered pursuant hereto or thereto, accounting
terms not defined in this Agreement or in any such certificate or other
document, and accounting terms partly defined in this Agreement or in any
such certificate or other document to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(d) The words "hereof", "herein", "hereunder", and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement; Section and
Exhibit references contained in this Agreement are references to Sections
and Exhibits in or to this Agreement unless otherwise specified; and the
term "including" shall mean "including without limitation".
(e) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1 Name. The Trust created hereby shall be known as
"MMCA Auto Owner Trust 1999-2", in which name the Owner Trustee may conduct
the business of the Trust, make and execute contracts and other instruments
on behalf of the Trust and sue and be sued.
SECTION 2.2 Office. The office of the Trust shall be in care
of the Owner Trustee at the Corporate Trust Office or at such other address
in the State of Delaware as the Owner Trustee may designate by written
notice to the Certificateholders and the Depositor.
SECTION 2.3 Purposes and Powers. (a) The purpose of the
Trust is, and Mthe Trust shall have the power and authority, to engage solely
in the following activities:
(i) to issue the Notes pursuant to the Indenture, and
the Certificates pursuant to this Agreement, and to sell the Notes
upon the written order of the Depositor;
(ii) with the proceeds of the sale of the Notes to
fund the Reserve Account, the Pre-Funding Account, the Negative
Carry Account and the Yield Supplement Account, to pay the
organizational, start-up and transactional expenses of the Trust,
and to pay the balance to the Depositor pursuant to the Sale and
Servicing Agreement;
(iii) to pay interest on and principal of the Notes
and distributions on the Certificates;
(iv) to assign, grant, transfer, pledge, mortgage and
convey the Owner Trust Estate (other than the Certificate
Distribution Account and the proceeds thereof) to the Indenture
Trustee pursuant to the Indenture;
(v) to enter into and perform its obligations under
the Basic Documents to which it is to be a party;
(vi) to engage in those activities, including
entering into agreements, that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or
connected therewith; and
(vii) subject to compliance with the Basic Documents,
to engage in such other activities as may be required in connection
with conservation of the Owner Trust Estate and the making of
distributions to the Noteholders and the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the other Basic Documents.
SECTION 2.4 Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of
the date hereof, to have all the rights, powers and duties set forth herein
and in the Business Trust Statute.
SECTION 2.5 Initial Capital Contribution of Owner Trust
Estate. As of October 1, 1999, the Depositor sold, assigned, transferred,
conveyed and set over to the Owner Trustee the sum of $1. The Owner Trustee
hereby acknowledges receipt in trust from the Depositor, as of such date,
of the foregoing contribution, which shall constitute the initial Owner
Trust Estate and shall be deposited in the Certificate Distribution
Account. The Depositor shall pay organizational expenses of the Trust as
they may arise or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses paid by the Owner
Trustee.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject
to the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that (i) the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust and
(ii) solely for income and franchise tax purposes, the Trust shall be
treated (a) if it has a single beneficial owner, as a non-entity and if has
more than one beneficial owner, as a partnership, with the assets of the
partnership being the Receivables and other assets held by the Trust, the
partners of the partnership being the Certificateholders and the Notes
constituting indebtedness of the partnership. The parties agree that,
unless otherwise required by the appropriate tax authorities, the Trust
will file or cause to be filed annual or other necessary returns, reports
and other forms consistent with the characterization of the Trust either as a
nonentity or as a partnership for such tax purposes. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust. The Owner Trustee has filed the Certificate of Trust
with the Secretary of State.
SECTION 2.7 Title to Trust Property. Legal title to the
entirety of the Owner Trust Estate shall be vested at all times in the
Trust as a separate legal entity, except where applicable law in any
jurisdiction requires title to any part of the Owner Trust Estate to be
vested in a trustee or trustees, in which case title shall be deemed to be
vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the
case may be.
SECTION 2.8 Situs of Trust. The Trust shall be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of
Delaware or the State of New York. The Trust shall not have any employees
in any state other than the State of Delaware; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware. Payments will be
received by the Trust only in Delaware or New York, and payments will be
made by the Trust only from Delaware or New York. The only office of the
Trust will be at the Corporate Trust Office in the State of Delaware.
SECTION 2.9 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Owner Trustee that:
(a) The Depositor is duly organized and 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 are currently owned and such business
is presently conducted.
(b) The Depositor 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) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms, and the Depositor has
full power and authority to sell and assign the property to be sold and
assigned to, and deposited with, the Trust, and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all
necessary corporate action; and the execution, delivery and performance of
this Agreement has been duly authorized by the Depositor by all necessary
corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do 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
Depositor, or any indenture, agreement or other instrument to which the
Depositor is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument (other than pursuant to
the Basic Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the
Depositor of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(e) There are no proceedings or investigations pending or,
to the Depositor's best knowledge, threatened before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor 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 or 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 Depositor of its
obligations under, or the validity or enforceability of, this Agreement or
(iv) which might adversely affect the Federal income tax attributes or
Applicable Tax State franchise or income tax attributes, of the Notes.
(f) The representations and warranties of the Depositor in
Section 3.1 of the Purchase Agreement are true and correct.
SECTION 2.10 Federal Income Tax Matters. The
Certificateholders acknowledge that it is their intent and that they
understand it is the intent of the Depositor and the Servicer that, for
purposes of Federal income, state and local income and franchise tax and
any other income taxes, the Trust will be treated either as a "nonentity"
under Treas. Reg. ss. 301.7701-3 or as a partnership, and the
Certificateholders (including the Depositor) will be treated as partners in
that partnership. The Depositor and the other Certificateholders by
acceptance of a Certificate agree to such treatment and agree to take no
action inconsistent with such treatment. For each taxable year (or portion
thereof), other than periods in which there is only one Certificateholder:
(a) amounts paid to the Depositor pursuant to Sections
4.1(b), 4.7(a), 4.7(b) and 4.9 of the Sale and Servicing Agreement or
clause (i) of the fourth paragraph of Section 5.1(a) of the Sale and
Servicing Agreement for such year (or other period) shall be treated as a
guaranteed payment within the meaning of Section 707(c) of the Code; and
(b) all remaining net income or net loss, as the case may
be, of the Trust for such year (or other period) as determined for Federal
income tax purposes (and each item of income, gain, credit, loss or deduction
entering into the computation thereof) shall be allocated to the
Certificateholders pro rata in accordance with the outstanding principal
balances of their respective Certificates.
The Depositor is authorized to modify the allocations in this paragraph if
necessary or appropriate, in its sole discretion, for the allocations to
fairly reflect the economic income, gain or loss to the Depositor or the
Certificateholders or as otherwise required by the Code.
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 Initial Ownership. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.5 and
until the issuance of the Certificates, the Depositor shall be the sole
beneficiary of the Trust.
SECTION 3.2 The Certificates. The Certificates shall be
issued in one or more registered, definitive, physical certificates, in
substantially the form set forth in Exhibit A, in minimum denominations of
at least $1,000,000 and multiples of $1,000 in excess thereof; provided,
however, that a single Certificate may be issued in a denomination equal to
the Initial Certificate Balance less the aggregate denominations of all
other Certificates or a denomination less than $1,000. No Certificate may
be sold, transferred, assigned, participated, pledged, or otherwise
disposed of (any such act, a "Transfer") to any Person except in accordance
with the provisions of Section 3.4, and any attempted Transfer in violation
of this section or Section 3.4 shall be null and void (each, a "Void
Transfer"). Notwithstanding the foregoing, following the delivery to the
Owner Trustee of an Opinion of Counsel to the effect that the elimination
of restrictions on transfer will not cause the Trust to be taxable as a
corporation for Federal income tax purposes or for purposes of the tax laws
of any Applicable Tax State, this Agreement may be amended to modify or
delete transfer restrictions in accordance with such Opinion of Counsel.
The Certificates may be in printed or typewritten form and
shall be executed on behalf of the Trust by manual or facsimile signature
of a Responsible Officer of the Owner Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefits of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates.
If Transfer of the Certificates is permitted pursuant to
this Section 3.2 and Section 3.4, a transferee of a Certificate shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such transferee's
acceptance of a Certificate duly registered in such transferee's name
pursuant to Section 3.4.
SECTION 3.3 Authentication of Certificates. Concurrently
with the initial sale of the Receivables to the Trust pursuant to the Sale
and Servicing Agreement, the Owner Trustee shall cause the Certificates, in
an aggregate principal amount equal to the Initial Certificate Balance, to
be executed on behalf of the Trust, authenticated and delivered to or upon
the written order of the Depositor, signed by its chief executive officer,
chief financial officer or chief accounting officer, without further
corporate action by the Depositor, in authorized denominations. No
Certificate shall entitle its Holder to any benefit under this Agreement,
or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set
forth in Exhibit A attached hereto executed by the Owner Trustee or
Wilmington Trust Company, as the Owner Trustee's authenticating agent, by
manual signature; such authentication shall constitute conclusive evidence
that such Certificate shall have been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
authentication.
SECTION 3.4 Registration of Certificates; Transfer and
Exchange of Certificates. (a) The Certificate Registrar shall keep or cause
to be kept, at the office or agency maintained pursuant to Section 3.8, a
Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Trust shall provide for the registration of Certificates
and of Transfers and exchanges of Certificates as herein provided.
Wilmington Trust Company shall be the initial Certificate Registrar. No
Transfer of a Certificate shall be recognized except upon registration of
such Transfer in the Certificate Register.
(b) No Certificateholder shall Transfer any Certificate
initially held by it unless such transfer is made pursuant to an effective
registration statement or otherwise in accordance with the requirements
under the Securities Act of 1933, as amended (the "1933 Act"), and
effective registration or qualification under applicable state securities
laws, or is made in a transaction which does not require such registration
or qualification. If a transfer is to be made in reliance upon an exemption
from the 1933 Act, and under the applicable state securities laws, (i) the
Certificate Registrar shall require an Opinion of Counsel reasonably
satisfactory to the Certificate Registrar and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act, applicable state
securities laws and other relevant laws, which Opinion of Counsel shall not
be an expense of the Certificate Registrar, the Depositor or the Trustee,
and (ii) the Certificate Registrar shall require the transferee to execute
a certification acceptable to and in form and substance satisfactory to the
Certificate Registrar setting forth the facts surrounding such transfer.
(c) No Transfer of any Certificate shall be permitted,
recognized or recorded unless the Depositor has consented in writing to
such Transfer, which consent may be withheld in the sole discretion of the
Depositor, provided, however, that no such consent of the Depositor shall
be required where the proposed transferee is, and at the time of the
Transfer will be, a Certificateholder. Each Certificate shall bear a legend
to the following effect unless determined otherwise by the Administrator
(as certified to the Certificate Registrar in an Officer's Certificate)
consistent with applicable law:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES FOR THE
BENEFIT OF THE TRUST AND THE DEPOSITOR THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN A DENOMINATION
OF AT LEAST $1,000,000, ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE
144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, SUBJECT
TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT C TO THE TRUST
AGREEMENT AND (B) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF
A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT D TO THE TRUST
AGREEMENT, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE RECEIPT BY THE
TRUST, AND THE CERTIFICATE REGISTRAR OF SUCH EVIDENCE ACCEPTABLE TO THE
TRUST THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH
THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (3)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN
RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT
PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE
REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT E TO
THE TRUST AGREEMENT OR (B) THE RECEIPT BY THE TRUST AND THE CERTIFICATE
REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUST THAT SUCH REOFFER,
RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE TRUST AGREEMENT AND
THE SECURITIES ACT AND OTHER APPLICABLE LAWS, OR (4) TO THE DEPOSITOR OR ITS
AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE STATES OF THE UNITED
STATES. IN ADDITION, EXCEPT IN THE CASE OF TRANSFERS TO EXISTING
CERTIFICATEHOLDERS, THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY WITH THE EXPRESS WRITTEN CONSENT OF THE DEPOSITOR
(WHICH CONSENT MAY BE WITHHELD FOR ANY REASON OR FOR NO REASON)."
As a condition to the registration of any Transfer of a
Certificate, the prospective transferee of such a Certificate shall
represent to the Owner Trustee and the Certificate Registrar the following:
(i) It has neither acquired nor will it Transfer any
Certificate it purchases (or any interest therein) or cause any
such Certificates (or any interest therein) to be marketed on or
through an "established securities market" within the meaning of
section 7704(b)(1) of the Code, including, without limitation, an
over-the-counter-market or an interdealer quotation system that
regularly disseminates firm buy or sell quotations.
(ii) It either (A) is not, and will not become, a
partnership, Subchapter S corporation, or grantor trust for U.S.
Federal income tax purposes, or (B) is such an entity, but none of
the direct or indirect beneficial owners of any of the interests in
such transferee have allowed or caused, or will allow or cause, 80%
or more (or such other percentage as the Depositor may establish
prior to the time of such proposed Transfer) of the value of such
interests to be attributable to such transferee's ownership of
Certificates.
(iii) It understands that no subsequent Transfer of
the Certificates is permitted unless (A) such Transfer is of a
Certificate with a denomination of at least $1,000,000 and (B) the
Depositor consents in writing (which consent may be withheld for
any reason or for no reason) to the proposed Transfer; provided,
however, that no such consent shall be required where the proposed
transferee is, and at the time of the Transfer will be, a Holder of
a Certificate.
(iv) It understands that the opinion of tax counsel
that the Trust is not a publicly traded partnership taxable as a
corporation is dependent in part on the accuracy of the
representations in paragraphs (i), (ii) and (iii) above.
(v) If it is acquiring any Certificates as a
fiduciary or agent for one or more investor accounts, it has sole
investment discretion with respect to each such account and it has
full power to make the acknowledgments, representations and
agreements contained herein on behalf of each such account.
(vi) It is not (A) an employee benefit plan, as
defined in Section 3(3) of ERISA, that is subject to Title I of
ERISA, (B) a plan described in Section 4975(e)(1) of the Code, (C)
a governmental plan, as defined in Section 3(32) of ERISA, subject
to any Federal, state or local law which is, to a material extent,
similar to the provisions of Section 406 of ERISA or Section 4975
of the Code, (D) an entity whose underlying assets include plan
assets by reason of a plan's investment in the entity (within the
meaning of Department of Labor Regulation 29 C.F.R. ss. 2510.3-101)
or (E) a person investing "plan assets" of any such plan
(excluding, for purposes of this clause (E), any entity registered
under the Investment Company Act of 1940, as amended).
(vii) It is a Person who is either (A) (1) a citizen
or resident of the United States, (2) a corporation, partnership or
other entity organized in or under the laws of the United States or
any political subdivision thereof or (3) a Person not described in
(1) or (2) whose ownership of the Certificates is effectively
connected with such Person's conduct of a trade or business within
the United States (within the meaning of the Code) and who provides
the Depositor and the Owner Trustee an IRS Form 4224 (and such
other certifications, representations or opinions of counsel as may
be requested by the Depositor or the Owner Trustee) or (B) an
estate or trust the income of which is includible in gross income
for United States Federal income tax purposes, regardless of
source.
(viii)It understands that any purported Transfer of
any Certificate (or any interest therein) in contravention of any
of the restrictions and conditions (including any violation of the
representation in paragraph (ii) above by an investor who continues
to hold such Certificates occurring any time after the Transfer in
which it acquired such Certificates) in this Section 3.4 shall be a
Void Transfer, and the purported transferee in a Void Transfer
shall not be recognized by the Trust or any other Person as a
Certificateholder for any purpose.
(ix) It agrees that if it determines to Transfer any
of the Certificates it will cause its proposed transferee to
provide to the Trust and the Certificate Registrar a letter
substantially in the form of Exhibit D or E hereof, as applicable,
or such other written statement as the Depositor shall prescribe.
(d) By acceptance of any Certificate, the Certificateholder
thereof specifically agrees with and represents to the Depositor, the
Certificate Registrar and the Trust that no Transfer of such Certificate
shall be made unless the registration requirements of the Securities Act
and any applicable state securities laws are complied with, or such
Transfer is exempt from the registration requirements under the Securities
Act because the Transfer satisfies one of the following:
(i) such Transfer is in compliance with Rule 144A
under the Securities Act ("Rule 144A"), to a transferee who the
transferor reasonably believes is a Qualified Institutional Buyer
that is purchasing for its own account or for the account of a
Qualified Institutional Buyer and to whom notice is given that such
transfer is being made in reliance upon Rule 144A under the
Securities Act and (x) the transferor executes and delivers to the
Trust and the Certificate Registrar a Rule 144A transferor
certificate substantially in the form attached as Exhibit C and (y)
the transferee executes and delivers to the Trust and the
Certificate Registrar an investment letter substantially in the
form attached as Exhibit D;
(ii) after the appropriate holding period, such
Transfer is pursuant to an exemption from registration under the
Securities Act provided by Rule 144 under the Securities Act and
the transferee, if requested by the Trust or the Certificate
Registrar, delivers an Opinion of Counsel in form and substance
satisfactory to the Trust and the Depositor; or
(iii) such Transfer is to an institutional accredited
investor as defined in rule 501(a)(1), (2), (3) or (7) of
Regulation D promulgated under the Securities Act in a transaction
exempt from the registration requirements of the Securities Act,
such Transfer is in accordance with any applicable securities laws
of any state of the United States or any other jurisdiction, and
such investor executes and delivers to the Trust and the
Certificate Registrar an investment letter substantially in the
form attached as Exhibit E.
(e) The Trust shall make available to the prospective
transferor and transferee information requested to satisfy the requirements
of paragraph (d)(4) of Rule 144A (the "Rule 144A Information"). The Rule
144A Information shall include any or all of the following items requested
by the prospective transferee:
(i) each statement delivered to Certificateholders
pursuant to Section 4.11 of the Sale and Servicing Agreement on
each Payment Date preceding such request; and
(ii) such other information as is reasonably
available to the Owner Trustee in order to comply with requests for
information pursuant to Rule 144A under the Securities Act.
None of the Depositor, the Certificate Registrar or the
Trust is under an obligation to register any Certificate under the
Securities Act or any other securities law.
(f) Upon surrender for registration of Transfer of any
Certificate at the office or agency maintained pursuant to Section 3.8 and
upon compliance with any provisions of this Agreement relating to such
Transfer, the Owner Trustee shall execute, authenticate and deliver (or
shall cause Wilmington Trust Company, as its authenticating agent, to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a
like aggregate amount dated the date of authentication by the Owner Trustee
or any authenticating agent.
Subject to Sections 3.4(b) and 3.4(c), at the option of a
Certificateholder, Certificates may be exchanged for other Certificates of
authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.8.
Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of
transfer and accompanied by IRS Form 4224 or W-9 in form satisfactory to
the Owner Trustee and the Certificate Registrar, duly executed by the
Certificateholder or his attorney duly authorized in writing. Each
Certificate surrendered for registration of Transfer or exchange shall be
cancelled and subsequently disposed of by the Certificate Registrar in
accordance with its customary practice.
No service charge shall be made for any registration of
Transfer or exchange of Certificates, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
Transfer or exchange of Certificates.
(g) The provisions of this Section 3.4 and of this Agreement
generally are intended to prevent the Trust from being characterized as a
"publicly traded partnership" within the meaning of Section 7704 of the
Code, in reliance on Treas. Reg. ss.ss. 1.7704-1(e) and (h), and the
Depositor shall take such intent into account in determining whether or not
to consent to any proposed Transfer of any Certificate.
The preceding provisions of this Section 3.4
notwithstanding, the Owner Trustee shall not make and the Certificate
Registrar shall not register any Transfer or exchange of Certificates for a
period of fifteen (15) days preceding the due date for any payment with respect
to the Certificates.
Notwithstanding anything contained herein to the contrary,
the Owner Trustee shall not be responsible for ascertaining whether any
transfer complies with the registration provisions or exemptions from the
Securities Act, the Exchange Act, applicable state securities law or the
Investment Company Act of 1940, as amended; provided, however, that if a
certification is specifically required to be delivered to the Owner Trustee
by a purchaser or transferee of a Certificate, the Owner Trustee shall be
under a duty to examine the same to determine whether it conforms to the
requirements of this Trust Agreement and to register transfers only upon
receipt of documents and certifications specified herein and shall promptly
notify the party delivering the same if such certification does not so
conform.
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there shall be delivered to the Certificate Registrar
and the Owner Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice that such
Certificate shall have been acquired by a bona fide purchaser, the Owner
Trustee on behalf of the Trust shall execute and the Owner Trustee, or
Wilmington Trust Company, as the Owner Trustee's authenticating agent,
shall authenticate and deliver, in exchange for, or in lieu of, any such
mutilated, destroyed, lost or stolen Certificate, as the case may be, a new
Certificate of like tenor and denomination. In connection with the issuance
of any new Certificate under this Section 3.5, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section 3.5
shall constitute conclusive evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 3.6 Persons Deemed Owners of Certificates. Prior to
due presentation of a Certificate for registration of transfer, the Owner
Trustee, the Certificate Registrar and any Paying Agent may treat the
Person in whose name any Certificate shall be registered in the Certificate
Register as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 5.2 and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar or any
Paying Agent shall be bound by any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, or to the Indenture Trustee, within fifteen
(15) days after receipt by the Owner Trustee of a written request therefor
from the Servicer, the Depositor, or the Indenture Trustee, as the case
may be, a list, in such form as the requesting party may reasonably
require, of the names and addresses of the Certificateholders as of the
most recent Record Date. If three or more Certificateholders or one or more
Holders of Certificates evidencing not less than 25% of the Certificate
Balance apply in writing to the Owner Trustee, and such application states
that the applicants desire to communicate with other Certificateholders
with respect to their rights under this Agreement or under the Certificates
and such application is accompanied by a copy of the communication that
such applicants propose to transmit, then the Owner Trustee shall, within
five (5) Business Days after the receipt of such application, afford such
applicants access during normal business hours to the current list of
Certificateholders. Each Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the
Depositor, the Certificate Registrar or the Owner Trustee accountable by
reason of the disclosure of its name and address, regardless of the source
from which such information was derived.
SECTION 3.8 Maintenance of Office or Agency. The Owner
Trustee shall maintain in Wilmington, Delaware, an office or offices or
agency or agencies where Certificates may be surrendered for registration
of Transfer or exchange and where notices and demands to or upon the Owner
Trustee in respect of the Certificates and the Basic Documents may be
served. The Owner Trustee shall give prompt written notice to the Depositor
and to the Certificateholders of any change in the location of the
Certificate Registrar or any such office or agency.
SECTION 3.9 Appointment of Paying Agent. The Paying Agent
shall make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.2 and shall report the amounts
of such distributions to the Owner Trustee. Any Paying Agent shall have the
revocable power to withdraw funds from the Certificate Distribution Account
for the purpose of making the distributions referred to above. The Owner
Trustee may revoke such power and remove the Paying Agent if the Owner
Trustee determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under this Agreement in any material
respect. The Paying Agent shall initially be Wilmington Trust Company, and
any co-paying agent chosen by the Owner Trustee. Wilmington Trust Company
shall be permitted to resign as Paying Agent upon thirty (30) days' written
notice to the Owner Trustee. In the event that Wilmington Trust Company
shall no longer be the Paying Agent, the Owner Trustee shall appoint a
successor to act as Paying Agent (which shall be a bank or trust company).
The Owner Trustee shall cause such successor Paying Agent or any additional
Paying Agent appointed by the Owner Trustee to execute and deliver to the
Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Owner Trustee that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for
the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders. The Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon removal of a Paying Agent
such Paying Agent shall also return all funds in its possession to the Owner
Trustee. The provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the
Owner Trustee also in its role as Paying Agent, for so long as the Owner
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Certificateholders with Respect
to Certain Matters. With respect to the following matters, the Owner
Trustee shall not take action unless, (i) at least thirty (30) days before
the taking of such action, the Owner Trustee shall have notified the
Certificateholders and the Rating Agencies in writing of the proposed
action and (ii) Certificateholders holding not less than a majority of the
aggregate Certificate Balance shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust
(except claims or lawsuits brought by the Servicer in connection with the
collection of the Receivables) and the settlement of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection by the Servicer of the
Receivables);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under
the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interests of
the Certificateholders;
(e) the amendment, change or modification of the Sale and
Servicing Agreement or the Administration Agreement, except to cure any
ambiguity or to amend or supplement any provision in a manner or add any
provision that would not materially adversely affect the interests of the
Certificateholders; or
(f) the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent for the Notes or Indenture Trustee or pursuant
to this Agreement of a successor Certificate Registrar, or the consent to
the assignment by the Note Registrar, Paying Agent for the Notes or Indenture
Trustee or Certificate Registrar of its obligations under the Indenture or this
Agreement, as applicable.
SECTION 4.2 Action by Certificateholders with Respect to
Certain Matters. The Owner Trustee may not, except upon the occurrence of
an Event of Servicing Termination subsequent to the payment in full of the
Notes and in accordance with the written direction of Certificateholders
holding not less than a majority of the aggregate Certificate Balance, (a)
remove the Servicer under the Sale and Servicing Agreement pursuant to
Article VIII thereof, (b) appoint a successor Servicer pursuant to Article
VIII of the Sale and Servicing Agreement, (c) remove the Administrator
under the Administration Agreement pursuant to Section 8 thereof, (d)
appoint a successor Administrator pursuant to Section 8 of the
Administration Agreement or (e) sell the Receivables after the termination
of the Indenture, except as expressly provided in the Basic Documents.
SECTION 4.3 Action by Certificateholders with Respect to
Bankruptcy. The Owner Trustee shall not have the power to commence a
voluntary proceeding in bankruptcy relating to the Trust unless the Notes
have been paid in full and each Certificateholder approves of such
commencement in advance and delivers to the Owner Trustee a certificate
certifying that such Certificateholder reasonably believes that the Trust
is insolvent.
SECTION 4.4 Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain
from taking any action if such action or inaction would be contrary to any
obligation of the Trust or the Owner Trustee under this Agreement or any of
the other Basic Documents or would be contrary to Section 2.3, nor shall
the Owner Trustee be obligated to follow any such direction, if given.
SECTION 4.5 Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Holders of Certificates evidencing not less
than a majority of the Certificate Balance. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to
this Agreement shall be effective if signed by Holders of Certificates
evidencing not less than a majority of the Certificate Balance at the time
of the delivery of such notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Certificate Distribution
Account. Pursuant to Section 4.1(e) of the Sale and Servicing Agreement,
there has been established and there shall be maintained a segregated trust
account in the name of the Owner Trustee at which shall be designated as
the "Certificate Distribution Account." The Certificate Distribution
Account shall be held in trust in the name of the Owner Trustee for the benefit
of the Certificateholders. Except as expressly provided in Section 3.9, the
Certificate Distribution Account shall be under the sole dominion and
control of the Owner Trustee. All monies deposited from time to time in the
Certificate Distribution Account pursuant to the Sale and Servicing
Agreement or the Indenture shall be applied as provided in this Agreement
and the Sale and Servicing Agreement or the Indenture.
SECTION 5.2 Application of Trust Funds.
(a) On each Payment Date, the Owner Trustee (if other than
the Paying Agent) shall, based on the information contained in the
Servicer's Certificate delivered on the relevant Determination Date
pursuant to Section 3.9 of the Sale and Servicing Agreement, transfer the
amount deposited in the Certificate Distribution Account pursuant to
Section 2.8(a) of the Indenture on such Payment Date to the Paying Agent, or
the Paying Agent, based upon such information, shall withdraw from the
Certificate Distribution Account, for distribution to the Certificateholders
pro rata based on the outstanding principal balance of the Certificates
funds available therein.
(b) On each Payment Date, the Owner Trustee shall, or shall
cause the Paying Agent to, send to each Certificateholder the statement
provided to the Owner Trustee by the Servicer pursuant to Section 4.11 of
the Sale and Servicing Agreement with respect to such Payment Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section 5.2. The Owner Trustee and each Paying Agent
is hereby authorized and directed to retain from amounts otherwise
distributable to the Certificateholders sufficient funds for the payment of
any such withholding tax that is legally owed by the Trust (but such
authorization shall not prevent the Owner Trustee from contesting any such
tax in appropriate proceedings, and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The amount of
any withholding tax imposed with respect to a Certificateholder shall be
treated as cash distributed to such Certificateholder at the time it is
withheld by the Trust and remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a non-U.S. Certificateholder ), the
Owner Trustee may, in its sole discretion, withhold such amounts in
accordance with this paragraph (d). In the event that a Certificateholder
wishes to apply for a refund of any such withholding tax, the Owner Trustee
shall reasonably cooperate with such Certificateholder in making such claim
so long as such Certificateholder agrees to reimburse the Owner Trustee for
any out-of-pocket expenses incurred.
SECTION 5.3 Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Payment Date
shall be made to each Certificateholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate
facilities therefor, if (i) such Certificateholder shall have provided to
the Certificate Registrar appropriate written instructions at least five
(5) Business Days prior to such Payment Date, or (ii) such
Certificateholder is the Depositor or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution
in respect of any Certificate (whether on the Certificateholders' Final
Scheduled Payment Date or otherwise) will be payable only upon presentation
and surrender of such Certificate at the office or agency maintained for
that purpose by the Owner Trustee pursuant to Section 3.8.
SECTION 5.4 No Segregation of Monies; No Interest. Subject
to Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder
need not be segregated in any manner except to the extent required by law,
the Indenture or the Sale and Servicing Agreement and may be deposited
under such general conditions as may be prescribed by law, and the Owner
Trustee shall not be liable for any interest thereon.
SECTION 5.5 Accounting and Reports to the
Certificateholders, the Internal Revenue Service and Others. The Owner
Trustee shall, based on information provided by the Depositor, (a) maintain
(or cause to be maintained) the books of the Trust on the basis of a fiscal
year ending December 31 and based on the accrual method of accounting, (b)
deliver to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required
(including Schedule K-1) to enable each Certificateholder to prepare its
Federal and state income tax returns, (c) file such tax returns relating to
the Trust (including a partnership information return, IRS Form 1065), and
make such elections as may from time to time be required or appropriate
under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership
for Federal income tax purposes, (d) cause such tax returns to be signed in
the manner required by law and (e) collect or cause to be collected any
withholding tax as described in and in accordance with Section 5.2(c) with
respect to income or distributions to Certificateholders. The Owner Trustee
shall elect under Section 1278 of the Code to include in income currently
any market discount that accrues with respect to the Receivables. The Owner
Trustee shall not make the election provided under Section 754 of the Code.
The Owner Trustee may satisfy its obligations with respect
to this Section 5.5 by retaining, at the expense of the Depositor, a firm
of independent public accountants (the "Accountants") chosen by the
Depositor which shall perform the filing obligations of the Owner Trustee
hereunder. The Accountants will provide prior to [November 15], 1999, a
letter in form and substance satisfactory to the Owner Trustee as to
whether any Federal tax withholding on Certificates is then required and,
if required, the procedures to be followed with respect thereto to comply with
the requirements of the Code. The Accountants shall be required to update the
letter in each instance that any additional tax withholding is subsequently
required or any previously required tax withholding shall no longer be
required. The Owner Trustee shall be deemed to have discharged its obligations
pursuant to this Section upon its retention of the Accountants, and the Owner
Trustee shall not have any liability with respect to the default or misconduct
of the Accountants.
SECTION 5.6 Signature on Returns; Tax Matters Partner. (a) The
Depositor, as general partner for income tax purposes, shall sign, on
behalf of the Trust, the tax returns of the Trust.
(b) The Depositor shall be designated the "tax matters
partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1 General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Documents to which
the Trust is to be a party and each certificate or other document attached
as an exhibit to or contemplated by the Basic Documents to which the Trust
is to be a party and any amendment or other agreement, in each case, in
such form as the Depositor shall approve, as evidenced conclusively by the
Owner Trustee's execution thereof and the Depositor's execution of this
Agreement, and to direct the Indenture Trustee to authenticate and deliver
Notes in the aggregate principal amount of $740,000,000 (comprised of
$326,000,000 in aggregate principal amount of Class A-1 Notes, $210,000,000
in aggregate principal amount of Class A-2 Notes, $142,000,000 in aggregate
principal amount of Class A-3 Notes and $62,000,000 in aggregate principal
amount of Class B Notes). In addition to the foregoing, the Owner Trustee
is authorized to take all actions required of the Trust pursuant to the
Basic Documents. The Owner Trustee is further authorized from time to time
to take such action on behalf of the Trust as is permitted by the Basic
Documents and which the Servicer or the Administrator recommends with
respect to the Basic Documents, except to the extent that this Agreement
expressly requires the consent of Certificateholders for such action.
SECTION 6.2 General Duties. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and the other Basic Documents to
which the Trust is a party and to administer the Trust in the interest of
the Certificateholders, subject to the lien of the Indenture and in
accordance with the provisions of this Agreement and the other Basic
Documents. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the
Basic Documents to the extent the Administrator is required in the
Administration Agreement to perform any act or to discharge such duty of
the Owner Trustee or the Trust hereunder or under any other Basic Document,
and the Owner Trustee shall not be held liable for the default or failure
of the Administrator to carry out its obligations under the Administration
Agreement.
SECTION 6.3 Action upon Instruction. (a) Subject to Article
IV, and in accordance with the terms of the Basic Documents, the
Certificateholders may, by written instruction, direct the Owner Trustee in
the management of the Trust.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic Document if the Owner Trustee shall
have reasonably determined, or shall have been advised by counsel, that
such action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any other Basic Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances)
to the Certificateholders requesting instruction as to the course of action
to be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Certificateholders received,
the Owner Trustee shall not be liable on account of such action to any
Person. If the Owner Trustee shall not have received appropriate
instruction within ten (10) days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this
Agreement or the other Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any
Person for such action or inaction.
(d) In the event the Owner Trustee is unsure as to the application
of any provision of this Agreement or any other Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to
the Certificateholders requesting instruction and, to the extent that the
Owner Trustee acts or refrains from acting in good faith in accordance with
any such instruction received, the Owner Trustee shall not be liable, on
account of such action or inaction, to any Person. If the Owner Trustee
shall not have received appropriate instruction within ten (10) days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it
may, but shall be under no duty to, take or refrain from taking such action
not inconsistent with this Agreement or the other Basic Documents, as it
shall deem to be in the best interests of the Certificateholders and shall
have no liability to any Person for such action or inaction.
SECTION 6.4 No Duties Except as Specified in this Agreement
or in Instructions. The Owner Trustee shall not have any duty or obligation
to manage, make any payment with respect to, register, record, sell,
dispose of, or otherwise deal with the Owner Trust Estate, or to otherwise
take or refrain from taking any action under, or in connection with, any
document contemplated hereby to which the Owner Trustee or the Trust is a
party, except as expressly provided by the terms of this Agreement or in
any document or written instruction received by the Owner Trustee pursuant
to Section 6.3; and no implied duties or obligations shall be read into
this Agreement or any other Basic Document against the Owner Trustee. The
Owner Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted
to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any other
Basic Document. The Owner Trustee nevertheless agrees that it will, at its
own cost and expense, promptly take all action as may be necessary to
discharge any lien (other than the lien of the Indenture) on any part of
the Owner Trust Estate that results from actions by, or claims against, the
Owner Trustee that are not related to the ownership or the administration
of the Owner Trust Estate.
SECTION 6.5 No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of the Owner Trust Estate except
(i) in accordance with the powers granted to and the authority conferred
upon the Owner Trustee pursuant to this Agreement, (ii) in accordance with
the other Basic Documents to which the Trust or the Owner Trust is a party
and (iii) in accordance with any document or instruction delivered to the
Owner Trustee pursuant to Section 6.3.
SECTION 6.6 Restrictions. The Owner Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set
forth in Section 2.3 or (b) that, to the actual knowledge of the Owner
Trustee, would (i) affect the treatment of the Notes as indebtedness for
Federal income or Delaware or California income or franchise tax purposes,
(ii) be deemed to cause a taxable exchange of the Notes for Federal income
or Delaware or California income or franchise tax purposes or (iii) cause
the Trust or any portion thereof to be taxable as an association or
publicly traded partnership taxable as a corporation for Federal income or
Delaware or California income or franchise tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that
would violate the provisions of this Section 6.6.
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this
Agreement. The Owner Trustee also agrees to disburse all monies actually
received by it constituting part of the Owner Trust Estate upon the terms
of this Agreement to which the Trust or Owner Trustee is a party and the
other Basic Documents. The Owner Trustee shall not be answerable or
accountable hereunder or under any other Basic Document under any
circumstances, except (i) for its own willful misconduct, bad faith or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Owner Trustee, in
its individual capacity. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
provisions of this Agreement at the instructions of any Certificateholder,
the Indenture Trustee, the Depositor, the Administrator or the Servicer;
(c) no provision of this Agreement or any other Basic
Document shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any of its
rights or powers hereunder or under any other Basic Document if the Owner
Trustee shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes or distributions on
the Certificates.
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or
in respect of the validity or sufficiency of the other Basic Documents,
other than the certificate of authentication on the Certificates, and the
Owner Trustee shall in no event assume or incur any liability, duty, or
obligation to any Noteholder or to any Certificateholder, other than as
expressly provided for herein and in the other Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Servicer, the Administrator, the Depositor or the
Indenture Trustee under any of the Basic Documents or otherwise and the
Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the other Basic Documents
that are required to be performed by the Administrator under the
Administration Agreement, the Servicer under the Sale and Servicing
Agreement or the Indenture Trustee under the Indenture; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any other Basic Document, at
the request, order or direction of any of the Certificateholders, unless
such Certificateholders have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities
that may be incurred by the Owner Trustee therein or thereby. The right of
the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any other Basic Document shall not be construed as a duty,
and the Owner Trustee shall not be answerable for other than its willful
misconduct, bad faith or negligence in the performance of any such act.
SECTION 7.2 Furnishing of Documents. The Owner Trustee shall
furnish to the Certificateholders promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee under the Basic Documents.
SECTION 7.3 Representations and Warranties. The Owner
Trustee, in its individual capacity, hereby represents and warrants to the
Depositor, for the benefit of the Certificateholders, that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It has
all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement will
be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof will
contravene any Federal or Delaware law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment
or order binding on it, or constitute any default under its charter
documents or by-laws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its properties may be
bound.
SECTION 7.4 Reliance; Advice of Counsel. (a) The Owner
Trustee may rely upon, shall be protected in relying upon, and shall incur
no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to
be signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and
effect. As to any fact or matter the method of the determination of which
is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations under this
Agreement or the other Basic Documents, the Owner Trustee (i) may act
directly or through its agents or attorneys pursuant to agreements entered
into with any of them, and the Owner Trustee shall not be liable for the
conduct or misconduct of such agents or attorneys if such agents or
attorneys shall have been selected by the Owner Trustee with reasonable
care, and (ii) may consult with counsel, accountants and other skilled
Persons to be selected with reasonable care and employed by it. The Owner
Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such Persons and not contrary to this
Agreement or any other Basic Document.
SECTION 7.5 Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created,
Wilmington Trust Company acts solely as Owner Trustee hereunder and not in
its individual capacity, and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
other Basic Document shall look only to the Owner Trust Estate for payment
or satisfaction thereof.
SECTION 7.6 Owner Trustee Not Liable for Certificates or
Receivables. The recitals contained herein and in the Certificates (other
than the signature and countersignature of the Owner Trustee on the
Certificates) shall be taken as the statements of the Depositor, and the
Owner Trustee assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or sufficiency of
this Agreement, of any other Basic Document or of the Certificates (other
than the signature and countersignature of the Owner Trustee on the
Certificates) or the Notes, or of any Receivable or related documents. The
Owner Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any
Receivable, or the perfection and priority of any security interest created
by any Receivable in any Financed Vehicle or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the
Owner Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence,
condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or any intervening assignment;
the completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Depositor or the Servicer with any
warranty or representation made under any Basic Document or in any related
document, or the accuracy of any such warranty or representation or any
action of the Indenture Trustee, the Administrator or the Servicer or any
subservicer taken in the name of the Owner Trustee.
SECTION 7.7 Owner Trustee May Own Certificates and Notes.
The Owner Trustee, in its individual or any other capacity, may become the
owner or pledgee of Certificates or Notes and may deal with the Depositor,
the Servicer, the Administrator and the Indenture Trustee in banking
transactions with the same rights as it would have if it were not Owner
Trustee.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1 Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees
as have been separately agreed upon before the date hereof between the
Depositor and the Owner Trustee, and the Owner Trustee shall be entitled to
and reimbursed by the Depositor for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and
disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of
its rights and its duties hereunder.
SECTION 8.2 Indemnification. The Depositor shall be liable as
prime obligor for, and shall indemnify Wilmington Trust Company and the
Owner Trustee and its successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and
suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses") which may at any time be imposed on,
incurred by, or asserted against Wilmington Trust Company or the Owner
Trustee or any Indemnified Party in any way relating to or arising out of
this Agreement, the other Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of the
Owner Trustee hereunder; provided that the Depositor shall not be liable
for or required to indemnify an Indemnified Party from and against Expenses
arising or resulting from any of the matters described in the third
sentence of Section 7.1. The Depositor will in no event be entitled to make
any claim upon the Trust Property for the payment or reimbursement of any
Expenses. The indemnities contained in this Section 8.2 shall survive the
resignation or termination of the Owner Trustee or the termination of this
Agreement. In the event of any claim, action or proceeding for which
indemnity will be sought pursuant to this Section 8.2, the Owner Trustee's
choice of legal counsel shall be subject to the approval of the Depositor,
which approval shall not be unreasonably withheld.
SECTION 8.3 Payments to the Owner Trustee. Any amounts paid
to the Owner Trustee pursuant to this Article VIII shall be deemed not to
be a part of the Owner Trust Estate immediately after such payment.
ARTICLE IX
TERMINATION
SECTION 9.1 Termination of Trust Agreement. (a) This
Agreement (other than the provisions of Article VIII) and the Trust shall
dissolve, wind-up and terminate in accordance with Section 3808 of the
Business Trust Statute and be of no further force or effect (i) upon the
payment to the Noteholders and the Certificateholders of all amounts
required to be paid to them pursuant to the terms of the Indenture, the
Sale and Servicing Agreement and Article V or (ii) the Payment Date next
succeeding the month which is one year after the maturity or other
liquidation of the last Receivable and the disposition of any amounts
received upon liquidation of any property remaining in the Trust. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any
court for a partition or winding up of all or any part of the Trust or
Owner Trust Estate nor (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) No Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Payment Date upon which the Certificateholders shall surrender their
Certificates, to the Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five (5) Business Days of receipt of
notice of such termination from the Servicer, stating (i) the Payment Date
upon or with respect to which final payment of the Certificates shall be
made upon presentation and surrender of the Certificates, at the office of
the Paying Agent therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such Payment
Date is not applicable, payments being made only upon presentation and
surrender of the Certificates at the office of the Paying Agent therein
specified. The Owner Trustee shall give such notice to the Certificate
Registrar (if other than the Owner Trustee) and the Paying Agent at the
time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Paying Agent shall cause to be
distributed to Certificateholders , amounts distributable on such Payment
Date pursuant to Section 5.2.
In the event that all of the Certificateholders shall not
surrender their Certificates, as the case may be, for cancellation within
six (6) months after the date specified in the above mentioned written
notice, the Owner Trustee shall give a second written notice to the
remaining Certificateholders to surrender their Certificates, respectively,
for cancellation and receive the final distribution with respect thereto.
If within one year after the second notice all the Certificates shall not
have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders, as the case may be, concerning
surrender of their Certificates as the case may be, and the cost thereof
shall be paid out of the funds and other assets that shall remain subject
to this Agreement. Subject to applicable escheat laws, any funds remaining
in the Trust after exhaustion of such remedies shall be distributed by the
Owner Trustee to the Depositor.
(d) Upon the winding up of the Trust and its termination,
the Owner Trustee shall cause the Certificate of Trust to be cancelled by
filing a certificate of cancellation with the Secretary of State in
accordance with the provisions of Section 3810 of the Business Trust
Statute.
SECTION 9.2 Prepayment of the Certificates. (a) The
Certificates shall be prepaid in whole, but not in part, at the direction
of the Servicer pursuant to Section 9.1(a) of the Sale and Servicing
Agreement, on any Payment Date on which the Servicer exercises its option
to purchase the assets of the Trust pursuant to said Section 9.1(a), and
the amount paid by the Servicer shall be treated as collections of
Receivables and applied to pay the unpaid principal amount of the Notes
plus accrued and unpaid interest thereon, together with the unpaid
principal amount of the Certificates. The Servicer shall furnish the Rating
Agencies and the Certificateholders notice of such prepayment. If the
Certificates are to be prepaid pursuant to this Section 9.2(a), the
Servicer shall furnish notice of such election to the Owner Trustee not
later than twenty (20) days prior to the Prepayment Date and the Trust
shall deposit by 10:00 A.M. (New York City time) on the Prepayment Date in
the Certificate Distribution Account the Prepayment Price of the
Certificates to be prepaid, whereupon all such Certificates shall be due
and payable on the Prepayment Date.
(b) In addition, following payment in full of the Notes, the
Holders of 100% of the Certificate Balance may agree to liquidate the Trust
and prepay the Certificates.
(c) Notice of prepayment under Section 9.2(a) shall be given
by the Owner Trustee by first-class mail, postage prepaid, or by facsimile
mailed or transmitted immediately following receipt of notice from the
Trust or Servicer pursuant to Section 9.2(a), but not later than ten (10)
days prior to the applicable Prepayment Date, to each Holder of Certificate
as of the close of business on the Record Date preceding the applicable
Prepayment Date, at such Holder's address or facsimile number appearing in
the Certificate Register.
All notices of prepayment shall state:
(i) the Prepayment Date;
(ii) the Prepayment Price; and
(iii) the place where such Certificates are to be
surrendered for payment of the Prepayment Price (which shall be the
office or agency of the Owner Trustee to be maintained as provided
in Section 3.8).
Notice of prepayment of the Certificates shall be given by the Owner
Trustee in the name and at the expense of the Trust. Failure to give notice
of prepayment, or any defect therein, to any Holder of any Certificate
shall not impair or affect the validity of the prepayment of any other
Certificate.
(d) The Certificates to be prepaid shall, following notice
of prepayment as required by Section 9.2(b), on the Prepayment Date be paid
by the Trust at the Prepayment Price and (unless the Trust shall default in
the payment of the Prepayment Price) no interest shall accrue on the
Prepayment Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Prepayment Price. Following
payment in full of the Prepayment Price, this Agreement and the Trust shall
terminate.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner Trustee. The
Owner Trustee shall at all times (i) be a corporation satisfying the
provisions of Section 3807(a) of the Business Trust Statute; (ii) be
authorized to exercise corporate trust powers; (iii) have a combined
capital and surplus of at least $50,000,000 and shall be subject to
supervision or examination by Federal or state authorities; and (iv) shall
have (or shall have a parent that has) a long-term debt rating of
investment grade by each of the Rating Agencies or be otherwise acceptable
to the Rating Agencies. If such corporation shall publish reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 10.1, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Owner
Trustee shall cease to be eligible in accordance with the provisions of
this Section 10.1, the Owner Trustee shall resign immediately in the manner
and with the effect specified in Section 10.2.
SECTION 10.2 Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Administrator. Upon
receiving such notice of resignation, the Administrator shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Owner Trustee
and one copy to the successor Owner Trustee. If no successor Owner Trustee
shall have been so appointed and have accepted appointment within thirty
(30) days after the giving of such notice of resignation, the resigning
Owner Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible
in accordance with the provisions of Section 10.1 and shall fail to resign
after written request therefor by the Administrator, or if at any time the
Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt
or insolvent, or a receiver of the Owner Trustee or of its property shall
be appointed, or any public officer shall take charge or control of the
Owner Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Administrator may
remove the Owner Trustee. If the Administrator shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the
Administrator shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered
to the outgoing Owner Trustee so removed and one copy to the successor
Owner Trustee and payment of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions
of this Section 10.2 shall not become effective until acceptance of
appointment by the successor Owner Trustee pursuant to Section 10.3 and
payment of all fees and expenses owed to the outgoing Owner Trustee. The
Administrator shall provide notice of such resignation or removal of the
Owner Trustee to the Certificateholders, the Indenture Trustee, the
Noteholders and each of the Rating Agencies.
SECTION 10.3 Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Administrator and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon
the resignation or removal of the predecessor Owner Trustee shall become
effective, and such successor Owner Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties, and obligations of its predecessor under this Agreement, with like
effect as if originally named as Owner Trustee. The predecessor Owner
Trustee shall, upon payment of its fees and expenses, deliver to the
successor Owner Trustee all documents and statements and monies held by it
under this Agreement, and the Administrator and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things
as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties,
and obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section 10.3 unless, at the time of such acceptance, such
successor Owner Trustee shall be eligible pursuant to Section 10.1.
Any successor Owner Trustee appointed pursuant to this
Section 10.3 shall file an amendment to the Certificate of Trust reflecting
the name and principal place of business of
such succession in the state of Delaware.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 10.3, the Administrator shall mail notice of the
successor of such Owner Trustee to all Certificateholders, the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Administrator
shall fail to mail such notice within ten (10) days after acceptance of
appointment by the successor Owner Trustee, the successor Owner Trustee
shall cause such notice to be mailed at the expense of the Administrator.
SECTION 10.4 Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate
trust business of the Owner Trustee, shall be the successor of the Owner
Trustee hereunder; provided that such corporation shall be eligible
pursuant to Section 10.1, without the execution or filing of any instrument
or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided further, however, that the
Owner Trustee shall mail notice of such merger or consolidation to the
Rating Agencies.
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Owner Trust Estate or any Financed Vehicle may at the time be located, the
Administrator and the Owner Trustee acting jointly shall at any time have
the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee to act as co-trustee, jointly
with the Owner Trustee, or separate trustee or separate trustees, of all or
any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust, or any part thereof, and, subject to the
other provisions of this Section 10.5, such powers, duties, obligations,
rights and trusts as the Administrator and the Owner Trustee may consider
necessary or desirable. If the Administrator shall not have joined in such
appointment within fifteen (15) days after the receipt by it of a request
so to do, the Owner Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall
be required to meet the terms of eligibility as a successor trustee
pursuant to Section 10.1 and no notice of the appointment of any co-trustee
or separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties, and obligations
conferred or imposed upon the Owner Trustee shall be conferred upon
and exercised or performed by the Owner Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Owner Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Owner Trustee shall
be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties, and obligations (including the
holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Owner Trustee;
(ii) no trustee under this Agreement shall be
personally liable by reason of any act or omission of any other
trustee under this Agreement; and
(iii) the Administrator and the Owner Trustee acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee.
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article X. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Owner Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee
and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint
the Owner Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Owner Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Supplements and Amendments. (a) This Agreement
may be amended by the Depositor and the Owner Trustee, with prior written
notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement inconsistent with any other
provision of this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement; provided, however, that such action shall not, as evidenced by
an Opinion of Counsel satisfactory to the Owner Trustee and the Indenture
Trustee adversely affect in any material respect the interests of any
Noteholder or Certificateholder and provided further that an Opinion of
Counsel shall be furnished to the Indenture Trustee and the Owner Trustee
to the effect that such amendment (A) 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 (B) will not
cause the Trust to be taxable as a corporation for Federal or any
Applicable Tax State income or franchise tax purposes.
(b) This Agreement may also be amended from time to time by
the Depositor and the Owner Trustee, with prior written notice to the
Rating Agencies, with the consent of the Holders (as defined in the
Indenture) of Notes evidencing not less than a majority of the aggregate
principal amount of the then outstanding Notes, voting as a group, and the
consent of the Holders of Certificates evidencing not less than a majority
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 (i)
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 are required to be made on any Note or
Certificate, or change any Note Interest Rate, or (ii) reduce the aforesaid
percentage of the principal amount of the then outstanding Notes and the
Certificate Balance required to consent to any such amendment, without the
consent of the holders of all the outstanding Notes and Certificates
affected thereby or (iii) adversely affect the ratings of any Class of
Notes by the Rating Agencies without the consent, respectively, of
holders of Notes evidencing not less than 66 2/3% of the aggregate
principal amount of the then outstanding Notes of such Class; and provided
further that an Opinion of Counsel shall be furnished to the Indenture
Trustee and the Owner Trustee to the effect that such amendment (A) 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 (B) will not cause the Trust to be taxable as a
corporation for Federal or any Applicable Tax State income or franchise tax
purposes.
(c) Promptly after the execution of any such amendment or
consent, 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.
(d) It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to
this Section 11.1 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 Certificateholders provided for in this Agreement or in any
other Basic Document) and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
(f) The Owner Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Owner Trustee's own rights,
duties or immunities under this Agreement or otherwise.
(g) Prior to the execution of any amendment to this Trust
Agreement or any amendment to any other agreement to which the Trust is a
party, the Owner Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel to the effect that such amendment is authorized
or permitted by the Basic Documents and that all conditions precedent in
the Basic Documents for the execution and delivery thereof by the Trust or
the Owner Trustee, as the case may be, have been satisfied.
SECTION 11.2 No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to
any part of the Owner Trust Estate. The Certificateholders shall be
entitled to receive distributions with respect to their undivided
beneficial interest therein only in accordance with Articles V and IX. No
transfer, by operation of law or otherwise, of any right, title, or
interest of the Certificateholders to and in their beneficial interest in
the Owner Trust Estate shall operate to terminate this Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Owner Trust Estate.
SECTION 11.3 Limitation on Rights of Others. The provisions
of this Agreement are solely for the benefit of the Owner Trustee, the
Depositor, the Administrator, the Certificateholders the Servicer and, to
the extent expressly provided herein, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of
this Agreement or any covenants, conditions or provisions contained herein.
SECTION 11.4 Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing
and shall be deemed given upon receipt by the intended recipient or three
Business Days after mailing if mailed by certified mail, postage prepaid
(except that notice to the Owner Trustee shall be deemed given only upon
actual receipt by the Owner Trustee), if to the Owner Trustee, addressed to
the Corporate Trust Office; if to the Depositor, addressed to MMCA Auto
Receivables Trust at the address of its principal executive office first
above written; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice
so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5 Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 11.6 Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.7 Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit
of, the Depositor, the Owner Trustee and its successors and each
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
SECTION 11.8 Covenants of the Depositor. In the event that
(a) the principal balance of Receivables underlying the Certificates shall
be reduced by Realized Losses and (b) any litigation with claims in excess
of $1,000,000 to which the Depositor is a party which shall be reasonably
likely to result in a material judgment against the Depositor that the
Depositor will not be able to satisfy shall be commenced by a
Certificateholder, during the period beginning nine (9) months following
the commencement of such litigation and continuing until such litigation is
dismissed or otherwise terminated (and, if such litigation has resulted in
a final judgment against the Depositor, such judgment has been satisfied),
the Depositor shall not pay any dividend to MMCA, or make any distribution
on or in respect of its capital stock to MMCA, or repay the principal
amount of any indebtedness of the Depositor held by MMCA, unless (i) after
giving effect to such payment, distribution or repayment, the Depositor's
liquid assets shall not be less than the amount of actual damages claimed
in such litigation or (ii) the Rating Agency Condition shall have been
satisfied with respect to any such payment, distribution or repayment. The
Depositor will not at any time institute against the Trust any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar
law in connection with any obligations relating to the Certificates, the
Notes, this Agreement or any of the other Basic Documents.
SECTION 11.9 No Petition; Subordination; Claims Against
Depositor. The Owner Trustee (not in its individual capacity but solely as
Owner Trustee), by entering into this Agreement, each Certificateholder, by
accepting a Certificate, and the Indenture Trustee and each Noteholder by
accepting the benefits of this Agreement, hereby covenant and agree that:
(a) they will not at any time institute against the
Depositor or the Trust, or join in any institution against the Depositor or
the Trust of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States
Federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, this Agreement or any
of the other Basic Documents;
(b) any claim that they may have at any time against the
Subtrust Assets of any Subtrust unrelated to the Notes or the Certificates,
and any claim that they may have at any time against the Depositor that
they may seek to enforce against the Subtrust Assets of any Subtrust
unrelated to the Notes or the Certificates, shall be subordinate to the
payment in full, including post-petition interest, in the event that the
Depositor 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) they hereby irrevocably make the election afforded by
Title 11 United States Code Section 1111(b)(1)(A)(i) to secured creditors
to receive the treatment afforded by Title 11 United States Code Section
1111(b)(2) with respect to any secured claim that they may have at any time
against the Depositor. The obligations of the Depositor under this
Agreement and the Certificates are limited to the related Subtrust and the
related Subtrust Assets.
SECTION 11.10 No Recourse. Each Certificateholder, by
accepting a Certificate, acknowledges that such Certificateholder's
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the Servicer, the
Administrator, the Owner Trustee, the Indenture Trustee or any Affiliate
thereof, and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated in this Agreement, the
Certificates, or the other Basic Documents.
SECTION 11.11 Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 11.12 Governing Law. This Agreement shall be
construed in accordance with the laws of the State of Delaware and the
obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Trust Agreement to be duly executed by their
respective officers hereunto duly authorized, as of the day and year first
above written.
MMCA AUTO RECEIVABLES TRUST,
as Depositor
By:_________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee
By:_________________________
Name:
Title:
EXHIBIT A
NUMBER $60,000,000
R-1
THIS CERTIFICATE MAY NOT
BE TRANSFERRED BY A
STOCK POWER BUT ONLY AS
SET FORTH BELOW.
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES OR BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES FOR THE BENEFIT OF
THE TRUST AND THE DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN A DENOMINATION OF AT LEAST
$1,000,000, ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS
INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, SUBJECT TO (A) THE RECEIPT BY THE
TRUST AND THE CERTIFICATE REGISTRAR OF A CERTIFICATE SUBSTANTIALLY IN THE
FORM ATTACHED AS EXHIBIT C TO THE TRUST AGREEMENT REFERRED TO BELOW AND (B)
THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A LETTER
SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT D TO THE TRUST AGREEMENT, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF SUCH EVIDENCE ACCEPTABLE TO THE TRUST THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE TRUST
AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (3) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT
PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE
REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT E TO
THE TRUST AGREEMENT OR (B) THE RECEIPT BY THE TRUST AND THE CERTIFICATE
REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUST THAT SUCH REOFFER,
RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE TRUST AGREEMENT AND
THE SECURITIES ACT AND OTHER APPLICABLE LAWS, OR (4) TO THE DEPOSITOR OR
ITS AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE STATES OF
THE UNITED STATES. IN ADDITION, EXCEPT IN THE CASE OF TRANSFERS TO EXISTING
CERTIFICATEHOLDERS, THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY WITH THE EXPRESS WRITTEN CONSENT OF THE
DEPOSITOR (WHICH CONSENT MAY BE WITHHELD FOR ANY REASON OR FOR NO REASON).
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE
TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS CERTIFICATE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
MMCA AUTO OWNER TRUST 1999-2
ASSET BACKED CERTIFICATE
evidencing a beneficial interest in the property of the Trust, as defined
below, which property includes a pool of retail installment sale contracts
secured by new and used automobiles and light-duty trucks sold from time to
time to MMCA Auto Receivables Trust by Mitsubishi Motors Credit of America,
Inc. and sold by MMCA Auto Receivables Trust from time to time to the
Trust. The property of the Trust (other than the Certificate Distribution
Account and the proceeds thereof) has been pledged to the Indenture Trustee
pursuant to the Indenture to secure the payment of the Notes issued
thereunder.
(This Certificate does not represent an interest in or obligation of
Mitsubishi Motors Credit of America, Inc., MMCA Auto Receivables Trust or
any of their respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT MMCA AUTO RECEIVABLES TRUST is the
registered owner of a ____________________________ DOLLARS nonassessable,
fully-paid, beneficial interest in Certificates of MMCA Auto Owner Trust
1999-2 (the "Trust") formed by MMCA Auto Receivables Trust, a Delaware
business trust (the "Depositor"). The Certificates have an aggregate
Initial Certificate Balance of $60,000,000.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
Dated: October 28, 1999
WILMINGTON TRUST COMPANY WILMINGTON TRUST COMPANY
not in its individual capacity but or not in its individual capacity but
solely as Owner Trustee solely as Owner Trustee
By:___________________ By: WILMINGTON TRUST COMPANY
Responsible Officer as Authenticating Agent
By:________________________
Responsible Officer
The Trust was created pursuant to an Amended and Restated
Trust Agreement, dated as of October 1, 1999 (as amended, supplemented or
otherwise modified and in effect from time to time, the "Trust Agreement"),
by and between the Depositor and Wilmington Trust Company, as owner trustee
(the "Owner Trustee"), a summary of certain of the pertinent provisions of
which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Trust Agreement or the Sale and Servicing Agreement, dated as of October 1,
1999 (as amended, supplemented or otherwise modified and in effect from
time to time, the "Sale and Servicing Agreement"), by and among the Trust,
the Depositor, as seller (in such capacity, the "Seller"), and Mitsubishi
Motors Credit of America, Inc., as servicer (the "Servicer"), as
applicable.
This Certificate is one of the duly authorized Certificates
designated as "Asset Backed Certificates" (herein called the
"Certificates"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The property of the Trust
includes (i) a pool of retail installment sale contracts for new and used
automobiles and light-duty trucks and certain rights and obligations
thereunder (the "Receivables"), (ii) with respect to Actuarial Receivables,
monies due thereunder on or after the related Cutoff Date (including
Payaheads) and, with respect to Simple Interest Receivables, monies
received thereunder on or after the related Cutoff Date; (iii) the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Trust in the Financed Vehicles;
(iv) all rights to receive proceeds with respect to the Receivables from
claims on any physical damage, theft, credit life or disability insurance
policies covering the Financed Vehicles or Obligors; (v) all rights to
receive proceeds with respect to the Receivables from recourse to Dealers
thereon pursuant to the Dealer Agreements; (vi) all of the Seller's rights
to the Receivable Files; (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 rights under the Sale and Servicing Agreement and the Yield Supplement
Agreement, (ix) all of the rights under the Purchase Agreement, including
the right of the Seller to cause MMCA to repurchase Receivables from the
Seller; (x) all payments and proceeds with respect to the Receivables held
by the Servicer; (xi) all property (including the right to receive
Liquidation Proceeds and Recoveries and Financed Vehicles and the proceeds
thereof acquired by the Trust pursuant to the terms of the Final Payment
Receivables), guarantees and other collateral securing a Receivable (other
than a Receivable repurchased by the Servicer or purchased by the Seller);
(xii) all rebates of premiums and other amounts relating to insurance
policies and other items financed under the Receivables in effect as of the
related Cutoff Date; and (xiii) all present and future claims, demands,
causes of action and chooses 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 o
ther 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 RIGHTS OF THE TRUST IN THE FOREGOING PROPERTY OF THE
TRUST (OTHER THAN THE CERTIFICATE DISTRIBUTION ACCOUNT AND THE PROCEEDS
THEREOF) HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO SECURE THE PAYMENT OF
THE NOTES.
Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business
Day, the next Business Day (each, a "Payment Date"), commencing November
15, 1999, to the Person in whose name this Certificate is registered at the
close of business on the fourteenth day of such calendar month (the "Record
Date") such Certificateholder's percentage interest in the amount to be
distributed to Certificateholders on such Payment Date; provided, however,
that principal will be distributed to the Certificateholders on each
Payment Date (to the extent of funds remaining after the Total Servicing
Fee, all required payments on Notes and any required deposit to the Reserve
Account and the Supplemental Reserve Account have been made on such Payment
Date). Notwithstanding the foregoing, following the occurrence and during
the continuation of an Event of Default under the Indenture which has
resulted in an acceleration of the Notes or following certain events of
insolvency with respect to the Depositor, no distributions of principal or
interest will be made on the Certificates until all the Notes have been
paid in full.
THE HOLDER OF THIS CERTIFICATE ACKNOWLEDGES AND AGREES THAT
ITS RIGHTS TO RECEIVE DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE ARE
SUBORDINATED TO THE RIGHTS OF THE NOTEHOLDERS AS DESCRIBED IN THE SALE AND
SERVICING AGREEMENT, THE INDENTURE AND THE TRUST AGREEMENT.
It is the intent of the Depositor, the Servicer and the
Certificateholders that, for purposes of Federal income, state and local
income tax and any other income taxes, the Trust will be treated as a
partnership and the Certificateholders (including the Depositor) will be
treated as partners in that partnership. The Depositor and the other
Certificateholders by acceptance of a Certificate, agree to treat, and to
take no action inconsistent with the treatment of, the Certificates for
such tax purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Depositor or the Trust, or join in any institution
against the Depositor or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations relating to the Notes, the Certificates,
the Trust Agreement or any of the other Basic Documents.
Distributions on this Certificate will be made as provided in the
Trust Agreement by the Owner Trustee or the Paying Agent by wire transfer
or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the
making of any notation hereon. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the
pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency maintained for the purpose by the
Owner Trustee in Wilmington, Delaware.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by a Responsible Officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the Holder hereof to any
benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
This Certificate shall be construed in accordance with the
laws of the State of Delaware, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
In WITNESS WHEREOF, the Owner Trustee, on behalf of the
Trust and not in its individual capacity, has caused this Certificate to be
duly executed.
MMCA AUTO OWNER TRUST 1999-2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee
By:__________________________________________
Responsible Officer
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Administrator, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against
such parties or their assets, except as may be expressly set forth or
contemplated herein, in the Trust Agreement or in the other Basic
Documents. This Certificate has been executed 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 have any liability for the representations, warranties,
covenants, agreements or other obligations of the Trust hereunder, as to
all of which recourse shall be solely to the assets of the Trust. In
addition, this Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections
with respect to the Receivables (and certain other amounts), all as more
specifically set forth herein and in the Sale and Servicing Agreement. The
Trust will furnish, upon the request of any holder of a Certificate, such
information as is specified in paragraph (d)(4) of Rule 144A of the
Securities Act with respect to the Trust. A registration statement, which
includes the Trust Agreement as an exhibit thereto, has been filed with the
Securities and Exchange Commission with respect to the Notes of the Trust
issued concurrently with this Certificate.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under
the Trust Agreement at any time by the Depositor and the Owner Trustee with
the consent of the Holders of the Notes and the Holders of the Certificates
each voting as a class evidencing not less than a majority of the principal
amount of the then outstanding Notes and the Certificate Balance,
respectively. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the registration of Transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of
such consent is made upon this Certificate. The Trust Agreement also
permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.
This Certificate may be Transferred only under the circumstances
described in Section 3.4 of the Trust Agreement, which, among other things,
requires that each prospective transferee represent in writing in the form
provided as an exhibit to the Trust Agreement that it will not acquire or
Transfer the Certificates through an established securities market, is not
and will not become, except in certain circumstances, a partnership,
Subchapter S corporation or grantor trust for U.S. Federal income tax
purposes, and will not acquire the Certificates for or on behalf of an
employee benefit plan, except in certain limited circumstances. Any
attempted Transfer in contravention of the restrictions and conditions of
Section 3.4 of the Trust Agreement shall be null and void. As provided in
the Trust Agreement, the Transfer of this Certificate is registerable in
the Certificate Register upon surrender of this Certificate for
registration of Transfer at the offices or agencies of the Certificate
Registrar maintained by the Owner Trustee in Wilmington, Delaware,
ACCOMPANIED BY THE WRITTEN REPRESENTATIONS REQUIRED BY THE TRUST AGREEMENT
AND, IF THE DEPOSITOR HAS CONSENTED TO SUCH TRANSFER, a written instrument
of transfer in form satisfactory to the Certificate Registrar duly executed
by the Holder hereof or such Holder's attorney duly authorized in writing,
and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under
the Trust Agreement is Wilmington Trust Company.
Except for Certificates issued to the Depositor, the
Certificates are issuable only as registered Certificates without coupons
in denominations of $1,000,000 and in integral multiples of $1,000 in
excess thereof. Certificates are exchangeable for new Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Holder surrendering the same. No service charge will be
made for any such registration of Transfer or exchange, but the Owner
Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent
of the Owner Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar or any
such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate upon the payment to
the Noteholders and the Certificateholders of all amounts required to be
paid to them pursuant to the Indenture, the Trust Agreement and the Sale
and Servicing Agreement and any remaining assets of the Trust shall be
distributed to the Depositor, in its capacity as Depositor. The Servicer of
the Receivables may at its option purchase the assets of the Trust at a
price specified in the Sale and Servicing Agreement, and such purchase of
the Receivables and other property of the Trust will effect early
retirement of the Notes and the Certificates; however, such right of
purchase is exercisable only as of the last day of any Collection Period as
of which the Pool Balance is less than or equal to 10% of the Initial Pool
Balance.
The Holder of this Certificate, by acceptance of this Certificate,
covenants and agrees by accepting the benefits of the Trust Agreement that
any claim that such Holder may have at any time against the Subtrust Assets
of any Subtrust unrelated to the Certificates, and any claim that such
Holder may have against the Depositor that such Holder may seek to enforce
against the Subtrust Assets of any Subtrust unrelated to the Certificates,
shall be subordinate to the payment in full, including post-petition
interest, in the event that the Depositor 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. The obligations of the Depositor represented by this Certificate
are limited to the related Subtrust and the related Subtrust Assets.
EACH HOLDER, BY ACCEPTANCE OF A CERTIFICATE, HEREBY
IRREVOCABLY MAKES THE ELECTION AFFORDED BY TITLE 11 UNITED STATES CODE
SECTION 1111(b)(1)(A)(i) TO SECURED CREDITORS TO RECEIVE THE TREATMENT
AFFORDED BY TITLE 11 UNITED STATES CODE SECTION 1111(b)(2) WITH RESPECT TO
ANY SECURED CLAIM THAT SUCH HOLDER MAY HAVE AT ANY TIME AGAINST THE
DEPOSITOR.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________ Attorney to
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:
_________________________________________*/
Signature Guaranteed:
_________________________________________*/
Signature Guaranteed:
*/ NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must
be guaranteed by a member firm of the New York Stock Exchange or a commercial
bank or trust company.
EXHIBIT B
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST OF
MMCA AUTO OWNER TRUST 1999-2
This Certificate of Trust of MMCA AUTO OWNER TRUST 1999-2 (the
"Trust") is being duly executed and filed by the Undersigned as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. Code,
ss. 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is MMCA AUTO
OWNER TRUST 1999-2.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust in accordance with Section
3811 of the Act.
Wilmington, Trust Company
as trustee
By:_______________________________
Name:
Title:
EXHIBIT C
[FORM OF RULE 144A TRANSFEROR CERTIFICATE]
[Date]
Wilmington Trust Company
as Owner Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Wilmington Trust Company
as Certificate Registrar
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Ladies and Gentlemen:
This is to notify you as to the transfer of $ [*] in
denomination of Asset Backed Certificates (the "Certificates") of MMCA Auto
Owner Trust 1999-2 (the "Trust").
The undersigned is the holder of the Certificates and with
this notice hereby deposits with the Owner Trustee $ [*] in denomination of
Certificates and requests that Certificates in the same aggregate
denomination be issued, executed and authenticated and registered to the
purchaser on , , as specified in the Amended and Restated Trust Agreement
dated as of October 1, 1999 relating to the Certificates, as follows:
Name: Denominations: [*]
Address:
Taxpayer I.D. No:
The undersigned represents and warrants that the undersigned
(i) reasonably believes the purchaser is a "qualified institutional buyer,"
as defined in Rule 144A under the Securities Act of 1933 (the "Act"), (ii)
such purchaser has acquired the Certificates in a transaction effected in
accordance with the exemption from the registration requirements of the
Act provided by Rule 144A and, (iii) if the purchaser has purchased the
Certificates for one or more accounts for which it is acting as fiduciary
or agent, (A) each such account is a qualified institutional buyer and (B)
the purchaser is acquiring Certificates for its own account or for one or
more institutional accounts for which it is acting as fiduciary or agent in
a minimum amount equivalent to at least $1,000,000 for each such account.
Very truly yours,
[NAME OF HOLDER
OF CERTIFICATES]
By:______________________________
Name:
Title:
- -------------------------
[* minimum of $1,000,000]
EXHIBIT D
[FORM OF INVESTMENT LETTER --
QUALIFIED INSTITUTIONAL BUYER]
[Date]
MMCA Auto Owner Trust 1999-2
as Issuer
Wilmington Trust Company
as Owner Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Wilmington Trust Company
as Certificate Registrar
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of the Asset Backed
Certificates (the "Certificates") of MMCA Auto Owner Trust 1999-2 (the
"Trust"), a trust formed by MMCA Auto Receivables Trust (the "Depositor" or
"Seller"), we confirm that:
1. We agree to be bound by the restrictions and conditions
set forth in the Amended and Restated Trust Agreement dated as of October
1, 1999 (the "Trust Agreement") relating to the Certificates and we agree
to be bound by, and not to resell, transfer, assign, participate, pledge,
or otherwise dispose of (any such act, a "Transfer") the Certificates
except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the "Securities Act").
2. We have neither acquired nor will we Transfer any
Certificate we purchase (or any interest therein) or cause any such
Certificates (or any interest therein) to be marketed on or through an
"established securities market" within the meaning of section 7704(b)(1) of
the Internal Revenue Code of 1986, as amended (the "Code"), including,
without limitation, an over-the-counter-market or an interdealer quotation
system that regularly disseminates firm buy or sell quotations.
3. We either (a) are not, and will not become, a
partnership, Subchapter S corporation, or grantor trust for U.S. Federal
income tax purposes or (b) are such an entity, but none of the direct or
indirect beneficial owners of any of the interests in us have allowed or
caused, or will allow or cause, 80% or more (or such other percentage as
the Seller may establish prior to the time of such proposed Transfer) of
the value of such interests to be attributable to our ownership of
Certificates.
4. We understand that no subsequent Transfer of the
Certificates is permitted unless (i) such Transfer is of a Certificate with
a denomination of at least $1,000,000 and (ii) the Depositor consents in
writing (which consent may be withheld for any reason or for no reason) to
the proposed Transfer; provided, however, that no such consent shall be
required where the proposed transferee is, and at the time of the Transfer
will be, a holder of a Certificate.
5. We understand that the opinion of tax counsel that the
Trust is not a publicly traded partnership taxable as a corporation is
dependent in part on the accuracy of the representations in paragraphs 2, 3
and 4.
6. We are a "qualified institutional buyer" (within the
meaning of Rule 144A under the Securities Act) (a "QIB") and we are
acquiring the Certificates for our own account or for the account of a QIB
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act, and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Certificates, and we and any accounts for which we are acting are each able
to bear the economic risk of our or their investment. We acknowledge that
the sale of the Certificates to us is being made in reliance on Rule 144A.
7. We are acquiring each of the Certificates purchased by us
for our own account or for a single account (which is a QIB and from which
no resale, pledge, or other transfer may be made) as to which we exercise sole
investment discretion.
8. We are not (A) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is subject to Title I of ERISA, (B) a plan
described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), (C) a governmental plan, as defined in Section 3(32)
of ERISA, subject to any Federal, state or local law which is, to a
material extent, similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code, (D) an entity whose underlying assets include
plan assets by reason of a plan's investment in the entity (within the
meaning of Department of Labor Regulation 29 C.F.R. ss. 2510.3-101) or (E)
a person investing "plan assets" of any such plan (excluding, for purposes
of this clause (E), any entity registered under the Investment Company Act
of 1940, as amended).
9. We are a person who is either (A) (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity organized in or under the laws of the United States or any political
subdivision thereof or (iii) a person not described in (i) or (ii) whose
ownership of the Certificates is effectively connected with such person's
conduct of a trade or business within the United States (within the meaning
of the Code) and who provides the Depositor and the Trust an IRS Form 4224
(and such other certifications, representations or opinions of counsel as
may be requested by the Depositor or the Trust) or (B) an estate or trust
the income of which is includible in gross income for United States Federal
income tax purposes, regardless of source.
10. We understand that any purported Transfer of any
Certificate (or any interest therein) in contravention of the restrictions
and conditions (including any violation of the representation in paragraph
3 by an investor who continues to hold such Certificates occurring any time
after the Transfer in which it acquired such Certificates) in paragraphs 1
through 9 above shall be null and void (each, a "Void Transfer"), and the
purported transferee in a Void Transfer shall not be recognized by the
Trust or any other person as a Certificateholder for any purpose.
11. We agree that if we determine to Transfer any of the
Certificates we will cause our proposed transferee to provide to the Trust
and the Certificate Registrar a letter substantially in the form of this
Exhibit D or Exhibit E to the Trust Agreement, as applicable.
You are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
By:_________________________
Name:
Title:
Securities To Be Purchased:
$ principal balance of Certificates
EXHIBIT E
[FORM OF INVESTMENT LETTER --
INSTITUTIONAL ACCREDITED INVESTOR]
[Date]
MMCA Auto Owner Trust 1999-2
c/o Wilmington Trust Company
as Owner Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Wilmington Trust Company
as Certificate Registrar
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of the Asset Backed
Certificates (the "Certificates") of MMCA Auto Owner Trust 1999-2 (the
"Trust"), a trust formed by MMCA Auto Receivables Trust (the "Depositor" or
"Seller"), we confirm that:
1. We agree to be bound by the restrictions and conditions
set forth in the Amended and Restated Trust Agreement dated as of October
1, 1999 (the "Trust Agreement") relating to the Certificates and we agree
to be bound by, and not to resell, transfer, assign, participate, pledge,
or otherwise dispose of (any such act, a "Transfer") the Certificates
except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the "Securities Act").
2. We have neither acquired nor will we Transfer any
Certificate we purchase (or any interest therein) or cause any such
Certificates (or any interest therein) to be marketed on or through an
"established securities market" within the meaning of section 7704(b)(1) of
the Internal Revenue Code of 1986, as amended (the "Code"), including,
without limitation, an over-the-counter-market or an interdealer quotation
system that regularly disseminates firm buy or sell quotations.
3. We either (a) are not, and will not become, a
partnership, Subchapter S corporation, or grantor trust for U.S. Federal
income tax purposes or (b) are such an entity, but none of the direct or
indirect beneficial owners of any of the interests in us have allowed or
caused, or will allow or cause, 80% or more (or such other percentage as
the Depositor may establish prior to the time of such proposed Transfer) of
the value of such interests to be attributable to our ownership of
Certificates.
4. We understand that no subsequent Transfer of the
Certificates is permitted unless (i) such Transfer is of a Certificate with
a denomination of at least $1,000,000 and (ii) the Depositor consents in
writing (which consent may be withheld for any reason or for no reason) to
the proposed Transfer; provided, however, that no such consent shall be
required where the proposed transferee is, and at the time of the Transfer
will be, a holder of a Certificate.
5. We understand that the opinion of tax counsel that the
Trust is not a publicly traded partnership taxable as a corporation is
dependent in part on the accuracy of the representations in paragraphs 2, 3
and 4 and that in addition to being subject to having its
purchase rescinded, it will be liable for damages.
6. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and we are
acquiring the Certificates for investment purposes and not with a view to,
or for offer or sale in connection with, any distribution in violation of
the Securities Act, and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Certificates, and we and any accounts for which we are
acting are each able to bear the economic risk of our or their investment.
7. We are acquiring each of the Certificates purchased by us
for our own account or for a single account (each of which is an
institutional "accredited investor" and from which no resale, pledge or
other transfer may be made) as to which we exercise sole investment
discretion.
8. We are not (A) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is subject to Title I of ERISA, (B) a plan
described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), (C) a governmental plan, as defined in Section 3(32)
of ERISA, subject to any Federal, state or local law which is, to a
material extent, similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code, (D) an entity whose underlying assets include
plan assets by reason of a plan's investment in the entity (within the
meaning of Department of Labor Regulation 29 C.F.R. ss. 2510.3-101) or (E)
a person investing "plan assets" of any such plan (excluding, for purposes
of this clause (E), any entity registered under the Investment Company Act
of 1940, as amended).
9. We are a person who is either (A) (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity organized in or under the laws of the United States or any political
subdivision thereof or (iii) a person not described in (i) or (ii) whose
ownership of the Certificates is effectively connected with such person's
conduct of a trade or business within the United States (within the meaning
of the Code) and who provides the Depositor and the Trust an IRS Form 4224
(and such other certifications, representations or opinions of counsel as
may be requested by the Depositor or the Trust) or (B) an estate or trust
the income of which is includible in gross income for United States Federal
income tax purposes, regardless of source.
10. We understand that any purported Transfer of any
Certificate (or any interest therein) in contravention of the restrictions
and conditions (including any violation of the representation in paragraph
3 by an investor who continues to hold such Certificates occurring any time
after the Transfer in which it acquired such Certificates) in paragraphs 1
through 9 above shall be null and void (each, a "Void Transfer"), and the
purported transferee in a Void Transfer shall not be recognized by the
Trust or any other person as a Certificateholder for any purpose.
11. We agree that if we determine to Transfer any of the
Certificates, we will cause our proposed transferee to provide to the Trust
and the Certificate Registrar a letter substantially in the form of this
Exhibit F or Exhibit E to the Trust Agreement, as applicable.
You are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
By:_________________________________
Name:
Title:
EXHIBIT 4.2
SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 1999-2,
as the Trust
MMCA AUTO RECEIVABLES TRUST,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of October 1, 1999
TABLES OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Other Definitional Provisions . . . . . . . . . . . . . . 23
SECTION 1.3 Business Day Certificate . . . . . . . . . . . . . . . . . 24
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property . . . . . . . . . . . . . . . 24
SECTION 2.2 Representations and Warranties of the Seller as to the
Receivables . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.3 Repurchase upon Breach . . . . . . . . . . . . . . . . . . 34
SECTION 2.4 Custody of Receivable Files . . . . . . . . . . . . . . . 34
SECTION 2.5 Duties of Servicer as Custodian . . . . . . . . . . . . . 35
SECTION 2.6 Instructions; Authority to Act . . . . . . . . . . . . . . 36
SECTION 2.7 Custodian's Indemnification . . . . . . . . . . . . . . . 36
SECTION 2.8 Effective Period and Termination . . . . . . . . . . . . . 37
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.2 Collection and Allocation of Receivable Payments . . . . . 40
SECTION 3.3 Realization upon Receivables . . . . . . . . . . . . . . . 42
SECTION 3.4 Physical Damage Insurance . . . . . . . . . . . . . . . . 43
SECTION 3.5 Maintenance of Security Interests in Financed Vehicles . . 43
SECTION 3.6 Covenants of Servicer . . . . . . . . . . . . . . . . . . 43
SECTION 3.7 Purchase by Servicer upon Breach . . . . . . . . . . . . . 44
SECTION 3.8 Servicing Compensation . . . . . . . . . . . . . . . . . . 44
SECTION 3.9 Servicer's Certificate . . . . . . . . . . . . . . . . . . 44
SECTION 3.10 Annual Statement as to Compliance;
Notice of Event of Servicing Termination . . . . . . . . 45
SECTION 3.11 Annual Independent Certified Public Accountants' Reports. . 45
SECTION 3.12 Access to Certain Documentation and Information Regarding
Receivables . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 3.13 Reports to the Commission . . . . . . . . . . . . . . . . 46
SECTION 3.14 Reports to Rating Agencies . . . . . . . . . . . . . . . 46
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 4.2 Collections . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 4.3 Application of Collections . . . . . . . . . . . . . . . . 53
SECTION 4.4 Advances . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.5 Additional Deposits . . . . . . . . . . . . . . . . . . . 55
SECTION 4.6 Allocation of Total Available Funds . . . . . . . . . . . 56
SECTION 4.7 Reserve Account; Supplemental Reserve Account . . . . . . 59
SECTION 4.8 Pre-Funding Account . . . . . . . . . . . . . . . . . . . 61
SECTION 4.9 Negative Carry Account . . . . . . . . . . . . . . . . . . 62
SECTION 4.10 Net Deposits . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 4.11 Statements to Noteholders and Certificateholders . . . . 62
SECTION 4.12 Control of Securities Accounts . . . . . . . . . . . . . 64
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 . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE VI
THE SELLER . . . . . . . . . . . . . . 67
SECTION 6.1 Representations, Warranties and Covenants of Seller . . . 67
SECTION 6.2 Liability of Seller; Indemnities . . . . . . . . . . . . . 68
SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller . . . . . . . . . . . . . . . . . 70
SECTION 6.4 Limitation on Liability of Seller and Others . . . . . . . 70
SECTION 6.5 Seller May Own Notes or Certificates . . . . . . . . . . . 70
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations and Warranties of Servicer . . . . . . . . 71
SECTION 7.2 Liability of Servicer; Indemnities . . . . . . . . . . . . 72
SECTION 7.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer . . . . . . . . . . . . . . . . 74
SECTION 7.4 Limitation on Liability of Servicer and Others . . . . . . 74
SECTION 7.5 Servicer Not to Resign . . . . . . . . . . . . . . . . . . 75
SECTION 7.6 Servicer May Own Notes or Certificates . . . . . . . . . . 75
ARTICLE VIII
SERVICING TERMINATION
SECTION 8.1 Events of Servicing Termination . . . . . . . . . . . . . 75
SECTION 8.2 Indenture Trustee to Act; Appointment of Successor
Servicer . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 8.3 Effect of Servicing Transfer . . . . . . . . . . . . . . . 77
SECTION 8.4 Notification to Noteholders and Certificateholders . . . . 78
SECTION 8.5 Waiver of Past Events of Servicing Termination . . . . . . 78
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables . . . . . . . . . . . 79
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 10.2 Protection of Title to Trust . . . . . . . . . . . . . . 81
SECTION 10.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 10.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 10.5 Severability of Provisions . . . . . . . . . . . . . . . 83
SECTION 10.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 10.7 Further Assurances . . . . . . . . . . . . . . . . . . . 84
SECTION 10.8 No Waiver; Cumulative Remedies . . . . . . . . . . . . . 84
SECTION 10.9 Third-Party Beneficiaries . . . . . . . . . . . . . . . . 84
SECTION 10.10 Actions by Noteholder or Certificateholders . . . . . . 84
SECTION 10.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.12 Agent for Service . . . . . . . . . . . . . . . . . . . 85
SECTION 10.13 No Bankruptcy Petition; Subordination; Claims
Against Seller . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.14 Limitation of Liability of Owner Trustee and Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . 85
SCHEDULES
SCHEDULE A Schedule of Initial Receivables
SCHEDULE B Location of Receivable Files
EXHIBITS
EXHIBIT A Form of Servicer's Certificate
EXHIBIT B Form of Statement to Noteholders
EXHIBIT C Form of Statement to Certificateholders
EXHIBIT D Form of Yield Supplement Agreement
EXHIBIT E Form of Second-Tier Subsequent Assignment
SALE AND SERVICING AGREEMENT, dated as of October 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement"), by and among MMCA AUTO OWNER TRUST 1999-2, 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
SECTION 1.1 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires,
whenever capitalized shall have the following meanings:
"Accrued Note Interest" shall mean, with respect to any Payment
Date and each Class of Notes, the sum of the Monthly Accrued Note Interest
and the Interest Carryover Shortfall for such Class for such Payment Date.
"Actuarial Advance" shall mean, with respect to an Actuarial
Receivable, the amount, as of the last day of a Collection Period, which is
required to be advanced with respect to such Actuarial Receivable by the
Servicer pursuant to Section 4.4(a).
"Actuarial Method" shall mean the method of allocating a fixed
level payment on a Receivable between principal and interest, pursuant to
which the portion of such payment that is allocated to interest is the
product of one-twelfth (1/12) of the APR on the Receivable multiplied by
the scheduled principal balance of the Receivable.
"Actuarial Receivable" shall mean any Receivable under which the
portion of a payment with respect thereto allocable to interest and the
portion of a payment with respect thereto allocable to principal is
determined in accordance with the Actuarial Method.
"Advance" shall mean an Actuarial Advance or a Last Scheduled
Payment Advance, as the context may require.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with such specified Person. For purposes of
this definition, "control" when used with respect to any specified Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" shall have the meaning specified in the recitals
hereto.
"Amount Financed" shall mean, with respect to a Receivable, the
aggregate amount advanced under such Receivable toward the purchase price
of the Financed Vehicle and any related costs.
"Applicable Tax State" shall mean, as of any date of
determination, each state as to which any of the following is then
applicable: (a) a state in which the Owner Trustee maintains the Corporate
Trust Office, (b) a state in which the Owner Trustee maintains its
principal executive offices, and (c) a state in which the Servicer
regularly conducts servicing and collection operations other than purely
ministerial activities and which relate to a material portion of the
Receivables.
"APR" of a Receivable shall mean the annual percentage rate of
interest stated in the Contract related to such Receivable.
"Available Funds" shall mean, for any Payment Date, an amount
equal to (a) the sum of the following amounts with respect to the related
Collection Period: (i) all collections on Receivables, including Payaheads
withdrawn from the Payahead Account but excluding Payaheads deposited into
the Payahead Account and excluding Rule of 78's Payments (and including the
proceeds of sale by the Trust of any Financed Vehicle sold to the Trust
upon termination, including a prepayment, of a Final Payment Receivable);
(ii) all Liquidation Proceeds on Defaulted Receivables and any Recoveries;
(iii) all extension and deferral fees paid with respect to the Receivables;
(iv) the Purchase Amount of each Receivable that became a Purchased
Receivable during the related Collection Period (net of applicable
expenses); (v) all Actuarial Advances and Last Scheduled Payment Advances
deposited to the Collection Account on such Payment Date by the Servicer;
(vi) amounts paid pursuant to the Yield Supplement Agreement (including
amounts, if any, withdrawn from the Yield Supplement Account, the
Supplemental Reserve Account or the Reserve Account pursuant to Section
5.1(a)(ii)) with respect to the related Collection Period; (vii) the
Negative Carry Amount for such Payment Date; (viii) partial prepayments
attributable to any refunded item included in the Amount Financed, such as
extended warranty protection plan costs or physical damage, credit life or
disability insurance premiums, or any partial prepayment which causes a
reduction in the Obligor's periodic payment to be below the Scheduled
Payment as of the related Cutoff Date; (ix) the Pre-Funding Account
Investment Earnings, if any, for the related Collection Period; and (x)
with respect to the Payment Date on or immediately following the last day
of the Pre-Funding Period, the Remaining Pre-Funded Amount; provided,
however, that in calculating the Available Funds, all payments and proceeds
(including Liquidation Proceeds) of any Purchased Receivables the Purchase
Amount of which has been included in the Available Funds in a prior
Collection Period (which shall be paid to the Seller or the Servicer, as
applicable) will be excluded, minus (b) the aggregate amount of funds
described in clause (a) above that are used in the related Collection
Period to reimburse the Servicer for the aggregate amount of Advances
previously made by the Servicer that are due and payable to the Servicer on
such Payment Date.
"Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions or trust companies in New
York, New York, Wilmington, Delaware or Los Angeles, California shall be
authorized or obligated by law, regulation or executive order to be closed.
"Capped Receivable" shall mean a Simple Interest Receivable that
is subject to a cap on the aggregate amount of interest to be paid by the
related Obligor during the term of such Receivable.
"Certificate" shall have the meaning assigned thereto in the
Trust Agreement.
"Certificate Balance" shall mean, as the context may require, (i)
with respect to all of the Certificates, an amount equal to, initially, the
Initial Certificate Balance and, thereafter, an amount equal to the Initial
Certificate Balance, as reduced from time to time by all amounts allocable
to principal previously distributed to Certificateholders or (ii) with
respect to any Certificate, an amount equal to, initially, the initial
denomination of such Certificate and, thereafter, an amount equal to such
initial denomination, as reduced from time to time by all amounts allocable
to principal previously distributed in respect of such Certificate;
provided, that in determining whether the Holders of the requisite portion
or percentage of the Certificate Balance of all of the Certificates have
given any request, demand, authorization, direction, notice, consent, or
waiver hereunder or under any other Basic Document, Certificates owned by
the Trust, any other obligor upon the Certificates, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed to be excluded from the Certificate Balance (unless
such Persons own 100% of the Certificate Balance of the Certificates),
except that, in determining whether the Indenture Trustee and Owner Trustee
shall be protected in relying on any such request, demand, authorization,
direction, notice, consent, or waiver, only Certificates that a Responsible
Officer of the Indenture Trustee, if applicable, and a Responsible Officer
of the Owner Trustee with direct responsibility for the administration of
the Trust Agreement, if applicable, knows to be so owned shall be so
disregarded. Certificates so owned that have been pledged in good faith
may be regarded as included in the Certificate Balance if the pledgee
establishes to the satisfaction of the Indenture Trustee or the Owner
Trustee, as applicable, the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Trust, any other obligor upon
the Certificates, the Seller, the Servicer or any Affiliate of any of the
foregoing Persons.
"Certificate Distribution Account" shall mean the account
established and maintained as such pursuant to Section 4.1(e).
"Certificate Pool Factor" shall mean, as of the close of business
on the last day of a Collection Period, a seven-digit decimal figure equal
to the Certificate Balance (after giving effect to any reductions therein
to be made on the immediately following Payment Date) divided by the
Initial Certificate Balance. The Certificate Pool Factor will be 1.0000000
as of the Closing Date; thereafter, the Certificate Pool Factor will
decline to reflect reductions in the Certificate Balance.
"Certificateholder" shall have the meaning assigned thereto in
the Trust Agreement.
"Closing Date" shall mean October 28, 1999.
"Collection Account" shall mean the account or accounts
established and maintained as such pursuant to Section 4.1(a).
"Collection Period" shall mean each calendar month during the
term of this Agreement or, in the case of the initial Collection Period,
the period from the Initial Cutoff Date to and including the last day of
the month in which the Initial Cutoff Date occurred. As used herein, the
Collection Period "related to" a Payment Date or "preceding" a Payment Date
refers to the Collection Period that ends on the last day of the calendar
month preceding the calendar month in which such Payment Date occurs.
"Commission" shall mean the Securities and Exchange Commission.
"Computer Tape" shall mean each computer tape or compact disk
generated by the Seller which provides information relating to the
Receivables and which was used by the Seller in selecting the Receivables
conveyed to the Trust hereunder on the Closing Date or any Subsequent
Transfer Date.
"Contract" shall mean a motor vehicle retail installment sale
contract, including a retail installment contract relating to the sale of
an automobile or a light-duty truck for commercial use.
"Corporate Trust Office" shall mean, as applicable, (i) the
principal office of the Indenture Trustee at which at any particular time
its corporate trust business shall be administered, which office at the
date of the execution of this Agreement is located at 1251 Avenue of the
Americas, New York, New York 10020-1104, Attention: Corporate Trust
Department, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders, the Owner Trustee and the
Seller, or the principal corporate trust office of any successor Indenture
Trustee (of which address such successor Indenture Trustee will notify the
Noteholders, the Owner Trustee and the Seller) or (ii) the principal office
of the Owner Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution
of this Agreement is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware, 19890-0001, Attention: Corporate Trust
Administration or at such other address as the Owner Trustee may designate
from time to time by notice to the Certificateholders, the Indenture
Trustee and the Seller, or the principal corporate trust office of any
successor Owner Trustee (of which address such successor Owner Trustee will
notify the Certificateholders, the Indenture Trustee and the Seller).
"Cutoff Date" shall mean the Initial Cutoff Date or any
Subsequent Cutoff Date, as the context may require.
"Dealer" shall mean, with respect to any Receivable, the seller
of the related Financed Vehicle who originated and assigned the Receivable
relating to such Financed Vehicle to MMCA under a Dealer Agreement.
"Dealer Agreement" shall mean an agreement between MMCA and a
Dealer relating to the assignment of Receivables to MMCA and all documents
and instruments relating thereto, as the same may from time to time be
amended, supplemented or otherwise modified and in effect.
"Defaulted Receivable" shall mean a Receivable (other than a
Purchased Receivable) as to which (i) the related Financed Vehicle has been
repossessed and liquidated, (ii) more than 10% of a scheduled payment
(including, in the case of a Final Payment Receivable, the amount owed by
an Obligor with respect to a Last Scheduled Payment but excluding in each
case any Excess Wear and Tear or Excess Mileage) is 120 or more days past
due and the Servicer has not repossessed the related Financed Vehicle or
(iii) the Servicer has determined, in accordance with its customary
servicing standards, policies and procedures, that eventual payment in full
(including, in the case of a Final Payment Receivable, the amount owed by
an Obligor with respect to a Last Scheduled Payment but excluding in each
case any Excess Wear and Tear or Excess Mileage) on the Receivable is
unlikely and the Servicer has either (x) repossessed and liquidated the
related Financed Vehicle or (y) repossessed and held the related Financed
Vehicle in its repossession inventory for 90 days, which 90 days shall not
be more than 180 days after the date on which a Scheduled Payment was due
but not paid.
"Depositor" shall mean the Seller, in its capacity as Depositor
under the Trust Agreement.
"Determination Date" shall mean, with respect to any Collection
Period, the seventh Business Day of the next succeeding calendar month (but
not later than the tenth calendar day of such month).
"Eligible Servicer" shall mean a Person which, at the time of its
appointment as Servicer or as a subservicer, (i) has a net worth of not
less than $50,000,000, (ii) is servicing a portfolio of motor vehicle
retail installment sale contracts and/or motor vehicle loans, (iii) is
legally qualified, and has the capacity, to service the Receivables, (iv)
has demonstrated the ability professionally and competently to service a
portfolio of motor vehicle retail installment sale contracts and/or motor
vehicle loans similar to the Receivables in accordance with standards of
skill and care that are consistent with prudent industry standards, and (v)
is qualified and entitled to use pursuant to a license or other written
agreement, and agrees to maintain the confidentiality of, the software
which the Servicer or any subservicer uses in connection with performing
its duties and responsibilities under this Agreement or the related
subservicing agreement or obtains rights to use, or develops at its own
expense, software which is adequate to perform its duties and
responsibilities under this Agreement or the related subservicing
agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Event of Servicing Termination" shall mean an event specified in
Section 8.1.
"Excess Mileage" shall mean, with respect to any Financed Vehicle
securing a Final Payment Receivable, the amounts payable by the related
Obligor relating to the excess of the number of miles by which such
Financed Vehicle has been driven over the number of miles such Financed
Vehicle may be driven during the term of the related Final Payment
Receivable (as specified in the Contract related to such Final Payment
Receivable) without incurring an excess mileage charge pursuant to the
related Contract, net of the amount, if any, payable to a third party
collection agency as payment of its fees and expenses in connection with
collecting such amounts from the related Obligor.
"Excess Wear and Tear" shall mean, with respect to any Financed
Vehicle securing a Final Payment Receivable, all amounts payable by the
related Obligor relating to damages to such Financed Vehicle that are not
the result of normal wear and tear, as more specifically described in the
Contract related to such Final Payment Receivable, net of the amount, if
any, payable to a third party collection agency as payment of its fees and
expenses in connection with collecting such amounts from the related
Obligor.
"Final Payment Receivable" shall mean all rights and obligations
arising under a Contract listed on a Schedule of Receivables which provides
for a series of scheduled payments which, if each is made on its scheduled
due date, will amortize the initial Level Pay Balance by the due date
immediately preceding the maturity date of the Receivable. At maturity of
the Final Payment Receivable, the Obligor thereunder will owe (assuming
that all payments have been made on their scheduled due dates) an amount
consisting of interest for the period from the preceding due date through
the maturity date and the remaining Principal Balance of the Receivable.
At maturity of the Final Payment Receivable, the Obligor may either (i) pay
the remaining Principal Balance of the Receivable, all accrued and unpaid
interest, plus any fees, charges, and other amounts then owing, (ii)
refinance the amount then due, subject to certain conditions or (iii) sell
the Financed Vehicle to MMCA on behalf of the Trust for an amount equal to
the Last Scheduled Payment, reduced by charges for Excess Wear and Tear and
Excess Mileage and a disposition fee payable to the Servicer, and pay any
excess of the total amount owed by the Obligor (calculated as in clause
(i)) over the Last Scheduled Payment to MMCA on behalf of the Trust, and
satisfy all other conditions stated under the terms of the Contract.
"Final Scheduled Maturity Date" shall mean (i) with respect to
any Initial Receivable, [________ __], 200[__] and (ii) with respect to any
Subsequent Receivable, March 31, 2005.
"Financed Vehicle" shall mean a new or used automobile or
light-duty truck, together with all accessions thereto, securing an
Obligor's indebtedness under the respective Receivable.
"Holder" shall mean a Noteholder or a Certificateholder, as the
case may be.
"Indenture" shall mean the Indenture, dated as of October 1,
1999, between the Trust and the Indenture Trustee, as the same may be
amended, supplemented or otherwise modified and in effect from time to
time.
"Indenture Trustee" shall mean Bank of Tokyo - Mitsubishi Trust
Company, a New York banking corporation, as Indenture Trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Certificate Balance" shall mean, as the context may
require, (i) with respect to all of the Certificates, $60,000,000, or (ii)
with respect to any Certificate, an amount equal to the initial
denomination of such Certificate.
"Initial Cutoff Date" shall mean October 1, 1999.
"Initial Payahead Account Deposit" shall mean $[____________].
"Initial Pool Balance" shall mean the aggregate Principal Balance
(including the aggregate principal balance of Last Scheduled Payments) of
the Initial Receivables as of the close of business on the Initial Cutoff
Date, which is $597,789,058.71.
"Initial Receivable" shall mean any Standard Receivable or Final
Payment Receivable conveyed by the Seller to the Trust on the Closing Date,
as described in the Schedule of Initial Receivables.
"Initial Yield Supplement Amount" shall mean $[________________].
"Insolvency Event" shall mean, with respect to any Person, (i)
the making of a general assignment for the benefit of creditors, (ii) the
filing of a voluntary petition in bankruptcy, (iii) being adjudged a
bankrupt or insolvent, or having had entered against such Person an order
for relief in any bankruptcy or insolvency proceeding, (iv) the filing by
such Person of a petition or answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any statute, law or regulation, (v) the filing by such Person of an answer
or other pleading admitting or failing to contest the material allegations
of a petition filed against such Person in any proceeding specified in
(vii) below, (vi) seeking, consenting to or acquiescing in the appointment
of a trustee, receiver or liquidator of such Person or of all or any
substantial part of the assets of such Person or (vii) the failure to
obtain dismissal within 60 days of the commencement of any proceeding
against such Person seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute,
law or regulation, or the entry of any order appointing a trustee,
liquidator or receiver of such Person or of such Person's assets or any
substantial portion thereof.
"Interest Accrual Period" shall mean, with respect to any Payment
Date, and with respect to each Class of the Notes, the period from and
including the 15th day of the calendar month immediately preceding such
Payment Date (or, in the case of the first Payment Date, the Closing Date),
to but excluding the 15th day of the calendar month in which such Payment
Date occurs.
"Interest Carryover Shortfall" shall mean, with respect to any
Payment Date and any Class of Notes, the excess of the sum of the Monthly
Accrued Note Interest for the preceding Payment Date and any outstanding
Interest Carryover Shortfall from the close of business on such preceding
Payment Date, over the amount in respect of interest that is actually
deposited in the Note Payment Account on such preceding Payment Date with
respect to such Class, plus interest on such excess to the extent permitted
by law, at the applicable Note Interest Rate for the related Interest
Accrual Period.
"Last Scheduled Payment" shall mean, with respect to each Final
Payment Receivable, the amount referred to in the Contract related to such
Final Payment Receivable as the "last scheduled payment."
"Last Scheduled Payment Advance" shall mean, with respect to a
Final Payment Receivable, the amount, as of the close of business on the
last day of a Collection Period, which is required to be advanced by the
Servicer with respect to such Final Payment Receivable pursuant to Section
4.4(b).
"Last Scheduled Payment Pool Balance" shall mean, for any Payment
Date, the aggregate principal balance of Last Scheduled Payments of Final
Payment Receivables as of the close of business on the last day of the
preceding Collection Period.
"Last Scheduled Payment Principal Collections" shall mean (a)
collections of principal on a Final Payment Receivable that are
attributable to Last Scheduled Payments, which includes any collection
attributable to principal on a Final Payment Receivable in excess of the
initial Level Pay Balance of that Receivable, whether or not such payment
is made on the due date of the related Last Scheduled Payment, and
including the proceeds of sale (net of expenses) of any Financed Vehicle
purchased by MMCA on behalf of the Trust pursuant to the terms of the
Receivable and subsequently sold on behalf of the Trust, minus (b) with
respect to any Final Payment Receivable with respect to which the Obligor
exercises its right to have MMCA, on behalf of the Trust, purchase the
related Financed Vehicle, the excess of the purchase price from the Obligor
of such Financed Vehicle over the remaining amount owed by the Obligor.
"Letter of Credit Bank" shall mean any Person having the Required
Rating that has provided a Yield Supplement Letter of Credit in accordance
with Section 5.1.
"Level Pay Balance" shall mean, with respect to each Final
Payment Receivable, (i) initially the Amount Financed under such Final
Payment Receivable minus the principal portion of the Last Scheduled
Payment thereon and (ii) thereafter, shall be the amount set forth in
clause (i) minus all collections on or with respect to principal on such
Receivable other than amounts on deposit in the Payahead Account with
respect to future due dates; provided that such Level Pay Balance for any
Final Payment Receivable shall not be less than zero.
"Level Pay Pool Balance" shall mean, for any Payment Date, the
sum of (i) the aggregate Level Pay Balance of Final Payment Receivables and
(ii) the aggregate Principal Balance of the Receivables other than Final
Payment Receivables, as of the close of business on the last day of the
preceding Collection Period.
"Lien" shall mean a security interest, lien, charge, pledge,
equity or encumbrance of any kind, other than tax liens, mechanics' or
materialmen's liens, judicial liens and any liens that may attach to a
Financed Vehicle by operation of law.
"Liquidation Proceeds" shall mean, with respect to a Defaulted
Receivable, the monies collected from whatever source during the Collection
Period in which such Receivable became a Defaulted Receivable, net of the
sum of (i) any expenses incurred by the Servicer in connection with
collection of such Receivable and the disposition of the Financed Vehicle
and (ii) any amounts required by law to be remitted to the Obligor.
"Maximum Negative Carry Amount" shall mean, as of any Payment
Date, an amount equal to the product of (a) the Weighted Average Rate as of
such Payment Date minus 2.5%, multiplied by (b) the product of the Note
Percentage as of such Payment Date and the Pre-Funded Amount as of such
Payment Date after giving effect to any withdrawals from the Pre-Funding
Account on such Payment Date, multiplied by (c) the percentage equivalent
of a fraction, the numerator of which is the actual number of days until
the expected end of the Pre-Funding Period and the denominator of which is
360. The Maximum Negative Carry Amount as of any Payment Date shall be
calculated in the manner described in the preceding sentence as an
approximation of the maximum aggregate amount of the Negative Carry Amounts
for all subsequent Payment Dates.
"Maximum Supplemental Reserve Amount" shall mean, with respect to
any Payment Date, an amount equal to the lesser of (i) 2.00% of the
Original Pool Balance as of such Payment Date (after giving effect to all
conveyances of Subsequent Receivables to the Trust on or prior to such
Payment Date) and (ii) an amount equal to (x) the outstanding principal
amount of the Notes on such Payment Date (after giving effect to any
principal payment made on such Payment Date) less (y) the amount on deposit
in the Reserve Account on such Payment Date (after giving effect to all
deposits and withdrawals therefrom), as such amount may be reduced from
time to time upon satisfaction of the Rating Agency Condition.
"MMCA" shall mean Mitsubishi Motors Credit of America, Inc., a
Delaware corporation, and its successors and assigns.
"Monthly Accrued Note Interest" shall mean, with respect to any
Payment Date and (i) any Class of Notes, interest accrued for the related
Interest Accrual Period at the applicable Note Interest Rate for such Class
on the aggregate principal balance of the Notes of such Class as of the
immediately preceding Payment Date, after giving effect to all payments of
principal to Noteholders on or prior to such preceding Payment Date (or, in
the case of the first Payment Date, the initial principal amount of the
Notes); and (ii) with respect to the Notes collectively, the sum of Monthly
Accrued Note Interest for each Class.
"Monthly Remittance Condition" shall have the meaning assigned
thereto in Section 4.1(g).
"Moody's" shall mean Moody's Investors Service, Inc., or its
successors and assigns.
"Negative Carry Account" shall mean the account established and
maintained as such pursuant to Section 4.1(c).
"Negative Carry Account Initial Deposit" shall mean
$[____________].
"Negative Carry Amount" shall mean, with respect to any Payment
Date, the difference (if positive) between (1) the product of (a) the
Monthly Accrued Note Interest for such Payment Date, multiplied by (b) the
Pre-Funded Percentage as of the immediately preceding Payment Date or, in
the case of the first Payment Date, the Closing Date, minus (2) the Pre-
Funding Account Investment Earnings for the related Collection Period (or,
in the case of the first Payment Date, from the Closing Date until October
31, 1999).
"Note Payment Account" shall mean the account established and
maintained as such pursuant to Section 4.1(d).
"Note Percentage" shall mean, as of any Payment Date, the
percentage equivalent of a fraction, the numerator of which is the
aggregate principal amount of the Notes as of such Payment Date (after
giving effect to any payments of principal on such Payment Date), and the
denominator of which is an amount equal to the sum of the aggregate
principal amount of the Notes and the Certificate Balance, in each case as
of such Payment Date (after giving effect to any payment of principal on
such Payment Date).
"Note Pool Factor" shall mean, with respect to any Class of
Notes, as of the close of business on the last day of a Collection Period,
a seven-digit decimal figure equal to the outstanding principal balance of
such Class of Notes (after giving effect to any reductions thereof to be
made on the immediately following Payment Date) divided by the original
outstanding principal balance of such Class of Notes. Each Note Pool
Factor will be 1.0000000 as of the Closing Date; thereafter, the Note Pool
Factor will decline to reflect reductions in the outstanding principal
amount of such Class of Notes.
"Noteholder" shall mean a Person in whose name a Note is
registered on the Note Register.
"Obligor" on a Receivable shall mean the purchaser or co-
purchasers of the related Financed Vehicle purchased in part or in whole by
the execution and delivery of such Receivable, or any other Person who owes
or may be liable for payments under such Receivable.
"Officer's Certificate" shall mean a certificate signed by the
chairman, the president, any executive vice president, vice president or
the treasurer of the Seller or the Servicer, as the case may be, and
delivered to the Owner Trustee and the Indenture Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel
(who, in the case of counsel to the Seller or the Servicer, may be an
employee of, or outside counsel to, the Seller or the Servicer), which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or
the Rating Agencies, as applicable.
"Optional Purchase Percentage" shall mean 10%.
"Original Pool Balance" shall mean, as of any date of
determination, an amount equal to the sum of (i) the Initial Pool Balance
plus (ii) the aggregate Principal Balance (including the aggregate
principal balance of Last Scheduled Payments) of all Subsequent Receivables
conveyed to the Trust on or prior to such date as of the close of business
on their respective Subsequent Cutoff Dates.
"Owner Trust Estate" shall have the meaning assigned thereto in
the Trust Agreement.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, its successors in interest and any
successor trustee under the Trust Agreement.
"Payahead" shall mean, with respect to an Actuarial Receivable,
the amount, as of the close of business on the last day of a Collection
Period, so designated in accordance with Section 4.3(a) with respect to
such Receivable.
"Payahead Account" shall mean the account established and
maintained as such pursuant to Section 4.1(f).
"Payahead Balance", with respect to an Actuarial Receivable,
shall mean the sum, as of the close of business on the last day of a
Collection Period, of all Payaheads made by or on behalf of the Obligor
with respect to such Actuarial Receivable (including any amount paid by or
on behalf of the Obligor prior to the related Cutoff Date that is due on or
after the related Cutoff Date and was not used to reduce the principal
balance of such Actuarial Receivable), as reduced by applications of
previous Payaheads with respect to such Actuarial Receivable, pursuant to
Sections 4.3(a) and 4.4.
"Payment Date" shall mean the 15th day of each month, or if such
day is not a Business Day, the immediately following Business Day,
commencing on November 15, 1999.
"Permitted Investments" shall mean, on any date of determination,
book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form with maturities not exceeding the
Business Day preceding the next Payment Date which evidence:
(a) direct obligations of, and obligations fully guaranteed
as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution or trust company incorporated under
the laws of the United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or State banking or depository institution
authorities; provided, however, that at the time of the investment or
contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such
depository institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest investment category granted
thereby;
(c) commercial paper having, at the time of the investment
or contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from
each of the Rating Agencies in the highest investment category granted
thereby (including funds for which the Indenture Trustee or the Owner
Trustee or any of their respective Affiliates is investment manager or
advisor);
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security
that is a direct obligation of, or fully guaranteed by, the United States
of America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or trust
company (acting as principal) described in clause (b); and
(g) any other investment with respect to which the Trust or
the Servicer has received written notification from the Rating Agencies
that the acquisition of such investment as a Permitted Investment will not
result in a withdrawal or downgrading of the ratings on any Class of Notes
or the Certificates.
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, limited liability partnership, trust,
unincorporated organization, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Pool Balance" shall mean, as of any date of determination, the
aggregate Principal Balance of the Receivables (including the aggregate
Principal Balance of Last Scheduled Payments) as of the close of business
on the last day of the preceding Collection Period or, with respect to any
date of determination during the first Collection Period, as of the Initial
Cutoff Date, after giving effect to, with respect to such Collection
Period, (i) all payments received from Obligors (other than Payaheads),
(ii) all Advances to be made by the Servicer and (iii) all Purchase Amounts
to be remitted by the Seller or the Servicer, in each case for such
Collection Period, and reduced by the aggregate Principal Balance of
Receivables that became Defaulted Receivables during such Collection
Period.
"Pre-Funded Amount" shall mean, with respect to the Closing Date
or any Payment Date, the amount on deposit in the Pre-Funding Account on
such date exclusive of any interest and other income (net of losses and
expenses) on amounts on deposit in the Pre-Funding Account.
"Pre-Funded Percentage" shall mean, as of any date of
determination, the percentage equivalent of a fraction, the numerator of
which is the Pre-Funded Amount as of such date of determination (after
giving effect to any withdrawals from the Pre-Funding Account on or prior
to such date of determination), and the denominator of which is the sum of
the Pool Balance (after giving effect to all conveyances of Subsequent
Receivables to the Trust on or prior to such date of determination) and the
Pre-Funded Amount (after giving effect to any withdrawals from the Pre-
Funding Account on or prior to such date of determination).
"Pre-Funding Account" shall mean the account designated as such,
established and maintained pursuant to Section 4.1(b).
"Pre-Funding Account Investment Earnings" shall mean, with
respect to any Collection Period, the interest and other income (net of
losses and expenses) earned on amounts on deposit in the Pre-Funding
Account during such Collection Period and deposited to the Pre-Funding
Account on or prior to the related Payment Date.
"Pre-Funding Period" shall mean the period from and including the
Closing Date and ending on the earliest of: (a) the last day of the
Collection Period on which the Pre-Funded Amount (after giving effect to
any transfers therefrom in connection with the transfer of Subsequent
Receivables to the Trust on or before such date) is less than $100,000, (b)
the date on which an Event of Default or an Event of Servicing Termination
occurs, (c) the date on which an Insolvency Event occurs with respect to
the Seller or the Servicer and (d) the close of business on March 31, 2000.
"Principal Balance" shall mean, with respect to any Receivable as
of any date of determination, the Amount Financed minus the sum of the
following amounts: (i) in the case of an Actuarial Receivable, that
portion of all Scheduled Payments due on or prior to such date allocable to
principal computed in accordance with the Actuarial Method (to the extent
collected or advanced), (ii) in the case of a Simple Interest Receivable,
that portion of all Scheduled Payments actually received on or prior to
such date allocable to principal using the Simple Interest Method (to the
extent collected or advanced), (iii) any refunded portion of extended
warranty protection plan costs, or of physical damage, credit life, or
disability insurance premiums included in the Amount Financed, and (iv) any
prepayment in full or partial prepayment applied to reduce the unpaid
principal balance of such Receivable. The Principal Balance of a Defaulted
Receivable shall be zero as of the beginning of the Collection Period
following the Collection Period in which it became a Defaulted Receivable.
"Principal Carryover Shortfall" shall mean, as of the close of
business on any Payment Date, the excess of the Principal Distribution
Amount and any outstanding Principal Carryover Shortfall from the preceding
Payment Date over the amount in respect of principal that is actually
deposited in the Note Payment Account on such Payment Date.
"Principal Distribution Amount" shall mean, with respect to any
Payment Date, the sum of (i) the Scheduled Principal for such Payment Date
(including, in the case of a Final Payment Receivable, the amount owed by
an Obligor with respect to a Last Scheduled Payment), (ii) any outstanding
Principal Carryover Shortfall as of the close of business on the preceding
Payment Date and (iii) with respect to the Payment Date on or immediately
following the end of the Pre-Funding Period, the Remaining Pre-Funded
Amount; provided, however, that the Principal Distribution Amount shall not
exceed the outstanding aggregate principal balance of the Notes; and
provided, further, that, on the Final Payment Date for each Class of Notes,
the principal required to be deposited in the Note Payment Account shall
include the amount necessary (after giving effect to the other amounts to
be deposited in the Note Payment Account on such Payment Date and allocable
to principal) to reduce the outstanding principal amount of the Notes of
such Class to zero.
"Program" shall have the meaning assigned thereto in Section
3.11.
"Purchase Agreement" shall mean the Purchase Agreement, dated as
of October 1, 1999, between the Seller and MMCA, as the same may be
amended, supplemented or otherwise modified and in effect from time to
time.
"Purchase Amount" shall mean, with respect to a Payment Date and
a Receivable to be repurchased by the Seller or purchased by the Servicer
on such Payment Date, an amount equal to the sum of (a) the Principal
Balance of such Receivable as of the first day of the Collection Period
preceding the Collection Period in which such Payment Date occurs and (b)
an amount equal to the amount of accrued and unpaid interest on such
Principal Balance at the related APR from the date a payment was last made
by or on behalf of the Obligor through the due date for payment of such
Receivable in the Collection Period preceding the Collection Period in
which such Payment Date occurs and, in the case of clauses (a) and (b),
after giving effect to the receipt of monies collected on such Receivable
in such preceding Collection Period.
"Purchased Receivable" shall mean, on any date of determination,
a Receivable as to which payment of the Purchase Amount has been made by
the Seller pursuant to Section 2.3 hereof or the Servicer pursuant to
Section 3.7 or 9.1 hereof.
"Qualified Institution" shall mean Bank of Tokyo - Mitsubishi
Trust Company, a New York banking corporation, or any depository
institution organized under the laws of the United States of America or any
one of the states thereof or incorporated under the laws of a foreign
jurisdiction with a branch or agency located in the United States of
America or one of the states thereof qualified to take deposits and subject
to supervision and examination by federal or state banking authorities
which at all times has a short-term deposit rating of P-1 by Moody's and A-
1 by S&P and, in the case of any such institution organized under the laws
of the United States of America, whose deposits are insured by the Federal
Deposit Insurance Corporation or any successor thereto.
"Qualified Trust Institution" shall mean the corporate trust
department of Bank of Tokyo - Mitsubishi Trust Company or any other
institution organized under the laws of the United States of America or any
one of the states thereof or incorporated under the laws of a foreign
jurisdiction with a branch or agency located in the United States of
America or one of the states thereof qualified to take deposits and subject
to supervision and examination by federal or state banking authorities
which at all times (i) is authorized under such laws to act as a trustee or
in any other fiduciary capacity, (ii) has not less than one billion dollars
in assets under fiduciary management, and (iii) has a long-term deposit
rating that satisfies the Rating Agency Condition.
"Rating Agency" shall mean either S&P or Moody's, and together,
the "Rating Agencies." If no such organization or successor is any longer
in existence, "Rating Agency" shall be a nationally recognized statistical
rating organization or other comparable Person designated by the Trust,
notice of which designation shall be given to the Indenture Trustee, the
Owner Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any action,
that each Rating Agency shall have been given prior notice thereof and that
each of the Rating Agencies shall have notified the Seller, the Servicer,
the Owner Trustee and the Indenture Trustee in writing that such action
will not result in a reduction or withdrawal of the then current rating of
the Notes or the Certificates.
"Realized Losses" shall mean, with respect to each Payment Date
and each Receivable that became a Defaulted Receivable during the related
Collection Period, the excess of the Principal Balance of such Defaulted
Receivable (including the principal of a Last Scheduled Payment) over the
Liquidation Proceeds attributable to such Defaulted Receivable.
"Receivables" shall mean, as of any date of determination, the
Initial Receivables together with any Subsequent Receivables conveyed to
the Trust as of such date of determination pursuant to Section 2.1(b)
hereof or any Second-Tier Subsequent Assignment.
"Receivable File" shall mean, with respect to a Receivable, the
electronic entries, documents, instruments and writings specified in
Section 2.4.
"Receivable Yield Supplement Amount" shall mean, with respect to
each Receivable and the related Payment Date (other than a Defaulted
Receivable or a Purchased Receivable, for Collection Periods after the
Collection Period in which such Receivable became a Defaulted Receivable or
a Purchased Receivable or any Receivable sold by the Indenture Trustee
following an Event of Default pursuant to Section 5.4 of the Indenture, for
Collection Periods after the Collection Period in which such Receivable is
sold by the Indenture Trustee), the amount, calculated by the Servicer, if
positive, equal to the product of (a) one-twelfth (1/12) times (b) an
amount equal to the difference (if positive) between (i) interest on such
Receivable's Principal Balance as of the first day of the related
Collection Period at a rate equal to the sum of (A) the Weighted Average
Rate as of the first day of the related Collection Period, (B) the
Servicing Rate and (C) 3.00%, and (ii) interest on such Receivable's
Principal Balance as of the first day of the related Collection Period at a
rate equal to its APR. For purposes of the definition of "Receivable Yield
Supplement Amount," the APR on a contract will be deemed to be zero until
the Payment Date following the first date on which a payment under the
Contract is due. On that Payment Date and on each following Payment Date,
the APR on a Contract will be the rate specified in the Contract.
"Record Date" shall mean, with respect to a Payment Date or
Redemption Date, (i) for any Book-Entry Notes, the close of business on the
Business Day immediately preceding such Payment Date or Redemption Date or,
(ii) for any Definitive Notes and for the Certificates, the fifteenth
(15th) day of the preceding month, unless such fifteenth (15th) day is not
a Business Day, in which case the immediately preceding Business Day.
"Recoveries" shall mean, with respect to any Collection Period
following the Collection Period in which such Receivable became a Defaulted
Receivable, all monies received by the Servicer with respect to such
Defaulted Receivable during any Collection Period, net of the sum of (i)
any expenses incurred by the Servicer in connection with the collection of
such Receivable and the disposition of the Financed Vehicle (to the extent
not previously reimbursed) and (ii) any payments on such Receivable
required by law to be remitted to the Obligor.
"Relevant UCC" shall mean the Uniform Commercial Code as in
effect in any relevant jurisdiction.
"Remaining Pre-Funded Amount" shall have the meaning assigned
thereto in Section 4.8(b).
"Required Negative Carry Account Balance" shall mean, as of any
Payment Date, the lesser of (x) the Negative Carry Account Initial Deposit
minus all previous withdrawals of the Negative Carry Amount from the
Negative Carry Account, including any withdrawals of the Negative Carry
Amount therefrom on such Payment Date, and (y) the Maximum Negative Carry
Amount as of such Payment Date.
"Required Rating" shall mean a rating on (i) short-term unsecured
debt obligations of P-1 by Moody's and (ii) short-term unsecured debt
obligations of A-1+ by S&P; and any requirement that short-term unsecured
debt obligations have the "Required Rating" shall mean that such short-term
unsecured debt obligations have the foregoing required ratings from each of
such Rating Agencies.
"Reserve Account" shall mean the account established and
maintained as such pursuant to Section 4.7(a).
"Reserve Account Advance Draw Amount" shall have the meaning
assigned thereto in Section 4.6(b).
"Reserve Account Amount" shall mean, with respect to any Payment
Date, the amount on deposit in the Reserve Account. Unless specifically
stated to the contrary, the Reserve Account Amount shall be calculated
after giving effect to all deposits and withdrawals therefrom on the prior
Payment Date (or, in the case of the first Payment Date, the Closing Date)
and all interest and other income (net of losses and investment expenses)
on such amounts during the related Collection Period.
"Reserve Account Initial Deposit" shall mean $896,683.59.
"Reserve Account Property" shall have the meaning assigned
thereto in Section 4.7(a).
"Reserve Account TRP Draw Amount" shall have the meaning assigned
thereto in Section 4.6(b).
"Responsible Officer" shall mean (a) with respect to the
Indenture Trustee, any officer within the Corporate Trust Office of the
Indenture Trustee with direct responsibility for the administration of the
Indenture and the other Basic Documents on behalf of the Indenture Trustee
and also, with respect to a particular matter, any other officer to whom
such matter is referred because of such officer's knowledge of and
familiarity with the particular subject, and (b) with respect to the Owner
Trustee, any officer within the Corporate Trust Office of the Owner
Trustee, including any vice president, assistant vice president, secretary,
assistant secretary, financial services officer or any other officer of the
Owner Trustee, customarily performing functions similar to those performed
by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject and shall also mean any officer of the Administrator.
"Rule of 78's Payment" shall mean, with respect to any Actuarial
Receivable which provides that, if such Receivable is prepaid in full, the
amount payable will be determined according to the Rule of 78's method
specified in the related Contract, an amount (if positive) equal to (i) the
amount due allocating payments between principal and interest based upon
the Rule of 78's minus (ii) the amount that would be due allocating
payments between principal and interest from the date of origination of the
Receivable using the Actuarial Method.
"S&P" shall mean Standard & Poor's Ratings Services, a Division
of The McGraw-Hill Companies, Inc., or its successors and assigns.
"Schedule of Initial Receivables" shall mean the list of
Contracts attached hereto as Schedule A (which list may be in the form of
computer tape, microfiche, compact disk or other electronic medium).
"Schedule of Receivables" shall mean the Schedule of Initial
Receivables or any Schedule of Subsequent Receivables, as the context may
require.
"Schedule of Subsequent Receivables" shall mean any list of
Contracts attached as Schedule A to the related Second-Tier Subsequent
Assignment (which list may be in the form of computer tape, microfiche or
compact disk).
"Scheduled Payment" shall mean, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid
by the Obligor in such Collection Period (without giving effect to
deferrals of payments pursuant to Section 3.2 or any rescheduling in any
insolvency or similar proceedings).
"Scheduled Principal" shall mean, with respect to any Payment
Date, the sum of (a) the sum of (i) collections of principal on Simple
Interest Receivables received during the related Collection Period,
including collections of principal attributable to the Last Scheduled
Payment of a Simple Interest Receivable that is a Final Payment Receivable
(unless a Last Scheduled Payment Advance has previously been made with
respect to such Last Scheduled Payment), and charges for Excess Wear and
Tear and Excess Mileage, and (ii) Last Scheduled Payment Advances made on
such Payment Date with respect to Simple Interest Receivables that are
Final Payment Receivables, (b) the principal portion of each Scheduled
Payment (including a Last Scheduled Payment on a Final Payment Receivable)
due on any Actuarial Receivable during the related Collection Period, (c)
(without duplication of amounts taken into account under (a) or (b)) the
Principal Balance of (i) Receivables prepaid in full during the related
Collection Period and (ii) Receivables which became Defaulted Receivables
during the related Collection Period, (d) the Purchase Amount of each
Receivable that was repurchased by the Seller or purchased by the Servicer
during such Collection Period to the extent attributable to principal, (e)
the proceeds of any other sale of a Receivable, to the extent allocable to
principal, and (f) partial prepayments attributable to any refunded item
included in the Amount Financed, such as extended warranty protection plan
costs or physical damage, credit life or disability insurance premiums, or
any partial prepayment which causes a reduction in the Obligor's periodic
payment to be below the Scheduled Payment as of the related Cutoff Date;
provided, however, that in calculating the Scheduled Principal, (x) all
payments and proceeds (including Liquidation Proceeds) of any Purchased
Receivables the Purchase Amount of which has been included in Scheduled
Principal in a prior Collection Period (which shall be paid to the Seller
or Servicer, as applicable) and (y) all amounts released from the Pre-
Funding Account will be excluded.
"Second-Tier Subsequent Assignment" shall have the meaning
assigned thereto in Section 2.1(d)(ii).
"Seller" shall mean MMCA Auto Receivables Trust, a Delaware
business trust, in its capacity as seller of the Receivables to the Trust
under this Agreement, and each successor thereto (in the same capacity)
pursuant to Section 6.3.
"Servicer" shall mean MMCA, in its capacity as Servicer of the
Receivables under this Agreement, each successor thereto (in the same
capacity) pursuant to Section 7.3, and each successor Servicer appointed
and acting pursuant to Section 8.2.
"Servicer's Certificate" shall have the meaning assigned thereto
in Section 3.9.
"Servicing Fee" shall mean, with respect to any Payment Date, the
fee payable to the Servicer for services rendered during the related
Collection Period, determined pursuant to and defined in Section 3.8.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables, whose name appears on a list of servicing officers attached to
an Officer's Certificate furnished on the Closing Date to the Owner Trustee
and the Indenture Trustee by the Servicer, as such list may be amended from
time to time by the Servicer in writing.
"Servicing Rate" shall mean 1.0% per annum.
"Simple Interest Method" shall mean the method of allocating a
fixed level payment between principal and interest, pursuant to which the
portion of such payment that is allocated to interest is equal to the
product of the APR multiplied by the unpaid principal balance multiplied by
the period of time (expressed as a fraction of a year, based on the actual
number of days in the calendar month and a 365-day year) elapsed since the
preceding payment was made and the remainder of such payment is allocable
to principal.
"Simple Interest Receivable" shall mean any Receivable under
which the portion of a payment allocable to interest and the portion
allocable to principal is determined in accordance with the Simple Interest
Method.
"Specified Reserve Balance" shall mean, with respect to any
Payment Date, the lesser of (a) 0.75% of the Original Pool Balance as of
such Payment Date (after giving effect to all conveyances of Subsequent
Receivables to the Trust on or prior to such Payment Date) and (b) the
outstanding principal amount of the Notes as of such Payment Date (after
giving effect to any principal payment made on such Payment Date).
Notwithstanding the foregoing, if (i) each Rating Agency delivers a letter
to the Indenture Trustee that the use of any new formulation requested by
the Seller would not cause a downgrade, qualification or withdrawal of the
then current rating on any Class of Notes, and (ii) an Opinion of Counsel
to the effect that the proposed change will not adversely affect the status
of the Notes as debt is delivered to the Indenture Trustee, then the
Specified Reserve Balance may be changed in accordance with such letters
without an amendment hereto.
"Specified Yield Supplement Account Balance" shall mean, on the
Closing Date, $[_______________] and, as of the close of business on any
Payment Date, an amount equal to the sum of all projected Yield Supplement
Amounts for all future Payment Dates, assuming that future Scheduled
Payments on the Receivables are made on their scheduled due dates; provided
that if, on any date, MMCA shall fail to pay the amount payable under the
Yield Supplement Agreement in accordance with the terms thereof, then, in
such event, the Specified Yield Supplement Account Balance shall not be
reduced thereafter.
"Standard Receivable" shall mean all rights and obligations under
a Contract listed on a Schedule of Receivables which is not a Final Payment
Receivable.
"Subsequent Cutoff Date", with respect to any Subsequent
Receivable, shall have the meaning specified in the related Second-Tier
Subsequent Assignment.
"Subsequent Payahead Account Deposit" shall mean, with respect to
any Subsequent Transfer Date, cash or Permitted Investments having a value
equal to the aggregate amount of the Payahead Balances as of the related
Subsequent Cutoff Date of the Subsequent Receivables conveyed to the Trust
on such Subsequent Transfer Date.
"Subsequent Receivable" shall mean any Receivable described in a
Schedule of Subsequent Receivables.
"Subsequent Reserve Account Deposit" shall mean, with respect to
any Subsequent Transfer Date, cash or Permitted Investments having a value
approximately equal to 0.15% of the aggregate Principal Balances as of the
related Subsequent Cutoff Date of the Subsequent Receivables conveyed to
the Trust on such Subsequent Transfer Date.
"Subsequent Transfer Date" shall mean, with respect to any
Subsequent Receivable, the Business Day during the Pre-Funding Period on
which the related Second-Tier Subsequent Assignment is executed and
delivered by the Seller to the Trust and the Indenture Trustee pursuant to
Section 2.1(d)(ii).
"Subsequent Yield Supplement Account Deposit" shall mean, with
respect to any Subsequent Transfer Date, cash or Permitted Investments
having a value approximately equal to the sum of the projected Receivable
Yield Supplement Amounts for the Subsequent Receivables conveyed to the
Trust on such Subsequent Transfer Date for all future Payment Dates,
assuming the future Scheduled Payments on such Subsequent Receivables are
made on their scheduled due dates.
"Supplemental Reserve Account" shall mean the account established
and maintained as such pursuant to Section 4.7(b).
"Supplemental Reserve Account Advance Draw Amount" shall have the
meaning assigned thereto in Section 4.6(b).
"Supplemental Reserve Account Amount" shall mean, with respect to
any Payment Date, the amount on deposit in the Supplemental Reserve
Account. Unless specifically stated to the contrary the Supplemental
Reserve Account Amount for any Payment Date shall be calculated after
giving effect to all deposits and withdrawals therefrom on the prior
Payment Date (or, in the case of the first Payment Date, the Closing Date)
and all interest and other income (net of losses and investment expenses)
on such amounts during the related Collection Period.
"Supplemental Reserve Account Property" shall have the meaning
assigned thereto in Section 4.7(b).
"Supplemental Reserve Account TRP Draw Amount" shall have the
meaning assigned thereto in Section 4.6(b).
"Supplemental Servicing Fee" shall mean, with respect to any
Payment Date, the fee payable to the Servicer for services rendered during
the related Collection Period, determined pursuant to and defined in
Section 3.8.
"Total Available Funds" shall mean, for any Payment Date, an
amount equal to the sum of (i) the Available Funds for such Payment Date,
(ii) the Reserve Account TRP Draw Amount, if any, for such Payment Date and
(iii) the Supplemental Reserve Account TRP Draw Amount, if any, for such
Payment Date.
"Total Required Payment" shall mean, with respect to any Payment
Date, the sum of (i) the Total Servicing Fee, (ii) the Accrued Note
Interest and (iii) the Principal Distribution Amount with respect to such
Payment Date.
"Total Servicing Fee" shall mean, with respect to any Payment
Date, the sum of (i) the Servicing Fee for the related Collection Period
plus (ii) all accrued and unpaid Servicing Fees for prior Collection
Periods.
"Trust" shall mean the MMCA Auto Owner Trust 1999-2, a Delaware
business trust.
"Trust Accounts" shall have the meaning assigned thereto in
Section 5.1(a).
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of October 1, 1999, between the Seller and the Owner
Trustee, as the same may be amended, supplemented or otherwise modified and
in effect from time to time.
"Trust Property" shall mean, as of any date of determination, the
Initial Receivables and other property related thereto sold, transferred,
assigned and otherwise conveyed by the Seller to the Trust pursuant to
Section 2.1(a), together with the Subsequent Receivables and other property
related thereto sold, transferred, assigned and otherwise conveyed by the
Seller to the Trust pursuant to Section 2.1(b) on or prior to such date of
determination pursuant to any Second-Tier Subsequent Assignment.
"Weighted Average Rate" shall mean, with respect to any date of
determination, a per annum rate equal to (1) the sum of (a) the product of
(x) the outstanding principal amount of the Class A-1 Notes on such date
and (y) the Class A-1 Rate, plus (b) the product of (x) the outstanding
principal amount of the Class A-2 Notes on such date and (y) the Class A-2
Rate, plus (c) the product of (x) the outstanding principal amount of the
Class A-3 Notes on such date and (y) the Class A-3 Rate, plus (d) the
product of (x) the outstanding principal amount of the Class B Notes on
such date and (y) the Class B Rate, divided by (2) the outstanding
principal amount of all of the Notes on such date; provided, that if the
date of determination is a Payment Date, then the outstanding principal
amount of any class of Notes shall be determined after giving effect to all
payments made on such date.
"Yield Supplement Account" shall have the meaning assigned
thereto in Section 5.1(a).
"Yield Supplement Agreement" shall mean the Yield Supplement
Agreement, dated as of October 1, 1999, by and between the Seller and MMCA,
as amended, modified or supplemented from time to time, substantially in
the form of Exhibit D hereto.
"Yield Supplement Amount" shall mean, with respect to any Payment
Date, the sum of all Receivable Yield Supplement Amounts for the related
Collection Period.
"Yield Supplement Letter of Credit" shall mean any letter of
credit issued by the Letter of Credit Bank, as permitted by Section 5.1, to
support payments of the Yield Supplement Amount under the Yield Supplement
Agreement.
SECTION 1.2 Other Definitional Provisions. (a) Capitalized
terms used herein and not otherwise defined herein have the meanings
assigned to them in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement; Article,
Section, Schedule and Exhibit references contained in this Agreement are
references to Articles, Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified, and the term "including" shall mean
"including without limitation."
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
SECTION 1.3 Business Day Certificate. On the Closing Date (with
respect to the remainder of calendar year 1999) 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 Owner Trustee and the
Indenture 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 on or after the Initial Cutoff Date
(including Payaheads) and, with respect to Initial Receivables that
are Simple Interest Receivables, monies received thereunder on or
after the Initial Cutoff Date;
(iii) the security interests in Financed Vehicles granted
by Obligors pursuant to the Initial Receivables and any other interest
of the Seller in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to the
Initial Receivables from claims on any physical damage, theft, credit
life or disability insurance policies covering the related Financed
Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to the
Initial Receivables from recourse to Dealers thereon pursuant to
Dealer Agreements;
(vi) all of the Seller's rights to the Receivable Files
that relate to the Initial Receivables;
(vii) the Trust Accounts and all amounts, securities,
investments in financial assets, and other property deposited in or
credited to any of the foregoing and all proceeds thereof;
(viii) all of the Seller's rights under the Yield
Supplement Agreement and the Purchase Agreement, including the right
of the Seller to cause MMCA to repurchase Receivables from the Seller;
(ix) all payments and proceeds with respect to the Initial
Receivables held by MMCA;
(x) all property (including the right to receive
Liquidation Proceeds and Recoveries and Financed Vehicles and the
proceeds thereof acquired by the Seller pursuant to the terms of an
Initial 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 4.8(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
transfers of the Trust Property contemplated by Sections 2.1(a) and any
Second-Tier Subsequent Assignments executed pursuant to Section 2.1(b)
constitute sales of the Trust Property, conveying good title to the Trust
Property from the Seller to the Trust. However, in the event that such
transfers are deemed to be pledges, 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 (5) 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 remaining maturity of the Receivables will
not be more than 53 months; and (B) the aggregate principal balance of
the Last Scheduled Payments as a percentage of the Pool Balance will
not be greater than 26%;
(ix) the Pre-Funding Period shall not have terminated prior
to the Subsequent Transfer Date;
(x) 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;
(xi) 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;
(xii) 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;
(xiii) 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;
(xiv) the addition of the Subsequent Receivables will not
result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(xv) 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;
(xvi) 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);
(xvii) 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
(xviii) 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 Seller agrees to transfer to the Trust, pursuant to
Section 2.1(b), Subsequent Receivables with an aggregate Principal Balance
as of the related Subsequent Cutoff Dates of approximately $202,210,941.29,
subject only to availability thereof.
(f) The sales, transfers, assignments and conveyances of the
Trust Property made under Sections 2.1(a) and (b) 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 Receivables 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 level monthly payments (provided that the payment in
the last month in the life of the Receivable may be different from the
level payment) that fully amortize the Amount Financed by maturity and
yield interest at the APR, (e) in the case of Final Payment
Receivables, shall provide for a series of fixed level monthly
payments and a larger payment due after such level monthly payments
that fully amortize the Amount Financed by maturity and yield interest
at the APR, (f) shall provide for, in the event that such contract is
prepaid, a prepayment that fully pays the Principal Balance and all
accrued and unpaid interest thereon, (g) is a retail installment sale
contract, (h) is secured by a new or used automobile or light-duty
truck, and (i) is an Actuarial Receivable or a Simple Interest
Receivable (and may also be a Final Payment Receivable).
(ii) Schedule of Receivables. The information set forth in
the related Schedule of Receivables shall be true and correct in all
material respects as of the opening of business on the 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
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B,
M 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 by MMCA to the
Seller, each Receivable shall be secured by a validly perfected first
priority security interest in the related Financed Vehicle in favor of
MMCA as secured party and, at such time as enforcement of such
security interest is sought, there shall exist a valid, subsisting and
enforceable first priority perfected security interest in such
Financed Vehicle for the benefit of the Seller and the Trust,
respectively (subject to any statutory or other lien arising by
operation of law after the Closing Date (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).
(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 thirty (30) days or payment
defaults of 10% or less of a 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. MMCA, in accordance with its customary
procedures, shall have determined whether or not the Obligor has
maintained physical damage insurance (which insurance shall not be
force placed insurance) covering the Financed Vehicle.
(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 account debtor that prohibits,
restricts or conditions the assignment of any portion of the
Receivables.
(xv) All Filings Made. All filings (including, without
limitation, filings under the Relevant UCC) necessary in any
jurisdiction to give the Trust a first priority perfected security
interest in the Receivables, and to give the Indenture Trustee a first
priority perfected security interest therein, shall be made within ten
(10) days of the Closing Date (with respect to the Initial
Receivables) or ten (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 86.31% of the
Initial Pool Balance, constituting approximately 93.09% of the total
number of the Initial Receivables, relate to new automobiles and
light-duty trucks, substantially all of which were manufactured or
distributed by the MMCA. Approximately 3.27% of the Initial Pool
Balance, constituting approximately 2.01% of the total number of
Initial Receivables, relate to used automobiles and light-duty
trucks, substantially all of which were manufactured or distributed
by the MMCA. Approximately 7.99% of the Initial Pool Balance,
constituting approximately 3.46% of the total number of Initial
Receivables, relate to program automobiles and light-duty trucks,
substantially all of which were manufactured or distributed by the
MMCA. Approximately 2.43% of the Initial Pool Balance, constituting
approximately 1.44% of the total number of Initial Receivables,
relate to used automobiles and light-duty trucks.
(xxi) Origination. Each Receivable shall have an
origination date during or after May 1996.
(xxii) Maturity of Receivables. Each Receivable shall have
a remaining maturity, as of the related Cutoff Date, of not more than
sixty (60) months from the date the first payment is due under the
Receivable.
(xxiii) Weighted Average Maturity of Receivables. The
weighted average remaining maturity of the Initial Receivables as of
the Initial Cutoff Date shall be not more than 53 months. The
weighted average remaining maturity of any Subsequent Receivables as
of the related Subsequent Cutoff Date shall be not more than
53 months.
(xxiv) Annual Percentage Rate. Each Receivable shall have
an APR of at least 0% and not more than 24%.
(xxv) Scheduled Payments. Each Initial Receivable shall
have a first Scheduled Payment due on or prior to [
], 1999, and no Receivable shall have a payment of which more than 10%
of such payment is more than thirty (30) days overdue as of the
related Cutoff Date.
(xxvi) Location of Receivable Files. The Receivable Files
shall be kept at one or more of the locations listed in Schedule B
hereto.
(xxvii) Capped Receivables and Simple Interest Receivables.
Except to the extent that there has been no material adverse effect on
Noteholders or Certificateholders, each Capped Receivable has been
treated consistently by the Seller and the Servicer as a Simple
Interest Receivable and payments with respect to each Simple Interest
Receivable have been allocated consistently in accordance with the
Simple Interest Method.
(xxviii) Agreement. The representations and warranties of
the Seller in Section 6.1 are true and correct.
(xxix) Other Data. The tabular data and the numerical data
relating to the characteristics of the Initial Receivables contained
in the Prospectus (as defined in the Purchase Agreement) are true and
correct in all material respects.
(xxx) Last Scheduled Payments. The aggregate principal
balance of the Last Scheduled Payments of Final Payment Receivables
that are Initial Receivables as a percentage of the Initial Pool
Balance as of the Initial Cutoff Date shall be not greater than 26%.
The aggregate principal balance of the Last Scheduled Payments of
Final Payment Receivables that are Subsequent Receivables as a
percentage of the aggregate principal amount of such Subsequent
Receivables as of the related Subsequent Cutoff Date shall be not
greater than 26%.
(xxxi) Receivable Yield Supplement Amounts. An amount
equal to the sum of all projected Yield Supplement Amounts for all
future Payment Dates with respect to each Receivable, assuming that
future Scheduled Payments on such Receivable are made on their
scheduled due dates, has been deposited to the Yield Supplement
Account on or prior to the Closing Date or the related Subsequent
Transfer Date, as applicable.
(xxxii) Prepaid Receivables. No Receivable shall have been
pre-paid by more than six monthly payments as of the related Cutoff
Date.
(xxxiii) Limited Credit Experience. Approximately 8.94% of
the Initial Pool Balance, constituting approximately 12.52% of the
total number of the Initial Receivables, relate to Receivables on
which the Obligor had limited credit experience. The aggregate
principal balance of the Subsequent Receivables on which the Obligor
has limited credit experience, as a percentage of the aggregate
principal amount of such Subsequent Receivables as of the related
Subsequent Cutoff Date, shall be not greater than 9%.
(xxxiv) Simple Interest Receivables. Approximately 94.04%
of the Initial Pool Balance relate to Simple Interest Receivables.
Approximately 5.78% of the Initial Pool Balance relate to Actuarial
Receivables, excluding Actuarial Receivables based on the "Rule of
78's." Approximately 0.18% of the Initial Pool Balance relate to
Actuarial Receivables based on the "Rule of 78's."
(xxxv) Principal Balance of Final Payment Receivables. The
average principal balance of Last Scheduled Payments of Final Payment
Receivables that are Initial Receivables is approximately $10,883.64,
which is approximately 48.65% of the average principal balance of
those Receivables.
(xxxvi) Deferred First Payments. Approximately 7.23% of
the Initial Pool Balance relate to Receivables on which the Obligor
was permitted to defer the first payment for up to 216 days from
origination. The aggregate principal balance of the Subsequent
Receivables on which the Obligor will be permitted to defer the first
payment for up to 216 days from origination, as a percentage of the
aggregate principal amount of such Subsequent Receivables as of the
related Subsequent Cutoff Date, shall be not greater than 8%.
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 sixtieth (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
or disc or on microfiche;
(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
file or disc or microfiche) 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
recordkeeping. The Servicer shall promptly report to the Owner Trustee and
the Indenture Trustee any failure on its part to hold the Receivable Files
and maintain its accounts, records, and computer systems as herein provided
and promptly take appropriate action to remedy any such failure. Nothing
herein shall be deemed to require an initial review or any periodic review
by the Trust, the Owner Trustee or the Indenture Trustee of the Receivable
Files and none of the Trust, the Owner Trustee and the Indenture Trustee
shall be liable or responsible for any action or failure to act by the
Servicer in its capacity as custodian hereunder.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B
to this Agreement, or at such other office as shall be specified to the
Trust and the Indenture Trustee by written notice not later than ninety
(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, 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 or Excess Mileage 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 or Excess Mileage. 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; provided, however, that the Servicer shall remain fully liable
hereunder for the performance of the duties of Servicer and any such
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.
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
will 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 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 the Final Scheduled Maturity
Date; and provided further that such extensions, in the aggregate, do not
exceed two (2) months for each twelve (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 to determine the necessity of any repairs.
If the Servicer determines that such Financed Vehicle requires repairs as a
result of Excess Wear and Tear, the Servicer shall require the Obligor to
pay the estimated cost of such repairs to the Servicer. If the Obligor
disputes the Servicer's estimate of the cost of such repairs, the Obligor
may obtain, at the Obligor's own expense, a professional appraisal of the
Financed Vehicle's value by an independent third-party appraiser acceptable
to both the Obligor and the Servicer, and the cost of repairs for Excess
Wear and Tear as determined by such appraisal shall be binding on the
Obligor and the Servicer. The Servicer shall, pursuant to the related
Contract, offset (x) the cost of repairs for Excess Wear and Tear as
determined by the appraisal, any charges for Excess Mileage and the
disposition fee payable to the Servicer pursuant to the related Contract,
and the Principal Balance, accrued interest and any other amounts owed by
the Obligor on the Receivable against (y) the purchase price otherwise due
to the Obligor for the Financed Vehicle, and shall collect any excess of
(x) over (y) from the Obligor.
(c) In connection with an Obligor's transfer of a Financed
Vehicle to MMCA on behalf of the Trust in satisfaction of its obligation to
pay the Last Scheduled Payment under a Final Payment Receivable, pursuant
to the terms of the Contract related to such Last Scheduled Payment, the
Servicer shall require the Obligor to pay a disposition fee (which the
Servicer will retain as servicing compensation), whereupon the Servicer
shall take possession of the related Financed Vehicle and shall prepare
such Financed Vehicle for sale at auction or otherwise in accordance with
the Servicer's customary servicing standards, policies, practices and
procedures.
(d) Proceeds received by the Servicer from the payment by an
Obligor of a Financed Vehicle of amounts attributable to Last Scheduled
Payments and other amounts (including Excess Wear and Tear and Excess
Mileage) owed by the Obligor and from the sale of a Financed Vehicle at
auction or otherwise constitute proceeds of Last Scheduled Payments and
collections on the Receivables, and shall be deposited into the Collection
Account. Following the sale of the Financed Vehicle, the Servicer, on
behalf of the Trust, shall deliver the related certificate of title to the
purchaser of such Financed Vehicle. Following the Servicer's receipt of
proceeds from the sale of such Financed Vehicle and amounts to be paid by
the Obligor pursuant to subparagraph (b) above, the Servicer shall record
on its books and records the termination of the Trust's ownership and
security interest in the related Final Payment Receivable (and shall
deliver copies thereof to the Indenture Trustee and the Owner Trustee upon
written request within ten days of receipt of such request).
(e) If the Obligor under any Final Payment Receivable has
notified the Dealer that it desires to refinance the amount that it owes on
termination of the Receivable, MMCA will, in accordance with its customary
servicing standards, policies, practices and procedures, make a decision to
grant or deny credit, except for Contracts for which the Obligors have the
right to refinance without such an assessment, in which case MMCA shall
honor the Obligor's right to refinance. If credit is denied, the Servicer
shall require the Obligor to satisfy its obligation to pay the remaining
amounts owed in accordance with the terms of the Final Payment Receivable.
If credit is granted, MMCA shall deposit an amount equal to the total
amount owed by the Obligor on the Receivable to the Collection Account.
Upon deposit of such amount into the Collection Account, the Trust's
ownership and security interest in the related Financed Vehicle shall
terminate, and the Trust will assign all interest in, to and under the
Receivable and the related Financed Vehicle to MMCA. The Servicer shall
record such termination on its books and records (and shall deliver copies
thereof to the Indenture Trustee and the Owner Trustee upon written request
within ten days of receipt of such request). If MMCA is no longer the
Servicer, the Trust or any Holder of the Certificates may make
arrangements for the successor Servicer or another party to provide
refinancing of Last Scheduled Payments to Obligors who desire to satisfy
the Last Scheduled Payment through refinancing and who meet such party's
credit criteria, and any reasonable costs and expenses of the successor
Servicer or such third party in determining whether to provide such
refinancing shall be payable from amounts, if any, which would otherwise be
released from the Supplemental Reserve Account and paid to the Seller and
to the extent of any shortfall in such amounts in the Supplemental Reserve
Account 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 sixtieth
(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 Servicing Rate and the Pool Balance 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, Rule of
78's Payments, 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), and expenses incurred in connection with distributions and
reports to the Certificateholders and the Noteholders), 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 4.11 and by the Indenture Trustee to the Noteholders
pursuant to Section 4.11 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, 2000, 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 (5) 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, 2000, 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 light-duty
truck loans serviced for others that such firm is required to report under
the Program. Such report shall also indicate that the firm is independent
with respect to the Seller and the Servicer within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants. A copy of such report shall be delivered by the Indenture
Trustee to each Noteholder, promptly following the Indenture Trustee's
receipt of such report, pursuant to Section 7.4 of the Indenture. In
addition, a copy of such report may be obtained by any Certificateholder by
a request in writing to the Owner Trustee, or by any Person certifying that
it is a Note Owner by a request in writing to the Indenture Trustee, in
either case addressed to the applicable Corporate Trust Office.
SECTION 3.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide the Certificateholders,
the Indenture Trustee and the Noteholders with access to the Receivable
Files in the cases where the Certificateholders, the Indenture Trustee or
the Noteholders shall be required by applicable statutes or regulations to
have access to such documentation. Such access shall be afforded without
charge, but only upon reasonable request and during normal business hours
at the offices of the Servicer. Nothing in this Section 3.12 shall affect
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation
shall not constitute a breach of this Section 3.12. Any Certificateholder
or Noteholder, by its acceptance of a Certificate or Note, as the case may
be, shall be deemed to have agreed to keep any information obtained by it
pursuant to this Section confidential, except as may be required by
applicable law.
SECTION 3.13 Reports to the Commission. The Servicer shall, on
behalf of the Trust, cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act , and
the rules and regulations of the Commission thereunder. The Seller shall,
at its expense, cooperate in any reasonable request made by the Servicer in
connection with such filings.
SECTION 3.14 Reports to Rating Agencies. The Servicer shall
deliver to each Rating Agency, at such address as each Rating Agency may
request, a copy of all reports or notices furnished or delivered pursuant
to this Article and a copy of any amendments, supplements or modifications
to this Agreement and any subservicing agreement and any other information
reasonably requested by such Rating Agency to monitor this transaction.
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1 Accounts. (a) The Servicer shall, prior to the
Closing Date, establish and maintain a segregated trust account in the name
of the Indenture Trustee, at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of
Bank of Tokyo - Mitsubishi Trust Company), which shall be designated as the
"Collection Account". The Collection Account shall be held in trust for
the benefit of the Noteholders and the Certificateholders. The Collection
Account shall be under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Collection
Account in accordance with the terms of this Agreement, the Indenture and
the Trust Agreement. All monies deposited from time to time in the
Collection Account shall be held by the Indenture Trustee as part of the
Trust Property and all deposits to and withdrawals therefrom shall be made
only upon the terms and conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant to the
first sentence of Section 4.2(a), all amounts held in the Collection
Account shall, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
bank or trust company then maintaining the Collection Account, in Permitted
Investments that mature not later than the Business Day immediately prior
to the Payment Date for the Collection Period to which such amounts relate
and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Collection Account shall be withdrawn from the Collection Account at
the written direction of the Servicer and shall be deposited in the
Certificate Distribution Account. In the event that the Collection Account
is no longer to be maintained at the corporate trust department of Bank of
Tokyo - Mitsubishi Trust Company, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Collection
Account to be moved to a Qualified Institution or a Qualified Trust
Institution within ten (10) Business Days (or such longer period not to
exceed thirty (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 ten (10) Business Days
(or such longer period not to exceed thirty (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 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 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 4.9. 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 Collection Account to be moved to a Qualified
Institution or a Qualified Trust Institution within ten (10) Business Days
(or such longer period not to exceed thirty (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 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
(iii) 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 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 ten (10) Business Days
(or such longer period not to exceed thirty (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 Owner Trustee at a
Qualified Institution or Qualified Trust Institution (which shall initially
be Wilmington Trust Company), which shall be designated as the "Certificate
Distribution Account". Except as provided in the Trust Agreement, the
Certificate Distribution Account shall be held in trust for the benefit of
the Certificateholders. The Certificate Distribution Account shall be
under the sole dominion and control of the Owner Trustee; provided that the
Indenture Trustee may make deposits to such account in accordance with the
directions of the Servicer pursuant to this Agreement and the Indenture.
All monies deposited from time to time in the Certificate Distribution
Account pursuant to this Agreement and the Indenture shall be held by the
Owner Trustee as part of the Trust Property and shall be applied as
provided in this Agreement and the Trust Agreement. In the event that the
Certificate Distribution Account is no longer to be maintained at
Wilmington Trust Company, the Servicer shall, with the Owner Trustee's
assistance as necessary, cause the Certificate Distribution Account to be
moved to a Qualified Institution or a Qualified Trust Institution within
ten (10) Business Days (or such longer period not to exceed thirty (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 ten (10) Business Days (or such longer period not to
exceed thirty (30) calendar days as to which each Rating Agency may
consent).
(g) Notwithstanding the provisions of clause (d) above, for so
long as (i) MMCA is the Servicer, (ii) the rating of MMCA's short-term
unsecured debt is at least P-1 by Moody's and is at least A-1 by S&P 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(g) that would require remittance of the Payaheads to the
Payahead 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 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 and Rule of 78's Payments,
but excluding payments with respect to Purchased Receivables and amounts
included in the Supplemental Servicing Fee other than Rule of 78's
Payments), including amounts treated as collections on Final Payment
Receivables pursuant to Section 3.2(d) and (ii) all Liquidation Proceeds
and all Recoveries, received by the Servicer during any Collection Period,
as soon as practicable, but in no event after the close of business on the
second Business Day after receipt thereof. Collections of Payaheads and
Rule of 78's Payments shall be deposited in the Collection Account,
pursuant to the preceding sentence for purposes of administrative
convenience only, pending, with respect to Payaheads, 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(g)), 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, and with respect to
Rule of 78's Payments, determination of such payments, which payments upon
determination shall be made to the Servicer, and the Trust shall not be
entitled to such amounts.
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 amounts received by
the Servicer with respect to Rule of 78's Payments, the amounts actually
collected with respect to the Supplemental Servicing Fee, amounts collected
with respect to a Purchased Receivable) shall be applied by the Servicer,
in the case of (i) a Simple Interest Receivable that is a Standard
Receivable, to interest and principal on the Receivable in accordance with
the Simple Interest Method, (ii) a Simple Interest Receivable that is a
Final Payment Receivable, to interest and principal in accordance with the
Simple Interest Method first, to accrued but unpaid interest, second, to
the Level Pay Balance of such Receivable, third, to the principal portion
of the Last Scheduled Payment to the extent a Last Scheduled Payment
Advance has not been made by the Servicer with respect to such Last
Scheduled Payment and fourth, to the extent of any unreimbursed Last
Scheduled Payment Advance with respect to such Simple Interest Receivable,
to reimburse the Servicer for such Last Scheduled Payment Advance and (iii)
an Actuarial Receivable, first, to the Scheduled Payment of such Actuarial
Receivable, second to the extent of any unreimbursed Actuarial Advances
with respect to such Actuarial Receivable, to reimburse the Servicer for
any such Actuarial Advances, third, to the extent of any unreimbursed Last
Scheduled Payment Advance with respect to such Actuarial Receivable, to
reimburse the Servicer for such Last Scheduled Payment Advance and fourth,
to the extent that any amounts are remaining then due to a prepayment of
such Actuarial Receivable, if the sum of such remaining amount and the
previous Payahead Balance shall be sufficient to prepay the Actuarial
Receivable in full, and otherwise to the Payahead Account (or, if all
Monthly Remittance Conditions are satisfied, to the Servicer) as a
Payahead.
(b) All Liquidation Proceeds and any Recoveries, and any
proceeds realized upon the liquidation, sale or dissolution of the Owner
Trust Estate (or any part thereof) upon the occurrence of an Event of
Default under the Indenture shall, with respect to any Final Payment
Receivable be applied first to accrued but unpaid interest thereon, second,
to the Level Pay Balance of such Receivable and third, to the principal
portion of the related Last Scheduled Payment.
SECTION 4.4 Advances. (a) As of the close of business on the
last day of each Collection Period, if the payments during such Collection
Period by or on behalf of the Obligor on or in respect of an Actuarial
Receivable (other than a Purchased Receivable) after application under
Section 4.3 shall be less than the Scheduled Payment, the Payahead Balance
of such Receivable shall be applied by the Indenture Trustee to the extent
of the shortfall, and such Payahead Balance shall be reduced accordingly.
Subject to the last sentence of this Section 4.4(a), on each Payment Date
the Servicer shall advance an amount equal to the excess, if any, of the
Scheduled Payment with respect to an Actuarial Receivable over the sum of
the (x) payments received on or in respect of such Actuarial Receivable
during the preceding Collection Period and (y) the Payahead Balance with
respect to such Actuarial Receivable (such advance, an "Actuarial
Advance"); provided that the Servicer shall make Actuarial Advances with
respect to the Last Scheduled Payment on Actuarial Receivables that are
Final Payment Receivables in accordance with Section 4.4(b). All
applications of the Payahead Balance of a Receivable by the Indenture
Trustee and all Actuarial Advances by the Servicer pursuant to this Section
4.4(a) shall be made based on the information set forth in the Servicer's
report attached to the Servicer's Certificate delivered pursuant to Section
3.9. Notwithstanding anything in this Agreement to the contrary, no
successor to Mitsubishi Motors Credit of America, Inc. as Servicer shall be
required to make Actuarial Advances.
(b) As of the last day of the Collection Period in which the
Last Scheduled Payment with respect to a Final Payment Receivable is due,
if the payments during such Collection Period by or on behalf of the
related Obligor on or in respect of such Last Scheduled Payment after
application under Section 4.3(a) and, in the case of an Actuarial
Receivable, the amounts, if any, in the Payahead Account allocable to such
Last Scheduled Payment, shall be less than the amount of such Last
Scheduled Payment, the Servicer shall advance an amount equal to the
shortfall by depositing such amount into the Collection Account on the
related Payment Date (such advance, a "Last Scheduled Payment Advance") .
Notwithstanding anything in this Agreement to the contrary, no successor to
Mitsubishi Motors Credit of America, Inc. as Servicer shall be required to
make Last Scheduled Payment Advances.
(c) (i) Upon either the written instructions of the Servicer or
based solely upon the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 3.9, the
Indenture Trustee shall release from amounts available in the Payahead
Account, the amounts required to be released from amounts available in the
Payahead Account pursuant to Sections 4.4(a) and (b) with respect to each
Collection Period and shall deposit such amounts in the Collection Account
on the related Payment Date pursuant to Section 4.5(a).
(ii) On each Payment Date, the Servicer shall deposit into
the Collection Account an amount equal to the aggregate amount of
Actuarial Advances required to be made with respect to related
Collection Period.
(d) On each Payment Date, the Servicer shall instruct the
Indenture Trustee to withdraw from the Collection Account for distribution
to the Servicer, in immediately available funds, an amount equal to the sum
of (i) the aggregate amount of collections on Actuarial Receivables with
respect to which the Servicer has made Actuarial Advances in a prior
Collection Period that are allocable to the reimbursement of such Actuarial
Advances pursuant to Section 4.3(a) and (ii) the aggregate amount of
Actuarial Advances that the Servicer has not been reimbursed for pursuant
to this Section 4.4(d), Section 4.5(b) or Section 4.5(c) 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) or
Section 4.5(c).
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 Supplemental 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
Supplemental 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 Supplemental Reserve Account TRP
Draw Amount, if any, calculated by the Servicer pursuant to Section 4.6(b),
and shall deposit such funds to the Collection Account.
(c) 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(g) an
amount equal to the sum of:
(A) 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
(B) 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 Scheduled Principal, the Principal Distribution
Amount, the Last Scheduled Payment Principal Collections, 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 or the
Supplemental Reserve Account but giving effect to all other deposits
to the Collection Account required to be made on such Payment Date)
and (y) the Supplemental 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 Supplemental Reserve
Account on such Payment Date) (the "Supplemental Reserve Account
Advance Draw Amount");
(ii) an amount equal to the lesser of (x) the amount, if
any, by which the amount specified in clause (x) of paragraph (i)
above exceeds the Supplemental Reserve Account Advance Draw Amount
for such Payment Date and (y) the Reserve Account Amount for such
Payment Date (without giving effect to any deposits of Total Available
Funds on such Payment Date) (the "Reserve Account Advance Draw
Amount");
(iii) 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 Supplemental Reserve Account Amount (without giving effect to any
deposits of Total Available Funds on such Payment Date) for such
Payment Date, less the Supplemental Reserve Account Advance Draw
Amount for such Payment Date (the "Supplemental Reserve Account TRP
Draw Amount");
(iv) an amount equal to the lesser of (x) the amount, if
any, by which the specified in clause (x) of paragraph (iii) above
exceeds the Supplemental Reserve Account TRP Draw Amount for such
Payment Date and (y) 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");
(v) the Total Available Funds for such Payment Date;
(vi) the Reserve Account Amount with respect to such Payment Date
after giving effect to the Reserve Account Advance Draw Amount and the
Reserve Account TRP Draw Amount for such Payment Date, and the
difference, if any, between the Reserve Account Amount and the
Specified Reserve Balance for such Payment Date; and
(vii) the Supplemental Reserve Account Amount with respect to
such Payment Date after giving effect to the Supplemental Reserve
Account Advance Draw Amount and the Supplemental Reserve Account TRP
Draw Amount for such Payment Date, and the difference, if any, between
the Supplemental Reserve Account Amount and the Maximum Supplemental
Reserve Amount for such Payment Date.
(c) On each Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section
3.9) to withdraw the Total Available Funds on deposit in the Collection
Account for the related Collection Period and make the following payments
and deposits for such Payment Date in the following order of priority:
(i) to the Servicer, the Total Servicing Fee;
(ii) to the Note Payment Account, the Accrued Note Interest
for the Class A Notes;
(iii) to the Note Payment Account, the Accrued Note
Interest for the Class B Notes;
(iv) to the Note Payment Account, the Principal
Distribution Amount;
(v) to the Reserve Account, the amount, if any, necessary
to reinstate the balance in the Reserve Account up to the Specified
Reserve Balance;
(vi) to the Supplemental Reserve Account, the amount, if
any, necessary to reinstate the balance in the Supplemental Reserve
Account up to the Maximum Supplemental Reserve Amount; and
(vii) to the Certificate Distribution Account, any
remaining portion of the Total Available Funds.
SECTION 4.7 Reserve Account; Supplemental 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 Servicer shall instruct the Indenture
Trustee to withdraw from the Pre-Funding Account and deposit to the Reserve
Account on such Subsequent Transfer Date an amount equal to the applicable
Subsequent Reserve Account Deposit as provided in Section 4.8(a). 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 Sections 2.1(a) and (b). Pursuant to the Indenture, the Trust
will pledge all of its right, title and interest in, to and under the
Reserve Account and the Reserve Account Property to the Indenture Trustee
on behalf of the Noteholders to secure its obligations under the Notes and
the Indenture.
The Reserve Account Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing
by the Servicer, by the bank or trust company then maintaining the Reserve
Account, in Permitted Investments that mature not later than the Business
Day immediately preceding the next Payment Date, and such Permitted
Investments shall be held to maturity. All interest and other income (net
of losses and investment expenses) on funds on deposit in the Reserve
Account shall, upon the written direction of the Servicer, be paid to the
Seller on any Payment Date to the extent that funds on deposit therein, as
certified by the Servicer, exceed the Specified Reserve Balance. In the
event the Reserve Account is no longer to be maintained at the corporate
trust department of Bank of Tokyo - Mitsubishi Trust Company, the Servicer
shall, with the Indenture Trustee's or Owner Trustee's assistance as
necessary, cause the Reserve Account to be moved to a Qualified Institution
or a Qualified Trust Institution within ten (10) Business Days (or such
longer period not to exceed thirty (30) calendar days as to which each
Rating Agency may consent).
(b) 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 "Supplemental Reserve
Account." The Supplemental Reserve Account shall be under the sole
dominion and control of the Indenture Trustee; provided, that the Servicer
may make deposits to the Supplemental Reserve Account in accordance with
this Agreement and the Indenture. The Supplemental Reserve Account and all
amounts, securities, investments, financial assets and other property
deposited in or credited to the Supplemental Reserve Account (the
"Supplemental 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
Supplemental Reserve Account and the Supplemental Reserve Account Property
to the Indenture Trustee on behalf of the Noteholders to secure its
obligations under the Notes and the Indenture.
The Supplemental 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 Supplemental 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 Supplemental 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 prior to making any
deposits or withdrawals therefrom on such Payment Date, as certified by the
Servicer, exceed the Maximum Supplemental Reserve Amount. In the event the
Supplemental 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 Supplemental Reserve Account to be moved to a
Qualified Institution or a Qualified Trust Institution within ten (10)
Business Days (or such longer period not to exceed thirty (30) calendar
days as to which each Rating Agency may consent).
(c) With respect to any Reserve Account Property or Supplemental
Reserve Account Property:
(i) any Reserve Account Property or Supplemental Reserve
Account Property that is a "financial asset" as defined in Section 8-
102(a)(9) of the UCC shall be physically delivered to, or credited to
an account in the name of, the Qualified Institution or Qualified
Trust Institution maintaining the Reserve Account or Supplemental
Reserve 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 Reserve Account Property or Supplemental 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 and the Supplemental Reserve Account
shall only be invested in securities or in other assets which the
Qualified Institution or Qualified Trust Institution maintaining the
Reserve Account or Supplemental Reserve Account, as applicable, agrees
to treat as "financial assets" as defined in Section 8-102(a)(9) of
the UCC.
(d) 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.
(e) If the amount on deposit in the Supplemental Reserve Account
on any Payment Date (after giving effect to all deposits thereto or
withdrawals therefrom on such Payment Date) is greater than the Maximum
Supplemental Reserve Amount, the Servicer shall instruct the Indenture
Trustee to distribute the amount of such excess to the Seller; provided
that the Indenture Trustee hereby releases, on each Payment Date, its
security interest, in, to and under the Supplemental Reserve Account
Property distributed to the Seller.
(f) 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 and Supplemental Reserve
Account Property shall be distributed to the Seller.
SECTION 4.8 Pre-Funding Account. (a) On the Closing Date, the
Seller shall deposit in the Pre-Funding Account $202,210,941.29 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 and instruct the Indenture Trustee to
withdraw such amounts from the Pre-Funding Account on such Subsequent
Transfer Date: (i) an amount equal to the aggregate Principal Balance of
the Subsequent Receivables transferred to the Trust on such Subsequent
Transfer Date less an amount equal to the sum of the amounts described in
clauses (ii) through (iv) of this sentence, which amount the Indenture
Trustee shall distribute to the Seller on such Subsequent Transfer Date,
(ii) the Subsequent Reserve Account Deposit for such Subsequent Transfer
Date, which amount the Indenture Trustee shall deposit to the Reserve
Account on behalf of the Seller on such Subsequent Transfer Date, (iii) if
the Yield Supplement Account has not been replaced by a Yield Supplement
Letter of Credit on or prior to such Subsequent Transfer Date, the
Subsequent Yield Supplement Account Deposit for such Subsequent Transfer
Date, which amount the Indenture Trustee shall deposit to the Yield
Supplement Account on behalf of the Seller on such Subsequent Transfer
Date, and (iv) the Subsequent Payahead Account Deposit, which amount the
Indenture Trustee shall deposit to the Payahead Account on behalf of the
Seller on such Subsequent Transfer Date.
(b) If the Pre-Funded Amount 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-Funded Amount 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 4.9 Negative Carry Account. 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.
SECTION 4.10 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 4.11 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 Principal Carryover Shortfall,
if any, for such 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 balance of the Supplemental Reserve Account on such
Payment Date, after giving effect to changes therein on such Payment
Date;
(xi) the aggregate Purchase Amount of Receivables
repurchased by the Seller or purchased by the Servicer, if any, with
respect to the related Collection Period;
(xii) the amount of Actuarial Advances and Last Scheduled
Payment Advances, if any, with respect to the related Collection
Period;
(xiii) for each such Payment Date during the Pre-Funding
Period and the Payment Date that is on or immediately following the
end of 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
(xiv) 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), (iii), (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 4.12 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 Supplemental 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 UCC; i.e., orders directing the
transfer or redemption of any financial asset) relating to such accounts
issued by the Indenture Trustee without further consent by the Seller or
the Trust; (ii) until the termination of the Indenture, it will not enter
into any other agreement relating to any such account pursuant to which it
agrees to comply with entitlement orders of any Person other than the
Indenture Trustee; and (iii) all assets delivered or credited to it in
connection with such accounts and all investments thereof will be promptly
credited to such accounts.
ARTICLE V
YIELD SUPPLEMENT LETTER OF CREDIT AND
THE YIELD SUPPLEMENT ACCOUNT
SECTION 5.1 Yield Supplement Letter of Credit and the Yield
Supplement Account. (a) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the
Indenture Trustee at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of Bank of Tokyo -
Mitsubishi Trust Company), which shall be designated as the "Yield
Supplement Account" (the Yield Supplement Account, together with the
Payahead Account, the Collection Account, the Pre-Funding Account, the Note
Payment Account, the Supplemental Reserve Account, the Reserve Account and
the Negative Carry 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 Servicer shall instruct the Indenture Trustee
to withdraw from the Pre-Funding Account and 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.
To the extent, on any Payment Date, the amount on deposit in the Yield
Supplement Account (after giving effect to any withdrawals to be made on
such Payment Date, but exclusive of net investment income) is greater than
the Specified Yield Supplement Account Balance for such Payment Date, then,
in such event, the Servicer shall instruct the Indenture Trustee in writing
to pay such excess amount to the Seller.
All amounts held in the Yield Supplement Account shall be
invested, as directed in writing by the Servicer, by the bank or trust
company then maintaining the Yield Supplement Account in Permitted
Investments that mature not later than the Business Day immediately
preceding the next Payment Date and such Permitted Investments shall be
held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Yield Supplement Account
shall be withdrawn from the Yield Supplement Account at the written
direction of the Servicer and shall be paid to the Seller. In the event
that the Yield Supplement Account is no longer to be maintained at the
corporate trust department of Bank of Tokyo - Mitsubishi Trust Company, the
Servicer shall, with the Indenture Trustee's assistance as necessary, cause
the Yield Supplement Account to be moved to a Qualified Institution or a
Qualified Trust Institution within ten (10) Business Days (or such longer
period not to exceed thirty (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 Supplemental Reserve
Account, and to the extent of any remaining shortfall 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, in either case,
delivers to the Indenture Trustee an Opinion of Counsel to the effect
that the contemplated action will not adversely affect the status of
the Trust as a partnership for Federal income and Applicable Tax State
income and franchise tax purposes 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 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 or obtain funds in the amount
required for deposit from 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 executed 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 Trust 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 executed 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
(3) 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 (5) 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 thirty (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 sixty (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, 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 (2) Business Days of receipt and shall not be retained
by the Servicer. Notwithstanding the above, the Indenture Trustee may, if
it shall be unwilling so to act, or shall, if it is legally unable so to
act, appoint, or petition a court of competent jurisdiction to appoint, an
Eligible Servicer as the successor to the terminated Servicer under this
Agreement. In connection with such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor Servicer out
of payments on Receivables as it and such successor shall agree, which, in
no event, shall be greater than that payable to MMCA as Servicer hereunder.
The Indenture Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such
succession including, but not limited to, making arrangements in respect of
the last sentence of Section 3.2(e) of this Agreement. The Indenture
Trustee shall not be relieved of its duties as successor Servicer under
this Section 8.2 until a newly appointed Servicer shall have assumed the
responsibilities and obligations of the terminated Servicer under this
Agreement.
SECTION 8.3 Effect of Servicing Transfer. (a) After the
transfer of servicing hereunder, the Indenture Trustee or successor
Servicer shall notify Obligors to make directly to the successor Servicer
payments that are due under the Receivables after the effective date of
such transfer.
(b) Except as provided in Section 8.2 after the transfer of
servicing hereunder, the outgoing Servicer shall have no further
obligations with respect to the administration, servicing, custody or
collection of the Receivables and the successor Servicer shall have all of
such obligations, except that the outgoing Servicer will transmit or cause
to be transmitted directly to the successor Servicer for its own account,
promptly on receipt and in the same form in which received, any amounts
held by the outgoing Servicer (properly endorsed where required for the
successor Servicer to collect any such items) received as payments upon or
otherwise in connection with the Receivables and the outgoing Servicer
shall continue to cooperate with the successor Servicer by providing
information and in the enforcement of the Dealer Agreements.
(c) Any successor Servicer shall provide the Seller with access
to the Receivable Files and to the successor Servicer's records (whether
written or automated) with respect to the Receivable Files. Such access
shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the successor Servicer.
Nothing in this Section 8.3 shall affect the obligation of the successor
Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 8.3.
SECTION 8.4 Notification to Noteholders and Certificateholders.
Upon any notice of an Event of Servicing Termination or upon any
termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Indenture Trustee shall give prompt written notice
thereof to Noteholders, and the Owner Trustee shall give prompt written
notice thereof to Certificateholders at their addresses of record and to
the Rating Agencies.
SECTION 8.5 Waiver of Past Events of Servicing Termination. The
Holders of Notes evidencing not less than 51% of the Notes Outstanding or
the Holders of Certificates evidencing not less than 51% of the Certificate
Balance (in the case of an Event of Servicing Termination which does not
adversely affect the Indenture Trustee or the Noteholders) may, on behalf
of all Noteholders and Certificateholders, waive any Event of Servicing
Termination hereunder and its consequences, except an event resulting from
the failure to make any required deposits to, or payments from, any of the
Trust Accounts and the Certificate Distribution Account in accordance with
this Agreement. Upon any such waiver of a past Event of Servicing
Termination, such event shall cease to exist, and shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other event or impair any right arising
therefrom, except to the extent expressly so waived.
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables. (a) On each
Payment Date following the last day of a Collection Period as to which the
Pool Balance shall be less than or equal to the Optional Purchase
Percentage (expressed as a seven-digit decimal) multiplied by the Original
Pool Balance, the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts and the Certificate
Distribution Account. To exercise such option, the Servicer shall notify
the Owner Trustee and the Indenture Trustee no later than the fifteenth day
of the month immediately preceding the month in which such repurchase is to
be effected and shall deposit an amount equal to the aggregate Purchase
Amount for the Receivables, plus the appraised value of any other property
held in the Trust other than in the Trust Accounts and the Certificate
Distribution Account, such value to be determined by an appraiser mutually
agreed upon by the Servicer, the Owner Trustee and the Indenture Trustee,
into the Collection Account on the Payment Date occurring in the month in
which such repurchase is to be effected. Upon such payment, the Servicer
shall succeed to and own all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to
exercise such option unless the amount to be deposited in the Collection
Account pursuant to the second preceding sentence is greater than or equal
to the sum of the outstanding principal balance of the Notes and all
accrued but unpaid interest (including any overdue interest) thereon and
the Certificate Balance. The Purchase Amount, any Negative Carry Amount
and any Yield Supplement Amounts for such Payment Date, plus to the extent
necessary all amounts in the Supplemental Reserve Account, 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 Supplemental Reserve Account in accordance with Sections 4.5(b)
and 4.7 and the Reserve Account in accordance with Sections 4.5(c) 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, but without the consent of any of the Noteholders or the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions in this Agreement which may be inconsistent with any other
provisions in this Agreement, or to add, change or eliminate any other
provisions with respect to matters or questions arising under this
Agreement that shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by
an Opinion of Counsel delivered to the Owner Trustee and the Indenture
Trustee, materially and adversely affect the interests of any Noteholder or
Certificateholder.
(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, the Specified Reserve
Balance or the Maximum Supplemental Reserve Amount, 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 execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve,
maintain, and protect the 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 9-402(7) of the Relevant UCC, unless it shall
have given the Owner Trustee and the Indenture Trustee at least sixty (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 sixty (60) days' prior written notice of any
relocation of its principal executive office if, as a result of such
relocation, 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 principal executive office, 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 Yield Supplement Account, the
Reserve Account and the Supplemental Reserve Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables to
the 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 light-duty truck receivables to any prospective
purchaser, lender, or other transferee, the Servicer shall give to such
prospective purchaser, lender, or other transferee computer tapes, compact
disks, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and
is owned by the Trust and has been pledged to the Indenture Trustee unless
such Receivable has been paid in full or repurchased by the Seller or
purchased by the Servicer.
(g) The Servicer shall permit the Owner Trustee, the Indenture
Trustee and their respective agents at any time during normal business
hours to inspect, audit, and make copies of and abstracts from the
Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner
Trustee and the Indenture Trustee, within ten (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 executed 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 ninety (90) days after the beginning of each calendar
year commencing in the year 2001, 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 executed 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 Governing Law. This Agreement shall be construed
in accordance with the laws of the State of New York and the obligations,
rights, and remedies of the parties under this Agreement shall be
determined in accordance with such laws.
SECTION 10.4 Notices. All demands, notices, and communications
under this Agreement shall be in writing, personally delivered, sent by
telecopier, 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 10.12 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: Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New
York 10007, and (e) in the case of S&P, at the following address: Standard
& Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc.,
55 Water Street, 40th Floor, New York, New York 10041, Attention: Asset
Backed Surveillance Department. 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 10.5 Severability of Provisions. If any one or more of
the covenants, agreements, provisions, or terms of this Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Agreement and shall in
no way affect the validity or enforceability of the other provisions of
this Agreement or of the Notes, the Certificates, or the rights of the
Holders thereof.
SECTION 10.6 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 10.7 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 10.8 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 10.9 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 10.10 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 10.11 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 10.12 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.,
6363 Katella Avenue, Cypress, California 90630-5205, mailing address: P.O.
Box 6038, Cypress, California 90630-0038.
SECTION 10.13 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
11 United States Code Section 1111(b)(1)(A)(i) to secured creditors to
receive the treatment afforded by Title 11 United States 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 10.14 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:______________________________
Name:
Title:
MMCA AUTO OWNER TRUST 1999-2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By: ______________________________
Name:
Title:
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By:____________________________
Name:
Title:
Accepted and agreed:
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By:____________________________
Name:
Title:
SCHEDULE A
[SCHEDULE OF INITIAL RECEIVABLES PROVIDED TO
THE INDENTURE TRUSTEE ON THE CLOSING DATE,
WHICH MAY BE ON COMPUTER TAPE,
COMPACT DISK, OR MICROFICHE]
SCHEDULE B
Locations of Receivables Files
Corporate Office
6363 Katella Avenue
P.O. Box 6038
Cypress, CA 90630-5205
National Service Center
10805 Holder Street, Third Floor
P.O. Box 6043
Cypress, CA 90630-0040
EXHIBIT A
[FORM OF SERVICER'S CERTIFICATE]
The undersigned certifies that he is a [title] 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 October 1, 1999, by and among the Company, as Servicer, MMCA Auto
Receivables Trust, as Seller, and MMCA Auto Owner Trust 1999-2 (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]
EXHIBIT C
[FORM OF STATEMENT TO CERTIFICATEHOLDERS]
EXHIBIT D
[FORM OF YIELD SUPPLEMENT AGREEMENT]
October 28, 1999
MMCA Auto Receivables Trust
6363 Katella Avenue
Cypress, California 90630-5205
Re: MMCA Auto Owner Trust 1999-2
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 October 1, 1999 (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 1999-2 (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
6363 Katella Avenue
Cypress, California 90630-5205
Attention: Secretary/Treasurer
Telephone: [ ]
Telecopy: [ ]
If to the Seller:
Mitsubishi Motors Credit of America, Inc.
6363 Katella Avenue
Cypress, California 90630-5205
Attention: Executive Vice President and Treasurer
Telephone: (714) 236-1500
Telecopy: (714) 236-1300
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
For value received, in accordance with and subject to the Sale
and Servicing Agreement, dated as of October 1, 1999 (the "Sale and
Servicing Agreement"), among MMCA Auto Owner Trust 1999-2 (the "Trust"),
MMCA Auto Receivables Trust, as the Seller (the "Seller"), and Mitsubishi
Motors Credit of America, Inc., as the Servicer (the "Servicer"), the
Seller hereby irrevocably sells, transfers, assigns and otherwise conveys
to the Trust, without recourse (subject to the obligations herein), all
right, title and interest of the Seller, whether now owned or hereafter
acquired, in, to and under the following:
(i) the Subsequent Receivables listed on Schedule A hereto;
(ii) with respect to the Subsequent Receivables that are
Actuarial Receivables, monies due thereunder on or after [___________,
_____](the "Subsequent Cutoff Date") (including Payaheads), and, with
respect to Subsequent Receivables that are Simple Interest
Receivables, monies received thereunder on or after the Subsequent
Cutoff Date;
(iii) the security interests in Financed Vehicles granted
by Obligors pursuant to such Subsequent Receivables and any other
interest of the Trust in such Financed Vehicles;
(iv) all rights to receive proceeds with respect to such
Subsequent Receivables from claims on any physical damage, theft,
credit life or disability insurance policies covering the related
Financed Vehicles or related Obligors;
(v) all rights to receive proceeds with respect to such
Subsequent Receivables from recourse to Dealers thereon pursuant to
Dealer Agreements;
(vi) all of the Seller's rights to the Receivable Files
that relate to such Subsequent Receivables;
(vii) all payments and proceeds with respect to such
Subsequent Receivables held by the Servicer;
(viii) all property (including the right to receive
Liquidation Proceeds and Recoveries and Financed Vehicles and the
proceeds thereof acquired by the Seller pursuant to the terms of a
Subsequent Receivable that is a Final Payment Receivable), guarantees
and other collateral securing a Subsequent Receivable (other than a
Subsequent Receivable purchased by the Servicer or repurchased by the
Seller);
(ix) all of the Seller's rights under the related First
Tier Subsequent Assignment;
(x) all rebates of premiums and other amounts relating to
insurance policies and other items financed under such Subsequent
Receivables in effect as of the Subsequent Cutoff Date; and
(xi) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment
of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing.
The Seller hereby represents that as of the Subsequent Cutoff
Date, the aggregate Principal Balance of the Subsequent Receivables was
$[______________].
The foregoing sale, transfer, assignment and conveyance shall not
constitute and is not intended to result in an assumption by the Trust of
any obligation of the Seller to the Obligors, the Dealers or any other
Person with respect the Subsequent Receivables set forth in Schedule A
attached hereto and the other Trust Property related thereto or any
agreement, document or instrument related thereto.
In the event that the foregoing sale, transfer, assignment and
conveyance is deemed to be a pledge, the Seller hereby grants to the Trust
a first priority security interest in all of the Seller's right to and
interest in the Subsequent Receivables and other property described in
clauses (i) through (xi) above to secure a loan deemed to have been made by
the Trust to the Seller in an amount equal to the sum of the initial
principal amount of the Notes plus accrued interest thereon and the Initial
Certificate Balance.
This Second-Tier Subsequent Assignment shall be construed in
accordance with the laws of the State of New York and the obligations of
the Seller under this Second-Tier Subsequent Assignment shall be determined
in accordance with such laws.
This Second-Tier Subsequent Assignment is made pursuant to and
upon the representations, warranties and agreements on the part of the
Seller contained in the Sale and Servicing Agreement (including the
Officer's Certificate of the Seller accompanying this Second-Tier
Subsequent Assignment) 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 [ ],
[ ].
MMCA AUTO RECEIVABLES TRUST
By: _________________________________
Name:
Title:
SCHEDULE A
[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
OFFICER'S CERTIFICATE
The undersigned officer of MMCA Auto Receivables Trust (the
"Company"), does hereby certify, pursuant to Section 2.1(d)(xvi) of the
Sale and Servicing Agreement, dated as of October 1, 1999, among MMCA Auto
Owner Trust 1999-2 (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:
Exhibit 4.3
==========================================================================
INDENTURE
between
MMCA AUTO OWNER TRUST 1999-2,
as Issuer,
and
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
as Indenture Trustee
Dated as of October 1, 1999
___________________________
$326,000,000 [____]% Class A-1 Asset Backed Notes
$210,000,000 [____]% Class A-2 Asset Backed Notes
$142,000,000 [____]% Class A-3 Asset Backed Notes
$62,000,000 [____]% Class B Asset Backed Notes
____________________________
==========================================================================
CROSS REFERENCE TABLE(1)
TIA Indenture
Section Section
------- ---------
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.(2)
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8; 6.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4; 11.5
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.15
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5; 11.5
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
316 (a) (last sentence) . . . . . . . . . . . . . . . . . . . . . 1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
_______________________
(1) Note: This Cross Reference Table shall not, for any purpose, be
deemed to be part of this Indenture.
(2) N.A. means Not Applicable.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act . . . . 12
SECTION 1.3 Rules of Construction . . . . . . . . . . . . . . . . . . 13
ARTICLE II
THE NOTES
SECTION 2.1 Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.2 Execution, Authentication and Delivery . . . . . . . . . . 14
SECTION 2.3 Temporary Notes . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.4 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.5 Registration; Registration of Transfer and Exchange . . . 15
SECTION 2.6 Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . 16
SECTION 2.7 Persons Deemed Owner . . . . . . . . . . . . . . . . . . . 17
SECTION 2.8 Payments . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.9 Cancellation . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.10 Release of Collateral . . . . . . . . . . . . . . . . . . 21
SECTION 2.11 Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.12 Notices to Clearing Agency . . . . . . . . . . . . . . . . 23
SECTION 2.13 Definitive Notes . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.14 Authenticating Agents . . . . . . . . . . . . . . . . . . 23
ARTICLE III
COVENANTS
SECTION 3.1 Payment Covenant . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.2 Maintenance of Office or Agency . . . . . . . . . . . . . 24
SECTION 3.3 Money for Payments To Be Held in Trust . . . . . . . . . . 25
SECTION 3.4 Existence . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.5 Protection of Trust Estate . . . . . . . . . . . . . . . . 27
SECTION 3.6 Opinions as to Trust Estate . . . . . . . . . . . . . . . 27
SECTION 3.7 Performance of Obligations; Servicing of Receivables . . . 28
SECTION 3.8 Negative Covenants . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.9 Annual Statement as to Compliance . . . . . . . . . . . . 30
SECTION 3.10 Issuer May Consolidate, etc., Only on Certain Terms . . . 31
SECTION 3.11 Successor of Transferee . . . . . . . . . . . . . . . . . 32
SECTION 3.12 No Other Business . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.13 No Borrowing . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.14 Servicer's Obligations . . . . . . . . . . . . . . . . . . 33
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities . . . . 33
SECTION 3.16 Capital Expenditures . . . . . . . . . . . . . . . . . . . 33
SECTION 3.17 Further Instruments and Acts . . . . . . . . . . . . . . . 33
SECTION 3.18 Restricted Payments . . . . . . . . . . . . . . . . . . . 34
SECTION 3.19 Notice of Events of Default . . . . . . . . . . . . . . . 34
SECTION 3.20 Removal of Administrator . . . . . . . . . . . . . . . . . 34
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture . . . . . . . . . 34
SECTION 4.2 Satisfaction, Discharge and Defeasance of the Notes . . . 35
SECTION 4.3 Application of Trust Money . . . . . . . . . . . . . . . . 37
SECTION 4.4 Repayment of Monies Held by Paying Agent . . . . . . . . . 37
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment . . . . 39
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee . . . . . . . . . . . . . . . . . . 40
SECTION 5.4 Remedies; Priorities . . . . . . . . . . . . . . . . . . . 42
SECTION 5.5 Optional Preservation of the Receivables . . . . . . . . . 43
SECTION 5.6 Limitation of Suits . . . . . . . . . . . . . . . . . . . 43
SECTION 5.7 Unconditional Rights of Noteholders To Receive
Principal and Interest . . . . . . . . . . . . . . . . . 44
SECTION 5.8 Restoration of Rights and Remedies . . . . . . . . . . . . 44
SECTION 5.9 Rights and Remedies Cumulative . . . . . . . . . . . . . . 44
SECTION 5.10 Delay or Omission Not a Waiver . . . . . . . . . . . . . . 45
SECTION 5.11 Control by Noteholders . . . . . . . . . . . . . . . . . . 45
SECTION 5.12 Waiver of Past Defaults . . . . . . . . . . . . . . . . . 46
SECTION 5.13 Undertaking for Costs . . . . . . . . . . . . . . . . . . 46
SECTION 5.14 Waiver of Stay or Extension Laws . . . . . . . . . . . . . 46
SECTION 5.15 Action on Notes . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.16 Performance and Enforcement of Certain Obligations . . . . 47
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee . . . . . . . . . . . . . . . 48
SECTION 6.2 Rights of Indenture Trustee . . . . . . . . . . . . . . . 50
SECTION 6.3 Individual Rights of Indenture Trustee . . . . . . . . . . 51
SECTION 6.4 Indenture Trustee's Disclaimer . . . . . . . . . . . . . . 51
SECTION 6.5 Notice of Defaults . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.6 Reports by Indenture Trustee to Holders . . . . . . . . . 51
SECTION 6.7 Compensation and Indemnity . . . . . . . . . . . . . . . . 51
SECTION 6.8 Replacement of Indenture Trustee . . . . . . . . . . . . . 52
SECTION 6.9 Successor Indenture Trustee by Merger . . . . . . . . . . 53
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee . . . . . . . . . . . . . . . . . . . 53
SECTION 6.11 Eligibility; Disqualification . . . . . . . . . . . . . . 55
SECTION 6.12 Preferential Collection of Claims Against Issuer . . . . . 55
SECTION 6.13 Pennsylvania Motor Vehicle Sales Finance Act Licenses . . 56
ARTICLE VII
NOTEHOLDERS' LISTS; REPORTING
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders . . . . . . . . . . . . . . . . 56
SECTION 7.2 Preservation of Information; Communications to
Noteholders . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.3 Reporting by Issuer . . . . . . . . . . . . . . . . . . . 56
SECTION 7.4 Reporting and Notices by Indenture Trustee . . . . . . . . 57
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money . . . . . . . . . . . . . . . . . . . 57
SECTION 8.2 Trust Accounts . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.3 General Provisions Regarding Accounts . . . . . . . . . . 58
SECTION 8.4 Release of Trust Estate . . . . . . . . . . . . . . . . . 59
SECTION 8.5 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 60
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders . . 60
SECTION 9.2 Supplemental Indentures with Consent of Noteholders . . . 62
SECTION 9.3 Execution of Supplemental Indentures . . . . . . . . . . . 64
SECTION 9.4 Effect of Supplemental Indenture . . . . . . . . . . . . . 64
SECTION 9.5 Conformity with Trust Indenture Act . . . . . . . . . . . 64
SECTION 9.6 Reference in Notes to Supplemental Indentures . . . . . . 64
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.2 Form of Redemption Notice . . . . . . . . . . . . . . . . 65
SECTION 10.3 Notes Payable on Redemption Date . . . . . . . . . . . . . 66
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc. . . . . . . . . 66
SECTION 11.2 Form of Documents Delivered to Indenture Trustee . . . . . 68
SECTION 11.3 Acts of Noteholders . . . . . . . . . . . . . . . . . . . 69
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.5 Notices to Noteholders; Waiver . . . . . . . . . . . . . . 70
SECTION 11.6 Alternate Payment and Notice Provisions . . . . . . . . . 71
SECTION 11.7 Conflict with Trust Indenture Act . . . . . . . . . . . . 71
SECTION 11.8 Effect of Headings and Table of Contents . . . . . . . . . 71
SECTION 11.9 Successors and Assigns . . . . . . . . . . . . . . . . . . 71
SECTION 11.10 Separability . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.11 Benefits of Indenture . . . . . . . . . . . . . . . . . . 71
SECTION 11.12 Legal Holiday . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.15 Recording of Indenture . . . . . . . . . . . . . . . . . . 72
SECTION 11.16 Trust Obligation . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.17 No Petition; Subordination; Claims Against Seller . . . . 72
SECTION 11.18 Inspection . . . . . . . . . . . . . . . . . . . . . . . . 73
SCHEDULES
SCHEDULE A Schedule of Receivables
SCHEDULE I List of Permitted Investments
EXHIBITS
EXHIBIT A-1 Form of Class A-1 Note
EXHIBIT A-2 Form of Class A-2 Note
EXHIBIT A-3 Form of Class A-3 Note
EXHIBIT B Form of Class B Note
EXHIBIT C Form of Opinion of Counsel Pursuant to Section 3.6(a)
INDENTURE, dated as of October 1, 1999 (as amended, supplemented
or otherwise modified and in effect from time to time, this "Indenture"),
between MMCA AUTO OWNER TRUST 1999-2, a Delaware business trust (the
"Issuer"), and BANK OF TOKYO - MITSUBISHI TRUST COMPANY, a New York banking
corporation, as trustee and not in its individual capacity (in such
capacity, the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the holders of the Issuer's
[_____]% Class A-1 Asset Backed Notes (the "Class A-1 Notes"), [____]%
Class A-2 Asset Backed Notes (the "Class A-2 Notes"), [____]% Class A-3
Asset Backed Notes (the "Class A-3 Notes" and, together with the Class A-1
Notes and the Class A-2 Notes, the "Class A Notes") and [____]% Class B
Asset Backed Notes (the "Class B Notes" and together with the Class A
Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as Indenture Trustee for the benefit of the Holders of the Notes, all
of the Issuer's right, title and interest in, to and under, whether now
owned or existing or hereafter acquired or arising (a) the Receivables; (b)
with respect to Actuarial Receivables, monies due thereunder on or after
the related Cutoff Date (including Payaheads) and, with respect to Simple
Interest Receivables, monies received thereunder on or after the related
Cutoff Date; (c) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Issuer
in the Financed Vehicles; (d) all rights to receive proceeds with respect
to the Receivables from claims on any physical damage, theft, credit life
or disability insurance policies covering the Financed Vehicles or
Obligors; (e) all rights to receive proceeds with respect to the
Receivables from recourse to Dealers thereon pursuant to the Dealer
Agreements; (f) all rights to the Receivable Files; (g) 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; (h) all rights under the Sale and Servicing Agreement and the
Yield Supplement Agreement; (i) all rights under the Purchase Agreement,
including the right of the Seller to cause MMCA to repurchase Receivables
from the Seller; (j) all payments and proceeds with respect to the
Receivables held by the Servicer; (k) all property (including the right to
receive Liquidation Proceeds and Recoveries and Financed Vehicles and the
proceeds thereof acquired by the Issuer pursuant to the terms of a Final
Payment Receivable), guarantees and other collateral securing a Receivable
(other than a Receivable purchased by the Servicer or repurchased by the
Seller); (l) all rebates of premiums and other amounts relating to
insurance policies and other items financed under the Receivables in effect
as of the related Cutoff Date; and (m) 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 (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of,
the Notes, equally and ratably without prejudice, priority or distinction,
and to secure compliance with the provisions of this Indenture, all as
provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Holders of the Notes, acknowledges such Grant, accepts the trusts under
this Indenture in accordance with the provisions of this Indenture and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the Holders of the Notes may be
adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. (a) Except as otherwise specified
herein or as the context may otherwise require, the following terms have
the respective meanings set forth below for all purposes of this Indenture.
"Accrued Note Interest" shall mean, with respect to any Payment
Date and each Class of Notes, the sum of the Monthly Accrued Note Interest
and the Interest Carryover Shortfall for such Class for such Payment Date.
"Act" shall have the meaning specified in Section 11.3(a).
"Administration Agreement" shall mean the Administration
Agreement, dated as of October 1, 1999, by and among the Administrator, the
Issuer and the Indenture Trustee, as the same may from time to time be
amended, supplemented or otherwise modified and in effect.
"Administrator" shall mean Mitsubishi Motors Credit of America,
Inc., a Delaware corporation, or any successor Administrator under the
Administration Agreement.
"Authenticating Agent" shall have the meaning specified in
Section 2.14.
"Basic Documents" shall mean this Indenture, the Certificate of
Trust, the Trust Agreement, the Assignments (as defined in the Purchase
Agreement), the Sale and Servicing Agreement, the Purchase Agreement, the
Administration Agreement, the Note Depository Agreement, the Yield
Supplement Agreement, the Control Agreement and other documents and
certificates delivered in connection therewith as the same may from time to
time be amended, supplemented or otherwise modified and in effect.
"Book-Entry Notes" shall mean a beneficial interest in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.11.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions or trust companies in New York, New
York, Wilmington, Delaware or Los Angeles, California are authorized or
obligated by law, regulation or executive order to be closed.
"Certificate of Trust" shall mean the certificate of trust of the
Issuer substantially in the form of Exhibit C to the Trust Agreement.
"Class" shall mean a class of Notes, which may be the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes or the Class B Notes.
"Class A Noteholder" shall mean the Person in whose name a Class
A Note is registered in the Note Register.
"Class A Notes" shall mean the Class A-1 Notes, the Class A-2
Notes and the Class A-3 Notes, collectively.
"Class A-1 Final Payment Date" shall mean the June 2002 Payment
Date.
"Class A-1 Noteholder" shall mean the Person in whose name a
Class A-1 Note is registered on the Note Register.
"Class A-1 Notes" shall mean the $326,000,000 aggregate initial
principal amount of [_____]% Class A-1 Asset Backed Notes issued by the
Issuer pursuant to this Indenture, substantially in the form of Exhibit A-1
to this Indenture.
"Class A-1 Rate" shall mean [_____]% per annum.
"Class A-2 Final Payment Date" shall mean the August 2003 Payment
Date.
"Class A-2 Noteholder" shall mean the Person in whose name a
Class A-2 Note is registered on the Note Register.
"Class A-2 Notes" shall mean the $210,000,000 aggregate initial
principal amount of [_____]% Class A-2 Asset Backed Notes issued by the
Issuer pursuant to this Indenture, substantially in the form of Exhibit A-2
to this Indenture.
"Class A-2 Rate" shall mean [_____]% per annum.
"Class A-3 Final Payment Date" shall mean the May 2004 Payment
Date.
"Class A-3 Noteholder" shall mean the Person on whose name a
Class A-3 Note is registered on the Note Register.
"Class A-3 Notes" shall mean the $142,000,000 aggregate initial
principal amount of [_____]% Class A-3 Asset Backed Notes issued by the
Issuer pursuant to this Indenture, substantially in the form of Exhibit A-3
to this Indenture.
"Class A-3 Rate" shall mean [_____]% per annum.
"Class B Final Payment Date" shall mean the April 2006 Payment
Date.
"Class B Noteholder" shall mean the Person in whose name a Class
B Note is registered on the Note Register.
"Class B Notes" shall mean the $62,000,000 aggregate initial
principal amount of [_____]% Class B Asset Backed Notes issued by the
Issuer pursuant to this Indenture, substantially in the form of Exhibit B
to this Indenture.
"Class B Rate" shall mean [____]% per annum.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" shall mean October 28, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations, including proposed or
temporary regulations, promulgated thereunder.
"Collateral" shall have the meaning specified in the Granting
Clause of this Indenture.
"Commission" shall mean the Securities and Exchange Commission.
"Control Agreement" shall mean the Securities Account Control
Agreement, dated as of October 1, 1999, by and among the Seller, the
Issuer, the Servicer, the Indenture Trustee and Bank of Tokyo - Mitsubishi
Trust Company in its capacity as a securities intermediary, as the same may
from time to time be amended, supplemented or otherwise modified and in
effect.
"Corporate Trust Office" shall mean the principal office of the
Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at date of execution of this
Indenture is located at 1251 Avenue of the Americas, New York, New York
10020-1104, Attention: Corporate Trust Department, or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Issuer, or the principal corporate trust office of any
successor Indenture Trustee at the address designated by such successor
Indenture Trustee by notice to the Noteholders and the Issuer.
"Default" shall mean any occurrence that is, or with notice or
the lapse of time or both would become, an Event of Default.
"Definitive Notes" shall have the meaning specified in Section
2.11.
"Event of Default" shall have the meaning specified in Section
5.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive Officer" shall mean, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation and, with respect to any
partnership, any general partner thereof.
"Final Payment Date" shall mean the Class A-1 Payment Date, the
Class A-2 Final Payment Date, the Class A-3 Final Payment Date and the
Class B Final Payment Date, collectively, or any of them, as the context
requires.
"Final Scheduled Maturity Date" shall mean (i) with respect to
any Initial Receivable, [__________] and (ii) with respect to any
Subsequent Receivable, [___________].
"Grant" shall mean to mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and to grant a
lien upon and a security interest in and right of set-off against, and to
deposit, set over and confirm pursuant to this Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all
rights, powers and options (but none of the obligations) of the granting
party thereunder, including the immediate and continuing right to claim
for, collect, receive and give receipt for principal and interest payments
in respect of the Collateral and all other monies payable thereunder, to
give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the
name of the granting party or otherwise, and generally to do and receive
anything that the granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"Holder" or "Noteholder" shall mean the Person in whose name a
Note is registered on the Note Register.
"Indenture Trustee" shall mean Bank of Tokyo - Mitsubishi Trust
Company, a New York banking corporation, as Indenture Trustee under this
Indenture, or any successor Indenture Trustee under this Indenture.
"Independent" shall mean, when used with respect to any specified
Person, that such Person (a) is in fact independent of the Issuer, any
other obligor on the Notes, the Seller and any Affiliate of any of the
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor,
the Seller or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Seller or any
Affiliate of any of the foregoing Persons as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing
similar functions.
"Independent Certificate" shall mean a certificate or opinion to
be delivered to the Indenture Trustee under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1,
made by an Independent appraiser or other expert appointed by an Issuer
Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read
the definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Interest Accrual Period" shall mean, with respect to any Payment
Date and with respect to each Class of the Notes, the period from and
including the 15th day of the calendar month immediately preceding such
Payment Date (or, in the case of the first Payment Date, the Closing Date),
to but excluding the 15th day of the calendar month in which such Payment
Date occurs.
"Interest Carryover Shortfall" shall mean, with respect to any
Payment Date and any Class of Notes, the excess of the sum of the Monthly
Accrued Note Interest for the preceding Payment Date and any outstanding
Interest Carryover Shortfall from the close of business on such preceding
Payment Date, over the amount in respect of interest that is actually
deposited in the Note Payment Account on such preceding Payment Date with
respect to such Class, plus interest on such excess, to the extent
permitted by law, at the applicable Note Interest Rate for the related
Interest Accrual Period.
"Issuer" shall mean MMCA Auto Owner Trust 1999-2, unless a
successor replaces it and, thereafter, means the successor and for purposes
of any provision contained herein and required by the TIA, each other
obligor on the Notes.
"Issuer Order" and "Issuer Request" shall mean a written order or
request signed in the name of the Issuer by any one of its Responsible
Officers and delivered to the Indenture Trustee.
"MART Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of October 1, 1999, between MMCA, as beneficiary, and
Chase Manhattan Bank Delaware, a Delaware banking corporation, as trustee,
relating to the Seller, as from time to time amended, supplemented or
otherwise modified and in effect.
"Monthly Accrued Note Interest" shall mean, with respect to any
Payment Date and (i) any Class of Notes, interest accrued for the related
Interest Accrual Period at the applicable Note Interest Rate for such Class
on the aggregate principal amount of the Notes of such Class as of the
immediately preceding Payment Date, after giving effect to all payments of
principal to Noteholders on or prior to such preceding Payment Date (or, in
the case of the first Payment Date, the initial principal amount of the
Notes); and (ii) with respect to the Notes collectively, the sum of Monthly
Accrued Note Interest for each Class.
"Note Depository Agreement" shall mean the agreement dated, as of
October 28, 1999, among the Issuer, the Indenture Trustee, the
Administrator and The Depository Trust Company, as the initial Clearing
Agency, relating to the Notes.
"Note Interest Rate" shall mean, in the case of the Class A-1
Notes, the Class A-1 Rate, in the case of the Class A-2 Notes, the Class A-
2 Rate, in the case of the Class A-3 Notes, the Class A-3 Rate and in the
case of the Class B Notes, the Class B Rate.
"Note Owner" shall mean, with respect to any Book-Entry Note, the
Person who is the beneficial owner of such Book-Entry Note, as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
"Note Register" and "Note Registrar" shall have the respective
meanings specified in Section 2.5(a).
"Noteholders" shall mean the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders and the Class B Noteholders,
collectively.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class B Notes, collectively.
"Officer's Certificate" shall mean a certificate signed by any
Responsible Officer of the Issuer, under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Responsible Officer of the Issuer.
"Opinion of Counsel" shall mean one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture,
be employees of or counsel to the Issuer, MMCA or the Servicer and who
shall be satisfactory to the Indenture Trustee, and which opinion or
opinions shall be addressed to the Indenture Trustee as Indenture Trustee,
shall comply with the applicable requirements of Section 11.1, and shall be
in form and substance satisfactory to the Indenture Trustee.
"Outstanding" shall mean, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note
Registrar or delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment
for which money in the necessary amount has been theretofore
deposited with the Indenture Trustee or any Paying Agent in trust
for the Holders of such Notes (provided, however, that if such
Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision for such notice has
been made, satisfactory to the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of
which other Notes have been authenticated and delivered pursuant
to this Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Notes are held by a protected
purchaser;
provided, that in determining whether the Holders of the requisite
principal amount of the Notes Outstanding have given any request, demand,
authorization, direction, notice, consent, or waiver hereunder or under any
Basic Document, Notes owned by the Issuer, any other obligor upon the
Notes, the Seller, the Servicer or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Indenture Trustee shall be protected in relying
on any such request, demand, authorization, direction, notice, consent, or
waiver, only Notes that a Responsible Officer of the Indenture Trustee
knows to be so owned shall be so disregarded. Notes so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons.
"Outstanding Amount" shall mean the aggregate principal amount of
all Notes Outstanding at the date of determination.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, or any successor Owner Trustee under the
Trust Agreement.
"Paying Agent" shall mean the Indenture Trustee or any other
Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 and is authorized by the Issuer to make payments
to and distributions from the Collection Account and the Note Payment
Account, including payment of principal of or interest on the Notes on
behalf of the Issuer.
"Payment Date" shall mean the 15th day of each month, or if any
such day is not a Business Day, the immediately following Business Day,
commencing on November 15, 1999.
"Predecessor Note" shall mean, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note and, for purposes of this
definition, any Note authenticated and delivered under Section 2.6 in lieu
of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Note.
"Principal Carryover Shortfall" shall mean, as of the close of
business on any Payment Date, the excess of the Principal Distribution
Amount and any outstanding Principal Carryover Shortfall from the preceding
Payment Date over the amount in respect of principal that is actually
deposited in the Note Payment Account on such Payment Date.
"Proceeding" shall mean any suit in equity, action at law or
other judicial or administrative proceeding.
"Rating Agency" shall mean either S&P or Moody's, and together,
the "Rating Agencies." If no such organization or successor is any longer
in existence, "Rating Agency" shall be a nationally recognized statistical
rating organization or other comparable Person designated by the Issuer,
notice of which designation shall be given to the Indenture Trustee, the
Owner Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any action,
that each Rating Agency shall have been given prior notice thereof and that
each of the Rating Agencies shall have notified the Seller, the Servicer,
the Indenture Trustee and the Owner Trustee that such action shall not
result in a reduction or withdrawal of the then current rating assigned to
any Class of Notes.
"Record Date" shall mean, with respect to a Payment Date or
Redemption Date, (i) for any Book-Entry Notes, the close of business on the
Business Day immediately preceding such Payment Date or Redemption Date or,
(ii) for any Definitive Notes that have been issued pursuant to Section
2.13, the fifteenth (15th) day of the preceding month, unless such
fifteenth (15th) day is not a Business Day, in which case the immediately
preceding Business Day.
"Redemption Date" shall mean (a) in the case of a redemption of
Notes pursuant to Section 10.1(a), the Payment Date specified by the
Servicer pursuant to Section 10.1(a) on which date the Indenture Trustee
shall withdraw any amount remaining in the Supplemental Reserve Account and
the Reserve Account and deposit the applicable amount thereof payable to
the Notes in the Note Payment Account first from any amount remaining in
the Supplemental Reserve Account and then to the extent of any remaining
shortfall from the Reserve Account and (b) in the case of a redemption of
Notes pursuant to Section 10.1(b), the Payment Date specified by the
Servicer pursuant to Section 4.8(b) of the Sale and Servicing Agreement.
"Redemption Price" shall mean (a) in the case of a redemption of
Notes pursuant to Section 10.1(a), an amount equal to the unpaid principal
amount of the Notes redeemed plus accrued and unpaid interest thereon as of
the applicable Redemption Date, and (b) in the case of a redemption of
Notes pursuant to Section 10.1(b), an amount equal to the lesser of (x) the
Remaining Pre-Funded Amount withdrawn from the Pre-Funding Account and
deposited to the Collection Account on or prior to the Redemption Date
pursuant to Section 4.8(b) of the Sale and Servicing Agreement and (y) the
amount specified in clause (a) above.
"Registered Holder" shall mean the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Responsible Officer" shall mean, (a) with respect to the Issuer,
any officer of the Owner Trustee who is authorized to act for or on behalf
of the Owner Trustee in matters relating to the Issuer and who is
identified on the list of Responsible Officers delivered by the Owner
Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and, for so long as
the Administration Agreement is in full force and effect, any officer of
the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant
to the Administration Agreement and (b) with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture
Trustee with direct responsibility for the administration of this Indenture
and also, with respect to a particular matter, any other officer to whom
such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of October 1, 1999, by and among the Issuer, the Seller
and the Servicer, as from time to time amended, supplemented or otherwise
modified and in effect.
"Scheduled Principal" shall mean, with respect to any Payment
Date, the sum of (a) the sum of (i) collections of principal on Simple
Interest Receivables received during the related Collection Period,
including collections of principal attributable to the Last Scheduled
Payment of a Simple Interest Receivable that is a Final Payment Receivable
(unless a Last Scheduled Payment Advance has previously been made with
respect to such Last Scheduled Payment), and charges for Excess Wear and
Tear and Excess Mileage, and (ii) Last Scheduled Payment Advances made on
such Payment Date with respect to Simple Interest Receivables that are
Final Payment Receivables, (b) the principal portion of each Scheduled
Payment (including a Last Scheduled Payment on a Final Payment Receivable)
due on any Actuarial Receivable during the related Collection Period, (c)
(without duplication of amounts taken into account under (a) or (b)) the
Principal Balance of (i) Receivables prepaid in full during the related
Collection Period and (ii) Receivables which became Defaulted Receivables
during the related Collection Period, (d) the Purchase Amount of each
Receivable that was repurchased by the Seller or purchased by the Servicer
during such Collection Period to the extent attributable to principal, (e)
the proceeds of any other sale of a Receivable, to the extent allocable to
principal, and (f) partial prepayments attributable to any refunded item
included in the Amount Financed, such as extended warranty protection plan
costs or physical damage, credit life or disability insurance premiums, or
any partial prepayment which causes a reduction in the Obligor's periodic
payment to be below the Scheduled Payment as of the related Cutoff Date;
provided, however, that in calculating the Scheduled Principal, (x) all
payments and proceeds (including Liquidation Proceeds) of any Purchased
Receivables the Purchase Amount of which has been included in Scheduled
Principal in a prior Collection Period (which shall be paid to the Seller
or Servicer, as applicable) and (y) all amounts released from the Pre-
Funding Account will be excluded.
"Securities" shall have the meaning specified in the MART Trust
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Seller" shall mean MMCA Auto Receivables Trust, a Delaware
business trust, in its capacity as seller under the Sale and Servicing
Agreement, and its successors-in-interest.
"Servicer" shall mean Mitsubishi Motors Credit of America, Inc.,
a Delaware corporation, in its capacity as servicer under the Sale and
Servicing Agreement, and any successor Servicer thereunder.
"State" shall mean any of the fifty States of the United States
of America or the District of Columbia.
"Subtrust" shall have the meaning specified in the MART Trust
Agreement.
"Subtrust Assets" shall have the meaning specified in the MART
Trust Agreement.
"Successor Servicer" shall have the meaning specified in Section
3.7(e).
"Total Required Payment" shall mean, on any Payment Date, the
Total Servicing Fee, the Accrued Note Interest and the Principal
Distribution Amount.
"Trust Estate" shall mean all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of this Indenture for the benefit of the Noteholders
(including, without limitation, all property and interests Granted to the
Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act
of 1939, as amended, unless otherwise specifically provided.
(b) Except as otherwise specified herein or as the context
may otherwise require, capitalized terms used but not otherwise defined
herein have the respective meanings set forth in, or incorporated by
reference into, the Sale and Servicing Agreement for all purposes of this
Indenture.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Indenture securities" shall mean the Notes.
"Indenture security holder" shall mean a Noteholder.
"Indenture to be qualified" shall mean this Indenture.
"Indenture trustee" or "Institutional trustee" shall mean the
Indenture Trustee.
"Obligor" on the indenture securities shall mean the Issuer and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in
the TIA, defined by TIA reference to another statute or defined by
Commission rule have the meaning assigned to them by such definitions.
SECTION 1.3 Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined
has the meaning assigned to it in accordance with generally
accepted accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without
limitation;
(v) words in the singular include the plural
and words in the plural include the singular; and
(vi) any agreement, instrument or statute
defined or referred to herein or in any instrument or certificate
delivered in connection herewith means such agreement, instrument
or statute as from time to time amended, modified or supplemented
and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its
permitted successors and assigns.
ARTICLE II
THE NOTES
SECTION 2.1 Form. (a) The Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class B Notes, together with the
Indenture Trustee's Certificates of Authentication, shall be in
substantially the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3
and Exhibit B, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes,
as evidenced by their execution thereof. Any portion of the text of any
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
(b) The Definitive Notes shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods
(with or without steel engraved borders), all as determined by the officers
executing such Notes, as evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its
authentication. The terms of the Notes set forth in Exhibits A-1, A-2, A-3
and B hereto are part of the terms of this Indenture and are incorporated
herein by reference.
SECTION 2.2 Execution, Authentication and Delivery. (a) The
Notes shall be executed on behalf of the Issuer by any of its Responsible
Officers. The signature of any such Responsible Officer on the Notes may
be manual or facsimile.
(b) Notes bearing the manual or facsimile signature of
individuals who were at any time Responsible Officers of the Issuer shall
bind the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Notes or did not hold such offices at the date of such Notes.
(c) The Indenture Trustee shall, upon Issuer Order,
authenticate and deliver [_____]% Class A-1 Asset Backed Notes for original
issue in an aggregate principal amount of $326,000,000, [_____]% Class A-2
Asset Backed Notes for original issue in an aggregate principal amount of
$210,000,000, [_____]% Class A-3 Asset Backed Notes for original issue in
an aggregate principal amount of $142,000,000, and [_____]% Class B Asset
Backed Notes for original issue in an aggregate principal amount of
$62,000,000. The aggregate principal amounts of [_____]% Class A-1 Asset
Backed Notes, [_____]% Class A-2 Asset Backed Notes, [_____]% Class A-3
Asset Backed Notes and [_____]% Class B Asset Backed Notes outstanding at
any time may not exceed those respective amounts except as provided in
Section 2.6.
(d) Each Note shall be dated the date of its
authentication. The Notes shall be issuable in minimum denominations of
$1,000 and integral multiples of $1,000 thereof.
(e) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears
on such Note a certificate of authentication substantially in the form
provided for herein executed by the Indenture Trustee by the manual
signature of one of its authorized signatories, and such certificate upon
any Note shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder.
SECTION 2.3 Temporary Notes. (a) Pending the preparation of
Definitive Notes pursuant to Section 2.13, the Issuer may execute, and upon
receipt of an Issuer Order the Indenture Trustee shall authenticate and
deliver, temporary Notes that are printed, lithographed, typewritten,
mimeographed or otherwise produced, of the tenor of the Definitive Notes in
lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
(b) If temporary Notes are issued pursuant to Section 2.3(a),
the Issuer shall cause Definitive Notes to be prepared without unreasonable
delay. After the preparation of Definitive Notes, the temporary Notes
shall be exchangeable for Definitive Notes upon surrender of the temporary
Notes at the office or agency of the Issuer to be maintained as provided in
Section 3.2, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Notes, the Issuer shall execute, and the
Indenture Trustee shall authenticate and deliver in exchange therefor, a
like principal amount of Definitive Notes of authorized denominations.
Until so exchanged, the temporary Notes shall in all respects be entitled
to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4 Tax Treatment. The Issuer has entered into this
Indenture, and the Notes shall be issued, with the intention that, for
federal, state and local income and franchise tax purposes, the Notes shall
qualify as indebtedness of the Issuer secured by the Trust Estate. The
Issuer, by entering into this Indenture, and each Noteholder, by its
acceptance of a Note (and each Note Owner by its acceptance of an interest
in the applicable Book-Entry Note), agree to treat the Notes for federal,
state and local income and franchise tax purposes as indebtedness of the
Issuer.
SECTION 2.5 Registration; Registration of Transfer and Exchange.
(a) The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the
Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee initially shall be the "Note
Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Issuer
shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Note Registrar.
(b) If a Person other than the Indenture Trustee is
appointed by the Issuer as Note Registrar, (i) the Issuer shall give the
Indenture Trustee prompt written notice of the appointment of such Note
Registrar and of the location and any change in the location, of the Note
Register, (ii) the Indenture Trustee shall have the right to inspect the
Note Register at all reasonable times and to obtain copies thereof and
(iii) the Indenture Trustee shall have the right to rely upon a certificate
executed on behalf of the Note Registrar by an Executive Officer thereof as
to the names and addresses of the Holders of the Notes and the principal
amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note
at the office or agency of the Issuer to be maintained as provided in
Section 3.2, if the requirements of Section 8-401 of the Relevant UCC are
met, the Issuer shall execute, and the Indenture Trustee shall authenticate
and the Noteholder shall obtain from the Indenture Trustee, in the name of
the designated transferee or transferees, one or more new Notes of the same
Class in any authorized denomination, of a like aggregate principal amount.
The Indenture Trustee may rely upon the Administrator with respect to the
determination of whether the requirements of Section 8-401 of the Relevant
UCC are met.
(d) At the option of the Noteholder, Notes may be exchanged
for other Notes of the same Class in any authorized denominations, of a
like aggregate principal amount, upon surrender of the Notes to be
exchanged at such office or agency. Whenever any Notes are so surrendered
for exchange, if the requirements of Section 8-401 of the Relevant UCC are
met, the Issuer shall execute, the Indenture Trustee shall authenticate,
and the Noteholder shall obtain from the Indenture Trustee, the Notes which
the Noteholder making such exchange is entitled to receive. The Indenture
Trustee may rely upon the Administrator with respect to the determination
of whether the requirements of Section 8-401 of the Relevant UCC are met.
(e) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing
the same debt, and entitled to the same benefits under this Indenture as
the Notes surrendered upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer in form satisfactory to the Indenture
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar.
(g) No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not
involving any transfer.
(h) The preceding provisions of this Section 2.5
notwithstanding, the Issuer shall not be required to make and the Note
Registrar need not register transfers or exchanges of Notes selected for
redemption or of any Note for a period of fifteen (15) days preceding the
due date for any payment with respect to such Note.
SECTION 2.6 Mutilated, Destroyed, Lost or Stolen Notes. (a) If
(i) any mutilated Note is surrendered to the Indenture Trustee, or the
Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (ii) there is delivered to the Indenture
Trustee such security or indemnity as may be required by it to hold the
Issuer and the Indenture Trustee harmless, then, in the absence of notice
to the Issuer, the Note Registrar or the Indenture Trustee that such Note
has been acquired by a protected purchaser, and provided that the
requirements of Section 8-405 of the Relevant UCC are met, the Issuer shall
execute, and upon its request the Indenture Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Note, a replacement Note of the same Class; provided, however,
that if any such destroyed, lost or stolen Note, but not a mutilated Note,
shall have become or within seven (7) days of the Indenture Trustee's
receipt of evidence to its satisfaction of such destruction, loss or theft
shall be due and payable, or shall have been called for redemption, instead
of issuing a replacement Note of the same Class, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the
Redemption Date without surrender thereof. The Indenture Trustee may rely
upon the Administrator with respect to the determination of whether the
requirements of Section 8-405 of the Relevant UCC are met. If, after the
delivery of such replacement Note or payment of a destroyed, lost or stolen
Note pursuant to the proviso to the preceding sentence, a protected
purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the
Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking
such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a protected purchaser, and
shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the
Issuer or the Indenture Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this
Section 2.6, the Issuer may require the payment by the Holder of such Note
of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other reasonable expenses (including
the fees and expenses of the Indenture Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section
2.6 in replacement of any mutilated, destroyed, lost or stolen Note shall
constitute an original additional contractual obligation of the Issuer,
whether or not the mutilated, destroyed, lost or stolen Note shall be at
any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Notes
duly issued hereunder.
(d) The provisions of this Section 2.6 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Notes.
SECTION 2.7 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name any Note is registered (as of the day of determination) as the
owner of such Note for the purpose of receiving payments of principal of
and interest, if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and none of the Issuer, the Indenture
Trustee or any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.
SECTION 2.8 Payments.
(a) On each Payment Date, upon receipt of written
instructions from the Servicer pursuant to Section 4.6(c) of the Sale and
Servicing Agreement, the Indenture Trustee shall withdraw the Total
Available Funds on deposit in the Collection Account for the related
Collection Period and make the following payments and deposits for such
Payment Date in the following order of priority:
(i) to the Servicer, the Total Servicing
Fee;
(ii) to the Note Payment Account, the Accrued
Note Interest for the Class A Notes;
(iii) to the Note Payment Account, the Accrued
Note Interest for the Class B Notes;
(iv) to the Note Payment Account, the
Principal Distribution Amount;
(v) to the Reserve Account, the amount, if
any, necessary to reinstate the balance in the Reserve Account up
to the Specified Reserve Balance;
(vi) to the Supplemental Reserve Account, all
remaining Total Available Funds until the Supplemental Reserve
Amount is equal to the Maximum Supplemental Reserve Amount; and
(vii) to the Certificate Distribution Account,
any remaining portion of 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).
(b) The principal of each Note shall be payable in
installments on each Payment Date in an aggregate amount (unless the Notes
have been accelerated in accordance with Section 5.2 following the
occurrence of an Event of Default) for all Classes of Notes equal to the
Principal Distribution Amount with respect to such Payment Date. On each
Payment Date, unless the Notes have been accelerated in accordance with
Section 5.2 following the occurrence of an Event of Default, the Issuer
shall cause to be paid all amounts on deposit in the Note Payment Account
with respect to the related Collection Period in the following order of
priority:
(i) to the Class A Noteholders, Accrued Note
Interest (and, if amounts on deposit in the Note Payment Account
are insufficient for such purpose, payments shall be made to the
to the Class A Noteholders pro rata in proportion to the Accrued
Note Interest for each Class of Notes);
(ii) to the Class B Noteholders, Accrued Note
Interest;
(iii) to the Class A-1 Noteholders, 100% of
the Principal Distribution Amount in reduction of principal until
the principal amount of the Class A-1 Notes has been paid in
full;
(iv) following payment in full of the Class
A-1 Notes, to the Class A-2 Noteholders, 100% of the Principal
Distribution Amount in reduction of principal until the principal
amount of the Class A-2 Notes has been paid in full;
(v) following payment in full of the Class
A-2 Notes, to the Class A-3 Noteholders, 100% of the Principal
Distribution Amount in reduction of principal until the principal
amount of the Class A-3 Notes has been paid in full; and
(vi) following payment in full of the Class
A-3 Notes, to the Class B Noteholders, 100% of the Principal
Distribution Amount in reduction of principal until the principal
amount of the Class B Notes has been paid in full.
(c) The principal amount of the Class A-1 Notes, to the
extent not previously paid, will be due on the Class A-1 Final Payment
Date, the principal amount of the Class A-2 Notes, to the extent not
previously paid, will be due on the Class A-2 Final Payment Date, the
principal amount of the Class A-3 Notes, to the extent not previously paid,
will be due on the Class A-3 Final Payment Date and the principal amount of
the Class B Notes, to the extent not previously paid, will be due on the
Class B Final Payment Date.
(d) The Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class B Notes shall accrue interest at the Class A-1 Rate,
the Class A-2 Rate, the Class A-3 Rate and the Class B Rate, respectively,
and such interest shall be due and payable on each Payment Date. Interest
on the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class B Notes shall be calculated on the basis of a 360-day year of twelve
30-day months. Subject to Section 3.1, any installment of interest or
principal, if any, payable on any Note that is punctually paid or duly
provided for by the Issuer on the applicable Payment Date shall be paid to
the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date by check mailed first-class postage prepaid
to such Person's address as it appears on the Note Register on such Record
Date; provided that, unless Definitive Notes have been issued pursuant to
Section 2.13, with respect to Notes registered on the Record Date in the
name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payment shall be made by wire transfer in immediately
available funds to the account designated by such nominee, and except for
the final installment of principal payable with respect to such Note on a
Payment Date or on the related Final Payment Date (and except for the
Redemption Price for any Note called for redemption), which shall be
payable as provided below. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.3. The
Issuer shall pay all Accrued Note Interest, including Interest Carryover
Shortfalls, to the Persons who are Noteholders on the Record Date for a
particular Payment Date even if a portion of such Accrued Note Interest
relates to a different Payment Date.
(e) All principal payments on a Class of Notes shall be
made pro rata to the Noteholders entitled thereto. The Indenture Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such
Note shall be paid. Such notice shall be mailed or transmitted by
facsimile prior to such final Payment Date and shall specify that such
final installment shall be payable only upon presentation and surrender of
such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemption of Notes shall be mailed to Noteholders as provided in Section
10.2.
(f) Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable, if not previously
paid, on the date on which an Event of Default shall have occurred and be
continuing, if the Indenture Trustee or the Holders of Notes representing
not less than a majority of the principal amount of the Notes Outstanding
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2. On each Payment Date following acceleration of the
Notes, all amounts on deposit in the Note Payment Account shall be paid in
the following order of priority.
(i) first, to the Indenture Trustee for
amounts due under Section 6.7;
(ii) second, to the Servicer for amounts due
and unpaid in respect of Total Servicing Fees;
(iii) third, to Noteholders of each Class of
the Class A Notes, Accrued Note Interest ratably in proportion to
Accrued Note Interest for each Class of the Class A Notes,
without preference or priority of any kind, according to the
amounts due and payable on the Class A Notes for interest;
(iv) fourth, to the Class A-1 Noteholders,
the Class A-2 Noteholders and the Class A-3 Noteholders, the
outstanding principal amount of the Class A-1 Notes, the Class A-
2 Notes and the Class A-3 Notes and the Class B Notes,
respectively, pro rata in proportion to the respective principal
balances of each of such Classes as of such Payment Date (prior
to giving effect to any payment of principal on such date) in
reduction of principal until the principal amount of each of such
Classes has been paid in full;
(v) fifth, to the Class B Noteholders,
Accrued Note Interest, according to the amounts due and payable
on the Class B Notes for interest;
(vi) sixth, to the Class B Noteholders, the
outstanding principal amount of the Class B Notes as of such
Payment Date (prior to giving effect to any payment of principal
on such date) in reduction of principal until the principal
amount of the Class B Notes has been paid in full; and
(vii) seventh, to the Certificateholders.
SECTION 2.9 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to
any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly cancelled by the Indenture Trustee. The
Issuer may at any time deliver to the Indenture Trustee for cancellation
any Notes previously authenticated and delivered hereunder which the Issuer
may have acquired in any manner whatsoever, and all Notes so delivered
shall be promptly cancelled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided
in this Section 2.9, except as expressly permitted by this Indenture. All
cancelled Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at
the time unless the Issuer shall direct by an Issuer Order that they be
destroyed or returned to it, provided, that such Issuer Order is timely and
the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.10 Release of Collateral. Subject to Section 11.1 and
the terms of the Basic Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of (i) an Issuer
Request accompanied by an Officer's Certificate and an Opinion of Counsel,
in each case stating that all conditions precedent, if any, provided for in
this Indenture relating to the release of the property from the lien of
this Indenture have been complied with, provided that counsel rendering any
such opinion may rely, without independent investigation, on the accuracy
and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action and (ii) Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an
Opinion of Counsel in lieu of such Independent Certificates to the effect
that the TIA does not require any such Independent Certificates. If the
Commission shall issue an exemptive order under TIA Section 304(d)
modifying the Owner Trustee's obligations under TIA Sections 314(c) and
314(d)(1), the Indenture Trustee shall release property from the lien of
this Indenture in accordance with the conditions and procedures set forth
in such exemptive order.
SECTION 2.11 Book-Entry Notes. The Notes, upon original
issuance, shall be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to the Indenture Trustee as custodian for
The Depository Trust Company, the initial Clearing Agency, by, or on behalf
of, the Issuer. The Book-Entry Notes shall be registered initially on the
Note Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Note Owner thereof shall receive a definitive Note
representing such Note Owner's interest in such Note, except as provided in
Section 2.13. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to such Note Owners pursuant to
Section 2.13:
(i) the provisions of this Section 2.11
shall be in full force and effect;
(ii) the Note Registrar and the Indenture
Trustee shall be entitled to deal with the Clearing Agency for
all purposes of this Indenture (including the payment of
principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole Holder of the
Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of
this Section 2.11 conflict with any other provisions of this
Indenture, the provisions of this Section shall control;
(iv) the rights of Note Owners shall be
exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such Note
Owners and the Clearing Agency and/or the Clearing Agency
Participants pursuant to the Note Depository Agreement; unless
and until Definitive Notes are issued pursuant to Section 2.13,
the initial Clearing Agency shall make book-entry transfers among
the Clearing Agency Participants and receive and transmit
payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or
permits actions to be taken based upon instructions or directions
of Holders of Notes evidencing a specified percentage of the
principal amount of the Notes or any Class of Notes Outstanding,
the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such
effect from Note Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of
the beneficial interest in the Notes or such Class of Notes and
has delivered such instructions to the Indenture Trustee.
SECTION 2.12 Notices to Clearing Agency. Whenever a notice or
other communication to the Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to such Note
Owners pursuant to Section 2.13, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Notes to the Clearing Agency, and shall have no obligation to such Note
Owners.
SECTION 2.13 Definitive Notes. If (i) the Issuer, the
Administrator or the Servicer advises the Indenture Trustee in writing that
the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Notes and the Indenture
Trustee or the Administrator is unable to locate a qualified successor,
(ii) the Administrator, at its option, advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through the
Clearing Agency or (iii) after the occurrence of an Event of Default or an
Event of Servicing Termination, Note Owners of the Book-Entry Notes
representing beneficial interests aggregating not less than 51% of the
principal amount of such Notes advise the Indenture Trustee and the
Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of such Note
Owners, then the Clearing Agency shall notify all Note Owners and the
Indenture Trustee of the occurrence of such event and of the availability
of Definitive Notes to Note Owners requesting the same. Upon surrender to
the Indenture Trustee of the typewritten Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the
Definitive Notes in accordance with the instructions of the Clearing
Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Any portion of a Book-Entry Note transferred or exchanged
pursuant to this Section 2.13 shall be executed, authenticated and
delivered only in the minimum denominations and integral multiples set
forth in Section 2.2(d). Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders.
SECTION 2.14 Authenticating Agents. The Indenture Trustee may
appoint one or more Persons (each, an "Authenticating Agent") with power to
act on its behalf and subject to its direction in the authentication of
Notes in connection with issuance, transfers and exchanges under Sections
2.2, 2.3, 2.5 and 2.6, as fully to all intents and purposes as though each
such Authenticating Agent had been expressly authorized by those Sections
to authenticate such Notes. For all purposes of this Indenture, the
authentication of Notes by an Authenticating Agent pursuant to this Section
2.14 shall be deemed to be the authentication of Notes "by the Indenture
Trustee."
Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to all
or substantially all of the corporate trust business of any Authenticating
Agent, shall be the successor of such Authenticating Agent hereunder,
without the execution or filing of any further act on the part of the
parties hereto or such Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Owner Trustee. The
Indenture Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Owner Trustee. Upon receiving such notice of
resignation or upon such a termination, the Indenture Trustee may appoint a
successor Authenticating Agent and shall give written notice of any such
appointment to the Owner Trustee.
The Administrator agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services. The provisions of
Sections 2.9 and 6.4 shall be applicable to any Authenticating Agent.
ARTICLE III
COVENANTS
SECTION 3.1 Payment Covenant. The Issuer shall duly and
punctually pay the principal of and interest on, if any, the Notes in
accordance with the terms of the Notes and this Indenture. Amounts
properly withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal shall be considered as having been
paid by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2 Maintenance of Office or Agency. The Issuer shall
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer shall give prompt written notice to the Indenture
Trustee of the location, and of any change in the location, of any such
office or agency. If, at any time, the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Indenture Trustee with
the address thereof, such surrenders, notices and demands may be made or
served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
SECTION 3.3 Money for Payments To Be Held in Trust. (a) As
provided in Section 8.2, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the
Collection Account, the Pre-Funding Account, the Reserve Account, the
Supplemental Reserve Account, the Negative Carry Account, the Yield
Supplement Account and the Note Payment Account shall be made on behalf of
the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so withdrawn from the Collection Account, the Pre-Funding Account,
the Reserve Account, the Supplemental Reserve Account, the Negative Carry
Account, the Yield Supplement Account and the Note Payment Account for
payments of Notes shall be paid over to the Issuer, except as provided in
this Section 3.3.
(b) On or before each Payment Date and Redemption Date, the
Issuer shall deposit or cause to be deposited in the Note Payment Account
an aggregate sum sufficient to pay the amounts then becoming due under the
Notes, such sum to be held in trust for the benefit of the Persons entitled
thereto, and (unless the Paying Agent is the Indenture Trustee) shall
promptly notify the Indenture Trustee of its action or failure so to act.
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture
Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so
agrees), subject to the provisions of this Section 3.3, that such Paying
Agent shall:
(i) hold all sums held by it for the payment
of amounts due with respect to the Notes in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and pay
such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any
default by the Issuer (or any other obligor upon the Notes) of
which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of
any such default, upon the written request of the Indenture
Trustee, forthwith pay to the Indenture Trustee all sums so held
in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and
forthwith pay to the Indenture Trustee all sums held by it in
trust for the payment of Notes if at any time it ceases to meet
the standards required to be met by a Paying Agent at the time of
its appointment; and
(v) comply with all requirements of the Code
and any state or local tax law with respect to the withholding
from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order
direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee
upon the same trusts as those upon which the sums were held by such Paying
Agent; and upon such payment by any Paying Agent to the Indenture Trustee,
such Paying Agent shall be released from all further liability with respect
to such money.
(d) Subject to applicable laws with respect to escheat of
funds, any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Note and remaining
unclaimed for two (2) years after such amount has become due and payable
shall be discharged from such trust and be paid to the Issuer on Issuer
Request; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to
the extent of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Indenture Trustee or
such Paying Agent, before being required to make any such repayment, shall
at the expense and direction of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than thirty (30) days from the date of such
publication, any unclaimed balance of such money then remaining shall be
repaid to the Issuer. The Indenture Trustee shall also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing
notice of such repayment to Holders whose Notes have been called but have
not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for
each such Holder).
SECTION 3.4 Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is
or becomes, organized under the laws of any other State or of the United
States of America, in which case the Issuer shall keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction)
and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture, the Notes, the
Collateral and each other instrument or agreement included in the Trust
Estate.
SECTION 3.5 Protection of Trust Estate. The Issuer shall from
time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and shall take such other action
necessary or advisable to:
(i) maintain or preserve the lien and
security interest (and the priority thereof) of this Indenture or
carry out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect
the validity of any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust
Estate and the rights of the Indenture Trustee and the
Noteholders in such Trust Estate against the claims of all
Persons.
The Issuer hereby designates the Indenture Trustee its agent and attorney-
in-fact to execute any financing statement, continuation statement or other
instrument required to be executed pursuant to this Section 3.5.
SECTION 3.6 Opinions as to Trust Estate. (a) On the Closing
Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel substantially in the form attached hereto as Exhibit C.
(b) On or before March 31, in each calendar year, beginning
in 2000, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action
has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any
other requisite documents and with respect to the execution and filing of
any financing statements and continuation statements as is necessary to
maintain the lien and security interest created by this Indenture and
reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and the execution and
filing of any financing statements and continuation statements that shall,
in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until March 31 in the following
calendar year.
SECTION 3.7 Performance of Obligations; Servicing of
Receivables. (a) The Issuer shall not take any action and shall use its
best efforts not to permit any action to be taken by others that would
release any Person from any of such Person's material covenants or
obligations under any instrument or agreement included in the Trust Estate
or that would result in the amendment, hypothecation, subordination,
termination or discharge of, or impair the validity or effectiveness of,
any such instrument or agreement, except as expressly provided in this
Indenture and the other Basic Documents.
(b) The Issuer may contract with other Persons to assist it
in performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee in an Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Servicer and the
Administrator to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer shall punctually perform and observe all of
its obligations and agreements contained in this Indenture, the Basic
Documents and in the instruments and agreements included in the Trust
Estate, including, but not limited to, filing or causing to be filed all
financing statements and continuation statements required to be filed under
the Relevant UCC by the terms of this Indenture and the Sale and Servicing
Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the
Issuer shall not waive, amend, modify, supplement or terminate any Basic
Document or any provision thereof without the consent of the Indenture
Trustee or the Holders of at least a majority of the principal amount of
the Notes Outstanding.
(d) If the Issuer shall have knowledge of the occurrence of
an Event of Servicing Termination under the Sale and Servicing Agreement,
the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies thereof and shall specify in such notice the action, if any, the
Issuer is taking in respect of such default. If an Event of Servicing
Termination shall arise from the failure of the Servicer to perform any of
its duties or obligations under the Sale and Servicing Agreement with
respect to the Receivables, the Issuer shall take all reasonable steps
available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of
termination to the Servicer of the Servicer's rights and powers pursuant to
Section 8.1 of the Sale and Servicing Agreement, the Issuer shall (subject
to the rights of the Indenture Trustee to direct such appointment pursuant
to Section 8.2 of the Sale and Servicing Agreement) appoint a successor
servicer (the "Successor Servicer"), and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to the
Indenture Trustee. In the event that a Successor Servicer has not been
appointed or has not accepted its appointment at the time when the Servicer
ceases to act as Servicer, the Indenture Trustee, without further action,
shall automatically be appointed the Successor Servicer. The Indenture
Trustee may resign as the Servicer by giving written notice of such
resignation to the Issuer and in such event shall be released from such
duties and obligations, such release not to be effective until the date a
new servicer enters into a servicing agreement with the Issuer as provided
below. Upon delivery of any such notice to the Issuer, the Issuer shall
obtain a new servicer as the Successor Servicer under the Sale and
Servicing Agreement. Any Successor Servicer (other than the Indenture
Trustee) shall (i) be an established financial institution having a net
worth of not less than $50,000,000 and whose regular business includes the
servicing of automotive installment sale contracts and (ii) enter into a
servicing agreement with the Issuer having substantially the same
provisions as the provisions of the Sale and Servicing Agreement applicable
to the Servicer. If, within thirty (30) days after the delivery of the
notice referred to above, the Issuer shall not have obtained such a new
servicer, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a Successor Servicer. In connection
with any such appointment, the Indenture Trustee may make such arrangements
for the compensation of such successor as it and such successor shall
agree, subject to the limitations set forth below and in the Sale and
Servicing Agreement, and in accordance with Section 8.2 of the Sale and
Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing of the Receivables (such agreement to be in
form and substance satisfactory to the Indenture Trustee). If the
Indenture Trustee shall succeed to the Servicer's duties as servicer of the
Receivables as provided herein, it shall do so in its individual capacity
and not in its capacity as Indenture Trustee and, accordingly, the
provisions of Article VI hereof shall be inapplicable to the Indenture
Trustee in its duties as the successor to the Servicer and the servicing of
the Receivables. If the Indenture Trustee shall become successor to the
Servicer under the Sale and Servicing Agreement, the Indenture Trustee
shall be entitled to appoint as Servicer any one of its Affiliates;
provided that the Indenture Trustee, in its capacity as the Servicer, shall
be fully liable for the actions and omissions of such Affiliate in such
capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and
powers pursuant to the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee. As soon as a Successor Servicer is
appointed by the Issuer, the Issuer shall notify the Indenture Trustee of
such appointment, specifying in such notice the name and address of such
Successor Servicer.
(g) Without derogating from the absolute nature of the
assignment granted to the Indenture Trustee under this Indenture or the
rights of the Indenture Trustee hereunder, the Issuer hereby agrees that it
shall not, without the prior written consent of the Indenture Trustee or
the Holders of at least a majority in principal amount of the Notes
Outstanding, amend, modify, waive, supplement, terminate or surrender, or
agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral (except to the extent otherwise
provided in the Sale and Servicing Agreement or the Basic Documents).
SECTION 3.8 Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this
Indenture, the Trust Agreement, the Purchase Agreement or the
Sale and Servicing Agreement, sell, transfer, exchange or
otherwise dispose of any of the properties or assets of the
Issuer, including those included in the Trust Estate, unless
directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any
deduction from the principal or interest payable in respect of,
the Notes (other than amounts properly withheld from such
payments under the Code or applicable state law) or assert any
claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon the Issuer;
(iii) dissolve or liquidate in whole or in
part; or
(iv) (A) permit the validity or effectiveness
of this Indenture to be impaired, or permit the lien of this
Indenture to be amended, hypothecated, subordinated, terminated
or discharged, or permit any Person to be released from any
covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit
any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be
created on or extend to or otherwise arise upon or burden the
assets of the Issuer or any part thereof or any interest therein
or the proceeds thereof or (C) permit the lien of this Indenture
not to constitute a valid first priority (other than with respect
to any such tax, mechanics' or other lien) security interest in
the Trust Estate.
SECTION 3.9 Annual Statement as to Compliance. The Issuer shall
deliver to the Indenture Trustee, on or before March 31 of each year
(commencing with the year 2000), an Officer's Certificate stating, as to
the Responsible Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer
during such year (or such shorter period, with respect to the
first such Officer's Certificate) and of its performance under
this Indenture has been made under such Responsible Officer's
supervision; and
(ii) to the best of such Responsible
Officer's knowledge, based on such review, the Issuer has
complied with all conditions and covenants under this Indenture
throughout such year (or such shorter period, with respect to the
first such Officer's Certificate), or, if there has been a
default in its compliance with any such condition or covenant,
specifying each such default known to such Responsible Officer
and the nature and status thereof.
SECTION 3.10 Issuer May Consolidate, etc., Only on Certain
Terms. (a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(i) the Person (if other than the Issuer)
formed by or surviving such consolidation or merger shall be a
Person organized and existing under the laws of the United States
of America or any State and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee,
the due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agreement
and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred
and be continuing;
(iii) the Rating Agency Condition shall have
been satisfied with respect to such transaction;
(iv) the Issuer shall have received an
Opinion of Counsel (and shall have delivered copies thereof to
the Indenture Trustee) to the effect that such transaction will
not have any material adverse tax consequence to the Issuer, any
Noteholder or any Certificateholder;
(v) any action that is necessary to maintain
the lien and security interest created by this Indenture shall
have been taken; and
(vi) the Issuer shall have delivered to the
Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such
transaction have been complied with (including any filing
required by the Exchange Act).
(b) Other than as specifically contemplated by the Basic
Documents, the Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person,
unless:
(i) the Person that acquires by conveyance
or transfer the properties and assets of the Issuer the
conveyance or transfer of which is hereby restricted shall (A) be
a United States citizen or a Person organized and existing under
the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed
and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in
such supplemental indenture, expressly agrees to indemnify,
defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture
and the Notes, and (E) expressly agrees by means of such
supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with
the Commission (and any other appropriate Person) required by the
Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred
and be continuing;
(iii) the Rating Agency Condition shall have
been satisfied with respect to such transaction;
(iv) the Issuer shall have received an
Opinion of Counsel (and shall have delivered copies thereof to
the Indenture Trustee) to the effect that such transaction will
not have any material adverse tax consequence to the Issuer, any
Noteholder or any Certificateholder;
(v) any action that is necessary to maintain
the lien and security interest created by this Indenture shall
have been taken; and
(vi) the Issuer shall have delivered to the
Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such
transaction have been complied with (including any filing
required by the Exchange Act).
SECTION 3.11 Successor of Transferee. (a) Upon any
consolidation or merger of the Issuer in accordance with Section 3.10(a),
the Person formed by or surviving such consolidation or merger (if other
than the Issuer) shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10(b), the Issuer shall be
released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee
stating that the Issuer is to be so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in
any business other than financing, acquiring, owning and pledging the
Receivables in the manner contemplated by this Indenture and the other
Basic Documents and activities incidental thereto.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for
any indebtedness except for the Notes.
SECTION 3.14 Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Sale and Servicing Agreement, including
Sections 3.7, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14 and 4.11 and Article VII
thereof.
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by this Indenture and the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable,
directly or indirectly, in connection with the obligations, stocks or
dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other
Person.
SECTION 3.16 Capital Expenditures. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
SECTION 3.17 Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.18 Restricted Payments. The Issuer shall not,
directly or indirectly, (i) make any distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest
or security or (iii) set aside or otherwise segregate any amounts for any
such purpose; provided, however, that the Issuer may make, or cause to be
made, (x) payments to the Servicer, the Owner Trustee and the
Certificateholders as contemplated by, and to the extent funds are
available for such purpose under, the Sale and Servicing Agreement or the
Trust Agreement and (y) payments to the Indenture Trustee pursuant to
Section 1(a)(ii) of the Administration Agreement. The Issuer shall not,
directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the other
Basic Documents.
SECTION 3.19 Notice of Events of Default. The Issuer shall give
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and of each default on the part of any party to
the Sale and Servicing Agreement or the Purchase Agreement with respect to
any of the provisions thereof.
SECTION 3.20 Removal of Administrator. For so long as any Notes
are Outstanding, the Issuer shall not remove the Administrator without
cause unless the Rating Agency Condition shall have been satisfied in
connection therewith.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes
except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon,
(iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12 and 3.13 hereof, (v) the
rights, obligations and immunities of the Indenture Trustee hereunder
(including the rights of the Indenture Trustee under Section 6.7 and the
obligations of the Indenture Trustee under Section 4.3), and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and
the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when either:
(A) all Notes of all Classes theretofore authenticated and
delivered (other than (i) Notes that have been destroyed, lost or
stolen and that have been replaced or paid as provided in Section
2.6 and (ii) Notes for whose payment money has theretofore been
irrevocably deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3) have been delivered to
the Indenture Trustee for cancellation; or
(B) each of the following:
(1) all Notes not theretofore delivered to the Indenture Trustee
for cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be irrevocably deposited with
the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust
for such purpose, in an amount sufficient to pay and discharge
the entire indebtedness on such Notes not theretofore delivered
to the Indenture Trustee for cancellation when due to the
applicable Final Payment Date or Redemption Date (if Notes shall
have been called for redemption pursuant to Section 10.1(a)), as
the case may be;
(2) the Issuer has paid or caused to be paid all other sums
payable by the Issuer hereunder and under the other Basic
Documents;
(3) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by
the TIA or the Indenture Trustee) an Independent Certificate from
a firm of certified public accountants, each meeting the
applicable requirements of Section 11.1(a) and, subject to
Section 11.2, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with; and
(4) the Issuer has delivered to the Indenture Trustee an Opinion
of Counsel to the effect that the satisfaction and discharge of
the Notes pursuant to this Section 4.1 will not cause any
Noteholder to be treated as having sold or exchanged any of its
Notes for purposes of Section 1001 of the Code.
SECTION 4.2 Satisfaction, Discharge and Defeasance of the Notes.
(a) Upon satisfaction of the conditions set forth in
subsection (b) below, the Issuer shall be deemed to have paid and
discharged the entire indebtedness on all the Notes Outstanding, and the
provisions of this Indenture, as it relates to such Notes, shall no longer
be in effect (and the Indenture Trustee, at the expense of the Issuer,
shall execute proper instruments acknowledging the same), except as to:
(i) the rights of Holders of Notes to
receive, from the trust funds described in subsection (b)(i)
hereof, payment of the principal of and interest on the Notes
Outstanding at maturity of such principal or interest;
(ii) the obligations of the Issuer with
respect to the Notes under Sections 2.5, 2.6, 3.2 and 3.3 hereof;
(iii) the obligations of the Issuer to the
Indenture Trustee under Section 6.7 hereof; and
(iv) the rights, powers, trusts and
immunities of the Indenture Trustee hereunder and the duties of
the Indenture Trustee hereunder.
(b) The satisfaction, discharge and defeasance of the Notes
pursuant to subsection (a) of this Section 4.2 is subject to the
satisfaction of all of the following conditions:
(i) the Issuer has deposited or caused to be
deposited irrevocably (except as provided in Section 4.4 hereof)
with the Indenture Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of
the Holders of the Notes, which, through the payment of interest
and principal in respect thereof in accordance with their terms
will provide, not later than one day prior to the due date of any
payment referred to below, money in an amount sufficient, in the
opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof
delivered to the Indenture Trustee, to pay and discharge the
entire indebtedness on the Notes Outstanding, for principal
thereof and interest thereon to the date of such deposit (in the
case of Notes that have become due and payable) or to the
maturity of such principal and interest, as the case may be;
(ii) such deposit will not result in a breach
or violation of, or constitute an event of default under, any
other agreement or instrument to which the Issuer is bound;
(iii) no Event of Default with respect to the
Notes shall have occurred and be continuing on the date of such
deposit or on the ninety-first (91st) day after such date;
(iv) the Issuer has delivered to the
Indenture Trustee an Opinion of Counsel to the effect that the
satisfaction, discharge and defeasance of the Notes pursuant to
this Section 4.2 will not cause any Noteholder to be treated as
having sold or exchanged any of its Notes for purposes of Section
1001 of the Code; and
(v) the Issuer has delivered to the
Indenture Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to
the defeasance contemplated by this Section 4.2 have been
complied with.
SECTION 4.3 Application of Trust Money. All monies deposited
with the Indenture Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes
for the payment or redemption of which such monies have been deposited with
the Indenture Trustee, of all sums due and to become due thereon for
principal and interest, but such monies need not be segregated from other
funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.
SECTION 4.4 Repayment of Monies Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all monies then held by any Paying Agent other than
the Indenture Trustee under the provisions of this Indenture with respect
to such Notes shall, upon demand of the Issuer, be paid to the Indenture
Trustee to be held and applied according to Section 3.3 and thereupon such
Paying Agent shall be released from all further liability with respect to
such monies.
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default. "Event of Default," wherever
used herein, means the occurrence of any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of any interest
on any Note when the same becomes due and payable, and such
default shall continue for a period of five (5) days or more; or
(ii) default in the payment of the principal
of or any installment of the principal of any Note when the same
becomes due and payable, including with respect to each Class of
Notes, the Final Payment Date for such Class; or
(iii) default in the observance or performance
of any material covenant or agreement of the Issuer made in this
Indenture (other than a covenant or agreement, a default in the
observance or performance of which is elsewhere in this Section
5.1 specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or
other writing delivered pursuant hereto or in connection herewith
proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall
continue or not be cured, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period
of sixty (60) days or in the case of a materially incorrect
representation and warranty thirty (30) days, after there shall
have been given, by registered or certified mail, to the Issuer
by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of not less than 25% of the principal
amount of the Notes Outstanding, a written notice specifying such
default or incorrect representation or warranty and requiring it
to be remedied and stating that such notice is a notice of
Default hereunder; or
(iv) the filing of a decree or order for
relief by a court having jurisdiction in the premises in respect
of the Issuer or any substantial part of the Trust Estate in an
involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or
ordering the winding-up or liquidation of the Issuer's affairs,
and such decree or order shall remain unstayed and in effect for
a period of sixty (60) consecutive days; or
(v) the commencement by the Issuer of a
voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or
the consent by the Issuer to the entry of an order for relief in
an involuntary case under any such law, or the consent by the
Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for
the benefit of creditors, or the failure by the Issuer generally
to pay its debts as such debts become due, or the taking of any
action by the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any Default which with the giving of notice and the lapse of
time would become an Event of Default under clause (iii), its status and
what action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default should occur and be continuing, then and in
every such case the Indenture Trustee or the Holders of Notes representing
not less than a majority of the principal amount of the Notes Outstanding,
voting as a group, may declare all the Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the Indenture
Trustee if given by Noteholders), and upon any such declaration the unpaid
principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
(b) At any time after a declaration of acceleration of
maturity has been made and before a judgment or decree for payment of the
amount due has been obtained by the Indenture Trustee as hereinafter
provided in this Article V, the Holders of Notes representing a majority of
the principal amount of the Notes Outstanding voting as a group, by written
notice to the Issuer and the Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Issuer has paid or deposited with
the Indenture Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on
all Notes and all other amounts that would then be due hereunder
or upon such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel and other amounts due and owing to the
Indenture Trustee pursuant to Section 6.7; and
(ii) all Events of Default, other than the
nonpayment of the principal of the Notes that has become due
solely by such acceleration, have been cured or waived as
provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee. (a) The Issuer covenants that if (i) there is a
default in the payment of any interest on any Note when the same becomes
due and payable, and such default continues for a period of five (5) days,
or (ii) there is a default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable, the Issuer shall, upon demand of the Indenture Trustee, pay to the
Indenture Trustee, for the benefit of the Holders of the Notes, the whole
amount then due and payable on the Notes for principal and interest, with
interest upon the overdue principal at the applicable Note Interest Rate
and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest at the applicable Note
Interest Rate and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel and other amounts due and
owing to the Indenture Trustee pursuant to Section 6.7.
(b) In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name and as
trustee of an express trust, may institute a Proceeding for the collection
of the sums so due and unpaid, and may prosecute such Proceeding to
judgment or final decree, and may enforce the same against the Issuer or
other obligor upon the Notes and collect in the manner provided by law out
of the property of the Issuer or other obligor upon the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.4, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings as the Indenture Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee
by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer
or any other obligor upon the Notes or any Person having or claiming an
ownership interest in the Trust Estate, Proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee
in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Issuer or
its property or such other obligor or Person, or in case of any other
comparable judicial Proceedings relative to the Issuer or other obligor
upon the Notes, or to the creditors or property of the Issuer or such other
obligor, the Indenture Trustee, irrespective of whether the principal of
any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to the provisions of this Section 5.3,
shall be entitled and empowered, by intervention in such Proceedings or
otherwise:
(i) to file and prove a claim or claims for
the whole amount of principal and interest owing and unpaid in
respect of the Notes and to file such other papers or documents
as may be necessary or advisable in order to have the claims of
the Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and
counsel, and all other amounts due and owing to the Indenture
Trustee pursuant to Section 6.7) and of the Noteholders allowed
in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of Notes in any
election of a trustee, a standby trustee or Person performing
similar functions in any such Proceedings;
(iii) to collect and receive any monies or
other property payable or deliverable on any such claims and to
pay all amounts received with respect to the claims of the
Noteholders and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee or the Holders of Notes
allowed in any judicial proceedings relative to the Issuer, its
creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official
in any such Proceeding is hereby authorized by each of such Noteholders to
make payments to the Indenture Trustee and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Indenture Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other amounts due and owing to the Indenture Trustee
pursuant to Section 6.7.
(e) Nothing herein contained shall be deemed to authorize
the Indenture Trustee to authorize or consent to or vote for or accept or
adopt on behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Noteholder in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture
Trustee without the possession of any of the Notes or the production
thereof in any trial or other Proceedings relative thereto, and any such
action or Proceedings instituted by the Indenture Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
compensation of the Indenture Trustee, each predecessor Indenture Trustee
and their respective agents and attorneys, shall be for the ratable benefit
of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee
(and also any Proceedings involving the interpretation of any provision of
this Indenture to which the Indenture Trustee shall be a party), the
Indenture Trustee shall be held to represent all the Noteholders, and it
shall not be necessary to make any Noteholder a party to any such
Proceedings.
SECTION 5.4 Remedies; Priorities. (a) If an Event of Default
shall have occurred and be continuing, the Indenture Trustee may, but shall
not be obligated to, do one or more of the following (subject to Section
5.5):
(i) institute Proceedings in its own name
and as trustee of an express trust for the collection of all
amounts then payable on the Notes or under this Indenture with
respect thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other
obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time
for the complete or partial foreclosure of this Indenture with
respect to the Trust Estate;
(iii) exercise any remedies of a secured party
under the Relevant UCC and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture
Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion
thereof or rights or interest therein, at one or more public or
private sales called and conducted in any manner permitted by
law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an
Event of Default described in Section 5.1(i) or (ii), unless (A) the
Holders of 100% of the principal amount of the Notes Outstanding, voting as
a group, consent thereto, (B) the proceeds of such sale or liquidation are
sufficient to pay in full the principal of and the accrued interest on the
outstanding Notes or (C) the Indenture Trustee determines that the Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Holders of 66-2/3% of the principal amount of the
Notes Outstanding, voting as a group. In determining such sufficiency or
insufficiency with respect to clauses (B) and (C) above, the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall pay out the money or property in the
order of priority set forth in Section 2.8(f).
(c) The Indenture Trustee may fix a record date and payment
date for any payment to Noteholders pursuant to this Section 5.4. At least
fifteen (15) days before such record date, the Issuer shall mail to each
Noteholder and the Indenture Trustee a notice that states the record date,
the payment date and the amount to be paid.
SECTION 5.5 Optional Preservation of the Receivables. If the
Notes have been declared to be due and payable under Section 5.2 following
an Event of Default, and such declaration and its consequences have not
been rescinded and annulled, the Indenture Trustee may, but need not, elect
to maintain possession of the Trust Estate and apply proceeds as if there
had been no declaration of acceleration; provided, however, that Total
Available Funds shall be applied in accordance with such declaration of
acceleration in the manner specified in Section 4.6(c) of the Sale and
Servicing Agreement. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes, and the Indenture Trustee shall
take such desire into account when determining whether or not to maintain
possession of the Trust Estate. In determining whether to maintain
possession of the Trust Estate, the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such
purpose.
SECTION 5.6 Limitation of Suits. No Holder of any Note shall
have any right to institute any Proceeding, judicial or otherwise, with
respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the principal
amount of the Notes Outstanding have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of Default in
its own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to
be incurred in complying with such request;
(d) the Indenture Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity has failed to
institute such Proceedings; and
(e) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the principal amount of the Notes Outstanding.
It is understood and intended that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of
any other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the principal amount of
the Notes Outstanding, the Indenture Trustee in its sole discretion may
determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.7 Unconditional Rights of Noteholders To Receive
Principal and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute
and unconditional, to receive payment of the principal of and interest on,
if any, such Note on or after the respective due dates thereof expressed in
such Note or in this Indenture (or, in the case of redemption, on or after
the Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 5.8 Restoration of Rights and Remedies. If the
Indenture Trustee or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has
been discontinued or abandoned for any reason or has been determined
adversely to the Indenture Trustee or to such Noteholder, then and in every
such case the Issuer, the Indenture Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair
any such right or remedy or constitute a waiver of any such Default or
Event of Default or any acquiescence therein. Every right and remedy given
by this Article V or by law to the Indenture Trustee or to the Noteholders
may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may
be.
SECTION 5.11 Control by Noteholders. The Holders of a majority
of the principal amount of the Notes Outstanding shall have the right to
direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided
that:
(a) such direction shall not be in conflict with any rule
of law or with this Indenture;
(b) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the Trust Estate
shall be by Holders of Notes representing not less than 100% of the
principal amount of the Notes Outstanding;
(c) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
Holders of Notes representing less than 100% of the principal amount of the
Notes Outstanding to sell or liquidate the Trust Estate shall be of no
force and effect; and
(d) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this Section,
subject to Section 6.1, the Indenture Trustee need not take any action that
it reasonably believes might involve it in costs, expenses and liabilities
for which it will not be adequately indemnified or might materially
adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.12 Waiver of Past Defaults. Prior to the declaration
of the acceleration of the maturity of the Notes as provided in Section
5.2, the Holders of Notes representing not less than a majority of the
principal amount of the Notes Outstanding, voting as a group, may waive any
past Default or Event of Default and its consequences except a Default or
Event of Default (a) in the payment of principal of or interest on any of
the Notes or (b) in respect of a covenant or provision hereof that cannot
be amended, supplemented or modified without the consent of the Holder of
each Note. In the case of any such waiver, the Issuer, the Indenture
Trustee and the Holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
Upon any such waiver, such Default or Event of Default shall
cease to exist and be deemed to have been cured and not to have occurred,
and any Event of Default arising therefrom shall be deemed to have been
cured and not to have occurred, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by such Holder's acceptance
thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Indenture Trustee for any
action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorney's fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section
5.13 shall not apply to (a) any suit instituted by the Indenture Trustee,
(b) any suit instituted by any Noteholder or group of Noteholders, in each
case holding in the aggregate more than 10% of the principal amount of the
Notes Outstanding or (c) any suit instituted by any Noteholder for the
enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture
(or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it shall not at
any time insist upon, or plead or in any manner whatsoever, claim or take
the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture, and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor
any rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against
the Issuer or by the levy of any execution under such judgment upon any
portion of the Trust Estate or upon any of the assets of the Issuer. Any
money or property collected by the Indenture Trustee shall be applied in
accordance with Section 5.4(b).
SECTION 5.16 Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so, and
at the Administrator's expense, the Issuer shall take all such lawful
action as the Indenture Trustee may request to compel or secure the
performance and observance by the Seller and the Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Sale and Servicing Agreement or by the Seller of each of its obligations
under or in connection with the Purchase Agreement, and to exercise any and
all rights, remedies, powers and privileges lawfully available to the
Issuer under or in connection with the Sale and Servicing Agreement to the
extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller or the
Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing
Agreement.
(b) If an Event of Default has occurred and is continuing,
the Indenture Trustee may, and at the direction (which direction shall be
in writing or by telephone, confirmed in writing promptly thereafter) of
the Holders of 66-2/3% of the principal amount of the Notes Outstanding,
voting as a group, shall, exercise all rights, remedies, powers, privileges
and claims of the Issuer against the Seller or the Servicer under or in
connection with the Sale and Servicing Agreement, or against the Seller
under or in connection with the Purchase Agreement, including the right or
power to take any action to compel or secure performance or observance by
the Seller or the Servicer, as the case may be, of each of their
obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension, or waiver under the Sale and
Servicing Agreement or the Purchase Agreement, as the case may be, and any
right of the Issuer to take such action shall be suspended.
(c) Promptly following a request from the Indenture Trustee
to do so and at the Administrator's expense, the Issuer agrees to take all
such lawful action as the Indenture Trustee may request to compel or secure
the performance and observance by MMCA of each of its obligations to the
Seller under or in connection with the Purchase Agreement in accordance
with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in
connection with the Purchase Agreement to the extent and in the manner
directed by the Indenture Trustee, including the transmission of notices of
default on the part of the Seller thereunder and the institution of legal
or administrative actions or proceedings to compel or secure performance by
MMCA of each of its obligations under the Purchase Agreement.
(d) If an Event of Default has occurred and is continuing,
the Indenture Trustee may, and, at the direction (which direction shall be
in writing or by telephone (confirmed in writing promptly thereafter)) of
the Holders of 66-2/3% of the principal amount of the Notes Outstanding,
voting as a group, shall, exercise all rights, remedies, powers, privileges
and claims of the Seller against MMCA under or in connection with the
Purchase Agreement, including the right or power to take any action to
compel or secure performance or observance by MMCA of each of its
obligations to the Seller thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Purchase
Agreement, and any rights of the Seller to take such action shall be
suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee. (a) If an Event of
Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to
perform such duties and only such duties as are specifically set
forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Indenture Trustee;
and
(ii) in the absence of bad faith on its part,
the Indenture Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Indenture
Trustee and, if required by the terms of this Indenture,
conforming to the requirements of this Indenture; however, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that:
(i) this paragraph does not limit the effect
of paragraph (b) of this Section 6.1;
(ii) the Indenture Trustee shall not be
liable for any error of judgment made in good faith by a
Responsible Officer unless it is proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be
liable with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it pursuant
to Section 5.11.
(d) Every provision of this Indenture that in any way
relates to the Indenture Trustee is subject to paragraphs (a), (b), (c),
(e) and (g) of this Section 6.1.
(e) The Indenture Trustee shall not be liable for interest
on any money received by it except as the Indenture Trustee may agree in
writing with the Issuer.
(f) Money held in trust by the Indenture Trustee need not
be segregated from other funds except to the extent required by law or the
terms of this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the
Indenture Trustee shall be subject to the provisions of this Section 6.1
and to the provisions of the TIA.
(i) The Indenture Trustee shall not be charged with
knowledge of any Event of Default unless either (1) a Responsible Officer
shall have actual knowledge of such Event of Default or (2) written notice
of such Event of Default shall have been given to the Indenture Trustee in
accordance with the provisions of this Indenture.
SECTION 6.2 Rights of Indenture Trustee. (a) The Indenture
Trustee may rely on any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Indenture Trustee need
not investigate any fact or matters stated in the document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may require an Officer's Certificate or an Opinion of Counsel.
The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on an Officer's Certificate or Opinion of
Counsel unless it is proved that the Indenture Trustee was negligent in
such reliance.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Indenture
Trustee shall not be responsible for any misconduct or negligence on the
part of, or for the supervision of, any such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, however, that such
action or omission by the Indenture Trustee does not constitute willful
misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Noteholders pursuant to this Indenture,
unless such Noteholders shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document, but
the Indenture Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Indenture Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Issuer, personally or by agent or attorney.
SECTION 6.3 Individual Rights of Indenture Trustee. The
Indenture Trustee, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Indenture
Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent
hereunder may do the same with like rights.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture
Trustee (i) shall not be responsible for, and makes no representation, as
to the validity or adequacy of this Indenture or the Notes and (ii) shall
not be accountable for the Issuer's use of the proceeds from the Notes, or
responsible for any statement of the Issuer in this Indenture or in any
document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder notice of such
Default within ninety (90) days after it occurs. Except in the case of a
Default in payment of principal of or interest on any Note (including
payments pursuant to the mandatory redemption provisions of such Note), the
Indenture Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the
notice is in the interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. Within a
reasonable period of time after the end of each calendar year, but not
later than the latest date permitted by law, in each case as determined by
the Servicer, the Indenture Trustee shall deliver to each Person who at any
time during the preceding calendar year was a Noteholder a statement
prepared by the Servicer pursuant to Section 3.9 of the Sale and Servicing
Agreement containing the information which is required to be expressed in
the Payment Date statements as a dollar amount per $1,000 of original
denomination of the Notes or Class of Notes, as applicable, aggregated for
such calendar year, for the purposes of such Noteholder's preparation of
Federal income tax returns.
SECTION 6.7 Compensation and Indemnity. (a) The Issuer shall,
or shall cause the Administrator to, pay to the Indenture Trustee from time
to time reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee
of an express trust. The Issuer shall, or shall cause the Administrator
to, reimburse the Indenture Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer
shall, or shall cause the Administrator to, indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify
the Issuer and the Administrator promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee to so notify the Issuer
and the Administrator shall not relieve the Issuer or the Administrator of
its obligations hereunder. The Issuer shall, or shall cause the Servicer
to, defend any such claim, and the Indenture Trustee may have separate
counsel and the Issuer shall, or shall cause the Servicer to, pay the fees
and expenses of such counsel. Neither the Issuer nor the Administrator
need reimburse any expense or indemnity against any loss, liability or
expense incurred by the Indenture Trustee through the Indenture Trustee's
own willful misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture
Trustee pursuant to this Section 6.7 shall survive the resignation or
removal of the Indenture Trustee and the discharge of this Indenture. When
the Indenture Trustee incurs expenses after the occurrence of a Default
specified in Section 5.1(iv) or (v) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
SECTION 6.8 Replacement of Indenture Trustee. (a) No resignation
or removal of the Indenture Trustee, and no appointment of a successor
Indenture Trustee, shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section
6.8. The Indenture Trustee may resign at any time by so notifying the
Issuer. The Holders of a majority in principal amount of the Notes
Outstanding, voting as a group, may remove the Indenture Trustee without
cause by so notifying the Indenture Trustee and the Issuer and may appoint
a successor Indenture Trustee. The Issuer shall remove the Indenture
Trustee if:
(i) the Indenture Trustee fails to comply
with Section 6.11;
(ii) the Indenture Trustee is adjudged a
bankrupt or insolvent;
(iii) a receiver or other public officer takes
charge of the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes
incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee.
(b) Any successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon, the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall
have all the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
(c) If a successor Indenture Trustee does not take office
within sixty (60) days after the retiring Indenture Trustee resigns or is
removed, the retiring Indenture Trustee, the Issuer or the Holders of a
majority in principal amount of the Notes Outstanding may petition any
court of competent jurisdiction to appoint a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction to remove the Indenture
Trustee and to appoint a successor Indenture Trustee.
(d) Notwithstanding the replacement of the Indenture
Trustee pursuant to this Section 6.8, the Issuer's and the Administrator's
obligations under Section 6.7 shall continue for the benefit of the
retiring Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. (a) If the
Indenture Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11.
The Indenture Trustee shall provide the Rating Agencies with prior written
notice of any such transaction.
(b) If at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Notes so authenticated, and if at that time any
of the Notes shall not have been authenticated, any successor to the
Indenture Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Indenture
Trustee. In all such cases such certificates shall have the full force
which it is anywhere in the Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee. (a) Notwithstanding any other provisions of this
Indenture, at any time, for the purpose of meeting any legal requirement of
any jurisdiction in which any part of the Trust Estate may at the time be
located, the Indenture Trustee shall have the power and may execute and
deliver an instrument to appoint one or more Persons to act as a co-trustee
or co-trustees, or separate trustee or separate trustees, of all or any
part of the Trust Estate, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Trust
Estate, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall
be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and
obligations conferred or imposed upon the Indenture Trustee shall
be conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee
shall not be authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are
to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of
title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
(ii) no trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee
hereunder; and
(iii) the Indenture Trustee may at any time
remove or accept the resignation of any separate trustee or co-
trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of
them. Every instrument appointing any separate trustee or co-trustee shall
refer to this Indenture and the conditions of this Article VI. Each
separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of
this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed
with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee as its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do any lawful
act under or in respect of this Agreement on its behalf and in its name.
If any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Indenture
Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 6.11 Eligibility; Disqualification. (a) The Indenture
Trustee shall at all times satisfy the requirements of TIA Section 310(a).
The Indenture Trustee or its parent shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition and shall have a long-term debt rating of
investment grade by each of the Rating Agencies or shall otherwise be
acceptable to each of the Rating Agencies. The Indenture Trustee shall
comply with TIA Section 310(b).
(b) Within ninety (90) days after ascertaining the
occurrence of an Event of Default which shall not have been cured or
waived, unless authorized by the Commission, the Indenture Trustee shall
resign with respect to the Class A Notes and/or the Class B Notes in
accordance with Section 6.8 of this Indenture, and the Issuer shall appoint
a successor Indenture Trustee for one or both of such Classes, as
applicable, so that there will be separate Indenture Trustees for the Class
A Notes and the Class B Notes. In the event the Indenture Trustee fails to
comply with the terms of the preceding sentence, the Indenture Trustee
shall comply with clauses (ii) and (iii) of TIA Section 310(b).
(c) In the case of the appointment pursuant to this Section
6.11 of a successor Indenture Trustee with respect to any Class of Notes,
the Issuer, the retiring Indenture Trustee and the successor Indenture
Trustee with respect to such Class of Notes shall execute and deliver an
indenture supplemental hereto wherein each successor Indenture Trustee
shall accept such appointment and which (i) shall contain such provisions
as shall be necessary or desirable to transfer and confirm to, and to vest
in, the successor Indenture Trustee all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes of the
Class to which the appointment of such successor Indenture Trustee relates,
(ii) if the retiring Indenture Trustee is not retiring with respect to all
Classes of Notes, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes of each
Class as to which the retiring Indenture Trustee is not retiring shall
continue to be vested in the Indenture Trustee and (iii) shall add to or
change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by
more than one Indenture Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Indenture Trustees co-
trustees of the same trust and that each such Indenture Trustee shall be a
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Indenture Trustee; and upon
the removal of the retiring Indenture Trustee shall become effective to the
extent provided herein.
SECTION 6.12 Preferential Collection of Claims Against Issuer.
The Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee
who has resigned or been removed shall be subject to TIA Section 311(a) to
the extent indicated.
SECTION 6.13 Pennsylvania Motor Vehicle Sales Finance Act
Licenses. The Indenture Trustee shall use its best efforts to maintain the
effectiveness of all licenses required under the Pennsylvania Motor Vehicle
Sales Finance Act in connection with this Indenture and the transactions
contemplated hereby until the lien and security interest of this Indenture
shall no longer be in effect in accordance with the terms hereof.
ARTICLE VII
NOTEHOLDERS' LISTS; REPORTING
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuer shall furnish or cause to be
furnished to the Indenture Trustee (a) not more than five (5) days after
each Record Date, a list, in such form as the Indenture Trustee may
reasonably require, of the names and addresses of the Holders of Notes as
of such Record Date and (b) at such other times as the Indenture Trustee
may request in writing, within thirty (30) days after receipt by the Issuer
of any such request, a list of similar form and content as of a date not
more than ten (10) days prior to the time such list is furnished; provided,
however, that so long as (i) the Indenture Trustee is the Note Registrar or
(ii) the Notes are issued as Book-Entry Notes, no such list shall be
required to be furnished.
SECTION 7.2 Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of the Holders
of Notes contained in the most recent list furnished to the Indenture
Trustee as provided in Section 7.1 and the names and addresses of Holders
of Notes received by the Indenture Trustee in its capacity as Note
Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in such Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section
312(b) with other Noteholders with respect to their rights under this
Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note
Registrar shall have the protection of TIA Section 312(c).
SECTION 7.3 Reporting by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within
fifteen (15) days after the Issuer is required to file the same
with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) that the Issuer may
be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the
Commission in accordance with the rules and regulations
prescribed from time to time by the Commission such additional
information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants of this Indenture as
may be required from time to time by such rules and regulations;
and
(iii) supply to the Indenture Trustee (and the
Indenture Trustee shall transmit by mail to all Noteholders
described in TIA Section 313(c)) such summaries of any
information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a)
and by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year
of the Issuer shall correspond to the calendar year.
SECTION 7.4 Reporting and Notices by Indenture Trustee. (a) If
required by TIA Section 313(a), within sixty (60) days after each March 31,
beginning with March 31, 2000, the Indenture Trustee shall mail to each
Noteholder as required by TIA Section 313(c) a brief report dated as of
such date that complies with TIA Section 313(a). The Indenture Trustee
also shall comply with TIA Section 313(b).
(b) A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the Commission and
each stock exchange, if any, on which the Notes are listed. The Issuer
shall notify the Indenture Trustee if and when the Notes are listed on any
stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of,
and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture and the Sale and Servicing Agreement. The Indenture Trustee
shall apply all such money received by it as provided in this Indenture and
the Sale and Servicing Agreement. Except as otherwise expressly provided
in this Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the Trust
Estate, the Indenture Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.2 Trust Accounts. (a) On or prior to the Closing
Date, the Issuer shall cause the Servicer to establish and maintain, in the
name of the Indenture Trustee, (i) for the benefit of the Noteholders and
the Certificateholders, each of the Trust Accounts other than the Negative
Carry Account and the Note Payment Account as provided in Sections 4.1,
4.7, and 5.1 of the Sale and Servicing Agreement and (ii) for the exclusive
benefit of the Noteholders, the Negative Carry Account and the Note Payment
Account as provided in Sections 4.1(c), 4.1(d) and 4.12 of the Sale and
Servicing Agreement.
(b) On or before each Payment Date, the Servicer shall
deposit in the Collection Account all amounts required to be deposited
therein with respect to the related Collection Period as provided in
Sections 4.2 and 4.4 of the Sale and Servicing Agreement. On or before
each Payment Date, all amounts required to be deposited in the Note Payment
Account with respect to the related Collection Period pursuant to Sections
4.6 and 4.7 of the Sale and Servicing Agreement shall be withdrawn by the
Indenture Trustee from the Collection Account, the Supplemental Reserve
Account and/or the Reserve Account and deposited to the Note Payment
Account for payment to Noteholders in accordance with Section 2.8 on such
Payment Date.
SECTION 8.3 General Provisions Regarding Accounts. (a) So long
as no Default or Event of Default shall have occurred and be continuing,
all or a portion of the funds in the Collection Account, the Pre-Funding
Account, the Payahead Account, the Reserve Account, the Supplemental
Reserve Account, the Negative Carry Account and the Yield Supplement
Account shall be invested by the Indenture Trustee at the direction of the
Servicer in Permitted Investments as provided in Sections 4.1, 4.7 and 5.1
of the Sale and Servicing Agreement. All income or other gain (net of
losses and investment expenses) from investments of monies deposited in the
Collection Account, the Pre-Funding Account, the Payahead Account, the
Reserve Account, the Supplemental Reserve Account, the Negative Carry
Account and the Yield Supplement Account shall be withdrawn by the
Indenture Trustee from such accounts and distributed (but only under the
circumstances set forth in the Sale and Servicing Agreement in the case of
the Pre-Funding Account, the Reserve Account, the Supplemental Reserve
Account, the Negative Carry Account and the Yield Supplement Account) as
provided in Sections 4.1, 4.7, 4.8, 4.9 and 5.1 of the Sale and Servicing
Agreement. The Servicer shall not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in any of the Trust
Accounts unless the security interest Granted and perfected in such account
will continue to be perfected in such investment or the proceeds of such
sale, in either case without any further action by any Person, and, in
connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall
not in any way be held liable by reason of any insufficiency in any of the
Trust Accounts resulting from any loss on any Permitted Investment included
therein, except for losses attributable to the Indenture Trustee's failure
to make payments on such Permitted Investments issued by the Indenture
Trustee, in its commercial capacity as principal obligor and not as
trustee, in accordance with their terms.
(c) If (i) the Servicer shall have failed to give
investment directions to the Indenture Trustee by 11:00 a.m., New York Time
(or such other time as may be agreed by the Issuer and Indenture Trustee),
on the Business Day preceding each Payment Date for any funds on deposit in
the Collection Account, the Pre-Funding Account, the Payahead Account, the
Reserve Account, the Supplemental Reserve Account, the Negative Carry
Account or the Yield Supplement Account, (ii) to the knowledge of a
Responsible Officer of the Indenture Trustee, a Default or Event of Default
shall have occurred and be continuing with respect to the Notes but the
Notes shall not have been declared due and payable pursuant to Section 5.2
or (iii) the Notes shall have been declared due and payable following an
Event of Default and amounts collected or receivable from the Trust Estate
are being applied in accordance with Section 5.4 as if there had not been
such a declaration, then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in such Trust Accounts in one or
more Permitted Investments as set forth in Schedule I hereto.
SECTION 8.4 Release of Trust Estate. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.7, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article VIII shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are
no Notes Outstanding and all sums due the Indenture Trustee pursuant to
Section 6.7 have been paid in full, release any remaining portion of the
Trust Estate that secured the Notes from the lien of this Indenture and
release to the Issuer or any other Person entitled thereto any funds then
on deposit in the Trust Accounts. The Indenture Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.4(b)
only upon receipt of (i) an Issuer Request accompanied by an Officer's
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent, if any, provided for in this Indenture relating to
the release of the property from the lien of this Indenture have been
complied with, provided that counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in
connection with any such action and (ii) if required by the TIA,
Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1.
SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall
receive at least seven (7) days notice when requested by the Issuer to take
any action pursuant to Section 8.4(a), accompanied by copies of any
instruments involved, and the Indenture Trustee shall also require, except
in connection with any action contemplated by Section 8.4(b), as a
condition to such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding
that all conditions precedent to the taking of such action have been
complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders in contravention of
the provisions of this Indenture; provided, however, that such Opinion of
Counsel shall not be required to express an opinion as to the fair value of
the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate
or other instrument delivered to the Indenture Trustee in connection with
any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders. (a) Without the consent of the Holders of any Notes but with
prior notice to the Rating Agencies, the Issuer and the Indenture Trustee,
when authorized by an Issuer Order, at any time and from time to time, may
enter into one or more indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as in force at the date of the
execution thereof), in form satisfactory to the Indenture Trustee, for any
of the following purposes:
(i) to correct or amplify the description of
any property at any time subject to the lien of this Indenture,
or better to assure, convey and confirm unto the Indenture
Trustee any property subject or required to be subjected to the
lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in
compliance with the applicable provisions hereof, of another
Person to the Issuer, and the assumption by any such successor of
the covenants of the Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer,
for the benefit of the Holders of the Notes, or to surrender any
right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or
pledge any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or
supplement any provision herein or in any supplemental indenture
that may be inconsistent with any other provision herein or in
any supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture
which will not be inconsistent with other provisions of the
Indenture;
(vi) to evidence and provide for the
acceptance of the appointment hereunder by a successor trustee
with respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to facilitate
the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the
provisions of this Indenture to such extent as shall be necessary
to effect the qualification of this Indenture under the TIA or
under any similar federal statute hereafter enacted and to add to
this Indenture such other provisions as may be expressly required
by the TIA;
provided, however, that (i) such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder, (ii) the Rating Agency Condition shall have been
satisfied with respect to such action and (iii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized
for Federal or any then Applicable Tax State income tax purposes as an
association taxable as a corporation or otherwise have any material adverse
impact on the Federal or any then Applicable Tax State income taxation of
any Notes Outstanding or outstanding Certificates or any Noteholder or
Certificateholder. The Indenture Trustee is hereby authorized to join in
the execution of any such supplemental indenture and to make any further
appropriate agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized
by an Issuer Order, may, with the consent of not less than a majority of
the principal amount of the Notes Outstanding and with prior notice to the
Rating Agencies, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture;
provided, however, that (i) such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder, (ii) the Rating Agency Condition shall have been
satisfied with respect to such action and (iii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized
for Federal or any then Applicable Tax State income tax purposes as an
association taxable as a corporation or otherwise have any material adverse
impact on the Federal or any then Applicable Tax State income taxation of
any Notes Outstanding or outstanding Certificates or any Noteholder or
Certificateholder.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order,
also may, with prior notice to the Rating Agencies and with the consent of
the Holders of not less than a majority of the principal amount of the
Notes Outstanding, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or modifying
in any manner the rights of the Holders of the Notes under this Indenture;
provided, however, that (i) such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder, (ii) the Rating Agency Condition shall have been
satisfied with respect to such action and (iii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized
for Federal or any then Applicable Tax State income tax purposes as an
association taxable as a corporation or otherwise have any material adverse
impact on the Federal or any then Applicable Tax State income taxation of
any Notes Outstanding or outstanding Certificates or any Noteholder or
Certificateholder; and provided, further, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:
(i) change any Final Payment Date or the
date of payment of any installment of principal of or interest on
any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, change
the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate
to payment of principal of or interest on the Notes, or change
any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor,
as provided in Article V, to the payment of any such amount due
on the Notes on or after the respective due dates thereof (or, in
the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the principal
amount of the Notes Outstanding, the consent of the Holders of
which is required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify or alter the provisions of the
proviso to the definition of the term "Outstanding";
(iv) reduce the percentage of the principal
amount of the Notes Outstanding required to direct the Indenture
Trustee to sell or liquidate the Trust Estate pursuant to Section
5.4 if the proceeds of such sale would be insufficient to pay the
principal amount and accrued but unpaid interest on the Notes and
the Certificates;
(v) modify any provision of this Indenture
specifying a percentage of the aggregate principal amount of the
Notes necessary to amend this Indenture or the other Basic
Documents except to increase any percentage specified herein or
to provide that certain additional provisions of this Indenture
or the Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this
Indenture in such manner as to affect the calculation of the
amount of any payment of interest or principal due on any Note on
any Payment Date (including the calculation of any of the
individual components of such calculation) or to affect the
rights of the Holders of Notes to the benefit of any provisions
for the mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking
prior to or on a parity with the lien of this Indenture with
respect to any part of the Trust Estate or, except as otherwise
permitted or contemplated herein, terminate the lien of this
Indenture on any such collateral at any time subject hereto or
deprive the Holder of any Note of the security provided by the
lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in
good faith or on the basis of an Opinion of Counsel.
It shall not be necessary for any Act of Noteholders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.2, the
Indenture Trustee shall mail to the Holders of the Notes to which such
amendment or supplemental indenture relates a notice setting forth in
general terms the substance of such supplemental indenture. Any failure of
the Indenture Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing,
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to
receive and, subject to Sections 6.1 and 6.2, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture and
that all conditions precedent to the execution and delivery of such
supplemental indenture have been satisfied. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and shall be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities
and immunities under this Indenture of the Indenture Trustee, the Issuer
and the Holders of the Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed
pursuant to this Article IX shall conform to the requirements of the Trust
Indenture Act as then in effect so long as this Indenture shall then be
qualified under the Trust Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as
to any matter provided for in such supplemental indenture. If the Issuer
or the Indenture Trustee shall so determine, new Notes so modified as to
conform, in the opinion of the Indenture Trustee and the Issuer, to any
such supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption. (a) The Notes are subject to
redemption in whole, but not in part, at the direction of the Servicer
pursuant to Section 9.1(a) of the Sale and Servicing Agreement, on any
Payment Date on which the Servicer exercises its option to purchase the
assets of the Issuer pursuant to said Section 9.1(a), and the amount paid
by the Servicer shall be treated as collections of Receivables and applied
to pay the unpaid principal amount of the Notes plus accrued and unpaid
interest thereon and the Certificate Balance. The Servicer or the Issuer
shall furnish the Rating Agencies and the Noteholders notice of such
redemption. If the Notes are to be redeemed pursuant to this Section
10.1(a), the Servicer or the Issuer shall furnish notice of such election
to the Indenture Trustee not later than twenty (20) days prior to the
Redemption Date and the Issuer shall deposit by 10:00 A.M. (New York City
time) on the Redemption Date with the Indenture Trustee in the Note Payment
Account the Redemption Price of the Notes to be redeemed, whereupon all
such Notes shall be due and payable on the Redemption Date.
(b) In the event that on or prior to the Payment Date on
which the Pre-Funding Period ends (or, if the Pre-Funding Period does not
end on a Payment Date, the immediately succeeding Payment Date) the
Remaining Pre-Funded Amount has been withdrawn from the Pre-Funding Account
and deposited to the Collection Account by the Indenture Trustee at the
direction of the Servicer pursuant to Section 4.8(b) of the Sale and
Servicing Agreement, the Remaining Pre-Funded Amount shall be treated as a
part of the Available Funds and the Principal Distribution Amount for such
Payment Date.
SECTION 10.2 Form of Redemption Notice. Notice of redemption
under Section 10.1(a) shall be given by the Indenture Trustee by first-
class mail, postage prepaid, or by facsimile mailed or transmitted promptly
following receipt of notice from the Issuer or Servicer pursuant to Section
10.1(a), but not later than ten (10) days prior to the applicable
Redemption Date, to each Holder of Notes as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's
address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or
agency of the Issuer to be maintained as provided in Section
3.2).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer; provided, that in the
case of a redemption pursuant to Section 10.1(b), no notice shall be
required to be given to Noteholders. Failure to give any required notice
of redemption, or any defect therein, to any Holder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.3 Notes Payable on Redemption Date. The Notes to be
redeemed shall, following notice of redemption as required by Section 10.2
(in the case of redemption pursuant to Section 10.1(a)), on the Redemption
Date become due and payable at the Redemption Price and (unless the Issuer
shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which
accrued interest is calculated for purposes of calculating the Redemption
Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc. (a)
Upon any application or request by the Issuer to the Indenture Trustee to
take any action under any provision of this Indenture, the Issuer shall
furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with, (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent,
if any, have been complied with and (iii) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants meeting
the applicable requirements of this Section 11.1, except that, in the case
of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(A) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(B) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(C) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation
as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(D) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Trustee that is to be made the
basis for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within ninety (90)
days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to
furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuer shall also
deliver to the Indenture Trustee an Independent Certificate as to
the same matters, if the fair value to the Issuer of the property
or securities to be so deposited and of all other such property
or securities made the basis of any such withdrawal or release
since the commencement of the then-current fiscal year of the
Issuer, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is ten percent (10%) or
more of the principal amount of the Notes Outstanding, but such a
certificate need not be furnished with respect to any property or
securities so deposited, if the fair value thereof to the Issuer
as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent (1%) of the principal amount of
the Notes Outstanding.
(iii) Whenever any property or securities are
to be released from the lien of this Indenture, the Issuer shall
also furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of such
release) of the property or securities proposed to be released
and stating that in the opinion of such person the proposed
release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to
furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the
matters described in clause (iii) above, the Issuer shall also
furnish to the Indenture Trustee an Independent Certificate as to
the same matters if the fair value of the property or securities
and of all other property, other than property as contemplated by
clause (v) below or securities released from the lien of this
Indenture since the commencement of the then-current calendar
year, as set forth in the certificates required by clause (iii)
above and this clause (iv), equals ten percent (10%) or more of
the principal amount of the Notes Outstanding, but such
certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in
the related Officer's Certificate is less than $25,000 or less
than one percent (1%) of the principal amount of the then
Outstanding Notes.
(v) Notwithstanding Section 2.10 or any
other provisions of this Section 11.1, the Issuer may, without
compliance with the requirements of the other provisions of this
Section 11.1, (A) collect, liquidate, sell or otherwise dispose
of Receivables and Financed Vehicles as and to the extent
permitted or required by the Basic Documents and (B) make cash
payments out of the Trust Accounts as and to the extent permitted
or required by the Basic Documents.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee.
(a) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
(b) Any certificate or opinion of a Responsible Officer of
the Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon
which such officer's certificate or opinion is based are erroneous. Any
such certificate of a Responsible Officer or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Servicer,
the Seller, the Administrator or the Issuer, stating that the information
with respect to such factual matters is in the possession of the Servicer,
the Seller, the Administrator or the Issuer, unless such Responsible
Officer or counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(c) Where any Person is required to make, give or execute
two or more applications, requests, comments, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not,
be consolidated and form one instrument.
(d) Whenever in this Indenture, in connection with any
application or certificate or report to the Indenture Trustee, it is
provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of the Issuer's compliance
with any term hereof, it is intended that the truth and accuracy, at the
time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions
stated in such document shall in such case be conditions precedent to the
right of the Issuer to have such application granted or to the sufficiency
of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth
and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
SECTION 11.3 Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided
by this Indenture to be given or taken by Noteholders may be embodied in
and evidenced by one or more instruments of substantially similar tenor
signed by such Noteholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided such action
shall become effective when such instrument or instruments are delivered to
the Indenture Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied herein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 11.3.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner that the Indenture
Trustee deems sufficient.
(c) The ownership of Notes shall be provided by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the
Holder of every Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance
thereon, whether or not notation of such action is made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request,
demand, authorization, direction, notice, consent, waiver or Act of
Noteholders is to be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder
or by the Issuer, shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing to or with the
Indenture Trustee at its Corporate Trust Office; or
(ii) the Issuer by the Indenture Trustee or
by any Noteholder, shall be sufficient for every purpose
hereunder if in writing and mailed first-class, postage prepaid
to the Issuer addressed to: MMCA Auto Owner Trust 1999-2, in
care of Wilmington Trust Company at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Department, with a copy to the Administrator at
6363 Katella Avenue, Cypress, California 90630-5205, Attention:
Executive Vice President and Treasurer, or at any other address
previously furnished in writing to the Indenture Trustee by the
Issuer or the Administrator. The Issuer shall promptly transmit
any notice received by it from the Noteholders to the Indenture
Trustee.
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, telecopied or mailed by certified mail, return
receipt requested, to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church
Street, New York, New York 10007 and (ii) in case of S&P, at the following
address: Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., 55 Water Street (40th Floor), New York, New York 10041,
Attention of Asset Backed Surveillance Department.
SECTION 11.5 Notices to Noteholders; Waiver. (a) Where this
Indenture provides for notice to Noteholders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if
in writing and mailed, first-class, postage prepaid to each Noteholder
affected by such event, at his address as it appears on the Note Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor
any defect in any notice so mailed to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Noteholders,
and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
(b) Where this Indenture provides for notice in any manner,
such notice may be waived in writing by any Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Noteholders shall be filed
with the Indenture Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such a
waiver.
(c) In case, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar activity, it
shall be impractical to mail notice of any event to Noteholders when such
notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be satisfactory to the
Indenture Trustee shall be deemed to be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance
constitute a Default or Event of Default.
SECTION 11.6 Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or
any Paying Agent to such Holder, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer
shall furnish to the Indenture Trustee a copy of each such agreement and
the Indenture Trustee shall cause payments to be made and notices to be
given in accordance with such agreements.
SECTION 11.7 Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision
hereof that is required to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall
control.
The provisions of TIA Sections 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and
govern this Indenture, whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors, co-trustees
and agents.
SECTION 11.10 Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture
or in the Notes, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, and the Noteholders, and
any other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 11.12 Legal Holiday. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding
any other provision of the Notes or this Indenture) payment need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the date on which nominally due,
and no interest shall accrued for the period from and after any such
nominal date.
SECTION 11.13 Governing Law. This Indenture shall be construed
in accordance with the laws of the State of New York.
SECTION 11.14 Counterparts. This Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one
and the same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such
recording is to be effected by the Issuer and at its expense accompanied by
an Opinion of Counsel (which may be counsel to the Indenture Trustee or any
other counsel reasonably acceptable to the Indenture Trustee) to the effect
that such recording is necessary either for the protection of the
Noteholders or any other Person secured hereunder or for the enforcement of
any right or remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.16 Trust Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the
Owner Trustee or the Indenture Trustee on the Notes or under this Indenture
or any certificate or other writing delivered in connection herewith or
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacities), and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all
purposes of this Indenture, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI, VII
and VIII of the Trust Agreement.
SECTION 11.17 No Petition; Subordination; Claims Against Seller.
The Indenture Trustee, by entering into this Indenture, and each Noteholder
or Note Owner, by accepting a Note or beneficial interest in a Note, as the
case may be, hereby covenant and agree that (a) they will not at any time
institute against the Seller or the Issuer, or join in any institution
against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings
under any United States federal or state bankruptcy or similar law in
connection with any obligations relating to the Notes, this Indenture or
any of the Basic Documents, (b) any claim that they may have at any time
against the Subtrust Assets of any Subtrust unrelated to the Notes, and any
claim they have at any time against the Seller that they may seek to
enforce against the Subtrust Assets of any Subtrust unrelated to the Notes,
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) they hereby irrevocably make the election afforded by
Title 11 United States Code Section 1111(b)(1)(A)(i) to secured creditors
to receive the treatment afforded by Title 11 United States Code Section
1111(b)(2) with respect to any secured claim that they may have at any time
against the Seller. The obligations of the Seller under this Indenture are
limited to the related Subtrust and the related Subtrust Assets.
SECTION 11.18 Inspection. The Issuer agrees that, with
reasonable prior notice, it will permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the
books of account, records, reports and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by
Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees, and
Independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Indenture Trustee shall and
shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the
extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers,
thereunto duly authorized, all as of the day and year first above written.
MMCA AUTO OWNER TRUST 1999-2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By: _________________________________________
Name:
Title:
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: _________________________________________
Name:
Title:
SCHEDULE A
[Schedule of Receivables provided to
Indenture Trustee on Computer Tape,
Compact Disk or Microfiche]
SCHEDULE I
List of Permitted Investments
Account(s) Permitted Investments
---------- ---------------------
Collection Account [___________________________________________]
Negative Carry Account [___________________________________________]
Payahead Account [___________________________________________]
Pre-Funding Account [___________________________________________]
Reserve Account [___________________________________________]
Supplemental Reserve Account [___________________________________________]
Yield Supplement Account [___________________________________________]
EXHIBIT A-1
Form of Class A-1 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $326,000,000
No. R-1 CUSIP NO. [____________]
MMCA AUTO OWNER TRUST 1999-2
[_____]% CLASS A-1 ASSET BACKED NOTES
MMCA Auto Owner Trust 1999-2, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of [________________________] DOLLARS
payable on each Payment Date in the aggregate amount, if any, payable from
the Note Payment Account in respect of principal on the Class A-1 Notes
pursuant to Section 2.8 of the Indenture, dated as of October 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to
time, the "Indenture"), between the Issuer and Bank of Tokyo-Mitsubishi
Trust Company, a New York banking corporation, as Indenture Trustee (in
such capacity the "Indenture Trustee"); provided, however, that if not paid
prior to such date, the entire unpaid principal amount of this Class A-1
Note shall be due and payable on the earlier of the June 2002 Payment Date
(the "Class A-1 Final Payment Date") and the Redemption Date, if any,
pursuant to Section 10.1(a) of the Indenture. In addition, the unpaid
principal amount of this Class A-1 Note may be redeemed pursuant to Section
10.1(b) of the Indenture to the extent of a pro rata share of funds
remaining in the Pre-Funding Account upon the termination of the Pre-
Funding Period. Capitalized terms used but not defined herein are defined
in Article I of the Indenture, which also contains rules as to construction
that shall be applicable herein.
The Issuer shall pay interest on this Class A-1 Note at the rate
per annum shown above on each Payment Date until the principal of this
Class A-1 Note is paid or made available for payment, on the principal
amount of this Class A-1 Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding
Payment Date), subject to certain limitations contained in Section 3.1 of
the Indenture. Interest on this Class A-1 Note will accrue for each Payment
Date from and including the previous Payment Date (or, in the case of the
initial Payment Date or if no interest has been paid, from the Closing
Date) to but excluding such Payment Date. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Class A-1 Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Class A-1 Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Class A-1 Note shall be
applied first to interest due and payable on this Class A-1 Note as
provided above and then to the unpaid principal of this Class A-1 Note.
Reference is made to the further provisions of this Class A-1
Note set forth on the reverse hereof, which shall have the same effect as
though fully set forth on the face of this Class A-1 Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this
Class A-1 Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any
purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Responsible Officer, as of the
date set forth below.
Date: October 28, 1999
MMCA AUTO OWNER TRUST 1999-2,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By: ___________________________________________
Responsible Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: __________________________________________
Responsible Officer
This Class A-1 Note is one of a duly authorized issue of Notes of
the Issuer, designated as its [_____]% Class A-1 Asset Backed Notes, which,
together with the [_____]% Class A-2 Asset-Backed Notes, the [_____]% Class
A-3 Asset-Backed Notes and the [_____]% Class B Asset-Backed Notes
(collectively, the "Notes"), are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture.
The Class A-1 Notes are and will be equally and ratably secured
by the collateral pledged as security therefor as provided in the
Indenture. The Class A-1 Notes are equal in right of payment to the Class
A-2 Notes and the Class A-3 Notes, and senior in right of payment to the
Class B Notes, each as and to the extent provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Payment
Date in an amount described on the face hereof. "Payment Date" means the
fifteenth day of each month or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 15, 1999.
As described above, the entire unpaid principal amount of this
Class A-1 Note shall be due and payable on the earlier of the Class A-1
Final Payment Date and the Redemption Date, if any, pursuant to Section
10.1(a) of the Indenture. In addition, the unpaid principal amount of this
Class A-1 Note may be redeemed pursuant to Section 10.1(b) of the Indenture
to the extent of a pro rata share of funds remaining in the Pre-Funding
Account upon the termination of the Pre-Funding Period. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee or the Holders of the Notes
representing not less than a majority of the outstanding principal amount
of the Notes of all classes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture. All
principal payments on the Class A-1 Notes shall be made pro rata to the
Holders entitled thereto.
Payments of interest on this Class A-1 Note due and payable on
each Payment Date, together with the installment of principal, if any, to
the extent not in full payment of this Class A-1 Note, shall be made by
check mailed to the Person whose name appears as the Registered Holder of
this Class A-1 Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date, except that with respect
to Class A-1 Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Class
A-1 Note be submitted for notation of payment. Any reduction in the
principal amount of this Class A-1 Note (or any one or more Predecessor
Notes) effected by any payments made on any Payment Date shall be binding
upon all future Holders of this Class A-1 Note and of any Class A-1 Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Class A-1 Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer,
will notify the Person who was the Registered Holder hereof as of the
Record Date preceding such Payment Date by notice mailed or transmitted by
facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Class A-1
Note at the Indenture Trustee's Corporate Trust Office or at the office of
the Indenture Trustee's agent appointed for such purposes located in New
York, New York.
The Issuer shall pay interest on overdue installments of interest
at the Class A-1 Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in the
manner and to the extent described in the Indenture and the Sale and
Servicing Agreement.
As provided in the Indenture, and subject to certain limitations
set forth therein, the transfer of this Class A-1 Note may be registered on
the Note Register upon surrender of this Class A-1 Note for registration of
transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, and thereupon one or more
new Class A-1 Notes of authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Class A-1 Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of
transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee, each in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution
for stock, unpaid capital contribution or failure to pay any installment or
call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that (a) such Noteholder or Note
Owner will not at any time institute against the Seller, or the Issuer, or
join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents and (b) any claim that such Noteholder or Note Owner
may have at any time against the Subtrust Assets of any Subtrust unrelated
to the Notes, and any claim that such Noteholder may have against the
Seller that such Noteholder may seek to enforce against the Subtrust Assets
of any Subtrust unrelated to the Notes, 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. The obligations of the Seller
represented by this Note are limited to the related Subtrust and the
related Subtrust Assets.
EACH NOTEHOLDER OR NOTE OWNER, BY ACCEPTANCE OF A NOTE OR, IN THE
CASE OF A NOTE OWNER, A BENEFICIAL INTEREST IN A NOTE, HEREBY IRREVOCABLY
MAKES THE ELECTION AFFORDED BY TITLE 11 UNITED STATES CODE SECTION
1111(b)(1)(A)(i) TO SECURED CREDITORS TO RECEIVE THE TREATMENT AFFORDED BY
TITLE 11 UNITED STATES CODE SECTION 1111(b)(2) WITH RESPECT TO ANY SECURED
CLAIM THAT SUCH NOTEHOLDER OR NOTE OWNER MAY HAVE AT ANY TIME AGAINST THE
SELLER.
The Issuer has entered into the Indenture and this Class A-1 Note
is issued with the intention that, for federal, state and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Trust Estate. Each Noteholder, by its acceptance of
a Note (and each Note Owner by its acceptance of a beneficial interest in a
Note), agrees to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class A-1 Note, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name this
Class A-1 Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the owner hereof for
all purposes, whether or not this Class A-1 Note be overdue, and none of
the Issuer, the Indenture Trustee or any such agent shall be affected by
notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under
the Indenture at any time by the Issuer with the consent of the Holders of
Notes representing a majority of all of the Notes Outstanding, voting as a
group. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Class A Notes Outstanding,
on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by
the Holder of this Class A-1 Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-1 Note and of any Class A-1 Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Class
A-1 Note. The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Issuer," as used in this Note, includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the
Indenture Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set
forth.
This Class A-1 Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or
currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Bank of Tokyo-Mitsubishi
Trust Company, in its individual capacity, Wilmington Trust Company, in its
individual capacity, any owner of a beneficial interest in the Issuer, or
any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable
for, nor shall recourse be had to any of them for, the payment of principal
or of interest on this Class A-1 Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The Holder of this Note, by his acceptance hereof, agrees
that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and
all liabilities, obligations and undertakings contained in the Indenture or
in this Class A-1 Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: _____________________ ______________________________*/
Signature Guaranteed
______________________________*/
Signature Guaranteed
---------------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar.
EXHIBIT A-2
Form of Class A-2 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $210,000,000
No. R-1 CUSIP NO. [____________]
MMCA AUTO OWNER TRUST 1999-2
[_____]% CLASS A-2 ASSET BACKED NOTES
MMCA Auto Owner Trust 1999-2, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of [________________________] DOLLARS
payable on each Payment Date in the aggregate amount, if any, payable from
the Note Payment Account in respect of principal on the Class A-2 Notes
pursuant to Section 2.8 of the Indenture, dated as of October 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to
time, the "Indenture"), between the Issuer and Bank of Tokyo-Mitsubishi
Trust Company, a New York banking corporation, as Indenture Trustee (in
such capacity the "Indenture Trustee"); provided, however, that if not paid
prior to such date, the entire unpaid principal amount of this Class A-2
Note shall be due and payable on the earlier of the August 2003 Payment
Date (the "Class A-2 Final Payment Date") and the Redemption Date, if any,
pursuant to Section 10.1(a) of the Indenture. In addition, the unpaid
principal amount of this Class A-2 Note may be redeemed pursuant to Section
10.1(b) of the Indenture to the extent of a pro rata share of funds
remaining in the Pre-Funding Account upon the termination of the Pre-
Funding Period. Capitalized terms used but not defined herein are defined
in Article I of the Indenture, which also contains rules as to construction
that shall be applicable herein.
The Issuer shall pay interest on this Class A-2 Note at the rate
per annum shown above on each Payment Date until the principal of this
Class A-2 Note is paid or made available for payment, on the principal
amount of this Class A-2 Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding
Payment Date), subject to certain limitations contained in Section 3.1 of
the Indenture. Interest on this Class A-2 Note will accrue for each
Payment Date from and including the previous Payment Date (or, in the case
of the initial Payment Date or if no interest has been paid, from the
Closing Date) to but excluding such Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Such
principal of and interest on this Class A-2 Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Class A-2 Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Class A-2 Note shall be
applied first to interest due and payable on this Class A-2 Note as
provided above and then to the unpaid principal of this Class A-2 Note.
Reference is made to the further provisions of this Class A-2
Note set forth on the reverse hereof, which shall have the same effect as
though fully set forth on the face of this Class A-2 Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this
Class A-2 Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any
purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Responsible Officer, as of the
date set forth below.
Date: October 28, 1999
MMCA AUTO OWNER TRUST 1999-2,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By: __________________________________________
Responsible Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: __________________________________________
Responsible Officer
This Class A-2 Note is one of a duly authorized issue of Notes of
the Issuer, designated as its [_____]% Class A-2 Asset Backed Notes, which,
together with the [_____]% Class A-1 Asset-Backed Notes, the [_____]% Class
A-3 Asset-Backed Notes and the [_____]% Class B Asset-Backed Notes
(collectively, the "Notes"), are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture.
The Class A-2 Notes are and will be equally and ratably secured
by the collateral pledged as security therefor as provided in the
Indenture. The Class A-2 Notes are equal in right of payment to the Class
A-1 Notes and the Class A-3 Notes, and senior in right of payment to the
Class B Notes, each as and to the extent provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Payment
Date in an amount described on the face hereof. "Payment Date" means the
fifteenth day of each month or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 15, 1999.
As described above, the entire unpaid principal amount of this
Class A-2 Note shall be due and payable on the earlier of the Class A-2
Final Payment Date and the Redemption Date, if any, pursuant to Section
10.1(a) of the Indenture. In addition, the unpaid principal amount of this
Class A-2 Note may be redeemed pursuant to Section 10.1(b) of the Indenture
to the extent of a pro rata share of funds remaining in the Pre-Funding
Account upon the termination of the Pre-Funding Period. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee or the Holders of the Notes
representing not less than a majority of the outstanding principal amount
of the Notes of all classes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture. All
principal payments on the Class A-2 Notes shall be made pro rata to the
Holders entitled thereto.
Payments of interest on this Class A-2 Note due and payable on
each Payment Date, together with the installment of principal, if any, to
the extent not in full payment of this Class A-2 Note, shall be made by
check mailed to the Person whose name appears as the Registered Holder of
this Class A-2 Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date, except that with respect
to Class A-2 Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Class
A-2 Note be submitted for notation of payment. Any reduction in the
principal amount of this Class A-2 Note (or any one or more Predecessor
Notes) effected by any payments made on any Payment Date shall be binding
upon all future Holders of this Class A-2 Note and of any Class A-2 Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Class A-2 Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer,
will notify the Person who was the Registered Holder hereof as of the
Record Date preceding such Payment Date by notice mailed or transmitted by
facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Class A-2
Note at the Indenture Trustee's Corporate Trust Office or at the office of
the Indenture Trustee's agent appointed for such purposes located in New
York, New York.
The Issuer shall pay interest on overdue installments of interest
at the Class A-2 Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in the
manner and to the extent described in the Indenture and the Sale and
Servicing Agreement.
As provided in the Indenture, and subject to certain limitations
set forth therein, the transfer of this Class A-2 Note may be registered on
the Note Register upon surrender of this Class A-2 Note for registration of
transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, and thereupon one or more
new Class A-2 Notes of authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Class A-2 Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of
transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee, each in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution
for stock, unpaid capital contribution or failure to pay any installment or
call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that (a) such Noteholder or Note
Owner will not at any time institute against the Seller, or the Issuer, or
join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents and (b) any claim that such Noteholder or Note Owner
may have at any time against the Subtrust Assets of any Subtrust unrelated
to the Notes, and any claim that such Noteholder may have against the
Seller that such Noteholder may seek to enforce against the Subtrust Assets
of any Subtrust unrelated to the Notes, 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. The obligations of the Seller
represented by this Note are limited to the related Subtrust and the
related Subtrust Assets.
EACH NOTEHOLDER OR NOTE OWNER, BY ACCEPTANCE OF A NOTE OR, IN THE
CASE OF A NOTE OWNER, A BENEFICIAL INTEREST IN A NOTE, HEREBY IRREVOCABLY
MAKES THE ELECTION AFFORDED BY TITLE 11 UNITED STATES CODE SECTION
1111(b)(1)(A)(i) TO SECURED CREDITORS TO RECEIVE THE TREATMENT AFFORDED BY
TITLE 11 UNITED STATES CODE SECTION 1111(b)(2) WITH RESPECT TO ANY SECURED
CLAIM THAT SUCH NOTEHOLDER OR NOTE OWNER MAY HAVE AT ANY TIME AGAINST THE
SELLER.
The Issuer has entered into the Indenture and this Class A-2 Note
is issued with the intention that, for federal, state and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Trust Estate. Each Noteholder, by its acceptance of
a Note (and each Note Owner by its acceptance of a beneficial interest in a
Note), agrees to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class A-2 Note, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name this
Class A-2 Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the owner hereof for
all purposes, whether or not this Class A-2 Note be overdue, and none of
the Issuer, the Indenture Trustee or any such agent shall be affected by
notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under
the Indenture at any time by the Issuer with the consent of the Holders of
Notes representing a majority of all of the Notes Outstanding, voting as a
group. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Class A Notes Outstanding,
on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by
the Holder of this Class A-2 Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-2 Note and of any Class A-2 Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Class
A-2 Note. The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Issuer," as used in this Note, includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the
Indenture Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set
forth.
This Class A-2 Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or
currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Bank of Tokyo-Mitsubishi
Trust Company, in its individual capacity, Wilmington Trust Company, in its
individual capacity, any owner of a beneficial interest in the Issuer, or
any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable
for, nor shall recourse be had to any of them for, the payment of principal
or of interest on this Class A-2 Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The Holder of this Note, by his acceptance hereof, agrees
that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and
all liabilities, obligations and undertakings contained in the Indenture or
in this Class A-2 Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ____________________ ____________________________*/
Signature Guaranteed
____________________________*/
Signature Guaranteed
---------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar.
EXHIBIT A-3
Form of Class A-3 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $142,000,000
No. R-1 CUSIP NO. [____________]
MMCA AUTO OWNER TRUST 1999-2
[_____]% CLASS A-3 ASSET BACKED NOTES
MMCA Auto Owner Trust 1999-2, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of [________________________] DOLLARS
payable on each Payment Date in the aggregate amount, if any, payable from
the Note Payment Account in respect of principal on the Class A-3 Notes
pursuant to Section 2.8 of the Indenture, dated as of October 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to
time, the "Indenture"), between the Issuer and Bank of Tokyo-Mitsubishi
Trust Company, a New York banking corporation, as Indenture Trustee (in
such capacity the "Indenture Trustee"); provided, however, that if not paid
prior to such date, the entire unpaid principal amount of this Class A-3
Note shall be due and payable on the earlier of the May 2004 Payment Date
(the "Class A-3 Final Payment Date") and the Redemption Date, if any,
pursuant to Section 10.1(a) of the Indenture. In addition, the unpaid
principal amount of this Class A-3 Note may be redeemed pursuant to Section
10.1(b) of the Indenture to the extent of a pro rata share of funds
remaining in the Pre-Funding Account upon the termination of the Pre-
Funding Period. Capitalized terms used but not defined herein are defined
in Article I of the Indenture, which also contains rules as to construction
that shall be applicable herein.
The Issuer shall pay interest on this Class A-3 Note at the rate
per annum shown above on each Payment Date until the principal of this
Class A-3 Note is paid or made available for payment, on the principal
amount of this Class A-3 Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding
Payment Date), subject to certain limitations contained in Section 3.1 of
the Indenture. Interest on this Class A-3 Note will accrue for each
Payment Date from and including the previous Payment Date (or, in the case
of the initial Payment Date or if no interest has been paid, from the
Closing Date) to but excluding such Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Such
principal of and interest on this Class A-3 Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Class A-3 Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Class A-3 Note shall be
applied first to interest due and payable on this Class A-3 Note as
provided above and then to the unpaid principal of this Class A-3 Note.
Reference is made to the further provisions of this Class A-3
Note set forth on the reverse hereof, which shall have the same effect as
though fully set forth on the face of this Class A-3 Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this
Class A-3 Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any
purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Responsible Officer, as of the
date set forth below.
Date: October 28, 1999
MMCA AUTO OWNER TRUST 1999-2,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By: __________________________________________
Responsible Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: _________________________________________
Responsible Officer
This Class A-3 Note is one of a duly authorized issue of Notes of
the Issuer, designated as its [_____]% Class A-3 Asset Backed Notes, which,
together with the [_____]% Class A-1 Asset-Backed Notes, the [_____]% Class
A-2 Asset-Backed Notes and the [_____]% Class B Asset-Backed Notes
(collectively, the "Notes"), are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture.
The Class A-3 Notes are and will be equally and ratably secured
by the collateral pledged as security therefor as provided in the
Indenture. The Class A-3 Notes are equal in right of payment to the Class
A-1 Notes and the Class A-2 Notes, and senior in right of payment to the
Class B Notes, each as and to the extent provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Payment
Date in an amount described on the face hereof. "Payment Date" means the
fifteenth day of each month or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 15, 1999.
As described above, the entire unpaid principal amount of this
Class A-3 Note shall be due and payable on the earlier of the Class A-3
Final Payment Date and the Redemption Date, if any, pursuant to Section
10.1(a) of the Indenture. In addition, the unpaid principal amount of this
Class A-3 Note may be redeemed pursuant to Section 10.1(b) of the Indenture
to the extent of a pro rata share of funds remaining in the Pre-Funding
Account upon the termination of the Pre-Funding Period. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due
and payable on the date on which an Event of Default shall have occurred
and be continuing and the Indenture Trustee or the Holders of the Notes
representing not less than a majority of the outstanding principal amount
of the Notes of all classes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture. All
principal payments on the Class A-3 Notes shall be made pro rata to the
Holders entitled thereto.
Payments of interest on this Class A-3 Note due and payable on
each Payment Date, together with the installment of principal, if any, to
the extent not in full payment of this Class A-3 Note, shall be made by
check mailed to the Person whose name appears as the Registered Holder of
this Class A-3 Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date, except that with respect
to Class A-3 Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Class
A-3 Note be submitted for notation of payment. Any reduction in the
principal amount of this Class A-3 Note (or any one or more Predecessor
Notes) effected by any payments made on any Payment Date shall be binding
upon all future Holders of this Class A-3 Note and of any Class A-3 Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Class A-3 Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer,
will notify the Person who was the Registered Holder hereof as of the
Record Date preceding such Payment Date by notice mailed or transmitted by
facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Class A-3
Note at the Indenture Trustee's Corporate Trust Office or at the office of
the Indenture Trustee's agent appointed for such purposes located in New
York, New York.
The Issuer shall pay interest on overdue installments of interest
at the Class A-3 Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in the
manner and to the extent described in the Indenture and the Sale and
Servicing Agreement.
As provided in the Indenture, and subject to certain limitations
set forth therein, the transfer of this Class A-3 Note may be registered on
the Note Register upon surrender of this Class A-3 Note for registration of
transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, and thereupon one or more
new Class A-3 Notes of authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Class A-3 Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of
transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee, each in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution
for stock, unpaid capital contribution or failure to pay any installment or
call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that (a) such Noteholder or Note
Owner will not at any time institute against the Seller, or the Issuer, or
join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents and (b) any claim that such Noteholder or Note Owner
may have at any time against the Subtrust Assets of any Subtrust unrelated
to the Notes, and any claim that such Noteholder may have against the
Seller that such Noteholder may seek to enforce against the Subtrust Assets
of any Subtrust unrelated to the Notes, 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. The obligations of the Seller
represented by this Note are limited to the related Subtrust and the
related Subtrust Assets.
EACH NOTEHOLDER OR NOTE OWNER, BY ACCEPTANCE OF A NOTE OR, IN THE
CASE OF A NOTE OWNER, A BENEFICIAL INTEREST IN A NOTE, HEREBY IRREVOCABLY
MAKES THE ELECTION AFFORDED BY TITLE 11 UNITED STATES CODE SECTION
1111(b)(1)(A)(i) TO SECURED CREDITORS TO RECEIVE THE TREATMENT AFFORDED BY
TITLE 11 UNITED STATES CODE SECTION 1111(b)(2) WITH RESPECT TO ANY SECURED
CLAIM THAT SUCH NOTEHOLDER OR NOTE OWNER MAY HAVE AT ANY TIME AGAINST THE
SELLER.
The Issuer has entered into the Indenture and this Class A-3 Note
is issued with the intention that, for federal, state and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Trust Estate. Each Noteholder, by its acceptance of
a Note (and each Note Owner by its acceptance of a beneficial interest in a
Note), agrees to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class A-3 Note, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name this
Class A-3 Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the owner hereof for
all purposes, whether or not this Class A-3 Note be overdue, and none of
the Issuer, the Indenture Trustee or any such agent shall be affected by
notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under
the Indenture at any time by the Issuer with the consent of the Holders of
Notes representing a majority of all of the Notes Outstanding, voting as a
group. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Class A Notes Outstanding,
on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by
the Holder of this Class A-3 Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-3 Note and of any Class A-3 Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Class
A-3 Note. The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Issuer," as used in this Note, includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the
Indenture Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set
forth.
This Class A-3 Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or
currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Bank of Tokyo-Mitsubishi
Trust Company, in its individual capacity, Wilmington Trust Company, in its
individual capacity, any owner of a beneficial interest in the Issuer, or
any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable
for, nor shall recourse be had to any of them for, the payment of principal
or of interest on this Class A-3 Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The Holder of this Note, by his acceptance hereof, agrees
that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and
all liabilities, obligations and undertakings contained in the Indenture or
in this Class A-3 Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ___________________ _______________________________*/
Signature Guaranteed
_______________________________*/
Signature Guaranteed
-----------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar.
EXHIBIT B
Form of Class B Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $62,000,000
No. R-1 CUSIP NO. [____________]
MMCA AUTO OWNER TRUST 1999-2
[_____]% CLASS B ASSET BACKED NOTES
MMCA Auto Owner Trust 1999-2, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of [________________________] DOLLARS
payable on each Payment Date in the aggregate amount, if any, payable from
the Note Payment Account in respect of principal on the Class B Notes
pursuant to Section 2.8 of the Indenture, dated as of October 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to
time, the "Indenture"), between the Issuer and Bank of Tokyo-Mitsubishi
Trust Company, a New York banking corporation, as Indenture Trustee (in
such capacity the "Indenture Trustee"); provided, however, that if not paid
prior to such date, the entire unpaid principal amount of this Class B Note
shall be due and payable on the earlier of the April 2006 Payment Date (the
"Class B Final Payment Date") and the Redemption Date, if any, pursuant to
Section 10.1(a) of the Indenture. In addition, the unpaid principal amount
of this Class B Note may be redeemed pursuant to Section 10.1(b) of the
Indenture to the extent of a pro rata share of funds remaining in the Pre-
Funding Account upon the termination of the Pre-Funding Period.
Capitalized terms used but not defined herein are defined in Article I of
the Indenture, which also contains rules as to construction that shall be
applicable herein.
The Issuer shall pay interest on this Class B Note at the rate
per annum shown above on each Payment Date until the principal of this
Class B Note is paid or made available for payment, on the principal amount
of this Class B Note outstanding on the preceding Payment Date (after
giving effect to all payments of principal made on the preceding Payment
Date), subject to certain limitations contained in Section 3.1 of the
Indenture. Interest on this Class B Note will accrue for each Payment Date
from and including the previous Payment Date (or, in the case of the
initial Payment Date or if no interest has been paid, from the Closing
Date) to but excluding such Payment Date. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Class B Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Class B Note are payable in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Class B Note shall be
applied first to interest due and payable on this Class B Note as provided
above and then to the unpaid principal of this Class B Note.
Reference is made to the further provisions of this Class B Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class B Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this
Class B Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any
purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Responsible Officer, as of the
date set forth below.
Date: October 28, 1999
MMCA AUTO OWNER TRUST 1999-2,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By: __________________________________________
Responsible Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: _________________________________________
Responsible Officer
This Class B Note is one of a duly authorized issue of Notes of
the Issuer, designated as its [_____]% Class B Asset Backed Notes, which,
together with the [_____]% Class A-1 Asset-Backed Notes, the [_____]% Class
A-2 Asset-Backed Notes and the [_____]% Class A-3 Asset-Backed Notes
(collectively, the "Notes"), are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture.
The Class B Notes are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
The Class B Notes are subordinated in right of payment to the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes as and to the extent
provided in the Indenture.
Principal of the Class B Notes will be payable on each Payment
Date in an amount described on the face hereof. "Payment Date" means the
fifteenth day of each month or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 15, 1999.
As described above, the entire unpaid principal amount of this
Class B Note shall be due and payable on the earlier of the Class B Final
Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a).
In addition, the unpaid principal amount of this Class B Note may be
redeemed pursuant to Section 10.1(b) of the Indenture to the extent of a
pro rata share of funds remaining in the Pre-Funding Account upon the
termination of the Pre-Funding Period. Notwithstanding the foregoing, the
entire unpaid principal amount of the Notes shall be due and payable on the
date on which an Event of Default shall have occurred and be continuing and
the Indenture Trustee or the Holders of the Notes representing not less
than a majority of the outstanding principal amount of the Notes of all
classes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2 of the Indenture. All principal payments on
the Class B Notes shall be made pro rata to the Holders entitled thereto.
Payments of interest on this Class B Note due and payable on each
Payment Date, together with the installment of principal, if any, to the
extent not in full payment of this Class B Note, shall be made by check
mailed to the Person whose name appears as the Registered Holder of this
Class B Note (or one or more Predecessor Notes) on the Note Register as of
the close of business on each Record Date, except that with respect to
Class B Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Class
B Note be submitted for notation of payment. Any reduction in the
principal amount of this Class B Note (or any one or more Predecessor
Notes) effected by any payments made on any Payment Date shall be binding
upon all future Holders of this Class B Note and of any Class B Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Class B Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer,
will notify the Person who was the Registered Holder hereof as of the
Record Date preceding such Payment Date by notice mailed or transmitted by
facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Class B Note
at the Indenture Trustee's Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in New York,
New York.
The Issuer shall pay interest on overdue installments of interest
at the Class B Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed in the
manner and to the extent described in the Indenture and the Sale and
Servicing Agreement.
As provided in the Indenture, and subject to certain limitations
set forth therein, the transfer of this Class B Note may be registered on
the Note Register upon surrender of this Class B Note for registration of
transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, and thereupon one or more
new Class B Notes of authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Class B Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of
transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer, the Owner Trustee or the Indenture
Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee, each in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution
for stock, unpaid capital contribution or failure to pay any installment or
call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that (a) such Noteholder or Note
Owner will not at any time institute against the Seller, or the Issuer, or
join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture
or the Basic Documents and (b) any claim that such Noteholder or Note Owner
may have at any time against the Subtrust Assets of any Subtrust unrelated
to the Notes, and any claim that such Noteholder may have against the
Seller that such Noteholder may seek to enforce against the Subtrust Assets
of any Subtrust unrelated to the Notes, 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. The obligations of the Seller
represented by this Note are limited to the related Subtrust and the
related Subtrust Assets.
EACH NOTEHOLDER OR NOTE OWNER, BY ACCEPTANCE OF A NOTE OR, IN THE
CASE OF A NOTE OWNER, A BENEFICIAL INTEREST IN A NOTE, HEREBY IRREVOCABLY
MAKES THE ELECTION AFFORDED BY TITLE 11 UNITED STATES CODE SECTION
1111(b)(1)(A)(i) TO SECURED CREDITORS TO RECEIVE THE TREATMENT AFFORDED BY
TITLE 11 UNITED STATES CODE SECTION 1111(b)(2) WITH RESPECT TO ANY SECURED
CLAIM THAT SUCH NOTEHOLDER OR NOTE OWNER MAY HAVE AT ANY TIME AGAINST THE
SELLER.
The Issuer has entered into the Indenture and this Class B Note
is issued with the intention that, for federal, state and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Trust Estate. Each Noteholder, by its acceptance of
a Note (and each Note Owner by its acceptance of a beneficial interest in a
Note), agrees to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class B Note, the Issuer, the Indenture Trustee and any agent of the Issuer
or the Indenture Trustee may treat the Person in whose name this Class B
Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all
purposes, whether or not this Class B Note be overdue, and none of the
Issuer, the Indenture Trustee or any such agent shall be affected by notice
to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under
the Indenture at any time by the Issuer with the consent of the Holders of
Notes representing a majority of the all of the Notes Outstanding voting
as a group. The Indenture also contains provisions permitting the Holders
of Notes representing specified percentages of the Notes Outstanding on
behalf of the Holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this Class B Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class B Note and of any Class B Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Class B Note. The
Indenture also permits the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer," as used in this Note, includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the
Indenture Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set
forth.
This Class B Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or
currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Bank of Tokyo-Mitsubishi
Trust Company, in its individual capacity, Wilmington Trust Company, in its
individual capacity, any owner of a beneficial interest in the Issuer, or
any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable
for, nor shall recourse be had to any of them for, the payment of principal
or of interest on this Class B Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The Holder of this Note, by his acceptance hereof, agrees
that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and
all liabilities, obligations and undertakings contained in the Indenture or
in this Class B Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ___________________ _______________________________*/
Signature Guaranteed
_______________________________*/
Signature Guaranteed
-------------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar.
EXHIBIT C
Form of Opinion of Counsel
Pursuant to Section 3.6(a)
October 28, 1999
To the Addressees Indicated
on Schedule A hereto
Re: MMCA Auto Owner Trust 1999-2
Ladies and Gentlemen:
We have acted as special counsel to Mitsubishi Motors Credit of
America, Inc., a Delaware corporation ("MMCA"), and MMCA Auto Receivables
Trust, a Delaware business trust ("MART"), in connection with the
transactions contemplated by (i) the Purchase Agreement, dated as of
October 1, 1999 (the "Purchase Agreement"), between MMCA and MART, (ii) the
Sale and Servicing Agreement, dated as of October 1, 1999 (the "Sale and
Servicing Agreement"), by and among MART, as seller, MMCA, as servicer, and
MMCA Auto Owner Trust 1999-2, a Delaware business trust (the "Trust"), as
issuer, (iii) the Indenture, dated as of October 1, 1999 (the "Indenture"),
between the Trust and Bank of Tokyo - Mitsubishi Trust Company, as
indenture trustee for the benefit of the Holders of the Notes (the
"Indenture Trustee"), and (iv) the Amended and Restated Trust Agreement,
dated as of October 1, 1999 (the "Trust Agreement"), between MART and
Wilmington Trust Company, as owner trustee (the "Owner Trustee").
Capitalized terms not otherwise defined herein have the meanings assigned
to such terms in the Sale and Servicing Agreement.
Pursuant to the Purchase Agreement and the Assignments (as such
term is defined in the Purchase Agreement) related thereto, MMCA proposes
to sell to MART on the Closing Date and from time to time thereafter during
the Pre-Funding Period, and MART proposes to purchase from MMCA, among
other things, certain motor vehicle retail installment sale contracts
(collectively, the "Receivables") secured by new and used automobiles and
light-duty trucks (collectively, the "Financed Vehicles"), certain monies
due or received thereunder on or after the related Cutoff Dates, MMCA's
security interests in the Financed Vehicles, MMCA's rights under certain
insurance policies, certain rights under dealer agreements relating to the
Receivables and certain other property related to the Receivables and all
the proceeds thereof. The Receivables that MMCA proposes to sell to MART
on the Closing Date, and MART proposes to buy from MMCA, are referred to
herein as the "Initial Receivables".
Pursuant to the Sale and Servicing Agreement, MART will sell to
the Trust all of its right, title and interest in, to and under the
Receivables, certain monies due or received thereunder on or after the
related Cutoff Dates, certain other property relating to the Receivables
and all proceeds thereof. The Trust will issue (i) $326,000,000 principal
amount of [ ]% Class A-1 Asset Backed Notes, $210,000,000 principal
amount of [ ]% Class A-2 Asset Backed Notes, $142,000,000 principal amount
of [ ]% Class A-3 Asset Backed Notes and $62,000,000 principal amount of [
]% Class B Asset Backed Notes (collectively, the "Notes") pursuant to the
Indenture for sale to the several underwriters named in the Underwriting
Agreement, dated October [ ], 1999, between MART and Credit Suisse First
Boston Corporation ("Credit Suisse"), as representative of the several
underwriters; and (ii) the Asset Backed Certificates (collectively, the
"Certificates") pursuant to the Trust Agreement for issuance to MART.
In our examination we have assumed the genuineness of all
signatures (including endorsements), the legal capacity of natural persons,
the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as
certified or photostatic copies, and the authenticity of the originals of
such copies. As to any facts material to this opinion which we did not
independently establish or verify, we have relied upon statements and
representations of MMCA and MART and their officers and other
representatives and of public officials.
In rendering the opinions set forth herein, we have examined and
relied on originals or copies, certified or otherwise identified to our
satisfaction, of the following:
(A) the Purchase Agreement, the Sale and Servicing
Agreement, the Indenture, the Trust Agreement and the First-Tier Initial
Assignment (as such term is defined in the Purchase Agreement);
(B) a Certificate of MART, dated the date hereof, a copy of
which is attached as Exhibit A hereto (the "MART Certificate");
(C) an unfiled but signed copy of (i) a financing statement
naming "MMCA Auto Receivables Trust" as debtor, "MMCA Auto Owner Trust
1999-2" as secured party and "Bank of Tokyo-Mitsubishi Trust Company" as
Indenture Trustee as assignee and (ii) a financing statement naming "Chase
Manhattan Bank Delaware, as Trust of MMCA Auto Receivables Trust" as
debtor, "MMCA Auto Owner Trust 1999-2" as secured party and "Bank of Tokyo-
Mitsubishi Trust Company, as Indenture Trustee" as assignee, which we
understand will be filed within ten (10) days of the transfer of the
security interest in the office of the Secretary of State of the State of
California (such filing office, the "Filing Office" and such financing
statements, the "Financing Statements");
(D) the certified reports of the Filing Office as to
financing statements naming (i) "MMCA Auto Receivables Trust" as debtor and
(ii) "Chase Manhattan Bank Delaware, as Trustee of MMCA Auto Receivables
Trust" as debtor and on file in the Filing Office as of an effective date
of [ ], 1999 (the "Search Reports");
(E) forms of motor vehicle retail installment sale
contracts (the "Form Contracts") attached as Annex A to the MART
Certificate; and
(F) such other agreements, certificates or documents as we
have deemed necessary or appropriate as a basis for the opinion set forth
below.
Unless otherwise indicated, references to the "UCC" shall mean:
(i) with respect to the validity of the security interests held by the
Trust and the Indenture Trustee, the Uniform Commercial Code as in effect
on the date hereof in the State of New York, (ii) with respect to the
perfection and the effect of perfection or non-perfection of the security
interest of the Trust in the Initial Receivables, the Uniform Commercial
Code as in effect on the date hereof in the State of California, and (iii)
with respect to our opinion in paragraph 1 below, the Uniform Commercial
Code as in effect on the date hereof in the States of New York and
California.
We express no opinion as to the laws of any jurisdiction other
than (i) the laws of the State of New York and (ii) with respect to the
security interest opinions set forth in paragraphs 1, 2 and 3 herein, the
UCC. References to the "Applicable States" shall mean California and/or
New York, as applicable.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Each Initial Receivable is a motor vehicle retail
installment sale contract that constitutes "chattel paper" as defined in
Section 9-105 of the UCC.
2. The provisions of the Sale and Servicing Agreement are
effective to create, in favor of the Trust, a valid security interest (as
such term is defined in Section 1-201 of the UCC) in MART's rights in the
Initial Receivables and proceeds thereof, which security interest if
characterized as a transfer for security will secure payment of the Notes.
3. The Financing Statements are in appropriate form for filing
in the Filing Office under the UCC. Upon the filing of the Financing
Statements in the Filing Office, the security interest in favor of the
Trust in the Initial Receivables and proceeds thereof will be perfected,
and no other security interest of any other creditor of MART's will be
equal or prior to the security interest of the Trust in the Initial
Receivables and proceeds thereof.
4. The provisions of the Indenture are effective to create in
favor of the Indenture Trustee, a valid security interest in the Trust's
rights in the Initial Receivables and proceeds thereof to secure payment
of the Notes.
Our opinions in paragraphs 1-4 above are subject to the following
qualifications:
(a) we have assumed that the Initial Receivables exist and
that MART has sufficient rights in the Initial Receivables for the security
interest of the Trust to attach, and that the Trust has sufficient rights
in the Initial Receivables for the security interest of the Indenture
Trustee to attach, and we express no opinion as to the nature or extent of
MART's or the Trust's rights in, or title to, any Initial Receivables;
(b) our security interest opinions are limited to Article 9
of the UCC, and therefore such opinions do not address (i) laws of
jurisdictions other than Applicable States, and of Applicable States except
for Article 9 of the UCC, (ii) collateral of a type not subject to Article
9 of the UCC, and (iii) under Section 9-103 of the UCC, what law governs
perfection of the security interests granted in the collateral covered by
this opinion. We call to your attention that California has recently
enacted SB 45 ("Revised Article 9") which contains a revised version of
Article 9 of the Uniform Commercial Code with conforming and miscellaneous
changes to other articles of the Uniform Commercial Code. By its terms, SB
45 does not become effective until July 1, 2001. The opinions expressed in
paragraphs 1 and 3 herein are based solely on the Uniform Commercial Code
in effect in the State of California on the date hereof and we express no
opinion as to the effect of Revised Article 9 on the validity, perfection
or priority of the security interest of the Trust or the Indenture Trustee.
(c) we call to your attention that under the UCC, events
occurring subsequent to the date hereof may affect any security interest
subject to the UCC including, but not limited to, factors of the type
identified in Section 9-306 with respect to proceeds; Section 9-402 with
respect to changes in name, structure and corporate identity of the debtor;
Section 9-103 with respect to changes in the location of the collateral and
the location of the debtor; Section 9-316 with respect to subordination
agreements; Section 9-403 with respect to continuation statements; and
Sections 9-307, 9-308 and 9-309 with respect to subsequent purchasers of
the collateral. In addition, actions taken by a secured party (e.g.,
releasing or assigning the security interest, delivering possession of the
collateral to the debtor or another person and voluntarily subordinating a
security interest) may affect the validity, perfection or priority of a
security interest;
(d) we have assumed that each Initial Receivable is
substantially in the form of a Form Contract, and we have assumed that no
Initial Receivable is or will be credited to a securities account;
(e) we have assumed that there are no agreements between
MART or the Trust and any account debtor prohibiting, restricting or
conditioning the assignment of any portion of the Initial Receivables;
(f) we express no opinion with respect to the perfection or
priority of the security interest of the Indenture Trustee;
(g) we call to your attention that the security interest of
the Trust and the Indenture Trustee may be subject to the rights of account
debtors, claims and defenses of account debtors and the terms of agreements
with account debtors;
(h) we express no opinion regarding the security interest
of the Trust or the Indenture Trustee in any Initial Receivables consisting
of claims against any government or governmental agency (including, without
limitation, the United States of America or any state thereof or any agency
or department of the United States of America or any state thereof);
(i) we express no opinion with respect to the Trust's or
Indenture Trustee's rights in and to any property which secures any Initial
Receivable;
(j) we express no opinion with respect to the priority of
the interest of the Trust in the Initial Receivables against any of the
following: ( pursuant to Section 9-301(1) of the UCC, a lien creditor or
bulk purchaser who attached or levied prior to the perfection of the
security interest of the Trust; ( pursuant to Section 9-301(4) of the UCC,
a lien creditor to the extent that provision limits the priority afforded
future advances; ( pursuant to Section 9-312(7) of the UCC, another secured
creditor to the extent that provision limits the priority afforded future
advances; ( pursuant to Sections 9-103(1)(d) or (3)(e) and Section 9-312(1)
of the UCC, a security interest perfected under the laws of another
jurisdiction to the extent MART was located in such jurisdiction within
four months prior to the date of the perfection of the security interest of
the Trust; ( pursuant to Section 9-312(3) and (4) of the UCC, a "purchase
money security interest" as such term is defined in Section 9-107 of the
UCC; ( pursuant to Section 9-312(6) of the UCC, another secured party with
a perfected security interest in other property of MART to the extent the
Initial Receivables are proceeds of such other creditor's property; (
pursuant to Sections 9-104, 9-113, 4-208 and 9-302(1) of the UCC, another
creditor not required to file a financing statement to perfect its
interest; and ( pursuant to Section 9-401(2) and (3) of the UCC, the
security interest of a creditor who filed a financing statement based on a
prior or incorrect location of MART or the Initial Receivables or use of
the Initial Receivables to the extent such other financing statement would
be effective under Section 9-401(2) or (3) of the UCC;
(k) we have assumed that no financing statement naming
"MMCA Auto Receivables Trust" or "Chase Manhattan Bank Delaware, as Trustee
of MMCA Auto Receivables Trust" as debtor was filed in the Filing Office
between the effective date of the Search Reports and the date of the filing
of the Financing Statements in the Filing Office;
(l) as used in paragraph 2, the term "security interest" is
used as defined in Section 1-201 of the UCC, which definition includes both
(i) an interest in chattel paper to secure payment and (ii) a sale of
chattel paper. In addition, we express no opinion whether or to what
extent the transfer pursuant to the Sale and Servicing Agreement will be
characterized as a sale or a transfer for security;
(m) we have assumed that (i) the Sale and Servicing
Agreement constitutes the legal, valid and binding obligation of the Trust,
enforceable against the Trust in accordance with its terms and (ii) the
Indenture constitutes the legal, valid and binding obligation of the
Indenture Trustee and the Trust, enforceable against the Indenture Trustee
and the Trust, respectively, in accordance with its terms; and
(n) we call to your attention that in the case of the
issuance of distributions on, or proceeds of, the Initial Receivables, the
security interest of the Trust therein will be perfected only if possession
thereof is obtained or other appropriate action is taken in accordance with
the provisions of the UCC or other applicable law and, in the case of
certain types of distributions or proceeds, other parties such as holders
in due course, protected purchasers and buyers in the ordinary course of
business may obtain superior priority.
We call to your attention that, with respect to paragraphs (a),
(e), (j)(iv) and (k) of our qualifications set forth above, we have relied
upon representations and warranties of MART as to the assumptions therein.
This opinion is being furnished only to you and is solely for
your benefit in connection with the closing today under the Sale and
Servicing Agreement and is not to be used, circulated, quoted, relied upon
or otherwise referred to for any purpose without prior written consent in
each instance.
Very truly yours,
Schedule A
Mitsubishi Motors Credit of America, Inc.
6363 Katella Avenue
Cypress, California 90630
Chase Manhattan Bank Delaware
as Trustee
MMCA Auto Receivables Trust
1201 Market Street
Wilmington, DE 19801
Attention: Corporate Trust Department
MMCA Auto Owner Trust 1999-2
c/o Wilmington Trust Company, as
Owner Trustee
1100 North Market Street
Wilmington, Delaware 19890-0001
Wilmington Trust Company, as
Owner Trustee
1100 North Market Street
Wilmington, Delaware 19890-0001
Bank of Tokyo - Mitsubishi Trust Company
as Indenture Trustee
1251 Avenue of the Americas
New York, New York 10020
Credit Suisse First Boston Corporation
as Representative of the several
Underwriters
Eleven Madison Avenue
New York, New York 10010
Standard & Poor's,
a division of The McGraw-Hill Companies, Inc.
55 Water Street
New York, New York 10041
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Exhibit A (to Opinion)
MMCA AUTO RECEIVABLES TRUST
OFFICER'S CERTIFICATE
The undersigned, a duly authorized officer of MMCA AUTO
RECEIVABLES TRUST ("MART"), does hereby certify as follows:
(1) No financing statements or other filings have been filed
naming MART as debtor or seller in any State of the United States of
America to perfect a sale, transfer or assignment of or lien, encumbrance,
security interest or other interest in, or which otherwise pertains to, the
Initial Receivables.
(2) At all times since the establishment of MART, MART has had
one place of business and it is and has been located in Cypress,
California.
(3) At all times since the establishment of MART and on the date
hereof, MART has had a mailing address of P.O. Box 6038, Cypress,
California 90630-0038.
(4) Attached hereto as Annex A are forms of motor vehicle retail
installment sales contracts used to create the Initial Receivables (the
"Form Contracts"), and each Initial Receivable is substantially in the form
of a Form Contract.
Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Sale and Servicing
Agreement, dated as of October 1, 1999, by and among MART, Mitsubishi
Motors Credit of America, Inc., as Servicer, and MMCA Auto Owner Trust
1999-2, as Trust, and accepted and agreed to by Bank of Tokyo - Mitsubishi
Trust Company, as Indenture Trustee.
IN WITNESS WHEREOF, I have set my hand this day of
October, 1999.
MMCA AUTO RECEIVABLES TRUST
By: ____________________________
Name:
Title:
Annex A (to Opinion)
FORMS OF RETAIL INSTALLMENT SALES CONTRACT
Annex B (to Opinion)
CERTIFIED REPORT OF FILING OFFICE ON PRIOR FINANCING STATEMENTS
Annex A
[FORMS OF RETAIL INSTALLMENT SALE CONTRACT]
EXHIBIT 4.4
This ADMINISTRATION AGREEMENT, dated as of October 1, 1999 (as
the same may be amended, supplemented or otherwise modified from time to
time and in effect, this "Agreement"), is by and among MMCA AUTO OWNER
TRUST 1999-2, a Delaware business trust (the "Issuer"), MITSUBISHI MOTORS
CREDIT OF AMERICA, INC., a Delaware corporation, as administrator (the
"Administrator"), and BANK OF TOKYO - MITSUBISHI TRUST COMPANY, a New York
banking corporation, not in its individual capacity but solely as Indenture
Trustee (the "Indenture Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer is issuing [______]% Class A-1 Asset Backed
Notes, [______]% Class A-2 Asset Backed Notes, [______]% Class A-3 Asset
Backed Notes and [______]% Class B Asset Backed Notes (collectively, the
"Notes") pursuant to the Indenture, dated as of October 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to
time, the "Indenture"), between the Issuer and the Indenture Trustee (terms
not defined in this Agreement shall have the meaning set forth in, or
incorporated by reference into, the Sale and Servicing Agreement or, if not
defined therein, in the Indenture);
WHEREAS, the Issuer has entered into certain agreements in
connection with the issuance of the Notes and of certain beneficial
interests in the Issuer, including (i) a Sale and Servicing Agreement,
dated as of October 1, 1999 (as amended, supplemented or otherwise modified
and in effect from time to time, the "Sale and Servicing Agreement"), among
the Issuer, Mitsubishi Motors Credit of America Inc., as servicer, and MMCA
Auto Receivables Trust, as seller (the "Seller"), (ii) a Letter of
Representations, dated October 28, 1999 (as amended, supplemented or
otherwise modified and in effect from time to time, the "Note Depository
Agreement"), among the Issuer, the Indenture Trustee and The Depository
Trust Company ("DTC") relating to the Notes, and (iii) the Indenture (the
Sale and Servicing Agreement, the Note Depository Agreement and the
Indenture being referred to hereinafter collectively as the "Related
Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and the
Owner Trustee are required to perform certain duties in connection with (a)
the Notes and the collateral therefor pledged pursuant to the Indenture
(the "Collateral") and (b) the beneficial interests in the Issuer (the
registered holders of such interests being referred to herein as the
"Certificateholders");
WHEREAS, the Issuer and the Owner Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Owner
Trustee referred to in the preceding clause and to provide such additional
services consistent with the terms of this Agreement and the Related
Agreements as the Issuer and the Owner Trustee may from time to time
request; and
WHEREAS, the Administrator has the capacity to provide the
services required hereby and is willing to perform such services for the
Issuer and the Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Duties of the Administrator. (a) Duties with Respect to the
Related Agreements. (i) The Administrator agrees to perform all its
duties as Administrator under the Note Depository Agreement. In addition,
the Administrator shall consult with the Owner Trustee regarding the duties
of the Issuer or the Owner Trustee under the Related Agreements. The
Administrator shall monitor the performance of the Issuer and shall advise
the Owner Trustee when action is necessary to comply with the Issuer's or
the Owner Trustee's duties under the Related Agreements. The Administrator
shall prepare for execution by the Issuer or the Owner Trustee, or shall
cause the preparation by other appropriate persons of, all such documents,
reports, filings, instruments, certificates and opinions that it shall be
the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to the Related Agreements. In furtherance of the foregoing, the
Administrator shall take all appropriate action that is the duty of the
Issuer or the Owner Trustee to take pursuant to the Indenture including,
without limitation, such of the foregoing as are required with respect to
the following matters under the Indenture (references are to sections of
the Indenture):
(A) causing the Note Register to be kept and notifying the
Indenture Trustee of any appointment of a new Note Registrar and the
location, or change in location, of the Note Register (Section 2.5);
(B) notifying the Noteholders of the final principal payment on
their Notes (Section 2.8(e));
(C) preparing or obtaining the documents and instruments
required for authentication of the Notes and delivering the same to
the Indenture Trustee (Section 2.2);
(D) preparing, obtaining or filing of the instruments, opinions
and certificates and other documents required for the release of
collateral (Section 2.10);
(E) maintaining an office in the Borough of Manhattan, City of
New York, for registration of transfer or exchange of the Notes
(Section 3.2);
(F) causing newly appointed Paying Agents, if any, to deliver to
the Indenture Trustee the instrument specified in the Indenture
regarding funds held in trust (Section 3.3);
(G) directing the Indenture Trustee to deposit monies with
Paying Agents, if any, other than the Indenture Trustee (Section 3.3);
(H) obtaining and preserving the Issuer's qualification to do
business in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the
Indenture, the Notes, the Collateral and each other instrument and
agreement included in the Trust Estate (Section 3.4);
(I) preparing all supplements and amendments to the Indenture
and all financing statements, continuation statements, instruments of
further assurance and other instruments and taking such other action
as is necessary or advisable to protect the Trust Estate (Section
3.5);
(J) delivering the Opinion of Counsel on the Closing Date and
annually delivering Opinions of Counsel as to the Trust Estate, and
annually delivering the Officer's Certificate and certain other
statements as to compliance with the Indenture (Sections 3.6 and 3.9);
(K) identifying to the Indenture Trustee in an Officer's
Certificate a Person with whom the Issuer has contracted to perform
its duties under the Indenture (Section 3.7(b));
(L) notifying the Indenture Trustee and the Rating Agencies of
an Event of Servicing Termination under the Sale and Servicing
Agreement and, if such Event of Servicing Termination arises from the
failure of the Servicer to perform any of its duties under the Sale
and Servicing Agreement with respect to the Receivables, taking all
reasonable steps available to remedy such failure (Section 3.7(d));
(M) causing the Servicer to comply with Sections 3.7, 3.9, 3.10,
3.11, 3.12, 3.13, 3.14, and 4.11 and Article VII of the Sale and
Servicing Agreement (Section 3.14);
(N) preparing and obtaining documents and instruments required
for the release of the Issuer from its properties or assets (Section
3.10(b));
(O) delivering written notice to the Indenture Trustee and the
Rating Agencies of each Event of Default under the Indenture and each
default by the Issuer, the Servicer or the Seller under the Sale and
Servicing Agreement and by the Seller or Mitsubishi Motors Credit of
America, Inc. under the Purchase Agreement (Section 3.19);
(P) monitoring the Issuer's obligations as to the satisfaction
and discharge of the Indenture and preparing an Officer's Certificate
and obtaining the Opinion of Counsel and the Independent Certificate
relating thereto (Section 4.1);
(Q) delivering to the Noteholders and the Note Owners any
Officer's Certificate received from the Issuer regarding the default
in the observance or performance of any material covenant or agreement
of the Issuer made in the Indenture or the breach of any
representation or warranty of the Issuer made in the Indenture or in
any certificate or other writing delivered pursuant to the Indenture
(Sections 5.1 and 7.4(b));
(R) complying with any written direction of the Indenture
Trustee with respect to the sale of the Trust Estate at one or more
public or private sales called and conducted in any manner permitted
by law if an Event of Default shall have occurred and be continuing
(Section 5.4);
(S) preparing and delivering notice to the Noteholders of the
removal of the Indenture Trustee and appointing a successor Indenture
Trustee (Section 6.8);
(T) preparing any written instruments required to confirm more
fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or
removal of any co-trustee or separate trustee (Section 6.10);
(U) furnishing the Indenture Trustee with the names and
addresses of the Noteholders during any period when the Indenture
Trustee is not the Note Registrar (Section 7.1);
(V) preparing and, after execution by the Issuer, filing with
the Securities and Exchange Commission, (the "Commission") any
applicable state agencies and the Indenture Trustee, documents
required to be filed on a periodic basis with, and summaries thereof
as may be required by rules and regulations prescribed by, the
Commission and any applicable state agencies and transmitting such
summaries, as necessary, to the Noteholders (Section 7.3);
(W) delivering to the Noteholders of Officer's Certificates and
reports, if any, delivered to the Indenture Trustee pursuant to
Section 3.10 and 3.11 of the Sale and Servicing Agreement (Section
7.4);
(X) opening one or more accounts in the Issuer's name, preparing
and delivering Issuer Orders, Officer's Certificates and Opinions of
Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.2 and 8.3);
(Y) preparing an Issuer Request and Officer's Certificate and
obtaining an Opinion of Counsel and Independent Certificates, if
necessary, for the release of the Trust Estate (Sections 8.4 and 8.5);
(Z) preparing Issuer Orders and obtaining Opinions of Counsel
with respect to the execution of supplemental indentures and mailing
to the Noteholders and to the Rating Agencies notices with respect to
such supplemental indentures (Sections 9.1, 9.2 and 9.3);
(AA) executing and delivering new Notes conforming to any
supplemental indenture (Section 9.6);
(A2) notifying the Noteholders and the Rating Agencies of
redemption of the Notes or causing the Indenture Trustee to provide
such notification (Section 10.1);
(B2) preparing and delivering all Officer's Certificates and
Opinions of Counsel and obtaining any Independent Certificates with
respect to any requests by the Issuer to the Indenture Trustee to take
any action under the Indenture (Section 11.1(a));
(C2) preparing and delivering Officer's Certificates and
obtaining any Independent Certificates necessary for the release of
property from the lien of the Indenture (Section 11.1(b));
(D2) notifying the Rating Agencies, upon the failure of the
Indenture Trustee to give such notification, of the information
required pursuant to Section 11.4 of the Indenture (Section 11.4);
(E2) preparing and delivering to the Noteholders and the
Indenture Trustee any agreements with respect to alternate payment and
notice provisions (Section 11.6);
(F2) recording the Indenture, if applicable (Section 11.15); and
(G2) preparing Definitive Notes in accordance with the
instructions of the Clearing Agency (Section 2.13).
(ii) The Administrator will:
(A) pay the Indenture Trustee from time to time reasonable
compensation for all services rendered by the Indenture Trustee under
the Indenture (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(B) except as otherwise expressly provided in the Indenture,
reimburse the Indenture Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Indenture
Trustee in accordance with any provision of the Indenture (including
the reasonable compensation, expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith;
(C) indemnify the Indenture Trustee and its agents for, and hold
them harmless against, any losses, liability or expense incurred
without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the transactions
contemplated by the Indenture, including the reasonable costs and
expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or
duties under the Indenture; and
(D) indemnify the Owner Trustee (in its individual and trust
capacities) and its agents for, and hold them harmless against, any
losses, liability or expense incurred without negligence or bad faith
on their part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust
Agreement, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties under the
Trust Agreement.
(b) Additional Duties. (i) In addition to the duties of the
Administrator set forth above, the Administrator shall perform such
calculations and shall prepare or shall cause the preparation by other
appropriate persons of, and shall execute on behalf of the Issuer or the
Owner Trustee, all such documents, reports, filings, instruments,
certificates and opinions that it shall be the duty of the Issuer or the
Owner Trustee to prepare, file or deliver pursuant to the Related
Agreements or Section 5.5 of the Trust Agreement, and at the request of the
Owner Trustee shall take all appropriate action that it is the duty of the
Issuer or the Owner Trustee to take pursuant to the Related Agreements. In
furtherance thereof, the Owner Trustee shall, on behalf of itself and of
the Issuer, execute and deliver to the Administrator and to each successor
Administrator appointed pursuant to the terms hereof, one or more powers of
attorney substantially in the form of Exhibit A hereto, appointing the
Administrator the attorney-in-fact of the Owner Trustee and the Issuer for
the purpose of executing on behalf of the Owner Trustee and the Issuer all
such documents, reports, filings, instruments, certificates and opinions.
Subject to Section 5 of this Agreement, and in accordance with the
directions of the Owner Trustee, the Administrator shall administer,
perform or supervise the performance of such other activities in connection
with the Collateral (including the Related Agreements) as are not covered
by any of the foregoing provisions and as are expressly requested by the
Owner Trustee and are reasonably within the capability of the
Administrator. Such responsibilities shall include obtaining and
maintaining any licenses required to be obtained or maintained by the
Issuer under the Pennsylvania Motor Vehicle Sales Finance Act. In
addition, the Administrator shall promptly notify the Indenture Trustee and
the Owner Trustee in writing of any amendment to the Pennsylvania Motor
Vehicle Sales Finance Act that would affect the duties or obligations of
the Indenture Trustee or the Owner Trustee under any Basic Document and
shall assist the Indenture Trustee or the Owner Trustee in obtaining and
maintaining any licenses required to be obtained or maintained by the
Indenture Trustee or the Owner Trustee thereunder. In connection
therewith, the Administrator shall cause the Seller to pay all fees and
expenses under such Act.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
promptly notifying the Owner Trustee in the event that any withholding tax
is imposed on the Issuer's payments (or allocations of income) to a
Certificateholder as contemplated in Section 5.2(c) of the Trust Agreement.
Any such notice shall specify the amount of any withholding tax required to
be withheld by the Owner Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the
Related Agreements to the contrary, the Administrator shall be responsible
for performing the duties of the Issuer or the Owner Trustee set forth in
Section 3.4(b) and (c), Section 5.5(a), (b), (c) and (d), the penultimate
sentence of Section 5.5 and Section 5.6(a) of the Trust Agreement with
respect to, among other things, accounting and reports to the
Certificateholders.
(iv) The Administrator will provide prior to [January 15, 2000],
a certificate of a Responsible Officer in form and substance satisfactory
to the Owner Trustee as to whether any tax withholding is then required
and, if required, the procedures to be followed with respect thereto to
comply with the requirements of the Code. The Administrator shall be
required to update the letter in each instance that any additional tax
withholding is subsequently required or any previously required tax
withholding shall no longer be required.
(v) The Administrator shall perform the duties of the
Administrator specified in Section 10.2 of the Trust Agreement required to
be performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the
Administrator under the Trust Agreement or any other Related Agreement.
(vi) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions or otherwise deal with any of its affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in
the Administrator's opinion, no less favorable to the Issuer than would be
available from unaffiliated parties.
(c) Non-Ministerial Matters. (i) With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time
before the taking of such action, the Administrator shall have notified the
Owner Trustee of the proposed action and the Owner Trustee shall not have
withheld consent or provided an alternative direction. For the purpose of
the preceding sentence, "non-ministerial matters" shall include, without
limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the
Issuer (other than in connection with the collection of the
Receivables or Permitted Investments);
(C) the amendment, change or modification of the Related
Agreements;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Administrators or Successor
Servicers, or the consent to the assignment by the Note Registrar,
Paying Agent or Indenture Trustee of its obligations under the
Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement,
the Administrator shall not be obligated to, and shall not, (x) make any
payments to the Noteholders under the Related Agreements or (y) take any
other action that the Issuer directs the Administrator not to take on its
behalf.
2. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books
of account and records shall be accessible for inspection by the Issuer,
the Owner Trustee and the Indenture Trustee at any time during normal
business hours.
3. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and, as reimbursement for
its expenses related thereto, the Administrator shall be entitled to $500
per month which shall be solely an obligation of the Seller.
4. Additional Information To Be Furnished to the Issuer. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably
request.
5. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall
not be subject to the supervision of the Issuer or the Owner Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or
the Owner Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Owner Trustee.
6. No Joint Venture. Nothing contained in this Agreement (i) shall
constitute the Administrator and either of the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed
to impose any liability as such on any of them or (iii) shall be deemed to
confer on any of them any express, implied or apparent authority to incur
any obligation or liability on behalf of the others.
7. Other Activities of Administrator. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or,
in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or
entity may engage in business activities similar to those of the Issuer,
the Owner Trustee or the Indenture Trustee.
8. Term of Agreement; Resignation and Removal of Administrator. (a)
This Agreement shall continue in force until the dissolution of the Issuer,
upon which event this Agreement shall automatically terminate.
(b) Subject to Sections 8(e) and 8(f), the Administrator may resign
its duties hereunder by providing the Issuer with at least sixty (60) days'
prior written notice.
(c) Subject to Sections 8(e) and 8(f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least
sixty (60) days' prior written notice.
(d) Subject to Sections 8(e) and 8(f), at the sole option of the
Issuer, the Administrator may be removed immediately upon written notice of
termination from the Issuer to the Administrator if any of the following
events shall occur:
(i) the Administrator shall default in the performance of any of
its duties under this Agreement and, after notice of such default, shall
not cure such default within ten (10) days (or, it such default cannot be
cured in such time, shall not give within ten (10) days such assurance of
cure as shall be reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises shall enter a
decree or order for relief, and such decree or order shall not have been
vacated within sixty (60) days, in respect of the Administrator in any
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect or appoint a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for the
Administrator or any substantial part of its property or order the winding-
up or liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, shall consent to the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator or similar
official for the Administrator or any substantial part of its property,
shall consent to the taking of possession by any such official of any
substantial part of its property, shall make any general assignment for the
benefit of creditors or shall fail generally to pay its debts as they
become due.
The Administrator agrees that if any of the events specified in
clauses (ii) or (iii) of this Section 8 shall occur, it shall give written
notice thereof to the Issuer and the Indenture Trustee within seven (7)
days after the happening of such event.
(e) No resignation or removal of the Administrator pursuant to this
Section shall be effective until (i) a successor Administrator shall have
been appointed by the Issuer and (ii) such successor Administrator shall
have agreed in writing to be bound by the terms of this Agreement in the
same manner as the Administrator is bound hereunder.
(f) The appointment of any successor Administrator shall be effective
only after satisfaction of the Rating Agency Condition with respect to the
proposed appointment.
(g) Subject to Section 8(e) and 8(f), the Administrator acknowledges
that upon the appointment of a Successor Servicer pursuant to the Sale and
Servicing Agreement, the Administrator shall immediately resign and such
Successor Servicer shall automatically become the Administrator under this
Agreement.
9. Action upon Termination, Resignation or Removal. Promptly upon
the effective date of termination of this Agreement pursuant to Section
8(a), the resignation of the Administrator pursuant to Section 8(b) or the
removal of the Administrator pursuant to Section 8(c) or (d), the
Administrator shall be entitled to be paid all fees and reimbursable
expenses accruing to it to this date of such termination, resignation or
removal. The Administrator shall forthwith upon such termination pursuant
to Section 8(a) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In
the event of the resignation of the Administrator pursuant to Section 8(b)
or the removal of the Administrator pursuant to Section 8(c) or (d), the
Administrator shall cooperate with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of the duties
of the Administrator.
10. Notices. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to:
MMCA Auto Owner Trust 1999-2
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration Department
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
(b) if to the Administrator, to:
Mitsubishi Motors Credit of America, Inc.
6363 Katella Avenue
Cypress, California 90630-5205
Attention: Executive Vice President and Treasurer
Telephone: (714) 236-1500
Telecopy: (714) 236-1600
(c) If to the Indenture Trustee, to:
Bank of Tokyo - Mitsubishi Trust Company
1251 Avenue of the Americas
New York, NY 10020
Attention: Corporate Trust Administration
Telephone: (212) 782-5909
Telecopy: (212) 782-5900
or to such other address as any party shall have provided to the other
parties in writing. Any notice required to be in writing hereunder shall
be deemed given if such notice is mailed by certified mail, postage
prepaid, or hand-delivered to the address of such party as provided above.
11. Amendments. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Issuer, the
Administrator and the Indenture Trustee, with the written consent of the
Owner Trustee but without the consent of the Noteholders and the
Certificateholders, 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
Certificateholders; provided that such amendment will not, as set forth in
an Opinion of Counsel satisfactory to the Indenture Trustee and the Owner
Trustee, materially and adversely affect the interest of any Noteholder or
Certificateholder. This Agreement may also be amended by the Issuer, the
Administrator and the Indenture Trustee with the written consent of the
Owner Trustee and the holders of Notes evidencing at least a majority of
the Outstanding Amount of the Notes, voting as a group, and the holders of
Certificates evidencing at least a majority 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 may (i) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that are required to be made for
the benefit of the Noteholders or the Certificateholders or (ii) reduce the
aforesaid percentage of the holders of Notes and Certificates which are
required to consent to any such amendment, without the consent of the
holders of all the outstanding Notes and Certificates. Notwithstanding the
foregoing, the Administrator may not amend this Agreement without the
consent of the Seller, which permission shall not be unreasonably withheld.
12. Successors and Assigns. This Agreement may not be assigned by
the Administrator unless such assignment is previously consented to in
writing by the Issuer and the Owner Trustee and subject to the satisfaction
of the Rating Agency Condition in respect thereof. Any assignment without
such consent and satisfaction shall be null and void. An assignment with
such consent and satisfaction, if accepted by the assignee, shall bind the
assignee hereunder in the same manner as the Administrator is bound
hereunder. Notwithstanding the foregoing, this Agreement may be assigned
by the Administrator without the consent of the Issuer or the Owner Trustee
to a corporation or other organization that is a successor (by merger,
consolidation or purchase of assets) to the Administrator; provided that
such successor organization executes and delivers to the Issuer, the Owner
Trustee and the Indenture Trustee an agreement in which such corporation or
other organization agrees to be bound hereunder by the terms of said
assignment in the same manner as the Administrator is bound hereunder.
Subject to the foregoing, this Agreement shall bind any successors or
assigns of the parties hereto.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
14. Headings. The Section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the
meaning, construction or affect of this Agreement.
15. Counterparts. This Agreement may be executed in counterparts,
each of which when so executed shall be an original, but all of which
together shall constitute but one and the same agreement.
16. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
17. Not Applicable to Mitsubishi Motors Credit of America, Inc. in
Other Capacities. Nothing in this Agreement shall affect any obligation
Mitsubishi Motors Credit of America, Inc. may have in any capacity other
than as Administrator under this Agreement.
18. Limitation of Liability of Owner Trustee and Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
instrument has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall Wilmington Trust Company in its individual
capacity or any beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder, as to all of which recourse shall be had solely to
the assets of the Issuer. For all purposes of this Agreement, in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned 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 Issuer hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Issuer.
19. Third-Party Beneficiary. The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party
hereto.
20. Successor Servicer and Administrator. The Administrator shall
undertake, as promptly as possible after the giving of notice of
termination to the Servicer of the Servicer's rights and powers pursuant to
Section 8.2 of the Sale and Servicing Agreement, to enforce the provisions
of Section 8.2 with respect to the appointment of a successor Servicer.
Such successor Servicer shall, upon compliance with the last sentence of
Section 8.2 of the Sale and Servicing Agreement, become the successor
Administrator hereunder; provided, however, that if the Indenture Trustee
shall become such successor Administrator, the Indenture Trustee shall not
be required to perform any obligations or duties or conduct any activities
as successor Administrator that would be prohibited by law and not within
the banking and trust powers of the Indenture Trustee. In such event, the
Indenture Trustee may appoint a sub-administrator to perform such
obligations and duties.
21. No Petition; Subordination; Claims Against Seller. (a)
Notwithstanding any prior termination of this Agreement, the Seller, the
Administrator, the Owner Trustee and the Indenture Trustee shall not, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer, acquiesce, petition or otherwise
invoke or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Issuer under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial
part of its property, or ordering the winding up or liquidation of the
affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, (x)
the Issuer, the Administrator, the Owner Trustee and the Indenture Trustee
shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce,
petition or otherwise invoke or cause the Seller to invoke the process of
any court or government authority for the purpose of commencing or
sustaining a case against the Seller under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Seller or
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Seller; (y) any claim that the Issuer,
the Administrator, the Owner Trustee and the Indenture Trustee may have at
any time against the Subtrust Assets of any Subtrust unrelated to the
Notes, the Certificates or the Receivables, and any claim that they may
have at any time against the Seller that they may seek to enforce against
the Subtrust Assets of any Subtrust unrelated to the Notes, the
Certificates or 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 (z) the Issuer, the Administrator,
the Owner Trustee and the Indenture Trustee hereby irrevocably make the
election afforded by Title 11 United States Code Section 1111(b)(1)(A)(i)
to secured creditors to receive the treatment afforded by Title 11 United
States Code Section 1111(b)(2) with respect to any secured claim that they
may have at any time against the Depositor. The obligations of the Seller
under this Agreement are limited to the related Subtrust and the related
Subtrust Assets.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
MMCA AUTO OWNER TRUST 1999-2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By: ___________________________________
Name:
Title:
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: __________________________________
Name:
Title:
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.,
as Administrator
By: __________________________________
Name:
Title:
EXHIBIT A
POWER OF ATTORNEY
STATE OF DELAWARE }
}
COUNTY OF NEW CASTLE }
KNOW ALL MEN BY THESE PRESENTS, that Wilmington Trust Company, a
banking corporation, not in its individual capacity but solely as owner
trustee (the "Owner Trustee") for MMCA AUTO OWNER TRUST 1999-2 (the
"Issuer"), does hereby make, constitute and appoint Mitsubishi Motors
Credit of America, Inc., in its capacity as administrator under the
Administration Agreement dated as of [October] 1, 1999 (the "Administration
Agreement"), among the Issuer, Mitsubishi Motors Credit of America, Inc.
and Bank of Tokyo - Mitsubishi Trust Company, as Indenture Trustee, as the
same may be amended from time to time, and its agents and attorneys, as
Attorneys-in-Fact to execute on behalf of the Owner Trustee or the Issuer
all such documents, reports, filings, instruments, certificates and
opinions as it should be the duty of the Owner Trustee or the Issuer to
prepare, file or deliver pursuant to the Related Agreements, or pursuant to
Section 5.5 of the Trust Agreement, including, without limitation, to
appear for and represent the Owner Trustee and the Issuer in connection
with the preparation, filing and audit of Federal, state and local tax
returns pertaining to the Issuer, and with full power to perform any and
all acts associated with such returns and audits that the Owner Trustee
could perform, including without limitation, the right to distribute and
receive confidential information, defend and assert positions in response
to audits, initiate and defend litigation, and to execute waivers of
restrictions on assessments of deficiencies, consents to the extension of
any statutory or regulatory time limit, and settlements.
All powers of attorney for this purpose heretofore filed or executed
by the Owner Trustee are hereby revoked.
Capitalized terms that are used and not otherwise defined herein shall
have the meanings ascribed thereto in the Administration Agreement.
EXECUTED this _____ day of October, 1999.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
__________________________________
Name:
Title:
STATE OF DELAWARE }
}
COUNTY OF NEW CASTLE }
Before me, the undersigned authority, on this day personally appeared
______________________________, known to me to be the person whose name is
subscribed to the foregoing instruments, and acknowledged to me that he/she
signed the same for the purposes and considerations therein expressed.
Sworn to before me this _____
day of October, 1999.
___________________________________
Notary Public - State of Delaware
EXHIBIT 5.1
October 15, 1999
MMCA Auto Receivables Trust
6363 Katella Avenue
Cypress, California 90630-5205
Re: Registration Statement on Form S-1
Registration No. 333-85685
Ladies and Gentlemen:
We are members of the Bar of the State of New York and have acted
as special counsel to MMCA Auto Receivables Trust, as seller (the
"Seller"), and Mitsubishi Motors Credit of America, Inc., as Servicer (the
"Servicer"), in connection with the issuance of the __% Class A-1 Asset
Backed Notes, __% Class A-2 Asset Backed Notes, __% Class A-3 Asset Backed
Notes and __% Class B Asset Backed Notes (collectively, the "Notes") by
MMCA Auto Owner Trust 1999-2 (the "Issuer") pursuant to the terms of an
Indenture, dated as of October __, 1999 (the "Indenture"), between the
Issuer and Bank of Tokyo-Mitsubishi Trust Company, as Indenture Trustee
(the "Indenture Trustee"). The Notes will be sold to the underwriters (the
"Underwriters") who are parties to an underwriting agreement (the
"Underwriting Agreement") between the Seller and Credit Suisse First Boston
Corporation, as representative of the several Underwriters. Terms not
otherwise defined herein have the meaning assigned to them in the
Prospectus (as defined below).
In this connection, we have examined and relied upon the
registration statement for the Notes on Form S-1, Registration No. 333-
85685, filed with the Securities and Exchange Commission (the "SEC") on
August 20, 1999 and Amendment No. 1 thereto filed with the SEC on October
15, 1999 (collectively, the "Prospectus"), the form of the Indenture and
the forms of the other documents to be executed in connection therewith,
and we have assumed that the parties to such documents will comply with the
terms thereof. In addition, we have examined and considered executed
originals or counterparts, or certified or other copies identified to our
satisfaction as being true copies of such certificates, instruments,
documents and other corporate records of the Seller and the Servicer and
matters of fact and law as we deem necessary for the purpose of the opinion
expressed below.
In our examination we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the original of
such latter documents. As to any facts material to the opinions expressed
herein that we did not independently establish or verify, we have relied
upon statements and representations of officers and other representatives
of the Seller, the Servicer and others.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of New York, the General Corporation Law of the
State of Delaware and the laws of the United States of America to the
extent specifically referred to herein.
Based upon and subject to the foregoing, we are of the opinion
that when the Indenture is executed and delivered by the parties thereto,
when the Notes to be issued pursuant to the Indenture have been duly and
validly authorized and executed by the Owner Trustee on behalf of the
Issuer and have been authenticated by the Indenture Trustee in accordance
with the provisions of the Indenture, and when the Notes are paid for by
the Underwriters pursuant to the Underwriting Agreement, the Notes will be
legally issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to Skadden, Arps, Slate,
Meagher & Flom LLP under the caption "Legal Opinions" in the Prospectus
included in the Registration Statement.
Very truly yours,
Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit 8.1
October 15, 1999
MMCA Auto Receivables Trust
6363 Katella Avenue
Cypress, California 90630-5205
Re: Registration Statement on Form S-1
Registration No. 333-85685
Ladies and Gentlemen:
We have acted as special counsel to MMCA Auto Receivables, Inc. as
Seller (the "Seller") in connection with the issuance of the __% Class A-1
Asset Backed Notes, __% Class A-2 Asset Backed Notes, __% Class A-3 Asset
Backed Notes and __% Class B Asset Backed Notes (collectively, the "Notes")
and the Asset Backed Certificates (the "Certificates") by MMCA Auto Owner
Trust 1999-2 (the "Issuer") pursuant to the terms of, (a) with respect to
the Notes, an Indenture dated as of October __, 1999 (the "Indenture")
between the Issuer and Bank of Tokyo-Mitsubishi Trust Company, as Indenture
Trustee, and (b) with respect to the Certificates, an Amended and Restated
Trust Agreement dated as of October __, 1999 (the "Trust Agreement")
between MMCA Auto Receivables Trust, as Depositor, and Wilmington Trust
Company, as Owner Trustee. The Notes will be sold to the underwriters (the
"Underwriters") who are parties to an underwriting agreement (the
"Underwriting Agreement") between the Seller and Credit Suisse First Boston
Corporation, as representative of the Underwriters. Terms not otherwise
defined herein have the meanings assigned to them in the Prospectus (as
defined below).
In this connection, we have examined and relied upon the registration
statement for the Notes on Form S-1, Registration No. 333-85685, filed with
the Securities and Exchange Commission (the "SEC") on August 20, 1999 and
Amendment No. 1 thereto filed with the SEC on October 15, 1999
(collectively, the "Registration Statement"), including (i) the form of
prospectus included therein (the "Prospectus"), (ii) the form of the
Indenture, (iii) the form of the Trust Agreement, (iv) the form of the
Purchase Agreement, (v) the form of the Sale and Servicing Agreement and
(vi) such other documents as we have deemed necessary or appropriate as a
basis for the opinion set forth below, and we have assumed (i) that such
documents will not be amended and (ii) that the parties to such documents
will comply with the terms thereof.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of
such latter documents. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have relied
upon statements, representations, and certifications of officers and other
representatives of the Seller, the Servicer, the Underwriters, and others,
including, in particular, (i) certain calculations performed by Credit
Suisse First Boston Corporation and (ii) a representation of the Servicer
regarding the reasonableness of certain fees payable to it.
In rendering our opinion, we have also considered and relied upon the
Internal Revenue Code of 1986, as amended, and administrative rulings,
judicial decisions, regulations, and such other authorities as we have
deemed appropriate, all as in effect as of the date hereof. The statutory
provisions, regulations, interpretations, and other authorities upon which
our opinion is based are subject to change, and such changes could apply
retroactively. In addition, there can be no assurance that positions
contrary to those stated in our opinion will not be taken by the Internal
Revenue Service.
We express no opinions as to the laws of any jurisdiction other than
the federal laws of the United States of America to the extent specifically
referred to herein.
Based upon and subject to the foregoing, we are of the opinion that
the statements in the Prospectus under the headings "Summary of Terms Tax
Status" and "Federal Income Tax Consequences," subject to the
qualifications set forth therein, accurately describe the material federal
income tax consequences to holders of Notes, under existing law and the
assumptions stated therein.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to Skadden, Arps, Slate Meagher
& Flom LLP under the caption "Federal Income Tax Consequences" in the
Prospectus.
Very truly yours,
Skadden, Arps, Slate, Meagher & Flom LLP
EXHIBIT 10.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT, dated as of October 1, 1999 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement"), by and between MITSUBISHI MOTORS CREDIT OF AMERICA, INC., a
Delaware corporation (the "Seller"), having its principal executive office
at 6363 Katella Avenue, Cypress, California 90630-5205, and MMCA AUTO
RECEIVABLES TRUST, a Delaware business trust (the "Purchaser"), having its
principal executive office at 6363 Katella Avenue, Cypress, California
90630-5205.
WHEREAS, in the regular course of its business, the Seller
purchases certain motor vehicle retail installment sale contracts secured
by new and used automobiles and light-duty trucks from motor vehicle
dealers; and
WHEREAS, the Seller and the Purchaser wish to set forth the terms
pursuant to which the Initial Receivables (such capitalized term and the
other capitalized terms used herein have the meanings assigned thereto
pursuant to Article I hereof) and certain additional property related
thereto are to be sold by the Seller to the Purchaser on the Closing Date
and the Subsequent Receivables and certain additional property related
thereto are to be sold by the Seller to the Purchaser from time to time
during the Pre-Funding Period, which Receivables and other property related
thereto will be sold by the Purchaser, pursuant to the Sale and Servicing
Agreement, to the MMCA Auto Owner Trust 1999-2 to be created pursuant to
the Trust Agreement.
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration, and the mutual terms and covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged by the
parties hereto, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Terms not defined in this Agreement shall have the meaning set
forth in, or incorporated by reference into, the Sale and Servicing
Agreement or, if not defined therein, in the Indenture. As used in this
Agreement, the following terms shall, unless the context otherwise
requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms of the terms defined):
"Agreement" shall have the meaning specified in the preamble
hereto.
"Assignment" shall mean, for purposes of this Agreement, the
First-Tier Initial Assignment or any First-Tier Subsequent Assignment, as
the context may require.
"Closing" shall have the meaning specified in Section 2.3.
"Closing Date" shall mean October 28, 1999.
"Cutoff Date" shall mean the Initial Cutoff Date or any
Subsequent Cutoff Date, as the context may require.
"First-Tier Initial Assignment" shall mean the document of
assignment in substantially the form attached to this Agreement as Exhibit
A-1.
"First-Tier Subsequent Assignment" shall mean any document of
assignment in substantially the form attached to this Agreement as Exhibit
A-2.
"Indenture" shall mean the Indenture, dated as of October 1,
1999, between the Trust and Bank of Tokyo - Mitsubishi Trust Company, a New
York banking corporation, as Indenture Trustee, as the same may from time
to time be amended, supplemented or otherwise modified and in effect.
"Initial Cutoff Date" shall mean October 1, 1999.
"Initial Receivable" shall mean, for purposes of this Agreement,
each motor vehicle retail installment sale contract described in the
Schedule of Initial Receivables attached hereto as Exhibit B and all rights
and obligations thereunder and any amendments, modifications or supplements
to such motor vehicle retail installment sale contract.
"Initial Receivables Purchase Price" shall mean $[________________].
"Officer's Certificate" shall mean, for purposes of this
Agreement, a certificate signed by the chairman, the president, any
executive vice president, vice president or the treasurer of the Seller,
and delivered to the Purchaser.
"Prospectus" shall have the meaning assigned to such term in the
Underwriting Agreement.
"Purchaser" shall mean MMCA Auto Receivables Trust, a Delaware
business trust, and its successors and assigns.
"Receivable" shall mean, for purposes of this Agreement, any
Initial Receivable or Subsequent Receivable, as the context may require.
"Relevant UCC" shall mean the Uniform Commercial Code, as in
effect from time to time in the relevant jurisdictions.
"Repurchase Event" shall have the meaning specified in Section
6.2.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of October 1, 1999, among Mitsubishi Motors Credit of
America, Inc., as servicer, the Purchaser, as seller, and the Trust, as
purchaser, as the same may from time to time be amended, supplemented or
otherwise modified and in effect.
"Schedule of Initial Receivables" shall mean, for purposes of
this Agreement, the list of Initial Receivables (which list may be in the
form of computer tape, microfiche or compact disk) annexed hereto as
Exhibit B.
"Schedule of Receivables" shall mean, for purposes of this
Agreement, the Schedule of Initial Receivables or any Schedule of
Subsequent Receivables, as the context may require.
"Schedule of Subsequent Receivables" shall mean, for purposes of
this Agreement, any list of Subsequent Receivables (which list may be in
the form of microfiche or compact disk) attached as Schedule A to the
related First-Tier Subsequent Assignment.
"Seller" shall mean Mitsubishi Motors Credit of America, Inc., a
Delaware corporation, and its successors and assigns.
"Subsequent Cutoff Date", with respect to any Subsequent
Receivable, shall have the meaning specified in the related First-Tier
Subsequent Assignment.
"Subsequent Receivable" shall mean, for purposes of this
Agreement, each motor vehicle retail installment sale contract described in
a Schedule of Subsequent Receivables attached as Schedule A to a First-Tier
Subsequent Assignment and all rights and obligations thereunder and any
amendments, modifications or supplements to such motor vehicle retail
installment sale contract.
"Subsequent Receivables Purchase Price" shall have the meaning
specified in Section 2.2(a).
"Subsequent Transfer Date" shall mean, with respect to any
Subsequent Receivable, the Business Day during the Pre-Funding Period on
which the related First-Tier Subsequent Assignment is executed and
delivered by the Seller to the Purchaser pursuant to Section
4.1(b)(iii)(A).
"Trust" shall mean the MMCA Auto Owner Trust 1999-2, a Delaware
business trust.
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of October 1, 1999, between the Purchaser, as
depositor, and Wilmington Trust Company, as Owner Trustee, as the same may
from time to time be amended, supplemented or otherwise modified and in
effect.
"Underwriting Agreement" shall mean the Underwriting Agreement,
dated October [__], 1999, by and between Credit Suisse First Boston
Corporation, as representative of the several underwriters specified
therein, and the Purchaser, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"Yield Supplement Agreement" shall mean the Yield Supplement
Agreement to be entered into by the Seller and the Purchaser on the Closing
Date, as the same may from time to time be amended, supplemented or
otherwise modified and in effect, in substantially the form attached to the
Sale and Servicing Agreement as Exhibit D.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.1. Purchase and Sale of Receivables.
On the Closing Date and each Subsequent Transfer Date, subject to
the terms and conditions of this Agreement, the Seller agrees to sell to
the Purchaser, and the Purchaser agrees to purchase from the Seller, the
Receivables set forth in the related Schedule of Receivables and the other
property relating thereto (as described below).
(a) Sale of Initial Receivables. On the Closing Date, and
simultaneously with the transactions to be consummated pursuant to the
Indenture, the Sale and Servicing Agreement and the Trust Agreement, the
Seller shall, pursuant to the First-Tier Initial Assignment, sell,
transfer, assign and otherwise convey to the Purchaser, 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, collectively: (i) the Initial Receivables; (ii) with respect to
Initial Receivables that are Actuarial Receivables, monies due thereunder
on or after the Initial Cutoff Date (including Payaheads) and, with respect
to Initial Receivables that are Simple Interest Receivables, monies
received thereunder on or 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 the Dealer
Agreements; (vi) all of the Seller's rights to the Receivable Files that
relate to the Initial Receivables; (vii) all payments and proceeds with
respect to the Initial Receivables held by the Seller; (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 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); (ix) 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 (x) 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.
It is the intention of the Seller and the Purchaser that the transfer
and assignment of the Initial Receivables and the other property described
in clauses (i) through (x) of this Section 2.1(a) shall constitute a sale
of the Initial Receivables and such other property from the Seller to the
Purchaser, conveying good title thereto free and clear of any liens, and
the Initial Receivables and such other property shall 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 or similar law. However, in the
event that the foregoing transfer and assignment is deemed to be a pledge,
the Seller hereby grants to the Purchaser a first priority security
interest in all of the Seller's right to and interest in the Initial
Receivables and other property described in the preceding paragraph to
secure a loan deemed to have been made by the Purchaser 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.
(b) Sale of Subsequent Receivables. Subject to
satisfaction of the conditions set forth in Section 4.1(b), the Seller
shall, pursuant to each First-Tier Subsequent Assignment, sell, transfer,
assign and otherwise convey to the Purchaser, 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,
collectively: (i) the Subsequent Receivables listed on Schedule A to the
related First-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 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 the related 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 Seller; (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 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 (x) 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.
It is the intention of the Seller and the Purchaser that each transfer
and assignment of Subsequent Receivables and the other property described
in clauses (i) through (x) of this Section 2.1(b) shall constitute a sale
of such Subsequent Receivables and other property from the Seller to the
Purchaser, conveying good title thereto free and clear of any liens, and
such Subsequent Receivables and other property shall 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 or similar law. However, in the
event that the foregoing transfer and assignment is deemed to be a pledge,
the Seller hereby grants to the Purchaser a first priority security
interest in all of the Seller's right to and interest in such Subsequent
Receivables and other property described in the preceding paragraph to
secure a loan deemed to have been made by the Purchaser 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.
SECTION 2.2. Payment of the Purchase Price
(a) Initial Receivables Purchase Price. In consideration
for the Initial Receivables, the other property described in Section 2.1(a)
and delivery of the Yield Supplement Agreement, the Purchaser shall, on or
prior to the Closing Date, pay to or upon the order of the Seller the
Initial Receivables Purchase Price. An amount equal to $[______________]
of the Initial Receivables Purchase Price shall be paid to the Seller in
cash. The remainder of the Initial Receivables Purchase Price shall be
paid by crediting the Seller with a contribution to the capital of the
Purchaser. The portion of the Initial Receivables Purchase Price to be
paid in cash shall be by federal wire transfer (same day) funds.
(b) Subsequent Receivables Purchase Price. In
consideration for the Subsequent Receivables and the other property related
thereto described in Section 2.1(b) to be sold, transferred, assigned and
otherwise conveyed to the Purchaser on the related Subsequent Transfer
Date, the Purchaser shall, on or prior to such Subsequent Transfer Date,
pay to or upon the order of the Seller an amount (the related "Subsequent
Receivables Purchase Price") equal to the aggregate Principal Balance of
the Subsequent Receivables as of the related Subsequent Cutoff Date, plus
any premium or minus any discount agreed upon by the Seller and the
Purchaser. Any Subsequent Receivables Purchase Price shall be payable as
follows: (i) cash in the amount released to the Purchaser from the Pre-
Funding Account pursuant to Section 4.8(a) of the Sale and Servicing
Agreement shall be paid to or upon the order of the Seller on the related
Subsequent Transfer Date by federal wire transfer (same day funds) and the
balance paid in cash as and when amounts are released to, or otherwise
realized by, the Purchaser from the Reserve Account and the Negative Carry
Account in accordance with the Sale and Servicing Agreement; or (ii) as
otherwise agreed by the Seller and the Purchaser.
SECTION 2.3. The Closing. The sale and purchase of the
Receivables shall take place at a closing (the "Closing") at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New
York 10022 on the Closing Date, simultaneously with the closings under:
(a) the Sale and Servicing Agreement, pursuant to which the Purchaser will
assign all of its right, title and interest in, to and under the Initial
Receivables, the Yield Supplement Agreement and other property described in
Section 2.1(a) to the Trust in exchange for the Notes and the Certificates;
(b) the Indenture, pursuant to which the Trust will issue the Notes and
pledge all of its right, title and interest in, to and under the Trust
Property to secure the Notes; (c) the Trust Agreement, pursuant to which
the Trust will issue the Certificates; and (d) the Underwriting Agreement,
pursuant to which the Purchaser will sell to the underwriters named therein
the Notes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Purchaser.
The Purchaser hereby represents and warrants to the Seller as of the date
hereof, the Closing Date and each Subsequent Transfer Date:
(a) Organization, etc. The Purchaser has been duly
established and is validly existing as a business trust in good standing
under the laws of the State of Delaware, with the power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority, and legal right to acquire
and own the Receivables, and has the power and authority to execute and
deliver this Agreement and to carry out its terms.
(b) Due Qualification. The Purchaser 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) Due Authorization and Binding Obligation. This
Agreement has been duly authorized, executed and delivered by the
Purchaser, and is the valid, binding and enforceable obligation of the
Purchaser except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights or by general equity principles.
(d) No Violation. The execution, delivery and performance
by the Purchaser of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof 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, its Certificate of Trust or its amended and restated trust
agreement, 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 Purchaser is a party or by which the Purchaser 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 Purchaser or its properties, of any
federal or state regulatory body, any court, administrative agency, or
other governmental instrumentality having jurisdiction over the Purchaser
or any of its properties.
(e) No Proceedings. No proceedings or investigations are
pending to which the Purchaser is a party or of which any property of the
Purchaser is the subject, and, to the best knowledge of the Purchaser, no
such proceedings or investigations are threatened or contemplated by
governmental authorities or threatened by others, other than such
proceedings or investigations which will not have a material adverse effect
upon the general affairs, financial position, net worth or results of
operations (on an annual basis) of the Purchaser and which do not (i)
assert the invalidity of this Agreement, (ii) seek to prevent the
consummation of any of the transactions contemplated by this Agreement or
(iii) seek any determination or ruling that might materially and adversely
affect the performance by the Purchaser of its obligations under, or the
validity or enforceability of, this Agreement.
SECTION 3.2. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the
Purchaser as of the date hereof, the Closing Date and each Subsequent
Transfer Date:
(i) Organization, etc. The Seller has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with the power and authority
to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and is
duly qualified to transact business and is in good standing in each
jurisdiction in the United States of America in which the conduct of
its business or the ownership or lease of its property requires such
qualification.
(ii) Power and Authority; Binding Obligation. The Seller
has full power and authority to sell and assign the property sold and
assigned to the Purchaser hereunder on the Closing Date and the
property to be sold and assigned to the Purchaser hereunder on each
Subsequent Transfer Date and has duly authorized such sales and
assignments to the Purchaser by all necessary corporate action. This
Agreement and the First-Tier Initial Assignment has been, and each
First-Tier Subsequent Assignment has been or will be on or before the
related Subsequent Transfer Date, duly authorized, executed and
delivered by the Seller, and in each case shall constitute the legal,
valid, binding and enforceable obligation of the Seller except as the
same may be limited by insolvency, bankruptcy, reorganization or other
laws relating to or affecting the enforcement of creditors' rights or
by general equity principles.
(iii) No Violation. The execution, delivery and
performance by the Seller of this Agreement and the consummation of
the transactions contemplated hereby and the fulfillment of the terms
hereof 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 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.
(iv) No Proceedings. No proceedings or investigations are
pending to which the Seller is a party or of which any property of the
Seller is the subject, and, to the best knowledge of the Seller, no
such proceedings or investigations are threatened or contemplated by
governmental authorities or threatened by others, other than such
proceedings or investigations which will not have a material adverse
effect upon the general affairs, financial position, net worth or
results of operations (on an annual basis) of the Seller and do not
(i) assert the invalidity of this Agreement, (ii) seek to prevent the
consummation of any of the transactions contemplated by this Agreement
or (iii) seek any determinations 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.
(v) 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.
(b) The Seller makes the following representations and
warranties as to the Receivables on which the Purchaser relies in accepting
the Receivables. Such representations and warranties speak as of the
Closing Date in the case of the Initial Receivables and as of the
applicable Subsequent Transfer Date in the case of the Subsequent
Receivables except to the extent otherwise provided in the following
representations and warranties, but shall survive the sale, transfer, and
assignment of the Receivables to the Purchaser hereunder and the subsequent
assignment and transfer of the Receivables pursuant to the Sale and
Servicing Agreement:
(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 the Seller in
connection with the refinancing by the Seller 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 such Dealer
under an existing Dealer Agreement with the Seller (unless such
Receivable was originated by the Seller in connection with a
refinancing), and shall have been validly assigned by such Dealer to
the Seller in accordance with its terms (unless such Receivable was
originated by the Seller in connection with a refinancing), (b) shall
have created or shall create a valid, binding, subsisting, and
enforceable first priority security interest in favor of the Seller in
the related Financed Vehicle, which security interest shall be
assignable by the Seller to the Purchaser, (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 level monthly payments
(provided that the payment in the last month in the life of the
Receivable may be different from the level payment) that fully
amortize the Amount Financed by maturity and yield interest at the
APR, (e) in the case of Final Payment Receivables, shall provide for a
series of fixed level monthly payments and a larger payment due after
such level monthly payments that fully amortize the Amount Financed by
maturity and yield interest at the APR, (f) shall provide for, in the
event that such contract is prepaid, a prepayment that fully pays the
Principal Balance and all accrued and unpaid interest thereon, (g) is
a retail installment sale contract, (h) is secured by a new or used
automobile or light-duty truck, and (i) is an Actuarial Receivable or
a Simple Interest Receivable (and may also be a Final Payment
Receivable).
(ii) Schedule of Receivables. The information set forth in
the related Schedule of Receivables shall be true and correct in all
material respects as of the opening of business on the 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 Purchaser and its
assigns 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
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B,
M and Z, the Soldiers' and Sailors' Civil Relief Act of 1940, the
Texas Consumer Credit Code, and State adaptations of the Uniform
Consumer Credit Code, and other consumer credit laws and equal credit
opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall represent
the genuine, legal, valid and binding payment obligation in writing of
the Obligor, enforceable by the holder thereof in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general principles
of equity.
(v) No Government Obligor. None of the Receivables is due
from the United States of America or any state or from any agency,
department, or instrumentality of the United States of America or any
state.
(vi) Security Interest in Financed Vehicle. Immediately
prior to the sale, assignment, and transfer thereof, each Receivable
shall be secured by a valid, subsisting and enforceable perfected
first priority security interest in the related Financed Vehicle in
favor of the Seller 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 Purchaser and the
Trust, respectively (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).
(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 is assignable from the
Seller to the Purchaser.
(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
3.2(b) 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 thirty (30) days or payment
defaults of 10% or less of a 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. The Seller, in accordance with its
customary procedures, shall have determined whether or not the Obligor
has maintained physical damage insurance (which insurance shall not be
force placed insurance) covering the Financed Vehicle.
(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 Purchaser
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 Purchaser. 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 Purchaser 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 shall be unlawful, void, or voidable. The Seller
has not entered into any agreement with any account debtor 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 Purchaser a first priority perfected security
interest in the Receivables shall be made within ten (10) days of the
Closing Date (with respect to the Initial Receivables) or ten (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 86.31% of the
Initial Pool Balance, constituting approximately 93.09% of the total
number of the Initial Receivables, relate to new automobiles and
light-duty trucks, substantially all of which were manufactured or
distributed by the Seller. Approximately 3.27% of the Initial Pool
Balance, constituting approximately 2.01% of the total number of
Initial Receivables, relate to used automobiles and light-duty
trucks, substantially all of which were manufactured or distributed
by the Seller. Approximately 7.99% of the Initial Pool Balance,
constituting approximately 3.46% of the total number of the Initial
Receivables, relate to program automobiles and light-duty trucks,
substantially all of which were manufactured or distributed by the
Seller. Approximately 2.43% of the Initial Pool Balance, constituting
approximately 1.44% of the total number of Initial Receivables,
relate to used automobiles and light-duty trucks.
(xxi) Origination. Each Receivable shall have an
origination during or after May 1996.
(xxii) Maturity of Receivables. Each Receivable shall have
a remaining maturity of not more than sixty (60) months from the date
the first payment is due under the Receivable.
(xxiii) Weighted Average Remaining Maturity of Receivables.
The weighted average remaining maturity of the Initial Receivables as
of the Initial Cutoff Date shall be not more than 53 months. The
weighted average remaining maturity of any Subsequent Receivables as
of the related Subsequent Cutoff Date shall be not more than 53
months.
(xxiv) Annual Percentage Rate. Each Receivable shall have
an APR of at least 0% and not more than 24%.
(xxv) Scheduled Payments. Each Receivable shall have a
first Scheduled Payment due on or prior to [__________], 1999, and no
Receivable shall have a payment of which more than 10% of such payment
is more than thirty (30) days overdue as of the related Cutoff Date.
(xxvi) Location of Receivable Files. The Receivable Files
shall be kept at one or more of the locations listed in Schedule A
hereto.
(xxvii) Capped Receivables and Simple Interest Receivables.
Except to the extent that there has been no material adverse effect on
Noteholders or Certificateholders, each Capped Receivable has been
treated consistently by the Seller as a Simple Interest Receivable and
payments with respect to each Simple Interest Receivable have been
allocated consistently in accordance with the Simple Interest Method.
(xxviii) Agreement. The representations and warranties of
the Seller in Section 3.2(a) are true and correct.
(xxix) Other Data. The tabular data and the numerical data
relating to the characteristics of the Initial Receivables contained
in the Prospectus are true and correct in all material respects.
(xxx) Last Scheduled Payments. The aggregate principal
balance of the Last Scheduled Payments of Final Payment Receivables
that are Initial Receivables, as a percentage of the Initial Pool
Balance as of the Initial Cutoff Date, shall be not greater than 26%.
The aggregate principal balance of the Last Scheduled Payments of
Final Payment Receivables that are Subsequent Receivables, as a
percentage of the aggregate principal amount of such Subsequent
Receivables as of the related Subsequent Cutoff Date, shall be not
greater than 26%.
(xxxi) Receivable Yield Supplement Amounts. An amount
equal to the sum of all projected Yield Supplement Amounts for all
future Payment Dates with respect to each Receivable, assuming that
future Scheduled Payments on such Receivable are made on their
scheduled due dates, has been deposited to the Yield Supplement
Account on or prior to the Closing Date or the related Subsequent
Transfer Date, as applicable.
(xxxii) Prepaid Receivables. No Receivable shall have been
pre-paid by more than six monthly payments as of the related Cutoff
Date.
(xxxiii) Limited Credit Experience. Approximately 8.94% of
the Initial Pool Balance, constituting approximately 12.52% of the
total number of the Initial Receivables, relate to Receivables on
which the Obligor had limited credit experience. The aggregate
principal balance of the Subsequent Receivables on which the Obligor
has limited credit experience, as a percentage of the aggregate
principal amount of such Subsequent Receivables as of the related
Subsequent Cutoff Date, shall be not greater than 9%.
(xxxiv) Simple Interest Receivables. Approximately 94.04%
of the Initial Pool Balance relate to Simple Interest Receivables.
Approximately 5.78% of the Initial Pool Balance relate to Actuarial
Receivables, excluding Actuarial Receivables based on the "Rule of
78's." Approximately 0.18% of the Initial Pool Balance relate to
Actuarial Receivables based on the "Rule of 78's."
(xxxv) Principal Balance of Final Payment Receivables. The
average principal balance of Last Scheduled Payments of Final Payment
Receivables that are Initial Receivables is approximately $10,883.64,
which is approximately 48.65% of the average principal balance of
those Receivables.
(xxxvi) Deferred First Payments. Approximately 7.23% of
the Initial Pool Balance relate to Receivables on which the Obligor
was permitted to defer the first payment for up to 216 days from
origination. The aggregate principal balance of the Subsequent
Receivables on which the Obligor will be permitted to defer the first
payment for up to 216 days from origination, as a percentage of the
aggregate principal amount of such Subsequent Receivables as of the
related Subsequent Cutoff Date, shall be not greater than 8%.
ARTICLE IV
CONDITIONS
SECTION 4.1. Conditions to Obligations of the Purchaser.
(a) Initial Receivables. The obligation of the Purchaser
to purchase the Initial Receivables is subject to the satisfaction of the
following conditions:
(i) Representations and Warranties True. The
representations and warranties of the Seller hereunder shall be true
and correct on the Closing Date with the same effect as if then made,
and the Seller shall have performed all obligations to be performed by
it hereunder on or prior to the Closing Date.
(ii) Computer Files Marked. The Seller shall, at its own
expense, on or prior to the Closing Date, indicate in its computer
files that the Initial Receivables have been sold to the Purchaser
pursuant to this Agreement and the First-Tier Initial Assignment and
deliver to the Purchaser the Schedule of Initial Receivables certified
by an officer of the Seller to be true, correct and complete.
(iii) Documents to be delivered by the Seller at the
Closing.
(A) The First-Tier Initial Assignment. At the
Closing, the Seller will execute and deliver the First-Tier
Initial Assignment in substantially the form of Exhibit A-1
hereto.
(B) The Yield Supplement Agreement. At the
Closing, the Seller will execute and deliver the Yield
Supplement Agreement.
(C) Evidence of UCC Filing. Within ten (10)
days of the Closing Date, the Seller shall record and file,
at its own expense, a UCC-1 financing statement in each
jurisdiction in which required by applicable law, executed
by the Seller, as seller or debtor, and naming the
Purchaser, as purchaser or secured party, naming the Initial
Receivables and the other property conveyed under Section
2.1(a) as collateral, meeting the requirements of the laws
of each such jurisdiction and in such manner as is necessary
to perfect the sale, transfer, assignment and conveyance of
the Initial Receivables to the Purchaser. The Seller shall
deliver a file-stamped copy, or other evidence satisfactory
to the Purchaser of such filing, to the Purchaser within ten
(10) days of the Closing Date.
(D) Other Documents. Such other documents as
the Purchaser may reasonably request.
(iv) Other Transactions. The transactions contemplated by
the Sale and Servicing Agreement, the Indenture, the Trust Agreement
and the Underwriting Agreement shall be consummated on the Closing
Date.
(b) Subsequent Receivables. The obligation of the
Purchaser to purchase the Subsequent Receivables to be conveyed to the
Purchaser on each Subsequent Transfer Date is subject to the satisfaction
of the following conditions:
(i) Representations and Warranties True. The
representations and warranties of the Seller under Section 3.2(a) with
respect to the Seller and Section 3.2(b) with respect to such
Subsequent Receivables shall be true and correct as of the date as of
which such representations and warranties are made, and the Seller
shall have performed all obligations to be performed by it hereunder
on or prior to the related Subsequent Transfer Date.
(ii) Computer Files Marked. The Seller shall, at its own
expense, on or prior to the related Subsequent Transfer Date, indicate
in its computer files that such Subsequent Receivables have been sold
to the Purchaser pursuant to this Agreement and the related First-Tier
Subsequent Assignment and deliver to the Purchaser the related First-
Tier Subsequent Assignment, including the related Schedule of
Subsequent Receivables certified by an officer of the Seller to be
true, correct and complete.
(iii) Documents to be delivered by the Seller on the
related Subsequent Transfer Date.
(A) The First-Tier Subsequent Assignment. On
the related Subsequent Transfer Date, the Seller will
execute and deliver the related First-Tier Subsequent
Assignment in substantially the form of Exhibit A-2 hereto.
(B) Evidence of UCC Filing. Within ten (10)
days of the related Subsequent Transfer Date, the Seller
shall record and file, at its own expense, a UCC-1 financing
statement in each jurisdiction in which required by
applicable law, executed by the Seller, as seller or debtor,
and naming the Purchaser, as purchaser or secured party,
naming such Subsequent Receivables and the other property
conveyed under Section 2.1(b) as collateral, meeting the
requirements of the laws of each such jurisdiction and in
such manner as is necessary to perfect the sale, transfer,
assignment and conveyance of such Subsequent Receivables to
the Purchaser. The Seller shall deliver a file-stamped
copy, or other evidence satisfactory to the Purchaser of
such filing, to the Purchaser within ten (10) days of the
related Subsequent Transfer Date.
(C) Officer's Certificate. The Seller shall have
delivered to the Purchaser an Officer's Certificate
confirming the satisfaction of each condition precedent
specified in this Section 4.1(b) (substantially in the form
attached as Annex A to the form of First-Tier Subsequent
Assignment attached hereto as Exhibit A-2).
(D) Other Documents. Such other documents as
the Purchaser may reasonably request.
(iv) As of the related Subsequent Transfer Date: (A) the
Seller was not insolvent and will not become insolvent as a result of
the transfer of such Subsequent Receivables on the related Subsequent
Transfer Date, (B) the Seller did 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 was not made by the Seller
with actual intent to hinder, delay or defraud any Person and (D) the
assets of the Seller did not constitute unreasonably small capital to
carry out its business as conducted.
(v) No selection procedures believed by the Seller to be
adverse to the interests of the Purchaser, the Trust, the Noteholders
or the Certificateholders shall have been utilized in selecting the
Subsequent Receivables.
(vi) The addition of the Subsequent Receivables will not
result in a material adverse tax consequence to the Purchaser, the
Trust, the Noteholders or the Certificateholders.
(vii) All the conditions to the transfer of the Subsequent
Receivables from the Purchaser to the Trust specified in Section
2.1(d) of the Sale and Servicing Agreement shall have been satisfied.
SECTION 4.2. Conditions to Obligation of the Seller. The
obligation of the Seller to sell the Initial Receivables to the Purchaser
on the Closing Date and any Subsequent Receivables to the Purchaser on the
related Subsequent Transfer Date is subject to the satisfaction of the
following conditions:
(a) Representations and Warranties True. The
representations and warranties of the Purchaser hereunder shall be true and
correct on the Closing Date or the related Subsequent Transfer Date, as
applicable, with the same effect as if then made, and the Purchaser shall
have performed all obligations to be performed by it hereunder on or prior
to the Closing Date or the related Subsequent Transfer Date, as applicable.
(b) Receivables Purchase Prices. (i) On or prior to the
Closing Date, the Purchaser shall deliver to the Seller the Receivables
Purchase Price, as provided in Section 2.2(a); and (ii) on or prior to each
Subsequent Transfer Date, the Purchaser shall have delivered to the Seller
the related Subsequent Receivables Purchase Price, as provided in Section
2.2(b).
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees with the Purchaser as follows; provided, that
to the extent that any provision of this Article V conflicts with any
provision of the Sale and Servicing Agreement, the Sale and Servicing
Agreement shall govern:
SECTION 5.1. Protection of Right, Title and Interest.
(a) The Seller shall execute and file such financing
statements and cause to be executed and filed such continuation statements,
all in such manner and in such places as may be required by law fully to
preserve, maintain, and protect the interest of the Purchaser under this
Agreement in, to and under the Receivables and the other property conveyed
hereunder and in the proceeds thereof. The Seller shall deliver (or cause
to be delivered) to the Purchaser file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) The Seller shall not 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 in
accordance with paragraph (a) above seriously misleading within the meaning
of Section 9-402(7) of the Relevant UCC, unless it shall have given the
Purchaser at least sixty (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 shall give the Purchaser at least sixty (60)
days' prior written notice of any relocation of its principal executive
office if, as a result of such relocation, 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 new
financing statement. The Seller shall at all times maintain each office
from which it shall service Receivables, and its principal executive
office, within the United States of America.
(d) The Seller shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit 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).
(e) The Seller shall maintain its computer systems so that,
from and after the time of sale hereunder of the Receivables to the
Purchaser, the Seller's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of
the Purchaser in such Receivable and that such Receivable is owned by the
Purchaser (or, upon sale of the Receivables to the Trust, by the Trust).
Indication of the Purchaser's ownership of a Receivable shall be deleted
from or modified on the Seller's computer systems when, and only when, the
Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller shall propose to sell, grant
a security interest in, or otherwise transfer any interest in any
automobile or light-duty truck receivables (other than the Receivables) to
any prospective purchaser, lender, or other transferee, the Seller 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 Purchaser or its assignee unless such Receivable has been
paid in full or repurchased.
(g) The Seller shall permit the Purchaser and its agents at
any time during normal business hours to inspect, audit, and make copies of
and abstracts from the Seller's records regarding any Receivable.
(h) Upon request, the Seller shall furnish to the
Purchaser, within ten (10) Business Days, a list of all Receivables (by
contract number and name of Obligor) then owned by the Purchaser, together
with a reconciliation of such list to the Schedule of Receivables.
SECTION 5.2. Other Liens or Interests. Except for the
conveyances hereunder, the Seller will not sell, pledge, assign or transfer
any Receivable to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on any interest therein, and the Seller shall
defend the right, title, and interest of the Purchaser in, to and under the
Receivables against all claims of third parties claiming through or under
the Seller; provided, however, that the Seller's obligations under this
Section 5.2 shall terminate upon the termination of the Trust pursuant to
the Trust Agreement.
SECTION 5.3. Costs and Expenses. The Seller agrees to pay all
reasonable costs and disbursements in connection with the perfection, as
against all third parties, of the Purchaser's right, title and interest in,
to and under the Receivables.
SECTION 5.4. Indemnification.
(a) The Seller shall defend, indemnify, and hold harmless
the Purchaser from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising out of or resulting from the
failure of a Receivable to be originated in compliance with all
requirements of law and for any breach of any of the Seller's
representations and warranties contained herein.
(b) The Seller shall defend, indemnify, and hold harmless
the Purchaser 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 Seller or any Affiliate thereof of a
Financed Vehicle.
(c) The Seller shall defend, indemnify, and hold harmless
the Purchaser from and against any and all taxes, except for taxes on the
net income of the Purchaser, that may at any time be asserted against the
Purchaser with respect to the transactions contemplated herein and in the
Yield Supplement Agreement, including, without limitation, any sales, gross
receipts, general corporation, tangible personal property, privilege, or
license taxes and costs and expenses in defending against the same.
(d) The Seller shall defend, indemnify, and hold harmless
the Purchaser from and against any and all costs, expenses, losses,
damages, claims and liabilities to the extent that such cost, expense,
loss, damage, claim or liability arose out of, or was imposed upon the
Purchaser through, the negligence, willful misfeasance, or bad faith of the
Seller in the performance of its duties under this Agreement or the Yield
Supplement Agreement, as the case may be, or by reason of reckless
disregard of the Seller's obligations and duties under the Agreement or the
Yield Supplement Agreement, as the case may be.
(e) The Seller shall defend, indemnify, and hold harmless
the Purchaser from and against all costs, expenses, losses, damages, claims
and liabilities arising out of or incurred in connection with the
acceptance or performance of the Seller's trusts and duties as Servicer
under the Sale and Servicing Agreement, except to the extent that such
cost, expense, loss, damage, claim or liability shall be due to the willful
misfeasance, bad faith, or negligence (except for errors in judgment) of
the Purchaser.
These indemnity obligations shall be in addition to any
obligation that the Seller may otherwise have.
SECTION 5.5. Sale. The Seller agrees to treat this conveyance
for all purposes (including without limitation tax and financial accounting
purposes) as an absolute transfer on all relevant books, records, tax
returns, financial statements and other applicable documents.
SECTION 5.6. Transfer of Subsequent Receivables. The Seller
agrees to transfer to the Purchaser, pursuant to Section 2.1(b), Subsequent
Receivables with an aggregate Principal Balance as of the related Cutoff
Dates approximately equal to $202,210,941.29, subject only to the
availability of such Subsequent Receivables.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. Obligations of Seller. The obligations of the
Seller under this Agreement shall not be affected by reason of any
invalidity, illegality or irregularity of any Receivable.
SECTION 6.2. Repurchase Events. The Seller hereby covenants and
agrees with the Purchaser for the benefit of the Purchaser, the Indenture
Trustee, the Owner Trustee, the Noteholders and the Certificateholders,
that the occurrence of a breach of any of the Seller's representations and
warranties contained in Section 3.2(b) shall constitute an event obligating
the Seller to repurchase Receivables hereunder (each, a "Repurchase Event")
at a price equal to the Purchase Amount from the Purchaser or from the
Trust. Subject to Section 5.4(a), the repurchase obligation of the Seller
shall constitute the sole remedy to the Purchaser, the Indenture Trustee,
the Owner Trustee, the Noteholders and the Certificateholders against the
Seller with respect to any Repurchase Event.
SECTION 6.3. Purchaser's Assignment of Repurchased Receivables.
With respect to all Receivables repurchased by the Seller pursuant to
Section 6.2 of this Agreement, the Purchaser shall assign, without
recourse, representation or warranty, to the Seller all the Purchaser's
right, title and interest in, to and under such Receivables, and all
security and documents relating thereto.
SECTION 6.4. Trust. The Seller acknowledges that:
(a) The Purchaser will, pursuant to the Sale and Servicing
Agreement, sell the Initial Receivables to the Trust on the Closing Date
and the Subsequent Receivables to the Trust on the related Subsequent
Transfer Dates and assign its rights under this Agreement and the Yield
Supplement Agreement to the Owner Trustee for the benefit of the
Noteholders and the Certificateholders, and that the representations and
warranties contained in this Agreement and the rights of the Purchaser
under this Agreement, including under Sections 6.2 and 6.3, are intended to
benefit the Trust, the Noteholders and the Certificateholders. The Seller
hereby consents to such sale and assignment.
(b) The Trust will, pursuant to the Indenture, pledge the
Receivables and its rights under this Agreement and the Yield Supplement
Agreement to the Indenture Trustee for the benefit of the Noteholders, and
the representations and warranties contained in this Agreement and the
rights of the Purchaser under this Agreement, including under Sections 6.2
and 6.3, are intended to benefit the Noteholders. The Seller hereby
consents to such pledge.
SECTION 6.5. Amendment. This Agreement may be amended from time
to time by a written amendment duly executed and delivered by the Seller
and the Purchaser; provided, however, that any such amendment that
materially adversely affects the rights of the Noteholders or the
Certificateholders under the Indenture, Sale and Servicing Agreement or
Trust Agreement shall be consented to by the Holders of Notes evidencing
not less than 51% of the then Outstanding Notes and the Holders of
Certificates evidencing not less than 51% of the Certificate Balance.
SECTION 6.6. Accountants' Letters.
(a) Ernst & Young LLP will perform certain procedures
regarding the characteristics of the Receivables described in the Schedule
of Initial Receivables set forth as Exhibit B hereto and will compare those
characteristics to the information with respect to the Initial Receivables
contained in the Prospectus.
(b) Seller will cooperate with the Purchaser and Ernst &
Young LLP in making available all information and taking all steps
reasonably necessary to permit such accountants to complete the procedures
set forth in Section 6.6(a) above and to deliver the letters required of
them under the Underwriting Agreement.
(c) Ernst & Young LLP will deliver to the Purchaser a
letter, dated the date of the Prospectus, in the form previously agreed to
by the Seller and the Purchaser, with respect to the financial and
statistical information contained in the Prospectus under the captions
"Delinquency Experience", "Net Credit Loss and Repossession Experience" and
"Contracts Providing for Balloon Payments: Loss Experience on Returned
Vehicles" and with respect to such other information as may be agreed in
the forms of such letters.
SECTION 6.7. Waivers. No failure or delay on the part of the
Purchaser in exercising any power, right or remedy under this Agreement or
any Assignment shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or
remedy.
SECTION 6.8. Notices. All communications and notices pursuant
hereto to either party shall be in writing or by confirmed facsimile or
telecopy and addressed or delivered to it at its address shown in the
opening portion of this Agreement or at such other address as may be
designated by it by notice to the other party and, if mailed or sent by
telecopy or facsimile, shall be deemed given when mailed or when electronic
confirmation of the telecopy or facsimile is received.
SECTION 6.9. Costs and Expenses. The Seller will pay all
expenses incident to the performance of its obligations under this
Agreement and the Seller agrees to pay all reasonable out-of-pocket costs
and expenses of the Purchaser, excluding fees and expenses of counsel, in
connection with the perfection as against third parties of the Purchaser's
right, title and interest in, to and under the Receivables and the
enforcement of any obligation of the Seller hereunder.
SECTION 6.10. 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 6.11. Confidential Information. The Purchaser agrees
that it will neither use nor disclose to any Person the names and addresses
of the Obligors, except in connection with the enforcement of the
Purchaser's rights hereunder, under the Receivables, the Sale and Servicing
Agreement or as required by law.
SECTION 6.12. Headings and Cross-References. The various
headings in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to Section names or numbers are to such
Sections of this Agreement.
SECTION 6.13. Governing Law. This Agreement and each Assignment
shall be governed by, and construed in accordance with, the internal laws
of the State of New York.
SECTION 6.14. Agreements of Purchaser.
(a) The Purchaser will not commingle any of its assets with
those of the Seller or the ultimate parent of the Purchaser.
(b) The Purchaser will maintain separate corporate records
and books of account from those of the Seller or the ultimate parent of the
Purchaser.
(c) The Purchaser will conduct its business from an office
separate from the Seller or the ultimate parent of the Purchaser.
SECTION 6.15. Counterparts. This Agreement may be executed in
two or more counterparts and by different parties on separate counterparts,
each of which shall be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereby have caused this Purchase
Agreement to be executed by their respective officers thereunto duly
authorized as of the date and year first above written.
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Seller
By: ______________________________
Name:
Title:
MMCA AUTO RECEIVABLES TRUST,
as Purchaser
By: ______________________________
Name:
Title:
EXHIBIT A-1
FORM OF FIRST-TIER INITIAL ASSIGNMENT
For value received, in accordance with the Purchase Agreement,
dated as of October 1, 1999, between the undersigned and MMCA AUTO
RECEIVABLES TRUST (the "Purchaser") (as amended, supplemented or otherwise
modified and in effect from time to time, the "Purchase Agreement"), the
undersigned does hereby sell, assign, transfer and otherwise convey unto
the Purchaser, without recourse (subject to the obligations in the Purchase
Agreement), all right, title and interest of the undersigned, whether now
owned or hereafter acquired, in, to and under the following, collectively:
(i) the Initial Receivables; (ii) with respect to Initial Receivables that
are Actuarial Receivables, monies due thereunder on or after the Initial
Cutoff Date (including Payaheads) and, with respect to Initial Receivables
that are Simple Interest Receivables, monies received thereunder on or
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 the Dealer Agreements; (vi) all of the
Seller's rights to the Receivable Files that relate to the Initial
Receivables; (vii) all payments and proceeds with respect to the Initial
Receivables held by the Seller; (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 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); (ix) 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 (x) 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 foregoing sale does not constitute
and is not intended to result in any assumption by the Purchaser of any
obligation of the undersigned to the Obligors, insurers or any other Person
in connection with the Initial Receivables, the related Receivable Files,
any insurance policies or any agreement or instrument relating to any of
them.
This First-Tier Initial Assignment is made pursuant to and upon
the representations, warranties and agreements on the part of the
undersigned contained in the Purchase Agreement and is to be governed by
the Purchase Agreement.
In the event that the foregoing sale, assignment, transfer and
conveyance is deemed to be a pledge, the undersigned hereby grants to the
Purchaser a first priority security interest in all of the undersigned's
right to and interest in the Initial Receivables and other property
described in clauses (i) through (x) above to secure a loan deemed to have
been made by the Purchaser to the undersigned 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 First-Tier Initial Assignment shall be construed in
accordance with the laws of the State of New York and the obligations of
the undersigned under this First-Tier Initial Assignment shall be
determined in accordance with such laws.
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.
IN WITNESS WHEREOF, the undersigned has caused this First-Tier
Initial Assignment to be duly executed as of October 1, 1999.
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.
By: _______________________
Name:
Title:
EXHIBIT A-2
FORM OF FIRST-TIER SUBSEQUENT ASSIGNMENT
For value received, in accordance with the Purchase Agreement,
dated as of October 1, 1999, between the undersigned and MMCA AUTO
RECEIVABLES TRUST (the "Purchaser") (as amended, supplemented or otherwise
modified and in effect from time to time, the "Purchase Agreement"), the
undersigned does hereby sell, assign, transfer and otherwise convey unto
the Purchaser, without recourse (subject to the obligations in the Purchase
Agreement), all right, title and interest of the undersigned, whether now
owned or hereafter acquired, in, to and under the following, collectively:
(i) the Subsequent Receivables set forth in the Schedule of Subsequent
Receivables attached hereto as Schedule A; (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 Seller; (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 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 (x) 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 foregoing sale does not constitute and is not intended to result in any
assumption by the Purchaser of any obligation of the undersigned to the
Obligors, insurers or any other Person in connection with the Subsequent
Receivables, the related Receivable Files, any insurance policies or any
agreement or instrument relating to any of them.
This First-Tier Subsequent Assignment is made pursuant to and
upon the representations, warranties and agreements on the part of the
undersigned contained in the Purchase Agreement (including the Officer's
Certificate of the Seller accompanying this First-Tier Subsequent
Assignment) and is to be governed by the Purchase Agreement.
The Seller hereby represents that as of the Subsequent Cut-off
Date the aggregate Principal Balance of the Subsequent Receivables conveyed
hereby was $[____________].
In the event that the foregoing sale, assignment, transfer and
conveyance is deemed to be a pledge, the undersigned hereby grants to the
Purchaser a first priority security interest in all of the undersigned's
right to and interest in the Subsequent Receivables and other property
described in clauses (i) through (x) above to secure a loan deemed to have
been made by the Purchaser to the undersigned 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 First-Tier Subsequent Assignment shall be construed in
accordance with the laws of the State of New York and the obligations of
the undersigned under this First-Tier Subsequent Assignment shall be
determined in accordance with such laws.
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.
IN WITNESS WHEREOF, the undersigned has caused this First-Tier
Subsequent Assignment to be duly executed as of [_________ __, _____].
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.
By: _______________________
Name:
Title:
SCHEDULE A
[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
OFFICERS' CERTIFICATE
The undersigned officer of Mitsubishi Motors Credit of America,
Inc., a Delaware corporation (the "Seller"), does hereby certify, pursuant
to Section 4.1(b)(iii)(C) of the Purchase Agreement, dated as of October 1,
1999 (as amended, supplemented or otherwise modified and in effect from
time to time, the "Purchase Agreement"), between the Seller and MMCA Auto
Receivables Trust, a Delaware business trust (the "Purchaser"), that all of
the conditions precedent to the transfer to the Purchaser of the Subsequent
Receivables listed on Schedule A to the First-Tier Subsequent Assignment
delivered herewith, and the other property and rights related to such
Subsequent Receivables as described in Section 2.1(b) of the Purchase
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 Purchase Agreement.
IN WITNESS WHEREOF, the undersigned have caused this certificate
to be duly executed this [______] day of [_______________, ________].
By: __________________________
Name:
Title:
EXHIBIT B
[SCHEDULE OF INITIAL RECEIVABLES PROVIDED TO
THE INDENTURE TRUSTEE ON THE CLOSING DATE,
WHICH MAY BE ON COMPUTER TAPE,
COMPACT DISK, OR MICROFICHE]
SCHEDULE A
Locations of Receivables Files
Corporate Office
6363 Katella Avenue
P.O. Box 6038
Cypress, CA 90630-5205
National Service Center
10805 Holder Street, Third Floor
P.O. Box 6043
Cypress, CA 90630-0040
EXHIBIT 10.2
October 28, 1999
MMCA Auto Receivables Trust
6363 Katella Avenue
Cypress, California 90630-5205
Re: MMCA Auto Owner Trust 1999-2
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 October 1, 1999 (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 1999-2 (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
6363 Katella Avenue
Cypress, California 90630-5205
Attention: Secretary/Treasurer
Telephone: [ ]
Telecopy: [ ]
If to the Seller:
Mitsubishi Motors Credit of America, Inc.
6363 Katella Avenue
Cypress, California 90630-5205
Attention: Executive Vice President and Treasurer
Telephone: (714) 236-1500
Telecopy: (714) 236-1300
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 24.1
MMCA AUTO RECEIVABLES TRUST
Unanimous Written Consent of the Board of Managers
- -------------------------------------------------------------------------------
Pursuant to Section 3806 of Title 12 of the Delaware Code
- -------------------------------------------------------------------------------
The undersigned, being all the Members of the Board of Managers
of MMCA Auto Receivables Trust, a Delaware business trust (the "Trust"), do
hereby consent to the adoption of and do hereby adopt the resolutions
hereinafter set forth as the action of the Board of Managers of the Trust
pursuant to Section 3806 of Title 12 of the Delaware Code with the same
force and effect as if said resolutions had been approved and adopted at a
special meeting of the Board of Managers of the Trust, duly called and held
for such purpose, and do hereby direct the Secretary of the Trust to insert
this Consent in the minute book of the Trust:
RESOLVED, that it is desirable and in the best interest of the
Trust that it cause securities to be qualified or registered for sale in
various states by its wholly-owned subsidiary MMCA Auto Owner Trust 1999-2
(the "Owner Trust"), that the President or any Vice President and the
Treasurer or any Assistant Treasurer and the Secretary or any Assistant
Secretary hereby are authorized to determine the states in which
appropriate action shall be taken to qualify or register for sale all or
such part of the securities of the Owner Trust as said officers may deem
advisable; that said officers are hereby authorized to perform on behalf of
the Owner Trust any and all such acts as they may deem necessary or
advisable in order to comply with the applicable laws of any such states,
and in connection therewith to execute and file all requisite papers and
documents, including, but not limited to, applications, reports, surety
bonds, irrevocable consents and appointments of attorneys for service of
process; and the execution by such officers of any such paper or document
or the doing by them of any action connection with the foregoing matters
shall conclusively establish their authority therefor from the Owner Trust
and the approval and ramification by the Owner Trust of the papers and
documents so executed and the action so taken.
IN WITNESS WHEREOF, the undersigned, being all the managers of
the Trust have executed this Consent, as of October 12, 1999.
/s/ Hiroshi Yajima /s/ John Maynard
- ------------------------ -----------------------------
Hiroshi Yajima John Maynard
/s/ Charles A. Tredway /s/ Yasuhiro Hagihara
- ------------------------ -----------------------------
Charles A. Tredway Yasuhiro Hagihara
/s/ Kenzo Yamada
- ------------------------
Kenzo Yamada
MMCA AUTO RECEIVABLES TRUST
Unanimous Written Consent of the Board of Managers
- -------------------------------------------------------------------------------
Pursuant to Section 3806 of Title 12 of the Delaware Code
- -------------------------------------------------------------------------------
The undersigned, being all the Members of the Board of Managers
of MMCA Auto Receivables Trust, a Delaware business trust (the "Trust"), do
hereby consent to the adoption of, and do hereby adopt, the resolutions
hereinafter set forth as the action of the Board of Managers of the Trust
pursuant to Section 3806 of Title 12 of the Delaware Code with the same
force and effect as if said resolutions had been approved and adopted at a
special meeting of the Board of Managers of the Trust, duly called and held
for such purpose, and do hereby direct the Secretary of the Trust to insert
this Consent in the minute books of the Trust (captialized terms used
herein with definition shall have the meaning ascribed to such term in the
Amended and Restated Trust Agreement dated as of October 1, 1999 between
Mitsubishi Motors Credit of America, Inc. as Beneficial Owner, and Chase
Manhattan Bank Delaware, as Trustee:
RESOLVED, that the Trust is hereby authorized to enter into an
agreement ("Purchase Agreement") with Mitsubishi Motors Credit of America,
Inc., providing for the purchase by the Trust of consumer and commercial
vehicle retail installment sale contracts and assets relating thereto, upon
such terms and conditions as may be approved by any two of the following
Authorized Officers: the President, any Executive Vice President and the
Treasurer.
RESOLVED, that the President, any Executive Vice President, and
the Treasurer, and each of them, be and hereby are authorized, in the name
and on behalf of the Trust, at any time, to take such action, and to
execute (by either manual or facsimile signature) and deliver the Purchase
Agreement and such agreements, documents or other instruments in connection
therewith or related thereto as they, or any of them, may determine
necessary, appropriate or desirable, the taking of such action or the
execution of the Purchase Agreement or agreements, documents or other
instruments in connection therewith or related thereto to be conclusive
evidence of such determination with respect thereto.
RESOLVED, that the Trust is hereby authorized to issue and sell in
(i) a public offering required to be registered with the Securities and
Exchange Commission (the "Commission") pursuant to the applicable
provisions of the Securities Act of 1933, as amended (the "Act"), and/or
(ii) in a private placement or offshore offering exempt from registration
under the Act, certificates or securities ("Receivables Securities")
relating to or representing an undivided interest in consumer and
commercial vehicle retail installment sale contracts ("Receivables")
acquired by the Trust, in an aggregate principal amount not to exceed the
aggregate principal amount authorized for registration under the Act
pursuant to the next succeeding resolution, upon such terms and conditions
as may be fixed by the Board of Managers or by the President, the Treasurer
and any Executive Vice President, and the President, the Treasurer and any
Executive Vice President be and hereby are authorized to determine the
terms and conditions of the Receivables Securities.
RESOLVED, that the preparation of a Registration Statement on
such form as may be appropriate (the "Registration Statement") covering the
Receivables Securities, including a prospectus, exhibits and other
documents, to be filed with the Commission, for the purpose of registering
the offer and sale of the Receivables Securities under the Act in principal
amount not to exceed in the aggregate $950 million be and it hereby is in
all respects approved; that the Managers and proper Authorized Officers of
the Trust, and each them, be and hereby are authorized to sign and execute
on their own behalf, or in the name and on behalf of the Trust, or both, as
the case may be, the Registration Statement, with such changes, if any,
therein, including amendments to the prospectus and the addition or
amendment of exhibits and other documents relating thereto or required by
law or regulation in connection therewith, all in such form as such
Managers and Authorized Officers may deem necessary, appropriate or
desirable, as conclusively evidenced by their execution thereof, and that
the appropriate Authorized Officers of the Trust, and each of them, be and
hereby are authorized to cause the Registration Statement, so executed, to
be filed with the Commission.
RESOLVED, that the Managers and appropriate Authorized Officers
of the Trust, and each of them, be and hereby are authorized to sign and
execute on their own behalf, or in the name and on behalf of the Trust, or
both, as the case may be, any and all amendments (including post-effective
amendments) to the Registration Statement, including amendments to the
prospectus and the addition of amendment of exhibits and other documents
relating thereto or required by law or regulation in connection therewith,
all in such form, with such changes, if any, therein as such Managers and
Authorized Officers may deem necessary, appropriate or desirable, as
conclusively evidenced by their execution thereof, and that the appropriate
Authorized Officers of the Trust, and each of them, be or hereby are
authorized to cause such amendment or amendments, so executed to be filed
with the Commission.
RESOLVED, that each Authorized Officer and Manager who may be
required to sign and execute the Registration Statement or any amendment
thereto or document in connection therewith (whether on behalf of the
Trust, or as an Authorized Officer or Manager of the Trust, or otherwise),
be and hereby is authorized to execute a power of attorney appointing Susan
M. Tyner, J. Sean Plater and Tatsuo Nonaka, and each of them, severally, as
true and lawful attorney or attorneys to sign in his name, place
and stead in any such capacity the Registration Statement and any and all
amendments (including post-effective amendments) thereto and documents in
connection therewith, and to file the same with the Commission, each of
said attorneys to have power to act with or without the other, and to have
full power and authority to do and perform, in the name and on behalf of
each of said Authorized Officers and Managers who shall have executed such
a power of attorney, every act whatsoever which such attorneys, or any of
them, may deem necessary, appropriate or desirable to be done in connection
therewith as fully and to all intents and purposes as such Authorized
Officers or Managers might or could do in person.
RESOLVED, that the proper Authorized Officers of the Trust be
and hereby are authorized in the name and on behalf of the Trust to take
any and all action which such persons, or any of them, may deem necessary,
appropriate or desirable in order to obtain a permit, register or qualify
the Receivables Securities for issuance and sale or to request an exemption
from registration of such securities or to register or obtain a license for
the Trust as a dealer or broker under the securities laws of such
jurisdictions as such person, or any of them, may deem necessary,
appropriate or desirable, and in connection with such registrations,
permits, licenses, qualifications and exemptions to execute, acknowledge,
verify, deliver, file and publish all such applications, reports,
resolutions, irrevocable consents to service of process, powers of attorney
and other papers and instruments as may be required under such laws, and to
take any and all further action which such persons, or any of them, may
deem necessary, appropriate or desirable in order to maintain such
registrations in effect for as long as such persons, or any of them, may
deem to be in the best interests of the Trust.
RESOLVED, that any and all in haec verba resolutions which may
be required by the Blue Sky or securities laws of any state in which the
Trust intends to offer to sell the Receivables Securities be, and they
hereby are, adopted; that the proper Authorized Officers of the Trust be,
and they hereby are, authorized to certify that such resolutions were duly
adopted by virtue of this Unanimous Written Consent of the Board of
Managers of the Trust, and that the Secretary of the Trust shall cause a
copy of each resolution so certified to be attached to this Consent.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, in the name and
on behalf of the Trust, authorized, empowered and directed to select one or
more underwriters of the Receivables Securities and to negotiate the terms
and provisions of an underwriting agreement (the "Underwriting Agreement")
between the Trust and such underwriters relating to the public offering
described in and contemplated by the Registration Statement.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, in the name and
on behalf of the Trust, authorized, empowered and directed to select one or
more purchasers or placement agents of the Receivables Securities and to
negotiate the terms and provisions of one or more purchase agreements
(each, a "Securities Purchase Agreement") between the Trust and such
purchasers or placement agents relating to the sale and distribution of the
Receivables Securities.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, in the name and
on behalf of the Trust, authorized, empowered and directed to negotiate the
terms and provisions of one or more trust agreements (each, an "Owner Trust
Agreement") between the Trust, as Depositor, and an entity qualified to act
in such capacity, as Owner Trustee, relating to the establishment of MMCA
Auto Trust 1999-2 (the "Owner Trust").
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, in the name and
on behalf of the Trust, authorized, empowered and directed to negotiate the
terms and provisions of one or more sale and servicing agreements (each, a
"Sale and Servicing Agreement") among the Trust, as Seller, Mitsubishi
Motors Credit of America, Inc., as Servicer, and the Trust, relating to the
transactions described in and contemplated by the Registration Statement.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, in the name and
on behalf of the Trust, authorized, empowered and directed to enter into
one or more limited guaranty or similar credit enhancement agreements
(each, a "Limited Guaranty Agreement") relating to the Receivables
Securities providing for the issuance by the Trust of a limited guaranty of
certain amounts ("Covered Amounts") that may become due with respect to the
Receivables Securities and the pledge of certain assets of the Trust to
secure such limited guaranty, the Covered Amounts under such Limited
Guaranty Agreements not to exceed in the aggregate $200 million.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, in the name and
on behalf of the Trust, authorized, empowered and directed to select one or
more domestic or foreign clearing corporations and to enter into one or
more agreements (each, a "Clearing Agreement") with a bank, financial
institution or other corporation or entity, providing for the settlement
and clearance of any Receivable Security through the facilities of any such
clearing corporation.
RESOLVED, that the President, the Treasurer and any Executive Vice
President of the Trust be, and each of them hereby is, in the name and on
behalf of the Trust, authorized, empowered and directed to execute and
deliver the Underwriting Agreement, Securities Purchase Agreements, Owner
Trust Agreements, Sale and Servicing Agreements, Limited Guaranty
Agreements and Clearing Agreements and to perform the obligations of the
Trust under the terms of the Underwriting Agreement, Securities Purchase
Agreements, Owner Trust Agreements, Sale and Servicing Agreements, Limited
Guaranty Agreements and Clearing Agreements, and Susan M. Tyner is
authorized to execute the Underwriting Agreement.
RESOLVED, that the Trust is authorized to sell, transfer, and
assign the Receivables, in a principal amount not to exceed $950 million,
to the Owner Trust and to have Receivables sold, transferred, and assigned
back to it by the Owner Trust in such amounts, at such times and as
otherwise described in or contemplated by the Registration Statement and
the Sale and Servicing Agreements, and that the President, the Treasurer
and any Executive Vice President of the Trust be, and each of them hereby
is, in the name and on behalf of the Trust, authorized, empowered and
directed to execute and deliver to the Owner Trust such papers and
documents, including, without limitation, assignment documents, bills of
sale, Uniform Commercial Code financing statements and such other documents
as are necessary or desirable to evidence the sale, transfer and assignment
of the Receivables to or the transfer and assignment of Receivables from
the Owner Trust as heretofore provided as described in and contemplated by
the Registration Statement and the Sale and Servicing Agreements and all
exhibits thereto.
RESOLVED, the President, the Treasurer and any Executive Vice
President of the Trust be, and each of them hereby is, authorized,
empowered and directed, in the name and on behalf of the Trust, to execute
(by manual or facsimile signature) Receivables Securities (and, in
addition, Receivables Securities to replace any of the Receivables
Securities which are lost, stolen, mutilated or destroyed and Receivable
Securities required for exchange, substitution or transfer, all as provided
in one or more indentures relating to the Receivables Securities (each, an
"Indenture"), the Owner Trust Agreements or other agreements) in fully
registered form in substantially the forms of Receivables Securities to be
set forth in the Indentures, Owner Trust Agreements or other agreements
with such changes therein and additional thereto as such Authorized Officer
or Authorized Officers executing the Receivables Securities may deem
necessary, appropriate or desirable, as conclusively evidenced by his or
their execution thereof.
RESOLVED, that the President, the Treasurer and any Executive Vice
President of the Trust be, and each of them hereby is, in the name and on
behalf of the Trust, authorized to appoint one or more paying agents,
registrars, transfer agents, and other agents and functionaries, and to
execute and deliver, in the name and on behalf of the Trust, any
agreements, instruments or documents relating to any such appointment, for
the purpose of the implementing and giving effect to the respective
provisions of the Indentures, Owner Trust Agreements, Receivables
Securities or other agreements which shall be executed and delivered
pursuant to the foregoing resolutions.
RESOLVED, that the retention of the law firm of Skadden, Arps,
Slate, Meagher & Flom LLP, and any other firm chosen by the President, the
Treasurer or any Executive Vice President, as special counsel to the Trust
in connection with the establishment of the Owner Trust and the preparation
of documents relating to the issuance and sale of the Receivables
Securities, and any and all related matters, be, and it hereby is, ratified
and approved.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, authorized and
empowered to retain such other counsel, accountants, investment advisors,
and such other professionals and advisors as he shall deem necessary or
desirable in order to accomplish the purpose and intent of these
resolutions.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, authorized to
pay any and all expenses and fees arising in connection with the issuance
and sale of the Receivables Securities, any registration, qualification or
exemption under securities laws of any state or other jurisdiction,
including Federal, and otherwise in connection with matters encompassed by
these resolutions.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, authorized and
directed to execute and deliver or cause to be executed and delivered such
additional or other documents, certificates, and instruments, and to take
any and all such other action as may be deemed by each such Authorized
Officer necessary, desirable or appropriate in order to carry out the
purpose and intent of the foregoing resolutions.
RESOLVED, that the President, the Treasurer and any Executive
Vice President of the Trust be, and each of them hereby is, in the name and
on behalf of the Trust, authorized, empowered and directed to do and
perform, or cause to be done and performed, all such acts, deeds, and
things and to make, execute, and deliver, or cause to be made, executed,
and delivered, all such agreements, undertakings, documents, instruments,
or certificates in the name and on behalf of the Trust, or otherwise as
such Authorized Officer may deem necessary or appropriate to effectuate or
carry out fully the purposes and intent of the foregoing resolutions,
including, without limitation, the performance of the obligations of the
Trust under the Registration Statement, Purchase Agreement, Underwriting
Agreement, Securities Purchase Agreements, Owner Trust Agreements, Sale and
Servicing Agreements, Limited Guaranty Agreements, Clearing Agreements, and
all agreements that are exhibits to the aforementioned agreements and
documents, or any other agreement, certificate, or instrument referred to
or contemplated herein or therein.
RESOLVED, that any and all actions taken or contracts entered
into heretofore by any of the President, the Treasurer or any Executive
Vice President of the Trust, as well as any and all actions taken or
contracts entered into by said person as an individual acting for the
Trust, with respect to the Registration Statement, Purchase Agreement,
Underwriting Agreement, Securities Purchase Agreements, Owner Trust
Agreements, Sale and Servicing Agreements, Limited Guaranty Agreements,
Clearing Agreements, and all agreements that are exhibits to the
aforementioned agreements and documents, or the transactions and events
contemplated hereby or thereby, be and the same hereby are ratified,
approved and confirmed, and all such actions and contracts are hereby
adopted as though said individuals had at such time full power and
authority to act for and on behalf of the Trust and in the same manner as
if each and every act had been done pursuant to the specific authorization
of the Board of Managers of the Trust.
RESOLVED, that for the purpose of facilitating the execution of
this Unanimous Written Consent of the Board of Managers, this document may
be executed in one or more counterparts, each of which counterpart shall be
deemed to be an original and all of which counterparts shall constitute but
one and the same instrument.
RESOLVED, that these resolutions are effective as of the
12th day of October, 1999.
IN WITNESS WHEREOF, the undersigned, being all the Managers of
MMCA Auto Receivables Trust have executed this Unanimous Written Consent of
the Board of Managers.
/s/ Hiroshi Yajima /s/ John Maynard
- --------------------------- -----------------------------
Hiroshi Yajima John Maynard
/s/ Charles A. Tredway /s/ Yasuhiro Hagihara
- --------------------------- -----------------------------
Charles A. Tredway Yasuhiro Hagihara
/s/ Kenzo Yamada
- ---------------------------
Kenzo Yamada
Exhibit 25
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
---------------------------
Bank of Tokyo-Mitsubishi Trust Company
(Exact name of trustee as specified in its charter)
New York 13-5643426
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
1251 Avenue of the Americas 10020
(Address of principal executive office) (Zip Code)
---------------------------
MMCA Auto Receivables Trust
(Exact name of obligor as specified in its charter)
Delaware 33-0570905
(State of other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
6363 Katella Avenue
Cypress, CA 90630-5205
(Address of principal executive offices) (Zip Code)
----------------------------
....% Asset Backed Notes ...
(Title of the indenture securities)
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
---- -------
Superintendent of Banks 2 Rector Street, New York, N.Y. 10006,
of the State New York and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York, N.Y. 10045
New York
Federal Deposit Insurance Washington, D.C. 20429
Corporation
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Attached herewith pursuant to Rule 7a-29 under the Trust Indenture Act
of 1939 (the "Act") and 17 C.F.R. 229.10 (d).
1. A copy of the Organization Certificate of Bank of Tokyo-Mitsubishi
Trust Company as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate
trust powers.*
2. A copy of the existing By-laws of the Trustee.*
3. The consent of the Trustee required by Section 321(b) of the Act.*
4. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
- ------------------------------
* Exhibit previously filed with the Securities and Exchange Commission
with Registration No. 333-32937 and incorporated herein by reference
thereto.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, Bank of
Tokyo-Mitsubishi Trust Company, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the
13th day of October 1999.
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ Felyce Caliendo
-----------------------------------
Name: Felyce Caliendo
Title: Trust Officer
EXHIBIT 6
Language for Item 6 of Form T-1
Bank of Tokyo-Mitsubishi Trust Company hereby consents to the
furnishing of reports of examinations by federal, state, territorial or
district authorities to the Securities and Exchange Commission
("Commission") upon the Commission's request.
EXHIBIT 7 TO FORM T-1
BANK OF TOKYO-MITSUBISHI TRUST COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997
- -----------------------------------------------------------------------------
($ In thousands, except share data) 1998 1997
- -----------------------------------------------------------------------------
ASSETS:
Cash and due from banks $ 666,759 $ 692,239
Interest-bearing deposits placed (note 10) 30,320 1,386,691
Federal funds sold 275,000 167,000
Available for sale securities (note 2) 393,513 503,301
Loans, net of unearned Income (note 3) 2,993,710 4,632,042
Less allowance for loan losses (note 3) 98,614 119,907
- -----------------------------------------------------------------------------
Loans, net 2,895,096 4,512,135
- -----------------------------------------------------------------------------
Bank premises and equipment net of accumulated
depreciation of $6,627 and $6,168,
respectively 7,778 9,305
Customers' liability on acceptances 56 541
Accrued interest receivable 42,939 64,818
Other assets 64,210 33,441
- -----------------------------------------------------------------------------
Total assets $4,375,671 $7,369,471
- -----------------------------------------------------------------------------
LIABILITIES:
Deposits:
Noninterest-bearing deposits in domestic
offices $1,335,124 $1,35l,563
Interest-bearing deposits in domestic
offices (note 6) 542,478 519,102
Interest-bearing deposits in overseas
offices (note 6) 326,447 1,989,833
- -----------------------------------------------------------------------------
Total deposits: 2,204,049 3,860,498
- -----------------------------------------------------------------------------
Federal funds purchased (overnight) and
securities sold under agreements to
repurchase 453,462 265,406
Other borrowed funds (including term Federal
funds purchased of $150,000 in 1997 &
$149,000 in 1996) 558,062 1,946,274
Acceptances outstanding 56 541
Accrued interest payable 29,087 42,353
Accrued taxes and other liabilities (note 5) 144,395 186,866
- -----------------------------------------------------------------------------
Liabilities other than capital notes 3,389,111 6,301,938
Capital notes and subordinated debt (note 7) 166,749 313,286
- -----------------------------------------------------------------------------
Total liabilities 3,555,860 6,615,224
- -----------------------------------------------------------------------------
STOCKHOLDERS EQUITY (NOTE 4):
Preferred stock (par value $100); 1,000,000
shares authorized, none outstanding - -
Common stock (par value $100); authorized
1,485,000 shares; issued 1,329,219 shares: 132,922 132,922
Surplus 311,494 311,494
Undivided profits 386,547 303,912
Net unrealized gain on available-for-sale
securities 6,848 5,919
- -----------------------------------------------------------------------------
Total stockholders equity 819,811 754,247
- -----------------------------------------------------------------------------
Total liabilities and stockholder's equity $4,375,671 $7,369,471
- -----------------------------------------------------------------------------
