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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) August 20, 1998
MMCA Auto Owner Trust 1998-1
(Issuer with respect to the Notes)
MMCA Auto Receivables, Inc.
(Originator of MMCA Auto Owner Trust 1998-1)
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
333-58869 33-0570905
(Commission File Number) (I.R.S. Employer
Identification No.)
6363 Katella Avenue, Cypress, California 90630-5205
(Address of Principal Executive Offices) (Zip Code)
(714) 236-1592
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
The Registrant is filing final forms of the exhibits listed in Item
7(c) below.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
EXHIBIT
NO. DOCUMENT DESCRIPTION
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1.1 Underwriting Agreement
4.1 Amended and Restated Trust Agreement
4.2 Sale and Servicing Agreement
4.3 Indenture
4.4 Administration Agreement
10.1 Purchase Agreement
10.2 Yield Supplement Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
MMCA Auto Receivables, Inc.,
as Originator of MMCA Auto Owner
Trust 1998-1
Dated: August 31, 1998
By: /s/ Charles A. Tredway
_____________________________
Name: Charles A. Tredway
Title: Executive Vice President and
General Manager
INDEX TO EXHIBITS
Exhibit No. Document Description Sequential
Page No.
1.1 Underwriting Agreement
4.1 Amended and Restated Trust Agreement
4.2 Sale and Servicing Agreement
4.3 Indenture
4.4 Administration Agreement
10.1 Purchase Agreement
10.2 Yield Supplement Agreement
Exhibit No. 1.1
$832,518,000
MMCA AUTO OWNER TRUST 1998-1
$200,000,000 5.621% CLASS A-1 ASSET BACKED NOTES
$250,000,000 5.72% CLASS A-2 ASSET BACKED NOTES
$322,056,000 5.86% CLASS A-3 ASSET BACKED NOTES
$60,462,000 6.07% CLASS B ASSET BACKED NOTES
MMCA AUTO RECEIVABLES, INC.
UNDERWRITING AGREEMENT
August 13, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
as Representative of the several Underwriters
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Dear Sirs:
1. Introductory. MMCA Auto Receivables, Inc., a Delaware
corporation (the "Company"), proposes, subject to the terms and conditions
stated herein, to cause MMCA Auto Owner Trust 1998-1 (the "Trust") to issue
and sell $200,000,000 aggregate principal amount of 5.621% Class A-1 Asset
Backed Notes (the "Class A-1 Notes"), $250,000,000 aggregate principal
amount of 5.72% Class A-2 Asset Backed Notes (the "Class A-2 Notes"),
$322,056,000 aggregate principal amount of 5.86% Class A-3 Asset Backed
Notes (the "Class A-3 Notes") and $60,462,000 aggregate principal amount of
6.07% 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
August 1, 1998 (the "Indenture"), between the Trust and Bank of
Tokyo-Mitsubishi Trust Company (the "Indenture Trustee").
Concurrently with the issuance and sale of the Notes as
contemplated herein, the Trust will issue $97,669,451.88 aggregate
principal amount of certificates of beneficial interest (the
"Certificates"), each representing an interest in the Trust Property. The
Company will retain the Certificates. The Certificates will be issued
pursuant to the Amended and Restated Trust Agreement, dated as of August 1,
1998 (the "Trust Agreement"), between the Company and Wilmington Trust
Company, as Owner Trustee. The Certificates are subordinated to the Notes.
The assets of the Trust will include, among other things, a pool of
motor vehicle retail installment sale contracts secured by new and used
automobiles and light-and medium-duty trucks (the "Receivables"), with
respect to Actuarial Receivables, certain monies due thereunder on or after
August 1, 1998 (the "Cutoff Date"), and, with respect to Simple Interest
Receivables, certain monies due or received thereunder on or after the
Cutoff Date, such Receivables to be sold to the Trust by the Company and to
be serviced for the Trust by Mitsubishi Motors Credit of America, Inc.
("MMCA" or, in its capacity as servicer, 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 August 1, 1998 (the "Sale and
Servicing Agreement"), among the Trust, the Company 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. The Company hereby agrees with the several
Underwriters named in Schedule A hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-1 (No. 333-58869)
relating to the Notes, including a form of prospectus, has been
filed with the Securities and Exchange Commission (the
"Commission") and either (i) has been declared effective under the
Securities Act of 1933, as amended (the "1933 Act"), and is not
proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If the Company does not
propose to amend the registration 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 1933 Act ("Rule 462(c)").
For purposes of this Agreement, "Effective Time" means (i) if the
Company has advised Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), 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 declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c), or (ii) if the Company 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 Effective
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 under the 1933 Act ("Rule 430A Information"), is hereinafter
referred to as the "Registration Statement". The form of prospectus
relating to the Notes, as first filed with the Commission pursuant
to and in accordance with Rule 424(b) under the 1933 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 1933 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 1933 Act and the rules and regulations of the
Commis sion thereunder (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 1933 Act and the Rules and
Regulations, and neither of such documents includes, or will
include, any untrue statement of a material 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 requirements
of the 1933 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 required to be stated therein
or necessary to make the statements therein not misleading and
(iii) no additional registration 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 Company by any Underwriter through the
Representative specifically for use therein.
(c) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business as a
foreign corporation 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 Company 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 Company of Notes, except
such as have been obtained and made under the 1933 Act, such as may
be required under state securities laws and the filing of any
financing statements required to perfect the Company's, the Trust's
and the Indenture Trustee's interest in the Receivables, which
financing statements will be filed in the appropriate offices
within ten (10) days of the Closing Date (as such term is defined
in Section 3).
(e) The Company is not in violation of its Certificate of
Incorporation or Bylaws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any agreement or instrument 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 Company 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 statute, any
rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company or
any of its properties, or any agreement or instrument to which the
Company is a party or by which the Company is bound or to which any
of the properties of the Company or any such subsidiary is subject,
or the Certificate of Incorporation or By-laws of the Company, and
the Company has full power and authority to authorize and issue the
Notes and the Certificates and to sell the Notes as contemplated by
this Agreement, 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 Company will have directed the
Owner Trustee to authenticate and execute the Certificates and,
when delivered and paid for pursuant to the Trust Agreement, the
Certificates 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) The Company possesses adequate certificates, authorities
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 proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on the Company.
(h) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the
Company or any of its properties that, if determined adversely to
the Company, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business or
results of operations of the Company, or would materially and
adversely affect the ability of the Company to perform its
obligations under this Agreement 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; and no such actions, suits or proceedings are
threatened or, to the Company's knowledge, contemplated.
(i) As of the Closing Date, the representations and
warranties of the Company contained in the Basic Documents will be
true and correct.
(j) 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 Company,
whether or not arising in the ordinary course of business and (ii)
there have been no transactions entered into by the Company, other
than those in the ordinary course of business, which are material
with respect to the Company.
(k) Each of the Basic Documents to which the Company is a
party has been duly authorized by the Company and, when duly
executed and delivered by the Company and the other parties
thereto, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance 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 enforcement 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).
(l) This Agreement has been duly authorized, executed and
delivered by the Company.
(m) The Company has authorized the conveyance of the
Receivables to the Trust and, as of the Closing Date, the Company
has directed the Trust to execute and issue the Notes and the
Certificates and to sell the Notes.
(n) The Company's assignment and delivery of the Receivables
to the Trust as of the Closing Date will vest in the Trust all of
the Company's right, title and interest therein, subject to no
prior lien, mortgage, security interest, pledge, adverse claim,
charge or other encumbrance.
(o) 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.
(p) The Computer Tape of the Receivables created as of
August 1, 1998 and made available to the Representative by the
Servicer was complete and accurate as of the date thereof and
includes an identifying description of the Receivables that are
listed on Schedule A to the Sale and Servicing Agreement.
(q) 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 Company at or prior to the Closing Date
to the extent then due.
(r) The consummation of the transactions contemplated by
this Agreement and the Basic Documents, and the fulfillment 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 Company
pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement, guarantee, lease financing agreement or similar
agreement or instrument under which the Company is a debtor or
guarantor.
(s) The Company is not and, after giving effect to the
issuance of the 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 Company agrees to sell to
the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Company, at a purchase price of, in the case of (i) the
Class A-1 Notes, 100.000000% of the principal amount thereof; (ii) the
Class A-2 Notes, 99.998812% of the principal amount thereof; (iii) the
Class A-3 Notes, 99.990796% of the principal amount thereof; and (iv) the
Class B Notes, 99.990291% 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 Company 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 Merrill Lynch by the Company at a bank acceptable
to Merrill Lynch, 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 August 20, 1998, or at such other time not later than seven full
business days thereafter as Merrill Lynch and the Company 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 Company 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 Company
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 "1934 Act"), the parties hereto have agreed that the
Closing Date will be not later than August 20, 1998, 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 Company. The Company agrees with the
several Underwriters:
(a) If the Effective Time is prior to the execution and
delivery of this Agreement, the Company will file the Prospectus
with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by Merrill Lynch,
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 Company will advise the Representative promptly
of any such filing pursuant to Rule 424(b).
(b) The Company will advise the Representative promptly of
any proposal to amend or supplement the registration statement as
filed or the related prospectus, or the Registration Statement or
the Prospectus, and will not effect such amendment or supple
mentation without the Representative's consent; and the Company
will also advise the Representative promptly of the effectiveness
of the Registration Statement (if its Effective Time is subsequent
to the execution and delivery of this Agreement) and of any
amendment or supplementation of the Registration Statement or the
Prospectus 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 lifting, if issued.
(c) If, at any time when a prospectus relating to the Notes
is required to be delivered under the 1933 Act in connection 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 1933 Act, the Company 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 compliance. 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 Company 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 1933 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 Company will furnish to the Representative copies of
the Registration Statement (two of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so
long as delivery of a prospectus relating to the Notes is required
to be delivered under the 1933 Act in connection 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 furnished on or prior to 3:00 p.m., New York
time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time. All other such
documents shall be so furnished as soon as available. The Company
will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company 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 Company 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 delivered to
the Indenture Trustee, the Owner Trustee or the Noteholders under
the Indenture, the Sale and Servicing Agreement or the other Basic
Documents.
(h) So long as any Note is outstanding, the Company will
furnish to the Representative by first-class mail as soon as
practicable, (i) all documents distributed, or caused to be
distributed, by the Company to Noteholders, (ii) all documents
filed, or caused to be filed, by the Company with the Commission
pursuant to the 1934 Act, any order of the Commission thereunder
and (iii) such other information in the possession of the Company
concerning the Trust as the Representative from time to time may
reasonably request.
(i) The Company 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 Company's officers and employees and any other expenses of the
Company 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 Company, the Company shall
furnish such documents and take any such other action.
(k) On or before the Closing Date, the Company shall cause
the computer records of the Company and MMCA relating to the
Receivables to be marked to show the Trust's absolute ownership of
the Receivables, and from and after the Closing Date neither the
Company 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 Company herein, to the accuracy of the
statements of Company officers made pursuant to the provisions hereof, to
the performance by the Company 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 Agreement, 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 registration statement to be filed shortly prior to such
Effective Time), of Ernst & Young LLP, in form and substance
satisfactory to the Representative and counsel for the
Underwriters, confirming that they are independent public
accountants within the meaning of the 1933 Act and the applicable
Rules and Regulations and stating in effect that (i) they have
performed certain specified procedures as a result of which they
determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records
of the Trust, MMCA and the Company) set forth in the Registration
Statement and the Prospectus (and any supplements thereto), agrees
with the accounting records of the Trust, MMCA and the Company,
excluding 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 registration statement as
proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to the Effective Time, including the 430
Information, 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 execution and
delivery of this Agreement, the Effective Time shall have occurred
not later than 5:00 p.m., New York time, on the date following 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
Company or the Representative, shall be contemplated by the
Commission.
(c) The Representative shall have received an opinion of J.
Sean Plater, Esq., General Counsel of the Company, dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect
that:
(i) the Company has been duly incorporated and is an
existing corpora tion in good standing under the laws of the
State of Delaware, with full corporate power and authority
to own its properties and conduct its business as described
in the Prospectus; the Company 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 Company
has full power and authority to enter into and perform its
obligations under this Agreement and the Basic Documents to
which it is a party, to direct the Owner Trustee to execute
the Notes and the Certificates, 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 authority 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 jurisdiction 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 consummate 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 Company to the
Indenture Trustee to authenticate the Notes and the
direction by the Company to the Owner Trustee to execute the
Notes has been duly authorized by the Company and, when the
Notes have been duly executed and delivered by the Owner
Trustee and, when authenticated 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,
will be duly and validly issued and outstanding and will be
entitled to the benefits of the Indenture;
(iv) the direction by the Company to the Owner
Trustee to authenticate and execute the Certificates has
been duly authorized by the Company and, when the
Certificates have been duly executed, authenticated and
delivered in accordance with the terms of the Trust
Agreement and the Certificates have been delivered to and
paid for by the Company 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) each Basic Document to which the Company or MMCA
is a party has been duly authorized, executed and delivered
by the Company and MMCA, respectively;
(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 Company of this Agreement and the Basic
Documents to which it is a party, for 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 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
Company pursuant to the Purchase Agreement and the transfer
of the Trust Property to the Trust pursuant to the Sale and
Servicing Agreement and the filing of a Uniform Commercial
Code financing statement in Delaware with respect to the
grant by the Trust of a security interest in the Trust
Property to the Indenture Trustee pursuant to the Indenture,
which financing statements will be filed in the appropriate
offices within ten (10) days of the Closing Date; (ii) such
as have been obtained and made under the 1933 Act; and (iii)
such as may be required under state securities laws;
(vii) the execution, delivery and performance of this
Agreement and the Basic Documents by the Company, the
execution, delivery and performance of the Note
Indemnification Agreement and the Basic Documents by MMCA
and the consummation of any other of the transactions
contemplated herein, in the Note Indemnification 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 Company pursuant to the terms of the
Certificate of Incorporation or the By-Laws of MMCA or the
Company, or any statute, rule, regulation or order of any
governmental agency or body, or any court having
jurisdiction over MMCA or the Company or their respective
properties, or any agreement or instrument known to such
counsel after due investigation to which MMCA or the Company
is a party or by which MMCA or the Company or any of their
respective properties is bound;
(viii) such counsel has no reason to believe that
any part of the Registra tion 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 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
Registration Statement and the Prospectus of statutes, legal
and governmental proceedings and contracts and other
documents are accurate and fairly present the information
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 Registration 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
investigations pending to which the Company 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
Company, (i) that are required to be disclosed in the
Registration Statement, (ii) asserting the invalidity of
this Agreement, the Note Indemnification Agreement, any
Basic Document, the Notes or the Certificates, (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 adversely affect the performance by the
Company or MMCA of its obligations under, or the validity or
enforceability of, this Agreement, the Note Indemnification
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 "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES";
(x) the statements in the Registration Statement
under the heading "CERTAIN 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 Company 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 the
Company, the Trust, the Owner Trustee or the Indenture
Trustee;
(xii) this Agreement has been duly authorized,
executed and delivered by the Company; and the Note
Indemnification Agreement has been duly authorized, executed
and delivered by MMCA;
(xiii) such counsel is familiar with MMCA's standard
operating procedures relating to MMCA's acquisition 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 procedures 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 Assignment dated as of August 1, 1997 from
MMCA to the Company has been duly authorized, executed and
delivered by MMCA;
(xv) the Receivables are chattel paper as defined in
the UCC; and
(xvi) immediately prior to the sale of Receivables
by MMCA to the Company pursuant to the Purchase Agreement
and the Assignment, MMCA was the sole owner of all right,
title and interest in, to and under the Receivables and the
other property to be transferred by it to the Company.
Immediately prior to the sale of Receivables by the Company
to the Trust pursuant to the Sale and Servicing Agreement,
the Company 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.
(d) The Representative shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the
Company, dated the Closing Date, and satisfactory in form and
substance to the Representative and counsel for the Underwriters,
to the effect that:
(i) each 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 Company's
rights in the Receivables and proceeds thereof, which
security interest, if characterized as a transfer for
security, will secure payment of the Notes;
(iii) the financing statement naming the Company as
debtor and the Trust as secured party in appropriate 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 Receivables and proceeds thereof
will be perfected, and no other security interest of any
other creditor of the Company will be equal or prior to the
security interest of the Owner Trustee in the 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 Receivables and proceeds thereof to
secure payment of the Notes;
(v) assuming that each of the direction by the
Company to the Indenture Trustee to authenticate the Notes
and the direction by the Company to the Owner Trustee to
execute and deliver the Notes has been duly authorized by
the Company, when the Notes have been duly executed and
delivered by the Owner Trustee and authenticated 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 Company to
the Owner Trustee to authenticate and execute the
Certificates has been duly authorized by the Company, when
the Certificates have been duly executed, authenticated and
delivered in accordance with the terms of the Trust
Agreement and the Certificates have been delivered to and
paid for by the Company 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 "CERTAIN LEGAL ASPECTS OF THE RECEIVABLES", 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 execution, delivery
and performance by the Company 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 consummation of the transactions contemplated by
this Agreement, 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 1933 Act;
(xi) the Registration Statement was declared
effective under the 1933 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 1933 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
1933 Act and the Rules and Regulations; such counsel have no
reason to believe that any part of the Registration
Statement or any amendment thereto, as of its effective
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 counsel need express
no opinion as to the financial statements or other financial
data contained in the Registration 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 Company and MMCA,
in each case as to those documents to which it is a party,
enforceable against the Company 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
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 indemnification 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 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 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
indemnification 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 Company is and,
after giving effect to the issuance and sale of the Notes
and the Certificates and the application of the proceeds
thereof, as described in the Prospectus, neither the Trust
nor the Company will be, an "investment company" as defined
in the Investment Company Act of 1940, as amended;
(xv) the Notes, the Certificates, the Purchase
Agreement, the Administra tion 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 descriptions
thereof contained in the Registration Statement and the
Prospectus;
(xvi) the Trust Agreement is the legal, valid and
binding agreement of the Company, enforceable against the
Company, in accordance with its terms under
the law of the State of Delaware; and
(xvii) this Agreement has been duly authorized,
executed and delivered by the Company; and the Note
Indemnification Agreement has been duly authorized, executed
and delivered by MMCA.
(e) The Representative shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel for
the Company, dated the Closing Date and satisfactory 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 indebtedness of the Trust that is secured
by the Receivables, (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--ERISA Considerations", "ERISA
CONSIDERATIONS", "SUMMARY--Tax Status", "CERTAIN FEDERAL INCOME TAX
CONSE QUENCES" and "DESCRIPTION OF THE NOTES--Indenture--" (last
sentence of second paragraph under "--Events of Default" and last
sentence of first paragraph under "--Remedies" only), to the extent
such statements constitute matters of law or legal conclusions with
respect thereto, are correct in all material respects.
(f) The Representative shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel for
the Company, dated the Closing Date and satisfactory in form and
substance to the Representative and counsel for the Underwriters,
to the effect that for California and Delaware state franchise and
California and Delaware state income tax purposes (i) the Notes
will be characterized as indebtedness of the Trust that is secured
by the Receivables, (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--Tax Status" and "CERTAIN STATE TAX
CONSEQUENCES", 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 from Brown & Wood
LLP, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the validity of the Notes, the
Registration Statement, the Prospectus and other related matters as
the Representative may require, and the Company shall have
furnished to such counsel such documents as it may request for the
purpose of enabling it to pass upon such matters.
(h) The Representative shall have received a certificate,
dated the Closing Date, of the Chairman of the Board, the President
or any Vice-President and a principal financial or accounting
officer of each of the Company and MMCA in which such officers, to
the best of their knowledge after reasonable investigation, shall
state that: the representations and warranties of the Company in
this Agreement are true and correct; the representations of MMCA in
the Note Indemnification Agreement are true and correct; the
Company or MMCA, as applicable, has complied with all agreements
and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date; the
representations and warranties of the Company or MMCA, as
applicable, in the Basic Documents are true and correct as of the
dates specified in such agreements; the Company or MMCA, as
applicable, has complied with all agreements and satisfied all
conditions 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 in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company or MMCA, whether or
not arising in the ordinary course of business.
(i) The Representative shall have received an opinion of
Pryor, Cashman, Sherman & Flynn, counsel to the Indenture Trustee,
dated the Closing Date and satis factory in form and substance to
the Representative and counsel for the Underwriters, to
the effect that:
(i) the Indenture Trustee is a banking corporation
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 Indenture and
the Administration Agreement and the acceptance 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 authorized by all necessary corporate action of
the Indenture Trustee and each has been duly executed and
delivered on behalf of the Indenture Trustee;
(iv) the Indenture, the Sale and Servicing Agreement
and the Adminis tration Agreement constitute valid and
binding obligations of the Indenture Trustee enforceable
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 Agreement
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 Indenture Trustee under the Trust
Indenture Act;
(vi) each of the Notes has been duly authenticated by
the Indenture Trustee;
(vii) neither the consummation by the Indenture
Trustee of the transac tions 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 Agreement, 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.
(j) 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 Underwriters, 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 delivered 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 transfer, reorganization, morato rium and other
similar laws affecting creditors' rights generally from time
to time in effect, 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);
(iii) the Certificates have been duly executed,
authenticated and delivered by the Owner Trustee as owner
trustee and authenticating agent; each of the Notes has been
duly executed and delivered by the Owner Trustee, on behalf
of the
Trust;
(iv) the execution and delivery by the Owner Trustee of
the Trust Agree ment 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.
(k) The Representative shall have received an opinion of
Richards, Layton & Finger, P.A., special Delaware counsel to the
Trust, dated the Closing Date and satis factory 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 Business
Trust Act, 12 Del.C. ss.3801 et seq. (the "Delaware Act");
(ii) the Trust has the power and authority under the
Delaware Act and the Trust Agreement, and the Trust
Agreement authorizes the Owner Trustee, to execute, deliver
and perform its obligations under the Sale and Servicing
Agreement, the Indenture, the Administration 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 Receivables 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 ss.9-312(4) of the
Delaware UCC and temporarily perfected security interests in
proceeds under ss.9-306(3) of the Delaware UCC;
(iv) no re-filing or other action is necessary under the
Delaware UCC in order to maintain the perfection of such
security interest except for the filing of continuation
statements at five year intervals;
(v) 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 Company, the Certificates will be validly issued and
entitled to the benefits of the Trust Agreement; and
(vi) under 12 Del. C. ss.3805(b), no creditor of any
Certificateholder (including creditors of the Company in its
capacity as Certificateholder) shall have any right to
obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of the
Trust except in accordance with the terms of the Trust
Agreement.
(l) The Representative shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Company,
dated the Closing Date and satis factory in form and substance to
the Representative and counsel for the Underwriters, (i) with
respect to the characterization of the transfer of the Receivables
by MMCA to the Company and from the Company to the Trust and (ii)
to the effect that should MMCA become the debtor in a case under
the Bankruptcy Code, and the Company 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
bankruptcy jurisdiction, the court, exercising reasonable judgment
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
Company with those of MMCA and such opinion shall be in
substantially the form previously discussed with the Representative
and counsel for the Underwriters and in any event satisfactory in
form and in substance to the Representative and counsel for the
Underwriters.
(m) The Representative shall have received evidence
satisfactory to it and its counsel that, within ten (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 Company and the
transfer of the interest of the Company 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.
(n) The Representative shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the
Company, 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 payment 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.
(o) Each Class of the Class A Notes shall have been rated in
the highest rating category by Moody's and Standard & Poor's and
the Class B Notes shall have been rated in the third highest
category by Moody's and Standard & Poor's.
(p) 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.
(q) On or prior to the Closing Date, the Certificates shall
have been issued to the Company.
(r) The Representative shall have received from Skadden,
Arps, Slate, Meagher & Flom LLP and each other counsel for the
Company, 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 Underwriters.
The Company 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 Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of
any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or
any amendment thereto), including the Rule 430A Information
or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission; provided
that (subject to Section 7(d) below) any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel
chosen by Merrill Lynch), reasonably incurred in
investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under clause
(i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through
Merrill Lynch expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information, or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). The foregoing indemnity with respect to any
untrue statement contained in or any omission from the Prospectus
shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any
such loss, liability, claim, damage or expense purchased any of the
Notes that are the subject thereof if (i) the untrue statement or
omission contained in the Prospectus was corrected; (ii) such
person was not sent or given a copy of the Prospectus which
corrected the untrue statement or omission at or prior to the
written confirmation of the sale of such Notes to such person if
required by applicable law; and (iii) the Company satisfied its
obligation pursuant to Section 4(e) of this Agreement to provide a
sufficient number of copies of the Prospectus to the Underwriters.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information, or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through
Merrill Lynch expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in
any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case
of parties indemnified pursuant to Section 7(a) above, counsel to
the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 7(b) above,
counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense
in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no
event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 7 hereof (whether
or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation,
proceeding or claim 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 at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii)
such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement.
(e) If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless
an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from
the offering of the Notes pursuant to this Agreement or (ii) if the
allocation provided by clause (i) 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 Company on the one hand and of the
Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company on the one
hand and the Underwriters on the other hand in connection with the
offering of the Notes pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total net proceeds
from the offering of the Notes pursuant to this Agreement (before
deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters, in each case as
set forth on the cover of the Prospectus, bear to the aggregate
initial public offering price of the Notes as set forth on such
cover.
The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this
Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or
alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, 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 any 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 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights
to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the principal amount of
Notes set forth opposite their respective names in Schedule A
hereto (after giving effect to Section 9, if applicable) and not
joint.
8. Termination of Agreement. The Representative may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Date (i) if there has been, since the time of execution of this Agreement
or since the respective dates as of which information is given in the
Prospectus, (a) any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company, whether or not arising in the ordinary course of business, or
(b) 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 and light-and medium-duty truck
financing business of the Trust, the Company, Mitsubishi Motor Sales of
America, Inc., Mitsubishi Motors Corporation or MMCA which, in the judgment
of the Representative, materially impairs the investment quality of each
Class of the Notes or 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; (ii) if there has occurred any downgrading in the rating of
the debt securities of the Company by any "nationally recognized
statistical rating organization" (as such term is defined for purposes of
Rule 436(g) under the 1933 Act), or any public announcement that such
organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) if there has occurred any material
adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving
a prospective change in international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representative, impracticable to market the Notes or to
enforce contracts for the sale of the Notes; (iv) if trading in any
securities of the Company, MMCA or Mitsubishi Motor Sales of America, Inc.
has been suspended or materially limited by the Commission, or if trading
generally on either the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or
by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority; or (v) if a banking moratorium
has been declared by federal, New York or California authorities.
9. 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 Company 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 Company 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
Company, except as provided in Section 10. 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.
10. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company 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 Company 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 Sections 8 or 9 or if for any
reason the purchase of the Notes by the Underwriters is not consummated,
the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 5 and the respective obligations of
the Company 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 9 or the occurrence of any event
specified in clause (ii), (iii) or (iv) of Section 8(c), the Company 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.
11. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or sent by facsimile
and confirmed to the Representative at Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, North Tower, World Financial Center,
New York, New York, 10281-1201, Attention: Theodore F. Breck, Director
(facsimile number (212) 449-9015), or, if sent to the Company, 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.
12. 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 Company or by a trust for which the Company 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 Company any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any Federal or state bankruptcy or similar law.
13. 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.
14. 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.
15. 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.
16. 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 Company 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 Company one
of the counterparts hereof, whereupon it will become a binding agreement
between the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
MMCA AUTO RECEIVABLES, INC.
By: /s/ Hideyuki Kitamura
_________________________
Name: Hideyuki Kitamura
Title: Treasurer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Theodore F. Breck
___________________________
Name: Theodore F. Breck
Title: Director
Acting on behalf of itself and as the
Representative of the several
Underwriters.
SCHEDULE A
<TABLE>
<CAPTION>
Amount of Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3 Class B
Underwriter Notes Notes Notes Notes
----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated $50,000,000 $62,500,000 $80,556,000 $60,462,000
Credit Suisse First Boston Corporation 50,000,000 62,500,000 80,500,000 0
Lehman Brothers Inc. 50,000,000 62,500,000 80,500,000 0
J.P. Morgan Securities Inc.
----------
50,000,000 62,500,000 80,500,000 0
---------- ---------- ---------- --
Total $200,000,000 $250,000,000 $322,056,000 $60,462,000
============ ============ ============ ===========
</TABLE>
Exhibit No. 4.1
=======================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
between
MMCA AUTO RECEIVABLES, INC.,
as Depositor,
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of August 1, 1998
=======================================================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Capitalized Terms . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Other Definitional Provisions . . . . . . . . . . . . 4
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Office . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.3. Purposes and Powers . . . . . . . . . . . . . . . . . 6
SECTION 2.4. Appointment of Owner Trustee. . . . . . . . . . . . . 7
SECTION 2.5. Initial Capital Contribution of Owner Trust
Estate . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.6. Declaration of Trust . . . . . . . . . . . . . . . . . 7
SECTION 2.7. [Reserved.] . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.8. Title to Trust Property . . . . . . . . . . . . . . . 8
SECTION 2.9. Situs of Trust . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.10. Representations and Warranties of the Depositor . . . 8
SECTION 2.11. Federal Income Tax Matters . . . . . . . . . . . . 10
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Ownership . . . . . . . . . . . . . . . . . 11
SECTION 3.2. The Certificates . . . . . . . . . . . . . . . . . . 11
SECTION 3.3. Authentication of Certificates . . . . . . . . . . . 12
SECTION 3.4. Registration of Certificates; Transfer and
Exchange of Certificates . . . . . . . . . . . . . . 12
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates . 19
SECTION 3.6. Persons Deemed Owners of Certificate . . . . . . . . 19
SECTION 3.7. Access to List of Certificateholders' Names
and Addresses . . . . . . . . . . . . . . . . . . . 19
SECTION 3.8. Maintenance of Office or Agency . . . . . . . . . . 20
SECTION 3.9. Appointment of Paying Agent . . . . . . . . . . . . 20
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with
Respect to Certain Matters . . . . . . . . . . . . . 22
SECTION 4.2. Action by Certificateholders with Respect to
Certain Matters . . . . . . . . . . . . . . . . . . 23
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.4. Restrictions on Certificateholders' Power . . . . . 23
SECTION 4.5. Majority Control . . . . . . . . . . . . . . . . . . 23
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution Account . 24
SECTION 5.2. Application of Trust Funds . . . . . . . . . . . . . 24
SECTION 5.3. Method of Payment . . . . . . . . . . . . . . . . . 25
SECTION 5.4. No Segregation of Monies; No Interest . . . . . . . 25
SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue
Service and Others . . . . . . . . . . . . . . . . . 26
SECTION 5.6. Signature on Returns; Tax Matters Partner . . . . . 26
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority . . . . . . . . . . . . . . . . . 28
SECTION 6.2. General Duties . . . . . . . . . . . . . . . . . . . 28
SECTION 6.3. Action upon Instruction . . . . . . . . . . . . . . 28
SECTION 6.4. No Duties Except as Specified in this
Agreement or in Instructions . . . . . . . . . . . . 30
SECTION 6.5. No Action Except Under Specified
Documents or Instructions . . . . . . . . . . . . . 30
SECTION 6.6. Restrictions . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties . . . . . . . . . . 32
SECTION 7.2. Furnishing of Documents . . . . . . . . . . . . . . 33
SECTION 7.3. Representations and Warranties . . . . . . . . . . . 33
SECTION 7.4. Reliance; Advice of Counsel . . . . . . . . . . . . 34
SECTION 7.5. Not Acting in Individual Capacity . . . . . . . . . 35
SECTION 7.6. Owner Trustee Not Liable for Certificates
or Receivables . . . . . . . . . . . . . . . . . . . 35
SECTION 7.7. Owner Trustee May Own Certificates and Notes . . . . 36
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses . . . . . . . . . 37
SECTION 8.2. Indemnification . . . . . . . . . . . . . . . . . . 37
SECTION 8.3. Payments to the Owner Trustee . . . . . . . . . . . 37
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement . . . . . . . . . . . 38
SECTION 9.2. Dissolution upon Bankruptcy of the Depositor . . . . 39
SECTION 9.3. Prepayment of the Certificates. . . . . . . . . . . 39
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee . . . . 42
SECTION 10.2. Resignation or Removal of Owner Trustee . . . . . . 42
SECTION 10.3. Successor Owner Trustee . . . . . . . . . . . . . . 43
SECTION 10.4. Merger or Consolidation of Owner Trustee . . . . . 44
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee . . . 44
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Supplements and Amendments . . . . . . . . . . . . 47
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders . . . . . . . . . . . . . . . . 49
SECTION 11.3. Limitation on Rights of Others . . . . . . . . . . 49
SECTION 11.4. Notices . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.5. Severability . . . . . . . . . . . . . . . . . . . 49
SECTION 11.6. Separate Counterparts . . . . . . . . . . . . . . . 50
SECTION 11.7. Successors and Assigns . . . . . . . . . . . . . . 50
SECTION 11.8. Covenants of the Depositor . . . . . . . . . . . . 50
SECTION 11.9. No Petition . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.10. No Recourse . . . . . . . . . . . . . . . . . . . 51
SECTION 11.11. Headings . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.12. Governing Law . . . . . . . . . . . . . . . . . . 51
EXHIBITS
EXHIBIT A Form of Certificate
EXHIBIT B [Reserved]
EXHIBIT C Form of Certificate of Trust
EXHIBIT D Form of Rule 144A Transferor
Certificate
EXHIBIT E Form of Investment Letter
Qualified Institutional Buyer
EXHIBIT F Form of Investment Letter
Institutional Accredited Investor
AMENDED AND RESTATED TRUST AGREEMENT, dated as of August 1, 1998
(as the same may be further amended, supplemented or otherwise modified and
in effect from time to time, this "Agreement"), between MMCA AUTO
RECEIVABLES, INC., a Delaware corporation, 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 July 9, 1998 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 Purchase
Agreement, the Sale and Servicing Agreement, the Indenture, the Yield
Supplement Agreement, the Note Depository Agreement, the Administration
Agreement and the other documents and certificates delivered in connection
therewith.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code section 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 C 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
Company).
"Depositor" shall mean MMCA Auto Receivables, Inc., a Delaware
corporation.
"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 August 1, 1998,
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 $97,669,451.88.
"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 9.3(a).
"Prepayment Price" means an amount equal to the Certificate
Balance.
"Qualified Institutional Buyer" has the meaning specified in Rule
144A.
"Record Date" shall mean, with respect to any Payment Date, the
close of business on the fourteenth day of the calendar month in which such
Payment Date occurs.
"Rule 144A" shall have the meaning assigned to such term in
Section 3.4(c).
"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 August 1, 1998, by 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 1998-1", 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 the 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 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 July 9, 1998, 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 of Delaware.
SECTION 2.7. [Reserved.]
SECTION 2.8. 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 2.9. 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 2.10. 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
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) The Depositor 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 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
articles of incorporation or by-laws 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 2.11. 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. section 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
and with respect to which the Depositor has received an opinion of counsel
that the Trust will be characterized as a "nonentity" under Treas. Reg.
section301.7701-3 for Federal, state and all other income tax purposes,
(a) amounts paid to the Depositor pursuant to Sections 4.7(a)
and (b) 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;
(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 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 an
authorized 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 chairman of the board, its
president, any executive vice president, any vice president, its secretary
or its treasurer, 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 D 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 E 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 F 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. section 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 E or F 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 D and
(y) the transferee executes and delivers to the Trust and the
Certificate Registrar an investment letter substantially in the
form attached as Exhibit E.
(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; and
(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 F.
(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 4.9 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. sections 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 of 1933, as amended, the Securities Act of 1934, as amended
applicable state securities law or the Investment Company Act; 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 , as the case may
be, 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(c) 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) [Reserved]
(c) 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 4.9 of
the Sale and Servicing Agreement with respect to such Payment Date.
(d) 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 Noteholders,
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(d) 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 17, 1998, 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 Internal Revenue Code of 1986, as amended. 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 $832,518,000 (comprised of
$200,000,000 in aggregate principal amount of Class A-1 Notes, $250,000,000
in aggregate principal amount of Class A-2 Notes, $322,056,000 in aggregate
principal amount of Class A-3 Notes and $60,462,000 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 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
terminate 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. Dissolution upon Bankruptcy of the Depositor.
Promptly after the occurrence of any Insolvency Event with respect to the
Depositor, (A) the Depositor shall give the Indenture Trustee and the Owner
Trustee written notice of such Insolvency Event, (B) the Owner Trustee
shall, upon the receipt of such written notice from the Depositor, give
prompt written notice to the Certificateholders, holders of interests, if
any, in the Reserve Account and the Indenture Trustee, of the occurrence of
such event and (C) the Indenture Trustee shall, upon receipt of written
notice of such Insolvency Event from the Owner Trustee or the Depositor,
give prompt written notice to the Noteholders of the occurrence of such
event;
SECTION 9.3. 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 9.3(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
Certificate 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 9.3(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 9.3(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 9.3(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 51% 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 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 (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 Issuer 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 Issuer 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. Except for
Section 2.7, 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 (other than
Section 2.7), 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, Inc. 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. 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 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.
SECTION 11.10. No Recourse. Each Certificateholder, by
accepting a Certificate, acknowledges that such Certificateholder's
Certificates, as the case may be, 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, INC.,
as Depositor
By: /s/ Hideyuki Kitamura
----------------------------
Name: Hideyuki Kitamura
Title: Treasurer
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee
By: /s/ Emmet R. Harmon
---------------------------
Name: Emmet R. Harmon
Title: Vice President
EXHIBIT A
NUMBER $97,669,451.88
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 D 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 E 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 F 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 1998-1
ASSET BACKED CERTIFICATE
evidencing a beneficial interest in the property of the Trust, as defined
below, which property includes a pool of retail installment sales contracts
secured by new and used automobiles and light- or medium-duty trucks sold
to MMCA Auto Receivables, Inc. by Mitsubishi Motors Credit of America, Inc.
and sold by MMCA Auto Receivables, Inc. 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, Inc. or
any of their respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT MMCA AUTO RECEIVABLES, INC. is the registered
owner of a NINETY-SEVEN MILLION SIX HUNDRED SIXTY-NINE THOUSAND FOUR
HUNDRED FIFTY-ONE DOLLARS AND EIGHTY-EIGHT CENTS nonassessable, fully-paid,
beneficial interest in Certificates of MMCA Auto Owner Trust 1998-1 (the
"Trust") formed by MMCA Auto Receivables, Inc., a Delaware corporation (the
"Depositor"). The Certificates have an aggregate Initial Certificate
Balance of $97,669,451.88.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
Dated: August 20, 1998
WILMINGTON TRUST COMPANY WILMINGTON TRUST COMPANY
as Owner Trustee or as Owner Trustee
By:________________________ By: WILMINGTON TRUST COMPANY
Authorized Officer as Authenticating Agent
By:________________________
Authorized Officer
The Trust was created pursuant to an Amended and Restated Trust
Agreement, dated as of August 1, 1998 (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 August 1,
1998 (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 sales contracts for new and used
automobiles and light- or medium-duty trucks and certain rights and
obligations thereunder (the "Receivables"), (ii) with respect to Actuarial
Receivables, monies due thereunder on or after the Cutoff Date (including
Payaheads) and, with respect to Simple Interest Receivables, monies due or
received thereunder on or after the 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) 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) 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, the Certificate Distribution Account, the
Reserve Account, the Supplemental Reserve Account and the Yield Supplement
Account 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)
payments and proceeds with respect to the Receivables held by the Servicer;
(x) 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); (xi) rebates of
premiums and other amounts relating to insurance policies and other items
financed under the Receivables in effect as of the Cutoff Date; and (xii)
all present and future claims, demands, causes of action and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all
cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing. 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 September
15, 1998, 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 an authorized 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 1998-1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee
By:______________________________________
Authorized 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. 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 of 1933, as amended 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.
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:
*/
*/ 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
[RESERVED]
EXHIBIT C
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST OF
MMCA AUTO OWNER TRUST 1998-1
This Certificate of Trust of MMCA AUTO OWNER TRUST 1998-1 (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,
section 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is MMCA
AUTO OWNER TRUST 1998-1.
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 D
[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 1998-1 (the "Issuer").
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 August 1, 1998 relating to the Certificates,
as follows:
Name: Denominations: [*]
Address:
Taxpayer I.D. No:
-------------------------
[* minimum of $1,000,000]
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:
EXHIBIT E
[FORM OF INVESTMENT LETTER
QUALIFIED INSTITUTIONAL BUYER]
[Date]
MMCA Auto Owner Trust 1997-1
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 1998-1 (the
"Issuer"), a trust formed by MMCA Auto Receivables, Inc. (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 August 1,
1998 (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 Issuer
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. section 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 Issuer an IRS Form 4224
(and such other certifications, representations or opinions of counsel as
may be requested by the Depositor or the Issuer) 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
Issuer 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 Issuer
and the Certificate Registrar a letter substantially in the form of this
Exhibit F or Exhibit G 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 F
[FORM OF INVESTMENT LETTER
INSTITUTIONAL ACCREDITED INVESTOR]
[Date]
MMCA Auto Owner Trust 1998-1
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 1998 (the
"Issuer"), a trust formed by MMCA Auto Receivables, Inc. (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 August 1,
1998 (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 Issuer
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. section 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 Issuer an IRS Form 4224
(and such other certifications, representations or opinions of counsel as
may be requested by the Depositor or the Issuer) 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
Issuer 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
Issuer 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 No. 4.2
=======================================================================
SALE AND SERVICING AGREEMENT
by and among
MMCA AUTO OWNER TRUST 1998-1,
as Issuer,
MMCA AUTO RECEIVABLES, INC.,
as Seller
and
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Servicer
Dated as of August 1, 1998
=======================================================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Other Definitional Provisions . . . . . . . . . . . . 25
SECTION 1.3 Business Day Certificate . . . . . . . . . . . . . . 26
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property . . . . . . . . . . . . 26
SECTION 2.2 Representations and Warranties of the Seller
as to the Receivables . . . . . . . . . . . . . . . 27
SECTION 2.3 Repurchase upon Breach . . . . . . . . . . . . . . . 32
SECTION 2.4 Custody of Receivable Files . . . . . . . . . . . . . 33
SECTION 2.5 Duties of Servicer as Custodian . . . . . . . . . . . 34
SECTION 2.6 Instructions; Authority to Act . . . . . . . . . . . 35
SECTION 2.7 Custodian's Indemnification . . . . . . . . . . . . . 35
SECTION 2.8 Effective Period and Termination . . . . . . . . . . 36
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer . . . . . . . . . . . . . . . . . 36
SECTION 3.2 Collection and Allocation of Receivable Payments . . 40
SECTION 3.3 Realization upon Receivables . . . . . . . . . . . . 43
SECTION 3.4 Physical Damage Insurance . . . . . . . . . . . . . . 43
SECTION 3.5 Maintenance of Security Interests in Financed
Vehicles . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.6 Covenants of Servicer . . . . . . . . . . . . . . . . 44
SECTION 3.7 Purchase by Servicer upon Breach . . . . . . . . . . 44
SECTION 3.8 Servicing Compensation . . . . . . . . . . . . . . . 45
SECTION 3.9 Servicer's Certificate . . . . . . . . . . . . . . . 45
SECTION 3.10 Annual Statement as to Compliance; Notice of
Event of Servicing Termination . . . . . . . . . . . 46
SECTION 3.11 Annual Independent Certified Public Accountants'
Reports . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 3.12 Access to Certain Documentation and Information
Regarding Receivables . . . . . . . . . . . . . . . 47
SECTION 3.13 Reports to the Commission . . . . . . . . . . . . . 47
SECTION 3.14 Reports to Rating Agencies . . . . . . . . . . . . . 47
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1 Accounts . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.2 Collections . . . . . . . . . . . . . . . . . . . . . 51
SECTION 4.3 Application of Collections . . . . . . . . . . . . . 53
SECTION 4.4 Advances . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.5 Additional Deposits . . . . . . . . . . . . . . . . . 55
SECTION 4.6 Allocation of Available Funds . . . . . . . . . . . . 56
SECTION 4.7 Reserve Account; Supplemental Reserve Account . . . . 58
SECTION 4.8 Net Deposits . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.9 Statements to Noteholders and Certificateholders . . 61
SECTION 4.10 Control of Securities Accounts . . . . . . . . . . . 63
ARTICLE V
YIELD SUPPLEMENT LETTER OF CREDIT
SECTION 5.1 Yield Supplement Letter of Credit and the Yield
Supplement Account . . . . . . . . . . . . . . . . . 63
ARTICLE VI
THE SELLER
SECTION 6.1 Representations, Warranties and Covenants of
Seller . . . . . . . . . . . . . . . . . . . . . . . 66
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 . . . . . . . . 71
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations and Warranties of Servicer . . . . . 71
SECTION 7.2 Liability of Servicer; Indemnities . . . . . . . . . 73
SECTION 7.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer . . . . . . . . . . . . . . 75
SECTION 7.4 Limitation on Liability of Servicer and Others . . . 75
SECTION 7.5 Servicer Not to Resign . . . . . . . . . . . . . . . 76
SECTION 7.6 Servicer May Own Notes or Certificates . . . . . . . 76
ARTICLE VIII
SERVICING TERMINATION
SECTION 8.1 Events of Servicing Termination . . . . . . . . . . . 77
SECTION 8.2 Indenture Trustee to Act; Appointment of Successor
Servicer . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 8.3 Effect of Servicing Transfer . . . . . . . . . . . . 80
SECTION 8.4 Notification to Noteholders and Certificateholders . 80
SECTION 8.5 Waiver of Past Events of Servicing Termination . . . 80
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables . . . . . . . . 81
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment . . . . . . . . . . . . . . . . . . . . . 82
SECTION 10.2 Protection of Title to Trust . . . . . . . . . . . . 84
SECTION 10.3 Governing Law . . . . . . . . . . . . . . . . . . . 87
SECTION 10.4 Notices . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 10.5 Severability of Provisions . . . . . . . . . . . . . 87
SECTION 10.6 Assignment . . . . . . . . . . . . . . . . . . . . . 87
SECTION 10.7 Further Assurances . . . . . . . . . . . . . . . . . 88
SECTION 10.8 No Waiver; Cumulative Remedies . . . . . . . . . . . 88
SECTION 10.9 Third-Party Beneficiaries . . . . . . . . . . . . . 88
SECTION 10.10 Actions by Noteholder or Certificateholders . . . 88
SECTION 10.11 Counterparts . . . . . . . . . . . . . . . . . . . 89
SECTION 10.12 Agent for Service . . . . . . . . . . . . . . . . . 89
SECTION 10.13 No Bankruptcy Petition . . . . . . . . . . . . . . 89
SECTION 10.14 Limitation of Liability of Owner Trustee and
Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . 89
SCHEDULES
SCHEDULE A Schedule of 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
SALE AND SERVICING AGREEMENT, dated as of August 1, 1998 (as
amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement"), by and among MMCA AUTO OWNER TRUST 1998-1, a
Delaware business trust (the "Issuer"), MMCA AUTO RECEIVABLES, INC., a
Delaware corporation (the "Seller"), and MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., a Delaware corporation (the "Servicer").
WHEREAS, the Issuer desires to purchase a portfolio 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;
WHEREAS, the Seller is willing to sell such receivables to the
Issuer; and
WHEREAS, Mitsubishi Motors Credit of America, Inc. is willing to
service such receivables on behalf of the Issuer;
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.
"Authorized Officer" shall mean any officer within the Corporate
Trust Office of the Indenture Trustee or the Owner Trustee, as the case may
be, including any vice president, assistant vice president, secretary,
assistant secretary, financial services officer or any other officer of the
Indenture Trustee or the Owner Trustee, as the case may be, 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, with respect to the Owner Trustee, any officer of the Administrator.
"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 Servicer of any Financed Vehicle 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; (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)); and (vii)
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 Cutoff Date; 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, executive order, or governmental decree to
remain 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 so requires, (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 Issuer, 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 an Authorized 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 Issuer, 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(c).
"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 August 20, 1998.
"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 Cutoff Date to and including the last day of the month
in which the Cutoff Date occurred.
"Commission" shall mean the Securities and Exchange Commission.
"Computer Tape" shall mean the 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.
"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- or medium-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, Attn: 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 August 1, 1998.
"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) 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, in the case of a Contract relating to
an automobile or light-duty truck, 120 or more days past due or, in the
case of a Contract relating to a medium-duty truck, 180 or more days past
due and, in either case, 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.
"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 to service a portfolio of motor vehicle retail
installment sale contracts and/or motor vehicle loans similar to the
Receivables professionally and competently 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" or "Servicer Default" 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 the 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 sale price to MMCA on behalf of the
Trust, and satisfy all other conditions stated under the terms of the
Contract.
"Financed Vehicle" shall mean a new or used automobile or light-
or medium-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 August 1, 1998,
between the Issuer 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 so
requires, (i) with respect to all of the Certificates, $97,669,451.88 or
(ii) with respect to any Certificate, an amount equal to the initial
denomination of such Certificate.
"Initial Pool Balance" shall mean $930,187,451.88.
"Initial Yield Supplement Amount" shall mean $66,416,937.00.
"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, (i) with respect to the Class A-1 Notes, the period from and
including the previous Payment Date (or, in the case of the first Payment
Date, the Closing Date) to but excluding such Payment Date and (ii) with
respect to the Class A-2 Notes, the Class A-3 Notes and the Class B 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, 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 1998-1, a Delaware
business trust.
"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(c).
"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 Supplemental Reserve Amount" shall mean, with respect to
any Payment Date, an amount equal to the lesser of (i) $18,603,749 and (ii)
the outstanding principal amount of the Notes on such Payment Date (after
giving effect to any principal payment made on such Payment Date), 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 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.
"Monthly Remittance Condition" shall have the meaning assigned
thereto in Section 4.1(e).
"Moody's" shall mean Moody's Investors Service, Inc., or its
successors and assigns.
"Note Payment Account" shall mean the account established and
maintained as such pursuant to Section 4.1(b).
"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%.
"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 with respect to such
Receivable.
"Payahead Account" shall mean the account established and
maintained as such pursuant to Section 4.1(d).
"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 Cutoff Date that is due on or after
the 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 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 September 15, 1998.
"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
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 Bank of Tokyo-Mitsubishi Trust Company or any of its Affiliates
or of any other 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 Issuer
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 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.
"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) plus (ii) any
outstanding Principal Carryover Shortfall as of the close of business on
the preceding Payment Date; provided, however, that the Principal
Distribution Amount shall not exceed the outstanding aggregate principal
amount 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 September 1, 1998, 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 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 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 the Principal Balance of such
Defaulted Receivable.
"Receivable" shall mean any Standard Receivable or Final Payment
Receivable.
"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
any 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), for any Collection Period the amount (if positive)
calculated by the Servicer equal to the product of one-twelfth (1/12) times
(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 for such Collection Period, (B) the Servicing Rate
for such Collection Period and (C) 2.00%, minus (ii) interest on such
Receivable at its APR, multiplied by such Receivable's Principal Balance as
of the first day of the related Collection Period.
"Record Date" shall mean, with respect to any Payment Date, the
close of business on the day immediately preceding such Payment Date or, if
Definitive Notes have been issued, the fifteenth (15th) day of the calendar
month preceding such Payment Date.
"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 any
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.
"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 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).
"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).
"Reserve Initial Deposit" shall mean, with respect to the Closing
Date, $1,395,281.
"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, or its successors and assigns.
"Schedule of Receivables" shall mean the list identifying the
Receivables attached hereto as Schedule A (which list may be in the form of
microfiche), as supplemented or amended from time to time.
"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 received during the related
Collection Period of principal on Simple Interest Receivables, including
collections of principal attributable to the Last Scheduled Payment of a
Simple Interest Receivable that is a Final Payment Receivable, and
including any charges for Excess Wear and Tear and Excess Mileage but
excluding collections received during the related Collection Period of
principal on Simple Interest Receivables that would be attributable to a
Last Scheduled Payment pursuant to Section 4.3(a) except that a Last
Scheduled Payment Advance has been made with respect to such Last Scheduled
Payment, and (ii) Last Scheduled Payment Advances made during the related
Collection Period 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)
the Principal Balance (without duplication of amounts taken into account
under (a) or (b)) of (i) each Receivable 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 (including
pursuant to Section 9.2 of the Trust Agreement), 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 Cutoff Date; provided,
however, that in calculating the Scheduled Principal, 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) will be excluded.
"Seller" shall mean MMCA Auto Receivables, Inc., a Delaware
corporation, 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, an amount equal to the lesser of (i) $6,976,406 and (ii) an
amount equal to (x) the outstanding principal amount of the Notes as of
such Payment Date (after giving effect to any principal payment made on
such Payment Date) less (y) the amounts on deposit in the Supplemental
Reserve Account on such Payment Date (after giving effect to any deposits
to or withdrawals from the Supplemental Reserve Account 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 reduced in
accordance with such letters without an amendment hereto.
"Specified Yield Supplement Account Balance" shall mean, on the
Closing Date, $66,416,937.00 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 which is not a Final Payment Receivable listed on the Schedule
of Receivables.
"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
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).
"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 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 Issuer.
"Trust Accounts" shall have the meaning assigned thereto in
Section 4.1(d).
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of August 1, 1998, 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 Officer" shall mean, in the case of 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, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the other
Basic Documents on behalf of the Owner Trustee.
"Trust Property" shall mean, collectively, (i) the Receivables;
(ii) with respect to Actuarial Receivables, monies due thereunder on or
after the Cutoff Date (including Payaheads) and, with respect to Simple
Interest Receivables, monies due or received thereunder on or after the
Cutoff Date; (iii) 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; (iv) 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) 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, the Certificate Distribution Account, the Reserve Account, the
Supplemental Reserve Account and the Yield Supplement Account 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) payments and proceeds with
respect to the Receivables held by the Servicer; (x) all property
(including the right to receive Liquidation Proceeds and Recoveries and
Financed Vehicles and the proceeds thereof acquired by the Seller pursuant
to the terms of a Final Payment Receivable), guarantees and other
collateral securing a Receivable (other than a Receivable repurchased by
the Servicer or purchased by the Seller); (xi) rebates of premiums and
other amounts relating to insurance policies and other items financed under
the Receivables in effect as of the Cutoff Date; and (xii) all present and
future claims, demands, causes of action and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds
of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time constitute
all or part of or are included in the proceeds of any of the foregoing.
"Weighted Average Rate" shall mean, with respect to any Payment
Date, a per annum rate equal to the product of (i) twelve and (ii) the
aggregate amount of the Monthly Accrued Interest for the Notes on such
Payment Date divided by the sum of the outstanding principal amount of the
Notes as of the preceding Payment Date (after giving effect to any
principal payment made on such Payment Date) or, with respect to the first
Payment Date, as of the Closing 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 August 1, 1998, 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. (i) Capitalized
terms used herein and not otherwise defined herein have the meanings
assigned to them in the Indenture.
(ii) 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.
(iii) 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.
(iv) 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."
(v) 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.
(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.
SECTION 1.3 Business Day Certificate. On or prior to December
17, 1998 (with respect to the remainder of calendar year 1998 and calendar
year 1999) and thereafter, within 15 days prior to the end of each calendar
year while this Agreement remains in effect (with respect to the succeeding
calendar years), 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. In consideration of
the Issuer'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 conveys to the Issuer all right,
title and interest of the Seller, whether now owned or hereafter acquired,
in, to and under the Trust Property, without recourse (subject to the
obligations herein). The sale, transfer, assignment and conveyance made
hereunder shall not constitute and is not intended to result in an
assumption by the Issuer 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.
It is the intention of the Seller and the Issuer that the
transfer of the Trust Property contemplated herein constitute a sale of the
Trust Property, conveying good title to the Trust Property from the Seller
to the Issuer. However, in the event that such transfer is deemed to be a
pledge to secure the payment of the Notes and the Certificates, the Seller
hereby grants to the Issuer 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 the payment of the Notes and the
Certificates, and in such event, this Agreement shall constitute a security
agreement under applicable law.
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 Issuer relies in accepting the
Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement, but shall survive the sale, transfer and
assignment of the Receivables to the Issuer 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 sales 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 a 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 Issuer and by the Issuer 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 a 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, (g) is a
retail installment sale contract, (h) is secured by a new or used
automobile or light-or medium-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 Schedule of Receivables shall be true and correct in all material
respects as of the opening of business on the Cutoff Date, and no selection
procedures believed to be adverse to the Noteholders and/or the
Certificateholders shall have been utilized in selecting the Receivables
from those receivables which meet the criteria contained herein and in the
Purchase Agreement. The compact disk or other listing regarding the
Receivables made available to the Issuer 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 at the execution of this Agreement, 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 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 the Financed Vehicle for the benefit of the Seller and
the Issuer, respectively (subject to any statutory or other lien arising by
operation of law after the Closing Date 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 Issuer.
(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 Cutoff Date,
or the failure of the Obligor to maintain satisfactory physical damage
insurance covering the Financed Vehicle, no default, breach, violation, or
event permitting acceleration under the terms of any Receivable shall have
occurred; no continuing condition that with notice or the lapse of time or
both would constitute a default, breach, violation, or event permitting
acceleration under the terms of any Receivable shall have arisen; the
Seller shall not have waived any of the foregoing; and no Financed Vehicle
shall have been repossessed as of the Cutoff Date.
(xii) Insurance. 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 the
transfer and assignment of the Receivables herein contemplated constitute a
sale of the Receivables from the Seller to the Issuer and that the
beneficial interest in, and title to, the 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 Issuer. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each Receivable
free and clear of all Liens, encumbrances, security interests, and rights
of others and, immediately upon the transfer thereof, the Issuer shall have
good and marketable title to each Receivable, 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 Issuer 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.
(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.
(xviii) Principal Balance. Each Receivable had an original
principal balance (net of unearned precomputed finance charges) of not more
than $60,000.00, and a remaining Principal Balance as of the Cutoff Date of
not less than $100.00.
(xix) No Bankrupt Obligors. As of the Cutoff Date, no
Receivable was due from an Obligor that was the subject of a proceeding
under the Bankruptcy Code of the United States or was bankrupt.
(xx) New and Used Vehicles. Approximately 93.29% of the Pool
Balance of the Receivables, constituting approximately 88.51% of the total
number of the Receivables, as of the Cutoff Date, relate to new automobiles
and light- or medium-duty trucks financed at new vehicle rates.
Approximately 6.71% of the Pool Balance of the Receivables, constituting
approximately 11.49% of the total number of Receivables as of the Cutoff
Date, relate to used automobiles and light- or medium-duty trucks. Of the
new and used vehicles, approximately 2.26% of the Pool Balance of the
Receivables, constituting approximately 3.16% of the total number of
Receivables as of the Cutoff Date, relate to program automobiles and light-
duty trucks manufactured in the current and immediately preceding model
years which are financed at new vehicle rates. Of the used vehicles,
approximately 3.38% of the Pool Balance of the Receivables, constituting
approximately 6.75% of the total number of Receivables as of the Cutoff
Date, relate to refinanced program automobiles and light- or medium-duty
trucks manufactured in prior model years which are financed at the original
rates set forth in the related Contracts or at used vehicle rates.
(xxi) Origination. Each Receivable shall have an origination
date during or after April 1994.
(xxii) Maturity of Receivables. Each Receivable shall have a
remaining maturity, as of the Cutoff Date, of not more than sixty (60)
months, and an original maturity of not more than sixty (60) months.
(xxiii) Annual Percentage Rate. Each Receivable shall have
an APR of at least 0%. Each Receivable shall have an APR of not more than
30%.
(xxiv) Scheduled Payments. Each Receivable shall have a
first Scheduled Payment due on or prior to August 31, 1998, and no
Receivable shall have a payment of which more than 10% of such payment is
thirty (30) days overdue as of the Cutoff Date.
(xxv) Location of Receivable Files. The Receivable Files
shall be kept at one or more of the locations listed in Schedule B hereto.
(xxvi) 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.
(xxvii) Agreement. The representations and warranties of the
Seller in Section 6.1 are true and correct.
(xxviii) No Receivables Originated in Alabama. No Receivable
shall have been originated in Alabama.
(xxix) Other Data. The tabular data and the numerical data
relating to the characteristics of the Receivables contained in the
Prospectus (as defined in the Purchase Agreement) is true and correct in
all material respects.
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
Issuer in a Receivable, the Seller shall repurchase from the Issuer 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. The sole remedy of the Issuer, 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 Issuer, 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 Issuer and
the Indenture Trustee of the following documents or instruments, which are
hereby constructively delivered to the Indenture Trustee, as pledgee of the
Issuer 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 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, the Servicer shall provide an Officer's
Certificate to the Issuer and the Indenture Trustee confirming that the
Servicer has received, on behalf of the Issuer and the Indenture Trustee,
all the documents and instruments necessary for the Servicer to act as the
agent of the Issuer and the Indenture Trustee for the purposes set forth in
this Section 2.4, including the documents referred to herein, and the
Issuer, 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 Issuer 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 Issuer 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 Issuer 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 Issuer, the Owner Trustee or the Indenture
Trustee of the Receivable Files and none of the Issuer, 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
Issuer 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 Issuer 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 Issuer
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 Issuer and
that the entire equitable interest in such Receivable and the related
Receivable File shall at all times be vested in the Issuer.
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 an Authorized
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
Authorized 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 Issuer, 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 Issuer, the Owner Trustee and
the Indenture Trustee or any of their respective officers, directors,
employees and agents as the result of any act or omission by the Servicer
relating to the maintenance and custody of the Receivable Files; provided,
however, that the Servicer shall not be liable hereunder to the Owner
Trustee to the extent, but only to the extent, that such liabilities,
obligations, losses, compensatory damages, payments, costs or expenses
result from the willful misfeasance, bad faith, or negligence of the Owner
Trustee and shall not be liable hereunder to the Indenture Trustee to the
extent, but only to the extent, that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith, or negligence of the Indenture Trustee.
SECTION 2.8 Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and
shall continue in full force and effect until terminated pursuant to this
Section 2.8. If the Servicer shall resign as Servicer under Section 7.5,
or if all of the rights and obligations of the Servicer shall have been
terminated under Section 8.1, the appointment of the Servicer as custodian
hereunder may be terminated by the Indenture Trustee or by the Holders of
Notes evidencing not less than 25% of the principal amount of the then
Outstanding Notes or, with the consent of Holders of Notes evidencing not
less than 25% of the principal amount of the then Outstanding Notes, by the
Owner Trustee or by Holders of Certificates evidencing not less than 25% of
the Certificate Balance, in the same manner as the Indenture Trustee or
such Holders may terminate the rights and obligations of the Servicer under
Section 8.1. As soon as practicable after any termination of such
appointment, the Servicer shall deliver, or cause to be delivered, the
Receivable Files and the related accounts and records maintained by the
Servicer to the Indenture Trustee, the Indenture Trustee's agent or the
Indenture Trustee's designee at such place or places as the Indenture
Trustee may reasonably designate.
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer. (a) The Servicer, acting alone
and/or through subservicers as provided in this Section 3.1, shall
administer the Receivables with reasonable care. The Servicer's duties
shall include, but not be limited to, the collection and posting of all
payments, responding to inquiries by Obligors on the Receivables, or by
federal, state, or local governmental authorities, investigating
delinquencies, reporting tax information to Obligors, furnishing monthly
and annual statements to the Owner Trustee and the Indenture Trustee with
respect to distributions, providing collection and repossession services in
the event of Obligor default, coordinating or arranging inspection of
Financed Vehicles relating to Final Payment Receivables at the end of the
related Contract term, refinancing or selling Financed Vehicles relating to
Final Payment Receivables at the end of the related Contract term depending
upon the options chosen by the Obligors and making Advances pursuant to
Sections 4.4(a) and (c). The Servicer shall also administer and enforce
all rights and responsibilities of the holder of the Receivables provided
for in the Dealer Agreements, to the extent that such Dealer Agreements
relate to the Receivables, the Financed Vehicles or the Obligors. In
performing its duties as Servicer hereunder, the Servicer will exercise
that degree of skill and attention that the Servicer exercises with respect
to all comparable motor vehicle receivables that it services for itself or
others. Subject to Section 3.2, the Servicer shall follow its customary
standards, policies, practices and procedures in performing its duties
hereunder as Servicer. Without limiting the generality of the foregoing,
the Servicer is hereby authorized and empowered to execute and deliver, on
behalf of itself, the Issuer, 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 Issuer 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 Issuer or the Owner Trustee all
licenses, if any, required by the laws of any jurisdiction to be held by
the Issuer 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 Issuer 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 Issuer (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 Issuer, 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
Issuer 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 shall for any reason no longer
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 Issuer 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
Issuer, 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 Issuer 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 Issuer 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 Issuer 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
Issuer, 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 Issuer, 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. Except as provided in Section 7.2, the sole remedy of the
Issuer, 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 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 4.9 and by the Indenture Trustee to the Noteholders
pursuant to Section 4.9 hereof and Section 6.6 of the Indenture. 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 and the Indenture Trustee 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, upon
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 Issuer.
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 May 31 of each year,
commencing May 31, 1999, an Officer's Certificate, stating that (i) a
review of the activities of the Servicer during the preceding calendar year
(or shorter period, in the case of 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 longer
period, in the case of the first such 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 may be obtained by any Certificateholder by a request in
writing to the Owner Trustee, or by any Noteholder or 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 May 31 of each year, commencing May 31, 1999, a report addressed to
the Board of Directors of the Servicer with respect to the preceding
calendar year (or shorter period, in the case of 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- or medium-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 may be obtained by any
Certificateholder by a request in writing to the Owner Trustee, or by any
Noteholder or 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 Issuer, 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, 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 "Note Payment
Account". The Note Payment Account shall be held in trust for the 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).
(c) 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.
(d) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account in the name of the Indenture
Trustee at a Qualified Institution or Qualified Trust Institution (which
shall initially be the corporate trust department of Bank of Tokyo -
Mitsubishi Trust Company), which shall be designated as the "Payahead
Account" (the Payahead Account, together with the Collection Account and
the Note Payment Account, the "Trust Accounts"). 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.
If the Servicer is required to remit collections pursuant to the
first sentence of Section 4.2, 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).
(e) Notwithstanding the provisions of clause (d) above and of
Section 4.6(a)(ii), 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(e) 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 an
Authorized Officer in the Corporate Trust Office with knowledge hereof and
familiarity herewith has actual knowledge of such event or circumstance.
(f) The Servicer shall be permitted to remit to any Obligor,
upon the request of such Obligor, the Payahead Balance with respect to such
Obligor's Receivable or such lesser amount as is requested by such Obligor,
in accordance with the Servicer's customary standards, policies, practices
and procedures, to the extent that such amount is not then due on such
Receivable. Upon any such remittance, the Payahead Balance with respect to
such Receivable shall be reduced by the amount of such remittance.
SECTION 4.2 Collections. (a) Subject to the provisions of
subsection (b) below, the Servicer shall remit to the Collection Account
(i) all payments by or on behalf of the Obligors (including, subject to the
next two sentences, Payaheads on the Receivables 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(e)), which amount shall be deposited in the
Payahead Account as soon as practicable but in no event later than the
Payment Date immediately following collection, and such amounts shall not
be transferred to the Collection Account until due, 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 sentence. 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 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, 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 an
Authorized 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.
On the related Payment Date, subject to the following sentence, an advance
shall be made by the Servicer to the extent of any remaining shortfall in
respect of such Actuarial Receivable (such advance, an "Actuarial
Advance"); provided that an Actuarial Advance shall not be made with
respect to the Last Scheduled Payment on an Actuarial Receivable that is a
Final Payment Receivable; provided further, that a Last Scheduled Payment
Advance shall be made with respect to an Actuarial Receivable that is a
Final Payment Receivable upon the occurrence of the circumstances set forth
in Section 4.4(c); provided, further, that 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.
All applications of the Payahead Balance of a Receivable by the Indenture
Trustee and all Actuarial Advances by the Servicer, in each case 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.
(b) (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 Section 4.4(a) 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 .
(c) 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 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 in the payment of such Last Scheduled Payment (such
advance, a "Last Scheduled Payment Advance"), by depositing an amount equal
to the Last Scheduled Payment Advance into the Collection Account on the
related Payment Date. 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.
(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) that are 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 (c).
SECTION 4.5 Additional Deposits. (a) The Indenture Trustee shall
deposit in the Collection Account amounts required pursuant to Section
4.4(b). The Servicer shall deposit in the Collection Account amounts
required to be paid by the Servicer pursuant to Sections 4.4(a) and (c).
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 the aggregate of 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 Available Funds. (a) On each Payment
Date, the Indenture Trustee shall cause to be made the following transfers
and distributions in the amounts set forth in the Servicer's Certificate
for such Payment Date:
(i) If the Monthly Remittance Conditions are not then
satisfied, from the Payahead Account, and otherwise from amounts paid by
the Servicer pursuant to Section 4.1(e), to the Collection Account in
immediately available funds, (x) the aggregate portion of Payaheads
constituting Scheduled Payments or prepayments in full, required by
Sections 4.3 and 4.4(a), and (y) the Payahead Balance, if any, relating
to any Purchased Receivable.
(ii) From the Collection Account to the Payahead Account,
or to the Servicer in the event that the Monthly Remittance Conditions
are then satisfied, in immediately available funds, the aggregate
Payaheads required by Section 4.3 for the Collection Period related to
such Payment Date.
(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 Reserve
Account Amount, the Supplemental Reserve Account Amount and the Yield
Supplement Amount, if any, in each case with respect to the next succeeding
Payment Date.
In addition, the Servicer shall calculate on each Determination
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 the related Payment Date pursuant to Section 4.4(d) and (e) exceeds the
amount paid to the Servicer out of the Collection Account on such Payment
Date pursuant to Sections 4.4(d) and (e) and (y) the Supplemental Reserve
Account Amount for such Payment Date (the "Supplemental Reserve Account
Advance Draw Amount"), (ii) an amount equal to the lesser of (x) the
positive difference, if any, between the amount calculated pursuant to
subclause (i)(x) of this paragraph and the Supplemental Reserve Account
Amount for such Payment Date and (y) the Reserve Account Amount for 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 the related Payment Date exceeds the Available Funds for such
Payment Date and (y) an amount equal to the Supplemental Reserve Account
Amount for such Payment Date less the Supplemental Reserve Account Advance
Draw Amount for such Payment Date (the "Supplemental Reserve Account TRP
Draw Amount") and (iv) an amount equal to the lesser of (x) the positive
difference, if any, between the amount calculated pursuant to subclause
(iii)(x) of this paragraph and the Supplemental Reserve Account TRP Draw
Amount for such Payment Date and (y) an amount equal to the Reserve Account
Amount for such Payment Date less the Reserve Account Advance Draw Amount
for such Payment Date (the "Reserve Account TRP Draw Amount").
(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 all 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 each Class of Notes;
(iii) to the Note Payment Account, the Principal
Distribution Amount;
(iv) to the Reserve Account, the amount, if any,
necessary to reinstate the balance in the Reserve Account up to the
Specified Reserve Balance;
(v) 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
(vi) to the Certificate Distribution Account, any
remaining portion of 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 Initial Deposit into the
Reserve Account from the net proceeds of the sale of the Notes. The
Reserve Account and all amounts, securities, investments, financial assets
and other property deposited in or credited to the Reserve Account (the
"Reserve Account Property") has been conveyed by the Seller to the Trust
pursuant to Section 2.1. 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. 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 deposited in the Certificate Distribution Account.
(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 Net Deposits. As an administrative convenience only,
unless the Servicer is required to remit collections pursuant to the first
sentence of Section 4.2, the Seller and the Servicer may make any
remittance pursuant to this Article IV with respect to a Collection Period
net of distributions to be made to the Seller or the Servicer with respect
to such Collection Period. Nonetheless, such obligations shall remain
separate obligations, no party shall have a right of offset, and each such
party shall account for all of the above described remittances and
distributions as if the amounts were deposited and/or transferred
separately.
SECTION 4.9 Statements to Noteholders and Certificateholders. On
or prior to each Payment Date, the Servicer shall provide to the Indenture
Trustee (with copies to the Rating Agencies and each Paying Agent) for the
Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date and to the Owner Trustee (with copies to the Rating
Agencies and to each Paying Agent) for the Owner Trustee to forward to each
Certificateholder of record as of the most recent Record Date a statement
in substantially the forms of Exhibits B and C, respectively, setting forth
at least the following information as to the Notes and the Certificates to
the extent applicable:
(i) the amount of such distribution allocable to
principal paid to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to
interest paid to each Class of Notes;
(iii) the Yield Supplement Amount;
(iv) the amount of the Total Servicing Fee with respect
to the related Collection Period;
(v) the aggregate outstanding principal balance of each
Class of Notes, the applicable Note Pool Factor, the Certificate Balance
and the Certificate Pool Factor as of the close of business on the last
day of the preceding Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above;
(vi) the Pool Balance, the Level Pay Pool Balance and the
Last Scheduled Payment Pool Balance, in each case as of the close of
business on the last day of the related Collection Period;
(vii) the amounts of the Interest Carryover Shortfall
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.
Each amount set forth on the Payment Date statement pursuant to
clauses (i), (ii), (iii), (v) and (vii) above shall be expressed as a
dollar amount per $1,000 of original principal balance of a Certificate or
Note, as applicable.
SECTION 4.10 Control of Securities Accounts. Notwithstanding
anything else contained herein, the Issuer agrees that with respect to each
of the Collection Account, the Note Payment Account, the Reserve Account,
the Supplemental Reserve Account and the Yield Supplement Account will only
be established at a Qualified Institution or Qualified Trust Institution
which 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 Issuer; (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
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." 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 will deposit the initial Specified Yield Supplement
Account Balance into the Yield Supplement Account from the net proceeds of
the sale of the Notes and Certificates. 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, 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 precedent 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 Issuer is deemed to have relied in acquiring the Trust Property.
The representations, warranties and covenants speak as of the execution and
delivery of this Agreement and shall survive the sale of the Trust Property
to the Issuer and the pledge thereof by the Issuer to the Indenture Trustee
pursuant to the Indenture:
(a) Organization and Good Standing. The Seller has been duly
organized 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 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 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 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 Issuer and has duly authorized such sale
and assignment to the Issuer by all necessary corporate action; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which it is a party have been duly authorized by the Seller by
all necessary corporate action.
(d) Valid Sale; Binding Obligation. This Agreement effects a
valid sale, transfer and assignment of the Receivables and the other Trust
Property conveyed by the Seller to the Issuer hereunder, enforceable
against creditors of and purchasers from the Seller; and this Agreement and
the other Basic Documents to which the Seller is a party constitute legal,
valid, and binding obligations of the Seller, enforceable against the
Seller in accordance with their terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws and to general equitable
principles.
(e) No Violation. The execution, delivery and performance by
the Seller of this Agreement and the other Basic Documents to which the
Seller is a party and the consummation of the transactions contemplated
hereby and thereby and the fulfillment of the terms hereof and thereof will
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
default under, the certificate of 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.
(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.
(h) Officer's Certificates. Each representation and warranty
made by the Seller in each of the Seller Officer's Certificates attached as
exhibits to the Purchase Agreement is true and correct as of the Closing
Date, and the Seller covenants to fulfill each covenant made by it in such
Seller Officer's Certificates.
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
Issuer, 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 Issuer 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 Issuer, 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
Issuer, 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 Issuer 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 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
Issuer is deemed to have relied in acquiring the Trust Property, and such
representations and warranties speak as of the execution and delivery of
this Agreement and shall survive the sale of the Trust Property to the
Issuer and the pledge thereof by the Issuer 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 Issuer, 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 Issuer, 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 Issuer, not including any taxes
asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuer 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 Issuer, 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 Issuer 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 Issuer, 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 Outstanding Notes, 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 a majority of the Outstanding
Amount of the Notes, 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 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 Outstanding Amount (as
defined in the Indenture) of the Notes or the Holders of Certificates
evidencing not less than a majority 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, the
Certificate Distribution Account, the Yield Supplement Account, the
Supplemental Reserve Account or the Reserve Account in accordance with this
Agreement. Upon any such waiver of a past Event of Servicing Termination,
such event shall cease to exist, and shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other event or impair any right arising therefrom, except to
the extent expressly so waived.
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables. (a) On each
Payment Date following the last day of a Collection Period as to which the
Pool Balance shall be less than or equal to the Optional Purchase
Percentage (expressed as a seven-digit decimal) multiplied by the Initial
Pool Balance, the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts, the Certificate Distribution
Account, the Reserve Account, the Supplemental Reserve Account and the
Yield Supplement 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, the
Certificate Distribution Account, the Reserve Account, the Supplemental
Reserve Account and the Yield Supplement Account, such value to be
determined by an appraiser mutually agreed upon by the Servicer, the Owner
Trustee and the Indenture Trustee, into the Collection Account on the
Payment Date occurring in the month in which such repurchase is to be
effected. Upon such payment, the Servicer shall succeed to and own all
interests in and to the Trust. Notwithstanding the foregoing, the Servicer
shall not be permitted to exercise such option unless the amount to be
deposited in the Collection Account pursuant to the second preceding
sentence is greater than or equal to the sum of the outstanding principal
balance of the Notes and all accrued but unpaid interest (including any
overdue interest) thereon and the Certificate Balance. The Purchase Amount
and any Yield Supplement Amounts for such Payment Date, plus to the extent
necessary all amounts in the 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 and
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 Issuer, 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 Issuer, with the consent of the Indenture
Trustee, the consent of the Holders of Notes evidencing not less than 51%
of Outstanding Amount of the Notes and the consent of the Holders of
Certificates evidencing not less than 51% of the Certificate Balance for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment shall (a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, or change the
allocation or priority of, collections of payments on Receivables or
distributions that shall be required to be made on any Note or Certificate
or change the Note Interest Rate or the Certificate 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 precedent 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 Issuer 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 Issuer, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of
the Issuer and the Indenture Trustee in such Receivable and that such
Receivable is owned by the Issuer and has been pledged to the Indenture
Trustee pursuant to the Indenture. Indication of the Issuer'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- or medium-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 Issuer 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 Schedule
of Receivables and to each of the Servicer's Certificates furnished before
such request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of
each amendment to any financing statement, an Opinion of Counsel
either (A) stating that, in the opinion of such Counsel, all
financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the
interest of the Issuer 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 beginning with the first calendar year beginning
more than three months after the Cutoff Date, 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 Issuer 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, 25
Broadway, 20th Floor, New York, New York 10004, 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.
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 Issuer 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. The Owner Trustee, the
Indenture Trustee, the Issuer and the Servicer each covenants and 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.
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 Issuer and in no event shall Wilmington Trust Company in its
individual capacity or, except as expressly provided in the Trust
Agreement, as beneficial owner of the Issuer, 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. 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 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 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 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.
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, INC.,
as Seller
By: /s/ Hideyuki Kitamura
------------------------------------
Name: Hideyuki Kitamura
Title: Treasurer
MMCA AUTO OWNER TRUST 1998-1,
as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By: /s/ Emmet R. Harmon
-----------------------------------
Name: Emmet R. Harmon
Title: Vice President
MITSUBISHI MOTORS CREDIT OF
AMERICA, INC., as Servicer
By: /s/ Hiroshi Yajima
----------------------------------
Name: Hiroshi Yajima
Title: President
Accepted and agreed:
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
as Indenture Trustee
By: /s/ Donna Marie White
-----------------------------
Name: Donna Marie White
Title: Trust Officer
SCHEDULE A
[SCHEDULE OF RECEIVABLES]
Delivered to Indenture Trustee at Closing
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
North Central Region
1101 Perimeter Drive, Suite 650
Schaumburg, IL 60173
Northeastern Region
2700 Westchester Avenue, Suite 400
Purchase, NY 10577-0600
Southeastern Region
1211 Semoran Boulevard, Suite 149
Casselberry, FL 32707
Southwestern Region
690 East Lamar Boulevard, Suite 350
Arlington, TX 76011
Western Region
10855 Business Center Drive, Suite B
Cypress, CA 90630
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 August 1, 1998, by and among the Company, as Servicer, MMCA Auto
Receivables, Inc., as Seller, and MMCA Auto Owner Trust 1998-1, as Issuer
(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 ____________, 19__.
MITSUBISHI MOTORS CREDIT
OF AMERICA, INC.
By:________________________________
Name: Hiroshi Yajima
Title: President
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Monthly Servicing Report -- MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
<S> <C>
I. ORIGINAL DEAL PARAMETERS
- -----------------------------
A Original Pool Balance $930,187,451.88
B. Original Level Payment Pool Balance $624,383,716.12
C. Last Scheduled Payment Pool Balance $305,803,735.76
D Notes
1. Class A-1
a. Initial Balance $200,000,000.00
b. Note Interest Rate 5.621%
c. Noteholders' Final Scheduled Payment Date 8/16/99
2. Class A-2
a. Initial Balance $250,000,000.00
b. Note Interest Rate 5.72%
c Noteholders' Final Scheduled Payment Date 8/15/04
d. Class A Noteholders' Percentage 90.44%
3. Class A-3
a. Initial Balance $322,056,000.00
b. Note Interest Rate 5.86%
c. Noteholders' Final Scheduled Payment Date 8/15/04
d. Class A Noteholders' Percentage 90.44%
4. Class B
a. Initial Balance $60,462,000.00
b. Note Interest Rate 6.07%
c. Noteholders' Final Scheduled Payment Date 8/15/04
d. Class B Noteholders' Percentage 9.56%
E. Certificates Initial Balance $97,669,451.88
F. Servicing Fee Rate 1.00%
G Original Weighted Average Coupon (WAC) 5.938%
H Weighted Average Original Term to Maturity (WAOM) in months 49.96
I. Weighted Average Remaining Term to Maturity (WAM) in months 38.96
J. Number of Contracts 53,764
K Reserve Account
1. Reserve Initial Deposit $1,395,281.00
2. Specified Reserve Balance $6,976,401.89
L. Yield Supplement Account Initial Deposit $66,416,937.00
M Maximum Supplemental Reserve Amount $18,603,749.04
II. INPUTS FROM PREVIOUS MONTHLY SERVICER REPORT
- -------------------------------------------------
A Total Pool Balance $930,187,451.88
B. Level Payment Pool Balance $624,383,716.12
C. Last Scheduled Payment Pool Balance $305,803,735.76
D Notes
1. Class A-1
a.Prior Month Note Balance $200,000,000.00
b.Interest Carryover Shortfall 0.00
c.Principal Carryover Shortfall 0.00
2. Class A-2
a.Prior Month Note Balance $250,000,000.00
b.Interest Carryover Shortfall 0.00
c.Principal Carryover Shortfall 0.00
3. Class A-3
a.Prior Month Note Balance $322,056,000.00
b.Interest Carryover Shortfall 0.00
c.Principal Carryover Shortfall 0.00
4. Class B
a.Prior Month Note Balance $60,462,000.00
b.Interest Carryover Shortfall 0.00
c.Principal Carryover Shortfall 0.00
E. Certificates Balance $97,669,451.88
F. Reserve Account Balance $1,395,281.00
G Supplemental Reserve Account Balance $0.00
H Yield Supplement Account Balance $66,416,937.00
I. Payahead Account Balance $668,045.87
J. Cumulative Losses for All Prior Periods $0.00
K Weighted Average Coupon (WAC) 5.938%
L. Weighted Average Remaining Term to Maturity (WAM) in months 38.96
M. Number of Contracts 53,764
</TABLE>
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Monthly Servicing Report -- MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
III. INPUTS FROM THE MAINFRAME (FROM LEWTAN REPORTS)
- -----------------------------------------------------
A. Precomputed Contracts Level Payment Principal
<S> <C> <C>
1. Scheduled Principal Reduction 7,900,000.00
2. Prepayments in Full 2,000,000.00
3. Prepayments in Full Due to Repurchases 0.00
B. Total Collections for Precomputed Contracts 12,500,000.00
C. Precomputed Contracts - Principal on Last Scheduled Payments
1. Collected Principal 1,000,000.00
2. Repurchased Receivables Principal 0.00
3. Last Scheduled Payment Principal Paid in Full Prior
to Month of Maturity 1,000,000.00
4. Last Scheduled Payment Principal Due on Loans Matured This Month 0.00
D. Simple Interest Contracts -Level Payment
1. Principal Reduction 7,000,000.00
2. Collected Principal 7,000,000.00
3. Collected Interest 3,200,000.00
4. Repurchased Receivables Principal 0.00
5. Repurchased Receivables Interest 0.00
E. Simple Interest Contracts - Principal on Last Scheduled Payments
1. Collected Principal 800,000.00
2. Repurchased Receivables Principal 0.00
3. Last Scheduled Payment Principal Collected Prior to
Month of Maturity 800,000.00
4. Last Scheduled Payment Principal Due on Loans Matured This Month 0.00
F. Yield Supplement Information
1. Yield Supplement Amount 2,000,000.00
2. Specified Yield Supplement Account Balance 63,916,937.00
G. Advances
1. Actuarial Advances
a.Beginning Actuarial Advances (or payments due
prior to Cutoff Date) 1,490,529.46
b.Current Month Actuarial Advances 500,000.00
c.Reimbursement of Actuarial Advances (or payments due
prior to Cutoff Date) 600,000.00
d.Ending Actuarial Advances 1,390,529.46
2. Precomputed Loans - Last Scheduled Payment Advances
a.Beginning Last Scheduled Payment Advances 0.00
b.Current Month Last Scheduled Payment Advances 0.00
c.Reimbursement of Last Scheduled Payment
Advances 0.00
d.Ending Last Scheduled Payment Advances 0.00
3. Simple Interest Loans - Last Scheduled Payment Advances
a.Beginning Last Scheduled Payment Advances 0.00
b.Current Month Last Scheduled Payment Advance 0.00
c.Reimbursement of Last Scheduled Payment 0.00
Advances
d.Ending Last Scheduled Payment Advances 0.00
4. Net Servicer Advances (100,000.00)
H. Payahead Account Activity
1. Net Change in Payahead Account Balance (50,000.00)
2. Payahead Balance of Loans Defaulted this Period 0.00
3. Ending Payahead Balance 618,045.87
I. Rule of 78s Payment 10,000.00
J. Weighted Average Coupon of Remaining Portfolio (WAC) 5.94%
K. Weighted Average Remaining Maturity of Portfolio (WAM) in months 38.00
L. Remaining Number of Receivables 53,500
M. Delinquent Contracts Contracts Amount
--------- --------
1.30-59 Days Delinquent 0 0.00% $0.00 0.00%
2.60-89 Days Delinquent 0 0.00% $0.00 0.00%
3.90 Days or more Delinquent 0 0.00% $0.00 0.00%
N. Net Loss and Defaulted Receivables Information
1.Vehicles Repossessed During Month 0 $0.00
2.Loans Defaulted During the Month 0
3.Level Payment Principal Balance of Defaulted
Receivables 0.00
4.Last Scheduled Payment Principal Balance of
Defaulted Receivables 0.00
5.Level Payment Liquidation Proceeds 0.00
6.Last Scheduled Payment Liquidation Proceeds 0.00
7.Recoveries of Level Payment and Last Scheduled Payment
on Previously Defaulted Receivables 0.00
O. Pool Balances
1.Total Pool Balance
2.Level Pay Pool Balance 911,487,451.88
3.Last Scheduled Payment Pool Balance 607,483,716.12
304,003,735.76
</TABLE>
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Monthly Servicing Report -- MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
IV. INPUTS DERIVED FROM OTHER SOURCES
- --------------------------------------
<S> <C> <C>
A. Reserve Account Investment Income 5,000.00
B. Collection Account Investment Income 80,000.00
C. Payahead Account Investment Income 3,000.00
D. Yield Supplement Account Investment Income 300,000.00
E. Supplemental Reserve Account Investment Income 0.00
V. COLLECTIONS
- ---------------
A. Level Payments Received (Excluding Repurchases)
1. Total Collections for Precomputed Contracts
(Level Payment Only) 12,500,000.00
2. Collected Principal on Simple Interest
Contracts (Level Payment Only) 7,000,000.00
3. Collected Interest on Simple Interest
Contracts (Level Payment Only) 3,200,000.00
4. Yield Supplement Amount 2,000,000.00
------------
24,700,000.00
B. Last Scheduled Payment Principal
Collections (Excluding Repurchases) 1,800,000.00
C. Net Change in Payahead Account Balance 50,000.00
D. Net Liquidation Proceeds and Recoveries Received 0.00
E. Principal and Interest on Purchased or Repurchased Contracts 0.00
F. Exclusion of Rule of 78's Payments (10,000.00)
G. Net Servicer Advances/(Reimbursements) (100,000.00)
--------------
H. Available Funds $26,440,000.00
=============
</TABLE>
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Monthly Servicing Report -- MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
<S> <C> <C>
VI. DISTRIBUTIONS
- -------------------
A. Scheduled Principal
1. Principal Payment (Excluding Repurchases
and Defaulted Receivables) 18,700,000.00
2. Principal Payment on Purchased and Repurchased Contracts 0.00
3. Principal Payment of Defaulted Receivables 0.00
------------
4. Total Scheduled Principal 18,700,000.00
B. Total Required Payment
1. Total Servicing Fee 775,156.21
2. Accrued Note Interest Due
a.Class A-1 811,922.22
b.Class A-2 993,055.56
c.Class A-3 1,310,589.00
d.Class B 254,864.13
------------
e.Total Accrued Note Interest 3,370,430.91
3. Principal Distribution Amount Due
a.Class A-1 18,700,000.00
b.Class A-2 0.00
c.Class A-3 0.00
d.Class B 0.00
------------
e.Total Principal Distribution Amount 18,700,000.00
4. Total Required Payment 22,845,587.12
5. Available Funds 26,440,000.00
6. Supplemental Reserve Account TRP Draw Amount 0.00
7. Reserve Account TRP Draw Amount 0.00
--------------
8. Funds Available for Distribution of
Total Required Payment $22,845,587.12
C. Current Period Payments
1. Servicing Fee paid 775,156.21
2. Interest Paid
a.Class A-1 811,922.22
b.Class A-2 993,055.56
c.Class A-3 1,310,589.00
d.Class B 254,864.13
------------
e.Total Interest Paid 3,370,430.91
3. Remaining Available Funds 19,475,156.21
4. Principal Payments
a.Class A-1 18,700,000.00
b.Class A-2 0.00
c.Class A-3 0.00
d.Class B 0.00
------------
e.Total Principal Payments 18,700,000.00
C. Current Period Shortfalls
1. Interest Carryover Shortfall
a.Class A-1 0.00
b.Class A-2 0.00
c.Class A-3 0.00
d.Class B 0.00
------------
e.Total Interest Carryover Shortfall 0.00
2. Principal Carryover Shortfall
a.Class A-1 0.00
b.Class A-2 0.00
c.Class A-3 0.00
d.Class B 0.00
------------
e.Total Principal Carryover Shortfall 0.00
D. Reserve
Account
1. Beginning Reserve Account Balance 1,395,281.00
2. Plus: Reserve Account Investment Income 5,000.00
3. Less: Reserve Account Advance Draw Amout 0.00
4. Less: Reserve Account TRP Draw Amount 0.00
------------
5. Reserve Account Balance before Deposit
to Reserve Account 1,400,281.00
6. Specified Reserve Account Balance 6,976,401.89
7. Amount Necessary to Reinstate Reserve
Account to Specified
Reserve Balance 5,576,120.89
8. Funds Available for Deposit to Reserve Account 3,594,412.88
9. Amount Deposited to Reserve Account 3,594,412.88 3,594,412.88
10.Reserve Account Investment Income
Released to Seller 0.00
11.Ending Reserve Account Balance 4,994,693.88
E. Supplemental Reserve Account
1. Beginning Supplemental Reserve Account Balance 0.00
2. Plus: Supplemental Reserve Account Investment Income 0.00
3. Less: Supplemental Reserve Account
Advance Draw Amount 0.00
4. Less: Supplemental Reserve Account TRP
Draw Amount 0.00
------------
5. Supplemental Reserve Account Balance
before Deposit to Supplemental Reserve Account 0.00
6. Maximum Supplemental Reserve Account Balance 18,603,749.04
7. Amount Necessary to Reinstate Supplemental
Reserve Account to Maximum Balance 18,603,749.04
8. Funds Available for Deposit to Supplemental Reserve
Account 0.00
9. Amount Deposited to Supplemental Reserve
Account 0.00 0.00
10.Supplemental Reserve Account Investment
Income Released to Seller 0.00
11.Ending Supplemental Reserve Account Balance 0.00
F. Excess Funds Deposited to Certificate Distribution Account 0.00 0.00
---------------
G. Total Distributions $ 26,440,000.00
================
</TABLE>
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Monthly Servicing Report -- MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
VII. POOL BALANCES AND PORTFOLIO INFORMATION
- --------------------------------------------- Beginning End
A. Balances and Principal Factors of Period of Period
-------------------- ------------------
<S> <C> <C>
1. Total Pool Balance $930,187,451.88 $911,487,451.88
2. Total Pool Factor 1.0000000 0.9798965
3. Level Payment Pool Balance $624,383,716.12 $607,483,716.12
4. Level Payment Pool Factor 1.0000000 0.9729333
5. Note Balance
a. Class A-1 200,000,000.00 181,300,000.00
b. Class A-2 250,000,000.00 250,000,000.00
c. Class A-3 322,056,000.00 322,056,000.00
d. Class B 60,462,000.00 60,462,000.00
-------------------- ------------------
e. Total 832,518,000.00 813,818,000.00
6. Pool Factor
a. Class A-1 1.0000000 0.9065000
b. Class A-2 1.0000000 1.0000000
c. Class A-3 1.0000000 1.0000000
d. Class B 1.0000000 1.0000000
7. Certificate Balance 97,669,451.88 97,669,451.88
8. Certificate Pool Factor 1.0000000 1.0000000
9. Last Scheduled Payment Pool Balance 305,803,735.76 304,003,735.76
B. Portfolio Information
1. Weighted Average Coupon of Portfolio (WAC) 5.938% 5.940%
2. Weighted Average Remaining Term to Maturity of Portfolio (WAM) in months 38.96 38.00
3. Remaining Number of Contracts 53,764 53,500
VIII. NET LOSS AND DELINQUENCY ACTIVITY
- ----------------------------------------
A. Losses for Collection Period Net of Recoveries 0.00
B. Cumulative Losses for all Periods 0.00
C. Delinquent and Repossessed Contracts
Contracts Amount
---------------- ----------------------------------------
1. 30-59 Days Delinquent 0 0.00% $0.00 0.00%
2. 60-89 Days Delinquent 0 0.00% $0.00 0.00%
3. 90 Days or more Delinquent 0 0.00% $0.00 0.00%
4. Vehicles Repossessed During
Collection Period 0 0.00% $0.00
IX. AVERAGE LOSS AND DELINQUENCY RATIOS
- ----------------------------------------
A. Annualized Ratio of Realized Losses to Pool Balance for Each Collection Period
1. Second Preceding Collection Period 0.00%
2. Preceding Collection Period 0.00%
3. Current Collection Period 0.00%
4. Three Month Average 0.00%
B. Ratio of Balance of Contracts Delinquent 60 Days or More to the
Pool Balance as of the End of the Collection Period.
1. Second Preceding Collection Period 0.00%
2. Preceding Collection Period 0.00%
3. Current Collection Period 0.00%
4. Three Month Average 0.00%
</TABLE>
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Monthly Servicing Report -- MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
X. RECONCILIATION OF COLLECTION ACCOUNT
- ----------------------------------------
A. Transfers Into Collection Account
<S> <C> <C>
1. Transfer of Daily Collections (input from bank records) 24,500,000.00
2. Yield Supplement Amount from MMCA 2,000,000.00
3. Net Servicer Advances (if positive) 0.00
4. Supplemental Reserve Account Draw for Total Required Payment 0.00
5. Reserve Account Draw for Total Required Payment 0.00
6. Deposit from Payahead Account 50,000.00
7. Collection Account Investment Income 80,000.00
---------------
8. Total Transfers Into Collection Account $ 26,630,000.00
==================
B. Transfers from Collection Account
1. To Servicer
a. Total Servicing Fee 775,156.21
b. Rule of 78's Payment 10,000.00
c. Net Reimbursement of Servicer Advance of Payments Due Prior to Cutoff Date 100,000.00
d. Less: Total Repurchases (Netted from Amounts Due Servicer) 0.00
---------------
e. Total To Servicer (Net of Total Repurchases) 885,156.21
2. Total Required Payment Distributed (Net of Total Servicing Fee) 22,070,430.91
3. Deposit to Payahead Account 0.00
4. Deposit to Reserve Account 3,594,412.88
5. Deposit to Supplemental Reserve Account 0.00
6. Deposit To Certificate Distribution Account
a. Excess Funds 0.00
b. Collection Account Investment Income 80,000.00
---------------
c. Total To Certificate Distribution Account 80,000.00
---------------
7. Total Transfers from Collection Account $ 26,630,000.00
==================
XI. RECONCILIATION OF RESERVE ACCOUNT
- --------------------------------------
A. Beginning Balance of Reserve Account 1,395,281.00
B. Transfers Into Reserve Account
1. Reserve Account Deposit from Available Funds 3,594,412.88
2. Reserve Account Investment Income 5,000.00
3. Total Transfers Into Reserve Account 3,599,412.88
---------------
C. Total Transfers In and Beginning Balance $ 4,994,693.88
==================
D. Distributions From Reserve Account
1. Transfer to Servicer for Reserve Account Advance Draw Amount 0.00
2. Transfer to Collection Account for Reserve Account TRP Draw Amount 0.00
3. Reserve Account Investment Income to Seller (MARI) 0.00
4. Total Transfers From Reserve Account 0.00
E. Ending Balance 4,994,693.88
---------------
F. Total Distributions and Ending Balance $ 4,994,693.88
==================
XI. RECONCILIATION OF SUPPLEMENTAL RESERVE ACCOUNT
- ---------------------------------------------------
A. Beginning Balance of Supplemental Reserve Account 0.00
B. Transfers Into Supplemental Reserve Account
1. Supplemental Reserve Account Deposit from Available Funds 0.00
2. Supplemental Reserve Account Investment Income 0.00
3. Total Transfers Into Supplemental Reserve Account 0.00
---------------
C. Total Transfers In and Beginning Balance $ 0.00
==================
D. Distributions From Supplemental Reserve Account
1. Transfer to Servicer for Supplemental Reserve Account Advance Draw Amount 0.00
2. Transfer to Collection Account for Supplemental Reserve Account TRP Draw Amount 0.00
3. Supplemental Reserve Account Investment Income to Seller (MARI) 0.00
4. Total Transfers From Supplemental Reserve Account 0.00
E. Ending Balance 0.00
---------------
F. Total Distributions and Ending Balance $ 0.00
==================
</TABLE>
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Monthly Servicing Report -- MMCA Auto Owner Trust 1998-1
Hypothetical Resuts for the Period August 1, 1998 through August 31, 1998
XIII. RECONCILIATION OF PAYAHEAD ACCOUNT
- -----------------------------------------
<S> <C> <C>
A. Beginning Balance of Payahead Account 668,045.87
B. Transfers Into Payahead Account
1. Ne Payahead Transfer from Collection Account 0.00
2. Payahead Account Investment Income 3,000.00
-----------------
3. Total Transfers Into Payahead Account 3,000.00
-----------------
C. Total Transfers In and Beginning Balance $ 671,045.87
=================
D. Distributions From Payahead Account
1. Net Payahead Transfer to Collection Account 50,000.00
2. Transfer Investment Income to Servicer 3,000.00
-----------------
3. Total Transfers From Payahead Account 53,000.00
E. Payahead Account Ending Balance 618,045.87
-----------------
F. Total Distributions and Ending Balance $ 671,045.87
=================
XIV. RECONCILIATION OF YIELD SUPPLEMENT ACCOUNT
- ------------------------------------------------
A. Beginning Balance of Yield Supplement Account $66,416,937.00
B. Yield Supplement Account Investment Income 300,000.00
-----------------
C. Total Investment Income and Beginning Balance $ 66,716,937.00
=================
D. Distributions From Yield Supplement Account
1. Yield Supplement Amount (if not paid by MMCA) 0.00
2. Transfer Investment Income to Seller (MARI) 300,000.00
3. Transfer Reduction in Specified Yield Supplement Account Balance to
Seller (MARI) 2,500,000.00
-----------------
4. Total Transfers From Yield Supplement Account 2,800,000.00
E. Specified Yield Supplement Account Ending Balance 63,916,937.00
-----------------
F. Total Distributions and Ending Balance $ 66,716,937.00
=================
XV. RECONCILIATION OF NOTE PAYMENT ACCOUNT
- -------------------------------------------
A. Beginning Balance of Note Payment Account $0.00
B. Transfers Into Note Payment Account
1. Total Required Payment Distributed (less Total Servicing Fee) from
Collection Account 22,070,430.91
-----------------
2. Total Transfers Into Note Payment Account 22,070,430.91
-----------------
C. Total Transfers In and Beginning Balance $ 22,070,430.91
=================
D. Distributions from Note Payment Account
1. Payments to Noteholders
a.Class A-1 19,511,922.22
b.Class A-2 993,055.56
c.Class A-3 1,310,589.00
d.Class B 254,864.13
-----------------
e.Total Payments to Noteholders 22,070,430.91
2. Ending Balance of Note Payment Account 0.00
-----------------
E. Total Distributions and Ending Balance $ 22,070,430.91
=================
XVI. RECONCILIATION OF CERTIFICATE DISTRIBUTION ACCOUNT
- --------------------------------------------------------
A. Beginning Balance of Certificate Distribution Account $0.00
B. Transfers Into Certificate Distribution Account
2. Excess Funds Deposited from Collection Account 0.00
3. Collection Account Investment Income 80,000.00
-----------------
4. Total Transfers into Certificate Distribution Account 80,000.00
-----------------
C. Total Transfers In and Beginning Balance $ 80,000.00
=================
D. Distributions from Certificate Distribution Account
1. Payments to Certificateholders 80,000.00
2. Ending Balance 0.00
-----------------
E. Total Distributions and Ending Balance $ 80,000.00
=================
</TABLE>
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Monthly Servicing Report -- MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
XVII. DISTRIBUTION SUMMARY
- ---------------------------
A. Distributions From Collection Account
<S> <C> <C>
1. To Note Payment Account 22,070,430.91
2. To Servicer (MMCA) 885,156.21
3. To Payahead Account 0.00
4. To Reserve Account 3,594,412.88
5 To Supplemental Reserve Account 0.00
6. To Certificate Distribution Account 80,000.00
----------------
7. Total Distributions From Collection Account $ 26,630,000.00
B. Distributions From Reserve Account
1. To Collection Account 0.00
2. To Seller (MARI) 0.00
3. To Server (MMCA) 0.00
----------------
4. Total Distributions From Reserve Account 0.00
C. Distributions From Supplemental Reserve Account
1. To Collection Account 0.00
2. To Seller (MARI) 0.00
3. To Servicer (MMCA) 0.00
----------------
4. Total Distributions From Supplemental Reserve Account 0.00
D. Distributions From Payahead Account
1. To Collection Account 50,000.00
2. Investment Income to Servicer (MMCA) 3,000.00
----------------
3. Total Distributions From Payahead Account 53,000.00
E. Distributions From Yield Supplement Account
1. To Collection Account 0.00
2. Investment Income to Seller (MARI) 300,000.00
3. Reduction in Specified Yield Supplement Account Balance to Seller (MARI) 2,500,000.00
----------------
4. Total Distributions From Yield Supplement Account 2,800,000.00
F. Total Distributions From All Accounts to:
1. Note Payment Account 22,070,430.91
2. Servicer (MMCA) 888,156.21
3. Seller (MARI) 2,800,000.00
4. Collection Account 50,000.00
5. Certificate Distribution Account 80,000.00
6. Reserve Account 3,594,412.88
7. Supplemental Reserve Account 0.00
8. Payahead Account 0.00
----------------
9. Total Distributions From All Accounts $ 29,483,000.00
==================
</TABLE>
EXHIBIT B
[FORM OF STATEMENT TO NOTEHOLDERS]
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Noteholders
MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
Per Original
$1,000 Note
Aggregate or Certificate
------------------- ----------------
I. A. Distribution of Note Principal
<S> <C> <C>
1. Class A-1 18,700,000.00 93.50
2. Class A-2 0.00 0.00
3. Class A-3 0.00 0.00
4. Class B 0.00 0.00
B. Distribution of Certificate Principal 0.00 0.00
II. Distribution of Note Interest
A. Class A-1 811,922.22 4.06
B. Class A-2 993,055.56 3.97
C. Class A-3 1,310,589.00 4.07
D. Class B 254,864.13 4.22
III. Yield Supplement Amount 2,000,000.00 30.11
IV. Total Servicing Fee 775,156.21
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1 181,300,000.00 906.50
2. Class A-2 250,000,000.00 1,000.00
3. Class A-3 322,056,000.00 1,000.00
4. Class B 60,462,000.00 1,000.00
B. Note Pool Factors
1. Class A-1 0.9065000
2. Class A-2 1.0000000
3. Class A-3 1.0000000
4. Class B 1.0000000
C. Certificate Balance 97,669,451.88 1,000.00
D. Certificate Pool Factor 1.0000000
VI. Pool Balance at End of This Collection Period
A. Pool Balance 911,487,451.88
B. Level Pay Pool Balance 607,483,716.12
C. Last Scheduled Payment Pool Balance 304,003,735.76
VII. Carryover Shortfalls
A. Interest Carryover Shortfall
1. Class A-1 0.00 0.00
2. Class A-2 0.00 0.00
3. Class A-3 0.00 0.00
4. Class B 0.00 0.00
B. Principal Carryover Shortfall
1. Class A-1 0.00 0.00
2. Class A-2 0.00 0.00
3. Class A-3 0.00 0.00
4. Class B 0.00 0.00
VIII. Aggregate Realized Losses for This Collection Period 0.00
IX. Reserve Account Balance on Payment Date 4,994,693.88
X. Supplemental Reserve Account Balance on Payment Date 0.00
XI. Purchase Amount of Receivables Repurchased by Seller or Purchased by Servicer 0.00
XII. Amount of Advances for This Collection Period
1. Actuarial Advances 500,000.00
2. Last Scheduled Payment Advances 0.00
</TABLE>
EXHIBIT C
[FORM OF STATEMENT TO CERTIFICATEHOLDERS]
<TABLE>
<CAPTION>
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
Statement to Certificateholders
MMCA Auto Owner Trust 1998-1
Hypothetical Results for the Period August 1, 1998 through August 31, 1998
Per Original
$1,000 Note
Aggregate or Certificate
------------------- ----------------
I. A. Distribution of Note Principal
<S> <C> <C>
1. Class A-1 18,700,000.00 93.50
2. Class A-2 0.00 0.00
3. Class A-3 0.00 0.00
4. Class B 0.00 0.00
B. Distribution of Certificate Principal 0.00 0.00
II. Distribution of Note Interest
A. Class A-1 811,922.22 4.06
B. Class A-2 993,055.56 3.97
C. Class A-3 1,310,589.00 4.07
D. Class B 254,864.13 4.22
III. Yield Supplement Amount 2,000,000.00 30.11
IV. Total Servicing Fee 775,156.21
V. Principal Balances and Pool Factors
A. Note Principal Balance
1. Class A-1 181,300,000.00 906.50
2. Class A-2 250,000,000.00 1,000.00
3. Class A-3 322,056,000.00 1,000.00
4. Class B 60,462,000.00 1,000.00
B. Note Pool Factors
1. Class A-1 0.9065000
2. Class A-2 1.0000000
3. Class A-3 1.0000000
4. Class B 1.0000000
C. Certificate Balance 97,669,451.88 1,000.00
D. Certificate Pool Factor 1.0000000
VI. Pool Balance at End of This Collection Period
A. Pool Balance 911,487,451.88
B. Level Pay Pool Balance 607,483,716.12
C. Last Scheduled Payment Pool Balance 304,003,735.76
VII. Carryover Shortfalls
A. Interest Carryover Shortfall
1. Class A-1 0.00 0.00
2. Class A-2 0.00 0.00
3. Class A-3 0.00 0.00
4. Class B 0.00 0.00
B. Principal Carryover Shortfall
1. Class A-1 0.00 0.00
2. Class A-2 0.00 0.00
3. Class A-3 0.00 0.00
4. Class B 0.00 0.00
VIII. Aggregate Realized Losses for This Collection Period 0.00
IX. Reserve Account Balance on Payment Date 4,994,693.88
X. Supplemental Reserve Account Balance on Payment Date 0.00
XI. Purchase Amount of Receivables Repurchased by Seller or Purchased by Servicer 0.00
XII. Amount of Advances for This Collection Period
1. Actuarial Advances 500,000.00
2. Last Scheduled Payment Advances 0.00
</TABLE>
EXHIBIT D
[FORM OF YIELD SUPPLEMENT AGREEMENT]
August 1, 1998
MMCA Auto Receivables, Inc.
6363 Katella Avenue
Cypress, California 90630-5205
`
Re: MMCA Auto Owner Trust 1998-1
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 August 1, 1998 (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, Inc., 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 1998-1 (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, Inc.
6363 Katella Avenue
Cypress, California 90630-5205
Attention: Secretary/Treasurer
Telephone: (714) 236-1592
Telecopy: (714) 236-1300
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: Hiroshi Yajima
Title: President
Agreed and accepted as of
the date first above written:
MMCA AUTO RECEIVABLES, INC.,
as Purchaser
By:___________________________
Name: Hideyuki Kitamura
Title: Treasurer
Exhibit No. 4.3
INDENTURE
between
MMCA AUTO OWNER TRUST 1998-1,
as Issuer,
and
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
as Indenture Trustee
Dated as of August 1, 1998
---------------------------
$200,000,000 5.621% Class A-1 Asset Backed Notes
$250,000,000 5.72% Class A-2 Asset Backed Notes
$322,056,000 5.86% Class A-3 Asset Backed Notes
$60,462,000 6.07% 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...............................2
SECTION 1.1 (a) Definitions............................................2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act..........14
SECTION 1.3 Rules of Construction......................................15
ARTICLE II
THE NOTES...............................................................16
SECTION 2.1 Form.......................................................16
SECTION 2.2 Execution, Authentication and Delivery.....................16
SECTION 2.3 Temporary Notes............................................17
SECTION 2.4 Tax Treatment..............................................18
SECTION 2.5 Registration; Registration of Transfer and Exchange........18
SECTION 2.6 Mutilated, Destroyed, Lost or Stolen Notes.................20
SECTION 2.7 Persons Deemed Owner.......................................21
SECTION 2.8 Payments...................................................21
SECTION 2.9 Cancellation...............................................25
SECTION 2.10 Release of Collateral.....................................26
SECTION 2.11 Book-Entry Notes..........................................26
SECTION 2.12 Notices to Clearing Agency................................27
SECTION 2.13 Definitive Notes..........................................27
SECTION 2.14 Authenticating Agents.....................................28
ARTICLE III
COVENANTS...............................................................30
SECTION 3.1 Payment Covenant...........................................30
SECTION 3.2 Maintenance of Office or Agency............................30
SECTION 3.3 Money for Payments To Be Held in Trust.....................30
SECTION 3.4 Existence..................................................32
SECTION 3.5 Protection of Trust Estate.................................33
SECTION 3.6 Opinions as to Trust Estate................................33
SECTION 3.7 Performance of Obligations; Servicing of
Receivables..........................................34
SECTION 3.8 Negative Covenants.........................................36
SECTION 3.9 Annual Statement as to Compliance..........................37
SECTION 3.10 Issuer May Consolidate, etc.,
Only on Certain Terms................................37
SECTION 3.11 Successor of Transferee...................................40
SECTION 3.12 No Other Business.........................................40
SECTION 3.13 No Borrowing..............................................40
SECTION 3.14 Servicer's Obligations....................................40
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.........40
SECTION 3.16 Capital Expenditures......................................41
SECTION 3.17 Further Instruments and Acts..............................41
SECTION 3.18 Restricted Payments.......................................41
SECTION 3.19 Notice of Events of Default...............................41
SECTION 3.20 Removal of Administrator..................................42
ARTICLE IV
SATISFACTION AND DISCHARGE..............................................43
SECTION 4.1 Satisfaction and Discharge of Indenture....................43
SECTION 4.2 Satisfaction, Discharge and Defeasance of the Notes........44
SECTION 4.3 Application of Trust Money.................................46
SECTION 4.4 Repayment of Monies Held by Paying Agent...................46
ARTICLE V
REMEDIES................................................................47
SECTION 5.1 Events of Default..........................................47
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.........48
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.....................49
SECTION 5.4 Remedies; Priorities.......................................52
SECTION 5.5 Optional Preservation of the Receivables...................53
SECTION 5.6 Limitation of Suits........................................54
SECTION 5.7 Unconditional Rights of Noteholders To
Receive Principal and Interest.......................55
SECTION 5.8 Restoration of Rights and Remedies.........................55
SECTION 5.9 Rights and Remedies Cumulative.............................55
SECTION 5.10 Delay or Omission Not a Waiver............................55
SECTION 5.11 Control by Noteholders....................................56
SECTION 5.12 Waiver of Past Defaults...................................56
SECTION 5.13 Undertaking for Costs.....................................57
SECTION 5.14 Waiver of Stay or Extension Laws..........................57
SECTION 5.15 Action on Notes...........................................58
SECTION 5.16 Performance and Enforcement of Certain
Obligations..........................................58
ARTICLE VI
THE INDENTURE TRUSTEE...................................................60
SECTION 6.1 Duties of Indenture Trustee................................60
SECTION 6.2 Rights of Indenture Trustee................................61
SECTION 6.3 Individual Rights of Indenture Trustee.....................63
SECTION 6.4 Indenture Trustee's Disclaimer.............................63
SECTION 6.5 Notice of Defaults.........................................63
SECTION 6.6 Reports by Indenture Trustee to Holders....................63
SECTION 6.7 Compensation and Indemnity.................................64
SECTION 6.8 Replacement of Indenture Trustee...........................64
SECTION 6.9 Successor Indenture Trustee by Merger......................66
SECTION 6.10 Appointment of Co-Indenture Trustee or
Separate Indenture Trustee...........................66
SECTION 6.11 Eligibility; Disqualification.............................68
SECTION 6.12 Preferential Collection of Claims Against Issuer..........68
SECTION 6.13 Pennsylvania Motor Vehicle Sales Finance
Act Licenses.........................................68
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS..........................................69
SECTION 7.1 Issuer To Furnish Indenture Trustee Names
and Addresses of Noteholders.........................69
SECTION 7.2 Preservation of Information; Communications
to Noteholders.......................................69
SECTION 7.3 Reports by Issuer..........................................69
SECTION 7.4 Reports by Indenture Trustee...............................70
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES....................................71
SECTION 8.1 Collection of Money........................................71
SECTION 8.2 Trust Accounts, the Reserve Account, the
Supplemental Reserve Account and the Yield
Supplement Account...................................71
SECTION 8.3 General Provisions Regarding Accounts......................72
SECTION 8.4 Release of Trust Estate....................................73
SECTION 8.5 Opinion of Counsel.........................................73
ARTICLE IX
SUPPLEMENTAL INDENTURES.................................................75
SECTION 9.1 Supplemental Indentures Without Consent
of Noteholders.......................................75
SECTION 9.2 Supplemental Indentures with Consent
of Noteholders.......................................77
SECTION 9.3 Execution of Supplemental Indentures.......................79
SECTION 9.4 Effect of Supplemental Indenture...........................79
SECTION 9.5 Conformity with Trust Indenture Act........................80
SECTION 9.6 Reference in Notes to Supplemental Indentures..............80
ARTICLE X
REDEMPTION OF NOTES.....................................................81
SECTION 10.1 Redemption................................................81
SECTION 10.2 Form of Redemption Notice.................................81
SECTION 10.3 Notes Payable on Redemption Date..........................82
ARTICLE XI
MISCELLANEOUS...........................................................83
SECTION 11.1 Compliance Certificates and Opinions, etc.................83
SECTION 11.2 Form of Documents Delivered to Indenture Trustee..........85
SECTION 11.3 Acts of Noteholders.......................................86
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer
and Rating Agencies..................................87
SECTION 11.5 Notices to Noteholders; Waiver............................88
SECTION 11.6 Alternate Payment and Notice Provisions...................88
SECTION 11.7 Conflict with Trust Indenture Act.........................89
SECTION 11.8 Effect of Headings and Table of Contents..................89
SECTION 11.9 Successors and Assigns....................................89
SECTION 11.10 Separability.............................................89
SECTION 11.11 Benefits of Indenture....................................89
SECTION 11.12 Legal Holiday............................................89
SECTION 11.13 Governing Law............................................90
SECTION 11.14 Counterparts.............................................90
SECTION 11.15 Recording of Indenture...................................90
SECTION 11.16 Trust Obligation.........................................90
SECTION 11.17 No Petition..............................................91
SECTION 11.18 Inspection...............................................91
SCHEDULE A............................................................SA-1
SCHEDULE I............................................................SI-1
EXHIBIT A-1............................................................A-1
EXHIBIT A-2............................................................A-2
EXHIBIT A-3............................................................A-3
EXHIBIT A-4............................................................A-4
EXHIBIT B..............................................................B-1
INDENTURE, dated as of August 1, 1998 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Indenture"), between MMCA AUTO OWNER TRUST 1998-1, 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 5.621% Class A-1 Asset Backed Notes (the "Class A-1 Notes"), 5.72%
Class A-2 Asset Backed Notes (the "Class A-2 Notes"), 5.86% 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 6.07% 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 Cutoff Date (including Payaheads) and, with
respect to Simple Interest Receivables, monies due or received thereunder
on or after the 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) 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) rights to receive proceeds with respect
to the Receivables from recourse to Dealers thereon pursuant to the Dealer
Agreements; (f) all of the Seller's rights to the Receivable Files; (g) the
Trust Accounts, the Reserve Account, the Supplemental Reserve Account and
the Yield Supplement Account and all amounts, securities, financial assets,
investments and other property deposited in or credited to any of the
foregoing and all proceeds thereof; (h) the Sale and Servicing Agreement
and the Yield Supplement Agreement; (i) all of the Seller's rights under
the Purchase Agreement, including the right of the Seller to cause MMCA to
repurchase Receivables from the Seller; (j) 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 repurchased by
the Servicer or purchased by the Seller) acquired by or on behalf of the
Issuer; (l) rebates of premiums and other amounts relating to insurance
policies and other items financed under the Receivables in effect as of the
Cutoff Date; and (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 (a) Definitions. 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 August 1, 1998, 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.
"Authorized Officer" shall mean, 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 Authorized 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.
"Basic Documents" shall mean this Indenture, the Certificate
of Trust, the Trust Agreement, the Assignment, 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, executive order or governmental decree to
remain 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 Noteholders' Percentage" shall mean 90.44%, the
percentage equivalent of a fraction, rounded to the nearest one-hundredth
of a percent, the numerator of which is an amount equal to the sum of the
initial principal balances of the Class A-2 Notes and the Class A-3 Notes,
and the denominator of which is an amount equal to the sum of the initial
principal balances of the Class A-2 Notes, the Class A-3 Notes and the
Class B Notes.
"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 August 1999
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 $200,000,000 aggregate
initial principal amount of 5.621% Class A-1 Asset Backed Notes issued by
the Trust pursuant to this Indenture, substantially in the form of Exhibit
A-1 to this Indenture.
"Class A-1 Rate" shall mean 5.621% per annum.
"Class A-2 Final Payment Date" shall mean the August 2004
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 $250,000,000 aggregate
initial principal amount of 5.72% Class A-2 Asset Backed Notes issued by
the Trust pursuant to this Indenture, substantially in the form of Exhibit
A-2 to this Indenture.
"Class A-2 Rate" shall mean 5.72% per annum.
"Class A-3 Final Payment Date" shall mean the August 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 $322,056,000 aggregate
initial principal amount of 5.86% Class A-3 Asset Backed Notes issued by
the Trust pursuant to this Indenture, substantially in the form of Exhibit
A-3 to this Indenture.
"Class A-3 Rate" shall mean 5.86% per annum.
"Class B Final Payment Date" shall mean the August 2004
Payment Date.
"Class B Noteholder" shall mean the Person in whose name a
Class B Note is registered on the Note Register.
"Class B Noteholders' Percentage" shall mean 9.56%, the
percentage equivalent of a fraction, rounded to the nearest one-hundredth
of a percent, the numerator of which is the initial principal balance of
the Class B Notes, and the denominator of which is an amount equal to the
sum of the initial principal balances of the Class A-2 Notes, the Class A-3
Notes and the Class B Notes.
"Class B Notes" shall mean the $60,462,000 aggregate initial
principal amount of 6.07% Class B Asset Backed Notes issued by the Trust
pursuant to this Indenture, substantially in the form of Exhibit A-5 to
this Indenture.
"Class B Rate" shall mean 6.07% 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 August 20, 1998.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and Treasury 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 August 1, 1998, by and among the Seller, the
Issuer, 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 Final 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 July 30, 2003.
"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, (i) with respect to the Class A-1 Notes, the period from and
including the previous Payment Date (or, in the case of the first Payment
Date, the Closing Date) to but excluding such Payment Date and (ii) with
respect to the Class A-2 Notes, the Class A-3 Notes and the Class B 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, 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 1998-1, 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
Authorized Officers and delivered to the Indenture Trustee.
"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 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
August 20, 1998, among the Issuer, the Indenture Trustee 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.
"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 Authorized 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 Authorized 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 any 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 September 15, 1998.
"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, the close of business on the day immediately preceding
such Payment Date or Redemption Date or, if Definitive Notes have been
issued pursuant to Section 2.13, the fifteenth (15th) day of the preceding
month.
"Redemption Date" shall mean the Payment Date specified by
the Servicer pursuant to Section 10.1(a) or (b), as applicable, 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 the any amount remaining in the Supplemental Reserve Account and
then to the extent of any remaining shortfall from the Reserve Account.
"Redemption Price" shall mean an amount equal to the unpaid
principal amount of the Notes redeemed plus accrued and unpaid interest
thereon.
"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, 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 that certain Sale
and Servicing Agreement, dated as of August 1, 1998, 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 received during the
related Collection Period of principal on Simple Interest Receivables,
including collections of principal attributable to the Last Scheduled
Payment of a Simple Interest Receivable that is a Final Payment Receivable,
and including any charges for Excess Wear and Tear and Excess Mileage but
excluding collections received during the related Collection Period of
principal on Simple Interest Receivables that would be attributable to a
Last Scheduled Payment pursuant to Section 4.3(a) except that a Last
Scheduled Payment Advance has been made with respect to such Last Scheduled
Payment, and (ii) Last Scheduled Payment Advances made during the related
Collection Period 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)
the Principal Balance (without duplication of amounts taken into account
under (a) or (b)) of (i) each Receivable 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 (including pursuant to
Section 9.2 of the Trust Agreement), 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 Cutoff Date; provided,
however, that in calculating the Scheduled Principal, 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) will be excluded.
"Schedule of Receivables" shall mean the listing of
Receivables set forth in Schedule A (which Schedule may be in the form of
microfiche).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Seller" shall mean MMCA Auto Receivables, Inc., a Delaware
corporation, 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.
"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 substantially
the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 and Exhibit
A-4, 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 through
A-4 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 Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
(b) Notes bearing the manual or facsimile signature
of individuals who were at any time Authorized 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 5.621% Class A-1 Asset Backed Notes for original
issue in an aggregate principal amount of $200,000,000, 5.72% Class A-2
Asset Backed Notes for original issue in an aggregate principal amount of
$250,000,000, 5.86% Class A-3 Asset Backed Notes for original issue in an
aggregate principal amount of $322,056,000 and 6.07% Class B Asset Backed
Notes for original issue in an aggregate principal amount of $60,462,000.
The aggregate principal amounts of 5.621% Class A-1 Asset Backed Notes,
5.72% Class A-2 Asset Backed Notes, 5.86% Class A-3 Asset Backed Notes and
6.07% 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 as registered Notes in minimum
denominations of $1,000 and integral multiples 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, 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, 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
instructions from the Servicer pursuant to Section 4.6(c) of the Sale and
Servicing Agreement, the Indenture Trustee will withdraw all 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 each Class of Notes;
(iii) to the Note Payment Account, the
Principal Distribution Amount;
(iv) to the Reserve Account, the amount, if
any, necessary to reinstate the balance in the Reserve Account up to
the Specified Reserve Balance;
(v) to the Supplemental Reserve Account,
all remaining Available Funds until the Supplemental Reserve
Amount is equal to the Maximum Supplemental Reserve Amount;
and
(vi) to the Certificate Distribution Account,
any remaining portion of 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, the Available Funds remaining after the
application of clauses (i) and (ii) above will be deposited in the Note
Payment Account and applied in accordance with Section 2.8(g).
(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 Class A Noteholders pro rata in proportion to the Accrued
Note Interest for each Class of Class A Notes);
(ii) following payment in full of the
Accrued Note Interest payable to the Class A Noteholders, to the
Class B Noteholders, Accrued Note Interest until the Accrued Note
Interest payable to the Class B Noteholders has been paid in full;
(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, the Class A Noteholders'
Percentage of the remaining 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, the Class A Noteholders'
Percentage of the remaining 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-1 Notes and payment of the Class A Noteholders' Percentage of the
Principal Distribution Amount, to the Class B Noteholders, the
Class B Noteholders' Percentage 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 will be calculated on the basis of
actual days elapsed and a 360-day year. Interest on the Class A-2 Notes,
the Class A-3 Notes and the Class B Notes will 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
pursuant to Section 10.1), 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 the 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) [Reserved.]
(g) 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
Class A Notes, Accrued Note Interest ratably in proportion to
Accrued Note Interest for each Class of Class A Notes, without
preference or priority of any kind, according to the amounts due
and payable on the Notes for interest;
(iv) fourth, to the Class B Noteholders,
Accrued Note Interest until the Accrued Note Interest payable to
the Class B Noteholders has been paid in full;
(v) fifth, 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, respectively, pro rata in proportion
to the respective principal balances of each of such Classes in
reduction of principal until the principal amount of each of such
Classes has been paid in full;
(vi) sixth, to the Class B Noteholders, the
outstanding principal amount of the Class B Notes 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 an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and
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 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. 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, if any, on 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 Reserve Account, the Supplemental Reserve 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 Reserve
Account, the Supplemental Reserve 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.
(vi) 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 B.
(b) On or before May 31, in each calendar year,
beginning in 1999, 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 May 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 and 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 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. In case 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 assert any claim against any present or former
Noteholder by reason of the payment of the taxes levied or assessed
upon the Trust;
(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
Trust 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, within 120 days after the end of
each calendar year (commencing with the year 1999), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuer
during such year and of its performance under this Indenture has
been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized
Officer's knowledge, based on such review, the Issuer has complied
with all conditions and covenants under this Indenture throughout
such year, or, if there has been a default in its compliance with
any such condition or covenant, specifying each such default known
to such Authorized 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 and the Certificates.
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 4.9 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:
(A) either
(1) 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
(2) 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;
(3) the Issuer has paid or caused to be paid all other sums
payable by the Issuer hereunder and under the other Basic
Documents;
(4) 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
(5) 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 or 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 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, 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)
default is made 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) default is made 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 such 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 such Notes and collect in the manner provided by law out
of the property of the Issuer or other obligor upon such 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 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 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 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 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. 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.
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 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, if
any, on 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 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 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 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) 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 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 for the appointment of a successor
Indenture Trustee. If the Indenture Trustee fails to comply with Section
6.11, any Noteholder may petition any court of competent jurisdiction for
the removal of the Indenture Trustee and the appointment of 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) In case 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 in case
at that time any of the Notes shall not have been authenticated, to 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, 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
accept the resignation of or remove 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 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. 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).
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 AND REPORTS
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 Reports 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 Reports by Indenture Trustee. (a) If required by
TIA Section 313(a), within sixty (60) days after each March 31, beginning
with March 31, 1999, 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, the Reserve Account, the
Supplemental Reserve Account and the Yield Supplement Account. (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, for the benefit of the
Noteholders and the Certificateholders, the Trust Accounts, the Reserve
Account, the Supplemental Reserve Account and the Yield Supplement Account
as provided in Sections 4.1, 4.7, 4.10 and 5.1 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
Section 4.2 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
Payahead Account, the Reserve Account, the Supplemental Reserve 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 Payahead Account, the
Reserve Account, the Supplemental Reserve 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 Reserve Account, the Supplemental
Reserve Account and the Yield Supplement Account) as provided in Sections
4.1, 4.7 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, the Reserve Account,
the Supplemental Reserve Account or the Yield Supplement Account 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, the Reserve Account, the Supplemental Reserve
Account or the Yield Supplement Account 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 for any funds on deposit in the Collection Account,
the Payahead Account, the Reserve Account, the Supplemental Reserve Account
or the Yield Supplement Account 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, (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) if such Notes shall have been declared due and
payable following an Event of Default, 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, the Reserve Account, the Supplemental Reserve Account or the
Yield Supplement, as the case may be, 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 an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (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.
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 the assets of the Issuer are sold
pursuant to Section 9.2 of the Trust Agreement, all amounts on deposit in
the Note Payment Account shall be paid to the Noteholders up to the unpaid
principal amount of the Notes and all accrued and unpaid interest thereon.
If the amounts are to be paid to Noteholders pursuant to this Section
10.1(b), the Servicer or the Issuer shall, to the extent practicable,
furnish notice of such event to the Indenture Trustee not later than twenty
(20) days prior to the Redemption Date, whereupon all such amounts shall be
payable on the Redemption 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. Failure to give 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
say such Person may certify or give an opinion as to such matters in one or
several documents.
(b) Any certificate or opinion of an Authorized
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 an Authorized 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 Authorized 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 1998-1, in care of Wilmington
Trust Company, 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, 25 Broadway (20th Floor), New York, New York 10004, 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. 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 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.
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 and duly attested, all as of the day
and year first above written.
MMCA AUTO OWNER TRUST 1998-1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Debra Eberly
______________________________
Name: Debra Eberly
Title: Administrative Account
Manager
BANK OF TOKYO - MITSUBISHI
TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Donna Marie White
_____________________________
Name: Donna Marie White
Title: Trust Officer
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
BEFORE ME, the undersigned authority, a Notary Public in and
for said county and state, on this day personally appeared ________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said ____________________________________, a _______________________________
of Wilmington Trust Company, an Owner Trustee of MMCA AUTO OWNER TRUST 1998-1,
a Delaware business trust, for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _____ day of
August, 1998.
_____________________________
Notary Public in and for the
State of Delaware.
[Seal]
My commission expires:
__________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and
for said county and state, on this day personally appeared ________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of
BANK OF TOKYO - MITSUBISHI TRUST COMPANY, a New York banking corporation,
and that such person executed the same as the act of said corporation for
the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _____ day of
August, 1998.
______________________________
Notary Public in and for the
State of New York.
[Seal]
My commission expires:
__________________________
SCHEDULE A
[Provided to the Indenture Trustee at the Closing]
SCHEDULE I
List of Permitted Investments
Account(s) Permitted Investments
- ---------- ---------------------
Reserve Account Time Deposits or Certificates of Deposit of Bank of
Tokyo-Mitsubishi Trust Company or its Affiliates
Supplemental Reserve Time Deposits or Certificates of Deposit of Bank of
Tokyo-Mitsubishi Trust Company or its Affiliates
Collection Account, Time deposits of Bank of Tokyo-
Yield Supplement Mitsubishi Trust Company or its Affiliates
Account, Payahead
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 $200,000,000
No. R-1 CUSIP NO. 553 083 AH9
MMCA AUTO OWNER TRUST 1998-1
5.621% CLASS A-1 ASSET BACKED NOTES
MMCA Auto Owner Trust 1998-1, 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 TWO HUNDRED MILLION 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 August 1, 1998 (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 August 1999 Payment
Date (the "Class A-1 Final Payment Date") and the Redemption Date, if any,
pursuant to Section 10.1 of the Indenture. 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 actual days elapsed and a 360-day year. 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 Authorized Officer, as of the
date set forth below.
Date: August 20, 1998
MMCA AUTO OWNER TRUST 1998-1,
By: WILMINGTON TRUST COMPANY
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 20, 1998
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
not in its individual capacity but
solely as Indenture Trustee
By: ___________________________
Authorized Officer
This Class A-1 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its 5.621% Class A-1 Asset Backed Notes,
which, together with the 5.72% Class A-2 Asset-Backed Notes, the 5.86%
Class A-3 Asset-Backed Notes and the 6.07% 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.
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 September 15, 1998.
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 of the Indenture. 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
whole or in part, 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 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.
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 the Outstanding Amount of all Notes,
voting as a group. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Outstanding
Amount of the Notes, 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
________________________________ */
______________________
*/ 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 $[ ]
No. R- [ ] CUSIP NO. 553 083 AJ5
MMCA AUTO OWNER TRUST 1998-1
5.72% CLASS A-2 ASSET BACKED NOTES
MMCA Auto Owner Trust 1998-1, 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 August 1, 1998 (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 2004 Payment Date (the "Class A-2
Final Payment Date") and the Redemption Date, if any, pursuant to Section
10.1 of the Indenture. 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 15th day of the calendar month preceding each
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 the 15th day of the
following calendar month. 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 Authorized Officer, as of the
date set forth below.
Date: August 20, 1998
MMCA AUTO OWNER TRUST 1998-1,
By: WILMINGTON TRUST COMPANY
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 20, 1998
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
not in its individual capacity but
solely as Indenture Trustee
By: ___________________________
Authorized Officer
This Class A-2 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its 5.72% Class A-2 Asset Backed Notes,
which, together with the 5.621% Class A-1 Asset-Backed Notes, the 5.86%
Class A-3 Asset-Backed Notes and the 6.07% 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.
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 September 15, 1998.
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 of the Indenture. 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
whole or in part, 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 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.
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 the Outstanding Amount of all Notes,
voting as a group. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Outstanding
Amount of the Notes, 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
_____________________________ */
__________________
*/ 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 $[ ]
No. R- [ ] CUSIP NO. 553 083 AK2
MMCA AUTO OWNER TRUST 1998-1
5.86% CLASS A-3 ASSET BACKED NOTES
MMCA Auto Owner Trust 1998-1, 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 August 1, 1998 (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 August 2004 Payment Date (the "Class A-3
Final Payment Date") and the Redemption Date, if any, pursuant to Section
10.1 of the Indenture. 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 15th day of the calendar month preceding each
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 the 15th day of the
following calendar month. 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 Authorized Officer, as of the
date set forth below.
Date: August 20, 1998
MMCA AUTO OWNER TRUST 1998-1,
By: WILMINGTON TRUST COMPANY
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 20, 1998
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
not in its individual capacity but
solely as Indenture Trustee
By: ___________________________
Authorized Officer
This Class A-3 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its 5.86% Class A-3 Asset Backed Notes,
which, together with the 5.621% Class A-1 Asset-Backed Notes, the 5.72%
Class A-2 Asset-Backed Notes and the 6.07% 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.
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 September 15, 1998.
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 of the Indenture. 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
whole or in part, 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 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.
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 the Outstanding Amount of all Notes,
voting as a group. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Outstanding
Amount of the Notes, 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
___________________________ */
___________________
*/ 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-4
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 $553 083 AL0
No. R-1 CUSIP NO. 553 083 AL0
MMCA AUTO OWNER TRUST 1998-1
6.07% CLASS B ASSET BACKED NOTES
MMCA Auto Owner Trust 1998-1, 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 SIXTY MILLION FOUR HUNDRED SIXTY
TWO THOUSAND 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
August 1, 1998 (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
August 2004 Payment Date (the "Class B Final Payment Date") and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture.
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 15th day of the calendar month preceding each
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 the 15th day of the
following calendar month. 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 Authorized Officer, as of the
date set forth below.
Date: August 20, 1998
MMCA AUTO OWNER TRUST 1998-1,
By: WILMINGTON TRUST COMPANY
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 20, 1998
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
not in its individual capacity but
solely as Indenture Trustee
By: ___________________________
Authorized Officer
This Class B Note is one of a duly authorized issue of Notes
of the Issuer, designated as its 6.07% Class B Asset Backed Notes, which,
together with the 5.621% Class A-1 Asset-Backed Notes, the 5.72% Class A-2
Asset-Backed Notes and the 5.86% 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.
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 September 15, 1998.
Payment of principal of and interest on the Class B Notes is subordinated
to the payment of principal of and interest on the Class A Notes in the
manner and to the extent set forth in the Indenture.
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 of the Indenture. 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. Payment of principal of and interest on
the Class B Notes following such declaration is subordinate to the payment
of principal of and interest on the Class A Notes in the manner and to the
extent set forth in 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
whole or in part, 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 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.
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 Outstanding Amount of all Notes,
voting as a group. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Outstanding
Amount of the Notes, 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
_____________________________ */
_______________________
*/ 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 Opinion of Counsel
Pursuant to Section 3.6(a)
August 20, 1998
To the Addressees Indicated
on Schedule A hereto
Re: MMCA Auto Owner Trust 1998-1
Ladies and Gentlemen:
We have acted as special counsel to Mitsubishi Motors Credit
of America, Inc., a Delaware corporation ("MMCA"), and MMCA Auto
Receivables, Inc., a Delaware corporation ("MARI"), in connection with the
transactions contemplated by (i) the Purchase Agreement, dated as of August
1, 1998 (the "Purchase Agreement"), between MMCA and MARI, (ii) the Sale
and Servicing Agreement, dated as of August 1, 1998 (the "Sale and
Servicing Agreement"), by and among MARI, as seller, MMCA, as servicer, and
MMCA Auto Owner Trust 1998-1, a Delaware business trust (the "Trust"), as
issuer, (iii) the Indenture, dated as of August 1, 1998 (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
August 1, 1998 (the "Trust Agreement"), between MARI and Wilmington Trust
Company, as owner trustee on behalf of the Trust (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 Assignment dated
as of August 20, 1998 related thereto (the "Assignment"), MMCA proposes to
sell to MARI, and MARI 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- and
medium-duty trucks (collectively, the "Financed Vehicles"), certain monies
due or received thereunder on or after the Cutoff Date, 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.
Pursuant to the Sale and Servicing Agreement, MARI proposes
to sell to the Trust all right, title and interest of MARI in, to and under
the Receivables, certain monies due or received thereunder on and after the
Cutoff Date, certain other property related to the Receivables and all
proceeds thereof. The Trust will issue (i) $200,000,000 aggregate principal
amount of 5.621% Class A-1 Asset Backed Notes, $250,000,000 aggregate
principal amount of 5.72% Class A-2 Asset Backed Notes, $322,056,000
aggregate principal amount of 5.86% Class A-3 Asset Backed Notes and
$60,462,000 aggregate principal amount of 6.07% Class B Asset Backed Notes
(collectively, the "Notes") pursuant to the Indenture for sale to the
several underwriters named in the Underwriting Agreement, dated August 13,
1998, between MARI and Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), as representative of the several underwriters; and (ii)
the Asset Backed Certificates (collectively, the "Certificates") pursuant
to the Trust Agreement for issuance to MARI.
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 MARI 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 Assignment;
(b) a Certificate of MARI, dated the date hereof, a
copy of which is attached as Exhibit A hereto (the "MARI Certificate");
(c) an unfiled, but signed copy of a financing
statement naming MMCA Auto Receivables, Inc. as debtor and MMCA Auto Owner
Trust 1998-1 as secured party, 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 statement, the "Financing Statement");
(d) the report of Lexis Document Services dated
August 12, 1998, as to financing statements naming MMCA Auto Receivables,
Inc. as debtor and on file in the office of the Secretary of State of the
State of California as of an effective date of August 7, 1998 (the "Search
Report");
(e) forms of motor vehicle retail installment sale
contracts (the "Form Contracts") attached as Annex A to the MARI
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 Owner Trustee 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 Owner Trustee in the 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,
California and Delaware.
Members of this Firm are admitted to practice in the States
of California, Delaware and New York. 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 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 Owner Trustee, a valid security
interest (as such term is defined in Section 1-201 of the UCC) in MARI's
rights in the Receivables and proceeds thereof, which security interest if
characterized as a transfer for security will secure payment of the Notes.
(3) The Financing Statement is in appropriate form for
filing in the Filing Office under the UCC. Upon the filing of the Financing
Statement in the Filing Office, the security interest in favor of the Owner
Trustee in the Receivables and proceeds thereof will be perfected, and no
other security interest of any other creditor of MARI's will be equal or
prior to the security interest of the Owner Trustee in the 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 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 Receivables exist and that
MARI has sufficient rights in the Receivables for the security interest of
the Owner Trustee to attach, and that the Owner Trustee has sufficient
rights in the Receivables for the security interest of the Indenture
Trustee to attach, and we express no opinion as to the nature or extent of
MARI's or the Owner Trustee's rights in, or title to, any 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;
(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 Receivable is
substantially in the form of a Form Contract, and we have assumed that no
Receivable is or will be credited to a securities account;
(e) we have assumed that there are no agreements
between MARI or the Owner Trustee and any account debtor prohibiting,
restricting or conditioning the assignment of any portion of the
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 Owner Trustee 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 Owner Trustee or the Indenture Trustee in any 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 Owner
Trustee's or Indenture Trustee's rights in and to any property which
secures any Receivable;
(j) we have assumed that MARI's chief executive
office is and will be located at the address set forth in the MARI
Certificate;
(k) we express no opinion with respect to the
priority of the interest of the Owner Trustee in the 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 Owner Trustee; ( 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 MARI was located in such
jurisdiction within four months prior to the date of the perfection of the
security interest of the Owner Trustee; ( 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 MARI to the extent the 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 MARI or the Receivables
or use of the Receivables to the extent such other financing statement
would be effective under Section 9-401(2) or (3) of the UCC;
(l) we have assumed that no financing statement
naming MARI as debtor was filed in the Filing Office between the effective
date of the Search Report and the date of the filing of the Financing
Statement in such Filing Office;
(m) 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;
(n) 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
(o) we call to your attention that in the case of the
issuance of distributions on, or proceeds of, the Receivables, the security
interest of the Owner Trustee 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), (k)(iv) and (l) of our qualifications set forth above, we have
relied upon representations and warranties of MARI as to the assumptions
therein.
This opinion is being furnished only to you and is solely
for your benefit 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
MMCA Auto Receivables, Inc.
6363 Katella Avenue
Cypress, California 90630
MMCA Auto Owner Trust 1998-1
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
Merrill Lynch, Pierce, Fenner
& Smith Incorporated, as
Representative of the several
Underwriters
250 Vesey Street
New York, New York 10281
Standard & Poor's,
a Division of The McGraw-Hill Companies
25 Broadway
New York, New York 10004
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Exhibit A
MMCA AUTO RECEIVABLES, INC.
OFFICER'S CERTIFICATE
The undersigned, a duly authorized officer of MMCA AUTO
RECEIVABLES, INC. (the "Company"), does hereby certify as follows:
(1) No financing statements or other filings have been filed
naming the Company 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
Receivables.
(2) At all times since the incorporation of the Company, the
Company has had one place of business and it is and has been located in
Cypress, California.
(3) At all times since the incorporation of the Company and
on the date hereof, the Company 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 Receivables (the
"Form Contracts"), and each 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 August 1, 1998, by and among the Company, Mitsubishi
Motors Credit of America, Inc., as Servicer, and MMCA Auto Owner Trust
1998-1, as Issuer, and accepted and agreed to by Bank of Tokyo - Mitsubishi
Trust Company, as Indenture Trustee.
IN WITNESS WHEREOF, I have set my hand this 20th day of
August, 1998.
MMCA AUTO RECEIVABLES, INC.
By:____________________________
Name: Hideyuki Kitamura
Title: Treasurer
Annex A
[FORMS OF RETAIL INSTALLMENT SALES CONTRACT]
Exhibit No. 4.4
This ADMINISTRATION AGREEMENT, dated as of August 1, 1998, is by
and among MMCA AUTO OWNER TRUST 1998-1, 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 5.621% Class A-1 Asset Backed
Notes, 5.72% Class A-2 Asset Backed Notes, 5.86% Class A-3 Asset Backed
Notes and 6.07% Class B Asset Backed Notes (collectively, the "Notes")
pursuant to the Indenture, dated as of August 1, 1998 (as amended,
supplemented or otherwise modified and in effect from time to time, the
"Indenture"), between the Issuer and the Indenture Trustee (capitalized
terms used and not otherwise defined herein shall have the meanings
assigned to such terms in, or incorporated by reference into, 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 August 1, 1998 (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, Inc., as seller (the "Seller"), (ii) a Letter of
Representations dated August 20, 1998 (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
"Owners");
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) the duty to cause the Note Register to be kept and to give
the Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note
Register (Section 2.5);
(B) the notification of Noteholders of the final principal
payment on their Notes (Section 2.8(e));
(C) reserved;
(D) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes and delivery of
the same to the Indenture Trustee (Section 2.2);
(E) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release
of collateral (Section 2.10);
(F) the maintenance of an office in the Borough of Manhattan,
City of New York, for registration of transfer or exchange of Notes
(Section 3.2);
(G) the duty to cause 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);
(H) the direction to the Indenture Trustee to deposit monies
with Paying Agents, if any, other than the Indenture Trustee (Section
3.3);
(I) the obtaining and preservation of 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);
(J) the preparation of all supplements and amendments to the
Indenture and all financing statements, continuation statements,
instruments of further assurance and other instruments and the taking
of such other action as is necessary or advisable to protect the Trust
Estate (Section 3.5);
(K) the delivery of the Opinion of Counsel on the Closing Date
and the annual delivery of Opinions of Counsel as to the Trust Estate,
and the annual delivery of the Officer's Certificate and certain other
statements as to compliance with the Indenture (Sections 3.6 and 3.9);
(L) the identification to the Indenture Trustee in an Officer's
Certificate of a Person with whom the Issuer has contracted to perform
its duties under the Indenture (Section 3.7(b));
(M) the notification of the Indenture Trustee and the Rating
Agencies of a Servicer Default under the Sale and Servicing Agreement
and, if such Servicer Default arises from the failure of the Servicer
to perform any of its duties under the Sale and Servicing Agreement
with respect to the Receivables, the taking of all reasonable steps
available to remedy such failure (Section 3.7(d));
(N) the duty to cause the Servicer to comply with Sections 3.7,
3.9, 3.10, 3.11, 3.12, 3.13, 3.14, and 4.9 and Article VII of the Sale
and Servicing Agreement (Section 3.14);
(O) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its properties or assets
(Section 3.10(b));
(P) the delivery of 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 the Company under the
Purchase Agreement (Section 3.19);
(Q) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officer's Certificate and the obtaining of the Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.1);
(R) the compliance with any written directive 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) the preparation and delivery of notice to Noteholders of the
removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee (Section 6.8);
(T) the preparation of 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 (Sections
6.8 and 6.10);
(U) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee
is not the Note Registrar (Section 7.1);
(V) the preparation and, after execution by the Issuer, the
filing with the Securities and Exchange Commission, (the
"Commission") any applicable state agencies and the Indenture Trustee
of 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
the transmission of such summaries, as necessary, to the Noteholders
(Section 7.3);
(W) the opening of one or more accounts in the Issuer's name,
the preparation and delivery of 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, the
Reserve Account, the Supplemental Reserve Account and the Yield
Supplement Account (Sections 8.2 and 8.3);
(X) the preparation of an Issuer Request and Officer's
Certificate and the obtaining of an Opinion of Counsel and Independent
Certificates, if necessary, for the release of the Trust Estate
(Sections 8.4 and 8.5);
(Y) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders of notices with respect
to such supplemental indentures (Sections 9.1, 9.2 and 9.3);
(Z) the execution and delivery of new Notes conforming to any
supplemental indenture (Section 9.6);
(A2) the duty to notify Noteholders of redemption of the Notes or
to cause the Indenture Trustee to provide such notification (Section
10.2);
(B2) the preparation and delivery of all Officer's Certificates,
Opinions of Counsel and 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) the preparation and delivery of Officer's Certificates and
the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section 11.1(b));
(D2) the notification of 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) the preparation and delivery to Noteholders and the
Indenture Trustee of any agreements with respect to alternate payment
and notice provisions (Section 11.6);
(F2) the recording of the Indenture, if applicable (Section
11.15); and
(G2) the preparation of 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(a), (b), (c) or (d) 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 the obtainment and maintenance of any licenses required to be
obtained or maintained by the Trust 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 its obtainment and maintenance of 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 Trust's payments (or allocations of income) to an Owner
as contemplated in Section 5.2(d) 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 performance of the duties of the Trust 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
Owners.
(iv) The Administrator will provide prior to January 15, 1998, a
certificate of an Authorized 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
and the Company 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 of follows:
(a) if to the Issuer or the Owner Trustee, to:
MMCA Auto Owner Trust 1998-1
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 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 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 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. 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 other capacity.
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. Nonpetition Covenants. (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, 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.
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 1998-1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By: /s/ Emmet R. Harmon
---------------------------------------
Name: Emmet R. Harmon
Title: Vice President
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
not in its individual capacity but solely
as Indenture Trustee
By: /s/ Donna Marie White
---------------------------------------
Name: Donna Marie White
Title: Trust Officer
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.,
as Administrator
By: /s/ Hiroshi Yajima
---------------------------------------
Name: Hiroshi Yajima
Title: President
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 1998-1 (the
"Trust"), does hereby make, constitute and appoint Mitsubishi Motors Credit
of America, Inc., as administrator under the Administration Agreement dated
as of August 1, 1998 (the "Administration Agreement"), among the Trust,
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 Trust all such documents, reports,
filings, instruments, certificates and opinions as it should be the duty of
the Owner Trustee or the Trust to prepare, file or deliver pursuant to the
Related Agreements, or pursuant to Section 5.5(a), (b), (c) or (d) of the
Trust Agreement, including, without limitation, to appear for and represent
the Owner Trustee and the Trust in connection with the preparation, filing
and audit of federal, state and local tax returns pertaining to the Trust,
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 August, 1998.
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 August, 1998.
---------------------------------
Notary Public - State of Delaware
Exhibit No. 10.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT, dated as of August 1, 1998 (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, INC., a Delaware corporation (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- and medium-duty trucks from motor
vehicle dealers.
WHEREAS, the Seller and the Purchaser wish to set forth the terms
pursuant to which the Receivables (as hereinafter defined) are to be sold
by the Seller to the Purchaser, which Receivables will be transferred by
the Purchaser, pursuant to the Sale and Servicing Agreement (as hereinafter
defined) to the MMCA Auto Owner Trust 1998-1 to be created pursuant to the
Trust Agreement (as hereinafter defined), which Trust will issue notes
secured by a portion of such Receivables and certain other property of the
Trust, pursuant to the Indenture (as hereinafter defined), and certificates
representing interests in certain property of the Trust, 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 recitals
hereto.
"Assignment" shall mean the document of assignment attached to
this Agreement as Exhibit A.
"Closing" shall have the meaning specified in Section 2.2.
"Closing Date" shall mean August 20, 1998.
"Cutoff Date" shall mean August 1, 1998.
"Indenture" shall mean the Indenture, dated as of August 1, 1998,
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.
"Prospectus" shall have the meaning assigned to such term in the
Underwriting Agreement.
"Purchaser" shall mean MMCA Auto Receivables, Inc., a Delaware
corporation, and its successors and assigns.
"Receivable" shall mean, for the purposes of this Agreement, each
retail installment sale contract for a Financed Vehicle described in the
Schedule of Receivables and all rights and obligations thereunder which
appears on Exhibit B hereto and any amendments, modifications or
supplements to such retail installment sales contract.
"Receivables Purchase Price" shall mean $927,719,167.00.
"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 August 1, 1998, 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 Receivables" shall mean the list of Receivables
annexed hereto as Exhibit B.
"Seller" shall mean Mitsubishi Motors Credit of America, Inc., a
Delaware corporation, and its successors and assigns.
"Trust" shall mean the MMCA Auto Owner Trust 1998-1 created by
the Trust Agreement.
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of August 1, 1998, between the Purchaser, as depositor,
and Wilmington Trust Company, as Owner Trustee, as the same may be from
time to time amended, supplemented or otherwise modified and in effect.
"Underwriting Agreement" shall mean the Underwriting Agreement by
and between Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
representative of the several underwriters, and the Purchaser, dated August
13, 1998.
"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.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.1. Purchase and Sale of Receivables.
On the Closing 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 and the other property
relating thereto (as described below).
(a) Sale of 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 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 Receivables; (ii) with respect
to Actuarial Receivables, monies due thereunder on or after the Cutoff Date
(including Payaheads) and, with respect to Simple Interest Receivables,
monies due or received thereunder on or after the Cutoff Date; (iii) the
security interests in the Financed Vehicles granted by Obligors pursuant to
the Receivables and any other interest of the Seller in the Financed
Vehicles; (iv) 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) 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) all payments and proceeds with
respect to the 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 Final Payment Receivable), guarantees and other
collateral securing a Receivable (other than a Receivable repurchased by
the Servicer or purchased by the Seller); (ix) rebates of premiums and
other amounts relating to insurance policies and other items financed under
the Receivables in effect as of the Cutoff Date; and (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.
(b) Receivables Purchase Price. In consideration for the
Receivables, the other property described in Section 2.1(a) and delivery of
the Yield Supplement Agreement, the Purchaser shall, on the Closing Date,
pay to the Seller the Receivables Purchase Price. An amount equal to
$762,237,496.84 of the Receivables Purchase Price shall be paid to the
Seller in cash. The remainder of the Receivables Purchase Price shall be
paid by crediting the Seller with a contribution to the capital of the
Purchaser. The portion of the Receivables Purchase Price to be paid in
cash shall be by federal wire transfer (same day) funds.
SECTION 2.2. 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
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
Receivables, the Yield Supplement Agreement and certain other property
described in Section 2.1(a) 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 and as of the Closing Date:
(a) Organization, etc. The Purchaser 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 had at all
relevant times, and has, the power, authority and legal right to acquire
and own the Receivables, and has full corporate 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 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 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, the certificate of incorporation or bylaws of the Purchaser, 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 do not (i) assert
the invalidity of this Agreement, (ii) seek to prevent the consummation of
any of the transactions contemplated by this Agreement and (iii) seek any
determinations or ruling that might materially and adversely affect the
performance by the Purchaser of its obligations under, or the validity and
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 and as of the Closing 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 and has duly authorized
such sale and assignment to the Purchaser by all necessary corporate
action. This Agreement has been duly authorized, executed and
delivered by the Seller and 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
and (iii) seek any determinations or ruling that might materially and
adversely affect the performance by the Seller of its obligations
under, or the validity and 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
execution and delivery of this Agreement, 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 (x) originated 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) originated by the
Seller in connection with the refinancing by the Seller of a motor
vehicle retail installment sales 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, (g) is a retail installment sales contract, (h) is
secured by a new or used automobile or light- or medium-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 Schedule of Receivables shall be true and correct in all
material respects as of the opening of business on the Cutoff Date,
and no selection procedures believed to be adverse to the Noteholders
or the Certificateholders shall have been utilized in selecting the
Receivables from those receivables which meet the criteria contained
herein. The compact disk or other listing regarding the Receivables
made available to the 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 at the execution of this
Agreement, 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 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 the 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 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
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 would constitute a default, breach,
violation, or event permitting acceleration under the terms of any
Receivable shall have arisen; the Seller shall not have waived any of
the foregoing; and no Financed Vehicle shall have been repossessed as
of the Cutoff Date.
(xii) Insurance. 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
the transfer and assignment of the Receivables herein contemplated
constitute a sale of the Receivables from the Seller to the Purchaser
and that the beneficial interest in and title to the 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
the transfer and assignment of the Receivables herein contemplated,
the Seller had good and marketable title to each Receivable 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 each Receivable, 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.
(xvi) Chattel Paper. Each Receivable constitutes
"chattel paper" as defined in the Relevant UCC.
(xvii) One Original. There shall be only one original
executed copy of each Receivable in existence.
(xviii) Principal Balance. Each Receivable had an
original principal balance (net of unearned precomputed finance
charges) of not more than $60,000, and a remaining Principal Balance
as of the Cutoff Date of not less than $100.
(xix) No Bankrupt Obligors. None of the Receivables
shall be due from any Obligor who, as of the Cutoff Date, was the
subject of a proceeding under the Bankruptcy Code of the United States
or was bankrupt.
(xx) New and Used Vehicles. Approximately 93.29% of
the Pool Balance of the Receivables, constituting approximately 88.51%
of the total number of the Receivables, as of the Cutoff Date, relate
to new automobiles and light- or medium-duty trucks financed at new
vehicle rates. Approximately 6.71% of the Pool Balance of the
Receivables, constituting approximately 11.49% of the total number
of Receivables, as of the Cutoff Date, relate to used automobiles
and light- or medium-duty trucks. Of the new and used vehicles,
approximately 2.26% of the Pool Balance of the Receivables,
constituting approximately 3.16% of the total number of the
Receivables, as of the Cutoff Date, relate to program automobiles
and light-duty trucks manufactured in the current and immediately
preceding model years which are financed at new vehicle rates. Of
the used vehicles, approximately 3.38% of the Pool Balance of the
Receivables, constituting approximately 6.75% of the total number
of Receivables as of the Cutoff Date, relate to refinanced program
automobiles and light- or medium-duty trucks manufactured in prior
model years which are financed at the original rates set forth in
the related Contracts or at used vehicle rates.
(xxi) Origination. Each Receivable shall have an
origination during or after April 1994.
(xxii) Maturity of Receivables. Each Receivable shall
have a remaining maturity, as of the Cutoff Date, of not more than
sixty (60) months, and an original maturity of not more than sixty
(60) months.
(xxiii) Annual Percentage Rate. Each Receivable shall
have an APR of at least 0% and not more than 30%.
(xxiv) Scheduled Payments. Each Receivable shall have
a first Scheduled Payment due on or prior to August 31, 1998 and no
Receivable shall have a payment of which more than 10% of such payment
is more than 30 days overdue as of the Cutoff Date.
(xxv) Location of Receivable Files. The Receivable
Files shall be kept at one or more of the locations listed in Schedule
A hereto.
(xxvi) 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.
(xxvii) No Receivables Originated in Alabama. No
Receivable shall have been originated in Alabama.
(xxviii) Other Data. The tabular data and the
numerical data relating to the characteristics of the Receivables
contained in the Prospectus and is true and correct in all material
respects.
ARTICLE IV
CONDITIONS
SECTION 4.1. Conditions to Obligation of the Purchaser. The
obligation of the Purchaser to purchase the Receivables is subject to the
satisfaction of the following conditions:
(a) 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.
(b) Computer Files Marked. The Seller shall, at its own
expense, on or prior to the Closing Date, indicate in its computer files
that the Receivables have been sold to the Purchaser pursuant to this
Agreement and deliver to the Purchaser the Schedule of Receivables
certified by an officer of the Seller to be true, correct and complete.
(c) Documents to be delivered by the Seller at the Closing.
(i) The Assignment. At the Closing, the Seller will
execute and deliver the Assignment in substantially the form of
Exhibit A hereto.
(ii) The Yield Supplement Agreement. At the Closing,
the Seller will execute and deliver the Yield Supplement Agreement.
The Yield Supplement Agreement shall be substantially in the form of
Exhibit D to the Sale and Servicing Agreement.
(iii) 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 Receivables and the other property conveyed hereunder
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 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.
(iv) Other Documents. Such other documents as the
Purchaser may reasonably request.
(d) 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.
SECTION 4.2. Conditions to Obligation of the Seller. The
obligation of the Seller to sell the Receivables to the Purchaser 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 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.
(b) Receivables Purchase Price. At the Closing Date, the
Purchaser shall deliver to the Seller the Receivables Purchase Price, as
provided in Section 2.1(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- or medium-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. Seller Officer's Certificates. The Seller
covenants to fulfill each covenant made by it in the Seller Officer's
Certificates.
SECTION 5.4. 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 5.5. 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 5.6. Sale. 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.
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 Receivables to the Trust 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 Receivables set forth as Exhibit B hereto and will compare those
characteristics to the information with respect to the 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 caption
"Delinquency and Loss Experience" 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
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 or telex and addressed or delivered to it at its address (or in
case of telex, at its telex number at such 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,
facsimile, or telex, shall be deemed given when mailed, electronic
confirmation of the telecopy or facsimile is received, or when the notice
is transmitted by telex.
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 the 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: /s/ Hiroshi Yajima
---------------------------------------
Name: Hiroshi Yajima
Title: President
MMCA AUTO RECEIVABLES, INC.,
as Purchaser
By: /s/ Hideyuki Kitamura
--------------------------------------
Name: Hideyuki Kitamura
Title: Treasurer
EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement
dated as of August 1, 1998, between the undersigned and MMCA AUTO
RECEIVABLES, INC. (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 Receivables; (ii) with respect to Actuarial Receivables, monies due
thereunder on or after the Cutoff Date (including Payaheads) and, with
respect to Simple Interest Receivables, monies due or received thereunder
on or after the Cutoff Date; (iii) the security interests in the Financed
Vehicles granted by Obligors pursuant to the Receivables and any other
interest of the Seller in the Financed Vehicles; (iv) 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) all payments and proceeds with respect to the 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 Final Payment
Receivable), guarantees and other collateral securing a Receivable (other
than a Receivable repurchased by the Servicer or purchased by the Seller);
(ix) rebates of premiums and other amounts relating to insurance policies
and other items financed under the Receivables in effect as of the Cutoff
Date; and (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 Receivables, Receivable Files, any insurance policies or any
agreement or instrument relating to any of them.
This 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.
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 Assignment to
be duly executed as of August 1, 1998.
MITSUBISHI MOTORS CREDIT OF AMERICA, INC.
By: _____________________________________
Name: Hiroshi Yajima
Title: President
EXHIBIT B
[SCHEDULE OF RECEIVABLES]
Delivered to Indenture Trustee at Closing
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
North Central Region
--------------------
1101 Perimeter Drive, Suite 650
Schaumburg, IL 60173
Northeastern Region
-------------------
2700 Westchester Avenue, Suite 400
Purchase, NY 10577-0600
Southeastern Region
-------------------
1211 Semoran Boulevard, Suite 149
Casselberry, FL 32707
Southwestern Region
-------------------
690 East Lamar Boulevard, Suite 350
Arlington, TX 76011
Western Region
--------------
10855 Business Center Drive, Suite B
Cypress, CA 90630
Exhibit No. 10.2
August 20, 1998
MMCA Auto Receivables, Inc.
6363 Katella Avenue
Cypress, California 90630-5205
`
Re: MMCA Auto Owner Trust 1998-1
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 August 1, 1998 (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, Inc., 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 1998-1 (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, Inc.
6363 Katella Avenue
Cypress, California 90630-5205
Attention: Secretary/Treasurer
Telephone: (714) 236-1592
Telecopy: (714) 236-1300
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: /s/ Hiroshi Yajima
---------------------------------------
Name: Hiroshi Yajima
Title: President
Agreed and accepted as of
the date first above written:
MMCA AUTO RECEIVABLES, INC.,
as Purchaser
By: /s/ Hideyuki Kitamura
-------------------------
Name: Hideyuki Kitamura
Title: Treasurer
