==============================================================================
Conformed Copy
SALE AND SERVICING AGREEMENT
between
PREMIER AUTO TRUST 1999-3
Issuer,
and
CHRYSLER FINANCIAL COMPANY L.L.C.,
Seller and Servicer
Dated as of June 1, 1999
==============================================================================
Table of Contents
Page
----
ARTICLE I
Definitions
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Other Definitional Provisions...............................14
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables...................................14
SECTION 2.02. Conveyance of Fixed Value Payments and
Fixed Value Finance Charges...............................15
SECTION 2.03. Fixed Value Securities......................................15
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of Seller with
Respect to the Receivables................................17
SECTION 3.02. Repurchase upon Breach......................................20
SECTION 3.03. Custody of Receivable Files.................................21
SECTION 3.04. Duties of Servicer as Custodian.............................21
SECTION 3.05. Instructions; Authority To Act..............................22
SECTION 3.06. Custodian's Indemnification.................................22
SECTION 3.07. Effective Period and Termination............................22
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer..........................................23
SECTION 4.02. Collection and Allocation of Receivable Payments............23
SECTION 4.03. Realization upon Receivables................................24
SECTION 4.04. Physical Damage Insurance...................................24
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles......24
SECTION 4.06. Covenants of Servicer.......................................24
SECTION 4.07. Purchase of Receivables upon Breach.........................24
SECTION 4.08. Servicing Fee...............................................25
SECTION 4.09. Servicer's Certificate......................................25
SECTION 4.10. Annual Statement as to Compliance; Notice of Default........25
SECTION 4.11. Annual Independent Certified Public Accountants' Report.....26
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables.....................................26
SECTION 4.13. Servicer Expenses...........................................26
SECTION 4.14. Appointment of Subservicer..................................26
i
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Deposit Account............................27
SECTION 5.02. Collections.................................................29
SECTION 5.03. Application of Collections..................................29
SECTION 5.04. Additional Deposits.........................................30
SECTION 5.05. Distributions...............................................30
SECTION 5.06. Reserve Account.............................................31
SECTION 5.07. Statements to Noteholders and Certificateholders............32
SECTION 5.08. Net Deposits................................................33
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller...................................33
SECTION 6.02. Corporate Existence.........................................34
SECTION 6.03. Liability of Seller; Indemnities............................35
SECTION 6.04. Merger or Consolidation of, or Assumption of
Obligations of, Seller....................................36
SECTION 6.05. Limitation on Liability of Seller and Others................36
SECTION 6.06. Seller May Own Notes........................................37
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer.................................37
SECTION 7.02. Indemnities of Servicer.....................................38
SECTION 7.03. Merger or Consolidation of, or Assumption of
Obligations of, Servicer..................................39
SECTION 7.04. Limitation on Liability of Servicer and Others..............39
SECTION 7.05. CFC Not To Resign as Servicer...............................40
ARTICLE VIII
Default
SECTION 8.01. Servicer Default............................................40
SECTION 8.02. Appointment of Successor....................................41
SECTION 8.03. Notification to Noteholders and Certificateholders..........42
SECTION 8.04. Waiver of Past Defaults.....................................42
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables........................43
ii
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment...................................................43
SECTION 10.02. Protection of Title to Trust................................44
SECTION 10.03. Notices.....................................................46
SECTION 10.04. Assignment by the Seller or the Servicer....................46
SECTION 10.05. Limitations on Rights of Others.............................47
SECTION 10.06. Severability................................................47
SECTION 10.07. Separate Counterparts.......................................47
SECTION 10.08. Headings....................................................47
SECTION 10.09. Governing Law...............................................47
SECTION 10.10. Assignment by Issuer........................................47
SECTION 10.11. Nonpetition Covenants.......................................47
SECTION 10.12. Limitation of Liability of Owner Truste
and Indenture Trustee.....................................48
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
EXHIBIT A Form of Distribution Statement to Noteholders..................A-1
EXHIBIT B Form of Servicer's Certificate.................................B-1
iii
SALE AND SERVICING AGREEMENT dated as of June 1, 1999, between
PREMIER AUTO TRUST 1999-3, a Delaware business trust (the
"Issuer"), and CHRYSLER FINANCIAL COMPANY L.L.C., a Michigan
limited liability company, as seller and servicer.
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with automobile retail installment sale contracts
generated by Chrysler Financial Company L.L.C. in the ordinary course of
business; and
WHEREAS Chrysler Financial Company L.L.C. is willing to sell such
receivables to, and to service such receivables on behalf of, the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Amortizing Payment" means, with respect to each Fixed Value
Receivable and each Collection Period prior to the date on which the Fixed
Value Payment relating to such Receivable is due, the amount specified in the
applicable Contract in the payment schedule as the "Amount of Each Payment",
except that in the case of a prepayment, liquidation or repurchase by the
Seller or purchase by the Servicer, the Amortizing Payment shall be equal to
the aggregate "Amount of Each Payment" that has not yet been paid for the
period through and including the last payment prior to the date when the
Fixed Value Payment is due less the amount of the unearned finance charges
under the related Contract allocable to such amount in accordance with the
Servicer's customary procedures.
"Amortizing Payment Finance Charge" means, with respect to each
payment collected on a Fixed Value Receivable, the finance charge included in
such payment (as determined in accordance with the Servicer's customary
procedures) that is allocable to the related Principal Balance.
"Amount Financed" means (i) with respect to a Standard Receivable,
the amount advanced under such Standard Receivable toward the purchase price
of the Financed Vehicle and any related costs, exclusive of any amount
allocable to the premium of force-placed physical damage insurance covering
the Financed Vehicle; and (ii) with respect to a Fixed Value Receivable, an
amount equal to the present value of the fixed level payment monthly
installments (not including the amount designated as the Fixed Value Payment)
under such Fixed Value Receivable, assuming that each payment is made on the
due date in the month in which such payment is due, discounted at the APR for
such Fixed Value Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of finance charges stated in the related Contract.
"Basic Documents" means the Indenture, the Trust Agreement, the
Administration Agreement and the Purchase Agreement.
"Cash Release Amount" means on each Payment Date during the
Release Period, the greater of:
(i) D - [S - (P x 95.5%)]
or
(ii) $0.00
where
D= the sum of (a) principal collections and principal
payments contained in the Total Distribution Amount for
such Payment Date and (b) the excess, if any, of (x) the
interest collections, interest payments and investment
earnings contained in such Total Distribution Amount
over (y) the sum of (A) the Servicing Fee for such
Payment Date and any unpaid Servicing Fees for prior
Payment Dates, (B) accrued and unpaid interest on the
Notes and (C) the amount, if any, required to be
deposited into the Reserve Account pursuant to Section
5.05(a)(ii)(B);
S= the sum of the aggregate Outstanding Amount of the
Notes and the Certificate Balance of the
Overcollateralization Certificates before giving effect
to payments made on the Notes and Overcollateralization
Certificates on such Payment Date.
P= the Related Pool Balance
provided that on the First Release Payment Date the Cash Release Amount shall
be reduced to the extent, if any, that the funds included in D are applied to
reduce the Outstanding Amount of the Class A-1 Notes to zero; provided
further that on the Last Release Payment Date the Cash Release Amount shall
equal the Initial Overcollateralization Amount less the aggregate of the Cash
Release Amounts for all prior Payment Dates.
"Certificate Balance" has the meaning assigned to such term in the
Trust Agreement
"Certificateholders" has the meaning assigned to such term in the
Trust Agreement.
"Certificates" means the Trust Certificates and the
Overcollateralization Certificates.
"CFC" means Chrysler Financial Company L.L.C., a Michigan limited
liability company, or its successors.
"Class" means any one of the classes of Notes.
2
"Class A-1 Final Scheduled Payment Date" means the March 2000
Payment Date.
"Class A-1 Initial Principal Balance" shall mean $280,000,000.00.
"Class A-1 Noteholder" means the Person in whose name a Class A-1
Note is registered in the Note Register.
"Class A-2 Final Scheduled Payment Date" means the February 2002
Payment Date.
"Class A-2 Noteholder" means the Person in whose name a Class A-2
Note is registered in the Note Register.
"Class A-3 Final Scheduled Payment Date" means the April 2003
Payment Date.
"Class A-3 Noteholder" means the Person in whose name a Class A-3
Note is registered in the Note Register.
"Class A-4 Final Scheduled Payment Date" means the March 2004
Payment Date.
"Class A-4 Noteholder" means the Person in whose name a Class A-4
Note is registered in the Note Register.
"Collection Period" means a calendar month. The "related
Collection Period" for a Payment Date is the Collection Period ending
immediately prior to such Payment Date. Unless otherwise specified, any
amount stated as of the last day of a Collection Period or as of the first
day of a Collection Period shall give effect to the following calculations as
determined as of the close of business on such last day: (1) all applications
of collections, and (2) all distributions to be made on the related Payment
Date.
"Company" means Premier Receivables L.L.C., a Michigan limited
liability company, and any successor in interest or, if the Rights (as
defined in the Purchase Agreement) have been assigned to a Person that
becomes a transferee in accordance with Section 5.05 of the Purchase
Agreement, such transferee Person and any successor in interest.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means the principal office of the
Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution of
this Agreement is located at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
XX 00000-0000; Corporate Trust Services Division; or at such other address as
the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (of which address such successor Indenture
Trustee will notify the Noteholders and the Seller).
"Cutoff Date" means June 7, 1999
3
"Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the related Receivable to CFC under an existing
agreement between such dealer and CFC.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i)
of the UCC and are susceptible of physical delivery, transfer
thereof to the Indenture Trustee or its nominee or custodian by
physical delivery 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, and,
with respect to a certificated security (as defined in Section
8-102 of the UCC) transfer thereof (i) by delivery of such
certificated security endorsed to, or registered in the name of,
the Indenture Trustee or its nominee or custodian or endorsed in
blank to a securities intermediary (as defined in Section 8-102 of
the UCC) and the making by such securities intermediary of entries
on its books and records identifying such certificated securities
(as defined in Section 8-102 of the UCC) of the Indenture Trustee
or its nominee or custodian or (ii) by delivery thereof to a
"clearing corporation" (as defined in Section 8-102 of the UCC)
and the making by such clearing corporation of appropriate entries
on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of a
securities intermediary by the amount of such certificated
security, the identification by the clearing corporation on its
books and records that the certificated securities are credited to
the sole and exclusive securities account of the securities
intermediary, the maintenance of such certificated securities by
such clearing corporation or a custodian or the nominee of such
clearing corporation subject to the clearing corporation's
exclusive control, and the making by such securities intermediary
of entries on its books and records identifying such certificated
securities as being credited to the securities account of the
Indenture Trustee or its nominee or custodian (all of the
foregoing, "Physical Property"), and, in any event, any such
Physical Property in registered form shall be in the name of the
Indenture Trustee or its nominee or custodian; and such additional
or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Trust
Account Property (as defined herein) 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 securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the
Federal National Mortgage Association that are book-entry
securities held through the Federal Reserve System pursuant to
Federal book-entry regulations, the following procedures, all in
accordance with applicable law, including applicable Federal
regulations and Articles 8 and 9 of the UCC: book-entry
registration of such Trust Account Property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a
securities intermediary which is also a "depository" pursuant to
applicable Federal regulations; the identification by the Federal
Reserve Bank of such book-entry securities on its record being
credited to the securities intermediary's securities account; the
making by such securities intermediary of entries in its books and
records identifying such book-entry security held through the
Federal
4
Reserve System pursuant to Federal book-entry regulations as being
credited to the Indenture Trustee's securities account; and such
additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such
Trust 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 Trust Account Property that
is an uncertificated security under Article 8 of the UCC and that
is not governed by clause (a) above, registration on the books and
records of the issuer thereof in the name of the securities
intermediary, the sending of a confirmation by the securities
intermediary of the purchase by the Indenture Trustee or its
nominee or custodian of such uncertificated security, the making
by such securities intermediary of entries on its books and
records identifying such uncertificated certificates as belonging
to the Indenture Trustee or its nominee or custodian.
"Deposit Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a)(i).
"Depositor" means the Seller in its capacity as Depositor under
the Trust Agreement.
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank), having
corporate trust powers and acting as trustee for funds deposited in such
account, so long as any of the securities of such depository institution
shall have a credit rating from each Rating Agency in one of its generic
rating categories that signifies investment grade.
"Eligible Institution" means (a) a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a
foreign bank), which (i) has either (A) a long-term unsecured debt rating of
AAA or better by Standard & Poor's and A1 or better by Moody's or (B) a
certificate of deposit rating of A-1+ by Standard & Poor's and P-1 or better
by Moody's, or any other long-term, short-term or certificate of deposit
rating acceptable to the Rating Agencies and (ii) whose deposits are insured
by the FDIC or (b) the corporate trust department of the Indenture Trustee,
the Owner Trustee or The Chase Manhattan Bank. If so qualified, the Indenture
Trustee, the Owner Trustee or The Chase Manhattan Bank may be considered an
Eligible Institution for the purposes of clause (b) of this definition.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed
as to the full and timely payment by, the United States of
America;
5
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under
the laws of the United States of America or any state thereof (or
any domestic branch of a foreign bank) and subject to supervision
and examination by Federal or State banking or depository
institution authorities; provided, however, that at the time of
the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations
(other than such obligations the rating of which is based on the
credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each of the
Rating Agencies in the highest applicable rating category granted
thereby;
(c) commercial paper, variable amount notes or other short
term debt obligations having, at the time of the investment or
contractual commitment to invest therein, a rating from each of
the Rating Agencies in the highest applicable rating category
granted thereby;
(d) investments in money market or common trust funds having
a rating from each of the Rating Agencies in the highest
applicable rating category granted thereby (including funds for
which the Indenture Trustee or the Owner Trustee or any of their
respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United
States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of
the United States of America, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (b);
(g) repurchase obligations with respect to any security or
whole loan, entered into with (i) a depository institution or
trust company (acting as principal) described in clause (b) above
(except that the rating referred to in the proviso in such clause
(b) shall be A-1 or higher in the case of Standard & Poor's) (such
depository institution or trust company being referred to in this
definition as a "financial institution"), (ii) a broker/dealer
(acting as principal) registered as a broker or dealer under
Section 15 of the Exchange Act (a "broker/dealer") the unsecured
short-term debt obligations of which are rated P-1 by Moody's and
at least A-1 by Standard & Poor's at the time of entering into
such repurchase obligation (a "rated broker/dealer"), (iii) an
unrated broker/dealer (an "unrated broker/dealer"), acting as
principal, that is a wholly-owned subsidiary of a non-bank holding
company the unsecured short-term debt obligations of which are
rated P-1 by Moody's and at least A-1 by Standard & Poor's at the
time of entering into such repurchase obligation (a "Rated Holding
Company") or (iv) an unrated subsidiary (a "Guaranteed
Counterparty"), acting as principal, that is a wholly-owned
subsidiary of a direct or indirect parent Rated Holding Company,
which guarantees such subsidiary's obligations under such
repurchase agreement; provided that the following conditions are
satisfied:
6
(A) the aggregate amount of funds invested in repurchase
obligations of a financial institution, a rated
broker/dealer, an unrated broker/dealer or Guaranteed
Counterparty in respect of which the Standard & Poor's
unsecured short-term ratings are A-1 (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such rating
being that of the related Rated Holding Company) shall not
exceed 20% of the sum of the then outstanding principal
balance of the Notes (there being no limit on the amount of
funds that may be invested in repurchase obligations in
respect of which such Standard & Poor's rating is A-1+ (in
the case of an unrated broker/dealer or Guaranteed
Counterparty, such rating being that of the related Rated
Holding Company));
(B) in the case of the amount allocated to the Reserve
Account, the rating from Standard & Poor's in respect of the
unsecured short-term debt obligations of the financial
institution, rated broker/dealer, unrated broker/dealer or
Guaranteed Counterparty (in the case of an unrated
broker/dealer or Guaranteed Counterparty, such rating being
that of the related Rated Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within 30 days
of the date on which the Indenture Trustee or the Issuer, as
applicable, enters into such repurchase obligation;
(D) the repurchase obligation shall not be subordinated
to any other obligation of the related financial institution,
rated broker/dealer, unrated broker/dealer or Guaranteed
Counterparty;
(E) the collateral subject to the repurchase obligation
is held, in the appropriate form, by a custodial bank on
behalf of the Indenture Trustee or the Issuer, as applicable;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a
Guaranteed Counterparty, the following conditions shall also
be satisfied:
(i) the Indenture Trustee or the Issuer, as
applicable, shall have received an opinion of counsel
(which may be in-house counsel) to the effect that the
guarantee of the related Rated Holding Company is a
legal, valid and binding agreement of the Rated Holding
Company, enforceable in accordance with its terms,
subject as to enforceability to bankruptcy, insolvency,
reorganization and moratorium or other similar laws
affecting creditors' rights generally and to general
equitable principles;
7
(ii) the Indenture Trustee or the Issuer, as
applicable, shall have received (x) an incumbency
certificate for the signer of such guarantee, certified
by an officer of such Rated Holding Company and (y) a
resolution, certified by an officer of the Rated
Holding Company, of the board of directors (or
applicable committee thereof) of the Rated Holding
Company authorizing the execution, delivery and
performance of such guarantee by the Rated Holding
Company;
(iii) the only conditions to the obligation of
such Rated Holding Company to pay on behalf of the
Guaranteed Counterparty shall be that the Guaranteed
Counterparty shall not have paid under such repurchase
obligation when required (it being understood that no
notice to, demand on or other action in respect of the
Guaranteed Counterparty is necessary) and that the
Indenture Trustee or the Issuer shall make a demand on
the Rated Holding Company to make the payment due under
such guarantee;
(iv) the guarantee of the Rated Holding Company
shall be irrevocable with respect to such repurchase
obligation and shall not be subordinated to any other
obligation of the Rated Holding Company; and
(v) each of Standard & Poor's and Moody's has
confirmed in writing to the Indenture Trustee or
Issuer, as applicable, that it has reviewed the form of
the guarantee of the Rated Holding Company and has
determined that the issuance of such guarantee will not
result in the downgrade or withdrawal of the ratings
assigned to the Notes.
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide
that, upon any failure to maintain such
overcollateralization, the repurchase obligation shall become
due and payable, and unless the repurchase obligation is
satisfied immediately, the collateral subject to the
repurchase agreement shall be liquidated and the proceeds
applied to satisfy the unsatisfied portion of the repurchase
obligation;
(h) any other investment with respect to which the Issuer or
the Servicer has received written notification from the Rating
Agencies that the acquisition of such investment as an Eligible
Investment will not result in a withdrawal or downgrading of the
ratings on the Notes.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Maturity Date" means June 30, 2005.
"Financed Vehicle" means an automobile or light-duty truck,
together with all accessions thereto, securing an Obligor's indebtedness
under the respective Standard Receivable or Fixed Value Receivable.
8
"First Release Payment Date" means the Payment Date on which the
Class A-1 Notes have been paid in full.
"Fixed Value Finance Charge" means, with respect to each payment
collected on a Fixed Value Receivable, the finance charge included in such
payment (as determined in accordance with the Servicer's customary
procedures) that is allocable to the related Fixed Value Payment.
"Fixed Value Payment" means, with respect to each Fixed Value
Receivable, the amount specified on the applicable Contract as the "Amount of
Fixed Value Payment" reduced (i) in the case of a prepayment or repurchase,
by the amount of the unearned finance charges under the Contract allocable to
such payment in accordance with the Servicer's customary procedures and (ii)
in the case of a liquidation, by the excess of Liquidation Proceeds collected
by the Servicer over the Amortizing Payment on such date.
"Fixed Value Receivable" means any Contract listed on Schedule A
(which Schedule may be in the form of microfiche) that provides for
amortization of the loan over a series of fixed level payment monthly
installments in accordance with the simple interest method, but also requires
a final payment that is greater than the scheduled monthly payments and is
due after payment of such scheduled monthly payments and that may be made by
(i) payment in full in cash of a fixed value amount, (ii) return of the
Financed Vehicle to the Servicer provided certain conditions are satisfied or
(iii) refinancing the final fixed value payment in accordance with specified
conditions.
"Fixed Value Securities" has the meaning assigned to such term in
Section 2.03.
"Indenture" means the Indenture dated as of June 1, 1999, between
the Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee
under the Indenture, its successors in interest and any successor trustee
under the Indenture.
"Initial Overcollateralization Amount" means $60,288,512.67.
"Insolvency Event" means, with respect to 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, 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 by such Person of any general assignment for the benefit of
9
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.
"Investment Earnings" means, with respect to any Payment Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Deposit Account to be applied on such Payment Date pursuant to
Section 5.01(b).
"Issuer" means Premier Auto Trust 1999-3.
"Last Release Payment Date" means the Payment Date on which the
aggregate amount of the Cash Release Amounts released from the lien of the
Indenture pursuant to Section 5.05(a)(ii)(D) on such Payment Date and all
prior Payment Dates is equal to the Initial Overcollateralization Amount.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of
any act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the
Servicer through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source on
a Liquidated Receivable during the Collection Period in which such Receivable
became a Liquidated Receivable, net of the sum of any amounts expended by the
Servicer in connection with such liquidation and any amounts required by law
to be remitted to the Obligor on such Liquidated Receivable.
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
"Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 Notes.
"Obligor" on a Receivable means the purchaser or co-purchasers of
the Financed Vehicle and any other Person who owes payments under the
Receivable.
"Officers' Certificate" means a certificate signed by (a) the
chairman of the board, any vice president, the controller or any assistant
controller and (b) the president, a treasurer, assistant treasurer, secretary
or assistant secretary of the Seller, the Company or the Servicer, as
appropriate.
"OMSC" means Overseas Military Sales Corporation, or its
successor.
"OMSC Receivable" means any Standard Receivable acquired by CFC
from OMSC.
"Opinion of Counsel" means one or more written opinions of
counsel, who may be an employee of or counsel to the Seller, the Company or
the Servicer, which counsel shall be acceptable to the Indenture Trustee, the
Owner Trustee or the Rating Agencies, as applicable.
10
"Original Pool Balance" means $1,567,492,512.67.
"Overcollateralization Amount" means, with respect to any Payment
Date, (i) the Related Pool Balance minus (ii) the Securities Amount.
"Overcollateralization Certificates" has the meaning assigned to
such term in the Trust Agreement.
"Overcollateralization Percentage" means, with respect to any
Payment Date, the percentage derived from the fraction, the numerator of
which is the Overcollateralization Amount for such Payment Date and the
denominator of which is the Related Pool Balance.
"Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under the
Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.
"Payment Date" means, with respect to each Collection Period, the
eighth day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on July 8, 1999.
"Payment Determination Date" means, with respect to any Payment
Date, the Business Day immediately preceding such Payment Date.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day
of a Collection Period, the aggregate Principal Balance of the Receivables as
of such day (excluding Purchased Receivables and Liquidated Receivables).
"Principal Balance" of a Receivable, as of the close of business
on any date of determination, means the Amount Financed minus the sum of (i)
the portion of all payments made by or on behalf of the related Obligor on or
prior to such day and allocable to principal using the Simple Interest Method
and (ii) any payment of the Purchase Amount with respect to the Receivable
allocable to principal.
"Purchase Agreement" means the Purchase Agreement dated as of
June 1, 1999, between the Seller and the Company.
"Purchase Amount" means the amount, as of the close of business on
the last day of a Collection Period, required to prepay in full a Receivable
under the terms thereof including interest to the end of the month of
purchase.
"Purchased Receivable" means a Receivable purchased as of the
close of business on the last day of a Collection Period by the Servicer
pursuant to Section 4.07 or by the Seller pursuant to Section 3.02.
11
"Rating Agency" means Moody's and Standard & Poor's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Seller, notice of which designation shall be given to the Indenture Trustee,
the Owner Trustee and the Servicer. Any notice required to be given to a
Rating Agency pursuant to this Agreement shall also be given to Fitch IBCA,
Inc. and Duff & Xxxxxx Credit Rating Co., although, except as set forth
above, neither shall be deemed to be a Rating Agency for any purposes of this
Agreement.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Company, the
Servicer, the Owner Trustee and the Indenture Trustee in writing that such
action will not result in a reduction or withdrawal of the then current
rating of the Notes.
"Receivable" means (i) any Standard Receivable and (ii) the
Amortizing Payments with respect to any Fixed Value Receivable.
"Receivable Files" means the documents specified in Section 3.03.
"Recoveries" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Related Pool Balance" means, with respect to any Payment Date,
the Pool Balance as of the end of the related Collection Period.
"Release Period" means the period from and including the First
Release Payment Date to and including the Last Release Payment Date.
"Reserve Account" means the account that is part of the Deposit Account and
is designated as such, established and maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means the initial deposit of
cash and Eligible Investments in the amount of $3,768,010.00 made by the
Seller into the Deposit Account on the Closing Date.
"Securities Amount" means, with respect to any Payment Date, the
sum of the aggregate Outstanding Amount of the Notes and the Certificate
Balance of the Overcollateralization Certificates after giving effect to
payments of principal made on the Notes and the Overcollateralization
Certificates on such Payment Date.
"Seller" means CFC and its successors in interest to the extent
permitted hereunder.
"Servicer" means CFC, as the servicer of the Receivables, and each
successor to CFC (in the same capacity) pursuant to Section 7.03 or 8.02.
12
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the
Servicer delivered pursuant to Section 4.09, substantially in the form of
Exhibit B.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08.
"Servicing Fee Rate" means 1/12 of 1.00% per month.
"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 a fraction, the numerator of which is the number of days elapsed since the
preceding payment of interest was made, the denominator of which is 365, and
the remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Amount" means, with respect to any Payment
Date, an amount equal to the Reserve Account Initial Deposit.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., or its successor.
"Standard Receivable" means any Contract listed on Schedule A
(which Schedule may be in the form of microfiche) that is not a Fixed Value
Receivable.
"Total Distribution Amount" means, with respect to any Payment
Date, the sum of the following amounts, without duplication, with respect to
the Receivables in respect of the Collection Period preceding such Payment
Date: (a) all collections on Receivables, (b) all Liquidation Proceeds of
Receivables that became Liquidated Receivables in accordance with the
Servicer's customary servicing procedures, (c) all Recoveries, (d) the
Purchase Amount of each Receivable that became a Purchased Receivable, (e)
partial prepayments relating to refunds of extended warranty protection plan
costs or of physical damage, credit life or disability insurance policy
premiums, but only to the extent that such costs or premiums were financed by
the respective Obligor as of the date of the related Contract, and (f)
Investment Earnings for the related Collection Period.
"Trust" means the Issuer.
"Trust Account Property" means the Deposit Account, all amounts
and investments held from time to time in the Deposit 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.
13
"Trust Agreement" means the Amended and Restated Trust Agreement
dated as of June 1, 1999, among the Seller, the Company and the Owner
Trustee.
"Trust Certificates" has the meaning assigned to such term in the
Trust Agreement.
"Trust Officer" means, in the case of the Indenture Trustee, any
Officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, 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 of such officer's knowledge of and familiarity
with the particular subject and, with respect to the Owner Trustee, any
officer in the Corporate Trust Administration Department of the Owner Trustee
with direct responsibility for the administration of the Trust Agreement and
the Basic Documents on behalf of the Owner Trustee.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the
extent that the definitions of accounting terms in this Agreement or in any
such certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document
shall control.
(d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
14
(g) For all purposes of this Agreement and the Basic Documents,
interest with respect to all Classes of Notes other than the Class A-1 Notes
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months; and interest with respect to the Class A-1 Notes shall be computed on
the basis of the actual number of days in each applicable Class A-1 Interest
Accrual Period divided by 360.
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of the Seller of (x) $1,164,591,284.24
(which amount represents the Original Pool Balance less (i) the Reserve
Account Initial Deposit, (ii) the Initial Overcollateralization Amount, (iii)
the Class A-1 Initial Principal Balance, (iv) the Initial Certificate Balance
(as defined in the Trust Agreement) and (v) certain other discounts and
expenses of the Issuer), and (y) the Certificates, the Seller does hereby
sell, transfer, assign, set over and otherwise convey to the Issuer, without
recourse (subject to the obligations of the Seller set forth herein), all
right, title and interest of the Seller in and to:
(a) the Receivables and all moneys received thereon on and
after June 7, 1999;
(b) the security interests in the Financed Vehicles granted
by Obligors pursuant to the Receivables and any other interest of
the Seller in the Financed Vehicles;
(c) any proceeds with respect to the Receivables from claims
on any physical damage, credit life or disability insurance
policies covering Financed Vehicles or Obligors;
(d) any proceeds from recourse to Dealers with respect to
Receivables with respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual
payment in full is unlikely;
(e) any Financed Vehicle that shall have secured a Receivable
and shall have been acquired by or on behalf of the Seller, the
Servicer, the Company or the Trust;
(f) all right, title and interest in all funds on deposit
from time to time in the Deposit Account, including the Reserve
Account Initial Deposit, and in all investments and proceeds
thereof (including all income thereon); and
(g) the proceeds of any and all of the foregoing.
15
The Seller hereby directs the Issuer to issue the
Certificates to the Company. The Seller and the Issuer acknowledge
that $280,000,000.00 of the purchase price of the Receivables owed
by the Issuer to the Seller pursuant to this Section 2.01 (which
amount is not included in the first sentence of this Section 2.01)
shall be offset by the Issuer against delivery of the Class A-1
Notes to the Seller.
SECTION 2.02. Conveyance of Fixed Value Payments and Fixed Value
Finance Charges. Promptly following the transfer to the Issuer of the
Receivables on the Closing Date, the Issuer shall, without further action
hereunder, be deemed to sell, transfer, assign, set over and otherwise convey
to the Seller, effective as of the Closing Date, without recourse,
representation or warranty, all the right, title and interest of the Issuer
in and to the Fixed Value Payments and the Fixed Value Finance Charges, all
monies due and to become due and all amounts received with respect thereto
and all proceeds thereof, subject to Section 5.03(b).
SECTION 2.03. Fixed Value Securities. (a) At any time after the
Closing Date, at the option of the Seller and upon 10 days prior notice to
the Owner Trustee and the Indenture Trustee, the Seller will be permitted to
sell to the Issuer, and the Issuer shall be obligated to purchase from the
Seller (subject to the availability of funds), all or any portion of the
Fixed Value Payments and/or Fixed Value Finance Charges, subject to the terms
and conditions described below. Upon any such sale, (x) the Seller and the
Owner Trustee will enter into an amendment to this Agreement and the Basic
Documents to provide for, at the election of the Seller, the issuance of
certificates representing ownership interests in the Trust to the extent of
such Fixed Value Payments and/or Fixed Value Finance Charges or the issuance
of indebtedness by the Issuer secured by such Fixed Value Payments
(collectively, the "Fixed Value Securities") and to make any other provisions
herein or therein that are necessary or desirable in connection therewith and
(y) the Owner Trustee will enter into any other agreements or instruments
related thereto as requested by the Seller; provided, however, that the Owner
Trustee may, but shall not be obligated to, enter into any such amendment,
agreement or instrument that affects the Owner Trustee's own rights, duties
or immunities under this Agreement or any other Basic Document; and provided,
further, that the obligation of the Issuer to purchase such Fixed Value
Payments and/or Fixed Value Finance Charges and of the Owner Trustee to enter
into any such amendment or other agreement or instrument is subject to the
following conditions precedent:
(i) such amendment and other agreements and instruments, in
forms satisfactory to the Owner Trustee and, in the case of
amendments or agreements to be executed and delivered by the
Indenture Trustee, in forms satisfactory to the Indenture Trustee,
shall have been executed by each other party thereto and delivered
to the Owner Trustee or the Indenture Trustee as appropriate;
(ii) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Officers' Certificate and an Opinion of
Counsel to the effect that each condition precedent (including the
requirement with respect to all required filings) provided by this
Section has been complied with and such amendment or other
agreement or instrument is authorized or permitted by this
Agreement;
16
(iii) the Rating Agency Condition shall have been satisfied
with respect to such sale and issuance;
(iv) such sale and issuance and such amendment or other
agreement or instrument shall not adversely affect in any material
respect the interest of any Noteholder or Certificateholder, and
the Depositor shall have provided to the Owner Trustee and the
Indenture Trustee an Officers' Certificate to such effect;
(v) the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such sale and
issuance will not have any material tax consequence to any
Noteholder or Certificateholder; and
(vi) all filings and other actions required to continue the
first perfected interest of the Trust in the Owner Trust Estate
and the Indenture Trustee in the Collateral shall have been duly
made or taken by the Seller.
(b) Except as described in Section 10.04, the Seller will not
sell, transfer, assign, set over or otherwise convey the Fixed Value Payments
and Fixed Value Finance Charges other than to the Issuer pursuant to
paragraph (a) .
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of Seller with
Respect to the Receivables. The Seller makes the following representations
and warranties as to the Receivables on which the Issuer is deemed to have
relied in acquiring the Receivables. Such representations and warranties
speak as of the execution and delivery of this Agreement and as of the
Closing Date, 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.
(a) Characteristics of Receivables. Each Standard Receivable
and Fixed Value Receivable (A) was originated in the United States
of America by a Dealer for the retail sale of a Financed Vehicle
in the ordinary course of such Dealer's business, was fully and
properly executed by the parties thereto, was purchased by the
Seller from such Dealer under an existing dealer agreement, (B)
has created or shall create a valid, subsisting and enforceable
first priority security interest in favor of the Seller and is
assignable by the Seller to the Issuer and by the Issuer to the
Indenture Trustee, (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 level monthly
payments (provided, that the payment in the first or last month in
the life of the Standard Receivable or Fixed Value Receivable may
be minimally different from the level payments and that the
payment in the last month of a Fixed Value Receivable may be a
Fixed Value Payment) that fully amortize the Amount
17
Financed by maturity and yield interest at the Annual Percentage
Rate. No Receivable conveyed to the Issuer on the Closing Date is
an OMSC Receivable.
(b) Schedule of Receivables. The information set forth in
Schedule A to this Agreement is true and correct in all material
respects as of the opening of business on the applicable Cutoff
Date, and no selection procedures believed to be adverse to the
Noteholders or Certificateholders were utilized in selecting the
Receivables. The computer tape or other listing regarding the
Standard Receivables and the Fixed Value Receivables made
available to the Issuer and its assigns (which computer tape or
other listing is required to be delivered as specified herein) is
true and correct in all respects.
(c) Compliance with Law. Each Standard Receivable and Fixed
Value Receivable and the sale of the Financed Vehicle complied at
the time it was originated or made and, at the execution of this
Agreement, complies in all material respects with all requirements
of applicable federal, state and local laws and regulations
thereunder (or, in the case of the OMSC Receivables, Swiss laws
and regulations and the laws and regulations of the jurisdiction
where the Receivable was originated), including usury laws, the
federal Truth-in-Lending Act, the Equal Credit Opportunity Act,
the Fair Credit Reporting Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx Warranty
Act, the Federal Reserve Board's Regulations B and Z, the Texas
Consumer Credit Code and State adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and other
consumer credit laws and equal credit opportunity and disclosure
laws.
(d) Binding Obligation. Each Standard Receivable and Fixed
Value Receivable represents the genuine, legal, valid and binding
payment obligation in writing of the Obligor, enforceable by the
holder thereof in accordance with its terms.
(e) No Government Obligor. None of the Standard Receivables
or Fixed Value Receivables is due from the United States of
America or any State or from any agency, department or
instrumentality of the United States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment and transfer thereof, each Standard
Receivable and Fixed Value Receivable shall be secured by a
validly perfected first security interest in the Financed Vehicle
in favor of the Seller as secured party or all necessary and
appropriate actions have been commenced that would result in the
valid perfection of a first security interest in the Financed
Vehicle in favor of the Seller as secured party.
(g) Receivables in Force. No Standard Receivable or Fixed
Value Receivable has been satisfied, subordinated or rescinded,
nor has any Financed Vehicle been released from the lien granted
by the related Standard Receivable or Fixed Value Receivable in
whole or in part.
18
(h) No Amendments. No Standard Receivable or Fixed Value
Receivable has been amended such that the amount of the Obligor's
scheduled payments has been increased.
(i) No Waiver. No provision of a Standard Receivable or Fixed
Value Receivable has been waived.
(j) No Defenses. No right of rescission, setoff, counterclaim
or defense has been asserted or threatened with respect to any
Standard Receivable or Fixed Value Receivable.
(k) No Liens. To the best of the Seller's knowledge, no liens
or claims have been filed for work, labor or materials relating to
a Financed Vehicle that are liens prior to, or equal to or
coordinate with, the security interest in the Financed Vehicle
granted by any Standard Receivable or Fixed Value Receivable.
(l) No Default. No Standard Receivable or Fixed Value
Receivable has a payment that is more than 30 days overdue as of
the related Cutoff Date, and, except as permitted in this
paragraph, no default, breach, violation or event permitting
acceleration under the terms of any Standard Receivable or Fixed
Value Receivable has occurred; and no continuing condition that
with notice or the lapse of time would constitute a default,
breach, violation or event permitting acceleration under the terms
of any Standard Receivable or Fixed Value Receivable has arisen;
and the Seller has not waived and shall not waive any of the
foregoing.
(m) Insurance. The Seller, in accordance with its customary
procedures, has determined that, at the origination of the
Standard Receivable or Fixed Value Receivable, the Obligor had
obtained physical damage insurance covering the Financed Vehicle
and under the terms of the Standard Receivable and Fixed Value
Receivable the Obligor is required to maintain such insurance.
(n) Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale of
the Standard Receivables and Fixed Value Receivables from the
Seller to the Issuer and that the beneficial interest in and title
to the Standard Receivables and Fixed Value Receivables not be
part of the debtor's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy
law. No Standard Receivable or Fixed Value Receivable has been
sold, transferred, assigned or pledged by the Seller to any Person
other than the Issuer. Immediately prior to the transfer and
assignment herein contemplated, the Seller had good and marketable
title to each Standard Receivable and Fixed Value Receivable free
and clear of all Liens, encumbrances, security interests and
rights of others and, immediately upon the transfer thereof, the
Issuer shall have good and marketable title to each Standard
Receivable and Fixed Value Receivable, free and clear of all
Liens, encumbrances, security interests and rights of others; and
the transfer has been perfected under the UCC.
19
(o) Lawful Assignment. No Standard Receivable or Fixed Value
Receivable has been originated in, or is subject to the laws of,
any jurisdiction under which the sale, transfer and assignment of
such Standard Receivable or Fixed Value Receivable or any
Receivable under this Agreement or the Indenture is unlawful, void
or voidable.
(p) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first perfected
ownership interest in the Standard Receivable and Fixed Value
Receivables, and to give the Indenture Trustee a first perfected
security interest therein, shall have been made.
(q) One Original. There is only one original executed copy of
each Standard Receivable and Fixed Value Receivable.
(r) Maturity of Receivables. Each Standard Receivable and
Fixed Value Receivable has a final maturity date not later than
June 30, 2005.
(s) Scheduled Payments. (A) Each Standard Receivable and
Fixed Value Receivable has a first scheduled due date on or prior
to the end of the month following the related Cutoff Date and (B)
no Standard Receivable or Fixed Value Receivable has a payment
that is more than 30 days overdue as of the related Cutoff Date,
and has a final scheduled payment date no later than the Final
Scheduled Maturity Date.
(t) Location of Receivable Files. The Receivable Files are
kept at one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
Standard Receivable or Fixed Value Receivable shall be no later
than the Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Standard Receivable
and Fixed Value Receivable has an outstanding principal balance of
at least $300.00.
(w) No Bankruptcies or First-Time Buyers. No Obligor on any
Standard Receivable or Fixed Value Receivable as of the related
Cutoff Date was noted in the related Receivable File as the
subject of a bankruptcy proceeding, and no such Obligor financed a
Financed Vehicle under the Seller's "New Finance Buyer Plan"
program.
(x) No Repossessions. No Financed Vehicle securing any
Standard Receivable or Fixed Value Receivable is in repossession
status.
(y) Chattel Paper. Each Standard Receivable and Fixed Value
Receivable constitutes "chattel paper" as defined in the UCC.
(z) Agreement. The representations of the Seller in Section
6.01 are true and correct.
20
(aa) Financing. As of the Cutoff Date, approximately 80.35%
of the aggregate principal balance of the Receivables,
constituting 74.31% of the number of Receivables, represents new
vehicles; approximately 86% of the aggregate principal balance of
the Receivables represents financing of vehicles manufactured by
DaimlerChrysler Corporation; all of the Receivables are Simple
Interest Receivables; by aggregate principal balance,
approximately 3.62% of the Receivables are Fixed Value
Receivables. The aggregate principal balance of the Receivables,
as of the Cutoff Date is $1,567,492,512.67. Receivable shall mean
only that portion of the Receivables with respect to which the
Trust has an ownership interest.
SECTION 3.02. Repurchase upon Breach. The Seller, the Servicer or
the Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery
of any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01. Unless any such breach shall have been cured by the
last day of the second Collection Period following the discovery thereof by
the Owner Trustee or receipt by the Owner Trustee of written notice from the
Seller or the Servicer of such breach, the Seller shall be obligated to
repurchase any Receivable materially and adversely affected by any such
breach as of such last day (or, at the Seller's option, the last day of the
first Collection Period following the discovery). In consideration of the
repurchase of any such Receivable, the Seller shall remit the Purchase
Amount, in the manner specified in Section 5.04. Subject to the provisions of
Section 6.03, the sole remedy of the Issuer, the Owner Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders with respect to a breach
of representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Seller to repurchase
Receivables pursuant to this Section, subject to the conditions contained
herein.
SECTION 3.03. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Issuer hereby revocably appoints the Servicer, and the Servicer hereby
accepts such appointment, to act for the benefit of the Issuer and the
Indenture Trustee as custodian of the following documents or instruments
which are hereby or will hereby be constructively delivered to the Indenture
Trustee, as pledgee of the Issuer, as of the Closing Date with respect to
each Receivable:
(a) the fully executed original of the Standard Receivable or
Fixed Value Receivable;
(b) the original credit application fully executed by the
Obligor;
(c) the original certificate of title or such documents that
the Servicer or the Seller shall keep on file, in accordance with
its customary procedures, evidencing the security interest of the
Seller in the Financed Vehicle; and
(d) any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary
procedures, relating to a Standard Receivable or Fixed Value
Receivable, an Obligor or a Financed Vehicle
21
SECTION 3.04. Duties of Servicer as Custodian. (a) Safekeeping.
The Servicer shall hold the Receivable Files as custodian for the benefit of
the Issuer and maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall enable the
Issuer to comply with 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
relating to all comparable automotive receivables that the Servicer services
for itself or others. The Servicer shall conduct, or cause to be conducted,
periodic audits of the Receivable Files held by it under this Agreement and
of the related accounts, records and computer systems, in such a manner as
shall enable the Issuer or the Indenture Trustee to verify the accuracy of
the Servicer's record keeping. The Servicer shall promptly report to the
Issuer and the Indenture Trustee any failure on its part to hold the
Receivable Files and maintain its accounts, records and computer systems as
herein provided and shall promptly take appropriate action to remedy any such
failure. Nothing herein shall be deemed to require an initial review or any
periodic review by the Issuer or the Indenture Trustee of the Receivable
Files.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of its offices specified in Schedule B
or at such other office as shall be specified to the Issuer and the Indenture
Trustee by written notice not later than 90 days after any change in
location. The Servicer shall make available to the Issuer and the Indenture
Trustee or their respective duly authorized representatives, attorneys or
auditors a list of locations of the Receivable Files and the related
accounts, records and computer systems maintained by the Servicer at such
times during normal business hours as the Issuer or the Indenture Trustee
shall instruct.
(c) Release of Documents. Upon instruction from the Indenture
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee,
as the case may be, at such place or places as the Indenture Trustee may
designate, as soon as practicable.
SECTION 3.05. Instructions; Authority To Act. The Servicer shall
be deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee.
SECTION 3.06. Custodian's Indemnification. The Servicer as
custodian shall indemnify the Trust, the Owner Trustee and the Indenture
Trustee and each of their respective officers, directors, employees and
agents for any and all liabilities, obligations, losses, compensatory
damages, payments, costs or expenses of any kind whatsoever that may be
imposed on, incurred by or asserted against the Trust, the Owner Trustee or
the Indenture Trustee or any of their respective officers, directors,
employees and agents as the result of any improper 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 to
the Owner Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Owner Trustee, and the
Servicer shall not be liable to the Indenture Trustee for any portion of any
such amount resulting from the willful misfeasance, bad faith or negligence
of the Indenture Trustee.
22
SECTION 3.07. 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. If CFC shall resign as Servicer in accordance with the provisions of
this Agreement or if all of the rights and obligations of any Servicer shall
have been terminated under Section 8.01, the appointment of such Servicer as
custodian shall be terminated by the Indenture Trustee or by the Holders of
Notes evidencing not less than 25% of the Outstanding Amount of the Notes or,
with the consent of Holders of the Notes evidencing not less than 25% of the
Outstanding Amount of the Notes, by the Owner Trustee, in the same manner as
the Indenture Trustee or such Holders may terminate the rights and
obligations of the Servicer under Section 8.01. The Indenture Trustee or,
with the consent of the Indenture Trustee, the Owner Trustee may terminate
the Servicer's appointment as custodian, with cause, at any time upon written
notification to the Servicer and, without cause, upon 30 days' prior written
notification to the Servicer. As soon as practicable after any termination of
such appointment, the Servicer shall deliver the Receivable Files to the
Indenture Trustee or the Indenture Trustee's agent at such place or places as
the Indenture Trustee may reasonably designate.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer. The Servicer, for the benefit of
the Issuer (to the extent provided herein), shall manage, service, administer
and make collections on the Receivables (other than Purchased Receivables)
with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to all comparable automotive receivables that
it services for itself or others. The Servicer's duties shall include
collection and posting of all payments, responding to inquiries of Obligors
on such Receivables, investigating delinquencies, sending payment coupons to
Obligors, reporting tax information to Obligors, accounting for collections
and furnishing monthly and annual statements to the Owner Trustee and the
Indenture Trustee with respect to distributions. Subject to the provisions of
Section 4.02, the Servicer shall follow its customary standards, policies and
procedures in performing its duties as Servicer. Without limiting the
generality of the foregoing, the Servicer is authorized and empowered to
execute and deliver, on behalf of itself, the Issuer, the Owner Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders or any of them,
any and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Vehicles securing such Receivables. If
the Servicer shall commence a legal proceeding to enforce a Receivable, the
Issuer (in the case of a Receivable other than a Purchased Receivable) shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal proceeding it shall be held that the Servicer may not enforce a
Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce such Receivable, the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders. The Owner
Trustee shall upon the written request of the Servicer furnish the Servicer
with any
23
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.
SECTION 4.02. Collection and Allocation of Receivable Payments.
The Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer shall allocate collections between principal and
interest in accordance with the customary servicing procedures it follows
with respect to all comparable automotive receivables that it services for
itself or others. The Servicer may grant extensions, rebates or adjustments
on a Standard Receivable or Fixed Value Receivable, which shall not, for the
purposes of this Agreement, modify the original due dates or amounts of the
originally scheduled payments of interest on such Standard Receivable or
Fixed Value Receivable; 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 the Standard Receivable
or Fixed Value Receivable from the Issuer in accordance with the terms of
Section 4.07. The Servicer may in its discretion waive any late payment
charge or any other fees that may be collected in the ordinary course of
servicing a Standard Receivable or Fixed Value Receivable. The Servicer shall
not agree to any alteration of the interest rate or the originally scheduled
payments on any Standard Receivable or Fixed Value Receivable.
SECTION 4.03. Realization upon Receivables. On behalf of the
Issuer, the Servicer shall use its best efforts, consistent with its
customary servicing procedures, to repossess or otherwise convert the
ownership of the Financed Vehicle securing any Receivable as to which the
Servicer shall have determined eventual payment in full is unlikely. The
Servicer shall follow such customary and usual practices and procedures as it
shall deem necessary or advisable in its servicing of automotive receivables,
which may include reasonable efforts to realize upon any recourse to Dealers
and selling the Financed Vehicle at public or private sale. The foregoing
shall be subject to the provision that, in any case in which the Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds in
connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Vehicle
as of the execution of the Standard Receivable or Fixed Value Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed
Vehicles. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Standard Receivable and Fixed Value
Receivable in the related Financed Vehicle. The Servicer is hereby authorized
to take such steps as are necessary to re-perfect such security interest on
behalf of the Issuer and the Indenture Trustee in the event of the relocation
of a Financed Vehicle or for any other reason.
24
SECTION 4.06. Covenants of Servicer. The Servicer shall not
release the Financed Vehicle securing any Receivable from the security
interest granted by such Receivable in whole or in part except in the event
of payment in full by the Obligor thereunder or repossession, nor shall the
Servicer impair the rights of the Issuer, the Indenture Trustee, the
Certificateholders or the Noteholders in such Receivable, nor shall the
Servicer increase the number of scheduled payments due under a Standard
Receivable or Fixed Value Receivable.
SECTION 4.07. Purchase of Receivables upon Breach. The Servicer or
the Owner Trustee shall inform the other party and the Indenture Trustee and
the Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the
last day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period),
the Servicer shall purchase any Receivable materially and adversely affected
by such breach as of such last day. If the Servicer takes any action during
any Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in
any Receivable or as otherwise provided in Section 4.02, the Servicer shall
purchase such Receivable as of the last day of such Collection Period. In
consideration of the purchase of any such Receivable pursuant to either of
the two preceding sentences, the Servicer shall remit the Purchase Amount in
the manner specified in Section 5.04. Subject to Section 7.02, the sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders with respect to a breach pursuant to
Section 4.02, 4.05 or 4.06 shall be to require the Servicer to purchase
Receivables pursuant to this Section. 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.
SECTION 4.08. Servicing Fee. The Servicing Fee for a Payment Date
shall equal the product of (a) one-twelfth (or, in the case of the initial
Collection Period, a fraction, the numerator of which is equal to the number
of days elapsed from the Cutoff Date through the last day of such initial
Collection Period and the denominator of which is 360), (b) the Servicing Fee
Rate and (c) the Pool Balance as of the first day of the preceding Collection
Period. The Servicer shall also be entitled to all late fees, prepayment
charges, and other administrative fees or similar charges allowed by
applicable law with respect to the Receivables, collected (from whatever
source) on the Receivables, plus any reimbursement pursuant to the last
paragraph of Section 7.02.
SECTION 4.09. Servicer's Certificate. Not later than 11:00 A.M.
(New York time) on each Payment Determination Date, the Servicer shall
deliver to the Owner Trustee, each Paying Agent, the Indenture Trustee and
the Seller, with a copy to the Rating Agencies, a Servicer's Certificate
containing all information necessary to make the distributions to be made on
the related Payment Date pursuant to Sections 5.05 and 5.06 for the related
Collection Period. Receivables to be purchased by the Servicer or to be
repurchased by the Seller shall be identified by the Servicer by account
number with respect to such Receivable (as specified in Schedule A).
SECTION 4.10. Annual Statement as to Compliance; Notice of
Default. (a) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee, on or before April 30 of each year beginning April 30,
2000, an Officers' Certificate, dated as of December 31 of the preceding
25
year, stating that (i) a review of the activities of the Servicer during the
preceding 12-month period (or such longer period as shall have elapsed since
the Closing Date) and of its performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such year or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. The
Indenture Trustee shall send a copy of such certificate and the report
referred to in Section 4.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Certificateholder, Noteholder or Note Owner by a request in writing to the
Owner Trustee addressed to the Corporate Trust Office. Upon the telephone
request of the Owner Trustee, the Indenture Trustee will promptly furnish the
Owner Trustee a list of Noteholders as of the date specified by the Owner
Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving
of notice or lapse of time, or both, would become a Servicer Default under
Section 8.01(a) or (b).
SECTION 4.11. Annual Independent Certified Public Accountants'
Report. The Servicer shall cause a firm of independent certified public
accountants, which may also render other services to the Servicer, the Seller
or their Affiliates, to deliver to the Owner Trustee and the Indenture
Trustee on or before April 30 of each year beginning April 30, 2000, a report
addressed to the Board of Directors of the Servicer, to the effect that such
firm has examined the financial statements of CFC and issued its report
thereon and that such examination (a) was made in accordance with generally
accepted auditing standards and accordingly included such tests of the
accounting records and such other auditing procedures as such firm considered
necessary in the circumstances; (b) included tests relating to automotive
loans serviced for others in accordance with the requirements of the Uniform
Single Attestation Program for Mortgage Bankers (the "Program"), to the
extent the procedures in such Program are applicable to the servicing
obligations set forth in this Agreement; and (c) except as described in the
report, disclosed no exceptions or errors in the records relating to
automobile and light-duty truck loans serviced for others that, in the firm's
opinion, paragraph four of such Program requires such firm to report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
and Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders shall be required by applicable statutes or
regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours
at the offices of the Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the
26
failure of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.
SECTION 4.13. Servicer Expenses. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and
reports to Certificateholders and Noteholders.
SECTION 4.14. Appointment of Subservicer. The Servicer may at any
time appoint a subservicer to perform all or any portion of its obligations
as Servicer hereunder; provided, however, that the Rating Agency Condition
shall have been satisfied in connection therewith; and provided, further,
that the Servicer shall remain obligated and be liable to the Issuer, the
Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders for the servicing and administering of the Receivables in
accordance with the provisions hereof without diminution of such obligation
and liability by virtue of the appointment of such subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Receivables. The fees and expenses of
the subservicer shall be as agreed between the Servicer and its subservicer
from time to time, and none of the Issuer, the Owner Trustee, the Indenture
Trustee, the Certificateholders or the Noteholders shall have any
responsibility therefor.
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Deposit Account. (a) The Servicer,
for the benefit of the Noteholders and the Certificateholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Deposit Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders and the Certificateholders. The Servicer shall establish the
Reserve Account as part of the Deposit Account.
(b) Funds on deposit in the Deposit Account shall be invested (1)
by the Indenture Trustee in Eligible Investments selected in writing by the
Servicer or an investment manager selected by the Servicer, which investment
manager shall have agreed to comply with the terms of this Agreement as it
relates to investing such funds or (2) by an investment manager in Eligible
Investments selected by such investment manager; provided that (A) such
investment manager shall be selected by the Servicer, (B) such investment
manager shall have agreed to comply with the terms of this Agreement as it
relates to investing such funds, (C) any investment so selected by such
investment manager shall be made in the name of the Indenture Trustee and
shall be settled by a Delivery to the Indenture Trustee that complies with
the terms of this Agreement as it relates to investing such funds, and (D)
prior to the settlement of any investment so selected by such investment
manager the Indenture Trustee shall affirm that such investment is an
Eligible Investment. The Servicer initially appoints the Indenture Trustee
investment
27
manager hereunder, which the Indenture Trustee hereby accepts. It is
understood and agreed that the Indenture Trustee shall not be liable for any
loss arising from an investment in Eligible Investments made in accordance
with this Section 5.01(b). All such Eligible Investments shall be held by the
Indenture Trustee for the benefit of the Noteholders and the
Certificateholders, as applicable; provided, that on each Payment
Determination Date all interest and other investment income (net of losses
and investment expenses) on funds on deposit in the Deposit Account shall be
deemed to constitute a portion of the Total Distribution Amount for the
related Payment Date. Other than as permitted by the Rating Agencies, funds
on deposit in the Deposit Account shall be invested in Eligible Investments
that will mature on or before the next Payment Date.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Deposit Account and
in all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The
Deposit Account shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders, as
applicable. If, at any time, the Deposit Account ceases to be an Eligible
Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Deposit
Account as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Deposit Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit
Accounts, subject to the last sentence of Section 5.01(c)(i);
and each such Eligible Deposit Account shall be subject to
the exclusive custody and control of the Indenture Trustee,
and the Indenture Trustee shall have sole signature authority
with respect thereto;
(B) any Trust 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, pending maturity or disposition, solely by
the Indenture Trustee or a securities intermediary (as such
term is defined in Section 8-102 of the UCC) acting solely
for the Indenture Trustee;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
federal book-entry regulations 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, through continued book-entry
registration of such Trust Account Property as described in
such paragraph; and
(D) any Trust Account Property that is an
"uncertificated security" under Article VIII of the UCC and
that is not governed by clause (C) above shall be delivered
to the Indenture Trustee in accordance with paragraph (c) of
the
26
definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through
continued registration of the Indenture Trustee's (or its
nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Deposit Account for the purpose
of permitting the Servicer to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its
duties under the Indenture.
SECTION 5.02. Collections. Subject to the continued satisfaction
of the commingling conditions described below, the Servicer shall remit to
the Deposit Account all payments by or on behalf of the Obligors with respect
to the Receivables (other than Purchased Receivables and not including Fixed
Value Payments), all Liquidation Proceeds and any subsequent Recoveries, both
as collected during a Collection Period, prior to 11:00 A.M. (New York time)
on the related Payment Date. Notwithstanding the foregoing, if any of the
commingling conditions ceases to be met, the Servicer shall remit to the
Deposit Account all payments by or on behalf of the Obligors with respect to
the Receivables (other than Purchased Receivables and not including Fixed
Value Payments), all Liquidation Proceeds and any subsequent Recoveries
within two Business Days of receipt thereof. The commingling conditions are
as follows: (i) CFC must be the Servicer, (ii) no Servicer Default shall have
occurred and be continuing and (iii) (x) CFC must maintain a short-term
rating of at least A-1 by Standard & Poor's and P-1 by Moody's or (y) if
daily remittances occur hereunder, prior to ceasing daily remittances, the
Rating Agency Condition shall have been satisfied (and any conditions or
limitations imposed by the Rating Agencies in connection therewith are
complied with). Notwithstanding anything herein to the contrary, so long as
CFC is the Servicer, CFC may withhold from the deposit into the Deposit
Account any amounts indicated on the related Servicer's Certificate as being
due and payable to CFC or the Seller and pay such amounts directly to CFC or
the Seller, as applicable. For purposes of this Article V, the phrase
"payments by or on behalf of Obligors" shall mean payments made with respect
to the Receivables by Persons other than the Servicer or the Seller. In the
event the commingling conditions cease to be met, the Servicer shall make
daily remittance of collections to the Deposit Account within two Business
Days of receipt thereof; provided however, daily remittance may commence no
later than five Business Days following a reduction of CFC's short-term
ratings below A-1 by Standard & Poor's or P-1 by Moody's.
SECTION 5.03. Application of Collections. (a) All collections for
the Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be
applied to interest and principal in accordance with the Simple
Interest Method.
(b) All collections of finance charges on a Fixed Value Receivable (as
determined in accordance with the Servicer's customary procedures) shall be
applied, first, to the Amortizing Payment Finance Charges due and unpaid on
the related Principal Balance and then to the Fixed Value Finance Charges due
and unpaid on the related Fixed Value Payment. The Servicer shall
29
release to the Company the Collections allocated to Fixed Value Finance
Charges pursuant to the preceding sentence. All Liquidation Proceeds and any
subsequent Recoveries with respect to any Fixed Value Receivable shall be
applied first to the related Receivable and only after the payment in full of
the Principal Balance thereof plus accrued but unpaid interest thereon shall
any such Liquidation Proceeds or Recoveries be applied to, or constitute, the
related Fixed Value Payment.
SECTION 5.04. Additional Deposits. The Servicer and the Seller
shall deposit or cause to be deposited in the Deposit Account the aggregate
Purchase Amount with respect to Purchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Section 9.01. The Servicer will
deposit the aggregate Purchase Amount with respect to Purchased Receivables
when such obligations are due, unless the Servicer shall not be required to
make daily deposits pursuant to Section 5.02. All such other deposits shall
be made on the Payment Determination Date for the related Collection Period.
SECTION 5.05. Distributions.
(a) (i) On each Payment Determination Date, the Servicer shall calculate all
amounts required to be distributed to the Noteholders and the
Certificateholders and all amounts to be allocated within the Deposit Account
as described below. For purposes of this Section, the Servicing Fee for the
related Payment Date and any previously unpaid Servicing Fees shall, and the
Cash Release Amount to be distributed to the Holders of the Trust
Certificates may, be deducted from the Total Distribution Amount at any time
on or prior to the Payment Date.
(ii) On each Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the
Servicer's Certificate delivered on the related Payment
Determination Date pursuant to Section 4.09) to make the following
allocations and distributions by 11:00 A.M. (New York time), to
the extent of the Total Distribution Amount (net of the Servicing
Fee for such Payment Date and any previously unpaid Servicing Fees
and any Cash Release Amount deducted pursuant to Section
5.05(a)(i)), in the following order of priority:
(A) allocate to the Noteholders for distribution
pursuant to Section 8.02 of the Indenture, from such net
Total Distribution Amount, an amount equal to the accrued and
unpaid interest due on the Notes on such Payment Date;
(B) allocate to the Reserve Account, from such net Total
Distribution Amount remaining after the application of clause
(A), the amount required, if any, such that the amount
therein is the Specified Reserve Amount;
(C) allocate to the Noteholders for distribution as
principal pursuant to Section 8.02 of the Indenture, from
such net Total Distribution Amount remaining after the
application of clauses (A) and (B), the remaining amount
until the Outstanding Amount of the Notes is reduced to zero;
provided, however, that on each Payment Date during the
Release Period, the amount distributed pursuant to this
clause (C) will be reduced by the Cash Release Amount (either
because the
30
Cash Release Amount is deducted pursuant to Section
5.05(a)(i) or distributed pursuant to Section
5.05(a)(ii)(D));
(D) if the conditions set forth in Section 5.05(b) are
satisfied, distribute to the Holders of the Trust
Certificates, from such net Total Distribution Amount
remaining after the application of clauses (A) through (C),
the Cash Release Amount for such Payment Date to the extent
not already deducted pursuant to Section 5.05(a)(i);
(E) distribute, as principal, to the Holders of the
Overcollateralization Certificates, such net Total
Distribution Amount remaining after the application of
clauses (A) through (D) and only after the Notes have been
paid in full, until the Certificate Balance has been reduced
to zero; and
(F) distribute to the Holders of the Trust Certificates
the portion, if any, of such net Total Distribution Amount
remaining after the application of clauses (A) through (E).
If pursuant to Section 5.02, the Servicer is permitted to remit collections
on the Receivables to the Deposit Account on the Payment Determination Date
preceding the related Payment Date or on or before the related Payment Date,
then the Servicer may net the amounts, if any, distributable pursuant to
clauses (D), (E) and (F) out of the Total Distribution Amount before
depositing the Total Distribution Amount into the Deposit Account and pay
such amounts directly to the related recipient.
Notwithstanding that the Notes have been paid in full, the
Indenture Trustee shall continue to maintain the Deposit Account hereunder
until the Pool Balance is reduced to zero.
(b) The distribution of a Cash Release Amount pursuant to Section
5.05(a)(ii)(D) on a Payment Date shall be subject to the satisfaction of all
of the following conditions:
(i) no such distribution or release shall be made until the
First Release Payment Date; and
(ii) the amount allocated to the Reserve Account is equal to
the Specified Reserve Amount and the aggregate amount of Cash
Release Amounts distributed pursuant to Section 5.05(a)(ii)(D) on
or prior to such Payment Date shall not exceed the Initial
Overcollateralization Amount.
SECTION 5.06. Reserve Account. (a) On the Closing Date, the Owner
Trustee will deposit, on behalf of the Seller, the Reserve Account Initial
Deposit into the Deposit Account from the net proceeds of the sale of the
Notes which amount shall be allocated to the Reserve Account.
(b) [RESERVED]
31
(c) (i) In the event that the Total Distribution Amount (after the
payment of the Servicing Fee and any previously unpaid Servicing Fees) with
respect to any Collection Period is less than the accrued and unpaid interest
on the Notes on a Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Payment Date an amount
equal to such deficiency, to the extent of funds available therein, and
allocate such amount for distribution to the Noteholders.
(ii) In the event that the amount allocated for distribution
to the Noteholders pursuant to Section 5.05(a)(ii)(C) is
insufficient to make payments of principal on (A) the Class A-1
Notes so that the Outstanding Amount for the Class A-1 Notes
equals zero on the Class A-1 Final Scheduled Payment Date; (B) the
Class A-2 Notes so that the Outstanding Amount for the Class A-2
Notes equals zero on the Class A-2 Final Scheduled Payment Date;
(C) the Class A-3 Notes so that the Outstanding Amount for the
Class A-3 Notes equals zero on the Class A-3 Final Scheduled
Payment Date and; (D) the Class A-4 Notes so that the Outstanding
Amount for the Class A-4 Notes equals zero on the Class A-4 Final
Scheduled Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Class Final
Scheduled Payment Date an amount equal to such deficiency, to the
extent of funds available therein, and allocate such amount for
distribution to the Noteholders.
(iii) In the event that the Outstanding Amount of the Notes
exceeds the Related Pool Balance, the Servicer shall instruct the
Indenture Trustee to withdraw from the Reserve Account on the
related Payment Date an amount equal to such excess, to the extent
of funds available therein, and allocate such amount for
distribution to the Noteholders.
(d) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.05(a) following payment in full of both the Outstanding
Amount of the Notes and of the Certificate Balance of the
Overcollateralization Certificates until the Pool Balance is reduced to zero.
Following the payment in full of the aggregate Outstanding Amount of the
Notes and of the Certificate Balance of the Overcollateralization
Certificates and of all other amounts owing or to be distributed hereunder or
under the Indenture or the Trust Agreement to Noteholders and the termination
of the Trust, any amount then allocated to the Reserve Account shall be
distributed to the Seller.
SECTION 5.07. Statements to Noteholders and Certificateholders. On
each Payment Date, the Servicer shall provide to the Owner Trustee (with a
copy to the Rating Agencies and each Paying Agent) for the Owner Trustee to
forward to each Certificateholder of record as of the most recent Record Date
and to the Indenture Trustee (with a copy to each Paying Agent) for the
Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date a statement substantially in the form of Exhibit A,
setting forth at least the following information as to the Notes, to the
extent applicable:
(i) the amount of such distribution allocable to principal
allocable to each Class of Notes;
32
(ii) the amount of such distribution allocable to interest
allocable to each Class of Notes;
(iii) the outstanding principal balance of each Class of
Notes as of the close of business on the last day of the preceding
Collection Period, after giving effect to payments allocated to
principal reported under clause (i) above;
(iv) the amount of the Servicing Fee paid to the Servicer
with respect to the related Collection Period;
(v) the amount allocated to the Reserve Account on such
Payment Determination Date after giving effect to allocations
thereto and withdrawals therefrom to be made on the next following
Payment Date, if any;
(vi) the Pool Balance as of the close of business on the last
day of the related Collection Period, after giving effect to
payments allocated to principal reported under clause (i) above;
and
(vii) the amount, if any, allocated for distribution to the
Certificateholders.
Each amount set forth on the Payment Date statement under clauses
(i), (ii) or (iv) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Note.
SECTION 5.08. Net Deposits. As an administrative convenience,
unless the Servicer is required to remit collections daily, the Servicer will
be permitted to make the deposit of collections on the Receivables and
Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to the Servicer with respect to the Collection
Period. The Servicer, however, will account to the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholders as if all
deposits, distributions and transfers were made individually.
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller. The Seller makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly
organized and validly existing as a limited liability company in
good standing under the laws of the State of Michigan, with the
power and authority as a limited liability company to own its
properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had
at all relevant times, and has, the power,
33
authority and legal right to acquire and own the Standard
Receivables and the Fixed Value Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign limited liability company in good standing,
and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business shall require such qualifications.
(c) Power and Authority. The Seller has the power and
authority as a limited liability company to execute and deliver
this Agreement and to carry out its terms; the Seller has full
power and authority to sell and assign the property to be sold and
assigned to and deposited with the Issuer, and the Seller shall
have duly authorized such sale and assignment to the Issuer by all
necessary action as a limited liability company; and the
execution, delivery and performance of this Agreement has been
duly authorized by the Seller by all necessary action as a limited
liability company.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Seller enforceable in
accordance with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof do not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of organization or
operating agreement of the Seller, or any indenture, agreement or
other instrument to which the Seller is a party or by which it is
bound; or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to this
Agreement and the Basic Documents); or 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.
(f) No Proceedings. To the Seller's best knowledge, there are
no proceedings or investigations pending or threatened before any
court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller
or its properties: (i) asserting the invalidity of this Agreement,
the Indenture or any of the other Basic Documents, the Notes or
the Certificates, (ii) seeking to prevent the issuance of the
Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any
of the other Basic Documents, (iii) seeking any determination or
ruling that might materially and adversely affect the performance
by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates or (iv) which might
adversely affect the federal or state income tax attributes of the
Notes or the Certificates.
SECTION 6.02. Preservation of Existence. During the term of this
Agreement, the Seller will keep in full force and effect its existence,
rights and franchises as a limited liability company
34
(or another legal entity) under the laws of the jurisdiction of its
organization and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic
Documents and each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Seller and its
Affiliates (including the Company) will be conducted on an arm's-length
basis.
SECTION 6.03. Liability of Seller; Indemnities. The Seller shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement:
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company and
the Servicer and any of the officers, directors, employees and
agents of the Issuer, the Owner Trustee and the Indenture Trustee
from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions
contemplated herein and in the Basic Documents, including any
sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of the
Issuer, not including any taxes asserted with respect to, and as
of the date of, the sale of the Receivables to the Issuer or the
issuance and original sale of the Certificates and the Notes, or
asserted with respect to ownership of the Receivables, or federal
or other income taxes arising out of distributions on the
Certificates or the Notes) and costs and expenses in defending
against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company, the
Certificateholders and the Noteholders and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee
and the Indenture Trustee from and against any loss, liability or
expense incurred by reason of (i) the Seller's willful
misfeasance, bad faith or negligence in the performance of its
duties under this Agreement, or by reason of reckless disregard of
its obligations and duties under this Agreement and (ii) the
Seller's or the Issuer's violation of federal or state securities
laws in connection with the offering and sale of the Notes and the
Certificates.
(c) The Seller shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective
officers, directors, employees and agents from and against all
costs, expenses, losses, claims, damages and liabilities arising
out of or incurred in connection with the acceptance or
performance of the trusts and duties herein and in the Trust
Agreement contained, in the case of the Owner Trustee, and in the
Indenture contained, in the case of the Indenture Trustee, except
to the extent that such cost, expense, loss, claim, damage or
liability: (i) in the case of the Owner Trustee, shall be due to
the willful misfeasance, bad faith or negligence (except for
errors in judgment) of the Owner Trustee or, in the case of the
Indenture Trustee, shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of the
Indenture Trustee; or (ii) in the case of the Owner Trustee, shall
arise from the breach by the Owner
35
Trustee of any of its representations or warranties set forth in
Section 7.03 of the Trust Agreement.
(d) The Seller shall pay any and all taxes levied or assessed
upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation
or removal of the Owner Trustee or the Indenture Trustee and the termination
of this Agreement and shall include reasonable fees and expenses of counsel
and expenses of litigation. If the Seller shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others,
such Person shall promptly repay such amounts to the Seller, without
interest.
SECTION 6.04. Merger or Consolidation of, or Assumption of
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Seller shall be a party or (c) which may succeed to the properties and
assets of the Seller substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption 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; provided, however, that
(i) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.01 shall have been breached and no
Servicer Default, and no event that, after notice or lapse of time, or both,
would become a Servicer Default shall have occurred and be continuing, (ii)
the Seller shall have delivered to the Owner Trustee and the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Condition shall have been satisfied with respect to
such transaction and (iv) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the Owner
Trustee and Indenture Trustee, respectively, in the Receivables and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interests. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii) and (iv) above shall be conditions to the consummation of the
transactions referred to in clauses (a) , (b) or (c) above.
SECTION 6.05. 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. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
36
SECTION 6.06. Seller May Own Notes. The Seller and any Affiliate
thereof may in its individual or any other capacity become the owner or
pledgee of Notes with the same rights as it would have if it were not the
Seller or an Affiliate thereof, except as expressly provided herein or in any
Basic Document. The Seller shall not own any Certificates unless the Rating
Agency Condition is satisfied.
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a limited liability company in
good standing under the laws of the state of its formation, with
the power and authority as a limited liability company to own its
properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had
at all relevant times, and has, the power, authority and legal
right to acquire, own, sell and service the Standard Receivables
and the Fixed Value Receivables and to hold the Receivable Files
as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign limited liability company in good standing,
and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the
conduct of its business (including the servicing of the Standard
Receivables and the Fixed Value Receivables as required by this
Agreement) shall require such qualifications.
(c) Power and Authority. The Servicer has the power and
authority as a limited liability company to execute and deliver
this Agreement and to carry out its terms; and the execution,
delivery and performance of this Agreement has been duly
authorized by the Servicer by all necessary action as a limited
liability company.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in
accordance with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof shall not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or
bylaws of the Servicer, or any indenture, agreement or other
instrument to which the Servicer is a party or by which it is
bound; or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than
37
this Agreement); or 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.
(f) No Proceedings. To the Servicer's best knowledge, there
are no proceedings or investigations pending or threatened before
any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer
or its properties: (i) asserting the invalidity of this Agreement,
the Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or
the Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other
Basic Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates or (iv) relating to
the Servicer and which might adversely affect the federal or state
income tax attributes of the Notes or the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no
Obligor on a Standard Receivable or Fixed Value Receivable is
shown on the Receivable Files as the subject of a bankruptcy
proceeding.
SECTION 7.02. Indemnities of Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders, the Certificateholders, the Company and the Seller
and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee and the Indenture Trustee from and
against any and all costs, expenses, losses, damages, claims and
liabilities arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of a Financed
Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee, the Indenture Trustee, the Seller,
the Company, the Certificateholders and the Noteholders and any of
the officers, directors, employees and agents of the Issuer, the
Owner Trustee and the Indenture Trustee from and against any and
all costs, expenses, losses, claims, damages and liabilities to
the extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon any such Person
through, the negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties under this Agreement or
by reason of reckless disregard of its obligations and duties
under this Agreement.
For purposes of this Section, in the event of the termination of
the rights and obligations of CFC (or any successor thereto pursuant to
Section 7.03) as Servicer pursuant to Section 8.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to
38
be the Servicer pending appointment of a successor Servicer (other than the
Indenture Trustee) pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation
or removal of the Owner Trustee or the Indenture Trustee or the termination
of this Agreement and shall include reasonable fees and expenses of counsel
and expenses of litigation. If the Servicer shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter collects any of such amounts from others, such
Person shall promptly repay such amounts to the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of
Obligations of, Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Servicer shall be a party, (c) which may succeed to the
properties and assets of the Servicer substantially as a whole or (d) with
respect to the Servicer's obligations hereunder, which is a legal entity 50%
or more of the voting power of which is owned, directly or indirectly, by
DaimlerChrysler Corporation or an affiliate of or successor to
DaimlerChrysler Corporation or an affiliate of such successor, which Person
executed an agreement of assumption to perform every obligation of the
Servicer hereunder, shall be the successor to the Servicer under this
Agreement without further act on the part of any of the parties to this
Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no Servicer Default and no event which, after notice or
lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (ii) the Servicer shall have delivered to the Owner
Trustee and the Indenture Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent provided for in this Agreement relating to such transaction have
been complied with, (iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction, (iv) immediately after giving
effect to such transaction, the successor to the Servicer shall become the
Administrator under the Administration Agreement in accordance with Section 8
of such Agreement and (v) the Servicer shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
the Indenture Trustee, respectively, in the Receivables and reciting the
details of such filings or (B) no such action shall be necessary to preserve
and protect such interests. Notwithstanding anything herein to the contrary,
the execution of the foregoing agreement of assumption and compliance with
clauses (i), (ii), (iii), (iv) and (v) above shall be conditions to the
consummation of the transactions referred to in clause (a), (b) or (c)
above.
SECTION 7.04. Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or agents
of the Servicer shall be under any liability to the Issuer, the Noteholders
or the Certificateholders, except as provided under this Agreement, for any
action taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless
39
disregard of obligations and duties under this Agreement. The Servicer and
any director, officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Receivables in
accordance with this Agreement and that in its opinion may involve it in any
expense or liability; provided, however, that the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and the Basic Documents and the rights and duties of the parties to
this Agreement and the Basic Documents and the interests of the
Certificateholders under this Agreement and the Noteholders under the
Indenture.
SECTION 7.05. CFC Not To Resign as Servicer. Subject to the
provisions of Section 7.03, CFC shall not resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement except upon a
determination that the performance of its duties under this Agreement shall
no longer be permissible under applicable law and cannot be cured. Notice of
any such determination permitting the resignation of CFC shall be
communicated to the Owner Trustee and the Indenture Trustee 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 shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee and the Indenture Trustee concurrently with or
promptly after such notice. No such resignation shall become effective until
the Indenture Trustee or a successor Servicer shall (i) have assumed the
responsibilities and obligations of CFC in accordance with Section 8.02 and
(ii) have become the Administrator under the Administration Agreement in
accordance with Section 8 of such Agreement.
ARTICLE VIII
Default
SECTION 8.01. Servicer Default. If any one of the following events
(a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit in the Deposit
Account any required payment or to direct the Indenture Trustee to
make any required distributions therefrom, which failure continues
unremedied for a period of five Business Days after written notice
of such failure is received by the Servicer from the Owner Trustee
or the Indenture Trustee or after discovery of such failure by an
officer of the Servicer; or
(b) failure by the Servicer or the Seller, as the case may
be, duly to observe or to perform in any material respect any
other covenants or agreements of the Servicer or the Seller (as
the case may be) set forth in this Agreement or any other Basic
Document, which failure shall (i) materially and adversely affect
the rights of Certificateholders or Noteholders and (ii) continue
unremedied for a period of 60 days after the date on which
40
written notice of such failure, requiring the same to be remedied,
shall have been given (A) to the Servicer or the Seller (as the
case may be) by the Owner Trustee or the Indenture Trustee or (B)
to the Servicer or the Seller (as the case may be), and to the
Owner Trustee and the Indenture Trustee by the Holders of Notes,
Trust Certificates or Overcollateralization Certificates, as
applicable, evidencing not less than 25% of the Outstanding Amount
of the Notes, evidencing Percentage Interests (as defined in the
Trust Agreement) aggregating at least 25% or evidencing not less
than 25% of the Certificate Balance; or
(c) the occurrence of an Insolvency Event with respect to the
Seller, the Servicer or the Company;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee or the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by
notice then given in writing to the Servicer (and to the Indenture Trustee
and the Owner Trustee if given by the Noteholders) may terminate all the
rights and obligations (other than the obligations set forth in Section 7.02
hereof) of the Servicer under this Agreement. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Notes, the Certificates or
the Receivables or otherwise, shall, without further action, pass to and be
vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, for the benefit 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 Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer, the
Indenture Trustee and the Owner 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, or shall thereafter be received by it with respect to any
Receivable. All reasonable costs and expenses (including attorneys' fees)
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 shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses.
Upon receipt of notice of the occurrence of a Servicer Default, the Owner
Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.02. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 8.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation,
until the later of (i) the date 45 days from the delivery to the Owner
Trustee and the Indenture Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement and (ii) the date upon which the
41
predecessor Servicer shall become unable to act as Servicer, as specified in
the notice of resignation and accompanying Opinion of Counsel. In the event
of the Servicer's termination hereunder, the Indenture Trustee shall appoint
a successor Servicer, and the successor Servicer shall accept its appointment
(including its appointment as Administrator under the Administration
Agreement as set forth in Section 8.02(b)) by a written assumption in form
acceptable to the Owner Trustee and the Indenture Trustee. In the event that
a successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section, the
Indenture Trustee without further action shall automatically be appointed the
successor Servicer and the Indenture Trustee shall be entitled to the
Servicing Fee. Notwithstanding the above, the Indenture Trustee shall, if it
shall be legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution, having a net worth of
not less than $100,000,000 and whose regular business shall include the
servicing of automotive receivables, as the successor to the Servicer under
this Agreement.
(b) Upon appointment, the successor Servicer (including the
Indenture Trustee acting as successor Servicer) shall (i) be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
(c) The Servicer may not resign unless it is prohibited from
serving as such by law.
SECTION 8.03. Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, the 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 Noteholders and the Rating Agencies.
SECTION 8.04. Waiver of Past Defaults. The Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes,
the Holders (as defined in the Trust Agreement) of Trust Certificates
evidencing not less than a majority of the Percentage Interests (as defined
in the Trust Agreement) or the Holders (as defined in the Trust Agreement) of
Overcollateralization Certificates evidencing not less than a majority of the
Certificate Balance may, on behalf of all Noteholders, the Holders of the
Trust Certificates or the Holders of the Overcollateralization Certificates,
as the case may be, waive in writing any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a
default in making any required allocations or distributions from the Deposit
Account in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
42
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables. (a) As of the
last day of any Collection Period immediately preceding a Payment Date as of
which the then outstanding Pool Balance is 10% or less of the Original Pool
Balance and the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes have
been paid in full, the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Deposit Account; provided, however, that, unless
Moody's agrees otherwise, the Servicer may not effect any such purchase if
the rating of the Servicer's long-term debt obligations is less than Baa3 by
Moody's, unless the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such purchase would not
constitute a fraudulent conveyance. To exercise such option, the Servicer
shall deposit pursuant to Section 5.04 in the Deposit Account an amount equal
to the aggregate Purchase Amount for the Receivables (including defaulted
Receivables), plus the appraised value of any such other property held by the
Trust other than the Deposit Account, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Trustee, and shall succeed to all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to
exercise such option unless the amount to be deposited in the Deposit Account
pursuant to the preceding sentence is greater than or equal to the sum of the
outstanding principal balance of the Notes and the Certificate Balance of the
Overcollateralization Certificates and all accrued but unpaid interest
(including any overdue interest and premium) thereon.
(b) As described in Article IX of the Trust Agreement, notice of
any termination of the Trust shall be given by the Servicer to the Owner
Trustee and the Indenture Trustee as soon as practicable after the Servicer
has received notice thereof.
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment. This Agreement may be amended by the
Seller, the Servicer and the Issuer, with the consent of the Indenture
Trustee, but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement (including for the issuance of Fixed Value Securities pursuant to
Section 2.03) or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Owner Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of
any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Seller, the Servicer and the Issuer, with the consent of the Indenture
Trustee, the consent of the Holders of Notes evidencing not less than a
majority of the Outstanding Amount of the Notes, the consent of the Holders
(as defined in the Trust Agreement) of outstanding Trust Certificates
evidencing not less
43
than a majority of the Percentage Interests (as defined in the Trust
Agreement) and the consent of the Holders (as defined in the Trust Agreement)
of Overcollateralization Certificates evidencing not less than a majority of
the Certificate Balance of the Overcollateralization Certificates, for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Noteholders or the Certificateholders; provided, however, that
no such amendment shall (a) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on Receivables
or distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage
of the Outstanding Amount of the Notes, the Percentage Interests (as defined
in the Trust Agreement) or the aforesaid percentage of the Certificate
Balance of the Overcollateralization Certificates, the Holders of which are
required to consent to any such amendment, without the consent of the Holders
of all the outstanding Notes, the Holders (as defined in the Trust Agreement)
of all the outstanding Trust Certificates and the Holders (as defined in the
Trust Agreement) of all the outstanding Overcollateralization Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and
each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Owner Trustee and the Indenture Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 10.02(i)(1). The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects
the Owner Trustee's or the Indenture Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following
such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of ss. 9-402(7)
of the UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least five days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
44
(c) Each of the Seller and the Servicer shall have an obligation
to 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 UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment or 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
Standard Receivable and each Fixed Value Receivable accurately and in
sufficient detail to permit (i) the reader thereof to know at any time the
status of such Standard Receivable or Fixed Value 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 Standard Receivable or Fixed Value Receivable and the amounts from time
to time deposited in the Deposit Account in respect of such Standard
Receivable or Fixed Value Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Standard Receivables
and the Fixed Value Receivables, the Servicer's master computer records
(including any backup archives) that refer to a Standard Receivable or Fixed
Value Receivable shall indicate clearly the interest of the Issuer and the
Indenture Trustee in such Standard Receivable or Fixed Value Receivable and
that such Standard Receivable or Fixed Value Receivable is owned by the
Issuer and has been pledged to the Indenture Trustee. Indication of the
Issuer's and the Indenture Trustee's interest in a Standard Receivable or
Fixed Value Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, the related Receivable shall have been
paid in full or repurchased.
(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
automotive receivables to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to
any Standard Receivable or Fixed Value Receivable, shall indicate clearly
that such Standard Receivable or Fixed Value 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 its agents
at any time during normal business hours to inspect, audit and make copies of
and abstracts from the Servicer's records regarding any Standard Receivable
or Fixed Value Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee
or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
45
(1) promptly after the execution and delivery of this
Agreement and of each amendment hereto, an Opinion of Counsel
stating that, in the opinion of such counsel, either (A) all
financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee 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) no such action shall be necessary to
preserve and protect such interest; and
(2) within 90 days after the beginning of each calendar
year beginning with the first calendar year beginning more than
three months after the Cutoff Date, an Opinion of Counsel, dated
as of a date during such 90-day period, stating that, in the
opinion of such counsel, either (A) all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner
Trustee 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) no such action
shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law,
cause the Notes to be registered with the Commission pursuant to Section
12(b) or Section 12(g) of the Exchange Act within the time periods specified
in such sections.
SECTION 10.03. Notices. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies 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 or the Servicer, to Chrysler Financial Company L.L.C.,
00000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention of Assistant
Secretary ((000) 000-0000), (b) in the case of the Issuer or the Owner
Trustee, at the Corporate Trust Office (as defined in the Trust Agreement),
(c) in the case of the Indenture Trustee, at the Corporate Trust Office, (d)
in the case of Moody's, to Xxxxx'x Investors Service, Inc., ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (e) in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx
00000, Attention of Asset Backed Surveillance Department, (f) in the case of
Fitch IBCA, Inc., to Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, X.X. 00000, and (g) in
the case of Duff & Xxxxxx Credit Rating Co., to 00 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000; or, as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 10.04. Assignment by the Seller or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided
in the remainder of this Section, as provided in Sections 6.04 and 7.03
herein and as provided in the provisions of this Agreement concerning the
resignation of the Servicer, this Agreement may not be assigned by the Seller
or the Servicer. The Issuer and the Servicer hereby acknowledge and consent
to the conveyance and assignment
46
(i) by the Seller to the Company pursuant to the Purchase Agreement and (ii)
by the Company to a limited liability company or other Person (provided that
conveyance and assignment is made in accordance with Section 5.05 of the
Purchase Agreement), of any and all of the Seller's rights and interests (and
corresponding obligations, if any) hereunder with respect to receiving
amounts from the Reserve Account and with respect to receiving and conveying
any Fixed Value Payments, and the Issuer and the Servicer hereby agree that
the Company, and any such assignee of the Company, shall be entitled to
enforce such rights and interests directly against the Issuer as if the
Company, or such assignee of the Company, were itself a party to this
Agreement.
SECTION 10.05. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Seller, the Company (and any
assignee of the Company pursuant to Section 10.04), the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy
or claim in the Owner Trust Estate or under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
SECTION 10.06. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.07. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10.10. Assignment by Issuer. 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/or the assignment of any
or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 10.11. Nonpetition Covenants. (a) Notwithstanding any
prior termination of this Agreement, the Servicer and the Seller shall not,
prior to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer or the Company, acquiesce, petition or
otherwise invoke or cause the Issuer or the Company (or any assignee of the
47
Company pursuant to Section 10.04) to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Issuer or the Company (or any assignee of the Company pursuant to
Section 10.04) under any federal or state bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or the Company (or any
assignee of the Company pursuant to Section 10.04) or any substantial part
of its property, or ordering the winding up or liquidation of the affairs
of the Issuer or the Company (or any assignee of the Company pursuant to
Section 10.04).
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Seller.
SECTION 10.12. Limitation of Liability of Owner Trustee and
Indenture Trustee. (a)Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Chase Manhattan Bank
Delaware not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall Chase Manhattan Bank Delaware in
its individual capacity or, except as expressly provided in the Trust
Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by The First National Bank of Chicago, not
in its individual capacity but solely as Indenture Trustee and in no event
shall The First National Bank of Chicago 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.
48
Schedule A IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
PREMIER AUTO TRUST 1999-3
By: CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely as
Owner Trustee on behalf of the Trust
By: /s/Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
CHRYSLER FINANCIAL COMPANY L.L.C.,
Seller and Servicer
By:/s/Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President & Treasurer
Acknowledged and accepted
as of the day and year
first above written:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity
but solely as Indenture Trustee
By: /s/Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
SCHEDULE A
Schedule of Receivables
Delivered to the Owner Trustee and Indenture Trustee at Closing
Schedule A
SCHEDULE B
Location of Receivable Files
Chrysler Financial Company L.L.C.
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Schedule B
EXHIBIT A
Form of Distribution Statement to Noteholders
Chrysler Financial Company L.L.C.
Premier Auto Trust 1999-3 Payment Date Statement to Noteholders
-----------------------------------------------------------------------------
Amount of Principal Paid to:
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Amount of Interest Paid to:
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Total Distribution Amount:
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Servicing Fee
Servicing Fee Per $1,000 Note
Reserve Account Balance
A-1
EXHIBIT B
Form of Servicer's Certificate
Chrysler Financial Company L.L.C.
Premier Auto Trust 1999-3 Monthly Servicer's Certificate
=============================================================================
Period
Payment Date
Dates Covered From & Incl. To & Incl.
-----------------------------------------------------------------------------
Collections
Accrual
30/360 Days
Actual/360 Days
Receivables Balances Beginning Ending
-----------------------------------------------------------------------------
Pool Balance
Simple Interest
Original Pool Balance
-----------------------------------------------------------------------------
Total Distribution Amount:
Loss & Delinquency
B-1
Account Activity
----------------------------------------------
----------------------------------------------------------------------------------------------
Beginning Ending Interest/Interest
Balance Balance Change Factor Servicing
Shortfall
----------------------------------------------------------------------------------------------
Initial Pool
Principal Paydown
Reserve
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Overcollateralization
Overcollateralization Percentage
Principal Allocation
----------------------------------------------
----------------------------------------------------------------------------------------------
Total
Principal
----------
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Total =================================================================
==============================================================================================
Miscellaneous
----------------------------------------------------------------------------------------------
Amounts allocated for distribution to Certificateholders
Cash Release Amount
Receivables to be released
Specified Reserve Amount
Distribution Amount to Seller
Servicing Fee to Servicer
Allocation of Funds
----------------------------------------------------------------------------------------------
Sources
-------
Redemption/Prepay Amount
Total Sources
B-2
