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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
December 10, 1998
---------------------------------
(Date of earliest event reported)
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
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(Daimler-Benz Vehicle Receivables Corporation - Originator)
(Exact name of Registrant as specified in its charter)
Delaware 333-64671 13-3770955
- -------------- --------------------- -------------------
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
1201 North Market Street, Suite 1406, Wilmington Delaware 19801
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(Address of principal executive offices, including zip code)
302-426-1900
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(Registrant's telephone number, including area code)
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Item 5. Other Events
In connection with the issuance by Daimler-Benz Vehicle Owner
Trust 1998-A (the "Trust") of Asset Backed Notes pursuant to the Prospectus
dated December 3, 1998 filed with the Securities and Exchange Commission
pursuant to its Rule 424(b)(4), Daimler Benz Vehicle Receivables Corporation
("DBVRC") is filing the exhibits listed below to this Current Report on Form 8-K
which are incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
EXHIBITS
Designation Description Method of Filing
- ----------- ----------- ----------------
Exhibit 1.1 Conformed copy of Filed with this
the Note Underwriting Agreement report
Exhibit 4.1 Conformed copy of Filed with this
the Amended and report
Restated Trust
Agreement dated as
of November 1, 1998
between DBVRC and
Chase Manhattan Bank
(Delaware)
Exhibit 4.2 Conformed copy of Filed with this
the Sale and Servicing report
Agreement dated
as of November 1,
1998 among DBVRC,
Mercedes-Benz Credit
Corporation ("MBCC")
and the Trust
Exhibit 4.3 Conformed copy of Filed with this
the Indenture dated report
as of November 1,
1998 between the
Trust and Citibank,
N.A.
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Exhibit 4.4 Conformed copy of Filed with this
the Administration report
Agreement dated as
of November 1, 1998
among the Trust,
MBCC and Citibank,
N.A.
Exhibit 10.1 Conformed copy of Filed with this
the Purchase Agreement report
dated as of
November 1, 1998
between MBCC and
DBVRC
Exhibit 25 Conformed copy of Filed with this
Form T-1 Statement report
of Eligibility under
the Trust Indenture
Act of 1939 of
Citibank, N.A.
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SIGNATURE
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 thereunto duly authorized.
Daimler-Benz Vehicle Owner Trust 1998-A
Date: December 23, 1998 By: Mercedes-Benz Credit Corporation
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(Servicer)
By: /s/ David A. Klanica
-----------------------------------
Name: David A. Klanica
Title: Director of Accounting Services,
Authorized Officer
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EXHIBIT INDEX
Designation Description
- ----------- -----------
Exhibit 1.1 Conformed copy of the Note Underwriting
Agreement
Exhibit 4.1 Conformed copy of the Amended and Restated
Trust Agreement dated as of November 1, 1998
between DBVRC and Chase Manhattan Bank (Dela
ware)
Exhibit 4.2 Conformed copy of the Sale and Servicing
Agreement dated as of November 1, 1998 among
DBVRC, Mercedes-Benz Credit Corporation
("MBCC") and the Trust
Exhibit 4.3 Conformed copy of the Indenture dated as of
November 1, 1998 between the Trust and
Citibank, N.A.
Exhibit 4.4 Conformed copy of the Administration Agree
ment dated as of November 1, 1998 among the
Trust, MBCC and Citibank, N.A.
Exhibit 10.1 Conformed copy of the Purchase Agreement
dated as of November 1, 1998 between MBCC and
DBVRC
Exhibit 25 Conformed copy of Form T-1 Statement of Eli
gibility under the Trust Indenture Act of
1939 of Citibank, N.A.
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Exhibit 1.1
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
5.27125% CLASS A-1 ASSET BACKED NOTES
5.23% CLASS A-2 ASSET BACKED NOTES
5.16% CLASS A-3 ASSET BACKED NOTES
5.22% CLASS A-4 ASSET BACKED NOTES
DAIMLER-BENZ VEHICLE RECEIVABLES CORPORATION
(Company)
MERCEDES-BENZ CREDIT CORPORATION
(Servicer)
December 3, 1998
NOTE UNDERWRITING AGREEMENT
Chase Securities Inc., and
Salomon Smith Barney Inc.,
as Representatives of the
Several Underwriters named
in Schedule I hereto (the "Representatives")
c/o Chase Securities Inc.
270 Park Avenue, 7th Floor
New York, New York 10017-2070
Ladies and Gentlemen:
Daimler-Benz Vehicle Receivables Corporation, a Delaware
corporation (the "Company" or the "Seller"), proposes to sell to the several
Underwriters named in Schedule I hereto (the "Underwriters") $360,000,000
aggregate principal amount of 5.27125% Class A-1 Asset Backed Notes (the "Class
A-1 Notes"), $508,000,000 aggregate principal amount of 5.23% Class A-2 Asset
Backed Notes (the "Class A-2 Notes"), $440,000,000 aggregate principal amount of
5.16% Class A-3 Asset Backed Notes (the "Class A-3 Notes") and $241,800,000
aggregate principal amount of 5.22% Class A-4 Asset Backed Notes (the "Class
A-4 Notes" and, together with the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, the "Notes") to be issued by Daimler-Benz Vehicle Owner Trust
1998-A (the "Trust"). Each Note will be secured by the Receivables (as
hereinafter defined) and certain other property
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of the Trust. The Notes will be issued in an aggregate principal amount of
$1,549,800,000, which is equal to approximately 95% of the aggregate principal
balance of the Receivables as of the Cutoff Date.
The Notes will be issued pursuant to the Indenture to be dated as
of November 1, 1998 (the "Indenture") by and between the Trust and Citibank,
N.A., as indenture trustee (the "Indenture Trustee"). Simultaneously with the
issuance and sale of the Notes, the Trust will issue $81,654,551.40 principal
balance of 5.62% Class B Asset Backed Certificates (the "Certificates"),
payments in respect of which are, to the extent specified in (i) the Indenture,
(ii) the Sale and Servicing Agreement to be dated as of November 1, 1998 (the
"Sale and Servicing Agreement") among the Trust, the Seller and Mercedes-Benz
Credit Corporation, as servicer (the "Servicer"), and (iii) the Trust Agreement
(as hereinafter defined), subordinated to the rights of the holders of the
Notes. The Certificates will be issued pursuant to the Amended and Restated
Trust Agreement (the "Trust Agreement") to be dated as of November 1, 1998, by
and between the Seller, as depositor, and Chase Manhattan Bank Delaware, as
owner trustee (the "Owner Trustee"). The Certificates will evidence an undivided
ownership interest of approximately 5% in the Trust, payments in respect of
which are, to the extent specified in the Sale and Servicing Agreement,
subordinated to the rights of the holders of the Notes.
The assets of the Trust include, among other things, a pool of
retail installment contracts for and retail loans evidenced by notes secured by
new and used automobiles and new and used medium- and heavy-duty trucks and
tractors (the "Receivables") and certain monies due thereunder on or after
November 1, 1998 (the "Cutoff Date"), such Receivables to be sold to the Trust
by the Company and to be serviced for the Trust by the Servicer.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
of the Commission thereunder (the "Rules and Regulations"), a registration
statement, including a prospectus, relating to the Notes. Any preliminary
prospectus
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included in such registration statement or filed with the Commission
pursuant to Rule 424(a) of the Rules and Regulations is referred to in this
Agreement as the "Preliminary Prospectus." The registration statement as amended
at the time when it shall become effective, or, if a post-effective amendment is
filed with respect thereto, as amended by such post-effective amendment at the
time of its effectiveness, including in each case information (if any) deemed to
be part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Act, is referred to in this Agreement as the "Registration
Statement," and the prospectus in the form used to confirm sales of Notes is
referred to in this Agreement as the "Prospectus."
The terms which follow, when used in this Agreement, shall have
the meanings indicated. "Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Rule 424" and
"Rule 430A" refer to such rules under the Act. To the extent not defined herein,
capitalized terms used herein have the meanings assigned to such terms in the
Sale and Servicing Agreement.
The Company agrees with the Underwriters as follows:
1. The Company agrees to sell and deliver the Notes to the
several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees to purchase, severally and not
jointly, from the Company the respective principal amount of Notes set forth
opposite such Underwriter's name in Schedule I hereto. The Class A-1 Notes are
to be purchased at the purchase price of 100.0000000% of the aggregate principal
amount thereof, the Class A-2 Notes are to be purchased at the purchase price of
99.9910190% of the aggregate principal amount thereof, the Class A-3 Notes are
to be purchased at the purchase price of 99.9886984% of the aggregate principal
amount thereof and the Class A-4 Notes are to be purchased at the purchase price
of 99.9897320% of the aggregate principal amount thereof.
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2. The Company understands that the Underwriters intend (a) to
make a public offering of their respective portions of the Notes as soon after
the Registration Statement and this Agreement have become effective as in the
judgment of the Representatives is advisable and (b) initially to offer the
Notes upon the terms set forth in the Prospectus.
3. Payment for Notes shall be made to the Company or to its order
by wire transfer of same day funds at the office of Skadden, Arps, Slate,
Meagher & Flom LLP, 919 Third Avenue, New York, New York 10022 at 9:00 A.M., New
York City time, on December 10, 1998 (the "Closing Date"), or at such other time
on the same or such other date, not later than the fifth Business Day
thereafter, as the Representatives and the Company may agree upon in writing. As
used herein, the term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York City.
Payment for the Notes shall be made against delivery to the
Representatives for the respective accounts of the several Underwriters of the
Notes registered in the name of Cede & Co. as nominee of The Depository Trust
Company and in such denominations, as permitted by the Sale and Servicing
Agreement, as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Notes duly paid by the
Company. The certificates for the Notes will be made available for inspection
and packaging by the Representatives at the office of Skadden, Arps, Slate,
Meagher & Flom LLP, 919 Third Avenue, New York, New York 10022 not later than
1:00 P.M., New York City time, on the Business Day prior to the Closing Date.
4. The Company represents and warrants to and
agrees with each Underwriter that:
(a) The Registration Statement on Form
S-1 (no. 333-64671), including the Prospectus and such amendments thereto as may
have been required on or prior to the date hereof, relating to the Notes, has
been filed with the Commission and such Registration Statement as amended has
become effective. With respect to the Regis-
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tration Statement, the conditions to the use of a registration statement on
Form S-1 under the Act, as set forth in the General Instructions to Form S-1,
have been satisfied by the Company;
(b) No stop order suspending the effectiveness of
the Registration Statement has been issued and no proceeding for that purpose
has been instituted or, to the knowledge of the Company, threatened by the
Commission, and on the Effective Date of the Registration Statement, the
Registration Statement and the Prospectus conformed in all respects to the
requirements of the Act and 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, on the Closing Date, the Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents will 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; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished to
the Company in writing by any Underwriter through the Representatives expressly
for use therein;
(c) The computer tape with respect to the
Receivables to be sold to the Trust created as of the Cutoff Date (the "Computer
Tape"), and made available to the Representatives by the Company, was complete
and accurate in all material respects as of the date thereof;
(d) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company;
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(e) The Notes have been duly authorized,
and, when issued and delivered pursuant to the Indenture, duly authenticated by
the Indenture Trustee and paid for by the Underwriters in accordance with the
terms of this Agreement, will be duly and validly issued, authenticated and
delivered and entitled to the benefits provided by the Indenture; each of the
Sale and Servicing Agreement, the Trust Agreement, the Purchase Agreement and
this Agreement have been duly authorized by the Company and, when executed and
delivered by the Company and the other parties thereto (in the case of the Sale
and Servicing Agreement, the Trust Agreement and the Purchase Agreement), each
of the Sale and Servicing Agreement, the Trust Agreement, the Purchase Agreement
and this Agreement will constitute a valid and binding agreement of the
Company; and the Notes, the Indenture, the Sale and Servicing Agreement, the
Trust Agreement and the Purchase Agreement will conform to the descriptions
thereof in the Prospectus in all material respects;
(f) No consent, approval, authorization
or order of, or filing with, any court or governmental agency or body is
required to be obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement, the Sale and Servicing Agreement,
the Trust Agreement or the Purchase Agreement except such as have been obtained
and made under the Act, such as may be required under state securities laws and
the filing of any financing statements required to perfect the Trust's interest
in the Receivables;
(g) The Company is not in violation of its
Certificate of Incorporation or By-laws 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
is bound which would have a material adverse effect on the transactions
contemplated herein or in the Sale and Servicing Agreement, the Trust Agreement
and the Purchase Agreement. The execution, delivery and performance of this
Agreement, the Sale and Servicing Agreement, the Trust Agreement and the
Purchase Agreement and the issuance and sale of the Notes and compliance with
the terms and provisions hereof and thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any stat-
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ute, rule, regulation or order of any governmental agency or body or any court
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 is subject, or the Certificate
of Incorporation or By-laws of the Company; and the Company has full power and
authority to authorize and sell, and establish, the Trust that will issue the
Notes as contemplated by this Agreement and to enter into this Agreement, the
Sale and Servicing Agreement, the Trust Agreement and the Purchase Agreement and
consummate the transactions contemplated hereby and thereby;
(h) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company is or may be a party
or to which any property of the Company is or may be the subject that, if
determined adversely to the Company, could individually or in the aggregate
reasonably be expected to have a material adverse effect on the general
affairs, business, prospects, management, financial position, stockholders'
equity or results of operations of the Company or that would reasonably be
expected to materially adversely affect the interests of the holders of the
Notes; and there are no contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be described
in the Registration Statement or the Prospectus which are not filed or described
as required; and
(i) By assignment and delivery of each of
the Receivables to the Trust as of the Closing Date, the Company will transfer
all of its right, title and interest in, to and under the Receivables to the
Trust, subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
5. The Company covenants and agrees with the
several Underwriters that:
(a) Prior to the termination of the
offering of the Notes, the Company will not file or cause to be filed any
amendment of the Registration Statement or supplement to the Prospectus which
shall be reasonably disapproved of promptly by the Representatives after
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reasonable notice thereof. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Prospectus is otherwise required under Rule 424(b), the Company
will cause the Prospectus, properly completed, and any supplement thereto, to be
filed with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory to the
Underwriters of such timely filing. The Company will promptly advise the
Underwriters (i) when the Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when,
prior to termination of the offering of the Notes, any amendment to the
Registration Statement shall have become effective, (iii) of any request by the
Commission for any amendment of the Registration Statement or supplement to the
Prospectus or for any additional information, (iv) of the receipt by the Company
of notification with respect to the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by the
Company of notification with respect to the suspension of the qualification of
the Notes for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its reasonable best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof;
(b) The Company will deliver, at its expense, to the
Representatives, two signed copies of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits, and to each
other Underwriter a conformed copy of the Registration Statement and each
amendment thereto, in each case without exhibits, and, during the period
mentioned in paragraph (e) below, to each of the Underwriters as many copies of
the Prospectus (including all amendments and supplements thereto) as the
Representatives may reasonably request. The Company will furnish or cause to be
furnished to the Representatives copies of all reports on Form SR required by
Rule 463 under the Act;
(c) If (i) during such period of time
after the first date of the public offering of the Notes as in the opinion of
counsel for the Underwriters a
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Prospectus relating to the Notes is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or (ii) it is necessary to amend or supplement
the Prospectus to comply with the applicable law, then the Company will
forthwith prepare and furnish, at the expense of the Company, to the
Underwriters and to the dealers (whose names and addresses the Representatives
will furnish to the Company) to which Notes may have been sold by the
Representatives on behalf of the Underwriters and upon request by the
Representatives to any other dealers identified by the Representatives, such
amendments or supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances under which they were made, be misleading or so that
the Prospectus will comply with the law;
(d) The Company will endeavor to qualify
the Notes for offer and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Representatives shall reasonably request and will continue
such qualification in effect so long as reasonably required for distribution of
the Notes and will pay all fees and expenses (including fees and disbursements
of counsel to the Underwriters) reasonably incurred in connection with such
qualification and in connection with the determination of the eligibility of
the Notes for investment under the laws of such jurisdictions as the
Representatives may designate; provided, however, that the Company shall not be
obligated to qualify to do business in any jurisdiction in which it is not
currently so qualified; and provided further that the Company shall not be
required to file a general consent to service of process in any jurisdiction;
(e) On or before March 31, 2000, the
Company will cause the Trust to make generally available to Noteholders and to
the Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of the
Trust occurring after the Effective Date of the Registration Statement, which
shall satisfy the
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provisions of Section 11(a) of the Act and Rule 158 of the Commission
promulgated thereunder;
(f) For the period from the date of this
Agreement until the retirement of the Notes the Servicer will furnish to the
Representatives (x) copies of each certificate and the annual statements of
compliance delivered to the Owner Trustee and the Indenture Trustee
pursuant to Section 3.10 of the Sale and Servicing Agreement and the annual
independent certified public accountant's servicing reports furnished to the
Owner Trustee and 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 Owner Trustee and the Indenture
Trustee and (y) copies of each amendment to the Sale and Servicing Agreement,
and on each Determination Date or as soon thereafter as practicable, the
Servicer shall give notice substantially in the form of Schedule II hereto by
telex or telecopy to the Representatives of the Pool Factor as of the related
Record Date;
(g) During the period beginning on the date hereof
and continuing to and including the Business Day following the Closing Date, the
Company will not offer, sell, contract to sell or otherwise dispose of any
securities of or guaranteed by the Company which are sub- stantially similar to
the Notes without the prior written consent of the Representatives;
(h) The Company will register the Notes pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act") on or prior
to December 1, 1998;
(i) To the extent, if any, that the rating provided
with respect to the Notes by the rating agency or rating agencies rating the
Notes (the "Rating Agency") is conditional upon the furnishing of documents or
the taking of any other action by the Company agreed upon on or prior to the
Closing Date, the Company shall use its reasonable best efforts to furnish such
documents and take any such other action; and
(j) So long as any of the Notes are outstanding, the
Company will furnish to the Representatives by first class mail (i) as soon as
practical after the end of the Company's fiscal year, copies of all docu-
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ments, records and financial statements required to be distributed to
Noteholders (including "Note Owners", as such term is defined in the Indenture)
or filed with the Commission pursuant to the Exchange Act, or any order of the
Commission thereunder and (ii) from time to time, any other information
concerning the Company filed with any government or regulatory authority or
national securities exchange which is otherwise publicly available, as the
Representatives may reasonably request.
6. The Company will pay all costs and expenses incident to the
performance of its obligations under this Agreement, including, without limiting
the generality of the foregoing, all costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the Notes, (ii)
incident to the preparation, printing and filing under the Act of the
Registration Statement, the Prospectus and any preliminary prospectus (including
in each case all exhibits, amendments and supplements thereto), (iii) incurred
in connection with the registration or qualification and determination of
eligibility for investment of the Notes under the laws of such jurisdictions as
the Underwriters may designate (including fees and disbursements of counsel for
the Underwriters with respect thereto), (iv) related to any filing with the
National Association of Securities Dealers, Inc., (v) in connection with the
printing (including word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Sale and Servicing Agreement, the Trust Agreement,
the Purchase Agreement and any Blue Sky Memorandum and the furnishing to Under-
writers and dealers of copies of the Registration Statement and the Prospectus
as herein provided, (vi) the fees and disbursements of the Company's counsel and
accountants and the Underwriters' counsel fees and disbursements, and (vii) any
fees and expenses payable to the Rating Agencies in connection with the rating
of the Notes. Notwithstanding the foregoing, the Underwriters have agreed to
reimburse the Company for legal fees and expenses of Skadden, Arps, Slate,
Meagher & Flom LLP, not to exceed $300,000, incurred by the Company in
connection with the issuance and distribution of the Notes.
7. The obligations of the several Underwriters to purchase and
pay for the Notes will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the state-
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ments of officers of the Company made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) At the time this Agreement is executed and
delivered by the Company and at the Closing Date, KPMG Peat Marwick shall have
furnished to the Representatives letters dated, respectively, as of the date of
this Agreement and as of the Closing Date substantially in the forms of the
drafts to which the Representatives previously agreed.
(b) The Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the Rules and Regulations and in accordance with
Section 5(a) of this Agreement; no stop order suspending the effectiveness of
the Registration Statement shall be in effect, and no proceedings for such
purpose shall be pending before or, to the knowledge of the Company, threat-
ened by the Commission; and all requests for additional information from the
Commission with respect to the Registration Statement shall have been complied
with to the satisfaction of the Representatives.
(c) The Representatives shall have received an
officer's certificate, dated the Closing Date, signed by the Chairman of the
Board, the President, or any Vice President and by a principal financial or ac-
counting officer of the Company representing and warranting that, as of the
Closing Date, except to the extent that they relate expressly to another date in
which case they will be true and correct as of such date on the Closing Date,
the representations and warranties of the Company in this Agreement are true and
correct, that the Company 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, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or, to the best of their knowledge, are contemplated by the
Commission.
(d) Subsequent to the execution and
delivery of this Agreement, there shall not have occurred (i) any change, or any
development involving a prospec-
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tive change, in or affecting particularly the business or properties of the
Trust, the Company, Daimler-Benz North America Corporation ("DBNA") or the
Servicer which, in the judgment of the Representatives, materially impairs the
investment quality of the Notes or makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Notes or (ii) any
downgrading in the rating of any debt securities of DBNA or any of its direct or
indirect subsidiaries by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or any
public announcement that any such organization has under surveillance or review
its rating of any such debt securities (other than an announcement with
positive implications of a possible upgrading, and no implication of a possible
downgrading, of such rating).
(e) Morgan, Lewis & Bockius LLP, special
counsel to the Company, MBCC, the Servicer and DBNA, shall have furnished to the
Representatives their written opinion, dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation 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.
(ii) MBCC has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and authority to own its prop-
erties and conduct its business as described in the Prospectus.
(iii) DBNA has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and authority to own its prop-
erties and conduct its business as described in the Prospectus, and is
duly qualified to transact business and is in good standing in the
State of New York.
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(iv) This Agreement, the Sale and Servicing
Agreement, the Administration Agreement, the Trust Agreement and the
Purchase Agreement have been duly authorized, executed and delivered
by, and each constitutes a valid and binding obligation of each of the
Company, MBCC and the Servicer, as applicable, enforceable against each
of the Company, MBCC and the Servicer, as applicable, in accordance
with its terms.
(v) The Servicing Guaranty Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and
binding obligation of, DBNA, enforceable against DBNA in accordance
with its terms.
(vi) This Agreement has been duly authorized,
executed and delivered by each of the Company and DBNA.
(vii) Neither the execution, delivery and performance
of this Agreement, the Sale and Servicing Agreement, the Trust
Agreement, the Administration Agreement and the Purchase Agreement by
the Company, MBCC or DBNA, as applicable, nor the execution, delivery
and performance of the Servicing Guaranty Agreement by DBNA, nor the
execution and delivery of the Indenture by the parties thereto will
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
properties or assets of the Company, MBCC or DBNA pursuant to the terms
of the Certificate of Incorporation or the By-Laws of the Company,
MBCC or DBNA, any statute, rule or regulation or, to the best of such
counsel's knowledge, any order of any governmental agency or body or
any court having jurisdiction over the Company, MBCC or DBNA, or any
of their respective properties or any agreement or instrument known to
such counsel to which the Company, MBCC or DBNA, is a party or by which
any of them may be bound or to which any of their properties may be
subject.
(viii) To the best of such counsel's knowledge, no
authorization, approval or consent of
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<PAGE> 15
any court or governmental agency or authority is required by law in
connection with the execution, delivery and performance by the
Company, MBCC, DBNA or the Servicer, as applicable, of this Agreement,
the Sale and Servicing Agreement, the Trust Agreement, the
Administration Agreement or the Purchase Agreement, or the execution,
delivery or performance by DBNA of the Servicing Guaranty Agreement,
and the execution and delivery by the parties thereto of the
Indenture, except such as may be required under the Act or the Rules
and Regulations and state securities laws, and except for such
authorizations, approvals or consents (specified in such opinion) as
are in full force and effect as of the Closing Date.
(ix) The Notes have been duly authorized and, when
executed and authenticated by the Indenture Trustee in accordance with
the Indenture and delivered and paid for pursuant to this Agreement,
will be validly issued and outstanding and entitled to the benefits
provided by the Indenture.
(x) Although they do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (xviii) of this Section 7(e),
they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the
Company prior to the Closing Date (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as
of its date, the Prospectus or any further amendment or supplement
thereto made by the Company or DBNA prior to the Closing Date (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of the Closing Date, either the Registration
15
<PAGE> 16
Statement or the Prospectus or any further amendment or supplement
thereto made by the Company or DBNA prior to the Closing Date (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and they do
not know of any amendment to the Registration Statement required to be
filed or of any contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or required to
be described in the Registration Statement or the Prospectus which
are not filed or described as required.
(xi) Such counsel does not know of any contract or
other document of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which is not filed or described as
required.
(xii) To the best of such counsel's knowledge, there
are no legal or governmental proceedings pending or threatened to
which DBNA is a party or of which any property of DBNA is subject, (A)
that are required to be disclosed in the Registration Statement or
(B)(1) that assert the invalidity of all or part of this Agreement,
the Sale and Servicing Agreement, the Servicing Guaranty Agreement or
the Purchase Agreement, (2) that seek to prevent the issuance of the
Notes, (3) that could materially and adversely affect DBNA's
obligations under this Agreement or the Servicing Guaranty Agreement or
(4) that seek to affect adversely the federal or state income tax
attributes of the Notes.
(xiii) MBCC has full power and authority to sell and
assign the property to be sold and assigned to the Company pursuant to
the Purchase Agreement and has duly authorized such sale and assignment
to the Company by all necessary corporate action.
16
<PAGE> 17
(xiv) The Company has full power and authority to
sell and assign the property to be sold and assigned to and deposited
with the Owner Trustee as part of the Trust pursuant to the Sale and
Servicing Agreement and has duly authorized such sale and assignment to
the Trust by all necessary corporate action.
(xv) Such counsel knows of no claim by or on behalf
of any third party to the effect that, immediately prior to the
transfer of Receivables by MBCC pursuant to the Purchase Agreement, any
person other than MBCC was the sole owner of any right, title or
interest in the Receivables and the other property to be transferred by
it to the Company.
(xvi) To the best of such counsel's knowledge, the
Receivables are "chattel paper" as defined in the UCC.
(xvii) All filings necessary under the Uniform
Commercial Code as in effect in the State of New York (the "UCC") or
the State of Delaware (the "DE-UCC") or the State of Connecticut (the
"CT-UCC") to perfect both the transfer of the Receivables and the
proceeds thereof (within the meaning of Section 9-306 of the UCC or
the DE-UCC or the CT-UCC, whichever may be applicable (the
"Applicable UCC")) by MBCC to the Company pursuant to the Purchase
Agreement and the transfer of the Receivables and the proceeds
thereof (within the meaning of Section 9-306 of the Applicable UCC)
by the Company to the Trust pursuant to the Sale and Servicing
Agreement have been made and, provided that neither MBCC nor the
Company relocates its chief executive office in a state other than
Connecticut or Delaware, respectively, the Indenture Trustee
maintains the list of Receivables for inspection by interested
parties, and no administrative errors are made by state or local
agencies affecting perfection, no other filings (other than the
filing of continuation statements) need be made to maintain the
perfection of the transfer of the Receivables and the proceeds thereof
(within the meaning of Section 9-306 of the Applicable UCC) either to
the Company pursuant to the Purchase Agreement or to the Trust
pursuant to the Sale and Servicing Agreement.
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<PAGE> 18
(xviii) The statements in the Registration Statement
and the Prospectus under the headings "ERISA Considerations,"
"Prospectus Summary -- Legal Investment" and "Certain Legal Aspects of
the Receivables," to the extent they constitute descriptions of
matters of law or legal conclusions with respect thereto, have been
prepared or reviewed by such counsel and are correct in all material
respects.
(xix) The Trust Agreement is not required to be
qualified under the Trust Indenture Act, the Indenture has been duly
qualified under the Trust Indenture Act of 1939, and the Trust is not
required to be registered as an "investment company" under the
Investment Company Act of 1940, as amended.
(xx) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or, to the best of such
counsel's knowledge, threatened by the Commission; the Registration
Statement and the Prospectus and any further amendments and
supplements thereto made by the Company prior to the Closing Date
(other than the financial statements and related schedules therein or
omitted therefrom, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act and the Rules and Regulations.
(xxi) The Notes, this Agreement, the Indenture, the
Sale and Servicing Agreement, the Trust Agreement, the Servicing
Guaranty Agreement, the Administration Agreement and the Purchase
Agreement each conform in all material respects with the descriptions
thereof contained in the Registration Statement and the Prospectus.
Such opinion may be made subject to the
qualifications that the enforceability of the terms of the Indenture, the Sale
and Servicing Agreement, the Trust Agreement, the Purchase Agreement, the
Administration Agreement and the Servicing Guaranty Agreement may be subject to
bankruptcy, insolvency, reorganization,
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<PAGE> 19
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(f) Morgan, Lewis & Bockius LLP shall have furnished
their written opinion, dated the Closing Date, with respect to the
characterization of the transfer of the Receivables by the Servicer to the
Company and from the Company to the Trust and such opinion shall be in
substantially the form previously discussed with the Representatives and their
counsel and in any event satisfactory in form and in substance to the
Representatives and their counsel.
(g) Morgan, Lewis & Bockius LLP, special
tax counsel to the Company, shall have furnished to the Representatives their
written opinion, dated the Closing Date, in form and substance satisfactory to
the Representatives, to the effect that:
(i) The Trust will not be classified as an
association or publicly traded partnership taxable as a corporation for
federal income tax purposes and for federal income tax purposes (a) if
(1) the Certificates, (2) the Seller's right to receive interest and
other income on funds on deposit in the Reserve Accounts in excess of
the Specified Class A Reserve Balance and the Specified Class B Reserve
Balance pursuant to Section 4.7(b) of the Sale and Servicing Agreement
(the "Reserve Accounts Income"), (3) the excess principal amount of the
Reserve Account Property pursuant to Section 4.7(d) of the Sale and
Servicing Agreement (the "Excess Reserve Principal") and (4) the
Seller's right to receive the remaining Reserve Account Property upon
termination of the Sale and Servicing Agreement pursuant to Section
4.7(f) of the Sale and Servicing Agreement (the "Reserve Accounts
Residual") are held by more than one person, the Trust will be treated
as a partnership and not as an association or a publicly traded
partnership taxable as a corporation, and (b) if (1) the Certificates,
(2) the Reserve Accounts Income, (3) the Excess Reserve Principal and
(4) the Reserve Accounts Residual are held solely by the
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<PAGE> 20
Seller, the Trust will either be ignored as an entity separate from
such Seller or treated as a grantor trust under Subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended.
(ii) The Notes will be characterized as
debt for federal income tax purposes.
(iii) The Trust will not be subject to New York State
income, franchise or other taxes measured by income, profits, capital,
or receipts (other than sales, excise, or ad valorem taxes that might
be imposed upon the sale of a Financed Vehicle acquired upon default of
a Receivable).
(iv) Note Owners who would not otherwise be subject
to tax imposed by the State of New York will not be subject to New York
State income or franchise taxes with respect to interest or other
amounts which are paid to or accrued by such Note Owners solely as a
result of such Note Owners' beneficial ownership of a Note.
(v) The statements in the Registration Statement and
Prospectus under the headings "Certain Federal Income Tax
Consequences," to the extent that they constitute descriptions of
matters of law or legal conclusions with respect thereto, have been
prepared or reviewed by such counsel and are correct in all material
respects.
(h) Mayer, Brown & Platt, special Illinois tax
counsel to the Company shall have furnished to the Representatives their written
opinion, dated the Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Trust will not be subject to tax under the
Illinois Income Tax Act (the "IITA"), the Illinois Franchise Tax or,
assuming that the Trust is not treated as a partnership for federal
income tax purposes, the personal property replacement income tax and
the Trust will not be subject to other Illinois taxes measured by
income, capital, profits or receipts (other than sales, excise, or ad
valorem taxes that might be imposed upon the sale of a vehicle
acquired upon default of a Receivable) and
20
<PAGE> 21
the Notes will be characterized as debt for Illinois income tax
purposes.
(ii) Note Owners who would not otherwise be subject
to tax under the IITA or the Illinois Franchise Tax will not be subject
to Illinois income or franchise taxes with respect to interest or other
amounts paid to or accrued by such Note Owners solely as a result of
such Note Owners' beneficial ownership of a Note.
(i) Fulbright & Jaworski, L.L.P., special
Texas tax counsel to the Company shall have furnished to the Representatives
their written opinion, dated the Closing Date, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Trust will not be subject to Texas franchise
tax or other Texas taxes measured by income, capital, profits or
receipts (other than sales, excise, or ad valorem taxes that might be
imposed upon the sale of a vehicle acquired upon default of a
Receivable) and the Notes will be characterized as debt for Texas
income tax purposes.
(ii) Note Owners who would not otherwise be subject
to tax in Texas will not be subject to Texas income or franchise taxes
with respect to interest or other amounts paid to or accrued by such
Note Owners solely as a result of such Note Owners' beneficial
ownership of a Note.
(j) Day, Berry & Howard, special Connecticut
tax counsel to the Company, shall have furnished to the Representatives their
written opinion, dated the Closing Date, in form and substance satisfactory to
the Representatives, to the effect that:
(i) The Trust will not be subject to Connecticut
income, franchise or other taxes measured by income, profits, capital,
or receipts (other than sales, excise, or ad valorem taxes that might
be imposed upon the sale of a vehicle acquired upon default of a
Receivable) and the Notes will be characterized as debt for Connecticut
income tax purposes.
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<PAGE> 22
(ii) Note Owners who would not otherwise be subject
to tax in Connecticut will not be subject to Connecticut income or
franchise taxes with respect to interest or other amounts paid to or
accrued by such Note Owners solely as a result of such Note Owners'
beneficial ownership of a Note (other than such Note Owners' share of
sales, excise, or ad valorem taxes that might be imposed upon the sale
of a vehicle acquired upon default of a Receivable).
(k) Troutman Sanders, special Georgia
tax counsel to the Company, shall have furnished to the Representatives their
written opinion, dated the Closing Date, in form and substance satisfactory to
the Representatives, to the effect that:
(i) The Trust will not be subject to Georgia income,
franchise or other taxes measured by income, profits, capital, or
receipts (other than sales, excise, or ad valorem taxes that might be
imposed upon the sale of a vehicle acquired upon default of a
Receivable) and the Notes will be characterized as debt for Georgia
income tax purposes.
(ii) Note Owners who would not otherwise be subject
to tax in Georgia will not be subject to Georgia income or franchise
taxes with respect to interest or other amounts paid to or accrued by
such Note Owners solely as a result of such Note Owners' beneficial
ownership of a Note (other than such Note Owners' share of sales,
excise, or ad valorem taxes that might be imposed upon the sale of a
vehicle acquired upon default of a Receivable).
(l) Robert Merck, Esq., General Counsel
of MBCC, shall have furnished to the Representatives his written opinion, dated
the Closing Date, in form and substance satisfactory to the Representatives, to
the effect that:
(i) MBCC has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and authority to own its prop-
erties and conduct its business as described in the Prospectus, and is
duly qualified to transact busi-
22
<PAGE> 23
ness and is in good standing in each jurisdiction in which the conduct
of its business or the ownership of its property requires such
qualification except where the failure to be so qualified or in good
standing would not have a material adverse effect on MBCC.
(ii) The Company has been duly incorporated and is
validly existing as a corporation 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, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
the ownership of its property requires such qualification except
where the failure to be so qualified or in good standing would not
have a material adverse effect on the Company.
(iii) The execution, delivery and performance of the
Sale and Servicing Agreement, the Administration Agreement and the
Purchase Agreement by MBCC or the Trust Agreement and the Indenture by
the parties thereto 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 properties or assets of MBCC pursuant to the terms of the
Certificate of Incorporation or the By-Laws of MBCC, any statute,
rule, regulation or order of any governmental agency or body or any
court having jurisdiction over MBCC or any of its properties or any
agreement or instrument to which MBCC is a party or by which MBCC or
any of its properties is bound.
(iv) No authorization, approval or consent of any
court or governmental agency or authority is necessary in connection
with the execution, delivery and performance by MBCC of the Sale and
Servicing Agreement, the Administration Agreement or the Purchase
Agreement, or by the parties thereto of the Trust Agreement and the
Indenture, except such as may be required under the Act or the Rules
and Regulations and state securities laws, and except for such
authorizations, approvals or consents
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<PAGE> 24
(specified in such opinion) as are in full force and effect as of the
latest Effective Date and the Closing Date.
(v) There are no legal or governmental
proceedings pending to which MBCC is a party or of which any property
of MBCC is the subject, and no such proceedings are known by such
counsel to be threatened or contemplated by governmental authorities
or threatened by others, (A) that are required to be disclosed in the
Registration Statement or (B)(1) asserting the invalidity of all or
part of the Sale and Servicing Agreement, the Administration
Agreement, the Trust Agreement, the Indenture or the Purchase
Agreement, (2) seeking to prevent the issuance of the Notes, (3) that
could materially and adversely affect MBCC's obligations under the
Purchase Agreement, the Administration Agreement or the Sale and
Servicing Agreement, or (4) seeking to affect adversely the federal or
state income tax attributes of the Notes.
(vi) There are no legal or governmental proceedings
pending to which the Company is a party or of which any property of the
Company is the subject, and no such proceedings are known by such
counsel to be threatened or contemplated by govern mental authorities
or threatened by others, (A) that are required to be disclosed in the
Registration Statement or (B)(1) asserting the invalidity of all or
part of the Sale and Servicing Agreement, the Administration Agreement,
the Trust Agreement, the Indenture or the Purchase Agreement, (2)
seeking to prevent the issuance of the Notes, (3) that could materially
and adversely affect the Company's obligations under the Purchase
Agreement, the Administration Agreement, the Trust Agreement, the
Indenture or the Sale and Servicing Agreement, or (4) seeking to affect
adversely the federal or state income tax attributes of the Notes.
(vii) Such counsel is familiar with MBCC's standard
operating procedures relating to MBCC's acquisition of a perfected
first priority security interest in the vehicles financed by MBCC
pursuant to retail installment sale contracts in the ordinary course
of MBCC's business. Assuming that
24
<PAGE> 25
MBCC's standard procedures have been followed with respect to the
perfection of security interests in the Financed Vehicles (and such
counsel has no reason to believe that MBCC has not followed its
standard procedures in connection with the perfection of security
interest in the Financed Vehicles), MBCC has acquired or will acquire
a perfected first priority security interest in each of the Financed
Vehicles.
(viii) Immediately prior to the transfer of
Receivables by MBCC pursuant to the Purchase Agreement, MBCC was the
sole owner of all right, title and interest in the Receivables and the
other property to be transferred by it to the Company.
(ix) The Receivables are "chattel paper"
as defined in the UCC.
(m) The Representatives shall have received an
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, dated the Closing Date,
with respect to the validity of the Notes and such other related matters as the
Representatives shall require and the Company shall have furnished or caused
to be furnished to such counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(n) The Representatives shall have received an
opinion addressed to the Underwriters, the Company and the Servicer of Seward &
Kissel, counsel to the Indenture Trustee, dated the Closing Date and
satisfactory in form and substance to the Representatives and its counsel, to
the effect that:
(i) The Indenture Trustee is a national banking
association duly organized and validly existing under the laws of the
United States.
(ii) The Indenture Trustee has the requisite power
and authority to execute, deliver and perform its obligations under the
Indenture and the Administration Agreement and to acknowledge and
accept the Sale and Servicing Agreement and has taken all necessary
action to authorize the execution and delivery of the Indenture and the
Administration Agreement and to execute the Sale and Ser-
25
<PAGE> 26
vicing Agreement and to perform its obligations under the Indenture,
the Sale and Servicing Agreement and the Administration Agreement.
(iii) The Indenture, the Sale and Servicing Agreement
and the Administration Agreement have been duly executed and delivered
by the Indenture Trustee and constitutes a legal, valid and binding
agreement of the Indenture Trustee and are enforceable against the
Indenture Trustee in accordance with their terms, except as the same
may be limited by bankruptcy, insolvency, reorganization, moratorium,
liquidation or other similar laws relating to or affecting the enforce-
ment of creditors' rights generally, and by general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether such
enforcibility is considered in a proceeding in equity or at law).
(iv) The Notes have been duly authenticated by the
Indenture Trustee in accordance with the terms of the Indenture.
(o) The Representatives shall have received an
opinion addressed to the Representatives, the Seller and MBCC of Pryor, Cashman,
Sherman & Flynn, counsel to the Owner Trustee, dated the Closing Date and
satisfactory in form and substance to the Representatives and counsel to the
Representatives, 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 with 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 Indenture, the Sale
and Servicing Agreement and the Administration Agreement.
(ii) The Trust Agreement duly creates for the benefit
of the Seller and the Certificateholders the interests in the Owner
Trust Estate which the Trust Agreement purports to create, and the
trust purported to be created by the Trust Agreement is validly formed
26
<PAGE> 27
and is validly existing as a business trust in good standing under the
laws of the State of Delaware.
(iii) The Trust Agreement authorizes the Trust to
execute and deliver the Indenture, the Sale and Servicing Agreement and
the Administration Agreement, to issue the Notes and to grant the
Indenture Trust Estate to the Indenture Trustee as security for the
Notes.
(iv) The execution and delivery of the Trust
Agreement and, on behalf of the Trust, the Indenture, the Sale and
Servicing Agreement and the Administration Agreement and the
performance by the Owner Trustee of its obligations under the Trust
Agreement, the Indenture, the Sale and Servicing Agreement and the
Administration Agreement have been duly authorized by all necessary
corporate action of the Owner Trustee and each has been duly executed
and delivered by the Owner Trustee.
(v) Assuming due authorization, execution and
delivery thereof by the parties thereto, the Trust Agreement, the
Indenture, the Sale and Servicing Agreement and the Administration
Agreement each constitutes a legal, valid and binding obligation of the
Owner Trustee, enforceable against the Owner Trustee in accordance with
its terms, except (1) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights, and (2)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(vi) Neither the execution nor delivery by the Owner
Trustee of the Trust Agreement and, on behalf of the Trust, the
Indenture, the Sale and Servicing Agreement and the Administration
Agreement, nor the consummation of any of the transactions by the Owner
Trustee con-
27
<PAGE> 28
templated thereby required the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action
with respect to, any governmental authority or agency under any
existing federal or Delaware State law governing the trust powers of
the Owner Trustee, except such as have been obtained, made or taken.
(vii) The Owner Trustee has duly authorized, issued,
executed and delivered each of the Notes pursuant to the terms and
provisions of the Indenture; each of such Notes is a legal, valid and
binding obligation of the Trust, enforceable against the Trust in
accordance with its terms and the terms of the Indenture; and each of
such Notes is entitled to the benefits and security afforded by the
Indenture in accordance with the terms of the Indenture.
(viii) The execution and delivery by the Owner
Trustee of the Trust Agreement and, on behalf of the Trust, the
Indenture, the Sale and Servicing Agreement and the Administration
Agreement, and the performance by the Owner Trustee of its obligations
thereunder do not conflict with or result in a breach or violation of
any of the terms, conditions or provisions of any law, governmental
rule or regulation of the United States or the State of Delaware
governing the banking or trust powers of the Owner Trustee or the
Certificate of Incorporation or By-Laws of the Owner Trustee or, to
such counsel's knowledge, any order writ, injunction or decree of any
court or governmental authority against the Owner Trustee or by which
it or any of its properties is bound or, to such counsel's knowledge,
any indenture, mortgage or contract or other agreement or instrument to
which the Owner Trustee is a party or by which it or any of its
properties is bound, or constitute a default thereunder.
(ix) The Owner Trustee has acquired such title to the
Receivables as has been conveyed to the Owner Trustee on the date
hereof,
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<PAGE> 29
subject to the security interest created pursuant to the Indenture;
and, to such counsel's knowledge, there exist no liens, security
interests or charges affecting the title of the Owner Trustee to the
Receivables resulting from acts of or claims against the Owner Trustee
except liens, security interests or charges contemplated by the Basic
Documents.
(p) The Representatives shall have received a letter
or letters from each counsel delivering any written opinion to any Rating Agency
in connection with the transaction described herein which is not other wise
described in this Agreement allowing the Underwriters to rely on such opinion as
if it were addressed to the Underwriters.
(q) The Representatives shall have received an
officer's certificate, dated the Closing Date, of the Chairman of the Board, the
President or any Vice President and by a principal financial or accounting
officer of each of the Company and the Servicer in which each such officer shall
state that, the representations and warranties of the Company or the Servicer,
as applicable, contained in the Sale and Servicing Agreement and the
representations and warranties of MBCC or the Company, as applicable, contained
in the Purchase Agreement are true and correct in all material respects and that
the Company or the Servicer, 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 in all material respects.
(r) The Notes shall have been rated "Aaa" by Moody's
Investors Service, Inc. and "AAA" by Standard & Poor's Ratings Services, a
Division of The McGraw-Hill Companies, Inc.
(s) On the Closing Date, the representations and
warranties of the Company in the Sale and Servicing Agreement will be true and
correct.
(t) Any taxes, fees and other governmental charges
which are due and payable in connection with the execution, delivery and
performance of this Agreement, the Indenture, the Sale and Servicing Agreement
29
<PAGE> 30
and the Notes shall have been paid by the Company at or prior to the Closing
Date.
8. The Company and DBNA agree to jointly and severally
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other
expenses reasonably incurred in connection with investigating, preparing or
defending any suit, action or proceeding or any claim asserted, except as
otherwise provided below regarding the limitation on use of counsel) caused by
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or the Prospectus (as amended or supplemented if
the Company shall have furnished such amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished to the Company or DBNA in writing by any Underwriter
through the Representatives expressly for use therein; provided that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any losses, claims or damages
purchased Notes if such untrue statement or omission or alleged untrue statement
or omission made in such preliminary prospectus is eliminated or remedied in the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) and, if the furnishing of a copy of the
Prospectus (as so amended or supplemented) to such person was required by law
or was requested in writing by the Company, a copy of the Prospectus (as so
amended or supplemented) shall not have been furnished to such person at or
prior to the written confirmation of the sale of such Notes to such person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each
30
<PAGE> 31
director and officer of the Company who signed the Registration Statement, and
DBNA and each person who controls the Company or DBNA within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company and DBNA to each Underwriter, but only
with reference to information furnished to the Company or DBNA in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be inap-
propriate due to actual or potential differing interests between them, in which
case such counsel for the Indemnified Person shall be reasonably satisfactory
to the Indemnifying Person. It is understood that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to one local counsel in each applicable jurisdiction) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
31
<PAGE> 32
they are incurred. Any such separate firm for the Under writers and such control
persons of Underwriters shall be designated in writing by the Representatives
and any such separate firm for the Company or DBNA or either of their directors,
officers who sign the Registration Statement or control persons shall be
designated in writing by DBNA. The Indemnifying Person shall not be liable for
any settlement of any claim or proceeding effected without its written consent.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person
shall have requested an Indemnifying Person to reimburse the Indemnified Person
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not
have reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first and second
paragraphs of this Section 8 is unavailable other than in accordance with its
terms to an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and DBNA on
the one hand and the Underwriters on the other hand from the offering of the
Notes or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and DBNA on the
32
<PAGE> 33
one hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and DBNA on the one hand and the Underwriters on the other shall
be deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company and DBNA and the
total underwriting discounts and the commissions received by the Underwriters,
in each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate public offering price of the Notes. The relative fault of the
Company and DBNA on the one hand and the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or DBNA or by any
of the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and DBNA and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 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 that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, in no event
shall an Underwriter 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 that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such
33
<PAGE> 34
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8 are several in proportion to the respective principal
amount of Notes set forth opposite their names in Schedule I hereto, and not
joint.
The indemnity and contribution agreements contained in this
Section 8 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company or DBNA, or any of their officers or directors or any
other person controlling the Company or DBNA and (iii) acceptance of and payment
for any of the Notes.
9. Notwithstanding anything herein contained, this Agreement
may be terminated in the absolute discretion of the Representatives, by notice
given to the Company, if after the execution and delivery of this Agreement
and prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, the New York Stock Exchange or
the American Stock Exchange; (ii) trading of any securities of or guaranteed by
DBNA or DaimlerChrysler AG shall have been suspended on any exchange or in any
over-the-counter market; (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Representatives is material and adverse and which,
in the judgment of the Representatives, makes it impracticable to market any
subclass of the Notes on the terms and in the manner contemplated in the
Prospectus.
10. This Agreement shall become effective upon the later of
(x) execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
34
<PAGE> 35
applicable, any post-effective amendment) by the Commission.
If on the Closing Date any one or more of the Underwriters
shall fail or refuse to purchase Notes of any subclass which it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of
Notes of such subclass which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of the Notes of such subclass to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
principal amount of Notes of such subclass set forth opposite their respective
names in Schedule I bears to the aggregate principal amount of Notes of such
subclass set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as the Representatives may specify, to purchase the
Notes of such subclass which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Notes of any subclass that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such principal amount of Notes of such subclass
without the written consent of such Underwriter. If on the Closing Date any
Underwriter or Underwriters shall fail or refuse to purchase Notes of any
subclass which it or they have agreed to purchase hereunder on such date, and
the aggregate principal amount of Notes of such subclass with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
the Notes of such subclass to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Notes are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case either the Representatives or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in
35
<PAGE> 36
respect of any default of such Underwriter under this Agreement.
11. If this Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement or any condition of the Underwriters' obligations cannot be
fulfilled, the Company agrees to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and expenses of
their counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, delivered by hand
or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given to the Representatives, c/o Chase Securities Inc.,
270 Park Avenue, 7th Floor, New York, New York 10260 (Facsimile No.:
212-834-6562), Attention: Global Securitized Finance and to Salomon Smith Barney
Inc., Seven World Trade Center, 33rd Floor New York, New York 10048, Attention:
Asset Backed Operations - facsimile number (212) 783-3848. Notices to the
Company shall be given to it at 1201 North Market Street, Suite 1406,
Wilmington, Delaware 19801 (Facsimile No.: 302-426-6520), Attention: President.
Notices to DBNA shall be given to it at 375 Park Avenue, New York, New York
10152 (Facsimile No.: 212-308-4252), Attention: Treasurer.
13. This Agreement shall inure to the benefit of and be
binding upon the Company, DBNA, the Underwriters, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein con-
tained. No purchaser of Notes from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
36
<PAGE> 37
14. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
37
<PAGE> 38
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement among the Company, DBNA and the
Underwriters in accordance with its terms.
Very truly yours,
DAIMLER-BENZ VEHICLE RECEIVABLES
CORPORATION
By: /s/ H.S. Traison
----------------------------
Name: Harvey S. Traison
Title: President
DAIMLER-BENZ NORTH AMERICA
CORPORATION
By: /s/ Timotheus Pohl
----------------------------
Name: Timotheus R. Pohl
Title: President and CEO
By: /s/ H.S. Traison
----------------------------
Name: Harvey S. Traison
Title: Vice President and
Treasurer
<PAGE> 39
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
CHASE SECURITIES INC.
By: /s/ Brad Dansker
-------------------------
Name: Brad Dansker
Title: Vice President
SALOMON SMITH BARNEY INC.
By: /s/ John P. Ebbott Jr.
-------------------------
Name: John P. Ebbott Jr.
Title: Vice President
Acting on behalf of themselves and
as the Representatives of the
several Underwriters
<PAGE> 40
SCHEDULE I
UNDERWRITERS
<TABLE>
<CAPTION>
Initial Initial Initial Initial
Principal Principal Principal Principal
Amount of Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3 Class A-4
Notes Notes Notes Notes
------------ ----------- ----------- ---------
<S> <C> <C> <C> <C>
Chase Securities Inc. ... $144,000,000 $203,176,000 $176,001,000 $96,720,000
Salomon Smith Barney Inc. 144,000,000 203,175,000 203,175,000 96,720,000
Deutsche Bank Securities
Inc. ................... 24,000,000 33,883,000 29,333,000 16,120,000
29,333,000 16,120,000
Merrill Lynch, Pierce,
Fenner & Smith
Incorporated........ 24,000,000 33,883,000 29,333,000 16,120,000
------------ ----------- ------------ ------------
Total ................... $360,000,000 $508,000,000 $440,000,000 $241,800,000
============ ============ ============ ============
</TABLE>
<PAGE> 41
SCHEDULE II
FORM OF SERVICER'S CERTIFICATE
Chase Securities Inc.
270 Park Avenue, 7th Floor
New York, New York 10017
Attention:
Re: Sale and Servicing Agreement dated as of
November 1, 1998 (the "Sale and Servicing
Agreement") between Daimler-Benz Vehicle
Receivables Corporation, as Seller,
Mercedes-Benz Credit Corporation, in its
individual capacity and as Servicer,
Daimler-Benz Vehicle Owner Trust 1998-A,
as Issuer and Citibank, N.A., as Indenture
Trustee
Determination Date to which this Certificate relates:
___________, 19__
For Monthly Period ending on _________, 19__
1. The undersigned Servicing Officer does hereby certify that
the Pool Factor is __________.
2. Capitalized terms used in this Certificate shall have the
same meanings as in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of the
above-referenced Determination Date.
MERCEDES-BENZ CREDIT
CORPORATION, as Servicer
By: ____________________
Servicing Officer
<PAGE> 1
Exhibit 4.1
AMENDED AND RESTATED
TRUST AGREEMENT
between
DAIMLER-BENZ VEHICLE RECEIVABLES CORPORATION,
as Depositor,
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of November 1, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS................................................................. 1
SECTION 1.1. Capitalized Terms................................................. 1
SECTION 1.2. Other Definitional Provisions..................................... 7
ARTICLE II ORGANIZATION OF THE TRUST................................................... 9
SECTION 2.1. Name.............................................................. 9
SECTION 2.2. Office............................................................ 9
SECTION 2.3. Purposes and Powers............................................... 9
SECTION 2.4. Appointment of Owner Trustee...................................... 10
SECTION 2.5. Initial Capital Contribution of Owner Trust Estate................ 10
SECTION 2.6. Declaration of Trust.............................................. 10
SECTION 2.7. Title to Trust Property........................................... 11
SECTION 2.8. Situs of Trust.................................................... 11
SECTION 2.9. Representations and Warranties of the Depositor................... 11
SECTION 2.10. Federal Income Tax Matters....................................... 12
ARTICLE III TRUST CERTIFICATES AND TRANSFER OF INTERESTS................................ 14
SECTION 3.1. Initial Ownership................................................. 14
SECTION 3.2. The Certificates.................................................. 14
SECTION 3.3. Authentication of Certificates.................................... 15
SECTION 3.4. Registration of Certificates; Transfer and Exchange of
Certificates............................................ 15
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates................. 22
SECTION 3.6. Persons Deemed Owners of Certificate.............................. 22
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses............................................... 23
SECTION 3.8. Maintenance of Office or Agency................................... 23
SECTION 3.9. Appointment of Paying Agent....................................... 23
ARTICLE IV ACTIONS BY OWNER TRUSTEE.................................................... 25
SECTION 4.1. Prior Notice to Certificateholders with Respect to
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
Certain Matters......................................... 25
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters................................................. 26
SECTION 4.3. Restrictions on Certificateholders' Power.......................... 26
SECTION 4.4. Majority Control.................................................. 26
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.................................. 28
SECTION 5.1. Establishment of Certificate Distribution Account................. 28
SECTION 5.2. Application of Trust Funds........................................ 28
SECTION 5.3. Method of Payment................................................. 29
SECTION 5.4. No Segregation of Monies; No Interest............................. 30
SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service
and Others.............................................. 30
SECTION 5.6. Signature on Returns; Tax Matters Partner......................... 31
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE....................................... 32
SECTION 6.1. General Authority................................................. 32
SECTION 6.2. General Duties.................................................... 32
SECTION 6.3. Action upon Instruction........................................... 32
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions............................................ 34
SECTION 6.5. No Action Except Under Specified Documents or
Instructions............................................ 34
SECTION 6.6. Restrictions...................................................... 34
ARTICLE VII REGARDING THE OWNER TRUSTEE................................................. 35
SECTION 7.1. Acceptance of Trusts and Duties................................... 35
SECTION 7.2. Furnishing of Documents........................................... 36
SECTION 7.3. Representations and Warranties.................................... 36
SECTION 7.4. Reliance; Advice of Counsel....................................... 37
SECTION 7.5. Not Acting in Individual Capacity................................. 38
SECTION 7.6. Owner Trustee Not Liable for Certificates or
Receivables............................................. 38
SECTION 7.7. Owner Trustee May Own Certificates and Notes...................... 38
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE............................................... 40
SECTION 8.1. Owner Trustee's Fees and Expenses................................. 40
SECTION 8.2. Indemnification................................................... 40
SECTION 8.3. Payments to Indemnified Parties................................... 40
ARTICLE IX TERMINATION................................................................. 41
SECTION 9.1. Termination of Trust Agreement.................................... 41
SECTION 9.2. Bankruptcy of the Depositor....................................... 42
SECTION 9.3. Prepayment of the Certificates.................................... 42
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES...................... 44
SECTION 10.1. Eligibility Requirements for Owner Trustee....................... 44
SECTION 10.2. Resignation or Removal of Owner Trustee.......................... 44
SECTION 10.3. Successor Owner Trustee.......................................... 45
SECTION 10.4. Merger or Consolidation of Owner Trustee......................... 46
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.................... 46
ARTICLE XI MISCELLANEOUS............................................................... 48
SECTION 11.1. Supplements and Amendments....................................... 48
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders...................................... 49
SECTION 11.3. Limitation on Rights of Others................................... 50
SECTION 11.4. Notices.......................................................... 50
SECTION 11.5. Severability..................................................... 50
SECTION 11.6. Separate Counterparts............................................ 51
SECTION 11.7. Successors and Assigns........................................... 51
SECTION 11.8. Covenant of the Depositor........................................ 51
SECTION 11.9. No Petition...................................................... 51
SECTION 11.10. No Recourse..................................................... 51
SECTION 11.11. Headings........................................................ 51
SECTION 11.12. Governing Law................................................... 52
</TABLE>
iii
<PAGE> 5
EXHIBITS
EXHIBIT A Form of Certificate
EXHIBIT B Form of Certificate of Trust
EXHIBIT C Form of Rule 144A Transferor
Certificate
EXHIBIT D Form of Investment Letter --
Qualified Institutional Buyer
EXHIBIT E Form of Investment Letter --
Institutional Accredited Investor
iv
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT, dated as of November 1, 1998 (as
the same may be further amended, supplemented or otherwise modified and in
effect from time to time, this "Agreement"), between DAIMLER-BENZ VEHICLE
RECEIVABLES CORPORATION, a Delaware corporation, as depositor (the "Depositor"),
having its principal executive office at 1201 North Market Street, Suite 1406,
Wilmington, Delaware 19801; and CHASE MANHATTAN BANK DELAWARE, 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 1201 North Market Street, Wilmington,
Delaware 19801.
WHEREAS, the parties hereto are parties to the Trust Agreement, dated
as of November 1, 1998 (the "Original Trust Agreement"), and now wish to amend
and restate the Original Trust Agreement 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 that the Original Trust Agreement is hereby amended and
restated 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:
"Accountants" shall have the meaning assigned to such term in Section
5.5(b).
"Accrued Certificate Interest" shall mean, with respect to any Payment
Date, the sum of Monthly Accrued Certificate Interest and the Certificate
Interest Carryover Shortfall for such Payment Date.
"Administration Agreement" shall have the meaning assigned to such term
in the Indenture.
<PAGE> 7
"Administrator" shall have the meaning assigned to such term in the
Indenture.
"Affiliate" shall have the meaning assigned to such term in the Sale
and Servicing Agreement.
"Agreement" shall have the meaning specified in the recitals hereto.
"Applicable Tax State" shall have the meaning assigned to such term in
the Sale and Servicing Agreement.
"Available Funds" shall have the meaning assigned to such term in the
Sale and Servicing Agreement.
"Basic Documents" shall have the meaning assigned to such term in the
Indenture.
"Business Day" shall have the meaning assigned to such term in the Sale
and Servicing Agreement.
"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" or "Class B 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 on the terms and subject to the conditions set forth herein; provided,
however, that certain of the Trust Property 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 Balance" shall mean, as the context requires, (a) with
respect to all of the Certificates, an amount equal to, initially, the Initial
Certificate Balance and, thereafter, the Initial Certificate Balance minus any
and all amounts allocable to principal previously distributed to
Certificateholders, and (b) with
2
<PAGE> 8
respect to any Certificate, an amount equal to, initially, the initial
denomination of such Certificate and, thereafter, an amount equal to such
initial denomination minus any and all amounts allocable to principal previously
distributed in respect of such Certificate.
"Certificate Distribution Account" shall have the meaning assigned to
such term in Section 5.1.
"Certificateholder" shall mean a Holder of a Certificate.
"Certificate Interest Carryover Shortfall" shall mean, with respect to
any Payment Date, the excess of the sum of (a) the Monthly Accrued Certificate
Interest for the preceding Payment Date and any outstanding Certificate Interest
Carryover Shortfall from the close of business on such preceding Payment Date,
over (b) the amount in respect of interest that is actually deposited into the
Certificate Distribution Account on such preceding Payment Date, plus interest
on such excess to the extent permitted by law, at the Class B Rate for the
related Certificate Interest Period.
"Certificate Interest Period" shall mean, with respect to any Payment
Date, the period from and including the Closing Date (in the case of the first
Payment Date) or from and including the twentieth (20th) day of the calendar
month preceding each Payment Date to but excluding the twentieth (20th) day of
the following calendar month.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B attached hereto 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.
"Class B Final Payment Date" shall mean the May 2006 Payment Date.
"Class B Rate" shall mean 5.62% per annum.
"Class B Reserve Account" shall have the meaning assigned to such term
in Section 5.1.
3
<PAGE> 9
"Closing Date" shall have the meaning assigned to such term in the
Indenture.
"Code" shall have the meaning assigned to such term in the Indenture.
"Commission" shall have the meaning assigned to such term in the
Indenture.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at 1201 North
Market Street, Wilmington, Delaware 19801; 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 (as to which
address the successor Owner Trustee will notify the Certificateholders and the
Company).
"Depositor" shall mean Daimler-Benz Vehicle Receivables Corporation, a
Delaware corporation, and its successors and assigns.
"Determination Date" shall have the meaning assigned to such term in
the Sale and Servicing Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall have the meaning assigned to such term in the
Indenture.
"Expenses" shall have the meaning assigned to such term in Section 8.2.
"Financed Vehicle" shall have the meaning assigned to such term in the
Sale and Servicing Agreement.
"Grant" shall have the meaning assigned to such term in the Indenture.
"Holder" shall mean, with respect to any Certificate, a Person in whose
name a Certificate is registered in the Certificate Register.
4
<PAGE> 10
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture, dated as of November 1, 1998, by
and between the Issuer and Citibank, N.A., a national banking association, as
the Indenture Trustee, as the same may be amended, supplemented or otherwise
modified and in effect from time to time.
"Indenture Trustee" shall have the meaning assigned to such term in the
Indenture.
"Initial Certificate Balance" shall mean, as the context requires, (a)
with respect to all of the Certificates, $81,654,551.40, or (b) with respect to
any Certificate, an amount equal to the initial denomination thereof.
"Insolvency Event" shall have the meaning assigned to such term in
Section 10.2.
"Issuer" shall have the meaning assigned to such term in the Indenture.
"MBCC" shall mean Mercedes-Benz Credit Corporation, a Delaware
corporation, and its successors and assigns.
"Monthly Accrued Certificate Interest" shall mean, with respect to any
Payment Date, interest accrued for the related Certificate Interest Period at
the Class B Rate on the Certificate Balance as of the immediately preceding
Payment Date, after giving effect to all payments of principal to
Certificateholders on or prior to such preceding Payment Date (or, in the case
of the first Payment Date, the Initial Certificate Balance).
"Note" shall have the meaning assigned to such term in the Indenture.
"Opinion of Counsel" shall have the meaning assigned to such term in
the Sale and Servicing Agreement.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in, to and under the Trust Property transferred and assigned to the Trust
pursuant to Article II of the Sale and Servicing Agreement.
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"Owner Trustee" shall mean Chase Manhattan Bank Delaware, 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, with respect to any amounts held on behalf
of or paid to any Certificateholders, any paying agent or co-paying agent
appointed pursuant to Section 3.9 and shall initially be Citibank, N.A.
"Payment Date" shall have the meaning assigned to such term in the Sale
and Servicing Agreement.
"Person" shall have the meaning assigned to such term in the Sale and
Servicing Agreement.
"Prepayment Date" shall mean, as of any date of determination, the
Payment Date specified by the Servicer pursuant to Section 9.3(a).
"Prepayment Price" means an amount equal to the Certificate Balance,
plus any Accrued Certificate Interest.
"Qualified Institutional Buyer" has the meaning specified in Rule 144A.
"Rating Agency" shall have the meaning assigned to such term in the
Sale and Servicing Agreement.
"Record Date" shall mean, with respect to the Certificates and any
Payment Date, the close of business on the last Business Day of the calendar
month preceding such Payment Date.
"Rule 144A" shall have the meaning assigned to such term in Section
3.4(e).
"Rule 144A Information" shall have the meaning assigned to such term in
Section 3.4(f).
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of November 1, 1998, by and among the Issuer, the Seller and
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MBCC, as the 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 have the meaning assigned to such term in the
Indenture.
"Seller" shall have the meaning assigned to such term in the Sale and
Servicing Agreement.
"Servicer" shall have the meaning assigned to such term in the Sale and
Servicing Agreement.
"Servicer's Certificate" shall have the meaning assigned thereto in the
Sale and Servicing Agreement.
"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 and Owner Trust Estate established by this
Agreement.
"Trust Property" shall have the meaning assigned to such term in the
Sale and Servicing Agreement.
"Void Transfer" shall have the meaning assigned to such term in Section
3.2.
SECTION 1.2. Other Definitional Provisions.
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(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.
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ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name. The Trust shall be known as "Daimler-Benz Vehicle
Owner Trust 1998-A", 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 and the
Certificates upon the written order of the Depositor;
(ii) with the proceeds of the sale of the Notes, to fund the
Class A Reserve Account, to pay the organizational, start-up and
transactional expenses of the Trust, to pay the balance to the
Depositor pursuant to the Sale and Servicing Agreement, and to fund the
Class B Reserve Account, if any, with amounts contributed by the
Depositor;
(iii) to pay interest on and principal of the Notes and the
Certificates and Available Funds to the Seller pursuant to the Sale and
Servicing Agreement and the Indenture;
(iv) to assign, grant, transfer, pledge, mortgage and convey
the Owner Trust Estate (other than the Certificate Distribution
Account, the Class B Reserve Account, and any money, financial assets
or other property from time to time held in or credited to, or
purchased with funds from, either of such accounts, which shall be part
of the Owner Trust Estate but not subject to the Grant under the
Indenture) to the Indenture Trustee pursuant to the Indenture;
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(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, the Certificateholders and the Seller.
(b) 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, and the Owner Trustee accepts such appointment.
SECTION 2.5. Initial Capital Contribution of Owner Trust Estate. As of
November 1, 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 (a) the Trust constitute a business trust
under the Business Trust Statute and that this Agreement constitute the
governing instrument of such business trust and (b) solely for income and
franchise tax purposes, the Trust shall be treated (i) if it has a single
beneficial owner, as a non-entity and (ii) if it has more than one
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beneficial owner, as a partnership, with the assets of the partnership being the
Receivables and other Trust Property held by the Trust, the partners of the
partner ship 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. Title to Trust Property. Legal title to the entirety of
the Owner Trust Estate shall be vested at all times in the Trust as a separate
legal entity, except where applicable law in any jurisdiction requires title to
any part of the Owner Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
SECTION 2.8. Situs of Trust. The Trust shall be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. The Trust shall not have any employees in any state other
than the State of Delaware; provided, however, that nothing herein shall
restrict or prohibit the Owner Trustee from having employees within or without
the State of Delaware. Payments will be received by the Trust only in Delaware,
New York or Texas, and payments will be made by the Trust only from Delaware,
New York or Texas. The only office of the Trust will be at the Corporate Trust
Office in the State of Delaware.
SECTION 2.9. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:
(a) The Depositor is duly organized and validly existing as a
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.
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(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.
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(f) The representations and warranties of the Depositor in Section 3.1
of the Purchase Agreement are true and correct.
SECTION 2.10. Federal Income Tax Matters. (a) 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. Section 301.7701-3 for Federal, state and all other income tax
purposes,
(i) amounts paid to the Depositor pursuant to Sections 4.7(a)
and (d) of the Sale and Servicing Agreement for such year (or other
period) shall be treated as a guaranteed payment within the meaning of
Section 707(c) of the Code; and
(ii) 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.
(b) 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.
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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. (a) (i) The Class B Certificates shall
be issued in one or more registered, definitive, physical certificates each 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 this
Section and Section 3.4, and any attempted Transfer in violation of this Section
3.2 or Section 3.4 shall be null and void (each, a "Void Transfer").
(ii) 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.
(iii) Furthermore, notwithstanding the foregoing or anything to the
contrary set forth herein, no Transfer of a Certificate by the Depositor, as the
initial Holder of all of the Certificates, or by any subsequent Holder of all of
the Certificates, to any Person will be effective unless and until (a) such
transferor delivers to the Owner Trustee an Opinion of Counsel to the effect
that the proposed Transfer will not cause the Trust to be taxable as a
corporation or as a partnership for federal income tax purposes or purposes of
the tax laws of any Applicable Tax State, or (b) such transferor delivers to the
Owner Trustee an officer's certificate that such transferor has deposited
sufficient funds in the applicable or necessary Reserve Accounts or otherwise
provided for any tax liability which may or will arise as a result of such
Transfer.
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(b) 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.
(c) If a 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 The Chase Manhattan Bank, as
the Owner Trustee's authenticating agent, or any successor thereto hereunder, 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. The Chase Manhattan Bank shall be
the initial Certificate Registrar.
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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 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 Securities 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 Securities 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 CLASS B 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 CLASS B CERTIFICATE, AGREES FOR THE BENEFIT OF THE
TRUST AND THE DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED
OR OTHER WISE 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
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HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE
MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER,
RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT C TO THE TRUST
AGREEMENT AND (B) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT D TO THE TRUST AGREEMENT,
(2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF SUCH EVIDENCE ACCEPTABLE TO THE TRUST THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE TRUST AGREEMENT
AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (3) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO ANY OTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN
THE FORM ATTACHED AS EXHIBIT E TO THE TRUST AGREEMENT OR (B) THE RECEIPT BY THE
TRUST AND THE CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE
TRUST THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, OR (4) TO THE
DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE
STATES OF THE UNITED STATES. IN ADDITION, EXCEPT IN THE CASE OF TRANSFERS TO
EXISTING CERTIFICATEHOLDERS, THIS CLASS B 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)."
THIS CLASS B CERTIFICATE MAY NOT BE ACQUIRED BY ANY (A) EMPLOYEE
BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF
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THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), THAT
IS SUBJECT TO TITLE I OF ERISA, (B) PLAN, AS DEFINED IN SECTION 4975(E)(1) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), THAT IS SUBJECT TO
SECTION 4975 OF THE CODE, (C) GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF
ERISA, THAT IS SUBJECT TO ANY STATE, LOCAL OR FEDERAL LAW WHICH IS, TO A
MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, (D) ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS"
(WITHIN THE MEANING OF DEPARTMENT OF LABOR REGULATION 29 C.F.R. Section 2510.3-
101 OR OTHERWISE UNDER ERISA) BY REASON OF ANY SUCH PLAN'S INVESTMENT IN THE
ENTITY OR (E) PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING, FOR
PURPOSES OF CLAUSE (D) AND THIS CLAUSE (E), AN INSURANCE COMPANY GENERAL
ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED).
(d) 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
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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,
as defined in Section 4975(e)(1) of the Code, that is subject to
Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, that is subject to any state, local or other
Federal 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" (within the meaning of
Department of Labor Regulation 29 C.F.R. Section 2510.3-101 or
otherwise under ERISA) by reason of a plan's investment in the entity
or (E) a Person investing "plan assets" of any such plan (including,
for purposes of clause (D) and this clause (E), an insurance company
general account, but excluding 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.
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(viii) It understands that any purported Transfer of any
Certificate (or any interest therein) in contravention of any of the
restrictions and conditions (including any violation of the
representation in paragraph (ii) above by an investor who continues to
hold such Certificates occurring any time after the Transfer in which
it acquired such Certificates) in this Section 3.4 shall be a Void
Transfer, and the purported transferee in a Void Transfer shall not be
recognized by the Trust or any other Person as a Certificateholder for
any purpose.
(ix) It agrees that if it determines to Transfer any of the
Certificates it will cause its proposed transferee to provide to the
Trust and the Certificate Registrar a letter substantially in the form
of Exhibit D or E hereof, as applicable, or such other written
statement as the Depositor shall prescribe.
(e) By acceptance of any Certificate, the Certificateholder thereof
specifically agrees with and represents to the Depositor, the Certificate
Registrar and the Trust that no Transfer of such Certificate shall be made
unless the registration requirements of the Securities Act and any applicable
state securities laws are complied with, or such Transfer is exempt from the
registration requirements under the Securities Act because the Transfer
satisfies one of the following:
(i) such Transfer is in compliance with Rule 144A under the
Securities Act ("Rule 144A"), to a transferee who the transferor
reasonably believes is a Qualified Institutional Buyer that is
purchasing for its own account or for the account of a Qualified
Institutional Buyer and to whom notice is given that such transfer is
being made in reliance upon Rule 144A under the Securities Act and (x)
the transferor executes and delivers to the Trust and the Certificate
Registrar a Rule 144A transferor certificate substantially in the form
attached as Exhibit C and (y) the transferee executes and delivers to
the Trust and the Certificate Registrar an investment letter
substantially in the form attached as Exhibit D;
(ii) after the appropriate holding period, such Transfer is
pursuant to an exemption from registration under the Securities Act
provided by Rule 144 under the Securities Act and the transferee, if
requested by the Owner Trustee or the Certificate Registrar, delivers
an Opinion of Counsel in form and substance satisfactory to the Trust
and the Depositor; and
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(iii) such Transfer is to an institutional accredited investor
as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
promulgated under the Securities Act in a transaction exempt from the
registration requirements of the Securities Act, such Transfer is in
accordance with any applicable securities laws of any state of the
United States or any other jurisdiction, and such investor executes and
delivers to the Trust and the Certificate Registrar an investment
letter substantially in the form attached as Exhibit E.
(f) The Trust, with the assistance of the Administrator as provided in
the Administration Agreement, 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
Administrator in order to comply with requests for information
pursuant to Rule 144A under the Securities Act.
None of the Depositor, the Certificate Registrar, the Owner Trustee or
the Trust is under an obligation to register any Certificate under the
Securities Act or any other securities law.
(g) (i) 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 The Chase
Manhattan Bank, as its authenticating agent, or any successor thereto hereunder,
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.
(ii) Subject to Section 3.4(b) and (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
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Certificates to be exchanged at the office or agency maintained
pursuant to Section 3.8.
(iii) 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 its 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.
(iv) 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.
(h) (i) 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.
(ii) 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.
(iii) Notwithstanding anything contained herein to the
contrary, neither the Owner Trustee nor the Certificate Registrar shall
be responsible for ascertaining whether any transfer complies with the
registration provisions or exemptions from the Securities Act, the
Exchange Act, applicable state securities law or the Investment Company
Act; provided, however, that if a certification is specifically
required to be delivered to the Owner Trustee or the Certificate
Registrar by a purchaser or transferee of a Certificate, the Owner
Trustee or the Certificate Registrar, as the case may be, shall be
under a duty to examine the same to determine whether it conforms to
the require-
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ments 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
The Chase Manhattan Bank, as the Owner Trustee's authenticating agent, or any
successor thereto hereunder, 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, the
Depositor or 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 twenty-five percent (25%) of the Certificate
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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 Servicer, the Depositor, the Certificate
Registrar, the Indenture Trustee 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 The Borough of Manhattan, The City of New York, 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 initially designates The Chase Manhattan Bank, 55 Water Street, New
York, New York 10041 as its office for such purposes. 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 make distributions from the Class B Reserve
Account, and investments of any amounts or property held therein or credited
thereto, pursuant to and in accordance with the Indenture and the Sale and
Servicing Agreement, and shall report the amounts of such distributions and
deposits to the Owner Trustee. Any Paying Agent shall have the revocable power
to withdraw funds from the Certificate Distribution Account and the Class B
Reserve 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 Citibank, N.A., and any co-paying agent
chosen by the Owner Trustee. Citibank, N.A. shall have the right to resign as
Paying Agent upon thirty (30) days' written notice to the Owner Trustee. In the
event that Citibank, N.A. 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
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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. Without limiting the generality of the foregoing or any other
provision hereof, including, without limitation, Section 8.2 hereof, the rights
and protections afforded to any Paying Agent under either the Indenture
(including, without limitation, Section 6.7 thereof), or the Sale and Servicing
Agreement (including, without limitation, Section 6.2 thereof), shall also be
afforded to any Paying Agent hereunder.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with Respect to Certain
Matters. With respect to the following matters, (a) at least ten (10) days
before the taking of such action, the Owner Trustee shall notify the
Certificateholders and the Rating Agencies in writing of the proposed action
(provided that any failure to give such notice shall not impair or affect the
effectiveness or validity of any such action) and (b) in the case of items (v),
(vi) and (vii) below, the Owner Trustee shall not take such action if
Certificateholders holding not less than a majority of the aggregate Certificate
Balance shall have notified the Owner Trustee in writing prior to the tenth
(10th) day after such notice is given that such Certificateholders have not
consented to such action or provided alternative direction:
(i) 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 in the ordinary course of business)
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);
(ii) 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);
(iii) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(iv) the amendment, change or modification of any of the Basic
Documents, 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;
(v) the amendment of the Indenture by a supplemental indenture
in circumstances where (A) the consent of any Noteholder is not
required or (B) the principal of the Notes, together with accrued and
unpaid interest thereon, shall have been paid in full, and the
Indenture shall have been
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discharged in accordance with its terms, and such amendment materially
adversely affects the interests of the Certificateholders;
(vi) the amendment, change or modification of any of the Basic
Documents (other than this Agreement pursuant to Section 11.1) in
circumstances where (A) the consent of any Noteholder is not required
or (B) the principal of the Notes, together with accrued and unpaid
interest thereon, shall have been paid in full, and the Indenture shall
have been discharged in accordance with its terms, and such amendment,
change or modification materially adversely affects the interests of
the Certificateholders; or
(vii) the appointment pursuant to this Agreement of a
successor Owner Trustee, Certificate Registrar or Paying Agent, or the
consent to the assignment by the Owner Trustee, Certificate Registrar
or Paying Agent of its respective obligations under this Agreement.
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee may not, except (a) upon the occurrence of an Event
of Servicing Termination subsequent to the payment in full of the principal of
the Notes and any accrued and unpaid interest thereon, and the discharge of the
Indenture in accordance with its terms, and (b) in accordance with the written
direction of Certificateholders holding not less than a majority of the
aggregate Certificate Balance, (i) remove the Servicer under the Sale and
Servicing Agreement pursuant to Article VII thereof, (ii) appoint a successor
Servicer pursuant to Article VII of the Sale and Servicing Agreement, (iii)
remove the Administrator under the Administration Agreement pursuant to Section
8 thereof, (iv) appoint a successor Administrator pursuant to Section 8 of the
Administration Agreement or (v) sell the Receivables after the termination of
the Indenture, except as expressly provided in the Basic Documents.
SECTION 4.3. 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 4.4. Majority Control. Except as expressly provided herein or
in any other Basic Document, any action that may be taken by the
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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.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution Account.
Pursuant to Section 4.1(c) and 4.7(a), respectively, of the Sale and Servicing
Agreement, there have been established and there shall be maintained (a) a
segregated trust account in the name of the Owner Trustee at Citibank, N.A.,
which shall be designated as the "Certificate Distribution Account", and (b) a
segregated trust account in the name of the Owner Trustee at Citibank, N.A.,
which shall be designated as the "Class B Reserve Account". The Certificate
Distribution Account and the Class B Reserve Account each shall be held in trust
by Citibank, N.A., as the initial Paying Agent hereunder, or by any successor
Paying Agent hereunder, 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 and the Class B Reserve Account each shall be
under the sole dominion and control of the Owner Trustee. All monies deposited
from time to time in the Certificate Distribution Account or the Class B Reserve
Account pursuant to the Sale and Servicing Agreement or the Indenture shall be
applied as provided in this Agreement, the Sale and Servicing Agreement and the
Indenture, and as specified in any written direction by the Administrator, the
Seller or the Servicer prescribed hereunder or thereunder.
SECTION 5.2. Application of Trust Funds.
(a) The principal of the Certificates shall be payable in installments
on each Payment Date in an aggregate amount determined in accordance with the
Sale and Servicing Agreement. The principal amount of the Certificates, to the
extent not previously paid, will be due on the Class B Final Payment Date. The
Certificates will bear interest at the Class B Rate. Interest on the
Certificates will be calculated on the basis of a 360 day year of twelve 30-day
months.
(b) On each Payment Date, the Owner Trustee (if the Owner Trustee is
not the Paying Agent and the Certificate Distribution Account is not then held
by 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, withdraw and transfer the amount deposited
pursuant to Section 2.8(a) of the Indenture in the Certificate Distribution
Account on account of principal of, or interest on, the Certificates on such
Payment Date to the Paying Agent, or (if the Paying Agent is then holding the
Certificate Distribution
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Account), the Paying Agent, based upon such information, shall withdraw such
amount from the Certificate Distribution Account, for distribution to the
Certificateholders pro rata based on the outstanding Certificate Balance of the
Certificates as determined in such Servicer's Certificate.
(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 as determined in writing by the Administrator 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, in its
sole discretion, or the Paying Agent, as directed in writing by the
Administrator, may 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 (a)
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five (5) Business Days prior to such
Payment Date, or (b) such Certificateholder is the Depositor or, if not, by
check mailed to such Certificateholder at the address of such
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Holder appearing in the Certificate Register. Notwithstanding the foregoing, the
final distribution in respect of any Certificate (whether on the Class B Final
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, 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. (a) The Owner
Trustee (or the Administrator on its behalf) shall, based on information
provided by the Depositor, (i) 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, (ii) 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, (iii) 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, (iv) cause such tax returns to be signed in the
manner required by law and (v) 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.
(b) The Owner Trustee (or the Administrator on its behalf) may satisfy
the obligations of the Owner Trustee under 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 January 15, 2000, a letter in form and substance satisfactory to the Owner
Trustee and each Paying Agent as to whether any federal tax withholding on
Certificates is then required and, if
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required, the procedures to be followed with respect thereto to comply with the
requirements of the Code. The Accountants shall be required to update the letter
in each instance that any additional tax withholding is subsequently required or
any previously required tax withholding shall no longer be required. The Owner
Trustee (or the Administrator on its behalf) shall be deemed to have discharged
the obligations of the Owner Trustee pursuant to this Section upon the
retention of the Accountants, and the Owner Trustee (or the Administrator, as
applicable) 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.
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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
$1,549,800,000, comprised of $360,000,000 in aggregate principal amount of Class
A-1 Notes, $508,000,000 in aggregate principal amount of Class A-2 Notes,
$440,000,000 in aggregate principal amount of Class A-3 Notes and $241,800,000
in aggregate principal amount of Class A-4 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.
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(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) Subject to Section 4.1, 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.
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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 (a) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (b) in accordance with the other Basic
Documents to which the Trust or the Owner Trust is a party and (c) 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, New York
or Connecticut income or franchise tax purposes, (ii) be deemed to cause a
taxable exchange of the Notes for Federal income or Delaware, New York or
Connecticut 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, New York or Connecticut
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.
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ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby amended and restated 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 (a) for its own willful
misconduct, bad faith or negligence or (b) 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):
(i) the Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee;
(ii) 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;
(iii) 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;
(iv) 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.
(v) 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
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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;
(vi) 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
(vii) 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 reasonably 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:
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(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
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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 amended and restated, Chase
Manhattan Bank Delaware 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.
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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.
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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 Chase Manhattan Bank Delaware and the Owner
Trustee, any Paying Agent hereunder and their respective 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 Chase Manhattan Bank Delaware or the Owner Trustee, any Paying
Agent hereunder 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 or any Paying Agent 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 Owner Trust Estate 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 any Paying Agent hereunder 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
choice of legal counsel of the Owner Trustee or any Paying Agent, as the case
may be, shall be subject to the approval of the Depositor, which approval shall
not be unreasonably withheld.
SECTION 8.3. Payments to Indemnified Parties. Any amounts paid to the
Owner Trustee or any other Indemnified Party pursuant to this Article
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VIII shall be deemed not to be a part of the Owner Trust Estate immediately
after such payment.
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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.
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(d) 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.
(e) 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. 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
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 8.1(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 8.1(a) (the Payment Date on which such prepayment shall
be made, the "Prepayment Date"), and the amount paid by the Servicer shall be
treated as collections of Receivables and applied to pay the in full the
Redemption Price of the Notes and the Prepayment Price 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
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such election to the Owner Trustee not later than twenty (20) days prior to the
Prepayment Date and shall deposit by 10:00 A.M. (New York City time) on the
Prepayment Date in the Certificate Distribution Account the Prepayment Price of
the Certificates to be prepaid, whereupon all such Certificates shall be due and
payable on the Prepayment Date.
(b) In addition, following payment in full of the Notes, the Holders of
one hundred percent (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 promptly following receipt of notice from the Trust or the Servicer
pursuant to Section 9.3(a), but not later than ten (10) days prior to the
applicable Prepayment Date, to each Holder of a 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
such 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 and direction of the Servicer. Failure to give
notice of prepayment, or any defect therein, to any Holder of any Certificate
shall not impair or affect the effectiveness or 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(c), 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 (other than the provisions of Article VIII) and the Trust
shall terminate.
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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. (a) The Owner
Trustee may at any time resign and be discharged from the trusts hereby amended
and restated 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.
(b) 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 (any of the foregoing events, an "Insolvency
Event"), then the Administrator may remove the Owner Trustee. If the
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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.
(c) 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. (a) 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.
(b) 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.
(c) 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.
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(d) 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 each Certificateholder, 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. (a)
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.
(b) Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
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(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.
(c) 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.
(d) 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.
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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 (i) 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 (ii) will not cause the Trust to be taxable as a corporation for Federal or
any Applicable Tax State income or franchise tax purposes.
(b) This Agreement may also be amended from time to time by the
Depositor and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of the Holders (as defined in the Indenture) of Notes
evidencing not less than a majority of the aggregate principal amount of the
then outstanding Notes, voting as a group, and the consent of the Holders of
Certificates evidencing not less than a majority of the Certificate Balance, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, or change the allocation or priority of,
collections of payments on Receivables or distributions that are required to be
made on any Note or Certificate, or change any Note Interest Rate, the Class B
Rate, the Specified Class A Reserve Balance or the Specified Class B Reserve
Balance, without the consent of the Holders of all the outstanding Notes and
Certificates affected thereby, (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
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<PAGE> 56
of Notes evidencing not less than sixty-six and two thirds percent (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.
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<PAGE> 57
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 in
and to 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 2.3), 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 (3) 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, ad dressed to Daimler-Benz Vehicle Receivables Corporation 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
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<PAGE> 58
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 each Certificateholder and their respective
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. Covenant of the Depositor. 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, any
Paying Agent hereunder, 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.
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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.
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<PAGE> 60
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
DAIMLER-BENZ VEHICLE
RECEIVABLES CORPORATION,
as Depositor
By: /s/ H.S. Traison
----------------------------------
Name: Harvey S. Traison
Title: President
CHASE MANHATTAN BANK
DELAWARE, not in its individual
capacity but solely as Owner Trustee
By: /s/ J. J. Cashin
----------------------------------
Name: John J. Cashin
Title: Vice-President
Acknowledged and Agreed:
CITIBANK, N.A.,
as Paying Agent
By: /s/ Denise Banaszek
----------------------------------
Name: Denise Banaszek
Title: Vice-President
<PAGE> 61
EXHIBIT A
NUMBER $[____________]
R-[ ]
THIS CLASS B CERTIFICATE
MAY NOT BE TRANSFERRED BY A
STOCK POWER BUT ONLY AS SET
FORTH BELOW.
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
5.62% CLASS B ASSET BACKED CERTIFICATE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CLASS B 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 CLASS B CERTIFICATE, AGREES FOR THE BENEFIT OF THE
TRUST AND THE DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY IN A DENOMINATION OF AT LEAST $1,000,000, ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS, AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE
MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER,
RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT C TO
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THE TRUST AGREEMENT REFERRED TO BELOW AND (B) THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT
D TO THE TRUST AGREEMENT, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE
RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF SUCH EVIDENCE ACCEPTABLE
TO THE TRUST THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH
THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (3) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO
ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT E TO THE TRUST AGREEMENT
OR (B) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUST THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER
IS IN COMPLIANCE WITH THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER
APPLICABLE LAWS, OR (4) TO THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
SECURITIES AND BLUE SKY LAWS OF ANY STATE OF THE UNITED STATES. IN ADDITION,
EXCEPT IN THE CASE OF TRANSFERS TO EXISTING CERTIFICATEHOLDERS, THIS CLASS B
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).
THIS CLASS B CERTIFICATE MAY NOT BE ACQUIRED BY ANY (A) 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) PLAN, AS DEFINED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (C)
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, THAT IS SUBJECT TO ANY
STATE, LOCAL OR FEDERAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE
PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (D) ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" (WITHIN THE MEANING OF DEPARTMENT OF
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LABOR REGULATION 29 C.F.R. Section 2510.3-101 OR OTHERWISE UNDER ERISA) BY
REASON OF ANY SUCH PLAN'S INVESTMENT IN THE ENTITY OR (E) PERSON INVESTING "PLAN
ASSETS" OF ANY SUCH PLAN (INCLUDING, FOR PURPOSES OF CLAUSE (D) AND THIS CLAUSE
(E), AN INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THE PRINCIPAL OF THIS CLASS B 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.
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<PAGE> 64
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
CLASS B 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 Mercedes-Benz automobiles and new and used medium- and heavy-duty
trucks and tractors manufactured by Freightliner Corporation and its
subsidiaries (collectively, "Freightliner") and used trucks and tractors and new
and used trailers manufactured by companies other than Freightliner sold to
Daimler-Benz Vehicle Receivables Corporation by Mercedes-Benz Credit Corporation
and sold by Daimler-Benz Vehicle Receivables Corporation to the Trust. The
property of the Trust (other than the Certificate Distribution Account, the
Class B Reserve Account and any money, financial assets or other property from
time to time held in or credited to, or purchased with funds from, either of
such accounts) 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
Mercedes-Benz Credit Corporation, Daimler-Benz North America Corporation,
Daimler-Benz Vehicle Receivables Corporation or any of their respective
affiliates, except to the extent described below.)
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<PAGE> 65
THIS CERTIFIES THAT [ ] is the registered owner of a [___________]
DOLLARS AND [______] CENTS nonassessable, fully-paid, beneficial interest in
Class B Certificates of Daimler-Benz Vehicle Owner Trust 1998-A (the "Trust")
formed by Daimler-Benz Vehicle Receivables Corporation, a Delaware corporation
(the "Depositor"). The Class B Certificates have an aggregate Initial
Certificate Balance of $81,654,551.40.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Trust Agreement.
Dated: [ ], 1998
CHASE MANHATTAN CHASE MANHATTAN
BANK DELAWARE BANK DELAWARE
as Owner Trustee OR as Owner Trustee
By:________________________ By: THE CHASE MANHATTAN BANK
Authorized Officer as Authenticating Agent
By:________________________
Authorized Officer
A-5
<PAGE> 66
The Trust was created pursuant to a Trust Agreement, dated as of
November 1, 1998 (as amended, supplemented or otherwise modified and in effect
from time to time, the "Trust Agreement"), by and between the Depositor and
Chase Manhattan Bank Delaware, as owner trustee thereunder (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 November 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 Mercedes-Benz Credit Corporation, as servicer
(in such capacity, the "Servicer"), as applicable.
This Certificate is one of the duly authorized Class B Certificates
designated as "Asset Backed Certificates" (herein called the "Certificates" or
the "Class B Certificates"). This Class B 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, tractors and trailers and certain
rights and obligations thereunder (the "Receivables"), (ii) all monies due or
received thereunder on or after the Cutoff Date; (iii) the Depositor's security
interests in the Financed Vehicles; (iv) all money, financial assets or other
property from time to time held in or credited to, or purchased with funds from,
the Collection Account, the Note Distribution Account, the Certificate
Distribution Account, the Payahead Account and the Reserve Accounts; (v) all of
the Depositor's rights to receive proceeds from claims on physical damage,
credit life and disability insurance policies covering the Financed Vehicles or
Obligors; (vi) all of the Depositor's rights to all documents contained in the
Receivable Files; (vii) all of the Depositor's rights under the Purchase
Agreement and the Sale and Servicing Agreement; (viii) all of the Depositor's
rights, if any, of recourse against Dealers arising out of breaches by Dealers
in connection with the Receivables; (ix) all property (including the right to
receive future Liquidation Proceeds and Recoveries) that secures a Receivable
and that will have been acquired by or on behalf of the Indenture Trustee; (x)
the Servicing Guaranty Agreement and (xi) all proceeds (within the meaning of
Section 9-306 of the Uniform Commercial Code) of the foregoing. The rights of
the Trust in the foregoing property of the Trust (other than the Certificate
Distribution Account, the Class B Reserve Account and any money, financial
assets or other property from time to time held in or credited to, or pur-
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<PAGE> 67
chased with funds from, either of such accounts) have been pledged to the
Indenture Trustee to secure the payment of the Notes.
Under the Trust Agreement, the Sale and Servicing Agreement and the
Indenture, there will be distributed on the twentieth (20th) day of each month
or, if such twentieth (20th) day is not a Business Day, the next Business Day
(each, a "Payment Date"), commencing December 21, 1998, to the Holder in whose
name this Certificate is registered at the close of business on the last
Business Day of the calendar month immediately preceding such Payment Date (the
"Record Date"), such Certificateholder's percentage interest in the amount on
deposit in the Certificate Distribution Account to be distributed to
Certificateholders on such Payment Date, including any Accrued Certificate
Interest and any Principal Distribution Amount with respect to the Certificates;
provided, however, that (a) interest will be distributed to the
Certificateholders on each Payment Date only to the extent of funds remaining
after the reimbursement of Advances by the Servicer, the payment of the Total
Servicing Fee and the payment of interest on the Notes on such Payment Date, and
(b) principal will be distributed to the Certificateholders on each Payment Date
only to the extent of funds remaining after the reimbursement of Advances by the
Servicer, the payment of the Total Servicing Fee, the payment of interest on the
Certificates, and the payment of all principal and interest on the Notes on such
Payment Date; provided, further, however, that if not paid prior to such date,
the entire unpaid principal amount of this Certificate together with any accrued
and unpaid interest thereto shall be due and payable on the earlier of the Class
B Final Payment Date and the Prepayment Date, if any, pursuant to Sections 5.2
and 9.1 of the Trust Agreement.
This Certificate shall bear interest at the rate per annum shown above
on each Payment Date unless the principal of this Certificate is paid or made
avail able for payment, on the principal amount of this Certificate 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 Certificate will accrue for each
Payment Date from and including the Closing Date (in the case of the first
Payment Date) or from and including the twentieth (20th) date of the calendar
month preceding each Payment Date to but excluding the twentieth (20th) day of
the following calendar month. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
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
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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.
Any distributions on this Certificate will be made on each Payment Date
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 as of the Record Date 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 The Borough of Manhattan, The City of New York.
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.
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<PAGE> 69
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.
DAIMLER-BENZ VEHICLE OWNER
TRUST 1998-A
By: CHASE MANHATTAN BANK
DELAWARE, not in its individual
capacity but solely as Owner Trustee
By: _______________________________________
Authorized Officer
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<PAGE> 70
[REVERSE OF CLASS B CERTIFICATE]
The Class B 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 Class B
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 Class B 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, and 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.
Any attempted Transfer in contravention of the
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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 The Borough of Manhattan, City of
New York, 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 The Chase Manhattan Bank.
Except for Certificates issued to the Depositor, the Class B
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, any Paying Agent for the
Certificates and any other agent of the Owner Trustee or any agent of 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 ten percent (10%)
of the Initial Pool Balance.
A-11
<PAGE> 72
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.
A-12
<PAGE> 73
EXHIBIT B
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST OF
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
This Certificate of Trust of DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
(the "Trust"), dated as of November 1, 1998, is being duly executed and filed by
Chase Manhattan Bank Delaware, a Delaware banking corporation, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Delaware Code,
Section 3801 et seq.).
1. Name. The name of the business trust formed hereby is DAIMLER-BENZ
VEHICLE OWNER TRUST 1998-A.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is Chase Manhattan Bank Delaware, 1201 North
Market Street, Wilmington, DE 19801, Attention: Corporate Trust Administration.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
CHASE MANHATTAN BANK DELAWARE, not in its individual capacity but solely
as owner trustee under a Trust Agreement
dated as of November 1, 1998
By:__________________________________________
Name:
Title:
B-1
<PAGE> 74
EXHIBIT C
[FORM OF RULE 144A TRANSFEROR CERTIFICATE]
[Date]
Chase Manhattan Bank Delaware,
as Owner Trustee
1201 North Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Administration
The Chase Manhattan Bank,
as Certificate Registrar
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Administration
Ladies and Gentlemen:
This is to notify you as to the transfer of $ [*] in denomination of
Class B Asset Backed Certificates (the "Certificates") of Daimler-Benz Vehicle
Owner Trust 1998-A (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
November 1, 1998, relating to the Certificates, as follows:
Name: Denominations: [*]
Address:
Taxpayer I.D. No:
The undersigned represents and warrants that the undersigned (i)
reasonably believes the purchaser is a "qualified institutional buyer," as
defined in Rule 144A under the Securities Act of 1933 (the "Act"), (ii) such
purchaser has acquired the Certificates in a transaction effected in accordance
with the exemption from the registration requirements of the Act provided by
Rule 144A and, (iii) if the purchaser has purchased the Certificates for one or
more accounts for which it is acting as fiduciary or agent, (A) each such
account is a qualified institutional buyer and (B) the purchaser
- -------------------------
[* minimum of $1,000,000]
C-1
<PAGE> 75
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:
C-2
<PAGE> 76
EXHIBIT D
[FORM OF INVESTMENT LETTER --
QUALIFIED INSTITUTIONAL BUYER]
[Date]
Daimler-Benz Vehicle Owner Trust 1998-A
as Issuer
Chase Manhattan Bank Delaware,
as Owner Trustee
1201 North Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Administration
The Chase Manhattan Bank,
as Certificate Registrar
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of the Class B Asset Backed
Certificates (the "Certificates") of Daimler-Benz Vehicle Owner Trust 1998-A
(the "Issuer"), a trust formed by Daimler-Benz Vehicle Receivables Corporation
(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 November 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.
D-1
<PAGE> 77
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, as defined in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), that
is subject to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, that is subject to any state, local or Federal 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" (within the meaning of Department of Labor Regulation 29 C.F.R. Section
2510.3-101 or otherwise under ERISA) by reason of any such plan's investment in
the entity or (E) a person investing "plan assets" of any such plan (including,
for purposes of clause (D) and this clause (E), an insurance company general
account, but excluding any entity registered under the Investment Company Act of
1940, as amended).
D-2
<PAGE> 78
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 D or
Exhibit E to the Trust Agreement, as applicable.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:_________________________
Name:
Title:
Securities To Be Purchased:
$ [principal balance of Certificates]
D-3
<PAGE> 79
EXHIBIT E
[FORM OF INVESTMENT LETTER --
INSTITUTIONAL ACCREDITED INVESTOR]
[Date]
Daimler-Benz Vehicle Owner Trust 1998-A
as Issuer
Chase Manhattan Bank Delaware,
as Owner Trustee
1201 North Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Administration
The Chase Manhattan Bank,
as Certificate Registrar
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of the Class B Asset Backed
Certificates (the "Certificates") of Daimler-Benz Vehicle Owner Trust 1998-A
(the "Issuer"), a trust formed by Daimler-Benz Receivables Corporation (the
"Depositor" or "Seller"), we confirm that:
1. We agree to be bound by the restrictions and conditions set forth in
the Amended or Restated Trust Agreement, dated as of November 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.
E-1
<PAGE> 80
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, as defined in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), that
is subject to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, that is subject to any state, local or Federal 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" (within the meaning of Department of Labor Regulation 29 C.F.R. Section
2510.3-101 or otherwise under ERISA) by reason of any such plan's investment in
the entity or (E) a person investing "plan assets" of any such plan (including,
for purposes of clause (D) and this clause (E), an insurance company general
account, but excluding any entity registered under the Investment Company Act of
1940, as amended).
E-2
<PAGE> 81
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 E or
Exhibit D 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:
E-3
<PAGE> 1
Exhibit 4.2
================================================================================
SALE AND SERVICING AGREEMENT
by and among
------------
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A,
as Issuer,
DAIMLER-BENZ VEHICLE RECEIVABLES CORPORATION,
as Seller
and
---
MERCEDES-BENZ CREDIT CORPORATION,
as Servicer
Dated as of November 1, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.................................................................................. 2
SECTION 1.2 Other Definitional Provisions................................................................ 19
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property................................................................. 20
SECTION 2.2 Representations and Warranties of the Seller
as to the Receivables........................................................................ 20
SECTION 2.3 Repurchase upon Breach....................................................................... 25
SECTION 2.4 Custody of Receivable Files.................................................................. 26
SECTION 2.5 Duties of Servicer as Custodian.............................................................. 26
SECTION 2.6 Instructions; Authority to Act............................................................... 28
SECTION 2.7 Indemnification by the Custodian............................................................. 28
SECTION 2.8 Effective Period and Termination............................................................. 29
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND OTHER TRUST PROPERTY
SECTION 3.1 Duties of Servicer........................................................................... 29
SECTION 3.2 Collection and Allocation of Receivable Payments............................................. 33
SECTION 3.3 Realization upon Receivables................................................................. 34
SECTION 3.4 Physical Damage Insurance.................................................................... 35
SECTION 3.5 Maintenance of Security Interests in Financed Vehicles....................................... 35
SECTION 3.6 Covenants of Servicer........................................................................ 35
SECTION 3.7 Purchase by Servicer upon Breach............................................................. 36
SECTION 3.8 Servicing Compensation....................................................................... 36
SECTION 3.9 Servicer's Certificate....................................................................... 37
SECTION 3.10 Annual Statement as to Compliance; Notice of Event
of Servicing Termination..................................................................... 37
SECTION 3.11 Annual Independent Certified Public Accountants' Reports..................................... 38
SECTION 3.12 Access to Certain Documentation and Information
Regarding Receivables........................................................................ 39
SECTION 3.13 Reports to the Commission.................................................................... 39
SECTION 3.14 Reports to Rating Agencies................................................................... 39
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE IV ACCOUNTS; COLLECTIONS; ADVANCES; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 4.1 Accounts..................................................................................... 40
SECTION 4.2 Collections.................................................................................. 44
SECTION 4.3 Application of Collections................................................................... 45
SECTION 4.4 Advances..................................................................................... 46
SECTION 4.5 Additional Deposits.......................................................................... 47
SECTION 4.6 Distributions................................................................................ 47
SECTION 4.7 Subordination; Reserve Accounts.............................................................. 49
SECTION 4.8 Net Deposits................................................................................. 54
SECTION 4.9 Statements to Noteholders and Certificateholders............................................. 54
SECTION 4.10 Control of Securities Accounts............................................................... 55
ARTICLE V
THE SELLER
SECTION 5.1 Representations, Warranties and Covenants of Seller.......................................... 56
SECTION 5.2 Liability of Seller; Indemnities............................................................. 58
SECTION 5.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller....................................................................... 59
SECTION 5.4 Limitation on Liability of Seller and Others................................................. 60
SECTION 5.5 Seller May Own Notes or Certificates......................................................... 60
ARTICLE VI
THE SERVICER
SECTION 6.1 Representations and Warranties of Servicer................................................... 60
SECTION 6.2 Liability of Servicer; Indemnities........................................................... 62
SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer..................................................................... 64
SECTION 6.4 Limitation on Liability of Servicer and Others............................................... 65
SECTION 6.5 Servicer Not to Resign....................................................................... 65
SECTION 6.6 Servicer May Own Notes or Certificates....................................................... 66
ARTICLE VII
SERVICING TERMINATION
SECTION 7.1 Events of Servicing Termination.............................................................. 66
SECTION 7.2 Indenture Trustee to Act; Appointment of Successor Servicer.................................. 68
SECTION 7.3 Effect of Servicing Transfer................................................................. 69
SECTION 7.4 Notification to Noteholders and Certificateholders........................................... 70
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 7.5 Waiver of Past Events of Servicing Termination............................................... 70
ARTICLE VIII
TERMINATION
SECTION 8.1 Optional Purchase of All Receivables......................................................... 71
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment.................................................................................... 72
SECTION 9.2 Protection of Title to Trust................................................................. 74
SECTION 9.3 Governing Law................................................................................ 76
SECTION 9.4 Notices...................................................................................... 77
SECTION 9.5 Severability of Provisions................................................................... 77
SECTION 9.6 Assignment................................................................................... 77
SECTION 9.7 Further Assurances........................................................................... 78
SECTION 9.8 No Waiver; Cumulative Remedies............................................................... 78
SECTION 9.9 Third-Party Beneficiaries.................................................................... 78
SECTION 9.10 Actions by Noteholder or Certificateholders.................................................. 78
SECTION 9.11 Counterparts................................................................................. 79
SECTION 9.12 Agent for Service............................................................................ 79
SECTION 9.13 No Bankruptcy Petition....................................................................... 79
SECTION 9.14 Limitation of Liability of Owner Trustee and Indenture Trustee............................... 79
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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 Servicing Guaranty Agreement
</TABLE>
iv
<PAGE> 6
SALE AND SERVICING AGREEMENT, dated as of November 1, 1998 (as
the same may be amended, supplemented or otherwise modified and in effect from
time to time, this "Agreement"), by and among DAIMLER-BENZ VEHICLE OWNER TRUST
1998-A, a Delaware business trust (the "Issuer"), DAIMLER-BENZ VEHICLE
RECEIVABLES CORPORATION, a Delaware corporation (the "Seller"), and
MERCEDES-BENZ CREDIT CORPORATION, a Delaware corporation (the "Servicer").
WHEREAS, the Issuer desires to purchase a portfolio of
accounts receivable arising in connection with (i) motor vehicle retail
installment contracts generated by authorized Mercedes-Benz motor vehicle
dealers throughout the United States and (ii) commercial vehicle retail
installment contracts for, and retail loans evidenced by notes secured by, new
and used medium- and heavy-duty trucks, tractors and trailers generated by
authorized Freightliner (as defined herein) commercial vehicle dealers
throughout the United States and used trucks and tractors and new and used
trailers manufactured by companies other than Freightliner and certain other
property, as more fully described herein, in the ordinary course of business
and sold to the Seller;
WHEREAS, the Seller is willing to sell such Receivables (as
defined herein) to the Issuer; and
WHEREAS, the Servicer 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:
<PAGE> 7
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 Certificate Interest" shall have the meaning assigned
thereto in the Trust Agreement.
"Accrued Note Interest" shall have the meaning assigned
thereto in the Indenture.
"Actuarial Method" shall mean the method of allocating a fixed
level payment between principal and interest, pursuant to which the portion of
each such payment that is allocated to interest is the product of one-twelfth
of the APR on the Receivable multiplied by the scheduled principal balance.
"Administration Agreement" shall have the meaning assigned
thereto in the Indenture.
"Administrator" shall have the meaning assigned thereto in the
Indenture.
"Advance" shall have the meaning assigned thereto in Section
4.4.
"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 assigned thereto in the
recitals hereto.
2
<PAGE> 8
"Amount Financed" shall mean, with respect to a Receivable,
the amount originally advanced under such Receivable toward the purchase price
of the related Financed Vehicles and any related costs.
"Applicable Tax State" shall mean, as of any date of
determination, each state in the United States 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.
"Assignment" shall mean the Assignment, dated as of November
1, 1998, by MBCC to the Seller.
"Authorized Officer" shall mean, in the case of the Indenture
Trustee, any duly authorized officer within the Corporate Trust Office of the
Indenture Trustee, including any vice president, assistant vice president,
senior trust officer, trust officer, secretary, assistant secretary, financial
services officer or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject and, with respect to the Owner Trustee,
any duly authorized officer of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement and the Basic Documents on behalf of
the Owner Trustee and shall also mean 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 immediately
preceding Collection Period: (i) all collections on the Receivables including
Payaheads withdrawn from the Payahead Account but excluding Payaheads deposited
into the Payahead Account; (ii) all Liquidation Proceeds; (iii) all Recoveries;
(iv) all Advances; (v) all proceeds from claims on physical damage, credit life
and disability insurance policies covering the Financed Vehicles or the
3
<PAGE> 9
Obligors and (vi) the Purchase Amount of each Purchased Receivable, minus (b)
the sum of the following amounts with respect to the related Collection Period:
(i) the aggregate amount of funds described in clause (a) above that are used
in the related Collection Period or to be used on or before such Payment Date
to reimburse the Servicer for the aggregate amount of Advances previously made
by the Servicer for prior Collection Periods that are due and payable to the
Servicer on such Payment Date; (ii) the Supplemental Servicing Fee, if any; and
(iii) any investment earnings and interest earned on the Reserve Accounts.
"Balloon Payment" shall mean a payment that becomes due on the
maturity date of a Balloon Receivable, which is sufficient to pay accrued
interest plus the remaining Amount Financed of such Receivable.
"Balloon Receivable" shall mean a Receivable that provides for
(a) fixed monthly payments prior to the maturity date for such Receivable that
amortize a portion of the Amount Financed of such Receivable, and (b) a Balloon
Payment on the maturity date of such Receivable.
"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 or Wilmington, Delaware shall be authorized or obligated by law,
executive order, or governmental decree to remain closed.
"Certificate" shall have the meaning assigned thereto in the
Trust Agreement.
"Certificate Balance" shall have the meaning assigned thereto
in the Trust Agreement.
"Certificate Distribution Account" shall have the meaning
assigned thereto in Section 5.1 of the Trust Agreement.
"Certificateholder" shall have the meaning assigned thereto in
the Trust Agreement.
"Certificate Interest Carryover Shortfall" shall have the
meaning assigned thereto in the Trust Agreement.
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<PAGE> 10
"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.
"Certificate Register" shall have the meaning assigned thereto
in the Trust Agreement.
"Certificate Registrar" shall have the meaning assigned
thereto in the Trust Agreement.
"Class" shall have the meaning assigned thereto in the
Indenture.
"Class A Reserve Account" shall mean the account established
and maintained as such pursuant to Section 4.7.
"Class A Reserve Account Amount" shall mean, with respect to
any Payment Date, the amount on deposit in the Class A 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), as
determined in accordance with Section 4.7.
"Class A Reserve Initial Deposit" shall mean, with respect to
the Closing Date, $40,786,363.79.
"Class B Reserve Account" shall have the meaning assigned
thereto in the Trust Agreement.
"Class B Reserve Account Amount" shall mean, with respect to
any Payment Date, the amount on deposit in the Class B 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), as
determined in accordance with Section 4.7.
"Class B Reserve Initial Deposit" shall mean, with respect to
the Closing Date, $0, which amount may be increased upon any sale by the Seller
of the
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<PAGE> 11
Certificates and receipt of an Opinion of Counsel to the effect that such
increase would not adversely affect the status of the Trust for federal income
tax purposes.
"Closing Date" shall mean December 10, 1998.
"Collection Account" shall mean the account established and
maintained as such pursuant to Section 4.1(a).
"Collection Period" shall mean (a) with respect to each
Payment Date during the term of this Agreement, the immediately preceding
calendar month, or, (b) 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.
"Commercial Vehicle" shall mean a medium- or heavy-duty truck,
tractor or trailer securing the indebtedness of the Obligor under the related
Receivable.
"Commercial Vehicle Dealers" shall mean authorized
Freightliner commercial vehicle dealers throughout the United States.
"Commission" shall have the meaning assigned thereto in the
Indenture.
"Contract" shall mean a retail installment sale contract,
including a retail installment contract or retail loan, relating to the sale of
a Motor Vehicle or Commercial Vehicle.
"Corporate Trust Office" with respect to (a) the Indenture
Trustee, shall have the meaning assigned thereto in the Indenture, and (b) the
Owner Trustee, shall have the meaning assigned thereto in the Trust Agreement.
"Cutoff Date" shall mean November 1, 1998.
"DBNA" shall mean Daimler-Benz North America Corporation, a
Delaware corporation, and its successors and assigns.
"Dealers" shall mean the Mercedes-Benz Dealers and the
Commercial Vehicle Dealers.
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"Dealer Agreement" shall mean an agreement by and between MBCC
and any Dealer relating to the assignment of a Receivable to MBCC and all
documents and instruments relating thereto, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Dealers" shall mean the Mercedes-Benz Dealers and the
Commercial Vehicle Dealers.
"Defaulted Receivable" shall mean a Receivable which, by its
terms, is in default and as to which (a) a Scheduled Payment is 240 or more
days past due, (b) the Servicer has determined, in accordance with its
customary servicing procedures, that eventual payment in full is unlikely and
the outstanding balance of the Receivable has been charged-off or (c) the
Servicer has repossessed and disposed of the related Financed Vehicle.
"Determination Date" shall mean, with respect to any
Collection Period, the earlier of (a) the sixteenth (16th) calendar day of the
next succeeding calendar month and (b) the third Business Day preceding the
next succeeding Payment Date; provided, that if any of the Class A-1 Notes are
still Outstanding after the December 1999 Payment Date, an additional
Determination Date shall be established on January 2, 2000 with respect to the
Class A-1 Final Payment Date, and the calculations and deposits required to be
made for the benefit of the Class A-1 Notes in connection with the January 3,
2000 Payment Date shall be made on or before January 2, 2000.
"Due Date" shall mean the date a payment is due under a
Contract.
"Eligible Bank" shall mean (a) the corporate trust department
of the Owner Trustee, the Indenture Trustee or Citibank, N.A. so long as it
shall be Paying Agent under the Trust Agreement or (b) any depository
institution with trust powers organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), (i) which has a net worth in excess of
$50,000,000, (ii) the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation (except with
respect to any domestic branch of a foreign bank), (iii) which is subject to
supervision and examination by Federal or state banking authorities and (iv)
which has a rating of P-1 from Moody's and A-1+ from S&P with respect to
short-term
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<PAGE> 13
deposit obligations or if such institution has issued long-term unsecured debt
obligations, a rating of A2 or higher from Moody's and AA- from S&P with
respect to long-term unsecured debt obligations.
"Eligible Deposit Account" shall mean either (a) a segregated
account with an Eligible Bank or (b) a segregated trust account with the trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having trust powers and acting as
trustee for funds deposited in such account, so long as the long-term unsecured
debt of such depository institution will have a credit rating from each Rating
Agency in one of its generic rating categories which signifies investment grade
(which, for Moody's, is Baa3 or higher, and for S&P, is BBB- or higher).
"Eligible Servicer" shall mean a Person which, at the time of
its appointment as Servicer or as a subservicer, (a) has a net worth of not
less than $50,000,000, (b) is servicing a portfolio of motor vehicle or
commercial vehicle retail installment sale contracts and/or loans, (c) is
legally qualified, and has the capacity, to service the Receivables, (d) has
demonstrated the ability to service a portfolio of motor vehicle or commercial
vehicle retail installment sale contracts and/or loans similar to the
Receivables professionally and competently in accordance with standards of
skill and care that are consistent with prudent industry standards, and (e) 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.
"Event of Servicing Termination" shall mean an event specified
in Section 7.1.
"Exchange Act" shall have the meaning assigned thereto in the
Indenture.
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"Financed Vehicle" shall mean a new or used Motor Vehicle or
Commercial Vehicle, together with all accessions thereto, securing the
indebtedness of the Obligor under the related Receivable.
"Freightliner" shall mean Freightliner Corporation and its
subsidiaries.
"Holder" shall have the meaning assigned thereto in the
Indenture.
"Indenture" shall mean the Indenture, dated as of November 1,
1998, by and between the Issuer and Citibank, N.A., a national banking
association, as the Indenture Trustee, as the same may be amended, supplemented
or otherwise modified and in effect from time to time.
"Indenture Trustee" shall have the meaning assigned thereto in
the Indenture.
"Initial Certificate Balance" shall have the meaning assigned
thereto in the Trust Agreement.
"Initial Pool Balance" shall mean $1,631,454,551.40.
"Issuer" shall have the meaning assigned thereto in the
Indenture.
"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 (a) any expenses incurred by the Servicer in connection with collection of
such Receivable and the disposition of the Financed Vehicle and (b) any amounts
required by law to be remitted to the Obligor. Liquidation Proceeds shall be
allocated first to accrued and unpaid interest on the Receivables and then to
the unpaid principal balance thereof.
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"MBCC" shall mean Mercedes-Benz Credit Corporation, a Delaware
corporation, and its successors and assigns.
"Mercedes-Benz Dealers" shall mean authorized Mercedes-Benz
motor vehicle dealers throughout the United States.
"Monthly Remittance Condition" shall have the meaning assigned
thereto in Section 4.1(e).
"Moody's" shall mean Moody's Investors Service, Inc., and its
successors and assigns.
"Motor Vehicle" shall mean a Mercedes-Benz motor vehicle
securing the indebtedness of the Obligor under the related Receivable.
"Note Distribution Account" shall mean the account established
and maintained as such pursuant to Section 4.1(b).
"Note Interest Carryover Shortfall" shall have the meaning
assigned thereto in the Indenture.
"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 have the meaning assigned thereto in the
Indenture.
"Obligor" on a Receivable shall mean, with respect to any
Receivable, 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.
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"Officer's Certificate" shall mean a certificate signed by (a)
the chairman, the president, any executive vice president, vice president or
the treasurer of the Seller or the Servicer, as the case may be or (b) an
Authorized Officer of the Owner Trustee on behalf of the Issuer, in each case
delivered to the Owner Trustee or the Indenture Trustee, as applicable.
"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 and
opinion shall be acceptable to the Indenture Trustee, the Owner Trustee, the
Rating Agencies, the Note Registrar or the Certificate Registrar, as
applicable.
"Optional Purchase Percentage" shall mean ten percent (10%).
"Outstanding" shall have the meaning assigned thereto in the
Indenture.
"Owner Trust Estate" shall have the meaning assigned thereto
in the Trust Agreement.
"Owner Trustee" shall have the meaning assigned thereto in the
Trust Agreement.
"Payahead" shall mean, with respect to a 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.
"Payahead Account" shall mean the account established and
maintained as such pursuant to Section 4.1(d).
"Payahead Balance" shall mean, with respect to a Receivable,
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
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 Receivable), as reduced by applications of
previous Payaheads with respect to such Receivable, pursuant to Sections 4.3
and 4.4.
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"Paying Agent" shall mean a Paying Agent under the Indenture
or a Paying Agent under the Trust Agreement.
"Payment Date" shall mean the twentieth (20th) day of each
month, or if such day is not a Business Day, the immediately following Business
Day, commencing on December 21, 1998; provided, that if any of the Class A-1
Notes are still Outstanding after the December 1999 Payment Date, the Class A-1
Notes shall be payable in full on January 3, 2000, such date shall be a Payment
Date (solely with respect to the Class A-1 Notes) and the Class A-1 Final
Payment Date, and the related Determination Date shall be January 2, 2000.
"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 any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (or any domestic branch of a foreign bank) and subject
to supervision and examination by Federal or State banking or
depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein,
the commercial paper or other short-term unsecured debt obligations
(other than such obligations the rating of which is based on the
credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category granted thereby;
(c) commercial paper having, at the time of the
investment or contractual commitment to invest therein, a rating from
each of the Rating Agencies in the highest investment category granted
thereby;
(d) investments in money market funds having a
rating from each of the Rating Agencies in the highest investment
category granted thereby (including funds for which the Indenture
Trustee or the Owner
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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.
"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, the aggregate
outstanding Principal Balance of the Receivables (excluding Defaulted
Receivables) as of the close of business on such date.
"Principal Balance" shall mean, with respect to any Receivable
as of any date, the Amount Financed minus the sum of: (a) that portion of all
Scheduled Payments due on or prior to such date and, with respect to periods
prior to the initial Collection Period, the amount indicated in such Receivable
as required to be paid by the Obligor in each such period, whether or not paid,
allocable to principal in accordance with the Actuarial Method, and (b) any
prepayment in full applied by the Servicer 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.
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"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 into
the Note Distribution Account and the Certificate Distribution Account, as
applicable, on such Payment Date.
"Principal Distribution Amount" shall mean, with respect to
any Payment Date, the sum of (a) the Scheduled Principal for such Payment Date
plus (b) 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 the Certificate Balance, as applicable; and provided, further,
that, on the Final Payment Date for each Class of Notes or the Certificates, as
applicable, the amount required to be deposited in the Note Distribution
Account to pay principal of the Notes and the amount required to be deposited
in the Certificate Distribution Account to pay the Certificate Balance, as
applicable, shall include the amount necessary (after giving effect to the
other amounts to be deposited in the Note Distribution Account and the
Certificate Distribution Account, as applicable, on such Payment Date and
allocable to principal or the Certificate Balance) to reduce the outstanding
principal amount of the Notes of such Class or the Certificate Balance, as
applicable, to zero.
"Proceedings" shall have the meaning assigned thereto in the
Indenture.
"Program" shall have the meaning assigned thereto in Section
3.11.
"Purchase Agreement" shall mean the Purchase Agreement, dated
as of November 1, 1998, by and between the Seller and MBCC, as the same may be
amended, supplemented or otherwise modified and in effect from time to time,
relating to the purchase of the Receivables by the Seller from MBCC.
"Purchase Amount" shall mean, with respect to a Payment Date
and a Receivable to be purchased or repurchased by the Seller or the Servicer
on such Payment Date, an amount equal to the sum of (a) the outstanding
Principal Balance of such Receivable as of the first day of the Collection
Period preceding the Collection Period in which such Payment Date occurred and
(b) an amount equal to the amount of accrued and unpaid interest on such
Principal Balance at the related
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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 occurred 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 8.1 hereof.
"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 each of 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 each of 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 any Class of the Notes.
"Receivable" shall mean each retail installment contract,
retail loan or Contract for a Financed Vehicle described in the Schedule of
Receivables and all rights and obligations thereunder, but excluding Purchased
Receivables.
"Receivable File" shall mean, with respect to a Receivable,
the electronic entries, documents, instruments and writings specified in
Section 2.4.
"Record Date" (a) with respect to the Notes and any Payment
Date, shall mean the close of business on the day immediately preceding such
Payment Date or, if Definitive Notes have been issued, the last day of the
calendar month preceding such Payment Date and (b) with respect to the
Certificates and any Payment Date, shall have the meaning assigned thereto in
the Trust Agreement.
"Recoveries" shall mean, with respect to any Collection Period
following the Collection Period in which a Receivable became a Defaulted
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Receivable, all monies received by the Servicer with respect to any Defaulted
Receivable during any Collection Period, net of the sum of (a) 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 (b) any payments on such Receivable required by law to be
remitted to the Obligor.
"Required Rating" shall mean a rating on short-term unsecured
debt obligations of (a) P-1 by Moody's and (b) 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 Accounts" shall have the meaning assigned thereto in
Section 4.7(a).
"Reserve Account Property" shall have the meaning assigned
thereto in Section 4.7(a).
"S&P" shall mean Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., and 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, computer disk or tape or any other medium acceptable to the Issuer
and the Indenture Trustee), 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
any Due Date or payment 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 principal portion of each Scheduled Payment due on any
Receivable during the related Collection Period, (b) without duplication of
amounts taken into account under (a), the outstanding principal balance of (i)
Receivables prepaid in full during the related Collection Period and (ii)
Receivables which became Defaulted Receivables during the related Collection
Period, (c) the Purchase
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<PAGE> 22
Amount of each Receivable that was purchased or repurchased by the Seller or
the Servicer during such Collection Period, to the extent attributable to
principal, and (d) without duplication of amounts taken into account under (b),
the proceeds of any other sale of a Receivable to the extent allocable to
principal; provided, however, that in calculating the Scheduled Principal, all
payments and proceeds (including Liquidation Proceeds) of any Purchased
Receivable, the Purchase Amount of which has been included in Scheduled
Principal in a prior Collection Period (which shall be paid to the Seller or
the Servicer, as applicable), will be excluded.
"Seller" shall mean Daimler-Benz Vehicle Receivables
Corporation, 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 5.3.
"Servicer" shall mean MBCC, in its capacity as Servicer of the
Receivables under this Agreement, each successor thereto (in the same capacity)
pursuant to Section 6.3, and each Successor Servicer appointed and acting
pursuant to Section 7.2 and Section 3.7(e) of the Indenture.
"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 Guarantor" shall mean DBNA, as Servicing Guarantor
under the Servicing Guaranty Agreement, and any successor thereto thereunder.
"Servicing Guaranty Agreement" shall mean an agreement,
substantially in the form of Exhibit D hereto, between DBNA, as Servicing
Guarantor, in favor of the Issuer, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"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
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<PAGE> 23
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 one percent (1.0%) per annum.
"Shortfall" have the meaning assigned in Section 4.4(a).
"Specified Class A Reserve Balance" shall mean, with respect
to the Closing Date, $40,786,363.79, and with respect to any Payment Date,
$57,100,909.30, except where on any Payment Date (a) the annualized average for
the preceding three Collection Periods of the ratios of net losses (that is,
the net balances of all Receivables which are charged off in the applicable
Collection Period, less any Liquidation Proceeds or Recoveries received in such
Collection Period) to the Pool Balance as of the first day of each such
Collection Period exceeds two and one-quarter percent (2.25%) or (b) the
average for the preceding three Collection Periods of the ratios of (i) the sum
of (A) the balance of Receivables that are delinquent sixty-one (61) days or
more plus (B) the balance of Receivables for any Contracts relating to
repossessed Vehicles which in both cases have not been charged off to (ii)
such outstanding Pool Balance exceeds four and one-quarter percent (4.25%),
then the Specified Class A Reserve Balance for such Payment Date will equal
$65,258,182.06. Notwithstanding the foregoing, if (1) 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 (2) there is
delivered to the Indenture Trustee 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 Class A Reserve Balance
may be reduced in accordance with such letters without an amendment hereto.
"Specified Class B Reserve Balance" shall mean, initially zero
and remain zero for so long as the Seller retains the Class B Certificates; if
the Seller sells the Class B Certificates, the Specified Class B Reserve
Balance shall be set at an amount determined by the Seller, in consultation
with the Rating Agencies, in order to achieve the desired rating for the Class
B Certificates, and provided that the Rating Agency Condition will be satisfied
with respect to each Class of the Notes.
"Successor Servicer" shall have the meaning assigned thereto
in the Indenture.
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"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 Servicing Fee" shall mean, with respect to any Payment
Date, the sum of (a) the Servicing Fee and the Supplemental Servicing Fee for
the related Collection Period plus (b) all accrued and unpaid Servicing Fees or
Supplemental Servicing Fees for prior Collection Periods.
"Trust" shall have the meaning assigned thereto in the Trust
Agreement.
"Trust Agreement" shall mean the Trust Agreement, dated as of
November 1, 1998, by and between the Owner Trustee and the Seller, as depositor
thereunder, as the same may be amended, supplemented or otherwise modified and
in effect from time to time (including the Amended and Restated Trust
Agreement, dated as of November 1, 1998, by and between the Owner Trustee and
the Seller, as depositor thereunder).
"Trust Property" shall mean, collectively, (a) the
Receivables, (b) all monies due or received thereunder on or after the Cutoff
Date, (c) all of the Seller's security interests in the Financed Vehicles, (d)
the Collection Account, the Note Distribution Account, the Certificate
Distribution Account, the Payahead Account and the Reserve Accounts and all
money, financial assets or other property from time to time held in or credited
to, or purchased with funds from, any of the foregoing accounts, (e) all of the
Seller's rights to receive proceeds from claims on physical damage, credit life
and disability insurance policies covering the Financed Vehicles or the
Obligors, (f) all of the Seller's rights to all documents contained in the
Receivables Files, (g) all of the Seller's rights under the Purchase Agreement
and this Agreement, (h) all of the Seller's rights, if any, of recourse against
Dealers arising out of breaches by Dealers in connection with the Receivables,
(i) all property (including the right to receive future Liquidation Proceeds
and Recoveries) that secures a Receivable and that will have been acquired by
or on behalf of the Indenture Trustee, (j) the Servicing Guaranty Agreement,
and (k) all proceeds (within the meaning of Section 9-306 of the UCC) of the
foregoing.
"UCC" or "Relevant UCC" shall mean the Uniform Commercial Code
as in effect in the relevant jurisdiction.
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"Vehicle" shall mean a Motor Vehicle or a Commercial Vehicle.
SECTION 1.2 Other Definitional Provisions. (a) Capitalized
terms used herein and not otherwise defined herein have the meanings assigned
to them in the Indenture, or if not defined therein, the meanings assigned to
them in the Trust Agreement.
(b) All terms defined in this Agreement shall
have the defined meanings when used in any certificate or other document made
or delivered pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any such certificate or
other document, and accounting terms partly defined in this Agreement or in any
such certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with
the meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
(d) The words "hereof," "herein," "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
Article, Section, Schedule and Exhibit references contained in this Agreement
are references to Articles, Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified, and the term "including" shall mean
"including without limitation."
(e) The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined
or referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of agreements
or instruments) references
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to all attachments thereto and instruments incorporated therein; references to
a Person are also to its permitted successors and assigns.
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property. (a) In
consideration of the delivery by the Issuer 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.
(b) 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 and Lien on all of
the right, title and interest of the Seller 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.
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(a) Characteristics of Receivables. Each
Receivable (a) was originated in the United States of America by a Dealer for
the retail sale of one or more Financed Vehicles in the ordinary course of such
Dealer's business, was fully and properly executed by the parties thereto, has
been purchased by the Seller from MBCC, which in turn purchased such Receivable
from such Dealer under an existing Dealer Agreement with MBCC, has been validly
assigned by such Dealer to MBCC, which in turn has validly assigned such
Receivable to the Seller, (b) contains 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, (c) except
in the case of a Balloon Receivable, provides for level monthly payments that
fully amortize the Amount Financed by maturity and yields interest at the APR
of such Receivable, and in the case of a Balloon Receivable, provides for fixed
monthly payments that amortize the Amount Financed to an amount equal to the
Balloon Payment by maturity, provides for a Balloon Payment at maturity that is
sufficient to pay the remaining Amount Financed of the Receivable, and yields
interest at the APR of such Receivable, (d) is a retail installment contract,
and (e) is secured by one or more Financed Vehicles.
(b) Schedule of Receivables. The information set
forth in the Schedule of Receivables was true and correct in all material
respects as of the opening of business on the Cutoff Date, and no selection
procedures believed by the Seller to be adverse to the Certificateholders were
utilized in selecting the Receivables.
(c) Compliance with Law. Each Receivable and the
sale of the related Financed Vehicle complied at the time it was originated or
made, and complies at the Closing Date, in all material respects with all
requirements of applicable federal, state, and local laws, and regulations
thereunder, including, without limitation, usury laws, the Federal Truth in
Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
Magnuson Moss Warranty Act, the Federal Reserve Board's Regulations B and Z,
and state adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and other consumer credit laws and equal credit opportunity and
disclosure laws.
(d) Binding Obligations. To the best of the
Seller's knowledge, each Receivable represents the legal, valid, and binding
payment obligation in writing of the related Obligor, enforceable by the holder
thereof in
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accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
(e) No Government Obligor. Neither the United
States of America nor any state or any agency, department, or instrumentality
of the United States of America or any state is an Obligor.
(f) Security Interest in Financed Vehicles. To the
best of the Seller's knowledge, immediately prior to the sale, assignment, and
transfer of each Receivable by MBCC to the Seller, such Receivable was secured
by a validly perfected first priority security interest and Lien in the related
Financed Vehicle in favor of MBCC as secured party. Such security interest and
Lien was validly assigned by MBCC to the Seller pursuant to the Purchase
Agreement and is being assigned by the Seller to the Issuer pursuant to this
Agreement, except that no certificate of title or certificate of ownership with
respect to such Financed Vehicle has been or will be amended to identify the
Seller or the Issuer as a secured party. At such time as enforcement of such
security interest is sought, there shall exist a valid, subsisting and
enforceable first priority security interest in such Financed Vehicle for the
benefit of the Issuer. The foregoing representations and warranties with
respect to perfection and enforceability of a security interest in a Financed
Vehicle do not cover statutory or other liens arising after the Closing Date by
operation of law or any rights of third parties arising after the Closing Date
as a result of the fraud or forgery of the Vehicle owner or administrative
error by state recording officials which are prior to such security interest.
(g) 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 MBCC to the Seller and by
the Seller to the Issuer.
(h) 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.
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(i) No Defenses. No right of rescission, setoff,
counterclaim, or defense has been asserted or, to the best of the Seller's
knowledge, threatened with respect to any Receivable.
(j) No Liens. To the best of the Seller's
knowledge, no liens or claims have been filed for work, labor, or materials
relating to a Financed Vehicle that are liens prior to, or equal or on a parity
with, the security interest in the Financed Vehicle granted by the related
Receivable.
(k) No Default; Repossession. Except for payment
defaults continuing for a period of not more than thirty (30) days in the case
of Motor Vehicles or sixty (60) days in the case of Commercial Vehicles as of
the Cutoff Date, to the best of the Seller's knowledge, no default, breach,
violation, or event permitting acceleration under the terms of any Receivable,
and no event that with notice or the lapse of time would constitute such a
default, breach, violation, or event permitting acceleration under the terms of
any Receivable has occurred; and no Financed Vehicle was repossessed on or
prior to the Cutoff Date.
(l) Insurance. Except in the case of certain fleet
customers which are permitted to be self-insured in accordance with MBCC's
customary standards, MBCC, in accordance with its customary procedures, has
determined that each Obligor has obtained or agreed to obtain physical damage
insurance covering the Financed Vehicle.
(m) 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 estate of the
Seller in the event of the filing of a bankruptcy petition or the commencement
of any Proceeding by or against the Seller under any bankruptcy or other
insolvency law. No Receivable has been sold, transferred, assigned, or pledged
by the Seller to any Person other than the Issuer. The Seller is transferring
title to each Receivable free and clear of all Liens and rights of others and
has perfected such transfer under the UCC.
(n) Valid Assignment. No Receivable was originated
in, or is subject to the laws of, any jurisdiction under which the sale,
transfer, and assignment of such Receivable under this Agreement is unlawful,
void, or voidable.
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The Seller has not entered into any agreement with any Obligor that prohibits,
restricts or conditions the assignment of any portion of the Receivables.
(o) All Filings Made. All filings (including,
without limitation, UCC filings) and agreements necessary in any jurisdiction
to give the Issuer a first priority perfected security interest in the
Receivables have been made.
(p) Chattel Paper. Each Receivable constitutes
"chattel paper" as defined in the Relevant UCC.
(q) One Original. There is only one original
executed copy of each Receivable.
(r) Principal Balances. Each Receivable had a
remaining Principal Balance as of the Cutoff Date of not more than
$5,617,494.16 and not less than $217.25.
(s) No Bankrupt Obligors. To the best of the
Seller's knowledge, no Obligor was, as of the Cutoff Date, the subject of a
Proceeding under title 11 of the United States Code or any other bankruptcy or
insolvency law.
(t) New and Used Vehicles. Approximately 70.13% of
the aggregate Principal Balance of the Receivables, constituting approximately
57.53% of the number of Receivables as of the Cutoff Date, relate to new
Financed Vehicles, and approximately 29.87% of the aggregate Principal Balance
of the Receivables, constituting 42.47% of the number of Receivables as of the
Cutoff Date, relate to used Financed Vehicles.
(u) Origination. Each Receivable has an
origination date on or after November 7, 1991.
(v) Maturity of Receivables. Each Receivable had a
remaining maturity, as of the Cutoff Date, of not more than eighty-four (84)
months, and an original maturity of not more than eighty-five (85) months.
(w) Annual Percentage Rate. Each Receivable has an
APR of at least 8.25% and not more than 13.0%.
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(x) Scheduled Payments. Each Receivable has a
first Scheduled Payment due on or prior to November 1, 1998, and no Receivable
has a payment that was more than thirty (30) days overdue in the case of Motor
Vehicles or sixty (60) days overdue in the case of Commercial Vehicles as of
the Cutoff Date.
(y) Location of Receivable Files. The Receivable
Files shall be kept at one or more of the locations listed in Schedule B
hereto, as supplemented from time to time.
(z) Billing Address. The Obligor under each
Receivable had a current billing address in the United States as of the Cutoff
Date.
(aa) Representations and Warranties. The
representations and warranties of the Seller in Section 5.1 are true and
correct.
(bb) 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 as of its date.
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 Owner Trustee, the Indenture Trustee and MBCC
(if it is no longer the Servicer) 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 (and, in the case of subsections 2.2(d),
(f), (i), (j), (k) and (s), any breach or failure which would have occurred if
such warranty had not been made to the best knowledge of the Seller). Unless
any such breach or failure shall have been cured by 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, the Indenture Trustee or the Servicer of, such breach or failure, and
such breach or failure materially and adversely affects the interests of the
Trust in any Receivable, the Seller shall repurchase from the Issuer any such
Receivable on the Payment Date immediately following such Collection Period,
but with effect from the first day of the Collection Period in which such
Payment Date occurs. 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 Certificateholders, the Indenture
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Trustee and the Noteholders 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 MBCC 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. (a) To assure
uniform quality in servicing the Receivables and to reduce administrative
costs, the Issuer, upon the execution and delivery of this Agreement, revocably
appoints the Servicer, and the Servicer 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 or other imaged copy thereof;
(iii) the original certificate of title or such
other documents that the Servicer or MBCC shall keep on file,
in accordance with its customary procedures, evidencing the
security interest of MBCC in the Financed Vehicle;
(iv) documents evidencing the existence of any
insurance covering the Financed Vehicle; and
(v) any and all other electronic entries, documents,
instruments and writings 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.
(b) On the Closing Date, the Servicer shall provide an
Officer's Certificate to the Issuer and the Indenture Trustee confirming that
the Servicer has
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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 herein, 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 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 recordkeeping of the Servicer. 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 Owner Trustee 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, the Owner Trustee and the Indenture Trustee or its
duly authorized representatives, attorneys, or auditors a list of locations of
the Receivable Files, the Receivable Files themselves,
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and the related accounts, records, and computer systems maintained by the
Servicer at such times as the Owner Trustee 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, or the agent or
designee of the Indenture Trustee, as the case may be, at such place or places
as the Indenture Trustee may designate, as soon thereafter as is practicable
and prior to the occurrence of an Event of Servicing Termination or an event
which with the passage of time and delivery of notice would constitute an Event
of Servicing Termination, so long as doing so will not adversely affect the
ability of the Servicer to perform its obligations under this Agreement. 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 and in any event at such time as may be required by the Servicer to
perform its obligations under this Agreement.
(d) Title to Receivables. The Servicer agrees
that, in respect of any Receivable held by the Servicer as custodian hereunder,
(i) 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 the
purpose of collecting or enforcing the Receivable for the benefit of the Issuer
and (ii) 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 Indemnification by the Custodian. 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,
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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 Issuer or 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,
errors in judgment 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, errors in judgment or
negligence of the Indenture Trustee or from the compliance by the Servicer with
instructions given by the Indenture Trustee or the Owner Trustee to the
Servicer pursuant hereto; and provided, further, that such indemnification
shall not extend to any credit losses on any Receivables.
SECTION 2.8 Effective Period and Termination. The
appointment of the Servicer 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 6.5, or if all of the rights and obligations of the Servicer shall have
been terminated under Section 7.1, 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 twenty-five percent (25%) of the principal amount of
the then Outstanding Notes or, with the consent of Holders of Notes evidencing
not less than twenty-five percent (25%) of the principal amount of the then
Outstanding Notes or, if the Notes have been paid in full and the Indenture
discharged in accordance with its terms, by the Owner Trustee or by Holders of
Certificates evidencing not less than twenty-five percent (25%) of the
Certificate Balance, in the same manner as the Indenture Trustee or such
Holders of the Notes may terminate the rights and obligations of the Servicer
under Section 7.1. As soon as practicable after any termination of such
appointment, the Servicer (at its own expense) shall deliver, or cause to be
delivered, the Receivable Files and the related accounts and records maintained
by the Servicer to the Indenture Trustee or an agent or designee of the
Indenture Trustee (including any Successor Servicer) at such place or places as
the Indenture Trustee may reasonably designate.
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ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND OTHER TRUST PROPERTY
SECTION 3.1 Duties of Servicer. (a) (i) The Servicer, acting
alone and/or through subservicers as provided in this Section, shall administer
the Receivables with reasonable care. The duties of the Servicer 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
Indenture Trustee and the Owner Trustee with respect to distributions and
providing collection and repossession services in the event of Obligor default
and making Advances pursuant to Section 4.4(a). 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 or commercial vehicle receivables that
it services for itself or others.
(ii) Subject to Section 3.2. the Servicer shall follow its
customary standards, policies and procedures in performing its
duties 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, Certificateholders, the Indenture Trustee, 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 which the Servicer would not attempt to
collect in accordance with its
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customary procedures, in which event the Servicer shall
indemnify the Issuer for such deficiency. 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 on behalf of the Trust 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 expense and direction of the Servicer, take
steps to enforce the Receivable, including bringing suit in
its name or the names of the Trust, the Certificateholders,
the Indenture Trustee, 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, as applicable,
all licenses, if any, required by the laws of any jurisdiction
to be held by the Issuer or the Owner Trustee, as applicable,
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.
(iii) 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 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 Property, 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
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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 which had been serviced by the terminated
subservicer or enter into a subservicing agreement with a successor subservicer
which will be bound by the terms of the subservicing agreement with the
terminated subservicer.
(d) As conditions to the appointment of any
subservicer, (i) the Servicer shall notify each of the Owner Trustee, the
Indenture Trustee and the Rating Agencies in writing before such assignment
becomes effective, and (ii) 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 any other Trust Property being serviced by
it, (A) 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, (B) 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), (C)
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 (D) the Owner
Trustee may enforce the provisions of this Agreement and any subservicing
agreement against the subservicer for the benefit of the Issuer
(notwithstanding any failure by the Servicer to perform its duties and
obligations hereunder), without diminution of such obligations or liabilities
by virtue of (1) any subservicing agreement, (2) any indemnification
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provided thereunder or (3) 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 any 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 any such subservicing agreements or arrangements or by virtue of any
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 any subservicing agreement. In such event, the Successor Servicer shall
be deemed to have assumed all of the interest of the Servicer 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 the 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 any 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
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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 any 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 any other Trust Property being
serviced by such subservicer to the Successor Servicer.
SECTION 3.2 Collection and Allocation of Receivable
Payments. 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 and commercial 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 or commercial 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 Due Date or other
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 or commercial 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. 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 first day of the
Collection Period following 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.
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SECTION 3.3 Realization upon Receivables. (a) On behalf
of the Issuer, the Servicer shall charge off a delinquent Receivable in
accordance with its customary standards and shall use its best efforts to
repossess and liquidate the Financed Vehicle securing any Defaulted Receivable
as soon as feasible after default, in accordance with the standard of care
required by Section 3.1. 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 motor vehicle and commercial vehicle
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 a
Financed Vehicle 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 expense and direction of the Servicer, 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 Trust, the Certificateholders,
the Indenture Trustee, 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 obtained physical damage insurance covering the related
Financed Vehicle.
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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 for the benefit of
the Noteholders in the event the Servicer receives notice of, or otherwise has
actual knowledge of, the relocation of a Financed Vehicle to a location in the
United States of America or Canada 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
Servicer will not (nor will it permit any subservicer to) release the Financed
Vehicle securing any Receivable from the security interest granted by the
Receivable in whole or in part, except as contemplated herein, or voluntarily
allow an Obligor to relocate outside the United States of America or Canada.
(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) and (d) 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 (nor
will it permit any subservicer to) increase or decrease the number or amount of
Scheduled Payments, or the Amount Financed under or the APR of, a Receivable,
or extend, rewrite or otherwise modify the Due Pate or any other payment terms
of a Receivable, except pursuant to Section 3.2.
(d) Extensions. The Servicer will not (nor
will it permit any subservicer to) extend a Receivable except in accordance
with Section 3.2.
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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, the Owner Trustee, the Indenture Trustee and MBCC (if
it is no longer the Servicer) promptly, in writing, upon the discovery of any
breach of Sections 3.2, 3.5 or 3.6. Subject to Section 3.2, unless any such
breach shall 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 any Receivable, the Servicer
shall purchase from the Issuer any such Receivable on the immediately succeeding
Payment Date; provided, however, that with respect to a breach of Section 3.2,
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 6.2, the sole remedy of the Issuer, the Owner Trustee, the
Certificateholders, the Indenture Trustee and the Noteholders against the
Servicer with respect to a breach of Sections 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 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, as
agreed upon between the Seller, the Owner Trustee and the Indenture Trustee (and
any custodian or Paying Agent appointed by the Owner Trustee and the Indenture
Trustee), 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
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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 each
Rating Agency, a certificate of a Servicing Officer substantially
in the form of Exhibit A hereto (a "Servicer's Certificate") and
attached to a report of the Servicer containing all information
necessary to make the deposits, transfers and distributions
pursuant to Sections 4.2, 4.3, 4.4, 4.5, 4.6 and 4.7, together
with the written statements to be furnished by the Owner Trustee
to the Certificateholders pursuant to Section 4.9 hereof and by
the Indenture Trustee to the Noteholders pursuant to Section 4.9
hereof, and Section 5.5 of the Trust Agreement and Section 6.6 of
the Indenture. The Servicer also shall identify separately (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 purchased or
repurchased by the Seller or the Servicer, as the case may be, on
such Payment Date, and, upon request of the Owner Trustee or the
Indenture Trustee, each Receivable which became a Defaulted
Receivable during the Collection Period immediately preceding
such Payment Date. The Servicer shall deliver to each Rating
Agency any information, to the extent it is available to the
Servicer, that any Rating Agency reasonably requests 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 March 31 of each year, commencing March 31, 2000, an
Officer's Certificate, stating that a review of the activities
of the Servicer during the preceding calendar year (or longer
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 the supervision of such officer and 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.
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(b) The Servicer shall deliver to the
Owner Trustee, the Indenture Trustee, the Seller 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 7.1.
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 MBCC) to deliver to the
Owner Trustee and the Indenture Trustee on or before
March 31 of each year, commencing March 31, 2000, a
report addressed to the Board of Directors of the
Servicer with respect to the preceding calendar year
(or longer 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 (a) was made in
accordance with generally accepted auditing
standards, (b) included tests relating to motor
vehicle and commercial 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 (c)
except as described in the report, disclosed no
exceptions or errors in the records relating to Motor
Vehicle and Commercial Vehicle loans serviced for
others that such firm is required to report under the
Program. Such report shall also indicate that the
firm is independent with respect to the Seller and
the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of
Certified Public Accountants. A copy of such report
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. In the event such firm of independent
certified public accountants requires the Indenture
Trustee to agree or consent to the procedures
performed by such firm, the Issuer shall direct the
Indenture Trustee in writing to so agree, and the
Indenture Trustee will not make any independent
inquiry or investigation as to, and shall have no
obligation or liability in respect of the
sufficiency, validity or correctness of such
procedures.
SECTION 3.12 Access to Certain
Documentation and Information Regarding Receivables.
The Servicer shall provide the Owner Trustee, the
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Certificateholders, the Indenture Trustee and the
Noteholders with access to the Receivable Files in
the cases where the Owner Trustee, 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, and,
prior to the occurrence of an Event of Servicing
Termination or an event which with the passage of
time and delivery of notice would constitute an Event
of Servicing Termination, only to the extent that
such access does not disrupt the normal business
operations of the Servicer and does not adversely
affect the ability of the Servicer to perform its
obligations under this Agreement. 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, and the
Owner Trustee and the Indenture Trustee 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 and not
to use any such information except as permitted by,
or to enforce, this Agreement, the Trust Agreement or
the Indenture.
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
ACCOUNTS; COLLECTIONS; ADVANCES; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
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SECTION 4.1 Accounts. (a) (i) The
Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account, in the name
of "Citibank, N.A. as Indenture Trustee, as secured
party from Daimler-Benz Vehicle Owner Trust 1998-A"
at an Eligible Bank (which shall initially be the
corporate trust department of Citibank, N.A.), 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 and conditions
of the Basic Documents. 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 thereto and withdrawals
therefrom shall be made only upon the terms and
conditions of the Basic Documents.
(ii) 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 Seller, 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 remain on deposit
therein pending distribution of all funds therein in
accordance with the Basic Documents. In the event
that the Collection Account is no longer to be
maintained at the corporate trust department of
Citibank, N.A., the Seller shall, with the assistance
of the Indenture Trustee or the Owner Trustee as
necessary, cause the Collection Account to be moved
to an Eligible Bank within ten (10) Business Days of
the date of determination that the Collection Account
shall no longer be maintained at the corporate trust
department of Citibank, N.A. (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 "Citibank, N.A. as
Indenture Trustee, as secured party from Daimler-Benz
Vehicle Owner Trust 1998-A" at an Eligible Bank
(which shall initially be the corporate trust
department of Citibank,
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N.A.), which shall be designated as the "Note
Distribution Account". The Note Distribution Account
shall be held in trust for the benefit of the
Noteholders. The Note Distribution Account shall be
under the sole dominion and control of the Indenture
Trustee; provided, that the Servicer may direct the
Indenture Trustee in writing to make withdrawals from
the Note Distribution Account in accordance with the
terms and conditions of the Basic Documents. All
monies deposited from time to time in the Note
Distribution Account 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 Distribution
Account is no longer to be maintained at the
corporate trust department of Citibank, N.A., the
Servicer shall, with the assistance of the Indenture
Trustee as necessary, cause the Note Distribution
Account to be moved to an Eligible Bank within ten
(10) Business Days of the date of determination that
the Note Distribution Account shall no longer be
maintained at the corporate trust department of
Citibank, N.A. (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 "Citibank, N.A. as
Paying Agent for Daimler- Benz Vehicle Owner Trust
1998-A" at an Eligible Bank (which shall initially be
the corporate trust department of Citibank, N.A.),
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 Servicer and
the Indenture Trustee in accordance with the
directions of the Servicer may make deposits to such
account pursuant to this Agreement and the Indenture,
and that the Servicer in the Servicer's Certificate
may direct Citibank, N.A., as Paying Agent under the
Trust Agreement, or any successor thereto as Paying
Agent, in writing to make withdrawals from the
Certificate Distribution Account in accordance with
the terms and conditions of the Basic Documents. All
monies deposited from time to time in the Certificate
Distribution Account shall be held by Citibank, N.A.,
as Paying Agent under the Trust Agreement, or any
successor Paying Agent, as part of the Trust Property
and shall be applied as provided in the Basic
Documents. In the event that the Certificate
Distribution Account is no longer to be maintained at
Citibank, N.A., the Servicer shall, with the
assistance of the Owner Trustee as necessary, cause
the Certificate Distribution Account to be moved to
an Eligible Bank within ten (10) Business Days of the
determination that the Certificate Distribution
Account shall no longer be maintained at the
corporate trust department
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of Citibank, N.A. (or such longer period not to
exceed thirty (30) calendar days as to which each
Rating Agency may consent) and shall promptly notify
the Owner Trustee in writing of the account number
and location of such account.
(d) (i) The Servicer shall, prior to
the Closing Date, establish and maintain a segregated
trust account in the name of "Citibank, N.A. as
Indenture Trustee, as secured party from Daimler-Benz
Vehicle Owner Trust 1998-A" at an Eligible Bank
(which shall initially be the corporate trust
department of Citibank, N.A.), which shall be
designated as the "Payahead Account". The Payahead
Account shall be held in trust for the benefit of the
Noteholders and the Certificateholders. The Payahead
Account shall be under the sole dominion and control
of the Indenture Trustee; provided that the Servicer
may make deposits to and direct the Indenture Trustee
in writing to make withdrawals from the Payahead
Account in accordance with the terms and conditions
of 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 thereto and
withdrawals therefrom shall be made only upon the
terms and conditions of the Basic Documents.
(ii) 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 Seller, 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
deposited into the Collection Account, for
distribution together with all other amounts on
deposit therein in accordance with the Basic
Documents. In the event that the Payahead Account is
no longer to be maintained at the corporate trust
department of Citibank, N.A., the Seller shall, with
the assistance of the Indenture Trustee or the Owner
Trustee as necessary, cause the Payahead Account to
be moved to an Eligible Bank within ten (10) Business
Days of the determination that the Payahead Account
shall no longer be maintained at the corporate trust
department of Citibank, N.A. (or such longer period
not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
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(e) Notwithstanding the provisions of
clause (d) above and of Sections 4.3 and 4.6(a)(ii),
for so long as (i) MBCC is the Servicer, (ii) the
rating of the short-term unsecured debt of the
Servicing Guarantor is at least P-1 by Moody's and is
at least A-1 by S&P and (iii) no Event of Servicing
Termination shall have occurred (each of the
conditions in clauses (i), (ii) and (iii) above, 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 each of the Monthly Remittance
Conditions is 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 any time
that a Monthly Remittance Condition is not met, the
Servicer shall deposit in the Payahead Account, as
soon as practicable but in no event after the close
of business on the second Business Day after receipt
thereof, 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 such 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 each Class of the
Notes. The Owner Trustee and the Indenture Trustee
shall not be deemed to have knowledge of any event or
circumstance under clauses (ii) or (iii) of the first
sentence of this Section 4.1(e) that would require
remittance of the Payaheads to the Payahead Account
unless the Owner Trustee or the Indenture Trustee has
received written notice of such event or circumstance
from the Seller or the Servicer in an Officer's
Certificate or from the Holders of Notes evidencing
not less than twenty-five percent (25%) of the
principal balance of the then Outstanding Notes or
from the Holders of Certificates evidencing not less
than twenty-five percent (25%) of the Certificate
Balance or unless an Authorized Officer in the
Corporate Trust Office of the Owner Trustee or of the
Indenture Trustee 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 any
Receivable of such Obligor or such lesser amount as
is requested by such Obligor, in accordance with the
customary standards, policies, practices and
procedures of the
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Servicer, 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) (i)
Subject to the provisions of subsections 4.2(a)(ii)
and (b) below, the Servicer shall remit to the
Collection Account (A) all payments by or on behalf
of the Obligors (including, subject to the next
sentence, Payaheads on the Receivables, but excluding
payments with respect to amounts included in the
Supplemental Servicing Fee and excluding amounts
received on a particular Receivable to the extent
that unreimbursed Advances for prior Collection
Periods with respect to such Receivable have
previously been made by the Servicer), including
amounts treated as collections on Balloon
Receivables, (B) all Liquidation Proceeds (except
Liquidation Proceeds with respect to a particular
Receivable to the extent of any unreimbursed Advances
for prior Collection Periods with respect to such
Receivable), (C) all Recoveries (except Recoveries
with respect to a particular Receivable to the extent
of any unreimbursed Advances for prior Collection
Periods with respect to such Receivable), (D) all
Advances made by the Servicer of principal or
interest due on the Receivables and (E) all proceeds
from claims on physical damage, credit life and
disability insurance policies covering the Financed
Vehicles or the Obligors and (F) all proceeds for
Purchased Receivables, in each case received by the
Servicer during any Collection Period, as soon as
practicable, but in no event after the close of
business on the second Business Day after receipt
thereof. Collections of Payaheads shall be deposited
by the Servicer in the Collection Account, pursuant
to the preceding sentence for purposes of
administrative convenience only, pending
determination of any amount to be deposited in the
Payahead Account (or in the event that each Monthly
Remittance Condition is 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, which payments upon determination
shall be made to the Servicer, and the Trust shall
not be entitled to such amounts.
(ii) MBCC, for so long as it is acting
as the Servicer, may make remittances of collections
on a less frequent basis than that specified in the
immediately preceding paragraph, provided that such
less frequent remittances may be made only on the
specific terms and conditions set forth below in this
Section 4.2, including the satisfaction of the
Monthly Remittance Condition, and only for so long
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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 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 such 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 any Class of the Notes. 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 written 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 twenty-five percent
(25%) of the principal balance of the then
Outstanding Notes or from the Holders of Certificates
evidencing not less than twenty-five percent (25%) of
the Certificate Balance or an Authorized Officer in
the Corporate Trust Office of the Owner Trustee or
the Indenture Trustee with knowledge hereof or
familiarity herewith has actual knowledge of such
event or circumstance.
(b) Notwithstanding the provisions of
Section 4.2(a) hereof, the Servicer may retain, or
will be entitled to be reimbursed, from amounts
otherwise payable into, or on deposit in, the
Collection Account with respect to a Collection
Period, any amounts previously deposited in the
Collection Account but later determined to have
resulted from mistaken deposits or postings or checks
returned unpaid for insufficient funds or other
reasons, in each case, with respect to which the
Servicer has not been previously reimbursed
hereunder. The amount to be retained or reimbursed
hereunder shall not be included in collections with
respect to the related Payment Date.
SECTION 4.3 Application of
Collections. (a) For the purposes of this
Agreement, all collections with respect to each
Receivable (other than amounts received by the
Servicer with respect to the Supplemental Servicing
Fee) in each Collection Period shall be applied by
the Servicer as follows:
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Payments by or on behalf of the Obligor
with respect to such Receivable shall be
applied first, to reduce outstanding Advances
from prior Collection Periods as described in
Section 4.4(a) below. Next, any excess shall
be applied to the Scheduled Payment for such
Collection Period in respect of such
Receivable. Any remaining excess shall be
applied to prepay the Receivable, but only if
the sum of such excess and the existing
Payahead Balance in respect of such
Receivable shall be sufficient to prepay such
Receivable in full. Otherwise, any such
remaining excess shall constitute a Payahead,
shall increase the Payahead Balance with
respect to such Receivable, and shall be
deposited into the Payahead Account.
(b) Collections with respect to the
Supplemental Servicing Fee in each Collection Period
shall be applied by the Servicer as additional
compensation to the Servicer.
SECTION 4.4 Advances. (a) (i) 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 a Receivable (other than a Purchased
Receivable) after application under Section 4.3 shall
be less than the Scheduled Payment in respect of such
Receivable (a "Shortfall"), the Payahead Balance with
respect to such Receivable shall be applied by the
Indenture Trustee in accordance with the written
direction of the Servicer to the extent of such
Shortfall, and such Payahead Balance shall be reduced
accordingly. On the Payment Date immediately
following such Collection Period, subject to the
following sentence, an advance shall be made by the
Servicer to the extent of any remaining Shortfall in
respect of such Receivable (such advance, an
"Advance"); provided that notwithstanding anything in
this Agreement to the contrary, no Successor Servicer
shall be required to make Advances. Outstanding
Advances with respect to a Receivable shall be
reduced by subsequent payments by or on behalf of the
related Obligor, collections of Liquidation Proceeds
and Recoveries in respect of the related Receivables,
and payment of the Purchase Amount.
(ii) If the Servicer shall determine
that an outstanding Advance with respect to any
Receivable shall not be recoverable as described in
the preceding paragraph, the Servicer shall be
reimbursed from any collections credited to payments
made on other Receivables in the Trust (including
Liquidation Proceeds
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and Recoveries), and outstanding Advances with
respect to such Receivable shall be reduced
accordingly.
(iii) The Servicer may elect not to
make an Advance with respect to a Receivable to the
extent that the Servicer, in its sole discretion,
does not expect to recover such Advance from
subsequent payments on such Receivable.
(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)(i) 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.
(ii) On each Payment Date, the
Servicer shall deposit into the Collection
Account an amount equal to the aggregate
amount of Advances required to be made with
respect to the related Collection Period.
(c) On each Payment Date, the Servicer
shall instruct the Indenture Trustee in writing 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 Receivables with respect to which
the Servicer has made Advances in a prior Collection
Period that are allocable to the reimbursement of
such Advances pursuant to Sections 4.3(a) and 4.4(a)
and (ii) the aggregate amount of Advances that the
Servicer has not been reimbursed for pursuant to this
Section 4.4(c) or Section 4.5 that are with respect
to Receivables that became Defaulted Receivables in
the related Collection Period.
SECTION 4.5 Additional Deposits. At
the written direction of the Servicer, the Indenture
Trustee shall deposit in the Collection Account the
amounts required pursuant to Section 4.4(a)(i) and
(b). The Servicer shall deposit in the Collection
Account amounts required to be paid by the Servicer
pursuant to Sections 4.4(a) and (b). The Seller and
the Servicer shall deposit or cause to be deposited
in the Collection Account the aggregate Purchase
Amount with respect to Purchased Receivables pursuant
to Section 2.3, 3.7 or 8.1. All such deposits with
respect to a Collection Period shall be made in
immediately available funds no later
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than 10:00 a.m., New York City time, on the Payment
Date related to such Collection Period.
SECTION 4.6 Distributions. (a) On
each Payment Date, after repayment of Advances
pursuant to Sections 4.3(a) and 4.4(c), 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
pursuant to Section 3.9:
(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 4.2 and 4.3(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 each event that the Monthly
Remittance Condition is 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 Accrued Certificate
Interest, the Scheduled Principal, the Principal
Distribution Amount, the Class A Reserve Account
Amount, the Specified Class A Reserve Balance, the
Class B Reserve Account Amount and the Specified
Class B Reserve Balance, in each case with respect to
the next succeeding Payment Date.
(c) On each Payment Date, the
Indenture Trustee (based on, and upon receipt of, the
information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant
to Section 3.9) shall (i) withdraw from the
Collection Account and pay to the Servicer any
amounts required to reimburse the Servicer for any
outstanding Advances for prior Collection Periods,
and thereafter, (ii) withdraw (A) all Available Funds
on deposit in the Collection Account for the related
Collection Period and (B) the additional amounts from
the sources specified below and make the following
payments and deposits from the sources
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specified below for such Payment Date in the
following order of priority:
(i) to the Servicer, the Total
Servicing Fee, such amount to be paid, first,
from Available Funds in the Collection
Account, second, from the Class B Reserve
Account, and third, from the Class A Reserve
Account;
(ii) to the Note Distribution
Account, the Accrued Note Interest on each
Class of Notes, such amount to be paid,
first, from Available Funds in the Collection
Account, and second, from the Class A Reserve
Account;
(iii) to the Certificate
Distribution Account, the Accrued Certificate
Interest, such amount to be paid, first, from
Available Funds in the Collection Account, and
second, from the Class B Reserve Account;
(iv) to the Note Distribution
Account, the Principal Distribution Amount
with respect to each Class of Notes, such
amount to be paid, first, from Available
Funds in the Collection Account, and second,
from the Class A Reserve Account;
(v) to the Certificate Distribution
Account, the Principal Distribution Amount
with respect to the Certificates, such amount
to be paid first, from Available Funds in the
Collection Account, and second, from the
Class B Reserve Account;
(vi) to the Class A Reserve Account,
from Available Funds in the Collection
Account, the amount required to bring the
amount in the Class A Reserve Account up to
the Class A Specified Reserve Balance;
(vii) to the Class B Reserve
Account, from Available Funds in the
Collection Account, the amount required to
bring the amount in the Class B Reserve
Account up to the Class B Specified Reserve
Balance; and
(viii) to the Seller, any remaining
Available Funds.
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(d) The rights of the
Certificateholders to receive distributions in
respect of the Certificates shall be and hereby are
subordinated, to the extent set forth in Section
4.6(c), to the rights of the Noteholders to receive
distributions in respect of the Class A Notes and the
rights of the Servicer to receive reimbursements of
Advances and payment of the Total Servicing Fee (and
any accrued and unpaid Servicing Fees or Supplemental
Servicing Fees from prior Collection Periods) in the
event of delinquency or defaults on the Receivables.
Upon the written instructions of the Servicer
included in the Servicer's Certificate delivered on
the related Determination Date pursuant to Section
3.9, the Indenture Trustee or any appropriate Paying
Agent shall release and apply amounts available in
the Class A Reserve Account and the Class B Reserve
Account, respectively, as provided in Sections 4.4(a)
and 4.7(d).
SECTION 4.7 Subordination; Reserve
Accounts. (a) The Seller shall, prior to the
Closing Date, establish and maintain a segregated
trust account in the name of "Citibank, N.A. as
Indenture Trustee, as secured party from Daimler-Benz
Vehicle Owner Trust 1998-A" at an Eligible Bank
(which shall initially be the corporate trust
department of Citibank, N.A.) which shall be
designated the "Class A Reserve Account" and shall,
prior to the Closing Date, establish and maintain a
segregated trust account in the name of "Citibank,
N.A., as Paying Agent for Daimler-Benz Vehicle Owner
Trust 1998-A" at an Eligible Bank (which shall
initially be the corporate trust department of
Citibank, N.A.) which shall be designated the "Class
B Reserve Account" (collectively, the "Reserve
Accounts"). On the Closing Date, the Seller shall
deposit the Class A Reserve Initial Deposit into the
Class A Reserve Account, and the Class B Reserve
Initial Deposit, if any, into the Class B Reserve
Account. The Class A Reserve Account shall be under
the sole dominion and control of the Indenture
Trustee, and the Class B Reserve Account shall be
under the sole dominion and control of the Owner
Trustee; provided, that the Servicer, the Indenture
Trustee and any appropriate Paying Agent may make
deposits to and withdrawals from the Reserve Accounts
in accordance with this Agreement, the Trust
Agreement and the Indenture, as applicable. The
Reserve Accounts and all amounts, securities,
investments, financial assets and other property
deposited in or credited to the respective Reserve
Accounts (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 Class A Reserve Account and the
Reserve Account Property deposited therein or
credited thereto to the Indenture Trustee on behalf
of the Noteholders to secure its
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obligations under the Notes and the Indenture. The
Class B Reserve Account and the Reserve Account
Property deposited therein or credited thereto will
not be pledged to the Indenture Trustee or the
Noteholders.
(b) The Reserve Account Property
shall, to the extent permitted by applicable law,
rules and regulations, be invested, as directed in
writing by the Seller, by the bank or trust company
(including any appropriate Paying Agent) then
maintaining the Reserve Accounts 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 Class
A Reserve Account and the Class B 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 Class A Reserve
Balance and the Specified Class B Reserve Balance,
respectively. In the event that either of the Class
A Reserve Account or the Class B Reserve Account is
no longer to be maintained at the corporate trust
department of Citibank, N.A., the Seller shall, with
the assistance of the Indenture Trustee or the Owner
Trustee as necessary, cause such Class A Reserve
Account or Class B Reserve Account, as applicable, to
be moved to an Eligible Bank 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:
(i) any Reserve Account Property on
deposit in the Class A Reserve Account 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 Eligible Bank maintaining
such Reserve Account, in accordance with
customary procedures of such institution such
that such institution establishes a
"securities entitlement" in favor of the
Indenture Trustee with respect thereto;
(ii) any Reserve Account Property
that is held in deposit accounts shall be held
solely in the name of the Indenture Trustee,
any appropriate Paying Agent or the Owner
Trustee, as applicable, at one or more
depository institutions having the Required
Rating and such Indenture Trustee, appropriate
Paying Agent or Owner Trustee, as applicable,
shall have sole signature authority with
respect thereto; and
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(iii) except for any deposit
accounts specified in clause (ii) above, the
Reserve Account Property on deposit in the
Class A Reserve Account shall only be invested
in securities or in other assets which the
Eligible Bank maintaining such Reserve Account
agrees to treat as "financial assets" as
defined in Section 8-102(a)(9) of the UCC.
(d) On any Distribution Date (i) if
the principal amount of the Reserve Account Property
on deposit in the Class A Reserve Account (after
taking into account any withdrawals from and deposits
into the Class A Reserve Account pursuant to Section
4.6) is greater than the Specified Class A Reserve
Balance for such Distribution Date, the Indenture
Trustee or any applicable Paying Agent shall, upon
the written instructions of the Servicer, release
such excess from the Class A Reserve Account and (ii)
if the principal amount of the Reserve Account
Property on deposit in the Class B Reserve Account
(after taking into account any withdrawals from and
deposits in the Class B Reserve Account pursuant to
Section 4.6) is less than the Specified Class B
Reserve Balance for such Distribution Date, the
Indenture Trustee or any appropriate Paying Agent
shall, upon the written instructions of the Servicer,
deposit such excess to the extent of such shortfall,
in the Class B Reserve Account and (iii) to the
extent that the principal amount of the Reserve
Account Property on deposit in the Class B Reserve
Account (after taking into account any withdrawals
from and deposits in the Class B Reserve Account
pursuant to Section 4.6) is equal to or greater than
the Specified Class B Reserve Balance for such
Distribution Date, the Owner Trustee or any
appropriate Paying Agent under the Trust Agreement
shall, upon written instructions of the Servicer,
release such excess from the Class B Reserve Account
to the Seller. Amounts properly released from the
Class A Reserve Account and deposited in the Class B
Reserve Account or distributed to the Seller pursuant
to Section 4.6(c) or this Section 4.7(d), either
directly from the Collection Account without deposit
in the Class A Reserve Account and/or the Class B
Reserve Account or from the Class A Reserve Account
and/or the Class B Reserve Account, shall be deemed
released from the trust established by this Section
4.7, and neither the Indenture Trustee, the
Noteholders, nor the Certificateholders shall have
any further claim upon any such distributed amounts.
The delivery of the Servicer's Certificate pursuant
to Section 3.9 shall, unless otherwise specified by
the Servicer, be deemed an appropriate written
instruction for any and all purposes of this Section
4.7(d).
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(e) (i) Amounts held in the Reserve
Accounts shall be invested in Permitted Investments
in the manner specified in Section 4.1(a), in
accordance with written instructions from the Seller,
and such investments shall not be sold or disposed of
prior to their maturity; provided, however, that to
the extent permitted by the Rating Agencies, funds on
deposit in the Reserve Accounts may be invested in
Permitted Investments that mature later than the next
succeeding Payment Date. All such investments shall
be made in the name of the Indenture Trustee or its
nominee, in the case of the Class A Reserve Account,
and in the name of the Owner Trustee or its nominee
or Paying Agent, in the case of the Class B Reserve
Account, and all income and gain realized in either
case shall be solely for the benefit of the Seller
and subject to Section 4.7(d) shall be payable to the
Seller on each Distribution Date. Additionally, it
is understood and agreed that neither the Indenture
Trustee, the Owner Trustee nor any appropriate Paying
Agent shall be liable for any loss arising from
investments in Permitted Investments or for the
selection of Permitted Investments and neither the
Indenture Trustee, the Owner Trustee nor any
appropriate Paying Agent shall have any liability in
respect of losses incurred as a result of the
liquidation of any Permitted Investments prior to its
stated maturity or the failure of the Seller to
provide timely written investment directions.
(ii) Each of the Seller and the
Servicer agrees to take or cause to be taken
such further actions, to execute, deliver and
file or cause to be executed, delivered and
filed such further documents and instruments
(including, without limitation, any UCC
financing statements or this Agreement) as
may be determined to be necessary, in the
Opinion of Counsel of the Seller delivered to
the Indenture Trustee, in order to perfect
the security interests in favor of the
Indenture Trustee created by this Section 4.7
and otherwise fully to effectuate the
purposes, terms and conditions of this
Section 4.7. The Seller and the Servicer
shall:
(A) promptly execute, deliver and file
any financing statements, amendments,
continuation statements, assignments,
certificates and other documents with
respect to such interests and perform all
such other acts as may be necessary in
order to perfect or to maintain the
perfection of the security interest of the
Indenture Trustee for the benefit of the
Noteholders; and
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(B) make the necessary filings of
financing statements or amendments thereto
within five days after the occurrence of
any of the following: (1) any change in
their respective corporate names or any
trade names, (2) any change in the
location of their respective chief
executive offices or principal places of
business and (3) any merger or
consolidation or other change in their
respective identities or corporate
structures; and shall promptly notify the
Indenture Trustee of any such filings.
(iii) Investment earnings attributable
to the Class A Reserve Account and proceeds
therefrom shall be held by the Indenture
Trustee, and investment earnings attributable
to the Class B Reserve Account and proceeds
therefrom shall be held by the Owner Trustee
or any Paying Agent under the Trust
Agreement, for the benefit of the Seller.
Except to the extent deposited into either
Reserve Account pursuant to Section 4.7(b),
investment earnings attributable to the Class
A Reserve Account and the Class B Reserve
Account shall not be available to satisfy the
subordination provisions of this Agreement
and shall not otherwise be subject to any
claims or rights of the Noteholders, the
Certificateholders or the Servicer. The
Indenture Trustee, the Owner Trustee or any
applicable Paying Agent shall cause all
investment earnings received on or prior to
each Distribution Date and attributable to
the Class A Reserve Account and the Class B
Reserve Account, respectively, to be
distributed on such Distribution Date to the
Seller in accordance with the written
direction of the Servicer and Section 4.7(d).
Losses, if any, on investments in the Class A
Reserve Account or the Class B Reserve
Account shall be charged first against
undistributed investment earnings
attributable to the Class A Reserve Account
or Class B Reserve Account, respectively, and
then against the principal amount of the
applicable Class A Reserve Account or Class B
Reserve Account, respectively.
(iv) Neither the Indenture Trustee,
the Owner Trustee nor any Paying Agent shall
enter into any subordination or intercreditor
agreement with respect to the Class A Reserve
Account or the Class B Reserve Account.
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(f) Upon termination of this
Agreement, all remaining Reserve Account Property
shall, upon written instruction of either the
Servicer or the Seller, be paid to the Seller.
(g) Following the payment in full of
the aggregate principal balance of the Notes and the
Certificate Balance and of all other amounts owing or
to be distributed hereunder or under the Indenture or
the Trust Agreement to Noteholders or
Certificateholders and the termination of the Trust,
any remaining Reserve Account Property shall be
distributed to the Seller.
SECTION 4.8 Net Deposits. As an
administrative convenience only, unless the Servicer
is required to remit collections pursuant to 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. Three Business Days 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 or the Paying Agent for
the Certificates 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 Certificate Balance;
(ii) the amount of such distribution
allocable to interest paid to each Class of
Notes and to the Certificates;
(iii) the amount of the Total
Servicing Fee and Supplemental Servicing Fee
with respect to the related Collection
Period;
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(iv) 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;
(v) the Pool Balance as of the
close of business on the last day of the
related Collection Period;
(vi) the amounts of the Note
Interest Carryover Shortfall, the Certificate
Interest Carryover Shortfall and the
Principal Carryover Shortfall, if any, for
such Payment Date and the portion thereof
attributable to each Class of Notes and to
the Certificates, as applicable;
(vii) the balance of the Class A
Reserve Account and the Class B Reserve
Account, if any, on such Payment Date, after
giving effect to changes therein on such
Payment Date; and
(viii) the aggregate Purchase Amount
of Receivables repurchased by the Seller or
purchased by the Servicer, if any, with
respect to the related Collection Period.
Each amount set forth on the Payment
Date statement pursuant to clauses (i), (ii), (iv)
and (vi) above shall be expressed as a dollar amount
per $1,000 of original principal balance of a Note or
Certificate Balance, as applicable.
SECTION 4.10 Control of Securities
Accounts. Notwithstanding anything else contained
herein, the Issuer agrees that each of the Collection
Account, the Note Distribution Account, the Payahead
Account and the Class A Reserve Account will be an
Eligible Deposit Account established at an Eligible
Bank which agrees substantially as follows: (a) 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; (b) 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 (c) all assets
delivered or credited to it in connection
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with such accounts and all investments thereof will
be promptly credited to such accounts.
ARTICLE V
THE SELLER
SECTION 5.1 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, except where the failure of the
Seller to so qualify or obtain such licenses or
approvals would not have a material adverse effect on
the Seller, the Issuer or any Receivable.
(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.
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(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 affecting the
enforcement of creditors' rights generally and by
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
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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) 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 5.2 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, any Paying Agents,
the Noteholders and the Certificateholders from and
against any loss, liability or expense incurred by
reason of (i) the willful misfeasance, bad faith, or
negligence of the Seller (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 violation by the Seller 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, the Indenture
Trustee any Paying Agent 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 any
Paying Agent under the Trust Agreement,
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and in the Indenture, in the case of the Indenture
Trustee and any Paying Agent under the Indenture,
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, the
Indenture Trustee or any Paying Agent, as applicable;
(ii) in the case of the Owner Trustee or any Paying
Agent under the Trust Agreement shall arise from the
breach by the Owner Trustee or such Paying Agent of
any of its respective representations or warranties
set forth in Sections 3.9 or 7.3 of the Trust
Agreement or (iii) in the case of the Indenture
Trustee or any Paying Agent under the Indenture shall
arise from the breach by the Indenture Trustee or
such Paying Agent of any of its respective
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) Notwithstanding the foregoing,
such indemnification shall not extend to any credit
losses on any Receivables. Indemnification under
this Section 5.2 shall survive the resignation or
removal of the Owner Trustee, the Indenture Trustee
or the particular Paying Agent 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 5.2 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 5.3 Merger or Consolidation
of, or Assumption of the Obligations of, Seller. Any
Person (a) into which the Seller may be merged or
consolidated, (b) resulting from any merger,
conversion, or consolidation to which the Seller
shall be a party or (c) 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
(i) 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 5.3, and (ii) the Seller shall have
delivered to the Owner Trustee and the Indenture
Trustee an
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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 5.3, any amendment to the
Articles of Incorporation of the Seller or of the
issuance of any other securities by the Seller to the
Rating Agencies. Notwithstanding anything herein to
the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses
(i) or (ii) above shall be conditions to the
consummation of the transactions referred to in
clauses (a), (b) or (c) above.
SECTION 5.4 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 and shall be protected in acting
or refraining from acting upon the advice of counsel
or on any resolution, certificate of auditors or
accountants or any other certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, appraisal, bond, note or
other paper or document believed by it to be genuine
and to have been signed or presented by the proper
party or parties. 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 5.5 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 IV
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THE SERVICER
SECTION 6.1 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 Indenture
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, except where the failure
of the Servicer so to qualify or obtain such licenses
or approvals would not have a material adverse effect
on the Servicer, the Issuer or any Receivable.
(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
affecting the enforcement of creditors' rights
generally and by general equitable principles.
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(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:
(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 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 (iv) that may adversely
affect the Federal or Applicable Tax State income,
excise, franchise or similar tax attributes of the
Notes or the Certificates.
SECTION 6.2 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, any Paying Agents,
the
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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, the Indenture Trustee and any Paying Agents
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, any Paying Agents,
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, the
Indenture Trustee and any Paying Agent, 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 of the Owner
Trustee, the Indenture Trustee or the particular
Paying Agent, 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
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the Owner Trustee, the Indenture Trustee or any
Paying Agent, as applicable; (c) in the case of the
Owner Trustee or any Paying Agent under the Trust
Agreement, shall arise from the breach by the Owner
Trustee or such Paying Agent of any of its respective
representations or warranties set forth in Sections
3.9 or 7.3 of the Trust Agreement or, in the case of
the Indenture Trustee or any Paying Agent under the
Indenture, from the breach by the Indenture Trustee
or such Paying Agent of any of its representations or
warranties set forth in the Indenture; or (d) shall
be one as to which the Seller is required to
indemnify the Indenture Trustee, the Owner Trustee or
any Paying Agent.
(e) For purposes of this Section 6.2,
in the event of the termination of the rights and
obligations of MBCC (or any successor thereto
pursuant to Section 7.2) as Servicer pursuant to
Section 7.1, 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 7.2.
(f) Notwithstanding the foregoing,
such indemnification shall not extend to any credit
losses on any Receivables. Indemnification under
this Section 6.2 by MBCC (or any successor thereto
pursuant to Section 7.2) 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,
the Indenture Trustee or any particular Paying Agent
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 6.3 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,
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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 6.3, 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 6.3 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 6.4 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 and shall be protected in
acting or refraining from acting upon any resolution,
certificate of auditors or accountants or any other
certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, appraisal,
bond, note or other paper or document believed by it
to be genuine and to have been signed or presented by
the proper party or parties.
(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;
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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 6.5 Servicer Not to Resign.
Subject to the provisions of Section 6.3, 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 (a) assumed the responsibilities
and obligations of the Servicer in accordance with
Section 7.2 and (b) become the Administrator under
the Administration Agreement pursuant to Section 8
thereof.
SECTION 6.6 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 V
SERVICING TERMINATION
SECTION 7.1 Events of Servicing
Termination. (a) If any one of the following events
("Events of Servicing Termination") shall occur and
be continuing:
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(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 (or, for
so long as the Servicer is an Affiliate of
the Seller, the Seller) 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 (or, for so long as the Servicer is
an Affiliate of the Seller, the Seller) 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 ninety
(90) days after the date on which written
notice of such failure, requiring the same to
be remedied, shall have been given to the
Servicer (or, for so long as the Servicer is
an Affiliate of the Seller, the Seller) 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 twenty-five percent
(25%) of the principal balance of the then
Outstanding Notes, in the aggregate, or if
the Notes have been paid in full and the
Indenture has been discharged in accordance
with its terms, twenty-five percent (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
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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
such 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 the Notes have been paid in full and the
Indenture discharged in accordance with its terms,
the Owner Trustee pursuant to the Trust Agreement, or
the Holders of Certificates evidencing not less than
a majority of the Certificate Balance, 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 7.2;
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
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electronic records relating to the Receivables to the
Successor Servicer in such electronic form as the
Successor Servicer may reasonably request and shall
cooperate with the successor servicer in the
enforcement of the Dealer Agreements. 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 7.1(a).
SECTION 7.2 Indenture Trustee to Act;
Appointment of Successor Servicer. Upon the
resignation by the Servicer pursuant to Section 6.5
or upon the receipt by the Servicer of notice of
termination as Servicer pursuant to Section 7.1, the
Indenture Trustee shall be the successor in all
respects to the Servicer in its capacity as Servicer
under this Agreement, 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, whether or not the
Indenture has been terminated. In the ordinary
course of business, the Indenture Trustee and any
other Person, in either case acting as Successor
Servicer, may at any time delegate any of its duties
hereunder to any Person, including any of its
affiliates, who agrees to conduct such duties in
accordance with standards comparable to those that
the Servicer executes pursuant to Section 3.1 hereof.
Such delegation shall not relieve the Indenture
Trustee and any other Person, in either case acting
as Successor Servicer, of its liabilities and
responsibilities with respect to such duties and
shall not constitute a resignation within the meaning
of Article VI of this Agreement. The Indenture
Trustee and any other Person, in either case acting
as Successor Servicer, shall provide each Rating
Agency and the Indenture Trustee with written notice
prior to the delegation of any of its duties to any
Person. 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
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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 MBCC as Servicer
hereunder. The Indenture Trustee and such Successor
Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any
such succession. The Indenture Trustee shall not be
relieved of its duties as Successor Servicer under
this Section 7.2 until a newly appointed Servicer
shall have assumed the responsibilities and
obligations of the terminated Servicer under this
Agreement. Notwithstanding anything herein or in the
Indenture to the contrary, in no event shall the
Indenture Trustee be liable for any Servicing Fee,
for any Advances or for any differential in the
amount of the Servicing Fee paid hereunder and the
amount necessary to induce any Successor Servicer to
act as Successor Servicer under this Agreement and
the transactions set forth or provided for herein.
SECTION 7.3 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 7.2
after the transfer of servicing hereunder, the
outgoing Servicer shall have no further obligations
with respect to the management, 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 records the Successor Servicer
(whether written or automated) with respect to the
Receivable Files. Such access shall be
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afforded without charge, but only upon reasonable
request and during normal business hours at the
offices of the Successor Servicer. Nothing in this
Section 7.3 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 7.3.
SECTION 7.4 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 respective addresses of
record and to the Rating Agencies.
SECTION 7.5 Waiver of Past Events of
Servicing Termination. The Holders of Notes
evidencing not less than a majority 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 Collection
Account, the Note Distribution Account, the Payahead
Account, the Certificate Distribution Account or the
Reserve Accounts 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 VI
TERMINATION
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SECTION 8.1 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 Collection Account, the
Note Distribution Account, the Payahead Account, the
Certificate Distribution Account and the Reserve
Accounts. To exercise such option, the Servicer shall
notify the Owner Trustee and the Indenture Trustee in
writing no later than the twentieth (20th) 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, including, without
limitation, in the Collection Account, the Note
Distribution Account, the Payahead Account, the
Certificate Distribution Account and the Reserve
Accounts, 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 Redemption Price of the Notes and the
Prepayment Price of the Certificates. The Purchase
Amount for such Payment Date, plus to the extent
necessary all amounts in the Reserve Accounts, shall
be used to make payments in full to Noteholders and
Certificateholders in the manner set forth in Article
IV. Following payment of all amounts payable to the
Noteholders and the Certificateholders, all remaining
available funds (including the amounts remaining in
the Class A Reserve Account and the Class B Reserve
Account) shall be distributed to the Seller.
(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 long-term unsecured debt of the Servicer
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.
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(c) Following the satisfaction and
discharge of the Indenture and the payment in full of
the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the
Noteholders hereunder, and the Indenture Trustee will
continue to carry out its obligations hereunder with
respect to the Certificateholders, including without
limitation making distributions from the Payahead
Account and the Collection Account in accordance with
Section 4.6 and making withdrawals from the Class A
Reserve Account in accordance with Sections 4.5 and
4.7.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 9.1 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 and
the consent of the Holders of Notes evidencing not
less than a majority of Outstanding Amount of the
Notes, voting as a group, for the purpose of adding
any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided,
however, that no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or
delay the timing of, or change the allocation or
priority of, collections of payments on Receivables
or distributions that shall be required to be made on
any Note or Certificate or change the Note Interest
Rate or the Specified Class A Reserve Balance without
the consent of all adversely affected Noteholders or
Certificateholders, or change the Certificate
Interest Rate or the Specified Class B Reserve
Balance without the consent of all of the Class B
Certificateholders then outstanding, (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
sixty-six and two-thirds percent (66-2/3%) of the
Notes of such Class Outstanding or adversely affect
the rating, if any, of the Certificates by the Rating
Agencies without the consent of Certificateholders
evidencing not less than sixty-six and two thirds
percent (66-2/3)% of the Certificates then
outstanding.
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(c) Prior to the execution of any
amendment or consent pursuant to Section 9.1(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
9.1, the Servicer shall furnish written notification
of the substance of such amendment or consent to each
Noteholder and 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 9.1
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 conclusively 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 the respective rights, duties, indemnities or
immunities of the Owner Trustee or the Indenture
Trustee under this Agreement or otherwise.
SECTION 9.2 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-
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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 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 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 and Reserve Accounts 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 master computer records of the Servicer
(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 respective
interests of the Issuer or the Indenture Trustee in a
Receivable shall be deleted from or modified on the
computer systems of the Servicer when, and only
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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 Vehicle receivables to any prospective purchaser,
lender, or other transferee, the Servicer shall give
to such prospective purchaser, lender, or other
transferee computer tapes, compact disks, records, or
print-outs (including any restored from back-up
archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by
the 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 records of the Servicer regarding
any Receivable, but, prior to the occurrence of an
Event of Servicing Termination or an event that with
the passage of time and delivery of notice would
constitute an Event of Servicing Termination, only to
the extent that such activities do not disrupt the
normal business operations of the Servicer and do not
adversely affect the ability of the Servicer to
perform its obligations under this Agreement.
(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, vehicle number, name
and address 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
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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 9.3 Governing Law. THIS
AGREEMENT SHALL BE CONSTRUED IN ITS ENTIRETY 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 9.4 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 9.12 hereof, or at
such other address as shall be designated by the
Seller or the Servicer in a written notice to
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the Owner Trustee and the Indenture Trustee, (b) in
the case of the Issuer or 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, a division of The McGraw-Hill
Companies, Inc., 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. Any
notice to be delivered to the Rating Agencies
hereunder shall also be delivered to the Seller.
SECTION 9.5 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 9.6 Assignment.
Notwithstanding anything to the contrary contained
herein, except as provided in Sections 6.3 and 7.2
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 sixty-six and
two-thirds percent (66- 2/3%) of the Outstanding
Amount of the Notes and the Holders of Certificates
evidencing not less than sixty-six and two-thirds
percent (66-2/3%) of the Certificate Balance.
SECTION 9.7 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
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statements relating to the Receivables for filing
under the provisions of the Relevant UCC of any
applicable jurisdiction.
SECTION 9.8 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 9.9 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 IX, 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 9.10 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 9.11 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
83
<PAGE> 89
deemed to be an original, and all of which
counterparts shall constitute but one and the same
instrument.
SECTION 9.12 Agent for Service. The
agent for service of the Seller and the Servicer in
respect of this Agreement shall be Harvey S. Traison,
Daimler-Benz North America Corporation, 375 Park
Avenue, Suite 3001, New York, New York 10152.
SECTION 9.13 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 9.13 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 either such
Agreement.
SECTION 9.14 Limitation of Liability
of Owner Trustee and Indenture Trustee. (a)
Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by
Chase Manhattan Bank Delaware, not in its individual
capacity but solely in its capacity as Owner Trustee
of the Issuer and in no event shall Chase Manhattan
Bank Delaware, 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 Citibank, N.A., not in its individual
capacity but solely as Indenture Trustee and as
Paying Agent, and in no event shall Citibank, N.A.
have any liability for the representations,
warranties, covenants,
84
<PAGE> 90
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 and under no circumstances shall Citibank,
N.A. be personally liable for the payment of any
indebtedness or expenses of the Trust.
85
<PAGE> 91
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.
DAIMLER-BENZ VEHICLE
RECEIVABLES CORPORATION,
as Seller
By: /s/ H.S. Traison
-----------------------------------------
Name: Harvey S. Traison
Title: President
MERCEDES-BENZ CREDIT
CORPORATION, as Servicer and in its
individual capacity
By: /s/ David A. Klanica
-----------------------------------------
Name: David A. Klanica
Title: Director,
Accounting Services
DAIMLER-BENZ VEHICLE
OWNER TRUST 1998-A,
as Issuer
By: CHASE MANHATTAN BANK DELAWARE
not in its individual
capacity but
solely as Owner Trustee
By: /s/ J. J. Cashin
-----------------------------------------
<PAGE> 92
Name: John J. Cashin
Title: Vice-President
Accepted and agreed:
CITIBANK, N.A.
as Indenture Trustee
By: /s/ Denise Banaszek
----------------------------------------------
Name: Denise Banaszek
Title: Vice President
CITIBANK, N.A.
as Paying Agent for the
Certificates under the
Trust Agreement
By: /s/ Denise Banaszek
-------------------------------------
Name: Denise Banaszek
Title: Vice President
<PAGE> 93
SCHEDULE A
[SCHEDULE OF RECEIVABLES]
Delivered to Indenture Trustee at Closing
<PAGE> 94
SCHEDULE B
Location of Receivable Files
Commercial Vehicles
Mercedes-Benz Credit Corporation
1011 Warrenville Road
Suite 500
Lisle, Illinois 60532
Motor Vehicles
Mercedes-Benz Credit Corporation
Seven Village Circle
Suite 300
Roanoke, Texas 76262
<PAGE> 95
EXHIBIT A
[FORM OF SERVICER'S CERTIFICATE]
The undersigned certifies that he is a
[title] of Mercedes-Benz Credit Corporation, 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 November 1, 1998, by and among the
Company, as Servicer, Daimler-Benz Vehicle
Receivables Corporation, as Seller, and Daimler-Benz
Vehicle Owner Trust 1998-A, 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 [____________], [____].
MERCEDES-BENZ CREDIT
CORPORATION, as Servicer
By:
----------------------------
Name:
Title:
A-1
<PAGE> 96
EXHIBIT B
[FORM OF STATEMENT TO NOTEHOLDERS]
B-1
<PAGE> 97
EXHIBIT C
[FORM OF STATEMENT TO CERTIFICATEHOLDERS]
C-1
<PAGE> 98
EXHIBIT D
[FORM OF SERVICING GUARANTEE AGREEMENT]
D-1
<PAGE> 1
Exhibit 4.3
================================================================================
INDENTURE
between
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A,
as Issuer,
and
CITIBANK, N.A.,
as Indenture Trustee
Dated as of November 1, 1998
---------------------------
$360,000,000 5.27125% Class A-1 Asset Backed Notes
$508,000,000 5.23% Class A-2 Asset Backed Notes
$440,000,000 5.16% Class A-3 Asset Backed Notes
$241,800,000 5.22% Class A-4 Asset Backed Notes
----------------------------
<PAGE> 2
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
<PAGE> 3
(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.
<PAGE> 4
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE...............................2
SECTION 1.1 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
i
<PAGE> 5
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
ii
<PAGE> 6
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
iii
<PAGE> 7
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 Establishment of Accounts.................................71
SECTION 8.3 General Provisions Regarding Accounts.....................72
SECTION 8.4 Release of Collateral.....................................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
iv
<PAGE> 8
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
SCHEDULES
SCHEDULE A............................................................SA-1
EXHIBITS
EXHIBIT A-1............................................................A-1
EXHIBIT A-2............................................................A-2
EXHIBIT A-3............................................................A-3
EXHIBIT A-4............................................................A-4
EXHIBIT B..............................................................B-1
v
<PAGE> 9
INDENTURE, dated as of November 1, 1998 (as the same may be further
amended, supplemented or otherwise modified and in effect from time to time,
this "Indenture"), between DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A, a Delaware
business trust (the "Issuer"), and CITIBANK, N.A., a national banking
association, 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 5.27125% Class
A-1 Asset Backed Notes (the "Class A-1 Notes"), 5.23% Class A-2 Asset Backed
Notes (the "Class A-2 Notes"), 5.16% Class A-3 Asset Backed Notes (the "Class
A-3 Notes") and 5.22% Class A-4 Asset Backed Notes (the "Class A-4 Notes" and,
together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes,
the "Class A Notes" or 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: (i) the Receivables, (ii) all monies
due or received thereunder on or after the Cutoff Date, (iii) the security
interests of the Seller or of the Issuer in the Financed Vehicles, (iv) the
Collection Account, the Note Distribution Account, the Class A Reserve Account
and the Payahead Account and all money, financial assets or other property from
time to time held in or credited to, or purchased with funds from, any of the
foregoing accounts (and excluding the Certificate Distribution Account and the
Class B Reserve Account and any amounts or property held in or credited to, or
purchased with funds from, either of such accounts), (v) all of the rights of
the Seller or of the Issuer to receive proceeds from claims on physical damage,
credit life and disability insurance policies covering the Financed Vehicles or
the Obligors, (vi) all of the rights of the Seller or of the Issuer to all
documents contained in the Receivable Files, (vii) all of the rights of the
Seller or of the Issuer under the Purchase Agreement, including the right of the
Seller to cause MBCC to repurchase Receivables from time to time from the Seller
under certain circumstances specified therein, and under the Sale and Servicing
Agreement, (viii) all of the rights of the Seller or of the Issuer, if any, of
recourse against Dealers arising out of breaches by Dealers in connection with
the Receivables, (ix) all property (including the right to receive future
Liquidation Proceeds and Recoveries) that secures a Receivable and that will
have been acquired by or on behalf of the Indenture Trustee,
<PAGE> 10
(x) the Servicing Guaranty Agreement, and (xi) all proceeds (within the meaning
of Section 9-306 of the UCC) of the foregoing, including, without limitation,
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 under 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 to the extent of the Collateral.
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
Note Interest Carryover Shortfall for such Class for such Payment Date.
"Act" shall have the meaning specified in Section 11.3(a).
2
<PAGE> 11
"Administration Agreement" shall mean the Administration Agreement,
dated as of November 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 MBCC, a Delaware corporation, or any
successor Administrator under the Administration Agreement.
"Affiliate" shall have the meaning specified in the Sale and
Servicing Agreement.
"Assignment" shall have the meaning specified in the Sale and
Servicing Agreement.
"Authenticating Agent" shall have the meaning specified in Section
2.14.
"Authorized Officer" shall have the meaning specified in the Sale
and Servicing 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 Servicing Guaranty 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 have the meaning specified in the Sale and
Servicing Agreement.
"Certificate" shall have the meaning specified in the Trust
Agreement.
"Certificate Distribution Account" shall have the meaning specified
in the Trust Agreement.
3
<PAGE> 12
"Certificate of Authentication" shall have the meaning specified in
Section 2.2(e).
"Certificate of Trust" shall have the meaning specified in 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 A-4 Notes.
"Class A Notes" shall mean the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes, collectively.
"Class A Reserve Account" shall have the meaning specified in the
Sale and Servicing Agreement.
"Class A-1 Final Payment Date" shall mean January 3, 2000.
"Class A-1 Noteholder" shall mean, subject to Section 2.11, the
Person in whose name a Class A-1 Note is registered on the Note Register.
"Class A-1 Notes" shall mean the $360,000,000 aggregate initial
principal amount of 5.27125% 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 5.27125% per annum.
"Class A-2 Final Payment Date" shall mean the December 2001 Payment
Date.
"Class A-2 Noteholder" shall mean, subject to Section 2.11, the
Person in whose name a Class A-2 Note is registered on the Note Register.
"Class A-2 Notes" shall mean the $508,000,000 aggregate initial
principal amount of 5.23% 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 5.23% per annum.
4
<PAGE> 13
"Class A-3 Final Payment Date" shall mean the January 2003 Payment
Date.
"Class A-3 Noteholder" shall mean, subject to Section 2.11, the
Person in whose name a Class A-3 Note is registered on the Note Register.
"Class A-3 Notes" shall mean the $440,000,000 aggregate initial
principal amount of 5.16% 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 5.16% per annum.
"Class A-4 Final Payment Date" shall mean the December 2003 Payment
Date.
"Class A-4 Noteholder" shall mean, subject to Section 2.11, the
Person in whose name a Class A-4 Note is registered on the Note Register.
"Class A-4 Notes" shall mean the $241,800,000 aggregate initial
principal amount of 5.22% Class A-4 Asset Backed Notes issued by the Trust
pursuant to this Indenture, substantially in the form of Exhibit A-4 to this
Indenture.
"Class A-4 Rate" shall mean 5.22% per annum.
"Class B Final Payment Date" shall have the meaning specified in the
Trust Agreement.
"Class B Reserve Account" shall have the meaning specified in the
Trust Agreement.
"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.
5
<PAGE> 14
"Closing Date" shall have the meaning specified in the Sale and
Servicing Agreement.
"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.
"Collection Account" shall have the meaning specified in the Sale
and Servicing Agreement.
"Commission" shall mean the Securities and Exchange Commission.
"Control Agreement" shall mean the Securities Account Control
Agreement, dated as of November 1, 1998, by and among the Seller, the Issuer,
the Owner Trustee, the Indenture Trustee and Citibank, N.A. in its capacity as
securities intermediary with respect to the Collection Account, the Note
Distribution Account, the Payahead Account and the Class A Reserve Account, as
the same may be amended, supplemented or otherwise modified and in effect from
time to time.
"Corporate Trust Office" shall mean, with respect to the Indenture
Trustee, 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 111 Wall Street, 5th Floor,
Zone 2, New York, NY 10005, Attention: Global Agency and Trust Services, 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.
"Cutoff Date" shall have the meaning specified in the Sale and
Servicing Agreement.
"Dealers" shall have the meaning specified in the Sale and Servicing
Agreement.
"Default" shall mean any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
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"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, the Class
A-4 Final Payment Date, the Class B Final Payment Date, collectively, or any of
them, as the context requires.
"Final Scheduled Maturity Date" shall mean November 21, 2005.
"Financed Vehicle" shall have the meaning specified in the Sale and
Servicing Agreement.
"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" with respect to (i) any Note, subject to Section 2.11,
shall mean the Person in whose name the Note is registered on the Note Register,
and (ii) any Certificate, shall have the meaning specified in the Trust
Agreement.
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"Indenture shall have the meaning specified in the recitals hereto.
"Indenture Trustee" shall mean Citibank, N.A., a national banking
association, 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 (i) is in fact independent of the Issuer, any other
obligor on the Notes, the Seller and any Affiliate of any of the foregoing
Persons, (ii) 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 (iii) 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.
"Issuer" shall mean Daimler-Benz Vehicle Owner Trust 1998-A, 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 Authorized Officer of the Owner
Trustee and delivered to the Indenture Trustee.
"Liquidation Proceeds" shall have the meaning specified in the Sale
and Servicing Agreement.
"MBCC" shall mean Mercedes-Benz Credit Corporation, a Delaware
corporation, and its successors and assigns.
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"Monthly Accrued Note Interest" shall mean, with respect to any
Payment Date and (i) any Class of Notes, interest accrued for the related Note
Interest 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 Letter of
Representations, dated as of November 1, 1998, by and among the Issuer, the
Indenture Trustee and The Depository Trust Company, as the initial Clearing
Agency, relating to the Notes, or as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"Note Distribution Account" shall have the meaning specified in the
Sale and Servicing Agreement.
"Note Interest Carryover Shortfall" shall mean, with respect to any
Payment Date and any Class of Notes, the excess of (i) the sum of the Monthly
Accrued Note Interest for the preceding Payment Date and any outstanding Note
Interest Carryover Shortfall from the close of business on such preceding
Payment Date, over (ii) the amount in respect of interest that is actually
deposited in the Note Distribution 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 Note Interest Period.
"Note Interest Period" shall mean, with respect to any Payment Date,
(i) with respect to the Class A-1 Notes, the period from and including the
Closing Date (in the case of the first Payment Date) or from and including the
most recent Payment Date to but excluding the following Payment Date and (ii)
with respect to the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes, the period from and including the Closing Date (in the case of the first
Payment Date) or from and including the twentieth (20th) day of the calendar
month preceding each Payment Date to but excluding the twentieth (20th) day of
the following calendar month.
"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
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case of the Class A-3 Notes, the Class A-3 Rate, and in the case of the Class
A-4 Notes, the Class A-4 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.
"Noteholder" shall mean the Holder of a Note.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes, collectively.
"Obligor" shall have the meaning specified in the Sale and Servicing
Agreement.
"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, the Seller, MBCC or the Servicer, as
applicable, 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 fully paid and cancelled by the Note
Registrar or delivered to the Note Registrar for re-registration and
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
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(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 the Notes that a
Responsible Officer of the Indenture Trustee actually 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 have the meaning specified in the Trust
Agreement.
"Payahead Account" shall have the meaning specified in the Sale and
Servicing Agreement.
"Paying Agent" shall mean, with respect to any amounts held on
behalf of or paid to any Noteholders, 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 Distribution Account,
including payment of principal of or interest on the Notes on behalf of the
Issuer.
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"Payment Date" shall have the meaning specified in the Sale and
Servicing Agreement.
"Permitted Investments" shall have the meaning specified in the Sale
and Servicing Agreement.
"Person" shall have the meaning specified in the Sale and Servicing
Agreement.
"Purchase Agreement" shall have the meaning specified in the Sale
and Servicing Agreement.
"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 have the meaning specified in
the Sale and Servicing Agreement.
"Principal Distribution Amount" shall have the meaning specified in
the Sale and Servicing Agreement.
"Proceeding" shall mean any suit in equity, action at law or other
judicial or administrative proceeding.
"Rating Agency Condition" shall have the meaning specified in the
Sale and Servicing Agreement.
"Receivable" shall have the meaning specified in the Sale and
Servicing Agreement.
"Receivable File" shall have the meaning specified in the Sale and
Servicing Agreement.
"Record Date" shall have the meaning specified in the Sale and
Servicing Agreement.
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"Recoveries" shall have the meaning specified in the Sale and
Servicing Agreement.
"Redemption Date" shall mean the Payment Date specified by the
Servicer pursuant to Section 10.1.
"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.
"Reserve Accounts" shall have the meaning specified in the Sale and
Servicing Agreement.
"Responsible Officer" shall mean, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee
including any managing director, vice president, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Indenture
Trustee customarily performing functions similar to those performed by the above
designated officers and having direct responsibility for the administration of
this Indenture and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of November 1, 1998, by and among the Issuer, the Seller and
MBCC, as Servicer, as the same may be amended, supplemented or otherwise
modified and in effect from time to time.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller" shall have the meaning specified in the Sale and Servicing
Agreement.
"Servicer" shall have the meaning specified in the Sale and
Servicing Agreement.
"Servicing Guaranty Agreement" shall have the meaning specified in
the Sale and Servicing Agreement.
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"Specified Class A Reserve Balance" and "Specified Class B Reserve
Balance" shall have the respective meanings specified in the Sale and Servicing
Agreement.
"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
with respect to the Notes.
"Trust" shall have the meaning specified in the Trust Agreement.
"Trust Agreement" shall mean the Trust Agreement, dated as of
November 1, 1998, by and between the Owner Trustee and the Seller, as depositor
thereunder, as the same may be amended, supplemented or otherwise modified and
in effect from time to time (including the Amended and Restated Trust Agreement,
dated as of November 1, 1998, by and between the Owner Trustee and the Seller,
as depositor thereunder).
"Trust Estate" shall mean the "Owner Trust Estate" as defined in the
Trust Agreement.
"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:
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"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.
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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 A-4 Notes, together with the Indenture Trustee's
Certificates of Authentication thereon, 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 Owner Trustee on behalf 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 5.27125% Class A-1 Asset Backed Notes for original issue in an aggregate
principal amount of $360,000,000, 5.23% Class A-2 Asset Backed Notes for
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original issue in an aggregate principal amount of $508,000,000, 5.16% Class A-3
Asset Backed Notes for original issue in an aggregate principal amount of
$440,000,000 and 5.22% Class A-4 Asset Backed Notes for original issue in an
aggregate principal amount of $241,800,000. The aggregate principal amounts of
5.27125% Class A-1 Asset Backed Notes, 5.23% Class A-2 Asset Backed Notes, 5.16%
Class A-3 Asset Backed Notes and 5.22% Class A-4 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 (such prescribed certificate, a "Certificate of
Authentication"), 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.
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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 Collateral. 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
conclusively 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
conclusively 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
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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 conclusively 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
satisfactory security or indemnity as may be required by it to hold the Issuer
and the Indenture Trustee harmless, then, in the absence of written notice to
the Issuer, the Note Registrar or the Indenture
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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 written 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 conclusively 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 set forth in 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 and the Trustee may require in addition to satisfactory security
or indemnity, 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 a
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.
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(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, any
Paying Agent and any other agent of the Issuer or the Indenture Trustee may
treat the Person in whose name any Note is registered in the Note Register (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 agent of the
Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.8 Payments.
(a) On each Payment Date, upon receipt of written instructions from
the Servicer pursuant to Section 4.6(c) of the Sale and Servicing Agreement, the
Indenture Trustee will (i) withdraw from the Collection Account and pay to the
Servicer any amounts required to reimburse the Servicer for any outstanding
Advances for any prior Collection Periods in accordance with Section 4.4 of the
Sale and Servicing Agreement, and thereafter, (ii) withdraw (A) all Available
Funds on deposit in the Collection Account for the related Collection Period and
(B) the additional amounts from the sources specified below and make the
following payments and deposits from the sources specified below for such
Payment Date in the following order of priority:
(i) to the Servicer, the Total Servicing Fee, such amount to
be paid, first, from Available Funds in the Collection Account, second,
from the Class B Reserve Account, and third, from the Class A Reserve
Account;
(ii) to the Note Distribution Account, the Accrued Note
Interest on each Class of Notes, such amount to be paid, first, from
Available Funds in the Collection Account, and second, from the Class A
Reserve Account;
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(iii) to the Certificate Distribution Account, the Accrued
Certificate Interest, such amount to be paid, first, from Available Funds
in the Collection Account, and second, from the Class B Reserve Account;
(iv) to the Note Distribution Account, the Principal
Distribution Amount with respect to each Class of Notes, such amount to be
paid, first, from Available Funds in the Collection Account, and second,
from the Class A Reserve Account;
(v) to the Certificate Distribution Account, the Principal
Distribution Amount with respect to the Certificates, such amount to be
paid, first, from Available Funds in the Collection Account, and second,
from the Class B Reserve Account;
(vi) to the Class A Reserve Account, from Available Funds in
the Collection Account, the amount required to bring the amount in the
Class A Reserve Account up to the Specified Class A Reserve Balance;
(vii) to the Class B Reserve Account, from Available Funds in
the Collection Account, the amount required to bring the amount in the
Class B Reserve Account up to the Specified Class B Reserve Balance; and
(viii) to the Seller, any remaining Available Funds in the
Collection Account.
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 Distribution Account and applied in
accordance with Section 2.8(f).
(b) The principal of each Note shall be payable in installments on
each Payment Date in an aggregate amount (unless the Notes have been accelerated
in accordance with Section 5.2 following the occurrence of an Event of Default)
for all Classes of Notes equal to the Principal Distribution Amount with respect
to such Payment Date. On each Payment Date, unless the Notes have been
accelerated in accordance with Section 5.2 following the occurrence of an Event
of Default, the Issuer shall cause to be paid all amounts on deposit in the Note
Distribution Account with respect to the related Collection Period in the
following order of priority;
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(i) to the Class A Noteholders, Accrued Note Interest (and, if
amounts on deposit in the Note Distribution 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) 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;
(iii) following payment in full of the Class A-1 Notes, to the
Class A-2 Noteholders, 100% 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;
(iv) following payment in full of the Class A-2 Notes, to the
Class A-3 Noteholders, 100% 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
(v) following payment in full of the Class A-3 Notes, to the
Class A-4 Noteholders, 100% of the remaining Principal Distribution Amount
in reduction of principal until the principal amount of the Class A-4
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 A-4 Notes, to the extent not
previously paid, will be due on the Class A-4 Final Payment Date.
(d) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes
and the Class A-4 Notes shall accrue interest at the Class A-1 Rate, the Class
A-2 Rate, the Class A-3 Rate and the Class A-4 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 A-4
Notes will be calculated on
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the basis of a 360-day year of twelve 30-day months. Subject to Section 3.1, any
installment of principal of or interest, 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 Note 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) 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 Distribution Account shall be paid in the following order of priority.
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(i) first, to the Indenture Trustee for amounts due under
Section 6.7;
(ii) second, to the Servicer for any unreimbursed Advances;
(iii) third, to the Servicer for amounts due and unpaid in
respect of Total Servicing Fees;
(iv) fourth, 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;
(v) fifth, to the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders and the Class A-4 Noteholders, the
outstanding principal amount of the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 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; and
(vi) sixth, to the Certificate Distribution Account, any
remaining balance in the Note Distribution Account.
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.
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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 Indenture 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:
(a) the provisions of this Section 2.11 shall be in full force and
effect;
(b) 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;
(c) 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;
(d) 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
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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;
(e) whenever this Indenture requires or permits actions to be taken
based upon written 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 written 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 written instructions to the
Indenture Trustee; and
(f) the Clearing Agency may be treated by the Indenture Trustee and
its agents, employees, officers and directors as the absolute owner of the Notes
for all purposes whatsoever.
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 (a) 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, (b) 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 (c) 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 a majority of the principal amount of such Notes advise the Indenture
Trustee and the Clearing Agency (or a successor thereto) 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, the Indenture Trustee and any Paying Agent
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hereunder in writing 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 the Indenture Trustee, or any Paying Agent hereunder 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. (a) 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".
(b) 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.
(c) 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.
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(d) 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.
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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 of the Indenture
Trustee, 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 or Certificates that are to be made from amounts withdrawn from the
Collection Account, the Reserve Accounts or the Note Distribution Account, as
applicable, shall be made on behalf of the Issuer by the Indenture Trustee or by
any other Paying Agent, and no amounts so withdrawn from the Collection Account,
the Reserve Accounts or the Note Distribution Account, as applicable, for
payments of Notes or Certificates 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, to the
extent funds are available for such purpose, the Indenture Trustee or any other
Paying Agent shall deposit or cause to be deposited in each of the Note
Distribution Account and the Certificate Distribution Account an aggregate sum
sufficient to pay
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the amounts then becoming due under the Notes and the Certificates, as the case
may be, such sum to be held in trust for the benefit of the Persons entitled
thereto, and (unless the only Paying Agent is the Indenture Trustee) shall
promptly notify the Indenture Trustee in writing 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 or the Certificates, as applicable, 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 and the Owner 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 or the Certificates, as applicable;
(iii) at any time during the continuance of any such default,
upon the written request of (a) the Indenture Trustee, forthwith pay to
the Indenture Trustee, and (b) the Owner Trustee, forthwith pay to the
Owner Trustee, as appropriate, all sums so held in trust by such Paying
Agent on behalf of the Noteholders and the Certificateholders,
respectively;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee and the Owner Trustee, respectively, all sums held
by it in trust for the payment of Notes or the Certificates, as
applicable, if at any time it ceases to meet the standards required to be
met by a Paying Agent at the time of its appointment;
(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 or Certificates, as applicable, of any applicable withholding
taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith; and
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(vi) Agree that 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 and the Owner Trustee, as appropriate, all sums held in
trust by such Paying Agent, such sums to be held, after receipt thereof by
the Indenture Trustee and the Owner Trustee, as applicable, upon the same
trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent, 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, the Owner Trustee or any Paying Agent in
trust for the payment of any amount due with respect to any Note or any
Certificate, as applicable, 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 or
Certificate, as applicable, 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 written 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 written 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 or Certificates, as
applicable, 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
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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 Certificates, 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 shall
file 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 rights hereunder with respect to the
Collateral; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, the Noteholders and the
Certificateholders 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 at the expense of the Issuer 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
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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.
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(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 in writing
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 7.1 of the Sale and Servicing Agreement, the Issuer shall (subject to
the rights of the Indenture Trustee to direct such appointment pursuant to
Section 7.2 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 7.2 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
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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 in writing. As soon as a Successor Servicer is appointed
by the Issuer, the Issuer shall notify in writing 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:
(a) 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;
(b) 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;
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(c) dissolve or liquidate in whole or in part; or
(d) (i) 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, (ii) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture or as specifically contemplated by the Basic Documents)
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
(iii) 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 Collateral.
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:
(a) 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
(b) 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
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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
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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
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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 VI 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.
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.
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SECTION 3.18 Restricted Payments. The Issuer shall not, directly or
indirectly, (a) 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, (b) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (c) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the Issuer
may make, or cause to be made, (i) payments to the Servicer, the Seller, the
Owner Trustee and the Certificateholders and into the Certificate Distribution
Account and the Class B Reserve Account as contemplated by, and to the extent
funds are available for such purpose under, this Indenture, the Sale and
Servicing Agreement or the Trust Agreement and (ii) 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.
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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 (a)
rights of registration of transfer and exchange, (b) substitution of mutilated,
destroyed, lost or stolen Notes, (c) rights of Noteholders to receive payments
of principal thereof and interest thereon, (d) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12 and 3.13 hereof, (e) the rights, obligations, indemnities 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 (f) 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:
(1) either
(A) all Notes of all Classes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 2.6 and (ii)
Notes for whose payment money has theretofore been irrevocably
deposited in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.3) have been delivered to the Indenture
Trustee for cancellation; or
(B) 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 sufficient 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
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Date or Redemption Date (if Notes shall have been called for
redemption pursuant to Section 10.1(a)), as the case may be;
(2) the Issuer has paid or caused to be paid all other sums payable
by the Issuer hereunder and under the other Basic Documents;
(3) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable
requirements of Section 11.1(a) and, subject to Section 11.2, each
stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been
complied with; and
(4) the Issuer has delivered to the Indenture Trustee an Opinion of
Counsel to the effect that the satisfaction and discharge of the
Notes pursuant to this Section 4.1 will not cause any Noteholder to
be treated as having sold or exchanged any of its Notes for purposes
of Section 1001 of the Code.
SECTION 4.2 Satisfaction, Discharge and Defeasance of the Notes. (a)
Upon satisfaction of the conditions set forth in subsection (b) below, the
Issuer shall be deemed to have paid and discharged the entire indebtedness on
all the Notes Outstanding, and the provisions of this Indenture, as it relates
to such Notes, shall no longer be in effect (and the Indenture Trustee, at the
expense of the Issuer, shall execute proper instruments acknowledging the same),
except as to:
(i) the rights of Holders of Notes to receive, from the trust
funds described in subsection (b)(i) hereof, payment of the principal of
and interest on the Notes Outstanding at maturity of such principal or
interest;
(ii) the obligations of the Issuer with respect to the Notes
under Sections 2.5, 2.6, 3.2 or 3.3 hereof;
(iii) the obligations of the Issuer to the Indenture Trustee
under Section 6.7 hereof; and
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(iv) the rights, powers, trusts, indemnities and immunities of
the Indenture Trustee hereunder and the duties of the Indenture Trustee
hereunder.
(a) 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
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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.
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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):
(a) 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
(b) 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
(c) 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 twenty-five percent (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
(d) 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,
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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
(e) 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 (c), its status and what action the
Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment. (a)
If an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or the Holders of Notes representing not less than a
majority of the principal amount of the Notes Outstanding, voting as a group,
may declare all the Notes to be immediately due and payable, by a notice in
writing to the Issuer (and to the Indenture Trustee if given by Noteholders),
and upon any such declaration the unpaid principal amount of such Notes,
together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
(b) At any time after a declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the amount due has been
obtained by the Indenture Trustee as hereinafter provided in this Article V, the
Holders of Notes representing a majority of the principal amount of the Notes
Outstanding, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
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(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) 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
(B) 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
(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 and all other amounts that would then be due hereunder or upon such
Notes, 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.
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(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, subject to the Basic Documents, 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, 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 in case of any other comparable judicial Proceedings relative to the
Issuer or other obligor upon the Notes, or to the 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;
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(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
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their respective agents, attorneys and counsel, 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
other wise, 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 Collateral;
(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 Collateral 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 Collateral following an Event of Default, other than an Event of
Default described in Section 5.1(a) or (b), unless (A) the Holders of one
hundred percent (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 Collateral will not continue to
provide sufficient funds for the payment of principal of and interest on the
Notes as they would have become due (with respect to principal, on the
applicable Final Payment Date for each class) if the Notes had not been declared
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due and payable, and the Indenture Trustee obtains the consent of Holders of
sixty-six and two-thirds percent (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 Collateral 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.
(c) The Indenture Trustee may fix a record date and payment date for
any payment to Noteholders pursuant to this Section 5.4. At least fifteen (15)
days before such record date, the Issuer shall mail to each Noteholder and the
Indenture Trustee a notice that states the record date, the payment date and the
amount to be paid.
SECTION 5.5 Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.2 following an Event of
Default, and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Collateral 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 Collateral. In determining whether to maintain
possession of the Collateral, the Indenture Trustee may, but need not, obtain
and conclusively 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 Collateral for such purpose.
SECTION 5.6 Limitation of Suits. (a) 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:
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(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than twenty-five percent (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;
(iii) such Holder or Holders have offered to the Indenture
Trustee indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for sixty (60) days after its
receipt of such written notice, request and offer of the required
indemnity has failed to institute such Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such sixty (60) day period by
the Holders of a majority of the principal amount of the Notes
Outstanding.
(b) 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.
(c) 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 and the Indenture Trustee shall not be liable for any action taken
pursuant to this Section.
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 and any other amount due, if
any, on such Note on or after the respective due dates thereof expressed in such
Note or in
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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. (a) 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
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available to the Indenture Trustee with respect to the Notes or exercising any
trust or power conferred on the Indenture Trustee; provided that:
(i) such written direction coupled with such satisfactory
indemnity of the Indenture Trustee shall not be in conflict with any rule
of law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any written
direction to the Indenture Trustee to sell or liquidate the Collateral
shall be by Holders of Notes representing not less than one hundred
percent (100%) of the principal amount of the Notes Outstanding;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Collateral
pursuant to such Section, then any written direction to the Indenture
Trustee by Holders of Notes representing less than one hundred percent
(100%) of the principal amount of the Notes Outstanding to sell or
liquidate the Collateral shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such written
direction.
(b) 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. (a) 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 (i) in the payment of
principal of or interest on any of the Notes or (ii) 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,
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respectively; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereto.
(b) 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 and
expenses, 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 ten percent (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 right of the Indenture Trustee to
seek and recover judgment on the Notes or under this Indenture shall not be
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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 written direction (which direction coupled
with the satisfactory indemnity of the Indenture Trustee shall be in writing or
by telephone, confirmed in writing promptly thereafter) of the Holders of
sixty-six and two-thirds percent (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.
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(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 MBCC 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 MBCC 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 written direction (which direction coupled
with the satisfactory indemnity of the Indenture Trustee shall be in writing or
by telephone (confirmed in writing promptly thereafter)) of the Holders of
sixty-six and two-thirds percent (66-2/3%) of the principal amount of the Notes
Outstanding, shall, exercise all rights, remedies, powers, privileges and claims
of the Seller against MBCC 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 MBCC 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.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing of which a Responsible Officer has actual
knowledge, 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 reasonably 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 6.1(c) 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 by a court of competent jurisdiction that the Indenture Trustee was
negligent in ascertaining the pertinent facts; and
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(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 indemnity satisfactory to it against such risk or
liability is not reasonably assured to it.
(h) In the event that the Indenture Trustee is also acting as Paying
Agent hereunder or under the Trust Agreement, or as Transfer Agent or Note
Registrar hereunder, the rights and protections afforded to the Indenture
Trustee pursuant to this Article VI shall also be afforded to the Paying Agent,
Transfer Agent and Note Registrar.
(i) 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.
(j) 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 and actually received by the Indenture Trustee
in accordance with the provisions of this Indenture.
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SECTION 6.2 Rights of Indenture Trustee. (a) The Indenture Trustee
may conclusively rely and shall be fully protected in relying on any document
believed by it to be genuine and to have been signed or presented by the
purportedly 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 and shall be entitled to receive 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 such Officer's Certificate
or Opinion of Counsel unless it is proved by a court of competent jurisdiction
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 of its choice,
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 written
request or direction of any of the Noteholders pursuant to this Indenture,
unless such Noteholders shall have offered to the Indenture Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
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(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, person ally or by agent or attorney
selected by it for such purpose.
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
(a) shall not be responsible for, and makes no representation or warranty, as to
the legality, validity, sufficiently, enforceablity or adequacy of this
Indenture, the Collateral or the Notes or the authenticity of the Notes and (b)
shall not be account able 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. Except as expressly
set forth in the Basic Documents, the Indenture Trustee shall have no obligation
to administer, service or collect the Receivables or to maintain or otherwise
supervise the administration, servicing or collection of the Receivables. The
Indenture Trustee shall have no duty to monitor the performance of the Servicer
nor shall it have any liability in connection with the malfeasance or
nonfeasance by the Servicer. The Indenture Trustee shall have no liability in
connection with compliance by the Servicer with statutory or regulatory
requirements related to the Receivables or any provision of this Indenture, the
Sale and Servicing Agreement or any related instrument or agreement. The
Indenture Trustee shall not make or be deemed to have made any representations
or warranties with respect to the applicable Basic Documents or the validity or
sufficiency of any assignment of the Receivables to the Indenture Trustee.
SECTION 6.5 Notice of Defaults. If a Default occurs and is
continuing and if it is actually 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
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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 in accordance with the prevailing fee
agreement. 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 and any
Paying Agent hereunder against any and all loss, liability or expense (including
attorneys' fees and expenses) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder and
under the Basic Documents. The Indenture Trustee and any Paying Agent shall
notify the Issuer and the Administrator promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee or the Paying Agent 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 or the Paying
Agent 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
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the Indenture Trustee or the Paying Agent through such Person's own willful
misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee and
any Paying Agent pursuant to this Section 6.7 arising prior to the resignation
or removal of the Indenture Trustee or such Paying Agent shall remain
enforceable notwithstanding such resignation or removal and the subsequent
discharge of this Indenture. When the Indenture Trustee or any Paying Agent
incurs expenses after the occurrence of a Default specified in Section 5.1(d) or
(e) 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 in writing
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.
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(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;
provided, however, that all amounts due and owing the predecessor trustee have
been paid. The successor Indenture Trustee shall mail a notice of its succession
to each Noteholder and to the Rating Agencies. 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, any successor to the Indenture Trustee may authenticate such
Notes either in the name of
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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
Property (other than the Certificate Distribution Account and the Class B
Reserve Account and any money, financial assets and other property from time to
time held in or credited to, or purchased with funding from either of such
accounts), and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders, such title such Trust Property, 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 any of the Trust Estate 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;
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(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.
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SECTION 6.13 Pennsylvania Motor Vehicle Sales Finance Act Licenses.
The Indenture Trustee shall use its reasonable 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.
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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 to the Indenture Trustee.
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).
(d) A copy of the Officer's Certificate required under Section
3.10(a) of the Sale and Servicing Agreement 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, and in connection therewith, the Indenture
Trustee shall be entitled to its
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reasonable fees and expenses, as agreed upon between the Seller and the
Indenture Trustee.
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 in writing 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
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exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee in writing if and when the Notes are listed on any stock
exchange.
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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 Collateral, 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 Establishment of Accounts. (a) On or prior to the
Closing Date, the Issuer shall cause the Servicer to establish and maintain, in
the name of the Indenture Trustee, the Collection Account and the Payahead
Account for the benefit of the Noteholders and the Certificateholders, and the
Note Distribution Account and the Class A Reserve Account for the benefit of the
Noteholders, as provided in Sections 4.1, 4.7 and 4.10 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 Distribution Account, the Certificate Distribution
Account, the Payahead Account and/or the Reserve Accounts, as applicable, 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, the
Owner Trustee or any Paying Agent from the Collection Account and/or the Reserve
Accounts, as applicable, and deposited into the Note Distribution Account, the
Certificate Distribution Account, the Payahead Account and/or the Reserve
Accounts, as applicable, including for payment to Noteholders,
Certificateholders and the Seller,
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as applicable, in accordance with Section 4.6 of the Sale and Servicing
Agreement and 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 and the
Class A Reserve Account shall be invested by the Indenture Trustee at the
written direction of the Seller in Permitted Investments as provided in Sections
4.1 and 4.7 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 and the Reserve Accounts shall be
withdrawn by the Indenture Trustee, the Owner Trustee or any Paying Agent, as
the case may be, from such accounts and deposited or distributed as provided in
Sections 4.1 and 4.7 of the Sale and Servicing Agreement. The Seller shall not
direct the Indenture Trustee, the Owner Trustee or any Paying Agent to make any
investment of any funds or to sell investment held in the Collection Account,
the Payahead Account or the Reserve Accounts unless security interests granted
and perfected in such accounts 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), neither the Indenture Trustee, the
Owner Trustee nor any Paying Agent shall in any way be held liable by reason of
any insufficiency in the Collection Account, the Payahead Account or the Reserve
Accounts, resulting from any loss on any Permitted Investment included therein,
except for losses attributable to the failure by the Indenture Trustee, the
Owner Trustee or any Paying Agent, as the case may be, to make payments on such
Permitted Investments issued by the Indenture Trustee, the Owner Trustee or any
Paying Agent, as applicable, in their respective commercial capacities as
principal obligors and not as trustees, in accordance with their terms. Neither
the Indenture Trustee, the Owner Trustee nor any Paying Agent shall have any
obligation to invest or reinvest any amounts held hereunder in the absence of
written investment direction.
SECTION 8.4 Release of Collateral. (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
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property from the lien of this Indenture, or convey the interest of the
Indenture Trustee 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 Collection
Account, the Payahead Account, the Note Distribution Account or the Class A
Reserve Account. 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) Business Days prior written 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.
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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 TIA
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 (other than the Certificate Distribution Account and the Class B
Reserve Account or any amounts or property held in or credited to, or
purchased with funds from, either of such accounts); 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;
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(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 (A) such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder, (B) the Rating Agency Condition shall have been satisfied with
respect to such action and (C) 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
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taxation of any Notes Outstanding or outstanding Certificates or any Noteholder
or Certificateholder.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. (a)
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 Collateral 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
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Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provision of the Indenture regarding
the voting of Notes held by the Trust, the Seller, the Servicer, an
affiliate of any of them or any Obligor;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the principal amount of the Notes
Outstanding required to direct the Indenture Trustee to sell or liquidate
the Collateral pursuant to Section 5.4 if the proceeds of such sale would
be insufficient to pay the principal amount of and accrued but unpaid
interest on the Notes;
(vi) 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;
(vii) 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
(viii) 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
Collateral 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.
(b) 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.
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(c) 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 supple mental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture, such notice to be prepared by the
Issuer. 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 conclusively
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, indemnities 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 TIA as then in effect so
long as this Indenture shall then be qualified under the TIA.
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
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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
deter mine, new Notes so modified as to conform 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.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption. The Notes are subject to redemption in
whole, but not in part, at the written direction of the Servicer pursuant to
Section 8.1(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 8.1(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 and the Certificate Balance, in each case, plus accrued and unpaid
interest thereon. The Servicer or the Issuer shall furnish the Rating Agencies
and the Noteholders written notice of such redemption. If the Notes are to be
redeemed pursuant to this Section 10.1, the Servicer or the Issuer shall furnish
written notice of such election to the Indenture Trustee not later than twenty
(20) days prior to the Redemption Date; the Indenture Trustee and any Paying
Agent will withdraw any amounts remaining in the Class A Reserve Account, the
Collection Account and the Payahead Account and deposit such amounts into the
Note Distribution Account; and the Issuer, upon the transfer of adequate funds
therefor by the Servicer and into the Note Distribution Account by the Indenture
Trustee and any Paying Agent, shall deposit by 10:00 A.M. (New York City time)
on the Business Day prior to the Redemption Date with the Indenture Trustee in
the Note Distribution Account the Redemption Price of the Notes to be redeemed,
whereupon all such Notes shall be due and payable on the Redemption Date.
SECTION 10.2 Form of Redemption Notice. Notice of redemption under
Section 10.1 shall be given by the Indenture Trustee at the expense of the
Issuer 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, 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
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(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 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.
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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) (if required by the TIA) 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.
(b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) 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;
(ii) 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;
(iii) 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
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(c) (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 another property or securities subject to the lien of this Indenture,
the Issuer shall, in
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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.
(i) 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.
(ii) 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.
(iii) 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
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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.
(iv) 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 Collection Account, the Payahead Account,
the Note Distribution Account, the Certificate Distribution Account and
the Reserve 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.
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(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 conclusively
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 written 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 written 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
written 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.
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(d) Any written 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. (a) 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: Daimler-Benz
Vehicle Owner Trust 1998-A, in care of Chase Manhattan Bank Delaware, 1201
North Market Street, Wilmington, Delaware 19801, Attention: Corporate
Trust Administration, with a copy to the Administrator at 201 Merritt 7,
Suite 700, Norwalk, Connecticut 06856-5425, 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.
(b) 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: Asset Backed Surveillance
Department.
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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
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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. (a) 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 TIA,
such required provision shall control.
(b) 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. Except insofar as the Indenture
Trustee and the Paying Agent are required to (a) make deposits to the Collection
Account, the Payahead Account, the Certificate Distribution Account and the
Class B Reserve Account in trust on behalf of the Certificateholders, (b) make
payments to the Seller, the Owner Trustee or the Certificateholders as required
herein and in the Sale and Servicing Agreement, and (c) give notices to the
Seller, the Owner Trustee or the Certificateholders as required herein and in
the Sale and Servicing Agreement, 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.
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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
ITS ENTIRETY 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,
the Indenture Trustee or any Paying Agent on the Notes or under this Indenture
or any certificate or other writing delivered in connection herewith or
therewith, against (a) any of the Indenture Trustee, the Owner Trustee or any
Paying Agent in their individual capacities, (b) any owner of a Certificate or
any other beneficial interest in the Issuer or (c) any partner, owner,
beneficiary, agent, officer, director, employee or agent of any of the Indenture
Trustee, the Owner Trustee or any Paying Agent in their individual capacities,
any holder of a Certificate or other beneficial interest in the Issuer, the
Owner Trustee, the Indenture Trustee or any Paying Agent or of any successor or
assign of the Indenture Trustee, the Owner Trustee or any Paying Agent in their
individual capacities, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee, the Owner Trustee and any Paying
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Agent 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 Articles 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.
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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.
DAIMLER-BENZ VEHICLE
OWNER TRUST 1998-A
By: CHASE MANHATTAN BANK
DELAWARE, not in its individual
capacity, but solely as Owner Trustee
By: /s/ J.J. Cashin
------------------------------------
Name: John J. Cashin
Title: Vice-President
CITIBANK, N.A.,
not in its individual capacity,
but solely as Indenture Trustee
By: /s/ Denise Banaszek
------------------------------------
Name: Denise Banaszek
Title: Vice-President
<PAGE> 102
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 CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee of DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A, 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
[_________], 1998.
------------------------
Notary Public in and for
the State of Delaware.
[Seal]
My commission expires:
- ----------------------
<PAGE> 103
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
[_____________], a [_______] of CITIBANK, N.A., 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
[_________], 1998.
------------------------
Notary Public in and for
the State of New York.
[Seal]
My commission expires:
- ----------------------
<PAGE> 104
SCHEDULE A
[Provided to the Indenture Trustee at the Closing]
SA-1
<PAGE> 105
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 OTHER WISE 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. 233833AA0
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
5.27125% CLASS A-1 ASSET BACKED NOTES
Daimler-Benz Vehicle Owner Trust 1998-A, 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 [_____________] MILLION DOLLARS payable
on each Payment Date in the aggregate amount, if any, payable from the Note
Distribution Account in respect of principal on the Class A-1 Notes pursuant to
A-1-1
<PAGE> 106
Section 2.8 of the Indenture dated as of November 1, 1998 (as amended,
supplemented or otherwise modified and in effect from time to time, the
"Indenture"), between the Issuer and Citibank, N.A., a national banking
association, 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 January 3, 2000 (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.
A-1-2
<PAGE> 107
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.]
A-1-3
<PAGE> 108
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: [__________], 1998
DAIMLER-BENZ VEHICLE
OWNER TRUST 1998-A,
By: CHASE MANHATTAN BANK
DELAWARE, 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: [___________], 1998
CITIBANK, N.A.,
not in its individual capacity,
but solely as Indenture Trustee
By: ___________________________
Authorized Officer
A-1-4
<PAGE> 109
This Class A-1 Note is one of a duly authorized issue of Notes of
the Issuer, designated as its 5.27125% Class A-1 Asset Backed Notes, which,
together with the 5.23% Class A-2 Asset Backed Notes, the 5.16% Class A-3 Asset
Backed Notes and the 5.22% Class A-4 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
twentieth (20th) day of each month or, if any such day is not a Business Day,
the next succeeding Business Day, commencing December 21, 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. Any such
payments in the form of 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-1-5
<PAGE> 110
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 govern mental
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
A-1-6
<PAGE> 111
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 Certificate or any other 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 Certificate or any other 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, single
business 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.
A-1-7
<PAGE> 112
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 Out standing 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 Citibank, N.A., in its individual
capacity,
A-1-8
<PAGE> 113
Chase Manhattan Bank Delaware, in its individual capacity, any owner of a
Certificate or any other 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.
A-1-9
<PAGE> 114
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.
A-1-10
<PAGE> 115
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. 233833AB8
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
5.23% CLASS A-2 ASSET BACKED NOTES
Daimler-Benz Vehicle Owner Trust 1998-A, 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 [ ] MILLION DOLLARS payable on each
Payment Date in the aggregate amount, if any, payable from the Note Distribution
Account in respect of principal on the Class A-2 Notes pursuant to Section 2.8
of the
A-2-1
<PAGE> 116
Indenture dated as of November 1, 1998 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Indenture"), between the Issuer
and Citibank, N.A., a national banking association, 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 December 2001 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
twentieth (20th) 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 twentieth (20th) 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.
A-2-2
<PAGE> 117
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.]
A-2-3
<PAGE> 118
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: [__________], 1998
DAIMLER-BENZ VEHICLE
OWNER TRUST 1998-A,
By: CHASE MANHATTAN BANK
DELAWARE, 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: [___________], 1998
CITIBANK, N.A.,
not in its individual capacity,
but solely as Indenture Trustee
By: ___________________________
Authorized Officer
A-2-4
<PAGE> 119
This Class A-2 Note is one of a duly authorized issue of Notes of
the Issuer, designated as its 5.23% Class A-2 Asset Backed Notes, which,
together with the 5.27125% Class A-1 Asset Backed Notes, the 5.16% Class A-3
Asset Backed Notes and the 5.22% Class A-4 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
twentieth (20th) day of each month or, if any such day is not a Business Day,
the next succeeding Business Day, commencing December 21, 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. Any such
payments in the form of checks shall
A-2-5
<PAGE> 120
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 govern mental
charge that may be imposed in connection with any such registration of transfer
or exchange.
A-2-6
<PAGE> 121
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 Certificate or any other
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 Certificate or any
other 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, single
business 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
A-2-7
<PAGE> 122
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 Out standing 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.
A-2-8
<PAGE> 123
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Citibank, N.A., in its individual
capacity, Chase Manhattan Bank Delaware, in its individual capacity, any owner
of a Certificate or any other 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.
A-2-9
<PAGE> 124
ASSIGNMENT
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.
A-2-10
<PAGE> 125
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. 233833AC6
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
5.16% CLASS A-3 ASSET BACKED NOTES
Daimler-Benz Vehicle Owner Trust 1998-A, 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 [ ] MILLION DOLLARS payable on each
Payment Date in the aggregate amount, if any, payable from the Note Distribution
Account in respect of principal on the Class A-3 Notes pursuant to Section 2.8
of the
A-3-1
<PAGE> 126
Indenture dated as of November 1, 1998 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Indenture"), between the Issuer
and Citibank, N.A., a national banking association, 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 January 2003 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
twentieth (20th) 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 twentieth (20th) 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.
A-3-2
<PAGE> 127
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.]
A-3-3
<PAGE> 128
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: [__________], 1998
By: CHASE MANHATTAN BANK
DELAWARE, 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: [___________], 1998
CITIBANK, N.A.,
not in its individual capacity,
but solely as Indenture Trustee
By: ___________________________
Authorized Officer
A-3-4
<PAGE> 129
This Class A-3 Note is one of a duly authorized issue of Notes of
the Issuer, designated as its 5.16% Class A-3 Asset Backed Notes, which,
together with the 5.27125% Class A-1 Asset Backed Notes, the 5.23% Class A-2
Asset Backed Notes and the 5.22% Class A-4 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
twentieth (20th) day of each month or, if any such day is not a Business Day,
the next succeeding Business Day, commencing December 21, 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. Any such
payments in the form of 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-3-5
<PAGE> 130
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 govern mental
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
A-3-6
<PAGE> 131
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 Certificate or any other 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 Certificate or any other 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, single
business 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.
A-3-7
<PAGE> 132
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 Out standing 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 Citibank, N.A., in its individual
capacity,
A-3-8
<PAGE> 133
Chase Manhattan Bank Delaware, in its individual capacity, any owner of a
Certificate or any other 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.
A-3-9
<PAGE> 134
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.
A-3-10
<PAGE> 135
EXHIBIT A-4
Form of Class A-4 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. 233833AD4
DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A
5.22% CLASS A-4 ASSET BACKED NOTES
Daimler-Benz Vehicle Owner Trust 1998-A, 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 [_____________] MILLION DOLLARS payable
on each Payment Date in the aggregate amount, if any, payable from the Note
Distribution Account in respect of principal on the Class A-4 Notes pursuant to
A-4-1
<PAGE> 136
Section 2.8 of the Indenture dated as of November 1, 1998 (as amended,
supplemented or otherwise modified and in effect from time to time, the
"Indenture"), between the Issuer and Citibank, N.A., a national banking
association, 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-4 Note shall be due and payable on the earlier
of the December 2003 Payment Date (the "Class A-4 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-4 Note at the rate per
annum shown above on each Payment Date until the principal of this Class A-4
Note is paid or made available for payment, on the principal amount of this
Class A-4 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-4 Note will accrue for each Payment Date from and including the
twentieth (20th) 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 twentieth (20th) day of the following
calendar month. 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-4 Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class A-4 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-4 Note shall be applied first to
interest due and payable on this Class A-4 Note as provided above and then to
the unpaid principal of this Class A-4 Note.
Reference is made to the further provisions of this Class A-4 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-4 Note.
A-4-2
<PAGE> 137
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Class
A-4 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.]
A-4-3
<PAGE> 138
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: [__________], 1998
DAIMLER-BENZ VEHICLE
OWNER TRUST 1998-A,
By: CHASE MANHATTAN BANK
DELAWARE, 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: [___________], 1998
CITIBANK, N.A.,
not in its individual capacity,
but solely as Indenture Trustee
By: ___________________________
Authorized Officer
A-4-4
<PAGE> 139
This Class A-4 Note is one of a duly authorized issue of Notes of
the Issuer, designated as its 5.22% Class A-4 Asset Backed Notes, which,
together with the 5.27125% Class A-1 Asset Backed Notes, the 5.23% Class A-2
Asset Backed Notes and the 5.16% 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 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-4 Notes will be payable on each Payment
Date in an amount described on the face hereof. "Payment Date" means the
twentieth (20th) day of each month or, if any such day is not a Business Day,
the next succeeding Business Day, commencing December 21, 1998.
As described above, the entire unpaid principal amount of this Class
A-4 Note shall be due and payable on the earlier of the Class A-4 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-4 Notes shall be made pro rata to the Holders entitled thereto.
Payments of interest on this Class A-4 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-4 Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Class A-4 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-4 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. Any such
payments in the form of 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-4-5
<PAGE> 140
A-4 Note be submitted for notation of payment. Any reduction in the principal
amount of this Class A-4 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-4 Note and of any Class A-4 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-4
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-4 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-4 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-4 Note may be registered on the Note
Register upon surrender of this Class A-4 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-4 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-4 Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other govern mental
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
A-4-6
<PAGE> 141
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 Certificate or any other 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 Certificate or any other 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-4 Note is
issued with the intention that, for federal, state and local income, single
business 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- 4 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-4 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-4 Note be overdue, and none of the Issuer, the Indenture
Trustee or any such agent shall be affected by notice to the contrary.
A-4-7
<PAGE> 142
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 Out standing 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-4
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-4 Note and of any Class
A-4 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-4 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-4 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 Citibank, N.A., in its individual
capacity,
A-4-8
<PAGE> 143
Chase Manhattan Bank Delaware, in its individual capacity, any owner of a
Certificate or any other 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-4
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-4 Note.
A-4-9
<PAGE> 144
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.
A-4-10
<PAGE> 145
EXHIBIT B
Form of Opinion of Counsel
Pursuant to Section 3.6(a)
[_______ __], 1998
To the Addressees Indicated
on Schedule A hereto
Re: Daimler-Benz Vehicle Owner Trust 1998-A
Ladies and Gentlemen:
We have acted as special counsel to Mercedes-Benz Credit
Corporation, a Delaware corporation ("MBCC"), and Daimler-Benz Vehicle
Receivables Corporation, a Delaware corporation (the "Seller"), in connection
with the transactions contemplated by (i) the Purchase Agreement, dated as of
November 1, 1998 (the "Purchase Agreement"), between MBCC and the Seller, (ii)
the Sale and Servicing Agreement, dated as of November 1, 1998 (the "Sale and
Servicing Agreement"), by and among the Seller, as seller, MBCC, as servicer,
and Daimler-Benz Vehicle Owner Trust 1998-A, a Delaware business trust (the
"Trust"), as issuer, (iii) the Indenture, dated as of November 1, 1998 (the
"Indenture"), between the Trust and Citibank, N.A., as indenture trustee for the
benefit of the Holders of the Notes (the "Indenture Trustee"), and (iv) the
Trust Agreement, dated as of November 1, 1998 (and as it may be amended and
restated, the "Trust Agreement"), between the Seller and Chase Manhattan Bank
Delaware, as owner trustee on behalf of the Trust (the "Owner Trustee").
Capitalized terms not otherwise defined herein have the meanings as signed to
such terms in the Sale and Servicing Agreement.
Pursuant to the Purchase Agreement and the Assignment dated as of
November 1, 1998 related thereto (the "Assignment"), MBCC proposes to sell to
the
<PAGE> 146
The Addressees Indicated on
Schedule A hereto
[_______ __], 1998
Page 2
Seller, and the Seller proposes to purchase from MBCC, 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, MBCC's security interests in the
Financed Vehicles, MBCC'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, the Seller proposes to
sell to the Trust all right, title and interest of the Seller in, to and under
the Receivables, all 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) $360,000,000 aggregate principal amount of
5.27125% Class A-1 Asset Backed Notes, $508,000,000 aggregate principal amount
of 5.23% Class A-2 Asset Backed Notes, $440,000,000 aggregate principal amount
of 5.16% Class A-3 Asset Backed Notes and $241,800,000 aggregate principal
amount of 5.22% Class A-4 Asset Backed Notes (collectively, the "Notes")
pursuant to the Indenture for sale to the several underwriters named in the
Underwriting Agreement, dated as of [_______ __], 1998, between the Seller and
Chase Securities Inc. and Salomon Smith Barney Inc., as representatives of the
several underwriters; and (ii) $81,654,551.40 aggregate principal amount of
5.62% Class B Asset Backed Certificates (collectively, the "Certificates")
pursuant to the Trust Agreement for issuance to the Seller.
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
<PAGE> 147
The Addressees Indicated on
Schedule A hereto
[_______ __], 1998
Page 3
of MBCC and the Seller 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 the Seller, dated the date hereof, a copy
of which is attached as Exhibit A hereto (the "Seller Certificate");
(c) an unfiled, but signed copy of a financing statement
naming the Seller as debtor and the Trust 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 [New York] (such filing
office, the "Filing Office" and such financing statement, the "Financing
Statement");
(d) the report of Lexis Document Services dated [______ __],
1998, as to financing statements naming the Seller as debtor and on file in the
office of the Secretary of State of the State of [New York] as of an effective
date of [______ __], 1998 (the "Search Report");
(e) forms of motor vehicle retail installment sale contracts
(the "Form Contracts") attached as Annex A to the Seller 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
<PAGE> 148
The Addressees Indicated on
Schedule A hereto
[_______ __], 1998
Page 4
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 [New York], and (iii) with respect to our opinion in paragraph 1
below, the Uniform Commercial Code as in effect on the date hereof in the States
of New York and Delaware.
Members of this Firm are admitted to practice in the States of
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 Delaware 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 the Seller'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 the Seller's will be equal or prior to the
security interest of the Owner Trustee in the Receivables and proceeds thereof.
<PAGE> 149
The Addressees Indicated on
Schedule A hereto
[_______ __], 1998
Page 5
(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 the
Seller 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 the Seller'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;
<PAGE> 150
The Addressees Indicated on
Schedule A hereto
[_______ __], 1998
Page 6
(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 the
Seller 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 the Seller's chief executive office
is and will be located at the address set forth in the the Seller 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:
(i) 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; (ii) pursuant to Section 9-301(4) of the UCC, a lien creditor to
the extent that
<PAGE> 151
The Addressees Indicated on
Schedule A hereto
[_______ __], 1998
Page 7
provision limits the priority afforded future advances; (iii) pursuant to
Section 9-312(7) of the UCC, another secured creditor to the extent that
provision limits the priority afforded future advances; (iv) 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 the
Seller was located in such jurisdiction within four months prior to the date of
the perfection of the security interest of the Owner Trustee; (v) 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; (vi) pursuant to Section
9-312(6) of the UCC, another secured party with a perfected security interest in
other property of the Seller to the extent the Receivables are proceeds of such
other creditor's property; (vii) pursuant to Sections 9-104, 9-113, 9-208 and
9-302(1) of the UCC, another creditor not required to file a financing statement
to perfect its interest; and (viii) 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 the Seller 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 the
Seller 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
<PAGE> 152
The Addressees Indicated on
Schedule A hereto
[_______ __], 1998
Page 8
(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 the Seller 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,
<PAGE> 153
Schedule A
Mercedes-Benz Credit Corporation
201 Merritt 7, Suite 700
Norwalk, CT 06856-5425
Daimler-Benz Vehicle Receivables Corporation
1201 North Market Street
Suite 1406
Wilmington, DE 19801
Chase Manhattan Bank Delaware,
as Owner Trustee
1201 North Market Street
Wilmington, Delaware 19801
Citibank, N.A.,
as Indenture Trustee
111 Wall Street, 5th Floor
New York, NY 10005
Chase Securities Inc., as
Representative of the several
Underwriters
270 Park Avenue, 7th Floor
New York, NY 10017
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
<PAGE> 154
Exhibit A
DAIMLER-BENZ VEHICLE RECEIVABLES CORPORATION
OFFICER'S CERTIFICATE
The undersigned, a duly authorized officer of DAIMLER-BENZ VEHICLE
RECEIVABLES CORP. (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 [Wilmington,
Delaware].
(3) At all times since the incorporation of the Company and on the
date hereof, the Company has had a mailing address of [1201 North Market Street,
Suite 1406, Wilmington, Delaware 19801].
(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 November 1, 1998, by and among the Company, Mercedes-Benz Credit
Corporation, as Servicer, and Daimler-Benz Vehicle Owner Trust 1998-A, as
Issuer, and accepted and agreed to by Citibank, N.A., as Indenture Trustee.
<PAGE> 155
IN WITNESS WHEREOF, I have set my hand this __ day of _______, 1998.
DAIMLER-BENZ VEHICLE
RECEIVABLES CORP.
By:__________________________________
Name:
Title:
<PAGE> 156
Annex A
[FORMS OF RETAIL INSTALLMENT SALES CONTRACT]
<PAGE> 1
Exhibit 4.4
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, dated as of November 1, 1998 (as the
same may be amended, supplemented or otherwise modified and in effect from time
to time, this "Administration Agreement"), is by and among DAIMLER-BENZ VEHICLE
OWNER TRUST 1998-A, a Delaware business trust (the "Issuer"), MERCEDES-BENZ
CREDIT CORPORATION, a Delaware corporation, as administrator (the
"Administrator"), and CITIBANK, N.A., a national banking association, 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 5.27125% Class A-1 Asset Backed
Notes, 5.23% Class A-2 Asset Backed Notes, 5.16% Class A-3 Asset Backed Notes
and 5.22% Class A-4 Asset Backed Notes (collectively, the "Notes") pursuant to
the Indenture, dated as of November 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) and is concurrently issuing 5.62%
Class B Asset Backed Certificates (collectively, the "Certificates") pursuant to
the Amended and Restated Trust Agreement, dated as of November 1, 1998 (as
amended, supplemented or otherwise modified and in effect from time to time, the
"Trust Agreement") between the Issuer and Chase Manhattan Bank Delaware, not in
its individual capacity but solely as Owner Trustee (the "Owner Trustee");
WHEREAS, the Issuer has entered into certain agreements in
connection with the issuance of the Notes and of the Certificates, including
(i) a Sale and Servicing Agreement, dated as of November 1, 1998 (as amended,
supplemented or otherwise modified and in effect from time to time, the "Sale
and Servicing Agreement"), among the Issuer, Mercedes-Benz Credit Corporation,
as servicer, and Daimler-Benz Vehicle Receivables Corporation, as seller (the
"Seller"), (ii) a Letter of Representations dated as of November 1, 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
<PAGE> 2
("DTC") relating to the Notes, (iii) the Indenture, (iv) the Trust Agreement,
(v) the Control Agreement and the Servicing Guaranty Agreement (the Sale and
Servicing Agreement, the Note Depository Agreement, the Indenture, the Trust
Agreement, the Control Agreement and the Servicing Guaranty Agreement being
referred to herein after 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 Certificates (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
2
<PAGE> 3
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 written 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) the preparation 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);
(D) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release
of Collateral (Section 2.10);
(E) the maintenance of an office in the Borough of Manhattan,
City of New York, for registration of the transfer or exchange of Notes
(Section 3.2);
(F) 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);
(G) the direction to the Indenture Trustee to deposit monies
with Paying Agents, if any, other than the Indenture Trustee (Section
3.3);
(H) 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 Certificates, the
Collateral and each other instrument and agreement included in the
Owner Trust Estate (Section 3.4);
(I) 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
3
<PAGE> 4
as is necessary or advisable to protect the Owner Trust Estate or the
Collateral (Section 3.5);
(J) the delivery of the Opinion of Counsel on the Closing Date
and the annual delivery of Opinions of Counsel as to the Owner 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);
(K) 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));
(L) the written notification of the Indenture Trustee and the
Rating Agencies of an Event of Servicing Termination under the Sale and
Servicing Agreement and, if such Event of Servicing Termination arises
from the failure of the Servicer to perform any of its duties under the
Sale and Servicing Agreement with respect to the Receivables, the
taking of all reasonable steps available to remedy such failure
(Section 3.7(d));
(M) 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 VI of the
Sale and Servicing Agreement (Section 3.14);
(N) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its properties or assets
(Section 3.10(b));
(O) 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 Mercedes-Benz Credit
Corporation under the Purchase Agreement (Section 3.19);
(P) 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 4.2);
4
<PAGE> 5
(Q) the compliance with any written directive of the Indenture
Trustee with respect to the sale of any Collateral 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);
(R) 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);
(S) 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);
(T) 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);
(U) 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);
(V) 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
the establishment and maintenance of, and the investment and
reinvestment of funds in, the Collection Account, the Payahead Account,
the Reserve Accounts, the Note Distribution Account and the Certificate
Distribution Account (Sections 8.2 and 8.3);
(W) 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 Collateral (Sections
8.4 and 8.5);
5
<PAGE> 6
(X) 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);
(Y) the execution and delivery of new Notes conforming to any
supplemental indenture (Section 9.6);
(Z) the duty to notify Noteholders of redemption of the Notes
or to cause the Indenture Trustee to provide such notification (Section
10.2);
(A2) 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));
(B2) 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(c));
(C2) 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);
(D2) the preparation and delivery to Noteholders and the
Indenture Trustee of any agreements with respect to alternate payment
and notice provisions (Section 11.6);
(E2) the recording of the Indenture, if applicable (Section
11.15); and
(F2) the preparation of Definitive Notes, if necessary, 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 pursuant to Section 6.7 of the Indenture (which
compensation shall
6
<PAGE> 7
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, directors,
officers and employees 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, or
under any of the Basic Documents, 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, directors, officers and employees 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, or under any of the Basic
Documents, 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 Sections 3.4 or 5.5 of the Trust
Agreement, and at the request of the Owner Trustee shall take all appropriate
action that it is the duty of the Issuer or the Owner Trustee to take pursuant
to the Related Agreements. In furtherance thereof, the Owner
7
<PAGE> 8
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 5.5 of the Trust Agreement with respect
to, among other things, accounting and reports to Owners.
(iv) The Administrator will provide prior to January 15, 2000,
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
8
<PAGE> 9
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 reasonable judgment, 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 in the ordinary course of
business);
(C) the amendment, change or modification of any of the
Related Agreements;
9
<PAGE> 10
(D) the appointment of any successor Note Registrar, successor
Paying Agent and successor Indenture Trustee pursuant to the Indenture
or the appointment of any successor Administrator or Successor
Servicer, or the consent to the assignment by any 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 $100 per month
which shall be payable by the Servicer in accordance with Section 3.8 of the
Sale and Servicing Agreement and Section 8.1 of the Trust Agreement.
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 (a) shall
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated busi-
10
<PAGE> 11
ness or other separate entity, (b) shall be construed to impose any liability as
such on any of them or (c) 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) and Section 4.2 of the
Trust Agreement, 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, subject to Section 4.2 of the Trust Agreement, 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, if 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,
11
<PAGE> 12
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(d) 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, (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 and (iii) the Owner Trustee shall have
complied with Section 4.2 of the Trust Agreement.
(f) The appointment of any successor Administrator shall be
effective only after satisfaction of (i) the Rating Agency Condition with
respect to the proposed appointment and (ii) Section 4.2 of the Trust Agreement.
(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 termina-
12
<PAGE> 13
tion pursuant to Section 8(a) deliver to the Issuer all property and documents
of or relating to the Collateral then in the custody of the Administrator. In
the event of the resignation of the Administrator pursuant to Section 8(b) or
the removal of the Administrator pursuant to Section 8(c) or (d), the
Administrator shall cooperate with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of the duties of
the Administrator.
10. Notices. Any notice, report or other communication given hereunder
shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to:
Daimler-Benz Vehicle Owner Trust 1998-A
c/o Chase Manhattan Bank Delaware
1201 North Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Administration
Telephone: (302) 428-3375
Telecopy: (302) 428-3390
(b) if to the Administrator, to:
Mercedes-Benz Credit Corporation
201 Merritt 7 Suite 700
Norwalk, Connecticut 06856-5425
Attention: Director, Accounting
Telephone: (203) 845-7305
Telecopy: (203) 845-7542
(c) If to the Indenture Trustee, to:
Citibank, N.A.
111 Wall Street, 5th Floor
New York, NY 10005
Attention: Global Agency and Trust Services
Telephone: (212) 657-5419
Telecopy: (212) 657-3862/4024
13
<PAGE> 14
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 each of 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 or, if the Notes have
been paid in full and the Indenture discharged in accordance with its terms, 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. Any 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,
14
<PAGE> 15
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. Limitation of Liability of Owner Trustee and Indenture Trustee. (a)
Notwithstanding anything contained herein to the contrary, this instrument has
been countersigned by Chase Manhattan Bank Delaware, not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall Chase Manhattan Bank Delaware 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.
15
<PAGE> 16
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Citibank, N.A. not in its individual
capacity but solely as Indenture Trustee and in no event shall Citibank, N.A.
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.
18. 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 7.1 of the
Sale and Servicing Agreement, to enforce the provisions of Section 7.2 of the
Sale and Servicing Agreement with respect to the appointment of a Successor
Servicer. Such Successor Servicer shall, upon compliance with the last sentence
of Section 7.2 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,
16
<PAGE> 17
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.
22. The Indenture Trustee in acting hereunder shall be entitled to the
rights, protections and immunities which it is afforded under the Indenture.
<PAGE> 18
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
DAIMLER-BENZ VEHICLE OWNER
TRUST 1998-A
By: CHASE MANHATTAN BANK
DELAWARE, not in its individual capacity
but solely as Owner Trustee
By: /s/ J. J. Cashin
--------------------------------------------
Name: John J. Cashin
Title: Vice-President
CITIBANK, N.A.,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Denise Banaszek
--------------------------------------------
Name: Denise Banaszek
Title: Vice-President
MERCEDES-BENZ CREDIT
CORPORATION, not in its individual
capacity but solely as Administrator
By: /s/ David A. Klanica
--------------------------------------------
Name: David A. Klanica
Title: Director, Accounting Services
18
<PAGE> 19
EXHIBIT A
POWER OF ATTORNEY
STATE OF DELAWARE }
}
COUNTY OF NEW CASTLE }
KNOW ALL MEN BY THESE PRESENTS, that CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, not in its individual capacity but solely as owner
trustee (the "Owner Trustee") for DAIMLER-BENZ VEHICLE OWNER TRUST 1998-A (the
"Trust"), does hereby make, constitute and appoint MERCEDES-BENZ CREDIT
CORPORATION, as administrator under the Administration Agreement dated as of
November 1, 1998 (the "Administration Agreement"), among the Trust,
Mercedes-Benz Credit Corporation and Citibank, N.A., 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 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.
A-0
<PAGE> 20
EXECUTED this day of [ ], 1998.
CHASE MANHATTAN BANK
DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By:__________________________
Name:
Title:
A-1
<PAGE> 21
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 [ ], 1998.
Notary Public - State of Delaware
A-2
<PAGE> 1
Exhibit 10.1
PURCHASE AGREEMENT
This Purchase Agreement is made as of the 1st day of November, 1998, by
and between MERCEDES-BENZ CREDIT CORPORATION, a Delaware corporation (the
"Seller"), having its principal executive office at 201 Merritt 7, Suite 700,
Norwalk, Connecticut 06856-5425, and DAIMLER-BENZ VEHICLE RECEIVABLES
CORPORATION, a Delaware corporation (the "Purchaser"), having its principal
executive office at 1201 North Market Street, Wilmington, Delaware 19801.
WHEREAS, in the regular course of its business, the Seller purchases
certain retail installment contracts for, and retail loans evidenced by notes
secured by, new and used Mercedes-Benz automobiles and new and used medium- and
heavy-duty trucks and tractors manufactured by Freightliner Corporation and its
subsidiaries (collectively, "Freightliner") and used trucks and tractors and new
and used trailers manufactured by companies other than Freightliner.
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
Daimler-Benz Vehicle Owner Trust 1998-A (the "Trust") to be created thereunder,
which Trust will issue certain classes of notes (the "Notes") and certain
certificates (the "Certificates") representing fractional undivided interests in
such Receivables and the other property of the Trust.
NOW, THEREFORE, in consideration of the foregoing and the mutual terms
and covenants contained herein, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Terms not defined in this Agreement shall have the meanings assigned to
such terms in the Sale and Servicing Agreement. 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 mean this Purchase Agreement and all amendments
hereof and supplements hereto.
"Assignment" shall mean an assignment in the form of Exhibit A hereto.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement dated as
<PAGE> 2
of the date hereof by and among Mercedes-Benz Credit Corporation, in its
individual capacity and as Servicer, the Purchaser, as Seller, and Daimler-Benz
Vehicle Owner Trust 1998-A, as Issuer.
"Prospectus" shall have the meaning assigned to such term in the
Underwriting Agreement.
"Receivable" shall mean each retail installment contract which appears
on Exhibit B hereto and all amendments thereof and supplements thereto.
"Receivables Purchase Price" shall mean $1,631,454,551.40.
"Schedule of Receivables" shall mean the list of Receivables annexed
hereto as Exhibit B.
"Underwriting Agreement" shall mean the Note Underwriting Agreement
dated December 3, 1998 by and between Chase Securities Inc. and Salomon Smith
Barney Inc., as representatives of the Underwriters, the Purchaser, as seller,
and Daimler-Benz North America Corporation.
"Underwriters" shall mean the several underwriters listed in Schedule I
to the Underwriting Agreement.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1 Purchase and Sale of Receivables.
(a) Sale of Receivables. On the Closing Date, subject to the
terms and conditions of this Agreement, the Seller shall sell, transfer, assign
and otherwise convey to the Purchaser, without recourse, and the Purchaser shall
purchase, all right, title and interest of the Seller, whether now owned or
hereafter acquired, in and to the following: (i) the Receivables, and all monies
due thereunder on or after the Cutoff Date; (ii) all of the Seller's the
security interests in the Financed Vehicles; (iii) all of the Seller's rights to
receive proceeds from claims on physical damage, credit life and disability
insurance policies covering Financed Vehicles or the Obligors; (iv) the rights
of recourse of the Seller against Dealers arising out of breaches by Dealers
with respect to the Receivables; (v) all of the Seller's rights to all documents
contained in the Receivable Files; (vi) all property (including the right to
receive future liquidation proceeds and Recoveries) that secures a Receivable
and that will have been acquired by or on behalf of the Indenture Trustee; and
(vii) all proceeds of any and all of the foregoing. The sale, transfer,
assignment and conveyance made hereunder shall not constitute and is not
intended to
<PAGE> 3
result in an assumption by the Purchaser of any obligation of the Seller to the
Obligors, the Dealers or any other Person in connection with the Receivables and
the property transferred under this Section 2.1(a) or any agreement, document or
instrument related thereto.
(b) Receivables Purchase Price. In consideration for the
Receivables and other properties described in Section 2.1(a), the Purchaser
shall, on the Closing Date, pay to the Seller the Receivables Purchase Price. An
amount equal to $1,546,971,721.48 of the Receivables Purchase Price shall be
paid to the Seller in cash. The remaining $84,482,829.92 of the Receivables
Purchase Price shall be deemed paid and returned to the Purchaser and be
considered a contribution to the capital of the Purchaser. The portion of the
Receivables Purchase Price to be paid in cash shall be paid by federal wire
transfer (same day) funds to such account in New York, New York as the Seller
shall designate.
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 transfer to the Trust all of the
Purchaser's right, title and interest in and to the Receivables and other
property described in Section 2.1(a) in exchange for the Notes and the
Certificates; and (b) the Underwriting Agreement, pursuant to which the
Purchaser will sell to the Underwriters the Notes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Purchaser. The Purchaser
makes the following representations and warranties:
(a) Organization and Good Standing. The Purchaser has been
duly organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware.
(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, except where the failure of the Purchaser to so qualify or
obtain such licenses or approvals would not have a material adverse affect on
the Purchaser, the Trust or any Receivable.
(c) Power and Authority. The Purchaser has the power and
authority to execute and deliver this Agreement and to carry out its terms. The
Purchaser has full power and authority to purchase the property to be sold and
assigned by the Seller and has duly authorized
<PAGE> 4
such purchase by all necessary corporate action; and the execution, delivery and
performance of this Agreement has been duly authorized by the Purchaser by all
necessary corporate action.
(d) Binding Obligations. This Agreement constitutes the legal,
valid and binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, except as enforceability may be eliminated by
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(e) 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 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) 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)
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 any of its properties are subject, or result in the creation or imposition of
any lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument or violate any law,
order, rule or regulation, applicable to the 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.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of the Purchaser, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Purchaser or its properties: (a)
asserting the invalidity of this Agreement, (b) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement, or (c)
seeking any determination or ruling that might materially and adversely affect
the performance by the Purchaser of its obligations under, or the validity or
enforceability of, this Agreement.
3.2 Representations and Warranties of the Seller
(a) The Seller makes the following representations and
warranties to the Purchaser:
(i) 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 currently
conducted, and had at all relevant times, and has, power, authority,
and legal right to acquire and own the Receivables.
(ii) Due Qualification. The Seller is duly qualified
to do
<PAGE> 5
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, except where the failure of the Seller to
so qualify or obtain such licenses or approvals would not have a
material adverse effect on the Seller or any Receivable.
(iii) Power and Authority. The Seller has the power
and authority to execute and deliver this Agreement and to carry out
its terms. The Seller has full power and authority to sell and assign
the property to be sold and assigned to the Purchaser and has duly
authorized such sale and assignment to the Purchaser by all necessary
corporate action; and the execution, delivery, and performance of this
Agreement have been duly authorized by the Seller by all necessary
corporate action.
(iv) Valid Sale; Binding Obligations. This Agreement
and the Assignment effect a valid sale, transfer, and assignment of the
Receivables and the other property conveyed by the Seller to the
Purchaser hereunder, enforceable against creditors of and purchasers
from the Seller; and this Agreement and the Assignment constitute
legal, valid and binding obligations of the Seller, enforceable against
the Seller in accordance with their terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(v) 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 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) 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) 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, 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.
(vi) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of the Seller, threatened,
before any court, regulatory body, administrative agency, or other
tribunal or governmental
<PAGE> 6
instrumentality having jurisdiction over the Seller or its properties:
(a) asserting the invalidity of this Agreement, (b) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement, or (c) 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.
(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 and the subsequent assignment and transfer
pursuant to the Sale and Servicing Agreement:
(i) Characteristics of Receivables. Each Receivable
(a) was originated in the United States of America by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business, was fully and properly executed by the parties
thereto, was purchased by the Seller from such Dealer under an existing
Dealer Agreement with the Seller, was validly assigned by such Dealer
to the Seller, (b) contains 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,
(c) except in the case of a Balloon Receivable, provides for level
monthly payments that fully amortize the Amount Financed by maturity
and yields interest at the APR of such Receivable, and in the case of a
Balloon Receivable, provides for fixed monthly payments that amortize
the Amount Financed to an amount equal to the Balloon Payment by
maturity, provides for a Balloon Payment at maturity that is sufficient
to pay the remaining Amount Financed of the Receivable, and yields
interest at the APR of such Receivable, (d) is a retail installment
contract, (e) is secured by one or more Financed Vehicles.
(ii) Schedule of Receivables. The information set
forth in Exhibit B to this Agreement was true and correct in all
material respects as of the opening of business on the Cutoff Date, and
no selection procedures believed by the Seller to be adverse to the
Certificateholders were utilized in selecting the Receivables.
(iii) Compliance with Law. Each Receivable and the
sale of the related Financed Vehicle complied at the time it was
originated or made, and complies 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 Debt
Collection Practices Act, the Federal Trade
<PAGE> 7
Commission Act, the Magnusson-Moss Warranty Act, the Federal Reserve
Board's Regulations B and Z, and state adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and other
consumer credit laws and equal credit opportunity and disclosure laws.
(iv) Binding Obligations. To the best of the Seller's
knowledge, each Receivable represents the legal, valid, and binding
payment obligation in writing of the related Obligor, enforceable by
the holder thereof in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation or other
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles.
(v) No Government Obligor. Neither the United States
of America nor any State or any agency, department, or instrumentality
of the United States of America or any State is an Obligor.
(vi) Security Interest in Financed Vehicles. To the
best of the Seller's knowledge, immediately prior to the sale,
assignment, and transfer of each Receivable to the Purchaser hereunder,
such Receivable shall be secured by a validly perfected first priority
security interest and lien in the related Financed Vehicle in favor of
the Seller as secured party. Such security interest and lien is being
assigned by the Seller to the Purchaser pursuant to this Agreement
except that no certificate of title or certificate of ownership with
respect to such Financed Vehicle has been or will be amended to
identify the Purchaser as a secured party. At such time as enforcement
of such security interest is sought, there shall exist a valid,
subsisting and enforceable first priority security interest in such
Financed Vehicle for the benefit of the Purchaser. The foregoing
representations and warranties with respect to perfection and
enforceability of a security interest in a Financed Vehicle do not
cover statutory or other liens arising after the Closing Date by
operation of law or any rights of third parties arising after the
Closing Date as a result of the fraud or forgery of the Vehicle owner
or administrative error by state recording officials which are 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 the Seller to the Purchaser and by the Purchaser to the
Trust.
(viii) No Waiver. No provision of a Receivable shall
have been waived in such a manner that such Receivable fails to meet
all of the representations and warranties made by the Seller in this
Section 3.2.
<PAGE> 8
(ix) No Defenses. No right of rescission, setoff,
counterclaim, or defense has been asserted or, to the best of the
Seller's knowledge, threatened with respect to any Receivable.
(x) No Liens. To the best of Seller's knowledge, no
liens or claims have been filed for work, labor, or materials relating
to a Financed Vehicle that are liens prior to, or equal or on a parity
with, the secured interest in the Financed Vehicle granted by the
related Receivable.
(xi) No Default, Repossession. Except for payment
defaults continuing for a period of not more than thirty (30) days in
the case of Motor Vehicles or sixty (60) days in the case of Commercial
Vehicles as of the Cutoff Date, to the best of the Seller's knowledge,
no default, breach, violation, or event permitting acceleration under
the terms of any Receivable and no event that with notice or the lapse
of time would constitute such a default, breach, violation, or event
permitting acceleration under the terms of any Receivable has occurred;
and no Financed Vehicle was repossessed on or prior to the Cutoff Date.
(xii) Insurance. Except in the case of certain fleet
customers which are permitted to be self-insured in accordance with the
Seller's customary standards, the Seller, in accordance with its
customary procedures, has determined that each Obligor has obtained or
agreed to obtain physical damage 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 or the commencement of any Proceeding by or against the Seller
under any bankruptcy or other insolvency law. No Receivable has been
sold, transferred, assigned, or pledged by the Seller to any Person
other than the Purchaser. The Seller is transferring title to each
Receivable free and clear of all Liens and rights of others and has
perfected such transfer under the UCC.
(xiv) Valid Assignment. No Receivable was originated
in, or is subject to the laws of, any jurisdiction under which the
sale, transfer, and assignment of such Receivable under this Agreement
is unlawful, void, or voidable. The Seller has not entered into any
agreement with any Obligor that prohibits, restricts or conditions the
assignment of any portion of the Receivables.
(xv) All Filings Made. All filings (including,
without limitation, UCC filings) and agreements necessary in any
jurisdiction to give the Purchaser a first priority perfected security
interest in the Receivables have been made.
<PAGE> 9
(xvi) Chattel Paper. Each Receivable constitutes
"chattel paper" as defined in the UCC.
(xvii) One Original. There is only one original
executed copy of each Receivable.
(xviii) Principal Balance. Each Receivable had a
remaining Principal Balance as of the Cutoff Date of not more than
$5,617,494.16 and not less than $217.25.
(xix) No Bankrupt Obligors. To the best of the
Seller's knowledge, no Obligor under any Receivable was, as of the
Cutoff Date, the subject of a Proceeding under the Bankruptcy Code of
the United States or any other bankruptcy or insolvency law.
(xx) New and Used Vehicles. Approximately 70.13% of
the aggregate Principal Balance of the Receivables, constituting 57.53%
of the Receivables as of the Cutoff Date relate to new Financed
Vehicles, and approximately 29.87% of the aggregate Principal Balance
of the Receivables, constituting 42.47% of the number of Receivables as
of the Cutoff Date, relate to used Financed Vehicles.
(xxi) Origination. Each Receivable shall have an
origination date during or after November 7, 1991.
(xxii) Maturity of Receivables. Each Receivable had a
remaining maturity, as of the Cutoff Date, of not more than 84 months
and an original maturity of not more than 85 months.
(xxiii) Annual Percentage Rate. Each Receivable has
an APR of at least 8.25% and not more than 13.0%.
(xxiv) Scheduled Payments. Each Receivable shall have
a first Scheduled Payment due on or prior to November 1, 1998, and no
Receivable shall have a payment that was more than thirty (30) days
overdue in the case of Motor Vehicles and sixty (60) days overdue in
the case of Commercial Vehicles as of the Cutoff Date.
(xxv) Billing Address. The Obligor under each
Receivable had a current billing address in the United States as of the
Cutoff Date.
(xxvi) Location of Receivable Files. The Receivable
Files shall be kept at one or more of the locations listed in Schedule
B to the Sale and Servicing Agreement.
<PAGE> 10
(xxvii) Other Data. The tabular data and the
numerical data relating to the characteristics of the Receivables
contained in the Prospectus is true and correct in all material
respects as of its date.
ARTICLE IV
CONDITIONS
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.
(ii) Evidence of UCC Filing. On or prior to the
Closing Date, the Seller shall record and file, at its own expense, a
UCC-1 financing statement in each jurisdiction in which it is 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 Receivable to the Purchaser. The Seller shall
deliver a file-stamped copy, or other evidence satisfactory to the
Purchaser of such filing, to the Purchaser as soon as practicable.
(iii) Other Documents. Such other documents as the
Purchaser may reasonably request.
(d) Other Transactions. The transactions contemplated by the
Sale and Servicing Agreement shall be consummated on the Closing Date.
<PAGE> 11
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. On the Closing Date, the Purchaser
will 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, however,
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:
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 in the Receivables 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 Section 5.1(a)
above seriously misleading within the meaning of ss. 9-402(7) of the UCC, unless
it shall have given the Purchaser at least five 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 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 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.
5.2 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
<PAGE> 12
right, title and interest in and to the Receivables.
5.3 Indemnification. The Seller shall indemnify and hold harmless the
Purchaser from and against any and all taxes that may at any time be asserted
against the Purchaser with respect to the transactions contemplated herein,
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 except for income, franchise or other taxes
measured by net income. These indemnity obligations shall be in addition to any
obligation that the Seller may otherwise have.
5.4 Sale. The Seller agrees to treat this conveyance for all purposes
(including without limitation tax and financial accounting purposes) as a sale
on all relevant books, records, tax returns, financial statements and other
applicable documents.
ARTICLE VI
MISCELLANEOUS PROVISIONS
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.
6.2 Repurchase upon Breach. The Purchaser shall inform the Seller
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 3.2(b)
and, in the case of subsections 3.2(b)(iv), (vi), (ix), (x), (xi) and (xix), any
breach or failure which would have occurred if such warranty had not been made
to the best knowledge of the Seller. Unless the breach or failure shall have
been cured by the last day of the Collection Period which includes the 60th day
after the date on which the Seller becomes aware of, or receives written notice
from the Purchaser of, such breach or failure, the Seller shall repurchase from
the Purchaser any Receivable, the interests of the Purchaser in which are
materially and adversely affected by the breach or failure, on the Payment Date
immediately following such Collection Period but with effect from the first day
of the Collection Period in which such Payment Date occurs. In consideration of
the purchase of a Receivable hereunder, the Seller shall remit the Purchase
Amount of such Receivable to the Purchaser. The sole remedy of the Purchaser
with respect to a breach or failure to be true of the representations and
warranties made by the Seller pursuant to Section 3.2(b) shall be to require the
Seller to repurchase the relevant Receivable pursuant to this Section 6.2.
6.3 Purchaser's Assignment of Repurchased Receivables. With respect to
all Receivables purchased by the Seller pursuant to Section 6.2, the Purchaser
shall assign, without recourse, representation, or warranty, to the Seller all
the Purchaser's right, title, and interest in and to such Receivables, and all
security and documents and all other property conveyed pursuant to Section
2.1(a) with respect to such Receivables. Such assignment shall be a sale and
assignment outright, and not for security. If, in any enforcement suit or legal
proceeding, it is
<PAGE> 13
held that the Seller may not enforce any such Receivable on the ground that it
shall not be a real party in interest or a holder entitled to enforce the
Receivable, the Purchaser and any transferee or assignee of the Purchaser shall,
at the expense of the Seller, take such steps as the Seller deems necessary to
enforce the Receivable, including bringing suit in the Purchaser's name or in
the name of any transferee or assignee of the Purchaser.
6.4 Trust. The seller acknowledges that: the Purchaser will, pursuant
to the Sale and Servicing Agreement, sell the Receivables to the Trust and
assign its rights under this Agreement to the Trustee for the benefit of the
Noteholders and Certificateholders. The Seller hereby consents to such sale and
assignment.
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.
6.6 Accountants' Letters.
(a) KPMG Peat Marwick will review the characteristics of the
Receivables described in the Schedule of Receivables hereto and will compare
those characteristics to the information with respect to the Receivables
contained in the Prospectus.
(b) The Seller will cooperate with the Purchaser and KPMG Peat
Marwick in making available all information and taking all steps reasonably
necessary to permit such accountants to complete the review set forth in Section
6.6(a) above and to deliver the letters required of them under the Underwriting
Agreement.
(c) KPMG Peat Marwick 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 form of
letter.
6.7 Waivers. No failure or delay on the part of the Purchaser in
exercising any power, right or remedy under this Agreement or the 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.
6.8 Notices. All demands, notices and communications under this
Agreement shall be in writing, personally delivered, sent by telecopier, sent by
courier or mailed by certified mail, return receipt requested, and shall be
deemed to have been given upon receipt to either party at its address shown in
the opening portion of this Agreement or at such other address as may be
designated by a party by notice to the other party.
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
<PAGE> 14
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 and to the Receivables and the enforcement of any
obligation of the Seller hereunder.
6.10 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 performance by the Purchaser of its obligations,
or the enforcement of the Purchaser's rights, under this Agreement, the
Receivables or the Sale and Servicing Agreement or as required by law.
6.11 Governing Law. THIS AGREEMENT AND THE ASSIGNMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES UNDER THIS AGREEMENT AND THE ASSIGNMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
<PAGE> 15
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date and year first above written.
MERCEDES-BENZ CREDIT CORPORATION
By /s/ David A. Klanica
Name: David A. Klanica
Title: Director, Accounting Services
DAIMLER-BENZ VEHICLE RECEIVABLES
CORPORATION
By /s/ H. S. Traison
Name: Harvey S. Traison
Title: President
<PAGE> 16
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated as
of November 1, 1998, between the undersigned and DAIMLER-BENZ VEHICLE
RECEIVABLES CORPORATION (the "Purchaser") (the "Purchase Agreement"), the
undersigned does hereby sell, assign transfer and otherwise convey unto the
Purchaser, without recourse, all right, title and interest of the undersigned
whether nor owned or hereafter acquired, in and to the following: (i) the
Receivables, and all monies due thereunder on or after the Cutoff Date; (ii) all
of the Seller's the security interests in the Financed Vehicles; (iii) all of
the Seller's rights to receive proceeds from claims on physical damage, credit
life and disability insurance policies covering Financed Vehicles or the
Obligors; (iv) the rights of recourse of the Seller against Dealers arising out
of breaches by Dealers with respect to the Receivables; (v) all of the Seller's
rights to all documents contained in the Receivable Files; (vi) all property
(including the right to receive future liquidation proceeds and Recoveries) that
secures a Receivable and that will have been acquired by or on behalf of the
Indenture Trustee; and (vii) all proceeds of any and all of the foregoing. The
sale, transfer, assignment and conveyance made hereunder shall not constitute
and is not intended to result in an assumption by the Purchaser of any
obligation of the Seller to the Obligors, the Dealers or any other Person in
connection with the Receivables and the property transferred under this Section
2.1(a) or any agreement, document or instrument related thereto.
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 herein and not otherwise defined shall have the
meanings assigned to them in or pursuant to the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of December 10, 1998.
MERCEDES-BENZ CREDIT CORPORATION
By
Name:
Title
<PAGE> 17
Exhibit B
Schedule of Receivables
DELIVERED TO PURCHASER
AT CLOSING
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b)(2) ____
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
399 Park Avenue, New York, New York 13-5266470
Address of principal executive office (I.R.S. employer
identification no.
Daimler-Benz Vehicle Owner Trust 1998-A
c/o Daimler-Benz Vehicle Receivables Corporation
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.
Delaware 13-3770955
19801
1201 North Market Street 19801
Wilmington, DE
Securitized Debt Securities
<PAGE> 2
(Title of the indenture securities)
1) Daimler Benz Auto Grantor Trust 1995-A - Asset Backed dated 11/1/95
$600,163,184.00
Class A $570,155,025.00 5.85% due 5/15/2002
Class B $30,008,159.00 5.85% due 5/15/2002
2) Daimler Benz Vehicle Trust 1996-A - Asset Backed dated 11/01/96
$862,928,985.00
Class A $795,188,138.00 5.85% due 7/20/2003
Class B $67,739,847.00 5.85% due 7/20/2003
3) Daimler Benz North America 1997-A - Asset Backed dated 10/17/97 $
657,019,404.00
Class A $657,019,404.00 6.05% due 03/31/2005
4) Daimler Benz A.G. - Debenture/Conv Debt dated 5/15/97 $1,000,000,000.00
American Depositary Notes for 5.75% Subordinated Mandatory Convertible
Notes due 11/15/2001
<PAGE> 3
5) Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, NY
33 Liberty Street
New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as exhibits
hereto.
Exhibit 1 - Copy of Articles of Association of the Trustee, as
now in effect. (Exhibit 1 to T-1 to Registration Statement No.
2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to Registration Statement
No. 2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise
corporate trust powers. (Exhibit 3 to T-1 to Registration
Statement No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit
4 to T-1 to
<PAGE> 4
Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section
321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1
to Registration Statement No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of
Citibank, N.A. (as September 30, 1998 - attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the _8th day
of , December 1998.
CITIBANK, N.A.
By: /s/ Cindy Tsang
(Authorized Officer)
<PAGE> 5
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
Citibank, N.A.
of New York in the State of New York, at the close of business on September 30,
1998 published in response to call made by Comptroller of the Currency under
Title 12, United States Code, Section 161, Charter Number 1461 Comptroller of
the Currency Northeastern District.
ASSETS
<TABLE>
<CAPTION>
Thousands
of dollars
<S> <C>
Cash and balances due from depository institutions;
Noninterest-bearing balances and currency and coin........... $ 8,336,000
Interest-bearing balances....................................... 14,937,000
Held-to-maturity securities..................................... 0
Available-for-sale securities................................... 33,505,000
Federal funds sold and securities purchased
under agreements to resell................................... 11,948,000
Loans and lease financing receivables:
Loans and Leases, net of unearned income..................... $ 174,282,000
LESS; Allowance for loan and lease losses.................... $4,631,000
Loans and leases, net of unearned income, allowance, and
reserve...................................................... 169,651,000
Trading assets.................................................. 36,759,000
Premises and fixed assets (including capitalized leases)........ 3,757,000
Other real estate owned......................................... 510,000
Investments in unconsolidated subsidiaries and associated
companies.................................................... 1,252,000
Customers' liability to this bank on acceptances outstanding.... 1,611,000
Intangible assets............................................... 2,965,000
Other assets.................................................... 10,891,000
-------------
TOTAL ASSETS.................................................... $ 296,122,000
=============
</TABLE>
<PAGE> 6
LIABILITIES
<TABLE>
<CAPTION>
Thousands
of dollars
<S> <C>
Deposits:
In domestic offices ................................. $ 38,517,000
Noninterest-bearing ................................. $ 12,875,000
Interest-bearing .................................... $ 25,642,000
In foreign offices, Edge and Agreement subsidiaries, and
IBF's ............................................... 162,357,000
Noninterest-bearing ................................. $ 10,724,000
Interest-bearing .................................... $151,633,000
Federal funds purchased and securities sold under
agreements to repurchase ............................ 8,114,000
Trading liabilities .................................... 31,664,000
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ....... 10,429,000
With a remaining maturity of more than one year
through three years ................................. 1,405,000
With a remaining maturity of more than three years .. 2,160,000
Bank's liability on acceptances executed and outstanding 1,684,000
Subordinated notes and debentures ...................... 6,000,000
Other liabilities ...................................... 15,590,000
------------
TOTAL LIABILITIES ...................................... $277,920,000
============
</TABLE>
EQUITY CAPITAL
<TABLE>
<CAPTION>
Thousands
of dollars
<S> <C>
Perpetual preferred stock and related surplus ............. 0
Common stock .............................................. $ 751,000
Surplus ................................................... 7,771,000
Undivided profits and capital reserves .................... 10,629,000
Net unrealized holding gains (losses) on available-for-sale
securities ............................................. (245,000)
Cumulative foreign currency translation adjustments ....... (704,000)
-------------
TOTAL EQUITY CAPITAL ...................................... $ 18,202,000
-------------
TOTAL LIABILITIES LIMITED-LIFE PREFERRED
STOCK, AND EQUITY CAPITAL .............................. $ 296,122,000
=============
</TABLE>
<PAGE> 7
I, Roger W. Trupin, Controller of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my
knowledge and belief.
ROGER W. TRUPIN
CONTROLLER
We, the undersigned directors, attest to the correctness of this Report
of Condition. We declare that it has been examined by us, and to the
best of our knowledge and belief has been prepared in conformance with
the instructions and is true and correct.
PAUL J. COLLINS
JOHN S. REED
WILLIAM R. RHODES
DIRECTORS
