FORM OF SALE AND
SERVICING AGREEMENT
(OWNER TRUST)
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CHASE MANHATTAN BANK USA, N.A.,
a National Banking Association
as Seller and Servicer
and
CHASE MANHATTAN AUTO OWNER TRUST 199_-_,
as Issuer
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SALE AND SERVICING AGREEMENT
Dated as of ________ __, 199_
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions............................................ 1
SECTION 1.2. Usage of Terms......................................... 29
SECTION 1.3. [Simple Interest [and Actuarial]
Method;] [Methods of Allocating
Payments or Receivables;] Allocations.................. 29
SECTION 1.4. Calculations Relating to the
__________ Distribution Date].......................... 30
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables.............................. 30
SECTION 2.2. Closing................................................ 31
ARTICLE III
THE RECEIVABLES
SECTION 3.1. Representations and Warranties
of Seller; Conditions Relating to
Receivables............................................ 32
SECTION 3.2. Repurchase Upon Breach or
Failure of a
Condition.............................................. 37
SECTION 3.3. Custody of Receivable Files............................ 38
SECTION 3.4. Duties of Servicer as Custodian........................ 38
SECTION 3.5. Instructions; Authority to Act......................... 39
SECTION 3.6. Custodian's Indemnification............................ 39
SECTION 3.7. Effective Period and
Termination............................................ 40
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. Duties of Servicer..................................... 40
SECTION 4.2. Collection of Receivable
Payments; Refinancing.................................. 41
SECTION 4.3. Realization Upon Receivables........................... 42
SECTION 4.4. Maintenance of Security
Interests in Financed Vehicles......................... 42
SECTION 4.5. Covenants of Servicer.................................. 43
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SECTION 4.6. Purchase of Receivables Upon
Breach................................................. 44
SECTION 4.7. Servicing Fee.......................................... 44
SECTION 4.8. Servicer's Certificate................................. 45
SECTION 4.9. Annual Statement as to
Compliance............................................. 45
SECTION 4.10. Annual Audit Report.................................... 46
SECTION 4.11. Access by Holders to Certain
Documentation and Information Regarding
Receivables............................................ 47
SECTION 4.12. Reports to Holders and the
Rating Agencies........................................ 47
SECTION 4.13. Reports to the Securities and
Exchange Commission.................................... 48
ARTICLE V
ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1. Establishment of Accounts.............................. 48
SECTION 5.2. Collections............................................ 49
SECTION 5.3. [Reserved]............................................. 51
SECTION 5.4. Additional Deposits.................................... 51
SECTION 5.5. Distributions.......................................... 51
SECTION 5.6. Reserve Account........................................ 53
SECTION 5.7. Net Deposits........................................... 56
SECTION 5.8. Statements to
[Certificateholders and] Noteholders................... 56
ARTICLE VI
THE SELLER
SECTION 6.1. Representations of Seller.............................. 57
SECTION 6.2. Liability of Seller;
Indemnities............................................ 59
SECTION 6.3. Merger or Consolidation of
Seller................................................. 60
SECTION 6.4. Limitation on Liability of
Seller and Others...................................... 60
SECTION 6.5. Seller May Own Notes [and
Certificates].......................................... 60
ARTICLE VII
THE SERVICER
SECTION 7.1. Representations of Servicer............................ 61
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Page
SECTION 7.2. Liability of Servicer;
Indemnities............................................ 63
SECTION 7.3. Merger or Consolidation of
Servicer............................................... 64
SECTION 7.4. Limitation on Liability of
Servicer and Others.................................... 64
SECTION 7.5. Servicer Not To Resign................................. 65
SECTION 7.6. Delegation of Duties................................... 66
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
SECTION 8.1. Events of Servicing Termination........................ 66
SECTION 8.2. Indenture Trustee to Act;
Appointment of Successor............................... 68
SECTION 8.3. Notification to Noteholders [and
Certificateholders].................................... 69
SECTION 8.4. Waiver of Past Defaults................................ 69
ARTICLE IX
TERMINATION
SECTION 9.1. Optional Purchase of All
Receivables; Trust Termination......................... 70
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment.............................................. 72
SECTION 10.2. Protection of Title to Owner
Trust Estate........................................... 73
SECTION 10.3. GOVERNING LAW.......................................... 76
SECTION 10.4. Notices................................................ 76
SECTION 10.5. Severability of Provisions............................. 76
SECTION 10.6. Assignment............................................. 77
SECTION 10.7. Certificates and Notes
Nonassessable and Fully Paid........................... 77
SECTION 10.8. Third-Party Beneficiaries.............................. 77
SECTION 10.9. Assignment to Indenture Trustee........................ 77
SECTION 10.10. Limitation of Liability of Owner
Trustee and Indenture Trustee.......................... 77
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SCHEDULES
Schedule A - List of Receivables
Schedule B - Location of Receivable Files
EXHIBITS
Exhibit A - Form of Servicer's Certificate
Exhibit B - Form of Monthly Report
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This Sale and Servicing Agreement, dated as of ________ __,
199_ (as amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement") is made between CHASE MANHATTAN BANK USA, National
Association, a national banking association having its principal executive
offices located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Chase USA,"
the "Seller" or the "Servicer" in its respective capacities as such), and CHASE
MANHATTAN AUTO OWNER TRUST 199_-_, as issuer (the "Issuer").
W I T N E S S E T H :
In consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Accrued Interest" on a Receivable, as of any date of
determination, means that amount of interest accrued on the Principal Balance at
the related Contract Rate but not paid by or on behalf of the Obligor.
"Accounts" means, collectively, the Collection Account[, the
Paid-Ahead Account] and the Note Distribution Account.
"Actuarial Receivable" means any monthly actuarial Receivable.
"Administration Agreement" means the Administration Agreement
dated as of ________ __, 199_, among the Issuer, the Administrator and the
Indenture Trustee, as the same may be amended and supplemented from time to
time.
"Administrator" means The Chase Manhattan Bank, a New York
banking corporation, as administrator, and its successors and assigns.
"Administration Fee" means $_____, the fee payable to the
Administrator on each Distribution Date pursuant to Section 5.5(c) for services
rendered pursuant to the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For purposes of this definition, "control" when used with
respect to any specified Person means 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. A Person shall not be
deemed to be an Affiliate of any specified Person solely because such other
Person has the contractual right or obligation to manage such specified Person
unless such other Person controls such specified Person through equity ownership
or otherwise.
"Aggregate Net Losses" means, for any Distribution Date, the
amount equal to (i) the aggregate principal balance of the Receivables that
became Defaulted Receivables during the related Collection Period minus (ii) the
Liquidation Proceeds allocable to principal collected during such Collection
Period with respect to any Defaulted Receivables.
"Amount Financed" in respect of a Receivable means the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and related costs.
"Applied Paid-Ahead Amount" means, with respect to any
Actuarial Receivable and any Collection Period for which the amount actually
paid is less than the Scheduled Payment due during such Collection Period, the
Deferred Paid-Ahead Amount with respect to such Actuarial Receivable to the
extent of such shortfall; provided that if such Actuarial Receivable becomes a
Defaulted Receivable during such Collection Period, the Applied Paid-Ahead
Amount with respect to such Collection Period shall equal such Receivable's then
outstanding Deferred Paid-Ahead Amount, if any.
"Assertion" has the meaning specified in Section 4.10.
"Authenticating Agent" has the meaning specified in Section
2.13 of the Indenture and shall initially be the corporate trust office of
Chase, and its successors and assigns in such capacity.
["Authorized Newspaper" means a leading daily newspaper in the
English language of general circulation in Luxembourg. On the Closing Date, the
Luxemburger Wort shall constitute an "Authorized Newspaper." If, because of
temporary or permanent suspension of publication or general circulation of any
newspaper or for any other reason, it is impossible or, in the opinion of the
Indenture Trustee, impracticable to make any publication of any notice required
hereby in an Authorized Newspaper, any
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publication or other notice in lieu thereof which is made or given in Luxembourg
with the approval of the Indenture Trustee shall constitute a sufficient
publication of such notice.]
"Authorized Officer" means any officer of the Owner Trustee,
Indenture Trustee or Servicer who is authorized to act on behalf of the Owner
Trustee, Indenture Trustee or Servicer, as applicable, and who is identified as
such on the list of authorized officers delivered by each such party on the
Closing Date.
"Available Interest" means, for any Distribution Date, that
portion of Collections on the Receivables received during the related Collection
Period allocated to interest and, to the extent attributable to interest, the
Repurchase Amount received with respect to each Receivable repurchased by the
Seller or purchased by the Servicer under an obligation that arose during the
related Collection Period.
"Available Principal" means, for any Distribution Date, that
portion of Collections on the Receivables received during the related Collection
Period allocated to the principal balance of the Receivables, and, to the extent
attributable to principal, the Repurchase Amount received with respect to each
Receivable repurchased by the Seller or purchased by the Servicer under an
obligation that arose during the related Collection Period.
"Available Reserve Account Amount" shall mean, for each
Distribution Date, an amount equal to the lesser of (i) the amount on deposit in
the Reserve Account and (ii) the Specified Reserve Account Balance with respect
to such Distribution Date.
"Average Delinquency Percentage" means for any Distribution
Date, the average of the Delinquency Percentages for such Distribution Date and
the preceding two (2) Distribution Dates.
"Average Net Loss Ratio" means for any Distribution Date, the
average of the Net Loss Ratios for such Distribution Date and the preceding two
(2) Distribution Dates.
"Basic Documents" means this Agreement, the Certificate of
Trust, the Indenture, the Depository Agreements, the Trust Agreement, the
Administration Agreement and other documents and certificates delivered in
connection therewith.
"Benefit Plan" has the meaning specified in Section
11.12 of the Trust Agreement.
["Book-Entry Certificates" means beneficial interests
in the Certificates, the ownership and transfers of which shall
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be made through book entries by a Clearing Agency or Foreign Clearing Agency as
described in Section 3.10 of the Trust Agreement.]
"Book-Entry Notes" means beneficial interests in the Notes,
the ownership and transfers of which shall be made through book entries by a
Clearing Agency or Foreign Clearing Agency as described in Section 2.10 of the
Indenture.
"Business Day" means a day, other than a Saturday or a Sunday,
on which the Indenture Trustee and banks located in New York, New York,
Wilmington, Delaware and __________, ____________ are open for the purpose of
conducting a commercial banking business.
"Business Trust Statute" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as amended from time to time.
"Capital Accounts" has the meaning specified in Section 5.7 of
the Trust Agreement.
"Cedel" means Cedel Bank, societe anonyme.
"Certificate" means a certificate evidencing the beneficial
interest of a Certificateholder in the Owner Trust Estate, substantially in the
form of Exhibit A to the Trust Agreement.
"Certificate Balance" means an amount equal to $ as of the
Closing Date and, thereafter, such initial Certificate Balance, reduced by all
amounts allocable to principal previously distributed to Certificateholders. The
Certificate Balance shall also be reduced on any Distribution Date by the
excess, if any, of (i) the sum of (A) the Certificate Balance and (B) the
outstanding principal amount of the Notes (in each case after giving effect to
amounts in respect of principal to be deposited in the Certificate Distribution
Account and the Note Distribution Account on such Distribution Date), over (ii)
the Pool Balance as of the close of business on the last day of the preceding
Collection Period. Thereafter, the Certificate Balance shall be increased on any
Distribution Date to the extent that any portion of the Total Distribution
Amount on any Distribution Date is available to pay the existing
Certificateholders' Principal Carryover Shortfall, but not by more than the
aggregate reductions in the Certificate Balance set forth in the preceding
sentence.
["Certificate Depository Agreement" means the agreement among
the Issuer, the Owner Trustee, Chase, as agent for the
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Depository Trust Company and The Depository Trust Company, as the initial
Clearing Agency, dated the Closing Date, relating to the Certificates,
substantially in the form attached as Exhibit C to the Trust Agreement, as the
same may be amended and supplemented from time to time.]
"Certificate Distribution Account" has the meaning specified
in Section 5.1 of the Trust Agreement.
"Certificate Final Scheduled Distribution Date" means the
______________ Distribution Date on which the outstanding principal amount, if
any, of the Certificates is payable.
"Certificate of Trust" means the Certificate of Trust in the
form of Exhibit B to the Trust Agreement to be filed for the Issuer pursuant to
Section 3810(a) of the Business Trust Statute.
"Certificate Owner" means, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency or Foreign Clearing Agency or on
the books of a direct or indirect Clearing Agency Participant.
"Certificate Pool Factor" as of the close of business on a
Distribution Date means a eight-digit decimal figure equal to the Certificate
Balance (after giving effect to distributions made on such date) divided by the
initial Certificate Balance. The Certificate Pool Factor will be 1.00000000 as
of the Cutoff Date; thereafter, the Certificate Pool Factor will decline to
reflect reductions in the Certificate Balance.
"Certificate Rate" means _____% per annum.
["Certificate Register" and "Certificate Registrar" means the
register maintained and the registrar appointed pursuant to Section 3.4 of the
Trust Agreement.]
"Certificateholder" means the Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent, request, waiver or demand pursuant to any of
the Basic Documents (other than pursuant to Section 4.3 of the Trust Agreement),
the interest evidenced by any Certificate registered in the name of the Seller,
the Servicer or any Person actually known by an Authorized Officer of the Owner
Trustee to be an Affiliate of the Seller or the Servicer shall not be taken into
account in determining whether the requisite percentage necessary to effect any
such consent, request or waiver shall have been obtained.
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"Certificateholders' Distributable Amount" means for any
Distribution Date, the sum of the Certificateholders' Principal Distributable
Amount and the Certificateholders' Interest Distributable Amount.
"Certificateholders' Interest Carryover Shortfall" means, (a)
for the initial Distribution Date, zero, and (b) for any other Distribution
Date, the excess of the Certificateholders' Interest Distributable Amount for
the preceding Distribution Date, over the amount in respect of the interest
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date, plus interest on such excess, to the extent permitted by law,
at the Certificate Rate from and including such preceding Distribution Date to,
but excluding, the current Distribution Date.
"Certificateholders' Interest Distributable Amount" means, for
any Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date.
"Certificateholders' Monthly Interest Distributable Amount"
means, for any Distribution Date, one month's interest (or, in the case of the
first Distribution Date, interest accrued from and including the Closing Date
to, but excluding, such Distribution Date) at the Certificate Rate on the
Certificate Balance on the immediately preceding Distribution Date, after giving
effect to all principal payments on such Distribution Date (or, in the case of
the first Distribution Date, the Certificate Balance on the Closing Date).
Interest shall be computed on the basis of a 360 day-year of twelve 30-day
months for purposes of this definition.
"Certificateholders' Monthly Principal Distributable Amount"
means, for any Distribution Date prior to the Distribution Date on which the
Notes have been paid in full, zero; and for any Distribution Date commencing on
or after the Distribution Date on which the Notes have been paid in full, 100%
of the Principal Distribution Amount (less the portion of the Principal
Distribution Amount required on the first such Distribution Date to pay the
Notes in full).
"Certificateholders' Principal Carryover Shortfall" means for
any Distribution Date, the sum of (a) the excess of (i) the Certificateholders'
Principal Distributable Amount for the preceding Distribution Date, over (ii)
the amount in respect of principal that was actually deposited in the
Certificate Distribution Account on such Distribution Date and (b) without
duplication of clause (a), the unreimbursed portion of the amount
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by which the Certificate Balance has been reduced pursuant to the second
sentence of the definition thereof.
"Certificateholders' Principal Distributable Amount" means,
for any Distribution Date, the sum of (i) the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date and (ii) the
Certificateholders' Principal Carryover Shortfall for such Distribution Date;
provided that the Certificateholders' Principal Distributable Amount shall not
exceed the Certificate Balance. In addition, on the Certificate Final Scheduled
Distribution Date, the principal required to be distributed to the
Certificateholders will include the lesser of (a) any payments of principal due
and remaining unpaid on each Receivable owned by the Issuer as of the last day
of the immediately preceding Collection Period and (b) the amount that is
necessary (after giving effect to the other amounts to be deposited in the
Certificate Distribution Account on such Distribution Date and allocable to
principal) to reduce the Certificate Balance to zero, in either case after
giving effect to any required distribution of the Noteholders' Principal
Distributable Amount to the Note Distribution Account.
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
"Chase Direct Receivable" means a Receivable originated by
Chase directly with an Obligor without the involvement of a Dealer.
["Class A Notes" means, collectively the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes[,] [and] the Class A-4 Notes [and the Class
A-5 Notes].]
["Class A Noteholder" means the Person in whose name a
Class A Note is registered on the Note Register.]
["Class A Noteholders' Interest Carryover Shortfall" means,
for any Distribution Date, the excess of (i) the Class A Noteholders' Interest
Distributable Amount for the preceding Distribution Date, over (ii) the amount
in respect of interest on the Class A Notes actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to the Class A Noteholders of each class on
the preceding Distribution Date, to the extent permitted by law, at the
respective Interest Rates borne by each class of the Class A Notes for the
related Interest Accrual Period.]
["Class A Noteholders' Interest Distributable Amount" means,
for any Distribution Date, the sum of the Class A Noteholders' Monthly
Interest Distributable Amount for all
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classes of Class A Notes for such Distribution Date and (y) the Class A
Noteholders' Interest Carryover Shortfall for such Distribution Date.]
["Class A Noteholders' Monthly Interest Distributable Amount"
means, for any Distribution Date, in the case of each class of Class A Notes,
interest accrued during the related Interest Accrual Period at the related
Interest Rate on the outstanding principal balance of the Class A Notes of such
class on such Distribution Date (or, in the case of the first Distribution Date,
on the Closing Date).]
"Class A-1 Event" shall have occurred if any Class A-1 Notes
are outstanding on the __________ Distribution Date (after giving effect to any
payments made on such date).
"Class A-1 Interest Rate" means _____% per annum.
"Class A-1 Notes" means the Class A-1 _____% Asset Backed
Notes, substantially in the form of Exhibit B to the Indenture.
"Class A-2 Interest Rate" means _____% per annum.
"Class A-2 Notes" means the Class A-2 _____% Asset Backed
Notes, substantially in the form of Exhibit C to the Indenture.
"Class A-3 Interest Rate" means _____% per annum.
"Class A-3 Notes" means the Class A-3 _____% Asset Backed
Notes, substantially in the form of Exhibit D to the Indenture.
"Class A-4 Interest Rate" means _____% per annum.
"Class A-4 Notes" means the Class A-4 _____% Asset Backed
Notes, substantially in the form of Exhibit E to the Indenture.
["Class A-5 Interest Rate" means _____% per annum.]
["Class A-5 Notes" means the Class A-5 ____% Asset Backed
Notes, substantially in the form of Exhibit F to the Indenture.]
["Class B Interest Rate" means _____% per annum.]
["Class B Noteholders' Interest Carryover Shortfall" means,
for any Distribution Date, the excess of (i) the Class B Noteholders' Interest
Distributable Amount for the preceding
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Distribution Date, over (ii) the amount in respect of interest for the Class B
Notes actually deposited in the Note Distribution Account on such preceding
Distribution Date, plus interest on the amount of interest due but not paid to
the Class B Noteholders on the preceding Distribution Date, to the extent
permitted by law, at the Class B Interest Rate for the related Interest Accrual
Period.]
["Class B Noteholders' Interest Distributable Amount" means,
for any Distribution Date, the sum of (x) the Class B Noteholders' Monthly
Interest Distributable Amount for such Distribution Date and (y) the Class B
Noteholders' Interest Carryover Shortfall for such Distribution Date.]
["Class B Noteholders' Monthly Interest Distributable Amount"
means, for any Distribution Date, interest accrued during the related Interest
Accrual Period at the Class B Interest Rate on the outstanding principal balance
of the Class B Notes on such Distribution Date (or, in the case of the first
Distribution Date, on the Closing Date).]
["Class B Notes" means the Class B _____% Asset Backed Notes,
substantially in the form of Exhibit F to the Indenture.]
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The initial
Clearing Agency shall be The Depository Trust Company.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other person for whom from time to time a
Clearing Agency effects book-entry transfers of securities deposited with the
Clearing Agency (including a Foreign Clearing Agency).
"Closing Date" means _____ __, ____.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" has the meaning specified in
Section 5.1(a)(i).
"Collection Period" means each calendar month beginning _____
__, ____ until Chase Manhattan Auto Owner Trust 199_-_ shall terminate pursuant
to Article IX of the Trust Agreement.
"Collections" means all collections in respect of Receivables.
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"Contract Rate" of a Receivable means the annual rate of
interest stated in such Receivable.
"Controlling Notes" means (i) initially, all classes of Class
A Notes voting as a single class until the Class A Notes have been paid in full
and (ii) after the Class A Notes have been paid in full, the Class B Notes.
"Corporate Trust Office" shall mean the New York office of the
Indenture Trustee or the ___________, ____________ office of the Owner Trustee,
as applicable.
"Cutoff Date" means ________ __, ____.
"Dealer" means the dealer which sold a Financed Vehicle
related to a Dealer Receivable and which originated or assisted in the
origination of such Dealer Receivable under a Dealer Agreement.
"Dealer Agreement" means any agreement and, if applicable,
assignment under which Dealer Receivables were originated by or through a Dealer
and sold to the Seller or an affiliate of the Seller.
"Dealer Receivable" means each Receivable which is not
a Direct Receivable.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Defaulted Receivable" means a Receivable (other than a
Repurchased Receivable) as to which the Servicer has determined based on its
usual collection practices and procedures, during any Collection Period, that
eventual payment in full of the Amount Financed (including accrued interest
thereon) is unlikely; provided that a Receivable shall become a Defaulted
Receivable during the calendar month in which more than 10% of the scheduled
payment becomes 240 days delinquent, regardless of whether any such
determination has been made.
"Deferred Paid-Ahead Amount" means, with respect to any
Collection Period and any Precomputed Receivable, the amount, if any, held by
the Servicer pursuant to Section 5.2(b) or in the Paid-Ahead Account with
respect to such Receivable.
["Definitive Notes" means Notes issued in certificated,
fully registered form as provided in Section 2.12 of the
Indenture.]
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"Definitive Certificates" means Certificates issued in
certificated, fully registered form as provided in Section 3.12 of the Trust
Agreement.
"Delaware Trustee" has the meaning specified in
Section 10.1 of the Trust Agreement.
"Delinquency Percentage" means, for any Distribution Date, the
sum of the outstanding principal balances of all Receivables which were 60 days
or more delinquent (including Receivables, which are not Defaulted Receivables,
relating to Financed Vehicles that have been repossessed), as of the close of
business on the last day of the Collection Period immediately preceding such
Distribution Date, determined in accordance with the Servicer's normal
practices, such sum expressed as a percentage of the Pool Balance as of the
close of business on the last day of such Collection Period.
"Delivery" when used with respect to Reserve Account
Property means:
(a)(i) with respect to "certificated securities"
within the meaning of Section 8-102(1)(a) of the Relevant UCC not held
by the initial Clearing Agency or other "instruments" within the
meaning of Section 9-105(1)(i) of the Relevant UCC, (A) physical
delivery thereof to the Indenture Trustee or its nominee or custodian
endorsed to, or registered in the name of, the Indenture Trustee or its
nominee or custodian or endorsed in blank, or, (B) with respect to a
certificated security, possession thereof by a financial intermediary
(as defined in Section 8-313(4) of the Relevant UCC) and the making by
such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture
Trustee or its nominee or custodian and the sending by such financial
intermediary of a confirmation of the purchase of such certificated
security by the Indenture Trustee or its nominee or custodian, or (ii)
with respect to "certificated securities" within the meaning of Section
8-102(4)(a) of the Relevant UCC held by the initial Clearing Agency or
by a "custodian bank" within the meaning of Section 8-102(4) of the
Relevant UCC (a "Custodian Bank") or a nominee of either subject to the
control of the initial Clearing Agency, the delivery thereof to the
initial Clearing Agency or a Custodian Bank or a nominee of either
subject to the control of the initial Clearing Agency and in bearer
form or endorsed in blank by an appropriate person or registered on the
books of the issuer thereof in the name of the initial Clearing Agency
or its Custodian Bank or a nominee of either and the identification by
book-entry or otherwise on the records of the financial intermediary,
the sending of a
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confirmation by the financial intermediary of the purchase by the
Indenture Trustee or its nominee or custodian of such securities and
the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian (all of the foregoing,
"Physical Property"), and such additional or alternative procedures as
may hereafter become appropriate to effect the complete transfer of
ownership of any such Reserve Account Property to the Indenture Trustee
or its nominee or custodian, consistent with changes in applicable law
or regulations or the interpretation thereof;
(b) with respect to any United States Securities
Entitlements that are maintained in the form of entries on the records
of the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures: entries on the records of a
member bank of the Federal Reserve System identifying such Reserve
Account Property as belonging to a Federal Reserve "depositary"
pursuant to applicable Federal regulations and the sending by such
depositary of written confirmation of the purchase of such Reserve
Account Property to the Indenture Trustee or its nominee or custodian;
the making by such depositary of entries in its books and records
identifying such Reserve Account Property as belonging to, or otherwise
subject to a security interest in favor of, the Indenture Trustee or
its nominee or custodian; and such additional or alternative procedures
as may hereafter become appropriate to effect transfer of ownership of
any such Reserve Account Property to the Indenture Trustee or its
nominee or custodian consistent with changes in applicable law or
regulations or the interpretation thereof; and
(c) with respect to any item of Reserve Account
Property that is an uncertificated security under Article 8 (or VIII,
as applicable) of the Relevant UCC and that is not governed by clause
(b) above, registration on the books and records of the issuer thereof
in the name of the financial intermediary, the sending of a
confirmation by the financial intermediary of the purchase by the
Indenture Trustee or its nominee or custodian of such uncertificated
security, the making by such financial intermediary of entries on its
books and records identifying such uncertificated certificates as
belonging to the Indenture Trustee or its nominee or custodian; and
such additional or alternative procedures as may hereafter become
appropriate to effect transfer of ownership of any such Reserve Account
Property to the Indenture Trustee or its nominee or custodian
consistent with changes in applicable law or regulations or the
interpretation thereof.
12
"Deposit Date" means the Business Day immediately
preceding each Distribution Date.
"Depositor" means the Seller in its capacity as
Depositor under the Trust Agreement.
"Depository Agreements" mean[, collectively, the
Certificate Depository Agreement and] the Note Depository
Agreement.
"Determination Date" means the 10th calendar day of the month
(or, if such 10th calendar day is not a Business Day, the Business Day preceding
the 10th calendar day of the month) immediately succeeding the related
Collection Period.
"Direct Receivable" means either a Chase Direct Receivable or
a Receivable originated by the Seller or an Affiliate of the Seller directly
with an Obligor without the involvement of a Dealer.
"Distribution Date" means, in the case of the first Collection
Period, _____ __, 199_, and in the case of every Collection Period thereafter,
the 15th day of the following month, or if the 15th day is not a Business Day,
the next following Business Day[; provided, however, that solely for purposes of
determining the Note Final Scheduled Distribution Date for the Class A-1 Notes,
making payments on the Notes pursuant to Section 5.5, the Indenture and the
Notes and making withdrawals from the Reserve Account, if the Class A-1 Event
shall have occurred, the Distribution Date in the case of the __________
Collection Period means (x) _____ __, 199_ with respect to the Class A-1 Notes,
and (y) _____ __, 199_ with respect to the Class A-2 Notes, the Class A-3
Notes[,] [and] the Class A-4 Notes, the Class [A-5][B] Notes [and the
Certificates].
"Eligible Deposit Account" means (a) a segregated identifiable
trust account established in the trust department of a Qualified Trust
Institution, which shall, except in the case of the Reserve Account, initially
be Chase, and may be maintained with Chase so long as Chase is a Qualified Trust
Institution; or (b) a separately identifiable deposit account established in the
deposit taking department of a Qualified Institution, which, except in the case
of the Reserve Account, may be Chase so long as Chase is a Qualified
Institution.
"ERISA" has the meaning specified in Section 11.12 of
the Trust Agreement.
"Executive Officer" means, with respect to any corporation or
bank, the Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, President, Executive Vice
13
President, any Vice President, the Secretary or the Treasurer of such
corporation or bank, and with respect to any partnership, any general partner
thereof.
"Euroclear Operator" means ▇▇▇▇▇▇ Guaranty Trust Company of
New York, Brussels, Belgium office, in its capacity as the operator of the
Euroclear system.
"Event of Default" means an event specified in Section
5.1 of the Indenture.
"Event of Servicing Termination" means an event
specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Expenses" has the meaning specified in Section 8.2 of
the Trust Agreement.
"Farm Credit Entitlement" means a "Security
Entitlement" as defined in 12 C.F.R. ss. 615.5450.
"FDIC" means the Federal Deposit Insurance Corporation
or any successor thereto.
"FHL Bank Entitlement": means a "Security Entitlement"
as defined in 12 C.F.R. ss. 912.1.
"FHLMC" means the Federal Home Loan Mortgage
Corporation or any successor thereto.
"Final Scheduled Maturity Date" means the last day of the
Collection Period immediately preceding the [Certificate] [Class B] Final
Scheduled Distribution Date.
"Financed Vehicle" means, with respect to a Receivable, the
new or used automobile or light-duty truck, together with all accessions
thereto, securing an Obligor's indebtedness under such Receivable.
"Fitch" means Fitch Investors Service L.P. and its
successors and assigns.
"FNMA" means the Federal National Mortgage Association
or any successor thereto.
"Foreign Clearing Agency" means, collectively, Cedel
and the Euroclear Operator.
14
"Funding Corporation Entitlement" means a "Security
Entitlement" as defined in 12 C.F.R. ss. 1511.1.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to the Indenture. A Grant of the Trust Estate 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 and all other moneys payable thereunder, to
give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the name
of the Granting party or otherwise and generally to do and receive anything that
the Granting party is or may be entitled to do or receive thereunder or with
respect thereto.
"Holder" or "Holders" means, unless the context otherwise
requires, both Certificateholders and Noteholders.
"HUD Entitlement" means a "Security Entitlement" as
defined in 24 C.F.R. ss. 81.2.
"Indemnified Parties" has the meaning specified in
Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture dated as of ________ __, ____,
between the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Trustee" means, initially, [_______________
____________________], as Indenture Trustee under the Indenture, or any
successor Indenture Trustee under the Indenture.
"Independent" means, when used with respect to any specified
Person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the
15
applicable requirements of Section 11.1 of the Indenture, made by an Independent
engineer, appraiser or other expert appointed by the Issuer 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 Agreement and that the signer is Independent within the meaning thereof.
"Insolvency Event" means, for a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property 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
(including any receiver appointed under the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended), liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person 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
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or the making of such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such
debts become due, or the taking of action by such Person in furtherance of any
of the foregoing.
"Interest Rate" means the rate of interest borne by the
Notes of any class.
"Investment Earnings" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Collection Account [and the Paid-Ahead Account].
"Issuer" means Chase Manhattan Auto Owner Trust 199_-_, a
Delaware business trust, until a successor replaces it and, thereafter, means
such successor and, for purposes of any provision contained in the Indenture and
required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any of its authorized officers and
delivered to the Indenture Trustee.
16
"Late Fees" means any late charges, credit related extension
fees, non-credit related extension fees or other administrative fees or similar
charges allowed by applicable law with respect to the Receivables.
"Lien" means a security interest, lien, charge, pledge or
encumbrance of any kind other than tax liens, mechanics' liens or any other
liens that attach by operation of law.
"Liquidation Proceeds" means, with respect to any Receivable,
(i) insurance proceeds, (ii) the monies collected during a Collection Period
from whatever source on a Defaulted Receivable and (iii) proceeds of a Financed
Vehicle sold after repossession, in each case net of any liquidation expenses
and payments required by law to be remitted to the Obligor.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, a division of Dun &
Bradstreet Corporation, and its successors and assigns.
"Net Loss Ratio" means, for any Distribution Date, an amount,
expressed as a percentage, equal to (i) the Aggregate Net Losses for such
Distribution Date divided by (ii) the average of the Pool Balances on each of
the related Settlement Dates and the last day of the related Collection Period.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3
Note[,] a Class A-4 Note or a Class [A-5][B] Note.
"Note Depository Agreement" means the agreement among the
Issuer, the Indenture Trustee, Chase, as agent for The Depository Trust Company
and The Depository Trust Company, as the initial Clearing Agency, dated the
Closing Date, relating to the Notes, substantially in the form of Exhibit G to
the Indenture, as the same may be amended or supplemented from time to time or
any similar agreement with any successor Clearing Agency.
"Note Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.1(a)(ii).
"Note Final Scheduled Distribution Date" means for (a) the
Class A-1 Notes, the __________ Distribution Date, (b) the Class A-2 Notes, the
__________ Distribution Date, (c) the Class A-3 Notes, the _____________
Distribution Date, (d) the Class A-4 Notes, the _________ Distribution Date and
(e) the Class [A-5] [B] Notes, the _____________ Distribution Date.
"Note Owner" means, with respect to a Book-Entry Note, the
person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or Foreign Clearing Agency,
17
or on the books of a direct or indirect Clearing Agency Participant.
"Note Pool Factor" for each class of Notes as of the close of
business on a Distribution Date means an eight-digit decimal figure equal to the
Outstanding Amount of such class of Notes divided by the Outstanding Amount as
of the Closing Date of such class of Notes. The Note Pool Factor for each class
of Notes will be 1.00000000 as of the Cutoff Date; thereafter, the Note Pool
Factor for each class of Notes will decline to reflect reductions in the
Outstanding Amount of such class of Notes.
"Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Noteholders' Distributable Amount" means, for any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for all classes of Notes.
"Noteholders' Interest Carryover Shortfall" means, for any
Distribution Date for any class of Notes (other than the initial Distribution
Date), the excess of (x) the Noteholders' Interest Distributable Amount for the
preceding Distribution Date for such class of Notes, over (y) the amount in
respect of interest actually deposited in the Note Distribution Account on such
preceding Distribution Date with respect to such class of Notes, plus interest
on the amount of interest due but not paid to the Noteholders of such class on
the preceding Distribution Date, to the extent permitted by law, at the
applicable Interest Rate from such preceding Distribution Date through the
current Distribution Date.
"Noteholders' Interest Distributable Amount" means, for any
Distribution Date for any class of Notes, the sum of (x) the Noteholders'
Monthly Interest Distributable Amount for such class of Notes for such
Distribution Date and (y) the Noteholders' Interest Carryover Shortfall for such
Distribution Date for such class of Notes.
"Noteholders' Monthly Interest Distributable Amount" means,
for any Distribution Date for each class of Notes, one month's interest (or, in
the case of the first Distribution Date, interest accrued from and including the
Closing Date to but excluding such Distribution Date) at the related Interest
Rate on the Outstanding Amount of the Notes of such class on such Distribution
Date (or, in the case of the first Distribution Date, on the Closing Date).
Interest for purposes of this definition (i) on the Class A-1 Notes shall be
computed on the basis of a 360-day year for the actual number of days elapsed
[(which will be __ days for the __________ Distribution Date for
18
the Class A-1 Notes)] and (ii) on the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class [A-5][B] Notes shall be computed on the basis of a
360-day year of twelve 30-day months.
"Noteholders' Monthly Principal Distributable Amount" means,
for any Distribution Date prior to the Distribution Date on which the Notes have
been paid in full, 100% of the Principal Distribution Amount; and for the
Distribution Date on which the Notes are paid in full, the portion of the
Principal Distribution Amount required to pay the Notes in full.
"Noteholders' Principal Carryover Shortfall" means for any
Distribution Date, the excess of (x) the Noteholders' Principal Distributable
Amount for the preceding Distribution Date over (y) the amount in respect of
principal that was actually deposited in the Note Distribution Account on such
Distribution Date.
"Noteholders' Principal Distributable Amount" means, for any
Distribution Date, the sum of (i) the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and (ii) the Noteholders'
Principal Carryover Shortfall for such Distribution Date; provided that the
Noteholders' Principal Distributable Amount shall not exceed the Outstanding
Amount of the Notes. In addition, on the Note Final Scheduled Distribution Date
of each class of Notes, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
the other amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the Outstanding Amount
of such class of Notes to zero.
"Note Register" and "Note Registrar" have the meanings
specified in Section 2.4 of the Indenture.
"Obligor" on a Receivable means the purchaser or the
co-purchasers of the Financed Vehicle purchased in part or in whole by the
execution and delivery of such Receivable or any other Person who owes or may be
liable for payments under such Receivable.
"Officer's Certificate" means a certificate signed by the
chairman of the board, the president, the treasurer, the controller, any
executive or senior vice president or any vice president of the Seller or
Servicer, as appropriate, meeting the requirements of Section 11.1 of the
Indenture.
"Opinion of Counsel" means a written opinion of counsel (who
may be counsel to the Seller or the Servicer) reasonably acceptable in form and
substance to the Indenture Trustee,
19
meeting the requirements of Section 11.1 of the Indenture (or in the case of an
Opinion of Counsel delivered to the Owner Trustee, reasonably acceptable in form
and substance to the Owner Trustee).
"Optional Purchase Percentage" shall be 5%.
"Original Pool Balance" shall be $________________.
"Outstanding" means, when used with respect to Notes, as of
the date of determination, all Notes theretofore authenticated and delivered
under the Indenture except:
(a) Notes theretofore canceled by the Note
Registrar or delivered to the Note Registrar for
cancellation;
(b) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited
with the Indenture Trustee or any Paying Agent in trust for
the Holders of such Notes (provided that if such Notes are to
be redeemed, notice of such redemption has been duly given
pursuant to the Indenture or provision therefor, satisfactory
to the Indenture Trustee, has been made); and
(c) Notes in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee
is presented that any such Notes are held by a bona fide
purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes 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 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 upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that an Authorized Officer of the Indenture Trustee either
actually knows to be so owned or has received written notice that such Note is
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 or any Affiliate of any of the foregoing Persons.
20
"Outstanding Amount" means, when used with respect to Notes,
as of any date of determination, the aggregate principal amount of all Notes, or
a class of Notes, as applicable, Outstanding as of such date.
"Owner Trust Estate" means all right, title and interest of
the Issuer in and to the property and rights assigned to the Issuer pursuant to
Article II of this Agreement, all funds on deposit from time to time in the
Trust Accounts (other than the Note Distribution Account) and the Certificate
Distribution Account and all other property of Issuer from time to time,
including any rights of the Owner Trustee and the Issuer pursuant to this
Agreement.
"Owner Trustee" means _______________________, a ________
banking corporation, not in its individual capacity but solely as owner trustee
under the Trust Agreement, and any successor Owner Trustee thereunder.
"Paid-Ahead Account" means, with respect to any Collection
Period and a Actuarial Receivable, any amount collected on such Actuarial
Receivable in excess of the sum of (i) the Scheduled Payment due on such
Actuarial Receivable during such Collection Period and (ii) any past due
Scheduled Payments from prior Collection Periods received during such Collection
Period but not representing a Principal Prepayment in full of such Receivable.
"Paying Agent" means: (a) when used in the Indenture or
otherwise with respect to the Notes, the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Indenture Trustee to make
the payments to and distributions from the Collection Account, [Paid-Ahead
Account] and the Note Distribution Account, including payment of principal of or
interest on the Notes on behalf of the Issuer; and (b) when used in the Trust
Agreement or otherwise with respect to the Certificates, the Owner Trustee or
any other paying agent or co-paying agent appointed pursuant to Section 3.9 of
the Trust Agreement, and in the case of the Indenture with respect to the Notes,
and the Trust Agreement with respect to the Certificates, such Paying Agent
shall initially be the corporate trust office of Chase.
"Permitted Investments" means, at any time, any one or more of
the following obligations, securities (certificated or uncertificated) or
instruments (excluding any security with the "r" symbol attached to its rating):
(i) obligations of the United States of America
or any agency thereof; provided such obligations are
21
backed by the full faith and credit of the United States of
America;
(ii) general obligations of or obligations
guaranteed as to the timely payment of interest and principal
by any state of the United States of America or the District
of Columbia then rated "A-1+" or "AAA" by Standard & Poor's,
"F-1+" or "AAA" by Fitch (if rated by Fitch) and "P-1+" or Aaa
by Moody's;
(iii) commercial paper which is then rated P-1 by
Moody's, "F-1+" by Fitch (if rated by Fitch) and "A-1+" by
Standard & Poor's;
(iv) certificates of deposit, demand or time
deposits, federal funds or banker's acceptances issued by any
depository institution or trust company (including the
Indenture Trustee acting in its commercial banking capacity)
incorporated under the laws of the United States or of any
state thereof or incorporated under the laws of a foreign
jurisdiction with a branch or agency located in the United
States of America and subject to supervision and examination
by federal or state banking authorities which short term
unsecured deposit obligations of such depository institution
or trust company are then rated P-1 by Moody's, "F-1+" by
Fitch (if rated by Fitch) and "A-1+" by Standard & Poor's;
(v) demand or time deposits of, or certificates of
deposit issued by, any bank, trust company, savings bank or
other savings institution; provided such deposits or
certificates of deposit are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by
any bank, insurance company or other corporation the short
term unsecured debt or deposits of which are rated P-1 by
Moody's, "AAA" by Fitch (if rated by Fitch) and "A-1+" by
Standard & Poor's or the long-term unsecured debt of which are
rated Aaa by Moody's, "AAA" by Fitch (if rated by Fitch) and
"AAA" by Standard & Poor's;
(vii) repurchase obligations with respect to any
security described in clauses (i) or (ii) herein or any other
security issued or guaranteed by the FHLMC, FNMA or any other
agency or instrumentality of the United States of America
which is backed by the full faith and credit of the United
States of America, in either case entered into with a federal
agency or a depository
22
institution or trust company (acting as principal)
described in (iv) above;
(viii) investments in money market funds, which funds
(A) are not subject to any sales, load or other similar
charge; and (B) are rated at least "AAAM" or "AAAM-G" by
Standard & Poor's, "AAAV-1+" by Fitch (if rated by Fitch) and
Aaa by Moody's;
(ix) such other investments where either (A) the
short-term unsecured debt or deposits of the obligor on such
investments are rated "A-1+" by Standard & Poor's, "F-1" by
Fitch (if rated by Fitch) and P-1 by Moody's; and
(x) any other obligation or security satisfying
the Rating Agency Condition.
Permitted Investments may include money market mutual funds (so long as such
fund has the ratings specified in clause (viii) hereof), including, without
limitation, the VISTA U.S. Government Money Market Fund or any other fund for
which Chase, the Indenture Trustee or an Affiliate thereof serves as an
investment advisor, administrator, shareholder servicing agent, and/or custodian
or subcustodian, notwithstanding that (i) Chase,
[_______________________________], [______________________] or an Affiliate
thereof charges and collects fees and expenses from such funds for services
rendered, (ii) Chase, [______________________________], [______________________]
or an Affiliate thereof charges and collects fees and expenses for services
rendered pursuant to this Agreement, and (iii) services performed for such funds
and pursuant to this Agreement may converge at any time. The Indenture Trustee
specifically authorizes Chase, [______________________________],
[______________________] or an Affiliate thereof to charge and collect all fees
and expenses from such funds for services rendered to such funds (but not to
exceed investment earnings), in addition to any fees and expenses Chase,
[_____________________] or [______________________], as applicable, may charge
and collect for services rendered pursuant to this Agreement.
"Person" means a legal person, including any individual,
corporation, limited liability company, estate, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Physical Property" has the meaning specified in the
definition of "Delivery" above.
23
"Pool Balance" as of any date of determination means, the
aggregate Principal Balance of the Receivables as of the close of business on
the last day of the preceding Collection Period, after giving effect to all
payments received from Obligors and Repurchase Amounts to be remitted by the
Servicer or the Seller, as the case may be, for such Collection Period and all
losses realized on Receivables liquidated during such Collection Period.
"Predecessor Note" means, 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 the purpose of this definition, any
Note authenticated and delivered under Section 2.5 of the Indenture 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 Balance" of a Receivable, as of any date of
determination, means the Amount Financed minus that portion of all payments
received on or prior to such date allocable to principal. The Principal Balance
of a Defaulted Receivable or a Repurchased Receivable shall be deemed to be
zero, in each case, as of such date.
"Principal Distribution Amount" means, for any Distribution
Date, the sum of (i) Available Principal and (ii) Aggregate Net Losses.
"Principal Prepayment" means a payment or other recovery of
principal on a Receivable (including insurance proceeds and Liquidation Proceeds
applied to principal on a Receivable) which is received in advance of its due
date.
"Proceeding" means any suit in equity, action or law or
other judicial or administrative proceeding.
"Qualified Institution" means a depository institution
organized under the laws of the United States of America or any State thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or any State thereof and subject to
supervision and examination by federal or state banking authorities which at all
times has the Required Deposit Rating and, in the case of any such institution
organized under the laws of the United States of America, whose deposits are
insured by the FDIC.
"Qualified Trust Institution" means an institution organized
under the laws of the United States of America or any State thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States
24
of America or any State thereof and subject to supervision and examination by
federal or state banking authorities which at all times (i) is authorized under
such laws to act as a trustee or in any other fiduciary capacity, (ii) has not
less than one billion dollars in assets under fiduciary management, and (iii)
has a long term deposits rating of not less than "BBB-" by Standard & Poor's,
Baa3 by Moody's and "BBB-" by Fitch (if rated by Fitch).
"Rating Agency" means any of Standard & Poor's, Moody's or
▇▇▇▇▇.
"Rating Agency Condition" means, with respect to any action or
event, that each Rating Agency shall have notified the Seller, the Servicer, the
Indenture Trustee and the Owner Trustee, in writing, that such action or event
will not result in reduction or withdrawal of any then outstanding rating of any
outstanding Note [or Certificate] with respect to which it is the Rating Agency.
"Receivable" means a retail installment sale contract or
purchase money promissory note or other promissory note and security agreement
executed by an Obligor in respect of a Financed Vehicle, and all proceeds
thereof and payments thereunder (other than interest accrued and unpaid as of
the close of business on the Cutoff Date), which Receivable shall be identified
on Schedule A to this Agreement.
"Receivable Files" means the documents specified in
Section 3.3.
"Receivables Pool" means the pool of Receivables included in
the Trust Estate.
"Record Date" means, with respect to any Distribution Date,
the Business Day prior to such Distribution Date unless Definitive Notes [or
Definitive Certificates] are issued, in which case, Record Date, with respect to
such Definitive Notes or Definitive Certificates, as applicable, shall mean the
last day of the immediately preceding calendar month.
"Redemption Date" means in the case of a redemption of the
Notes pursuant to Section 10.1 of the Indenture, the Distribution Date specified
by the Servicer pursuant to such Section 10.1.
"Redemption Price" means in the case of a redemption of the
[Class A-5 Notes] [the Class A-4 Notes and the Class B Notes] pursuant to
Section 10.1 of the Indenture, an amount equal to the Outstanding Amount of the
[Class A-5 Notes] [the Class A-4 Notes and the Class B Notes] plus accrued and
unpaid interest thereon to but excluding the Redemption Date.
25
"Relevant UCC" means the Uniform Commercial Code as in
effect in the applicable jurisdiction.
"Repurchase Amount" of a Repurchased Receivable or any
Receivable purchased by the Servicer pursuant to Section 9.1, means the sum, as
of the last day of the Collection Period on which such Receivable becomes such,
of the Principal Balance thereof plus the Accrued Interest thereon.
"Repurchased Receivable" means a Receivable repurchased by the
Seller pursuant to Section 3.2 or purchased by the Servicer pursuant to Section
4.6.
"Required Deposit Rating" shall be a short-term certificate of
deposit rating from Moody's of P-1, from Fitch of "F-1+" (if rated by Fitch) and
from Standard & Poor's of "A-1+," and a long-term unsecured debt rating of not
less than Aa3 by Moody's, "AA" by Fitch (if rated by Fitch) and "AA-" by
Standard & Poor's.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 5.6.
"Reserve Account Initial Deposit" means an amount equal
to $_____________.
"Reserve Account Property" means all amounts and investments
held from time to time in the Reserve Account (whether in the form of deposit
accounts, Physical Property, book-entry securities, uncertificated securities or
otherwise), including the Reserve Account Initial Deposit and all proceeds of
the foregoing.
"Reserve Account Transfer Amount" means, for any Distribution
Date, an amount equal to the lesser of (a) the amount of cash or other
immediately available funds on deposit in the Reserve Account on such
Distribution Date (before giving effect to any withdrawals therefrom relating to
such Distribution Date) and (b) the amount, if any, by which the sum of the
amounts set forth in clauses (i) through (vi) of Section 5.5(c), inclusive,
exceeds the Total Distribution Amount for such Distribution Date.
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee,
including any 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 any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because
26
of such officer's knowledge of and familiarity with the particular subject.
"Sale Proceeds" has the meaning specified in
Section 9.1(b).
"▇▇▇▇▇▇ ▇▇▇ Entitlement" means a "Security Entitlement"
as defined in 31 C.F.R. ss. 354.1.
"Scheduled Payment" means, with respect to a Actuarial
Receivable, that portion of the payment required to be made by the Obligor
during each Collection Period sufficient to amortize the Principal Balance of
such Receivable under the related actuarial method over the term of the
Receivable and to provide interest at the related Contract Rate. When Scheduled
Payment is used with reference to a Collection Period, it means the payment
which is due during such Collection Period.
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller" means Chase Manhattan Bank USA, National Association,
a national banking association with its principal executive offices in
Wilmington, Delaware, in its capacity as the seller of the Receivables under
this Agreement, and each successor to Chase Manhattan Bank USA, National
Association (in the same capacity) pursuant to Section 6.3.
"Servicer" means Chase Manhattan Bank USA, National
Association, a national banking association with its principal offices in
Wilmington, Delaware, in its capacity as the servicer of the Receivables under
this Agreement, and each successor to Chase Manhattan Bank USA, National
Association (in the same capacity) pursuant to Section 7.3.
"Servicer's Certificate" means a certificate, substantially in
the form of Exhibit A attached hereto, completed and executed by the Servicer by
its chairman of the board, the president, treasurer, controller or any
executive, senior vice president or vice president pursuant to Section 4.8.
"Servicing Fee" with regard to a Collection Period means the
fee payable to the Servicer for services rendered during such Collection Period,
determined pursuant to Section 4.7.
"Servicing Fee Rate" means 1.00% per annum.
"Settlement Date" means, with respect to any Collection
Period, the last day of the Collection Period immediately preceding such
Collection Period, and with respect to any
27
Distribution Date, the last day of the second Collection Period preceding the
Collection Period in which such Distribution Date occurs.
"Simple Interest Method" means the method of allocating a
fixed level payment to principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid Principal Balance multiplied by the
period of time elapsed since the preceding payment of interest was made and the
remainder of such payment is allocable to principal.
"Specified Reserve Account Balance" with respect to any
Distribution Date, means ____% of the Pool Balance as of the related Settlement
Date, but in any event will not be less than the lesser of (i) $____________ and
(ii) the sum of (A) such Pool Balance; provided that the Specified Reserve
Account Balance will be calculated using a percentage of ____% for any
Distribution Date (beginning with the _________ Distribution Date) for which the
Average Net Loss Ratio exceeds ____% or the Average Delinquency Percentage
exceeds ____%. Upon written notification to the Indenture Trustee by the Seller,
the Specified Reserve Account Balance may be reduced to a lesser amount as
determined by the Seller so long as such reduction satisfies the Rating Agency
Condition.
"Standard & Poor's" means Standard & Poor's Ratings Services,
and its successors and assigns.
"Total Distribution Amount" means, for any Distribution Date,
the sum of Available Interest and Available Principal for such Distribution
Date. The Total Distribution Amount on any Distribution Date shall exclude all
payments and proceeds (including any Liquidation Proceeds and any amounts
received from Dealers with respect to Receivables) of (i) any Receivables the
Repurchase Amount of which has been included in the Total Distribution Amount
for a prior Distribution Date and (ii) Investment Earnings and any Late Fees.
"Treasury Entitlement" means a "Security Entitlement"
as defined in 31 C.F.R. ss. 357.2.
"Treasury Regulations" means, the treasury regulations
promulgated under Code.
"Trust Accounts" means, collectively, the Collection Account,
[the Paid-Ahead Account,] the Note Distribution Account and the Reserve Account.
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"Trust Agreement" means the Trust Agreement dated as ________
__, ____, between the Seller and the Owner Trustee, as the same may be amended
and supplemented from time to time.
"Trust Estate" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of the Indenture for the benefit of the Noteholders (including all
property and interests Granted to the Indenture Trustee), including all proceeds
thereof and the Reserve Account.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as in force on the date hereof, unless otherwise specifically provided.
"United States Securities Entitlement" means a Treasury
Entitlement, a HUD Entitlement, a FHL Bank Entitlement, a Funding Corporation
Entitlement, a Farm Credit Entitlement or a ▇▇▇▇▇▇ ▇▇▇ Entitlement.
["____________ Class A-1 Note Distribution" means the amount
distributable from the Collection Account pursuant to Section 5.5(b) to the
Noteholders of the Class A-1 Notes on the __________ Distribution Date with
respect to the Class A-1 Notes if the Class A-1 Event has occurred.]
SECTION 1.2. Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation." All references herein to Articles,
Sections, Subsections and Exhibits are references to Articles, Sections,
Subsections and Exhibits contained in or attached to this Agreement unless
otherwise specified, and each such Exhibit is part of the terms of this
Agreement.
SECTION 1.3. [Simple Interest [and Actuarial] Method;]
[Methods of Allocating Payments or Receivables;] Allocations. All allocations of
payments to principal and interest and determinations of periodic charges and
the like on the [Simple Interest] Receivables shall be based on a year with the
actual number of days in such year and twelve months with the actual number of
days in each such month. [Allocations of payments to principal and interest on
the Actuarial Receivables shall be based on the related add-on financed charge
and related
29
precomputed scheduled payment calculated in accordance with the actuarial method
set forth in the related Receivable.]
Each payment on a Receivable shall be applied first to the amount of
interest accrued on such Receivable to the date of receipt, then to reduce the
scheduled principal amount outstanding on the Receivable to the extent of the
remaining scheduled payment and then to any outstanding fees and Late Fees under
the terms of the Receivable. Amounts paid by the Seller or the Servicer in
respect of Repurchased Receivables shall be allocated first to any Accrued
Interest and then to the Principal Balance of the related Receivable.
[SECTION 1.4. Calculations Relating to the __________
Distribution Date]. If the Class A-1 Event has occurred, the calculations
hereunder for the __________ Distribution Dates with respect to the Total
Distribution Amount, the [Class A] Noteholders' Distributable Amount, [Class B
Noteholders' Distributable Amount,] [the Certificateholders' Distributable
Amount,] the Specified Reserve Account Balance and the Reserve Account Transfer
Amount, and the respective components thereof, shall be calculated as if there
were a single __________ Distribution Date. Amounts hereunder will be
distributed on the respective __________ Distribution Dates in accordance with
Section 5.5(d).]
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables. In consideration of
the Issuer's delivery of the Notes and the Certificates to and upon the order of
the Seller, the Seller does hereby sell, transfer, assign, and otherwise convey
to the Issuer, without recourse (subject to the Seller's obligations herein):
(i) all right, title, and interest of the Seller
in, to and under the Receivables listed in Schedule A hereto,
all proceeds thereof and all amounts and monies received
thereon on or after the Cutoff Date (including proceeds of the
repurchase of Receivables by the Seller pursuant to Section
3.2 or the purchase of Receivables by the Servicer pursuant to
Section 4.6 or 9.1), together with the interest of the Seller
in the security interests in the Financed Vehicles granted by
the Obligors pursuant to the Receivables and in any
repossessed Financed Vehicles;
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(ii) all right, title and interest of the Seller in
any Liquidation Proceeds and in any proceeds of any extended
warranties, theft and physical damage, credit life or credit
disability policies relating to the Financed Vehicles or the
Obligors;
(iii) all right, title and interest of the Seller
in any proceeds from Dealer repurchase obligations
relating to the Receivables; and
(iv) all proceeds (as defined in the Relevant UCC)
of the foregoing.
In connection with such sale, the Seller agrees to record and
file, at its own expense, financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the
Receivables for the sale of accounts and chattel paper meeting the requirements
of applicable state law in such manner and in such jurisdictions as are
necessary to perfect the sale and assignment of the Receivables to the Issuer.
It is the intention of the Seller and the Issuer that the
assignment and transfer herein contemplated constitute a sale of the
Receivables, conveying good title thereto free and clear of any liens and
encumbrances, from the Seller to the Issuer and the Receivables not be part of
the Seller's estate in the event of an insolvency. In the event that such
conveyance is deemed to be a pledge to secure a loan, the Seller hereby grants
to the Issuer a first priority perfected security interest in all of the
Seller's right, title and interest in, to and under the items of property listed
in clauses (i) through (iii) above, and in all proceeds (as defined in the
Relevant UCC) of the foregoing, to secure the loan deemed to be made in
connection with such pledge and, in such event, this Agreement shall constitute
a security agreement under applicable law.
SECTION 2.2. Closing. The conveyance of the Receivables shall
take place at the offices of ________________________________, New York, New
York on the Closing Date, simultaneously with the closing of the transactions
contemplated by the underwriting agreements related to the Notes [and the
Certificates] and the other Basic Documents. Upon the acceptance by the Seller
of the Notes and the Certificates, the ownership of each Receivable and the
contents of the related Receivable File will be vested in the Issuer, subject
only to the lien of the Indenture.
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ARTICLE III
THE RECEIVABLES
SECTION 3.1. Representations and Warranties of Seller;
Conditions Relating to Receivables.
(a) The Seller makes the following representations and
warranties as to the Receivables on which the Issuer shall rely in acquiring the
Receivables. Such representations and warranties shall speak as of the Cutoff
Date unless otherwise specified, but shall survive the sale, transfer, and
assignment of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(i) Schedule of Receivables. The information set
forth in Schedule A hereto with respect to each Receivable is
true and correct in all material respects, and no selection
procedures materially adverse to the Holders has been utilized
in selecting the Receivables from all receivables owned by the
Seller which meet the selection criteria specified herein.
(ii) No Sale or Transfer. No Receivable has been
sold, transferred, assigned or pledged by the Seller to
any Person other than the Issuer.
(iii) Good Title. Immediately prior to the transfer
and assignment of the Receivables to the Issuer herein
contemplated, the Seller has good and marketable title to each
Receivable free and clear of all Liens and rights of others;
and, immediately upon the transfer thereof, the Issuer has
either (i) good and marketable title to each Receivable, free
and clear of all Liens and rights of others, other than the
Lien of the Indenture Trustee under the Indenture, and the
transfer has been perfected under applicable law or (ii) a
first priority perfected security interest in each Receivable
and the proceeds thereof.
(b) Each Receivable satisfies the following conditions as of
the Cutoff Date unless otherwise specified and such conditions shall survive the
sale, transfer and assignment of the Receivables to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(i) Acquisition. Each Receivable is either a
Dealer Receivable acquired directly or indirectly from or
made through a Dealer located in the United States
32
(including the District of Columbia) or is a Direct Receivable;
(ii) Security. Each Receivable is secured by a
new or used automobile or light-duty truck;
(iii) Maturity of Receivables. Each Receivable had a
remaining maturity of not less than ___ months nor greater than ___
months, and (A) in the case of each Receivable secured by new Financed
Vehicles, had an original maturity of at least ___ months and not more
than ___ months, or (B) in the case of each Receivable secured by used
Financed Vehicles, had an original maturity of at least ___ months and
not more than ___ months.
(iv) Contract Rate. Each Receivable is a fully-
amortizing fixed rate simple interest [or actuarial] contract that
provides for level scheduled monthly payments over its remaining term,
and has a Contract Rate of at least ____% and not more than ____ %;
(v) No Repossessions. Each Receivable is secured
by a Financed Vehicle that had not been repossessed without
reinstatement of such Receivable;
(vi) Obligor Not Subject to Bankruptcy Proceedings.
Each Receivable has been entered into by an Obligor who had not been
identified on the computer files of the Seller as in bankruptcy
proceedings as of the Cutoff Date;
(vii) No Overdue Payments. Each Receivable had no
payment that was more than 30 days past due;
(viii) [Reserved];
(ix) Remaining Principal Balance. Each Receivable
had a remaining principal balance of at least $_____ and not greater
than $______;
(x) No Force Placed Insurance. As of the Cutoff
Date, each Receivable was secured by a Financed Vehicle that
was not insured by a force placed insurance policy or any
vendor's single interest and non-filing insurance policy;
(xi) Receivable Files. The Receivable Files shall
be kept at one or more of the locations specified in Schedule B hereto;
(xii) Characteristics of Receivables. Each
Receivable (a) (i) in the case of a Dealer Receivable, has
33
been originated in the form of a credit sales transaction by a Dealer
or a purchase money loan or other notes through a Dealer located in one
of the States of the United States (including the District of Columbia)
for the retail financing of a Financed Vehicle or (ii) in the case of a
Direct Receivable, has been originated by Chase or an affiliate thereof
in the form of a secured loan for the retail financing of a Financed
Vehicle, and, in each case, has been fully and properly executed by the
parties thereto, (b) (i) in the case of a Dealer Receivable, if a
retail installment sales contract, has been purchased by the Seller
from the originating Dealer or an affiliate of the Seller, has been
validly assigned by such Dealer or an affiliate of the Seller to the
Seller in accordance with its terms or (ii) in the case of a Chase
Direct Receivable, has been purchased by the Seller from Chase, and has
been validly assigned by Chase to the Seller; (c) contains customary
and enforceable provisions such that the rights and remedies of the
holder thereof are adequate for realization against the collateral of
the benefits of the security; and (d) provides for fully amortizing
level scheduled monthly payments (provided that[, in the case of Simple
Interest Receivables,] the payment in the last month in the life of the
Receivable may be different from the level scheduled payment) and for
accrual of interest at a fixed rate according to the simple interest
method;
(xiii) Compliance with Laws. Each Receivable and each
sale of the related Financed Vehicle complied at the time it was
originated or made, and complied on and after the Cutoff Date, in all
material respects with all requirements of applicable federal, state,
and local laws, and regulations thereunder, including usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Reporting Act, the Federal Trade Commission Act, the
▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, Federal Reserve Board Regulations B and Z,
state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code, and any other consumer credit, equal opportunity,
and disclosure laws applicable to such Receivable and sale thereof;
(xiv) Binding Obligation. Each Receivable constitutes
the legal, valid, and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in all material respects in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, liquidation and other similar
laws and equitable principles relating to or affecting the enforcement
of creditors' rights;
34
(xv) No Government Obligor. Each Receivable is not
due from the United States of America or any State or from any agency,
department, instrumentality or political subdivision of the United
States of America or any State or local municipality, and each
Receivable is not due from a business except to the extent that such
Receivable has a personal guaranty;
(xvi) Security Interest in Financed Vehicle.
Immediately prior to the sale and assignment thereof to the Issuer as
herein contemplated, each Receivable was secured by a validly perfected
first priority security interest in the related Financed Vehicle in
favor of or for the benefit of the Seller as secured party (subject to
administrative delays and clerical errors on the part of the applicable
governmental agency and to any statutory or other lien arising by
operation of law after the Closing Date which is prior to such security
interest), the Seller's security interest (or beneficial interest
therein) is assignable, and has been so assigned by the Seller to the
Issuer (subject to administrative delays and clerical errors on the
part of the applicable governmental agency and to any statutory or
other lien arising by operation of law after the Closing Date which is
prior to such security interest);
(xvii) Receivables in Force. No Receivable has been
satisfied, subordinated, or rescinded, nor has any Financed
Vehicle been released from the Lien granted by the related
Receivable, in whole or in part;
(xviii) No Waiver. No provision of a Receivable has
been waived in such a manner that such Receivable fails either to meet
all of the representations and warranties made by the Seller herein
with respect thereto or to meet all of the conditions with respect
thereto pursuant to this Section 3.1(b);
(xix) No Amendments. No Receivable has been amended
except pursuant to either instruments included in the Receivable Files
or instruments to be included in the Receivable Files pursuant to
Section 4.2 (or otherwise maintained by the Seller in the ordinary
course of its business), and no such amendment has caused such
Receivable either to fail to meet all of the representations and
warranties made by the Seller herein with respect thereto or to fail to
meet all of the conditions with respect thereto pursuant to this
Section 3.1(b);
(xx) No Defenses. The Seller had no knowledge
either of any facts which would give rise to any right of
rescission, setoff, counterclaim, or defense, or of the same
35
being asserted or threatened, with respect to any Receivable;
(xxi) No Liens. The Seller had no knowledge of any
Liens or claims that have been filed, including liens for work, labor,
materials or unpaid taxes relating to a Financed Vehicle, that would be
liens prior to, or equal or coordinate with, the lien granted by the
Receivable;
(xxii) No Default. Except for payment defaults
continuing for a period of not more than 30 days as of the close of
business on the Cutoff Date, the Seller has no knowledge that a
default, breach, violation, or event permitting acceleration under the
terms of any Receivable exists; the Seller has no knowledge that a
continuing condition that with notice or lapse of time would constitute
a default, breach, violation, or event permitting acceleration under
the terms of any Receivable exists; and the Seller has not waived any
of the foregoing;
(xxiii) Insurance. Each Receivable requires that the
Obligor thereunder maintain comprehensive, liability, theft
and physical damage insurance covering the related Financed
Vehicle;
(xxiv) Lawful Assignment. No Receivable has been
originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment
of such Receivable under this Agreement or pursuant to
transfers of the Certificates or the Notes is unlawful, void
or voidable;
(xxv) All Filings Made. No filings (other than
filings under the Relevant UCC which have been made) or
other actions are necessary in any jurisdiction to give the
Issuer a first perfected security interest in the
Receivables;
(xxvi) One Original. There is no more than one
original executed copy of each Receivable which, immediately
prior to the delivery thereof to the Servicer (as custodian
for the Issuer), was in the possession of the Seller;
(xxvii) Excluded Loans. Each Receivable (A) is not a
Receivable whose related Obligor resides in the State of Alabama (in
the case of a Direct Receivable) or a Receivable originated by or
through a Dealer located in the State of Alabama (in the case of a
Dealer Receivable), and (B) has not been the subject of a previous
securitization; and
36
(xxviii) Account Number. Each Dealer Receivable has been
assigned an account number that corresponds to the number assigned to
the Dealer from or through whom such Receivable was acquired, and each
Direct Receivable has been assigned an account number that corresponds
to the number assigned to the applicable originating branch (or the
"loanby-phone" line).
SECTION 3.2. Repurchase Upon Breach or Failure of a Condition.
The Seller, the Servicer, the Indenture Trustee or the Owner Trustee, as the
case may be, shall inform the other parties in writing, upon the discovery by
the Seller, the Servicer or an Authorized Officer of the Indenture Trustee or
the Owner Trustee of either any breach of the Seller's representations and
warranties set forth in Section 3.1(a) or the failure of any Receivable to
satisfy any of the conditions set forth in Section 3.1(b) which materially and
adversely affects the Holders' interest in any Receivable. Unless the breach or
failed condition shall have been cured by the last day of the Collection Period
following the Collection Period in which such discovery occurred (or, at the
Seller's option, the last day of the Collection Period in which such discovery
occurred), the Seller shall repurchase any Receivable the Holders' interest in
which was materially and adversely affected by the breach or failed condition,
as of such last day. Notwithstanding anything herein to the contrary, with
respect to the breach of a representation and warranty in Section
3.1(b)(xxviii), the Seller shall repurchase such Receivable regardless of its
effect on the interest of the Holders in such Receivable or whether notice
thereof has been delivered by any of the parties thereto, and the repurchase of
any such Receivable shall take place at any time as is administratively
convenient for the Seller and the Servicer. In consideration of the repurchase
of a Receivable, the Seller shall remit the Repurchase Amount of such Receivable
as of such last day (less any Liquidation Proceeds deposited, or to be
deposited, by the Servicer in the Collection Account with respect to such
Receivable pursuant to Section 4.3) in the manner specified in Section 5.4. The
sole remedy of the Issuer, the Indenture Trustee or the Holders with respect
either to a breach of the Seller's representations and warranties set forth in
Section 3.1(a) or to a failure of any of the conditions set forth in Section
3.1(b) shall be to require the Seller to repurchase Receivables pursuant to this
Section 3.2. The obligation of the Seller to repurchase under this Section 3.2
shall not be dependent upon the actual knowledge of the Seller of any breached
representation or warranty. The Owner Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 3.2 or the eligibility of
any Receivable for purposes of this Agreement.
37
SECTION 3.3. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Issuer, upon the execution and delivery of this Agreement, agrees to have the
Servicer act as custodian of the following documents or instruments (the
"Receivable Files") which are hereby constructively delivered to the Issuer with
respect to each Receivable:
(i) The original executed Receivable;
(ii) Any and all other documents or records that the
Seller or the Servicer, as the case may be, shall keep on
file, in accordance with its customary procedures, relating to
a Receivable, an Obligor, or a Financed Vehicle.
The Servicer hereby agrees to act as custodian and as agent
for the Issuer hereunder. The Servicer acknowledges that it holds the documents
and instruments relating to the Receivables for the benefit of the Issuer. The
Issuer shall have no responsibility to monitor the Servicer's performance as
custodian and shall have no liability in connection with the Servicer's
performance of such duties hereunder.
SECTION 3.4. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian,
shall hold the Receivable Files on behalf of the Issuer, and maintain such
accurate and complete accounts, records (either original execution documents or
copies of such originally executed documents shall be sufficient), and computer
systems pertaining to the Receivables as shall enable the Issuer to comply with
its obligations pursuant to this Agreement. 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 of comparable new or used automobile receivables that the Servicer
services for itself. The Servicer shall conduct, or cause to be conducted,
periodic audits of the files of all receivables owned or serviced by the
Servicer which shall include the Receivable Files held by it under this
Agreement and the related accounts, records, and computer systems, in such a
manner as shall enable the Owner Trustee or the Indenture Trustee to identify
all Receivable Files and such related accounts, records and computer systems and
to verify, if the Owner Trustee or the Indenture Trustee so elects, the accuracy
of the Servicer's recordkeeping. The Servicer shall promptly report to the Owner
Trustee or 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.
38
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of the locations specified in Schedule B to
this Agreement, or at such other location as shall be specified to the Owner
Trustee and the Indenture Trustee by 30 days' prior written notice. The Servicer
shall make available to the Owner Trustee, the Indenture Trustee or their
respective duly authorized representatives, attorneys, or auditors, the
Receivable Files and the related accounts, records, and computer systems
maintained by the Servicer at such times during normal operating hours as the
Owner Trustee or Indenture Trustee shall reasonably instruct which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations.
(c) Release of Documents. Upon instruction from the Indenture
Trustee (or, if the Notes have been paid in full, from the Owner Trustee), the
Servicer shall release any document in the Receivable Files to the Indenture
Trustee or Owner Trustee, or their respective agents or designee as the case may
be, at such place or places as such Person may reasonably designate as soon as
reasonably practicable to the extent it does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations. The Servicer
shall not be responsible for any loss occasioned by the failure of the Owner
Trustee or Indenture Trustee, or their respective agents or designees, to return
any document or any delay in doing so.
(d) Title to Receivables. The Servicer agrees that, in respect
of any Receivable held by it 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 solely for the purpose of collecting
or enforcing the Receivable for the benefit of the Issuer and (ii) the related
Receivable File shall at all times be property of the Issuer.
SECTION 3.5. 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 (or, if the Notes have been paid in
full, of the Owner Trustee). A certified copy of a by-law or of a resolution of
the Board of Directors of the Owner Trustee or 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 Owner Trustee or the
Indenture Trustee.
SECTION 3.6. Custodian's Indemnification. The Servicer, as
custodian, shall indemnify the Issuer, the Owner Trustee and the Indenture
Trustee for any and all liabilities,
39
obligations, losses, damages, payments, costs, or expenses of any kind
whatsoever that may be imposed on, incurred, or asserted against the Issuer, the
Owner Trustee or the Indenture Trustee as the result of any act or omission in
any way relating to the maintenance and custody by the Servicer, as custodian,
of the Receivable Files; provided, however, that the Servicer shall not be
liable for any portion of any such amount resulting from the wilful misfeasance,
bad faith, or negligence of the Issuer, the Owner Trustee or the Indenture
Trustee.
SECTION 3.7. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section 3.7
or until this Agreement shall be terminated. If the Servicer shall resign as
Servicer under Section 7.5 or if all of the rights and obligations of the
Servicer shall have been terminated under Section 8.1, the appointment of the
Servicer as custodian may be terminated by the Indenture Trustee or by the
Holders of Notes evidencing not less than a majority of the aggregate
Outstanding Amount of the Notes (or, if there are no Notes outstanding, the
Holders of Certificates representing not less than a majority of the Certificate
Balance), in the same manner as the Indenture Trustee or such Holders may
terminate the rights and obligations of the Servicer under Section 8.1. As soon
as practicable after any termination of such appointment, the Servicer shall, at
its expense, deliver the Receivable Files to the Issuer or the Issuer's agent at
such place or places as the Issuer may reasonably designate. Notwithstanding the
termination of the Servicer as custodian, the Owner Trustee agrees that upon any
such termination, the Issuer shall provide, or cause its agent to provide,
access to the Receivable Files to the Servicer for the purpose of carrying out
its duties and responsibilities with respect to the servicing of the Receivables
hereunder.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. Duties of Servicer. The Servicer is hereby
authorized to act as agent for the Issuer and in such capacity shall manage,
service, administer and make collections on the Receivables (other than
Repurchased Receivables) with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to comparable new or used
automobile receivables that it services for itself. The Servicer's duties shall
include collection and posting of all payments, responding to inquiries by
Obligors or by federal, state, or local governmental authorities with respect to
the Receivables, investigating delinquencies, reporting tax
40
information to Obligors in accordance with its customary practices, advancing
costs of disposition of defaults, monitoring Receivables in cases of Obligor
defaults, accounting for collections, furnishing monthly and annual statements
to the Indenture Trustee with respect to distributions. The Servicer shall
follow its customary standards, policies, and procedures in performing its
duties as Servicer hereunder; provided that the Servicer shall be permitted to
take or to refrain from taking any action not specified in this Agreement with
respect to servicing the Receivables if such action or inaction would not
contravene any material term of this Agreement or materially adversely affect
the interests of Holders. Without limiting the generality of the foregoing, the
Servicer shall be authorized and empowered by the Issuer to execute and deliver,
on behalf of itself, the Owner Trustee, the Indenture Trustee and the Holders,
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments,
without recourse to the Issuer, with respect to the Receivables or with respect
to the Financed Vehicles. If the Servicer shall commence a legal proceeding to
enforce a Receivable or a Defaulted Receivable, the Issuer shall thereupon be
deemed to have automatically assigned such Receivable and the related property
conveyed to the Issuer with respect to such Receivable to the Servicer, solely
for the purpose of collection. The Owner Trustee shall furnish the Servicer with
such documents as have been prepared by the Servicer for execution by the Owner
Trustee and as are necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder.
SECTION 4.2. Collection of Receivable Payments; Refinancing.
(a) The Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Receivables and of this Agreement as
and when the same shall become due, and shall follow such collection procedures
as it follows with respect to comparable new or used automobile receivables that
it services for itself and that are consistent with prudent industry standards.
In connection therewith, the Servicer may grant extensions, rebates or
adjustments on a Receivable without the consent of the Issuer; provided,
however, that if the Servicer extends the date for final payment by the Obligor
of any Receivable beyond the Final Scheduled Maturity Date, it shall promptly
repurchase such Receivable pursuant to Section 4.6. The Servicer is authorized
in its discretion to waive any Late Fees that may be due in the ordinary course
of collecting a Receivable; provided, further, the Servicer shall not agree to
any change in the underlying Contract Rate on any Receivable, to any change in
the Principal Balance thereof (except with respect to a prepayment of a
scheduled payment that does not result in a deferral of any other scheduled
payment), to any reduction of the total number of payments due thereunder or,
41
subject to the foregoing, to any reduction of the amount of any scheduled
payment on a Receivable. In the event that at the end of the scheduled term of
any Receivable, the outstanding principal amount thereof is such that the final
payment to be made by the related Obligor is larger than the regularly scheduled
payment of principal and interest made by such Obligor, the Servicer may permit
such Obligor to pay such remaining principal amount in more than one payment of
principal and interest; provided, however, that the last such payment shall be
due on or prior to the Final Scheduled Maturity Date.
(b) Notwithstanding anything in this Agreement to the
contrary, the Servicer may refinance any Receivable by accepting a new
promissory note from the related Obligor and applying the proceeds of such
refinancing to pay all obligations in full of such Obligor under such
Receivable. The receivable created by the refinancing shall not be property of
the Issuer.
SECTION 4.3. Realization Upon Receivables. The Servicer shall
use reasonable efforts, consistent with its customary servicing procedures, to
repossess or otherwise take possession of the Financed Vehicle securing any
Receivable which the Servicer shall have determined to be a Defaulted Receivable
or otherwise. The Servicer shall follow such customary and usual practices and
procedures as it shall deem necessary or advisable in its servicing of new or
used automobile receivables, which may include reasonable efforts to realize
upon any recourse to Dealers, consigning the Financed Vehicle to a Dealer for
resale and selling the Financed Vehicle at public or private sale. The Servicer
shall be entitled to recover from proceeds all reasonable expenses incurred by
it in the course of converting the Financed Vehicle into cash proceeds. The
Liquidation Proceeds with respect to a Receivable shall be deposited by the
Servicer in the Collection Account in the manner specified in Section 5.2 and
shall be applied to reduce (or to satisfy, as the case may be) the Repurchase
Amount of the Receivable, if such Receivable is to be repurchased by the Seller
pursuant to Section 3.2, or is to be purchased by the Servicer pursuant to
Section 4.6. 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 sole discretion that such repair and/or
repossession will increase the Liquidation Proceeds of the related Receivable by
an amount equal to or greater than the amount of such expenses.
SECTION 4.4. Maintenance of Security Interests in Financed
Vehicles. The Servicer, in accordance with its customary servicing procedures,
shall take such steps as are necessary to maintain perfection of the first
priority security
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interest of the Seller created in any Financed Vehicle which secures a
Receivable. The Owner Trustee, on behalf of the Issuer, and the Indenture
Trustee hereby authorize the Servicer, and the Servicer hereby agrees, to take
such steps as are necessary to re-perfect such security interest in the event of
the relocation of a Financed Vehicle or for any other reason, in either case,
when the Servicer has knowledge of the need for such re-perfection. In the event
that the assignment of a Receivable to the Issuer and by the Issuer to the
Indenture Trustee pursuant to the Indenture is insufficient without a notation
on the related Financed Vehicle's certificate of title, or without fulfilling
any additional administrative requirements under the laws of the State in which
the Financed Vehicle is located, to grant to the Indenture Trustee a perfected
security interest in the related Financed Vehicle, the Seller and Servicer
hereby agree that the Seller's listing as the secured party on the certificate
of title is deemed to be in its capacity as agent of the Indenture Trustee and
the Servicer further agrees to hold such certificate of title as the Indenture
Trustee's agent and custodian; provided, however, that the Servicer shall not,
nor shall the Owner Trustee, the Indenture Trustee or Holders have the right to
require that the Servicer, make any such notation on the related Financed
Vehicles' certificate of title or fulfill any such additional administrative
requirement of the laws of the State in which a Financed Vehicle is located.
SECTION 4.5. Covenants of Servicer. The Servicer hereby makes
the following covenants on which the Issuer will rely in accepting the
Receivables:
(i) Security Interest to Remain in Force. The
Financed Vehicle securing each Receivable shall not be
released from the security interest granted by the
Receivable in whole or in part except if such Financed
Vehicle is substituted in whole by the manufacturer,
dealer or seller as a result of mechanical defects or a
total loss of the Financed Vehicle because of accident
or theft or as otherwise contemplated herein;
(ii) No Impairment. The Servicer shall not impair
the rights of the Issuer, the Indenture Trustee or any Holder
in the Receivables; and
(iii) Extensions; Defaulted Receivables. The
Servicer shall not increase the number of payments under a
Receivable, nor increase the Amount Financed under a
Receivable, nor extend or forgive payments on a Receivable,
except as provided in Section 4.2.
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SECTION 4.6. Purchase of Receivables Upon Breach. The Seller,
the Servicer, the Indenture Trustee or the Owner Trustee, as the case may be,
shall inform the other parties promptly, in writing, upon the discovery by the
Seller, the Servicer or an Authorized Officer of the Indenture Trustee or the
Owner Trustee, as the case may be, of any breach by the Servicer of its
covenants under Section 4.5 which materially and adversely affects the interest
of the Holders in any Receivable (for this purpose, any breach of the covenant
set forth in Section 4.5(iii) shall be deemed to materially and adversely affect
the interest of the Holders in a Receivable). Except as otherwise specified in
Section 4.2, unless the breach shall have been cured by the last day of the
Collection Period following the Collection Period in which such discovery
occurred (or, at the Servicer's election, the last day of the Collection Period
in which such discovery occurred), the Servicer shall purchase any Receivable
materially and adversely affected by such breach as of such last day. In
consideration of the purchase of such Receivable, the Servicer shall remit the
Repurchase Amount (less any Liquidation Proceeds deposited, or to be deposited,
by the Servicer in the Collection Account with respect to such Receivable
pursuant to Section 4.3) in the manner specified in Section 5.4. The sole remedy
of the Issuer, the Owner Trustee, the Indenture Trustee or the Holders against
the Servicer with respect to a breach pursuant to Section 4.2 or 4.5 shall be to
require the Servicer to purchase Receivables pursuant to this Section 4.6. The
Owner Trustee shall have no duty to conduct any affirmative investigation as to
the occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section 4.6 or the eligibility of any Receivable for purposes
of this Agreement.
SECTION 4.7. Servicing Fee. The Servicing Fee for a Collection
Period shall be payable on the related Distribution Date pursuant to Section 5.5
and shall equal the sum of (i) the product of one-twelfth of the Servicing Fee
Rate and the Pool Balance as of the related Settlement Date and (ii) Late Fees
received from Obligors during such Collection Period. In addition, as part of
the Servicing Fee, the Servicer shall be entitled to receive on each
Distribution Date Investment Earnings when and as paid on amounts on deposit in
the Collection Account or earned on collections pending deposit in the
Collection Account. The Servicer shall be required to pay from its own account
all expenses incurred by it in connection with its activities hereunder
(including fees and disbursements of independent accountants and auditors, taxes
imposed on the Servicer, and other costs incurred in connection with
administering and servicing the Receivables) and the fees and disbursements of
the Issuer, the Administrator, the Owner Trustee, the Indenture Trustee, the
Owner Trustee's and the Indenture Trustee's counsel, the Paying Agent, the
Authenticating Agent, the Note Registrar and the Certificate Registrar except
44
for United States federal, state and local income and franchise taxes, if any,
imposed on the Issuer or any Holder or any expenses in connection with realizing
upon Receivables under Section 4.3.
SECTION 4.8. Servicer's Certificate. On or before each
Determination Date, the Servicer shall deliver to the Indenture Trustee, the
Owner Trustee, the Paying Agent and the Rating Agencies a Servicer's
Certificate, substantially in the form of Exhibit A hereto, for the Collection
Period preceding such Determination Date, containing all information necessary
to make the distributions pursuant to Section 5.5, and all information necessary
for the Paying Agent to send statements to Holders pursuant to Section 5.8[;
provided, however, that if the Class A-1 Event has occurred, the Servicer shall
deliver the Servicer's Certificate for the __________ Collection Period to such
parties no later than _____________.] The Servicer shall deliver to the Rating
Agencies any information, to the extent it is available to the Servicer, that
the Rating Agencies reasonably request in order to monitor the Issuer. The
Servicer shall also specify each Receivable which the Seller or the Servicer is
required to repurchase or purchase, as the case may be, as of the last day of
the preceding Collection Period and each Receivable which the Servicer shall
have determined to be a Defaulted Receivable during the preceding Collection
Period. Subsequent to the Closing Date, the form of Servicer's Certificate may
be revised or modified to cure any ambiguities or inconsistencies between such
form and this Agreement; provided, however, that no material information shall
be deleted from the form of Servicer's Certificate. In the event that the form
of Servicer's Certificate is revised or modified in accordance with the
preceding sentence, a form thereof, as so revised or modified, shall be provided
to the Owner Trustee, the Paying Agent, the Indenture Trustee and each Rating
Agency.
SECTION 4.9. Annual Statement as to Compliance. (a) The
Servicer shall deliver to a firm of independent certified public accountants, on
or before March 31 of each year commencing March 31, ____, a certificate signed
by the chairman of the board, the president, the treasurer, the controller, any
executive or senior vice president or any vice president of the Servicer,
stating that (a) a review of the activities of the Servicer during the year
ended the preceding December 31 (or the period since the Cutoff Date in the case
of the first such certificate) and of its performance under this Agreement has
been made under such officer's supervision and (b) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
in all material respects under this Agreement throughout such year (or the
period since the Cutoff Date in the case of the first such certificate), or, if
there has been a default in the fulfillment of any such obligation,
45
specifying each such default known to such officer and the nature and status
thereof.
(b) The Servicer shall deliver to the Indenture Trustee, the
Owner Trustee and each Rating Agency promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, an Officer's
Certificate specifying any event which with the giving of notice or lapse of
time, or both, would become an Event of Servicing Termination under Section 8.1.
The Seller shall deliver to the Indenture Trustee and the Owner Trustee,
promptly after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, an Officer's Certificate specifying any event
which with the giving of notice or lapse of time, or both, would become an Event
of Servicing Termination under Section 8.1.
SECTION 4.10. Annual Audit Report. The Servicer shall cause a
firm of independent public accountants (which may provide other services to the
Servicer or the Seller) to prepare a report (with a copy of the certificate
described in Section 4.9(a) attached) addressed to the Board of Directors of the
Servicer, for the information and use of the Indenture Trustee, the Owner
Trustee and the Rating Agencies on or before March of each year, beginning March
31, ____, to the effect that, with respect to the twelve months ended the
preceding December 31 (or the period since the Cutoff Date, in the case of the
first such certificate), such firm has either (A) examined a written assertion
by the Servicer about the effectiveness of the Servicer's internal control
structure over the processing and reporting of transactions relating to
securitized automobile loans with respect to the criteria set forth by the
Servicer (the "Assertion") and that, on the basis of such examination, such firm
is of the opinion that the Servicer's Assertion is fairly stated in all material
respects except for (i) such exceptions as such firm believes to be immaterial
and (ii) such other exceptions as shall be set forth in such firm's report, or
(B) such firm has performed the following procedures:
1. For a sample of daily cash receipts during the preceding
calendar year:
a. Trace total cash receipts to deposits on bank
statements.
b. Agree cash receipts for securitized loans to computer
reports.
c. Trace cash receipts for securitized loans to
disbursements to the Owner Trustee and the Indenture
Trustee.
2. For a sample of monthly cash receipt reports:
46
a. Agree total cash receipts per the cash receipt reports to
"Total Payments From Obligors Applied to Collection Period"
per monthly Servicer Certificates.
b. Agree total principal payments per the cash receipt
reports to "Principal Payments" per monthly Servicer
Certificates.
3. For a sample of loans delinquent 30 days or more and for a sample of
loans in repossession status, selected from the loan delinquency report
or a new repossession report, as applicable, at a point in time, trace
loan number to inclusion in the loan collection system.
The determination of which of the two alternative reports to be prepared and
delivered, and the size of each sample to be tested, shall be decided in the
sole discretion of the Servicer. The report of the independent certified public
accountants shall also indicate that such accounting firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.11. Access by Holders to Certain Documentation and
Information Regarding Receivables. The Servicer shall provide to the Holders
access to the Receivable Files in such cases where the Holders shall be required
by applicable statutes or regulations to have access to such documentation.
Access by the Holders shall be afforded without charge, but only upon reasonable
request and during normal business hours which does not unreasonably interfere
with the Servicer's normal operations or customer or employee relations. Nothing
in this Section 4.11 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 4.11.
SECTION 4.12. Reports to Holders and the Rating Agencies. (a)
The Indenture Trustee or the Owner Trustee, as applicable, shall provide to any
Holder who so requests in writing (addressed to the Corporate Trust Office of
such trustee) a copy of any Servicer's Certificate described in Section 4.8, of
the annual statement described in Section 4.9(a), or of the annual report
described in Section 4.10. The Indenture Trustee or the Owner Trustee, as
applicable, may require the Holder to pay a reasonable sum to cover the cost of
the Indenture Trustee's or the Owner Trustee's complying with such request, as
applicable.
(b) The Indenture Trustee or the Owner Trustee, as applicable,
shall forward to the Rating Agencies the statement to Holders described in
Section 5.8 and any other reports it may
47
receive pursuant to this Agreement to (i) Standard & Poor's Ratings Services,
Asset-Backed Surveillance Group, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (ii)
▇▇▇▇▇'▇ Investors Service, ABS Monitoring Dept., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (iii) to Fitch Investors Services, L.P., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 4.13. Reports to the Securities and Exchange
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 Securities and Exchange
Commission thereunder.
ARTICLE V
ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1. Establishment of Accounts. (a) The Servicer shall
establish and maintain:
(i) For the benefit of the Noteholders and the
Certificateholders, in the name of the Indenture Trustee, an
Eligible Deposit Account for the deposit of Collections (the
"Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(ii) For the benefit of the Noteholders, in the name
of the Indenture Trustee, an Eligible Deposit Account for the
deposit of distributions to the Noteholders (the "Note
Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of the Noteholders.
[(iii) For the benefit of the Noteholders and the
Certificateholders, in the name of the Indenture Trustee, an
Eligible Deposit Account for the deposit of Paid-Ahead Amounts
(the "Paid-Ahead Account") bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of the Noteholders [and the Certificateholders].
Each Account shall be an Eligible Deposit Account established
initially at Chase.
48
(b) Should any depositary of an Account or of the Certificate
Distribution Account (including Chase (or an Affiliate thereof)) cease to be
either a Qualified Institution or a Qualified Trust Institution, as applicable,
then the Servicer shall, with the Seller's assistance as necessary, cause the
related Account to be moved to a Qualified Institution or a Qualified Trust
Institution, unless the Rating Agency Condition is satisfied in connection with
such depositary's ceasing to be a Qualified Institution or a Qualified Trust
Institution, as the case may be.
All amounts held in the Collection Account [and the Paid-Ahead
Account] shall be invested by the bank or trust company then maintaining the
account (at the written direction of the Servicer) in Permitted Investments that
mature not later than the Deposit Date next succeeding the date of investment
[(or, if the Class A-1 Event has occurred, not later than _____ __, ____, in the
case of investments made on or after the Deposit Date in __________ and prior to
the Deposit Date in __________, in an amount at least equal to the __________
Class A-1 Note Distribution)] except, if the Collection Account [or the Paid-
Ahead Account] is maintained with the Indenture Trustee for investments on which
the Indenture Trustee is the obligor (including repurchase agreements on which
the Indenture Trustee, in its commercial capacity, is liable as principal),
which investments may mature on the next succeeding Distribution Date; provided,
however, that once such amounts have been invested by such bank or trust
company, as applicable, in Permitted Investments, such Permitted Investments
must be held or maintained until they mature on or before the dates described
above. Amounts on deposit in the Note Distribution Account shall not be
invested.
(c) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Accounts and in all
proceeds thereof (excluding Investment Earnings) and all such funds,
investments, proceeds and income shall be part of the Owner Trust Estate. Except
as otherwise provided herein, the Accounts shall be under the sole dominion and
control of Indenture Trustee for the benefit of the Noteholders and the
Certificateholders, or the Noteholders, as the case may be.
SECTION 5.2. Collections. The Servicer shall remit daily
within forty-eight hours of receipt to the Collection Account all payments by or
on behalf of the Obligors on the Receivables and all Liquidation Proceeds, both
as collected during the Collection Period (other than Paid-Ahead Amounts). The
Servicer shall remit daily within forty-eight hours of receipt to the Paid-Ahead
Account all Paid-Ahead Amounts with respect to the Receivables collected during
the Collection
49
Period. Chase USA has requested that, so long as it is acting as the Servicer,
the Servicer be permitted to make remittances of collections (including
Paid-Ahead Amounts) on a less frequent basis than that specified in the two
immediately preceding sentences. It is understood that such less frequent
remittances may be made only on the specific terms and conditions set forth
below in this Section 5.2 and only for so long as such terms and conditions are
fulfilled. Accordingly, notwithstanding the provisions of the first sentence of
this Section 5.2, the Servicer (i) shall remit such collections to the
Collection Account in Automated Clearinghouse Corporation next-day funds or
immediately available funds no later than 11:00 a.m., New York City time, on the
Deposit Date and (ii) may retain Paid-Ahead Amounts until any Applied Paid-Ahead
Amounts would otherwise be required to be withdrawn from the Paid-Ahead Account
and deposited in the Collection Account, and shall deposit such Applied
Paid-Ahead Amounts into the Collection Account in the manner described in the
preceding clause (i), but only for so long as the short-term certificate of
deposit ratings of the Servicer are at least P-1 by Moody's, "F-1" by Fitch (if
rated by Fitch) and "A-1" by Standard & Poor's, or the Rating Agency Condition
is satisfied as a result of Collections being remitted on a monthly, rather than
daily, basis and (y) the Servicer shall be Chase USA or Chase; [provided,
however, that if the Class A-1 Event has occurred, with respect to Collections
received during the __________ Collection Period, the Servicer shall remit to
the Collection Account on _____ __, ____ an amount of such Collections equal to
the __________ Class A-1 Note Distribution]. Upon remittance by the Servicer of
Collections to the Collection Account pursuant to the preceding sentence, the
Paying Agent shall provide written notice to the Indenture Trustee and the Owner
Trustee no later than 11 a.m., New York City time, on each Deposit Date [(or
_____ __, ____),] setting forth the amounts remitted by the Servicer on such
date and, if the Paying Agent fails to provide the Indenture Trustee and the
Owner Trustee, with such written notice by 12 noon, New York City time, on such
Deposit Date [(or _____ __, ____)], then the Indenture Trustee and the Owner
Trustee shall assume that no deposits were made to the Collection Account
pursuant to this Section 5.2. For purposes of this Section 5.2 the phrase
"payments made on behalf of the Obligors" shall mean payments made by Persons
other than the Seller or the Servicer.
Notwithstanding anything in this Agreement to the contrary, if
the Servicer inadvertently deposits amounts that it mistakenly believes are
Collections resulting in the payment in full of a Receivable, the Servicer shall
be deemed to have purchased such Receivable pursuant to Section 4.6 as of the
last day of the Collection Period during which such error shall have occurred.
50
Deferred Paid-Ahead Amounts on Repurchased Receivables. With
respect to any Repurchased Receivable, the Servicer shall forward to the Seller
or Servicer purchasing such Receivable any Deferred Paid-Ahead Amounts with
respect to such Repurchased Receivable (by withdrawing such amounts from the
Paid-Ahead Account or otherwise).
SECTION 5.3. [Reserved].
SECTION 5.4. Additional Deposits. The Servicer, or the Seller,
as the case may be, shall deposit into the Collection Account the aggregate
Repurchase Amount pursuant to Sections 3.2, 4.6 and 9.1(a), as applicable. All
remittances shall be made to the Collection Account, in Automated Clearinghouse
Corporation next-day funds or immediately available funds, no later than 11
a.m., New York City time, on the Deposit Date[; provided, however, that if the
Class A-1 Event has occurred and the amount of Collections on the Receivables
received during the __________ Collection Period is less than the __________
Class A-1 Note Distribution, such remittances (up to the amount of such
shortfall) shall be deposited into the Collection Account no later than _____
__, ____].
SECTION 5.5. Distributions. (a) No later than 12 noon, New
York City time, on each Determination Date, the Servicer shall calculate all
amounts required to determine the amounts to be withdrawn from the Reserve
Account (if any) and deposited into the Collection Account and the amounts to be
withdrawn from the Collection Account and paid to the Servicer and the
Administrator, deposited into the Note Distribution Account [and the Certificate
Distribution Account] and paid to the Seller with respect to the next succeeding
Distribution Date.
(b) (i) On each Deposit Date, the Servicer shall instruct the
Indenture Trustee in writing (based on the information contained in the
Servicer's Certificate delivered on the related Determination Date pursuant to
Section 4.8) to withdraw from the Reserve Account and deposit in the Collection
Account the Reserve Account Transfer Amount (if any) for the related
Distribution Date, and the Indenture Trustee shall so withdraw and deposit the
Reserve Account Transfer Amount for such Distribution Date[; provided, however,
that if the Class A-1 Event has occurred and the Total Distribution Amount for
the __________ Distribution Date is less than the __________ Class A-1 Note
Distribution, the Servicer shall instruct the Indenture Trustee in writing to
withdraw from the Reserve Account and deposit in the Collection Account on
_________ __, ___ a portion of the Reserve Account Transfer Amount for the _____
____ Distribution Date equal to the lesser of such Reserve Account Transfer
Amount and the amount of such insufficiency as determined by the Servicer].
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(ii) On each Deposit Date, the Servicer shall instruct the
Indenture Trustee, or the Paying Agent on behalf of the Indenture Trustee, in
writing (based on the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 4.8) to withdraw
from the Paid-Ahead Account and deposit in the Collection Account any Applied
Paid-Ahead Amounts (if any) with respect to the related Collection Period, and
the Indenture Trustee or Paying Agent shall so withdraw and deposit the Applied
Paid-Ahead Amounts for such Distribution Date.
(c) Not later than 11:00 a.m., New York City time, on each
Distribution Date, at the Servicer's direction, the Indenture Trustee, or the
Paying Agent on behalf of the Indenture Trustee, shall cause to be made the
following distributions, to the extent of the Total Distribution Amount then on
deposit in the Collection Account and amounts withdrawn from the Reserve Account
and deposited in the Collection Account by wire transfer of immediately
available funds, in the following order of priority and in the amounts set forth
in the Servicer's Certificate for such Distribution Date:
(i) to the Servicer, the sum of (x) the Servicing
Fee for the preceding Collection Period, plus (y) the amount
of any Servicing Fee previously due but not paid, if any, to
the extent such amounts are not deducted from the Servicer's
remittance to the Collection Account pursuant to Section 5.7;
(ii) to the Administrator, the sum of (x) the
Administration Fee for such Distribution Date, plus (y) the
amount of any Administration Fee previously due but not paid,
if any;
(iii) to the Note Distribution Account, the [Class
A] Noteholders' Interest Distributable Amount;
[(iv) except as set forth in Section 5.5(d), to the
Note Distribution Account, the Class B Noteholders' Interest
Distributable Account;]
[(v) except as set forth in Section 5.5(d), to the
Owner Trustee for deposit in the Certificate Distribution
Account, the Certificateholders' Interest Distributable
Amount;]
(vi) except as set forth in Section 5.5(d), to the
Note Distribution Account, the Noteholders' Principal
Distributable Amount; and
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[(vii) except as set forth in Section 5.5(d), to the
Owner Trustee for deposit in the Certificate Distribution
Account, the Certificateholders' Principal Distributable
Amount; and]
[(viii) except as set forth in Section 5.5(d), to the
Reserve Account, any remaining portion of the Total
Distribution Amount].
In the event that the Collection Account is maintained with an
institution other than the Indenture Trustee, the Servicer shall instruct and
cause such institution to make all deposits and distributions pursuant to this
Section 5.5(c) on the related Deposit Date.
(d) If the Notes have been declared immediately due and
payable as provided in Section 5.2 of the Indenture, any amounts remaining in
the Collection Account after the distributions described in clauses (i), (ii)
and (iii) of Section 5.5(c) shall be distributed as follows: (1) an amount equal
to the Outstanding Amount of the [Class A] Notes will be deposited in the [Class
A] Note Distribution Account, and (2) any remaining amounts will be applied
pursuant to clauses (iv), (v), (vi) and (vii) [(iv), (v) (up to the Outstanding
Amount of Class B Notes), (vi), (vii), (viii) and (ix)] of Section 5.5(c).
[(e) Notwithstanding any of the foregoing to the contrary, if
the Class A-1 Event shall have occurred (x) the __________ Class A-1 Note
Distribution will be deposited in the Note Distribution Account on the
__________ Distribution Date with respect to Class A-1 Notes pursuant to clauses
(iii) and (v) of Section 5.5(c) and (y) the remainder of the Noteholders'
Distributable Amount will be withdrawn from the Collection Account, as
applicable, and applied on the __________ Distribution Date with respect to the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class [A-5][B]
Notes and the Certificates pursuant to clauses (i) through (vi), inclusive, of
Section 5.5(c); provided, however if the sum of the Total Distribution Amount
and the Reserve Account Transfer Amount for the __________ Distribution Date is
less than the sum of the amounts set forth in clauses (i) through (v) of Section
5.5(c), amounts shall be distributed from the Collection Account with respect to
the Class A-1 Notes only to the same extent that such amounts would have been
distributable therefrom if the __________ Distribution Date with respect to the
Class A-1 Notes were the same as that with respect to the Class A-2 Notes, the
Class A-3 Notes[,] [and] the Class A-4 Notes, the Class [A-5][B] Notes and the
Certificates.]
SECTION 5.6. Reserve Account. (a) The Seller shall establish
and maintain an Eligible Deposit Account (the "Reserve
53
Account") at [__________________________________________] in the name of the
Indenture Trustee for the benefit of the Noteholders and the Certificateholders.
Pursuant to Section 2.5 of the Trust Agreement, on the Closing Date, the Owner
Trustee shall deposit the Reserve Account Initial Deposit into the Reserve
Account.
(b) Should any sole depositary of the Reserve Account cease to
be either a Qualified Institution or a Qualified Trust Institution, the Seller
shall cause the Reserve Account to be moved to a Qualified Institution or a
Qualified Trust Institution, as applicable, unless the Seller provides the
Indenture Trustee with a letter from the Rating Agencies to the effect that the
Rating Agency Condition will be satisfied in connection with such depositary's
ceasing to be a Qualified Institution or a Qualified Trust Institution, as the
case may be.
All amounts held in the Reserve Account shall be invested by
the bank or trust company then maintaining the account (at the written direction
of the Seller) in Permitted Investments that mature not later than the Deposit
Date next succeeding the date of investment (or, if the Class A-1 Event has
occurred, not later than _____________ to the extent of the __________ Class A-1
Note Distribution) except, if the Reserve Account is maintained with the
Indenture Trustee, for investments on which the Indenture Trustee is the obligor
(including repurchase agreements on which the Indenture Trustee in its
commercial capacity is liable as principal), which investments may mature on the
next succeeding Distribution Date; provided, however, that amounts on deposit in
the Reserve Account may be invested in Permitted Investments that mature later
than the next succeeding Deposit Date (or _______________ if the Class A-1 Event
has occurred) if the Rating Agency Condition is satisfied.
(c) With respect to the Reserve Account Property:
(i) any Reserve Account Property that constitutes
Physical Property shall be delivered to the Indenture Trustee
in accordance with paragraph (a) of the definition of
"Delivery" and shall be held by the Indenture Trustee, pending
maturity or disposition;
(ii) any Reserve Account Property that is a United
States Security Entitlement shall be delivered in accordance
with paragraph (b) of the definition of "Delivery" and shall
be maintained by the Indenture Trustee, pending maturity or
disposition; and
(iii) any Reserve Account Property that is an
"uncertificated security" under Article 8 (or VIII as
applicable) of the Relevant UCC and that is not governed by
clause (ii) above shall be delivered to the
54
Indenture Trustee in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition.
The Indenture Trustee shall, at the expense of the Servicer, take such action as
is required to maintain the Indenture Trustee's security interest in any Reserve
Account Property; provided, however, that (x) the Indenture Trustee shall not be
required to prepare or file any financing statements or continuation statements
and (y) the Indenture Trustee may rely upon the written instructions of the
Servicer as to the method by which the security interest of the Indenture
Trustee may be perfected. Upon written request from the Indenture Trustee, the
Servicer shall provide such instructions and an opinion of counsel with respect
to the method of perfection of such security interest; provided, however, that
the Servicer shall not be obligated to deliver to the Indenture Trustee an
opinion of counsel with respect to the method of perfecting a security interest
in any Permitted Investment the method of perfecting an ownership interest in
which was described in that certain legal opinion of [___________________],
special local counsel to the Indenture Trustee, dated _____ __, ____, unless
there has been change in law or the interpretation thereof from the date of such
opinion with respect to the method of perfecting a security interest in such
Permitted Investment.
(d) On each Distribution Date, the Indenture Trustee shall
withdraw from the Reserve Account and pay to the Seller the excess, if any, of
the amount on deposit in the Reserve Account over the Specified Reserve Account
Balance with respect to such Distribution Date (after giving effect to all
deposits therein or withdrawals therefrom on such Distribution Date). Upon any
distribution to the Seller of amounts from the Reserve Account, the Holders will
have no rights in, or claims, to, such amounts. Amounts properly distributed to
the Seller from the Reserve Account shall not be available under any
circumstances to the Indenture Trustee, and the Seller shall not in any event
thereafter be required to refund any such distributed amounts. [For purposes of
this Section 5.6(d), the __________ Distribution Date shall be _____ __, ____
regardless of whether the Class A-1 Event has occurred.]
(e) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Reserve Account and in
all proceeds thereof and all such funds, investments, proceeds and income shall
be part of the Trust Estate. Except as otherwise provided herein, the Reserve
Account shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Noteholders and the Certificateholders.
55
SECTION 5.7. Net Deposits. Chase USA (in its capacity as the
Seller or the Servicer) may make the remittances pursuant to Sections 5.2 and
5.4 above, net of amounts to be retained by it or distributed to it (also in any
such capacity) pursuant to Section 4.7 (if applicable) and Section 5.5, if (a)
it shall be the Servicer and (b) it is entitled, pursuant to Section 5.2, to
make deposits on a monthly basis, rather than a daily basis. Nonetheless, the
Servicer shall account for all of the above described amounts as if such amounts
were deposited and distributed separately.
SECTION 5.8. Statements to [Certificateholders and]
Noteholders. (a) On each Distribution Date, the Servicer shall provide to the
Indenture Trustee (for the Indenture Trustee to forward to each Noteholder of
record pursuant to the Indenture) [and to the Owner Trustee (for the Owner
Trustee to forward to each Certificateholder of record pursuant to the Trust
Agreement)] a statement substantially in the form of Exhibit B (or such other
form that is acceptable to the Indenture Trustee, the Owner Trustee and the
Servicer), with a copy to the Rating Agencies [and the Luxembourg Stock Exchange
(so long as any Notes are listed thereon)], setting forth at least the following
information as to the Notes (separately stating such information as to the Class
A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the
Class [A-5][B] Notes) and the Certificates, to the extent applicable:
(i) the amount of such distribution allocable to
principal on each class of Notes [and the
Certificates];
(ii) the amount of such distribution allocable to
interest on each class of Notes [and the Certificates];
(iii) the amount of the Servicing Fee paid to the
Servicer pursuant to Section 5.5(c);
(iv) the amount of the Administration Fee paid to
the Administrator on such Distribution Date;
(v) the Outstanding Amount of each class of the
Notes, the Class A-1 Note Pool Factor, the Class A-2 Note Pool
Factor, the Class A-3 Note Pool Factor, the Class A-4 Note
Pool Factor[,] the Class [A-5][B] Note Pool Factor[,] the
Certificate Balance and the Certificate Pool Factor[,] in each
case after giving effect to payments allocated to principal
reported under (i) above;
(vi) the Pool Balance as of the last day of the
preceding Collection Period;
56
(vii) the aggregate amount of the Repurchase Amounts
for Repurchased Receivables with respect to the related
Collection Period paid by each of the Seller and the Servicer
(accounted for separately);
(viii) the amount of Aggregate Net Losses, if any,
for such Distribution Date;
(ix) the balance of the Reserve Account on such
Distribution Date, after giving effect to deposits into and
withdrawals from the Reserve Account on such Distribution
Date;
(x) the balance of the Paid-Ahead Account as of
such date, after giving effect to any changes therein
on such date;
(x) [(xi)] the Specified Reserve Account Balance for
such Distribution Date;
(xi) [(xii)] the Total Distribution Amount for such
Distribution Date;
(xii) [(xiii)] the [Class A] Noteholders' Distributable Amount
[, the Class B Noteholders' Distributable Amount] and the
components thereof; [and]
[(xiii) [(xiv)] the Certificateholders' Distributable Amount
and the components thereof; and]
(xiv) [(xv)] [(xiii)] the Reserve Account Transfer Amount,
if any, for such Distribution Date.
Each amount set forth pursuant to subclause (i), (ii), (iii),
(iv), (xii) [or (xiii)] above shall be expressed as a dollar amount per $1,000
of original principal balance of a Note [or a Certificate, as applicable].
ARTICLE VI
THE SELLER
SECTION 6.1. Representations of Seller. The Seller makes the
following representations on which the Issuer shall rely in acquiring the
Receivables. The representations shall speak as of the execution and delivery of
this Agreement, and shall survive the sale of the Receivables to the Issuer and
pledge thereof to the Indenture Trustee pursuant to the Indenture.
57
(i) Organization and Good Standing. The Seller has
been duly organized and is validly existing as a national
banking association in good standing under the laws of the
United States of America, 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, and
had at all relevant times, and has, power, authority, and
legal right to acquire and own the Receivables.
(ii) 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 respective terms, the Seller has full power and
authority to sell and assign the property to be sold and
assigned to the Issuer as the Owner Trust Estate 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 has been duly authorized by the Seller by
all necessary action.
(iii) Valid Sale; Binding Obligations. This Agreement
effects a valid sale, transfer, and assignment of the
Receivables, enforceable against creditors of and purchasers
from the Seller; this Agreement and each of the other Basic
Documents to which it is a party constitutes a legal, valid,
and binding obligation of the Seller enforceable in accordance
with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law.
(iv) No Violation. The consummation of the
transactions contemplated by this Agreement and the other
Basic Documents and the fulfillment of the terms hereof and
thereof do not conflict with, result in any breach of any of
the terms and provisions of, nor constitute (with or without
notice or lapse of time) a default under, the articles of
association or bylaws of the Seller, or conflict with or
breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default
under, any indenture, agreement, or other instrument to which
the Seller 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
58
indenture, agreement, or other instrument; nor violate any law
or, to the best of the Seller's knowledge, any order, rule, or
regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over
the Seller or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or, to the Seller's best knowledge,
threatened, before any court, regulatory body, administrative
agency, or other governmental instrumentality having
jurisdiction over the Seller or its properties: (a) asserting
the invalidity of this Agreement, any other Basic Document[,]
the Notes [or the Certificates], (b) seeking to prevent the
issuance of the Notes [or the Certificates] or the
consummation of any of the transactions contemplated by this
Agreement or any other Basic Document, (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, any
other Basic Document[,] [or] the Notes [or the Certificates],
or (d) relating to the Seller and which might adversely affect
the federal or state income tax attributes of the Notes [or
the Certificates].
SECTION 6.2. Liability of Seller; Indemnities. The Seller
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller in such capacity under this Agreement and
shall have no other obligations or liabilities hereunder.
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 [and the Certificates], including any sales, gross
receipts, general corporation, tangible or intangible personal property,
privilege, or license taxes (but not including any taxes asserted with respect
to ownership of the Receivables or federal or other income taxes, including
franchise taxes measured by net income), arising out of the transactions
contemplated by this Agreement and the other Basic Documents, and costs and
expenses in defending against the same.
The Seller shall indemnify, defend, and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee from and against any loss,
liability or expense incurred by reason of (i)
59
the Seller's wilful misfeasance, bad faith, or gross negligence in the
performance of its duties hereunder, or by reason of reckless disregard of the
obligations and duties hereunder and (ii) the Seller's violation of federal or
state securities laws in connection with the registration of the sale of the
Notes [and the Certificates].
Indemnification under this Section 6.2 shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Seller shall have made any indemnity payments to the Issuer, the Owner Trustee
or the Indenture Trustee, respectively, pursuant to this Section 6.2 and the
Issuer, the Owner Trustee or the Indenture Trustee, respectively, thereafter
shall collect any of such amounts from others, the Issuer, the Owner Trustee or
the Indenture Trustee, respectively, shall repay such amounts to the Seller,
without interest.
SECTION 6.3. Merger or Consolidation of Seller. Any
corporation or other entity (i) into which the Seller may be merged or
consolidated, (ii) which may result from any merger, conversion, or
consolidation to which the Seller shall be a party, or (iii) which may succeed
to all or substantially all of the business of the Seller, which corporation or
other entity shall be bound to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement. The Seller shall give prompt written notice of any merger or
consolidation to the Issuer, the Owner Trustee, the Indenture Trustee, the
Servicer and the Rating Agencies.
SECTION 6.4. Limitation on Liability of Seller and Others. The
Seller and any director, officer, employee or agent of the Seller may rely in
good faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder or under any other Basic Documents. The Seller shall not be under any
obligation under this Agreement to appear in, prosecute, or defend any legal
action that shall be unrelated to its obligations under this Agreement or any
other Basic Document, and that in its opinion may involve it in any expense or
liability.
SECTION 6.5. Seller May Own Notes [and Certificates]. The
Seller or any of its Affiliates 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 provided in the definition of "Outstanding" specified in Section 1.1.
Notes [or Certificates] so owned by or pledged to the Seller or any Affiliate
thereof shall have an equal and
60
proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Notes [or Certificates,
as applicable].
ARTICLE VII
THE SERVICER
SECTION 7.1. Representations of Servicer. The Servicer makes
the following representations on which the Issuer shall rely in acquiring the
Receivables. The representations shall speak as of the execution and delivery of
this Agreement (or as of a date a Person (other than the Indenture Trustee)
becomes Servicer pursuant to Section 7.3 or Section 8.2), and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(i) Organization and Good Standing. The Servicer
has been duly organized and is validly existing as a national
banking association or corporation and is in good standing
under the laws of the United States of America or the
jurisdiction of its incorporation, 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, and had at all relevant times, and has, 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 Issuer.
(ii) Power and Authority. The Servicer has the power
and authority to execute and deliver this Agreement and the
Basic Documents to which it is a party and to carry out the
terms thereof; and the execution, delivery, and performance of
this Agreement and the other Basic Documents has been duly
authorized by the Servicer by all necessary action.
(iii) Binding Obligations. This Agreement and the
other Basic Documents to which it is a party constitute legal,
valid, and binding obligations of the Servicer enforceable in
accordance with their respective terms subject, as to
enforcement, to applicable bankruptcy, insolvency,
reorganization, liquidation or other similar laws and
equitable principles relating to or affecting the enforcement
of creditors' rights, whether considered in a proceeding at
law or in equity.
61
(iv) No Violation. The consummation of the
transactions contemplated by this Agreement and the other
Basic Documents and the fulfillment of the terms hereof and
thereof do not conflict with, result in any breach of any of
the terms and provisions of, nor constitute (with or without
notice or lapse of time) a default under, the articles of
association or bylaws of the Servicer, or conflict with or
breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default
under, any indenture, agreement, or other instrument to which
the Servicer 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; nor violate any law or, to the
best of the Servicer's knowledge, any order, rule, or
regulation applicable to the Servicer of any court or of any
federal or state regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over
the Servicer or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or to the Servicer's best knowledge,
threatened, before any court, regulatory body, administrative
agency, or other governmental instrumentality having
jurisdiction over the Servicer or its properties: (a)
asserting the invalidity of this Agreement[,] [or] the Notes
[or the Certificates], (b) seeking to prevent the issuance of
the Notes [or the Certificates] or the consummation of any of
the transactions contemplated by this Agreement or any other
Basic Document, (c) seeking any determination or ruling that
might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or
enforceability of, this Agreement, any other Basic Document[,]
[or] the Notes [or the Certificates], or (d) relating to the
Servicer and which might adversely affect the federal or state
income tax attributes of the Notes [or the Certificates].
(vi) Fidelity Bond. The Servicer maintains a
fidelity bond in such form and amount as is customary for
banks acting as custodian of funds and documents in respect of
retail automotive installment sales contracts.
62
SECTION 7.2. Liability of Servicer; Indemnities. The Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement and shall have no
other obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold
harmless the Issuer, the Owner Trustee, the Indenture Trustee
and the Holders 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.
(ii) The Servicer shall indemnify, defend, and hold
harmless the Issuer, the Owner Trustee and the Indenture
Trustee from and against any taxes that may at any time be
asserted against the Issuer with respect to the transactions
contemplated in this Agreement, including, without limitation,
any sales, gross receipts, general corporation, tangible or
intangible personal property, privilege, or license taxes (but
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 [or the Certificates],
or asserted with respect to ownership of the Receivables or
federal, state or other income taxes, including franchise
taxes measured by net income) arising out of distributions on
the Notes [or the Certificates] and costs and expenses in
defending against the same.
(iii) The Servicer shall indemnify, defend, and hold
harmless the Issuer, the Owner Trustee, the Indenture Trustee
and the Holders 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 the Issuer, the Owner Trustee, the
Indenture Trustee or the Holders through the wilful
misfeasance, gross negligence, or bad faith of the Servicer in
the performance of its duties under this Agreement or by
reason of reckless disregard of its obligations and duties
under this Agreement.
Indemnification under this Section 7.2 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 7.2 and
the recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts to the Servicer,
63
without interest. The indemnification obligations of the Servicer set forth in
this Section 7.2 shall survive the termination of such Servicer with respect to
any act or failure to act which occurs prior to such Servicer's termination. The
provisions of Section 6.7 of the Indenture and Sections 8.1 and 8.2 of the Trust
Agreement with respect to the Servicer's obligations are incorporated by
reference herein.
SECTION 7.3. Merger or Consolidation of Servicer. Any
corporation or other entity (i) into which the Servicer may be merged or
consolidated, (ii) which may result from any merger, conversion, or
consolidation to which the Servicer shall be a party, or (iii) which may succeed
to all or substantially all of the business of the Servicer, which corporation
or other entity shall be bound to perform every obligation of the Servicer
hereunder, shall be the successor to the Servicer 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. The Servicer shall promptly inform the Issuer,
the Owner Trustee, the Indenture Trustee, the Seller and the Rating Agencies in
writing of any such merger or consolidation.
SECTION 7.4. Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of the directors or officers
or employees or agents of the Servicer shall be under any liability to the
Issuer, the Owner Trustee, the Indenture Trustee or the Holders, except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Agreement; 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 wilful misfeasance, gross
negligence, or bad faith in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement. The Servicer and any
director or officer or employee or agent of the Servicer may rely in good faith
on the advice of counsel or on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under this
Agreement.
(b) The Servicer, and any director, or officer, employee or
agent of the Servicer, shall be indemnified by the Issuer and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees
and expenses) incurred in connection with any legal action relating to the
performance of the Servicer's duties under this Agreement, other than (i) any
loss or liability otherwise reimbursable pursuant to this Agreement or the Basic
Documents; (ii) any loss, liability, or expense incurred solely by reason of the
Servicer's wilful misfeasance, negligence, or bad faith in the performance of
its
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duties hereunder or by reason of reckless disregard of its obligations and
duties under this Agreement or the Basic Documents; and (iii) any loss,
liability, or expense for which the Issuer is to be indemnified by the Servicer
under this Agreement or the Basic Documents. Any amounts due the Servicer
pursuant to this Section 7.4 shall be payable on a Distribution Date from
amounts distributable to the Seller from the Reserve Account pursuant to Section
5.6(d).
(c) 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 obligations under this Agreement, and that
in its opinion may involve it in any expense or liability; provided, however,
that the Servicer may undertake any reasonable action that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties to this Agreement and the interests of the Holders 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 Issuer, and
the Servicer shall be entitled to be reimbursed therefor. Any amounts due the
Servicer pursuant to this Section 7.4 shall be payable on a Distribution Date
from amounts distributable to the Seller from the Reserve Account pursuant to
Section 5.6(d).
The Person to be indemnified shall provide the Issuer, the
Owner Trustee and the Indenture Trustee with a certificate and accompanying
Opinion of Counsel requesting indemnification and setting forth the basis for
such request.
SECTION 7.5. Servicer Not To Resign. Except as permitted by
Section 7.3, the Servicer shall not resign from its obligations and duties under
this Agreement except (i) upon determination that the performance of its duties
shall no longer be permissible under applicable law or (ii) in the event of the
appointment of a successor Servicer, upon satisfaction of the Rating Agency
Condition. Notice of any such determination permitting the resignation of the
Servicer shall be communicated to the Issuer, the Indenture Trustee, the Owner
Trustee and the Rating Agencies at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Issuer, the Indenture Trustee and the Owner Trustee concurrently with such
notice. No such resignation shall become effective until the Indenture Trustee
(which shall not be obligated to act as successor Servicer if the Servicer has
resigned for a reason other than that the performance of its duties are no
longer permissible under applicable law) or a successor Servicer shall
65
have assumed the responsibilities and obligations of the Servicer hereunder in
accordance with Section 8.2.
SECTION 7.6. Delegation of Duties. So long as Chase USA acts
as Servicer, the Servicer shall have the right, in the ordinary course of its
business, to delegate any of its duties under this Agreement to any Person. Any
compensation payable to such Person shall be paid by the Servicer from its own
funds and none of the Issuer, the Owner Trustee, the Indenture Trustee or the
Holders shall have any liability to such Person with respect thereto.
Notwithstanding any delegation of duties by the Servicer pursuant to this
Section 7.6, the Servicer shall not be relieved of its liability and
responsibility with respect to such duties, and any such delegation shall not
constitute a resignation within the meaning of Section 7.5. Any agreement that
may be entered into by the Servicer and a Person that provides for any
delegation of the Servicer's duties hereunder to such Person shall be deemed to
be between the Servicer and such Person alone, and the Issuer, the Owner
Trustee, the Indenture Trustee and Holders shall not be deemed parties thereto
and shall have no claims, rights, obligations, duties or liabilities with
respect thereto.
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
SECTION 8.1. Events of Servicing Termination. Any one of the
following events which shall occur and be continuing shall constitute an event
of servicing termination hereunder (each, an "Event of Servicing Termination"):
(i) Any failure by the Servicer to deliver to the
Indenture Trustee the Servicer's Certificate for the related
Collection Period, or any failure by the Servicer to deliver
to the Indenture Trustee, for deposit in any of the Trust
Accounts [or the Certificate Distribution Account,] any
proceeds or payment required to be so delivered under the
terms of the Certificates or the Notes and this Agreement (or,
in the case of a payment or deposit to be made not later than
the Deposit Date, the failure to make such payment or deposit
on such Deposit Date), which failure continues unremedied for
a period of five Business Days after (A) discovery by an
officer of the Servicer or (B) written notice (1) to the
Servicer by the Indenture Trustee or the Owner Trustee or (2)
to the Indenture Trustee or the Owner Trustee, as applicable,
and the Servicer by the Holders of Notes evidencing not less
than 25% of the Outstanding Amount of the Notes [(or,
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if the Notes have been paid in full, by Holders of the
Certificates evidencing not less than 25% of the
Certificate Balance)];
(ii) Failure on the part of the Servicer duly to
observe or to perform in any material respect any other
covenants or agreements of the Servicer set forth in this
Agreement or the Indenture, which failure shall (a) materially
and adversely affect the rights of the Issuer or the Holders,
and (b) continue unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the
same to be remedied, shall have been given (1) to the Servicer
by the Indenture Trustee or the Owner Trustee, or (2) to the
Indenture Trustee or the Owner Trustee, as applicable, and the
Servicer by the Holders of Notes evidencing not less than 25%
of the Outstanding Amount of the Notes [(or, if the Notes have
been paid in full, by Holders of the Certificates evidencing
not less than 25% of the Certificate Balance)];
(iii) The entry of a decree or order by a court or
agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, or
liquidator for the Servicer in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar
proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(iv) The consent by the Servicer to the appointment
of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities,
or similar proceedings of or relating to the Servicer or of or
relating to substantially all of its property; or the Servicer
shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors,
or voluntarily suspend payment of its obligations.
Upon the occurrence of any Event of Servicing Termination as described above,
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 [(or, if the Notes have been paid in full and the Indenture has
been discharged in accordance with its terms, by the Owner
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Trustee or the Holders of Certificates evidencing not less than a majority of
the Certificate Balance)], by notice given in writing to the Servicer (and to
the Indenture Trustee or the Owner Trustee, as applicable, if given by Holders)
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 Certificates, the Notes or the Receivables or otherwise, shall pass to
and be vested in the Indenture Trustee pursuant to this Section 8.1; and,
without limitation, the Indenture Trustee shall be hereby authorized and
empowered to execute and deliver, on behalf of the predecessor 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, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer and the Indenture Trustee in
effecting the termination of the responsibilities and rights of the predecessor
Servicer under this Agreement, including the transfer to the successor Servicer
for administration by it of all cash amounts that shall at the time be held by
the predecessor Servicer for deposit, shall have been deposited by the
predecessor Servicer in the Collection Account, or shall thereafter be received
with respect to a Receivable. All reasonable costs and expenses (including
attorneys' fees and disbursements) incurred in connection with transferring the
Receivable Files to the successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section 8.1 shall be paid
by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses. The Indenture Trustee and the Owner Trustee shall give
written notice of any termination of the Servicer to their related Holders, and
the Indenture Trustee shall give such notice to the Rating Agencies. Neither the
Indenture Trustee nor any successor Servicer shall be deemed to be in default
hereunder by reason of its failure to make, or any delay in making, any
distribution hereunder or any portion thereof which was caused by (i) the
failure of the predecessor Servicer to deliver, or any delay in delivering cash,
documents or records to it, or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the predecessor Servicer.
SECTION 8.2. Indenture Trustee to Act; Appointment of
Successor. Upon the Servicer's receipt of notice of termination pursuant to
Section 8.1 or resignation pursuant to Section 7.5, 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 arising thereafter relating thereto placed on the Servicer by
the terms and provisions of this Agreement. As
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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. Notwithstanding the above, the
Indenture Trustee may, if it shall be unwilling so to act, or shall, if it shall
be legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established financial institution (x) having a net
worth of not less than $100,000,000 as of the last day of the most recent fiscal
quarter for such institution and (y) whose regular business shall include the
servicing of automobile receivables, as successor Servicer under this Agreement;
provided, that the appointment of any such successor Servicer is required to
satisfy the Rating Agency Condition. 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
Servicer shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Servicer under this Agreement. The Indenture
Trustee and such successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Unless the
Indenture Trustee shall be prohibited by law from so acting, the Indenture
Trustee shall not be relieved of its duties as successor Servicer under this
Section 8.2 until the newly appointed successor Servicer shall have assumed the
responsibilities and obligations of the Servicer under this Agreement.
SECTION 8.3. Notification to Noteholders [and
Certificateholders]. Upon any Event of Servicing Termination, or appointment of
a successor Servicer pursuant to this Article VIII, the Owner Trustee shall give
prompt written notice thereof to Certificateholders and the Indenture Trustee
shall give prompt written notice thereof to the Noteholders, at their respective
addresses of record, and to the Rating Agencies.
SECTION 8.4. Waiver of Past Defaults. The Holders of Notes
evidencing at least a majority of the Outstanding Amount of the Notes [(or, the
Holders of Certificates evidencing not less than a majority of the Certificate
Balance, in the case of any Event of Servicing Termination that does not
adversely affect the Indenture Trustee or the Noteholders)] may, on behalf of
all such Holders, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits to or payments from any of the Trust Accounts [or the
Certificate Distribution Account] in accordance with this Agreement. Upon any
such waiver of a past default, such default shall cease to exist, and any Event
of Servicing Termination arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No
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such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived. The Servicer shall
give prompt written notice of any waiver to the Rating Agencies; provided,
however, that the Indenture Trustee or the Owner Trustee shall only be required
to give such notice if a Responsible Officer thereof has actual knowledge of the
related event.
ARTICLE IX
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables; Trust
Termination. (a) As of the last day of any Collection Period as of which the
Pool Balance shall be equal to or less than the Optional Purchase Percentage of
the Original Pool Balance, the Servicer shall have the option to purchase the
Owner Trust Estate, other than the Trust Accounts and the Certificate
Distribution Account. To exercise such option, the Servicer shall notify the
Indenture Trustee, the Owner Trustee[,] [and] the Note Registrar [and the
Certificate Registrar] in writing, no later than the 25th day of the Collection
Period following which purchase is to be effected, shall pay the aggregate
Repurchase Amount for the Receivables (including Defaulted Receivables) and
shall succeed to all interests in, to and under such property. The payment shall
be made in the manner specified in Section 5.4, and shall be distributed
pursuant to Section 5.5. The Indenture Trustee shall not permit the purchase of
the Owner Trust Estate pursuant to this Section 9.1 unless (i) the Servicer's
long-term unsecured debt is rated at the time of such purchase at least "BBB-"
by Standard & Poor's and Fitch (if rated by Fitch) and Baa3 by Moody's or (ii)
the Servicer provides to the Indenture Trustee an Opinion of Counsel in form and
substance satisfactory to the Rating Agencies to the effect that such purchase
will not constitute a fraudulent transfer under applicable state and federal
law.
(b) Upon any sale of the assets of the Issuer pursuant to
Article V of the Indenture, the Servicer shall instruct the Indenture Trustee in
writing to deposit the proceeds from such sale after all payments and reserves
therefrom (including the expenses of such sale) have been made (the "Sale
Proceeds") in the Collection Account. On the Distribution Date on which the Sale
Proceeds are deposited in the Collection Account (or, if such proceeds are not
so deposited on a Distribution Date, on the Distribution Date immediately
following such deposit), the Servicer shall instruct the Indenture Trustee in
writing to make, and the Indenture Trustee shall make, the following deposits
and distributions (after the application on such Distribution Date of the Total
Distribution Amount pursuant to Section 5.5) from the
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Sale Proceeds and any funds remaining on deposit in the Reserve Account
(including the proceeds of any sale of investments therein):
(i) to the Note Distribution Account, any portion
of the [Class A] Noteholders' Interest Distributable Amount
not otherwise deposited into the Note Distribution Account on
such Distribution Date;
(ii) to the Note Distribution Account, the
Outstanding Amount of the [Class A] Notes (after giving effect
to the reduction in the Outstanding Amount of the [Class A]
Notes resulting from the deposits made in the Note
Distribution Account on such Distribution Date);
[(iii) to the Note Distribution Account, any portion
of the Class B Noteholders' Interest Distributable Amount not
otherwise deposited into the Note Distribution Account on such
Distribution Date;]
[(iv) to the Distribution Account, the Outstanding
Amount of the Class B Notes (after giving effect to the
reduction in the Outstanding Amount of the Class B Notes
resulting from the deposits made in the Note Distribution
Account on such Distribution Date);]
(iii)[(v)] to the Certificate Distribution Account, any
portion of the Certificateholders' Interest Distributable
Amount not otherwise deposited into the Certificate
Distribution Account on such Distribution Date; and
(iv)([vi]) to the Certificate Distribution Account, the
Certificate Balance and any Certificateholders' Principal
Carryover Shortfall (after giving effect to the reduction in
the Certificate Balance resulting from the deposits made in
the Certificate Distribution Account on such Distribution
Date).
Any Sale Proceeds remaining after the deposits described above shall be paid to
the Seller.
(c) Notice of any termination of the Issuer shall be given by
the Servicer to the Owner Trustee, the Indenture Trustee and the Rating Agencies
as soon as practicable after the Servicer has received notice thereof.
(d) 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
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rights of the Noteholders hereunder and the Owner Trustee will succeed to the
rights of, and assume the obligations of, the Indenture Trustee pursuant to this
Agreement.
(e) After the payment to the Indenture Trustee, the Owner
Trustee, the Holders and the Servicer of all amounts required to be paid under
this Agreement, the Indenture and the Trust Agreement, any amounts on deposit in
the Reserve Account or the Collection Account shall be paid to the Seller, and
any other assets remaining in the Owner Trust Estate shall be distributed to the
Seller.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment. This Agreement may be amended by the
Seller, the Servicer and the Owner Trustee, with the prior consent of the
Indenture Trustee and prior notice to the Rating Agencies but without prior
notice to or the consent of any of the Holders, (i) to cure any ambiguity, to
correct or supplement any provisions in this Agreement which may be inconsistent
with any other provisions herein, to evidence a succession to the Servicer or
the Seller pursuant to this Agreement or to add 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 Officer's Certificate and/or an Opinion of
Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely and
materially affect the interests of the Issuer or any of the Holders; provided,
further, that the Servicer shall deliver written notice of such changes to each
Rating Agency prior to the execution of any such amendment, or (ii) to effect a
transfer or assignment in compliance with Section 10.6(a) of this Agreement.
Notwithstanding the foregoing, no amendment modifying the provisions of Section
5.5 shall become effective without satisfaction of the Rating Agency Condition.
This Agreement may also be amended from time to time by the
Seller, the Servicer and the Owner Trustee, with the consent of the Indenture
Trustee, the Holders of Certificates evidencing at least a majority of the
Certificate Balance of the Certificates and the consent of the Holders of Notes
evidencing at least a majority of the Outstanding Amount of the Notes, 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 (including effecting a transfer or
assignment in compliance with Section 10.6(a) of this Agreement); provided,
72
however, that no such amendment, except with the consent of the Holders of all
Certificates or Notes, as applicable, then outstanding, shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments of Receivables, or distributions that shall be required
to be made on any Certificate or Note, or (b) reduce the aforesaid percentage of
the Certificate Balance of the Certificates or the Outstanding Amount of the
Notes required to consent to any such amendment.
Promptly after the execution of any amendment or consent
referred to in this Section 10.1, the Owner Trustee shall furnish a copy of such
amendment or consent to the Indenture Trustee and each Noteholder and
Certificateholder and to the Rating Agencies.
It shall not be necessary for the consent of the Indenture
Trustee, the Certificateholders or the Noteholders pursuant to this Section 10.1
to approve the particular form of any proposed amendment or consent, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders or Noteholders shall be subject to such
reasonable requirements as the Indenture Trustee or the Owner Trustee may
prescribe.
Prior to the execution of any amendment to this Agreement, the
Indenture Trustee and the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Indenture Trustee and the Owner
Trustee shall not be obligated to enter into any such amendment which affects
the Indenture Trustee's and the Owner Trustee's own rights, duties or immunities
under this Agreement.
Satisfaction of the Rating Agency Condition is required prior
to the execution of any amendment to this Agreement, other than an amendment
permitted pursuant to clause (i) of the first paragraph of this Section 10.1.
SECTION 10.2. Protection of Title to Owner Trust Estate.
(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 interests of the Issuer and the Indenture Trustee in
the Receivables and in the proceeds thereof. The Servicer shall deliver (or
cause to be delivered) to the Owner Trustee and the Indenture Trustee
file-stamped copies of, or filing receipts for,
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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 in
accordance with paragraph (a) above seriously misleading within the meaning of
ss. 9-402(7) (or any comparable section) of the Relevant UCC, unless it shall
have given the Owner Trustee and the Indenture Trustee at least 30 days prior
written notice thereof.
(c) The Seller and the Servicer shall give the Owner Trustee
and the Indenture Trustee 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 Relevant UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of 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
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables to the
Issuer, the Servicer's master computer records (including archives) that shall
refer to a Receivable indicate clearly, by numerical code or otherwise, that
such Receivable is owned by the Issuer and has been pledged to the Indenture
Trustee. Indication of the Issuer's and Indenture Trustee's interest in a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Receivable shall have been paid in full, repurchased or
assigned pursuant hereto.
(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 a new
or used automobile receivable to any prospective purchaser, creditor, or other
transferee, the Seller or the Servicer, as the case may be, shall give to such
prospective purchaser, creditor, or other transferee computer tapes, records, or
print-outs (including any restored from
74
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.
(g) The Servicer shall permit the Indenture Trustee and the
Owner Trustee and their respective agents upon reasonable notice at any time
during normal business hours which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations to inspect,
audit, and make copies of and abstracts from the Servicer's records regarding
the Receivables.
(h) Upon request, the Servicer shall furnish to the Owner
Trustee or the Indenture Trustee, within five Business Days, a list of all
Receivables by contract number and name of Obligor then held by the Issuer,
together with a reconciliation of such list to the Schedule of Receivables
attached as Schedule A to this Agreement and to each of the Servicer
Certificates indicating removal of Receivables from the Owner Trust Estate.
(i) The Servicer shall deliver to the Owner Trustee
and the Indenture Trustee:
(i) upon the execution and delivery of this
Agreement, an Opinion of Counsel either (a) stating that, in
the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Receivables, and
reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b)
stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest; and
(ii) on or before March 31 of each year, commencing
with March 31, ____, an Opinion of Counsel, dated as of such
date, 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. Notwithstanding the provisions of
Section 10.4, such Opinion of Counsel may be sent by regular
non-certified mail, and such
75
mailed opinion shall be deemed delivered when so mailed.
(j) The Seller shall, to the extent required by applicable
law, cause the Certificates and the Notes to be registered with the Securities
and Exchange Commission pursuant to Section 12(b) or Section 12(g) of the
Exchange Act within the time periods specified in such sections.
(k) For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 10.3. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 10.4. Notices. All demands, notices, and
communications under this Agreement shall be in writing, personally delivered 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, c/o Chase Automotive
Finance Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention:
Financial Controller, or at such other address as shall be designated by the
Seller in a written notice to the Indenture Trustee, (b) in the case of the
Servicer, c/o Chase Manhattan Automotive Finance Corporation, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Financial Controller, or at such other
address as shall be designated by the Servicer in a written notice to the
Indenture Trustee, (c) in the case of the Indenture Trustee, at
_________________________________________________, Attention:
______________________, [and] (d) in the case of the Issuer and the Owner
Trustee, at c/o __________________________
________________________________________________________________, Attention:
Corporate Trust Administration [and (e) in the case of the Luxembourg Stock
Exchange, ▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇,
▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇]. Any notice required or permitted to be mailed to a Holder
shall be given by first class mail, postage prepaid, at the address of record of
such Holder. Any notice to a Holder so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Holder shall receive such notice.
SECTION 10.5. Severability of Provisions. If any one or more
of the covenants, agreements, provisions, or terms of this Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be
76
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 Certificates or of the Notes or
the rights of the Holders thereof.
SECTION 10.6. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 6.3, 7.3, 7.5 and 8.2,
neither the Seller nor the Servicer may assign all, or a portion of, its rights,
obligations and duties under this Agreement unless such transfer or assignment
satisfies the Rating Agency Condition. In the event of a transfer or assignment
pursuant to this Section 10.6, the Rating Agencies shall be provided with notice
of such transfer or assignment.
SECTION 10.7. Certificates and Notes Nonassessable and Fully
Paid. The interests represented by the Certificates and Notes shall be
nonassessable for any losses or expenses of the Issuer or for any reason
whatsoever, and, upon authentication thereof by the Indenture Trustee and the
Owner Trustee pursuant to the Trust Agreement and the Indenture, respectively,
each Certificate and Note shall be deemed fully paid.
SECTION 10.8. Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, and their
respective successors and permitted assigns. The Administrator, the Owner
Trustee, individually and on behalf of the Certificateholders, and the Indenture
Trustee, individually and on behalf of the Noteholders are third-party
beneficiaries to this Agreement and are entitled to the rights and benefits
hereunder and may enforce the provisions hereof as it were a party hereto.
Except as otherwise provided in this Agreement, no other person will have any
right or obligation hereunder.
SECTION 10.9. Assignment to Indenture Trustee. The Seller
hereby acknowledges and consents to any mortgage, pledge, assignment and grant
of a security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest of
the Issuer in, to and under the Receivables and the other property constituting
the Owner Trust Estate and/or the assignment of any or all of the Issuer's
rights and obligations hereunder to the Indenture Trustee.
SECTION 10.10. Limitation of Liability of Owner Trustee and
Indenture Trustee. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Wilmington Trust Company not
in its individual capacity but solely in its capacity as Owner Trustee of the
Issuer, and in no event shall Wilmington Trust Company in its individual
capacity
77
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 acknowledged and accepted by
____________________________________________ not in its individual capacity but
solely as Indenture Trustee, and in no event shall
____________________________________________ 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.
78
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
CHASE MANHATTAN BANK USA, N.A.,
as Seller and Servicer
By
----------------------------
Name:
Title:
CHASE MANHATTAN AUTO OWNER TRUST,
199_ -__, as Issuer
By: [______________________],
not in its individual
capacity but solely as
Owner Trustee on behalf
of the Issuer
By:_________________________
Name:
Title:
Acknowledged and Accepted:
[------------------------------------------]
not in its individual capacity,
but solely in its capacity
as Indenture Trustee
By:_________________________
Name:
Title:
SCHEDULE A
LIST OF RECEIVABLES
Delivered to the Owner Trustee and the Indenture Trustee
on the Closing Date.
SCHEDULE B
Location of Receivable Files
The Chase Manhattan Bank
20 Clinton Avenue South
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▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Iron Mountain
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▇.▇. ▇▇▇ ▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Chase Manhattan Automotive Finance Corporation
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▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT A
[FORM OF SERVICER'S CERTIFICATE]
A-1
EXHIBIT B
[FORM OF CERTIFICATEHOLDER AND NOTEHOLDER REPORT]
B-1