Exhibit 4.3
===========================================================================
SALE AND SERVICING AGREEMENT
between
PREMIER AUTO TRUST 1996-4,
Issuer,
and
CHRYSLER FINANCIAL CORPORATION,
Seller and Servicer
Dated as of August 1, 1996
===========================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
Definitions
SECTION 1.01. Definitions.......................................... 1
SECTION 1.02. Other Definitional Provisions........................ 18
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables............................ 19
SECTION 2.02. [Reserved]........................................... 19
SECTION 2.03. Conveyance of Fixed Value Payments................... 19
SECTION 2.04. Fixed Value Securities............................... 20
SECTION 2.05. Purchase of Eligible Investment Receivables.......... 21
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of the
Seller with Respect to the Receivables............... 23
SECTION 3.02. Repurchase upon Breach............................... 27
SECTION 3.03. Custody of Receivable Files.......................... 27
SECTION 3.04. Duties of Servicer as Custodian...................... 28
SECTION 3.05. Instructions; Authority To Act....................... 28
SECTION 3.06. Custodian's Indemnification.......................... 28
SECTION 3.07. Effective Period and Termination..................... 28
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer................................... 29
SECTION 4.02. Collection and Allocation of Receivable Payments..... 29
SECTION 4.03. Realization upon Receivables......................... 30
SECTION 4.04. Physical Damage Insurance.............................30
SECTION 4.05. Maintenance of Security Interests
in Financed Vehicles................................. 30
SECTION 4.06. Covenants of Servicer................................ 30
SECTION 4.07. Purchase of Receivables upon Breach.................. 30
SECTION 4.08. Servicing Fee........................................ 31
SECTION 4.09. Servicer's Certificate............................... 31
SECTION 4.10. Annual Statement as to Compliance;
Notice of Default.................................... 31
SECTION 4.11. Annual Independent Certified
Public Accountants' Report........................... 32
SECTION 4.12. Access to Certain Documentation
and Information Regarding Receivables................ 32
SECTION 4.13. Servicer Expenses.................................... 32
i
SECTION 4.14. Appointment of Subservicer........................... 32
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Trust Accounts...................... 33
SECTION 5.02. Collections.......................................... 35
SECTION 5.03. Application of Collections........................... 35
SECTION 5.04. Advances............................................. 36
SECTION 5.05. Additional Deposits.................................. 36
SECTION 5.06. Distributions........................................ 37
SECTION 5.07. Reserve Account...................................... 38
SECTION 5.08. [Reserved]........................................... 40
SECTION 5.09. Statements to Certificateholders and Noteholders..... 40
SECTION 5.10. Net Deposits......................................... 41
SECTION 5.11. Transfer of the Class A-1 Notes...................... 41
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller............................ 41
SECTION 6.02. Corporate Existence.................................. 42
SECTION 6.03. Liability of Seller; Indemnities..................... 42
SECTION 6.04. Merger or Consolidation of, or
Assumption of the Obligations of, Seller............. 43
SECTION 6.05. Limitation on Liability of Seller and Others......... 44
SECTION 6.06. Seller May Own Certificates or Notes................. 44
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer.......................... 44
SECTION 7.02. Indemnities of Servicer.............................. 45
SECTION 7.03. Merger or Consolidation of, or Assumption
of the Obligations of, Servicer...................... 46
SECTION 7.04. Limitation on Liability of Servicer and Others....... 47
SECTION 7.05. CFC Not To Resign as Servicer........................ 47
ARTICLE VIII
Default
SECTION 8.01. Servicer Default..................................... 47
SECTION 8.02. Appointment of Successor............................. 48
SECTION 8.03. Repayment of Advances................................ 49
SECTION 8.04. Notification to Noteholders and
Certificateholders................................... 49
SECTION 8.05. Waiver of Past Defaults.............................. 49
ii
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables................. 50
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment........................................... 51
SECTION 10.02. Protection of Title to Trust........................ 52
SECTION 10.03. Notices............................................. 54
SECTION 10.04. Assignment by the Seller or the Servicer............ 54
SECTION 10.05. Limitations on Rights of Others..................... 54
SECTION 10.06. Severability........................................ 54
SECTION 10.07. Separate Counterparts............................... 55
SECTION 10.08. Headings............................................ 55
SECTION 10.09. Governing Law....................................... 55
SECTION 10.10. Assignment by Issuer................................ 55
SECTION 10.11. Nonpetition Covenants............................... 55
SECTION 10.12. Limitation of Liability of Owner Trustee
and Indenture Trustee................................55
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
SCHEDULE C Schedule of Eligible Investment Receivables
EXHIBIT A Form of Distribution Statement to
Certificateholders................................A-1
EXHIBIT B Form of Distribution State ent to Noteholders.....B-1
EXHIBIT C Form of Servicer's Certificate....................C-1
EXHIBIT D [Reserved]........................................D-1
EXHIBIT E [Reserved]........................................E-1
EXHIBIT F Form of Assignment for Eligible Investment
Receivables.......................................F-1
iii
SALE AND SERVICING AGREEMENT dated as of August 1, 1996, between PREMIER
AUTO TRUST 1996-4, a Delaware business trust (the "Issuer"), and
CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, 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 Corporation in the ordinary course of
business; and
WHEREAS Chrysler Financial Corporation 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:
"Accelerated Principal Distribution Amount" means, with respect to any
Distribution Date, an amount equal to that portion of the Total Distribution
Amount for such Distribution Date that remains after the payment of (i) the
Servicing Fee, (ii) the Noteholders' Interest Distributable Amount, (iii) the
Regular Principal Distribution Amount, (iv) the Certificateholders' Interest
Distributable Amount, and (v) the amount, if any, required to be deposited
into the Reserve Account on such Distribution Date pursuant to Section
5.06(b)(ii)(F).
"Advance" means either a Precomputed Advance or Simple Interest Advance
or both, as applicable.
"Amortizing Payment" means with respect to each Fixed Value Receivable
or Eligible Investment Fixed Value Receivable and each Collection Period prior
to the date on which the Fixed Value Payment 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.
"Amount Financed" means (i) with respect to a Standard Receivable or
Eligible Investment Standard Receivable, as applicable, the amount advanced
under the Standard Receivable or Eligible Investment Standard Receivable, as
applicable, 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 or Eligible Investment Fixed Value Receivable, as
applicable, 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 the Fixed
Value Receivable or Eligible Investment Fixed Value Receivable, as applicable,
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 or
Eligible Investment Fixed Value Receivable, as applicable.
"Annual Percentage Rate" or "APR" of a Receivable or Eligible Investment
Receivable means the annual rate of finance charges stated in the related
Contract.
"Available Amount" means, with respect to any Distribution Date, the
amount of funds on deposit in the Reserve Account on such Distribution Date
(other than Investment Earnings on Eligible Investments that are not Eligible
Investment Receivables) less the Certificate Interest Reserve Amount with
respect to such Distribution Date before giving effect to any reduction
thereto on such date.
"Certificate Balance" equals, initially, $56,249,236.33 and, thereafter,
equals the Initial Certificate Balance reduced by all amounts allocable to
principal previously distributed to Certificateholders.
"Certificate Distribution Account" has the meaning assigned to such term
in the Trust Agreement.
"Certificate Interest Reserve Amount" means, at the time of reference,
the lesser of (i) $935,143.56 less the amount of any application of the
Certificate Interest Reserve Amount to pay interest on the Certificates on any
prior Distribution Date and (ii) 1.6625% of the Certificate Balance on such
Distribution Date (before giving effect to any reduction thereof on such
Distribution Date); provided, however, that the Certificate Interest Reserve
Amount shall be zero subsequent to any reduction by any Rating Agency of its
rating of any Class of Notes to less than "A-" or its equivalent, or
withdrawal by any Rating Agency of its rating of any Class of Notes, unless
such rating has been restored.
"Certificate Pool Factor" means, as of the close of business on the last
day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made
on the immediately following Distribution Date) divided by the Initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Closing Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Certificateholders' Principal Distributable
Amount and the Certificateholders' Interest Distributable Amount for such
date.
"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess of the sum of the Certificateholders'
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Certificateholders' Interest Carryover Shortfall on such
preceding Distribution Date, over the amount in respect of interest that is
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date, plus 30 days' interest on such excess, to the extent
permitted by law, at the Pass-Through Rate.
2
"Certificateholders' Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date. Interest with respect
to the Certificates shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of this Agreement and the
Basic Documents.
"Certificateholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest accrued from and including the Closing Date
to but excluding September 6, 1996) at the Pass- Through Rate on the
Certificate Balance on the last day of the preceding Collection Period (or, in
the case of the first Distribution Date, on the Closing Date).
"Certificateholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date prior to the Distribution Date on which the
Notes are paid in full, zero; and with respect to any Distribution Date on or
after the Distribution Date on which the Notes are paid in full, the Regular
Principal Distribution Amount for such Distribution Date (less, on the
Distribution Date on which the Notes are paid in full, the portion thereof
payable on the Notes).
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Certificateholders' Monthly
Principal Distributable Amount and any outstanding Certificateholders'
Principal Carryover Shortfall from the preceding Distribution Date, over the
amount in respect of principal that is actually deposited in the Certificate
Distribution Account on such current Distribution Date.
"Certificateholders' Principal Distributable Amount" means, with respect
to any Distribution Date, the sum of the Certificateholders' Monthly Principal
Distributable Amount for such Distribution Date and the Certificateholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided, however, that the Certificateholders' Principal Distributable
Amount shall not exceed the Certificate Balance. In addition, on the Final
Scheduled Distribution Date, the principal required to be included in the
Certificateholders' Principal Distributable Amount will include the lesser of
(a) (i) any Scheduled Payments of principal due and remaining unpaid on each
Precomputed Receivable and (ii) any principal due and remaining unpaid on each
Simple Interest Receivable, in each case, in the Trust as of the Final
Scheduled Maturity Date or (b) the amount that is necessary (after giving
effect to the other amounts to be deposited in the Certificate Distribution
Account on such Distribution Date and allocable to principal) to reduce the
Certificate Balance to zero.
"Certificates" means the Trust Certificates (as defined in the Trust
Agreement).
"CFC" means Chrysler Financial Corporation, a Michigan corporation, or
its successors.
"Class" means any one of the classes of Notes.
"Class A-1 Final Scheduled Distribution Date" means the September 1997
Distribution Date.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
3
"Class A-2 Final Scheduled Distribution Date" means the September 1999
Distribution 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 Distribution Date" means the November 2000
Distribution 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 Distribution Date" means the October 2001
Distribution Date.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a)(i).
"Collection Period" means a calendar month. 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, (2) all
current and previous Payaheads, (3) all applications of Payahead Balances, (4)
all Advances and reductions of Outstanding Precomputed Advances or Outstanding
Simple Interest Advances and (4) all distributions to be made on the following
Distribution 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 5.06 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 000 Xxxxxxx Xxxxxx, 00X, Xxx Xxxx, Xxx Xxxx 00000, Corporate Trust
Administration; 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 the Initial Cutoff Date or a Subsequent Cutoff
Date.
"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.
4
"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 financial intermediary (as defined in Section 8-313 of the UCC) and
the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian and the sending by such
financial intermediary of a confirmation of the purchase of such
certificated security by the Indenture Trustee or its nominee or
custodian, or (ii) by delivery thereof to a "clearing corporation" (as
defined in Section 8-102(3) 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 financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of
the certificated securities for the sole and exclusive account of the
financial intermediary, the maintenance of such certificated securities
by such clearing corporation or a "custodian bank" (as defined in
Section 8-102(4) of the UCC) or the nominee of either subject to the
clearing corporation's exclusive control, the sending of a confirmation
by the financial intermediary of the purchase by the Indenture Trustee
or its nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying
such certificated securities as belonging to the Indenture Trustee or
its nominee or custodian (all of the foregoing, "Physical Property"),
and, 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 is a book-entry security 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 financial
intermediary which is also a "depository" pursuant to applicable Federal
regulations and issuance by such financial intermediary of a deposit
advice or other written confirmation of such book-entry registration to
the Indenture Trustee or its nominee or custodian of the purchase by the
Indenture Trustee or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in its
books and records identifying such book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations as
belonging to the Indenture Trustee or its nominee or custodian and
indicating that such custodian holds such Trust Account Property solely
as agent for the Indenture Trustee or its nominee or custodian; and such
additional or alternative
5
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 (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the purchase
by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or
custodian.
"Depositor" means the Seller in its capacity as Depositor under the
Trust Agreement.
"Distribution Date" means, with respect to each Collection Period, the
sixth day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on September 6, 1996.
"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) the corporate trust department of the
Indenture Trustee, the Owner Trustee or The Chase Manhattan Bank so long as it
shall be Paying Agent under the Trust Agreement or (b) 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. 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 Investment Fixed Value Receivable" means any Contract listed
on Schedule C (which Schedule may be in the form of microfiche), as such
Schedule shall be supplemented to reflect the transfer of Eligible Investment
Receivables to the Issuer on Transfer Dates pursuant to Section 2.05, which
provides for amortization of the loan over a series of fixed level payment
monthly installments in accordance with the actuarial method, the simple
interest method or the Rule of 78s, 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 certain conditions.
6
"Eligible Investment Receivable" means (i) any Eligible Investment
Standard Receivable and (ii) the Amortizing Payments with respect to any
Eligible Investment Fixed Value Receivable.
"Eligible Investment Standard Receivable" means any Contract listed on
Schedule C (which Schedule may be in the form of microfiche), as such Schedule
shall be supplemented to reflect the transfer of Eligible Investment
Receivables to the Issuer pursuant to Section 2.05, which is not an Eligible
Investment Fixed Value Receivable.
"Eligible Investment Receivables Transfer Assignment" has the meaning
assigned thereto in Section 2.05(b)(i).
"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;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws
of the United States of America or any state thereof (or any domestic
branch of a foreign bank) and subject to supervision and examination by
Federal or State banking or depository institution authorities;
provided, however, that at the time of the investment or contractual
commitment to invest therein, the commercial paper or other short-term
unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from
each of the Rating Agencies in the highest investment category granted
thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee or
any of their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b);
(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
7
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:
(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 and the Certificate Balance (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 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
8
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;
(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 or the Certificates.
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide
that, upon any failure to maintain such over collateralization,
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) Eligible Investment Receivables; provided that Eligible
Investment Receivables shall be Eligible Investments only for funds in
the Reserve Account and only to the extent of the portion of the
Specified Reserve Account Balance specified in clause (ii) of the
definition of "Specified Reserve Account Balance"; and
(i) 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 or
Certificates.
"FDIC" means the Federal Deposit Insurance Corporation.
9
"Final Scheduled Distribution Date" means the Distribution Date
immediately following the Final Scheduled Maturity Date.
"Final Scheduled Maturity Date" means August 31, 2002.
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable, Fixed Value Receivable or Eligible Investment
Receivable, as the case may be.
"Fixed Value Payment" means, with respect to each Fixed Value Receivable
or Eligible Investment 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 actuarial method, the simple interest method or the Rule
of 78s, 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 certain conditions.
"Fixed Value Securities" has the meaning assigned to such term in
Section 2.04.
"Indenture" means the Indenture dated as of August 1, 1996, 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 Certificate Balance" shall have the meaning set forth in the
Trust Agreement.
"Initial Cutoff Date" means August 9, 1996.
"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
10
assignment for the benefit of creditors, or the failure by such Person
generally to pay its debts as such debts become due, or the taking of action
by such Person in furtherance of any of the foregoing.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the Receivables (i.e., not Eligible Investment Receivables) in respect of the
Collection Period preceding such Distribution Date: (a) that portion of all
collections on Receivables (including Payaheads) allocable to interest plus
that portion of Payaheads allocable to principal, (b) Liquidation Proceeds
with respect to the Receivables to the extent allocable to interest due
thereon in accordance with the Servicer's customary servicing procedures, (c)
all Advances made by the Servicer of interest due on Receivables, (d) the
Purchase Amount of each Receivable that became a Purchased Receivable during
such Collection Period to the extent attributable to accrued interest on such
Receivable, (e) Recoveries for such Collection Period, and (f) Investment
Earnings (exclusive of Investment Earnings in respect of Eligible Investment
Receivables) for the related Distribution Date; provided, however, that in
calculating the Interest Distribution Amount the following will be excluded:
(i) amounts received on Precomputed Receivables to the extent of any
unreimbursed Precomputed Advances of interest; (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any
unreimbursed Precomputed Advances of interest; (iii) all payments and proceeds
(including Liquidation Proceeds) of any Purchased Receivables the Purchase
Amount of which has been included in the Interest Distribution Amount in a
prior Collection Period; (iv) the sum for all the Simple Interest Receivables
of collections on each such Simple Interest Receivable received during such
preceding Collection Period in excess of the amount of interest that would be
due on the aggregate Principal Balance of the Simple Interest Receivables
during such Collection Period at their respective APRs if a payment were
received on each Simple Interest Receivable during such Collection Period on
the date payment is due under the terms of such Simple Interest Receivable;
and (v) Liquidation Proceeds with respect to a Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not including
interest for the then current Collection Period) but only to the extent of any
unreimbursed Simple Interest Advances.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b); provided that Investment
Earnings on Eligible Investment Receivables shall be applied as part of the
Reserve Account in accordance with Section 2.05 rather than deposited in the
Collection Account.
"Issuer" means Premier Auto Trust 1996-4.
"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 or Eligible Investment
Receivable, as applicable, 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 or Eligible
Investment Receivable, as applicable, became a Liquidated Receivable, net of
the sum of any amounts expended by the Servicer in
11
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.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Note Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the outstanding principal balance of such Class of
Notes (after giving effect to any reductions thereof to be made on the
immediately following Distribution Date) divided by the original outstanding
principal balance of such Class of Notes. The Note Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Note Pool Factor will
decline to reflect reductions in the outstanding principal balance of such
Class of Notes.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for such Distribution Date.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Noteholders' Interest Carryover Shortfall on such preceding Distribution Date,
over the amount in respect of interest that is actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the respective Interest
Rates borne by each Class of the Notes for the related Interest Period.
"Noteholders' Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Distribution Date and the Noteholders' Interest Carryover
Shortfall for such Distribution Date. For all purposes of this Agreement and
the Basic Documents, interest with respect to all Classes of Notes other than
the Class A-2 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-2
Notes shall be computed on the basis of the actual number of days in each
applicable Floating Rate Interest Accrual Period divided by 360.
"Noteholders' Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued for the related Interest Accrual
Period or Floating Rate Interest Accrual Period, as applicable, on each Class
of Notes at the respective Interest Rate for such Class on the outstanding
principal balance of the Notes of such Class on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date), after giving effect to all distributions of principal to the
Noteholders of such Class on or prior to such Distribution Date (or, in the
case of the first Distribution Date, on the Closing Date).
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of (i) the Regular Principal
Distribution Amount plus (ii) the Accelerated Principal Distribution Amount
plus (iii) any accelerated payments of principal
12
required to be made from amounts on deposit in the Reserve Account pursuant to
Section 5.07(b)(ii).
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date, over the amount in respect of
principal that is actually deposited in the Note Distribution Account on such
current Distribution Date.
"Noteholders' Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Principal Distributable
Amount for such Distribution Date and the Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date; provided,
however, that the Noteholders' Principal Distributable Amount shall not exceed
the outstanding principal balance of the Notes. In addition, (a) on the Class
A-1 Final Scheduled Distribution Date, the principal required to be deposited
in the Note Distribution Account will include the amount necessary (after
giving effect to the other amounts to be deposited in the Note Distribution
Account on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-1 Notes to zero; (b) on the Class A-2 Final
Scheduled Distribution Date, the principal required to be deposited in the
Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account
on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-2 Notes to zero; (c) on the Class A-3 Final
Scheduled Distribution Date, the principal required to be deposited in the
Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account
on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-3 Notes to zero; and (d) on the Class A-4
Final Scheduled Distribution Date, the principal required to be deposited in
the Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account
on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-4 Notes to zero.
"Obligor" on a Receivable or an Eligible Investment Receivable means the
purchaser or co-purchasers of the Financed Vehicle and any other Person who
owes payments under the Receivable or Eligible Investment Receivable,
respectively.
"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.
"Original Pool Balance" means $1,499,991,236.33.
13
"Outstanding Precomputed Advances" on the Precomputed Receivables means
the sum, as of the close of business on the last day of a Collection Period,
of all Precomputed Advances as reduced as provided in Section 5.04(a).
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances as reduced as provided in
Section 5.04(b).
"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.
"Pass-Through Rate" means 6.65% per annum.
"Payahead" on a Receivable that is a Precomputed Receivable means the
amount, as of the close of business on the last day of a Collection Period,
computed in accordance with Section 5.03 with respect to such Receivable.
"Payahead Balance" on a Receivable that is a Precomputed Receivable
means the sum, as of the close of business on the last day of a Collection
Period, of all Payaheads made by or on behalf of the Obligor with respect to
such Precomputed Receivable, as reduced by applications of previous Payaheads
with respect to such Precomputed Receivable pursuant to Sections 5.03 and
5.04.
"Payment Determination Date" means, with respect to any Distribution
Date, the Business Day immediately preceding such Distribution 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).
"Precomputed Advance" means the amount, as of the close of business on
the last day of a Collection Period, which the Servicer is required to advance
on the related Precomputed Receivables pursuant to Section 5.04(a).
"Precomputed Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, under which the portion of a payment allocable to
earned interest (which may be referred to in the related Contract as an add-on
finance charge) and the portion allocable to the Amount Financed is determined
according to the sum of periodic balances or the sum of monthly balances or
any equivalent method or which is a monthly actuarial receivable.
"Principal Balance" of (a) a Precomputed Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed
minus the sum of (i) that portion of all Scheduled Payments due on or prior to
such day allocable to principal using the actuarial or constant yield method,
(ii) any refunded portion of extended warranty protection plan costs or of
physical damage, credit life or disability insurance premiums included in the
Amount Financed, (iii) any payment of the Purchase Amount with respect to the
Precomputed
14
Receivable allocable to principal and (iv) any prepayment in full
or any partial prepayments applied to reduce the Principal Balance of the
Precomputed Receivable and (b) a Simple Interest Receivable, as of the close
of business on the last day of a Collection Period, 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 Simple Interest Receivable allocable to principal.
"Purchase Agreement" means the Purchase Agreement dated as of August 1,
1996, 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 or
Eligible Investment Receivable, as applicable, under the terms thereof
including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable or Eligible Investment
Receivable, as applicable, 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.
"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
Investors Service, L.P. 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 or
the Certificates.
"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Liquidation Proceeds to the extent allocable to principal.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable. An Eligible Investment
Receivable is not a 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.
"Regular Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication, with
respect to the Receivables (i.e.,
15
not any Eligible Investment Receivables) in respect of the Collection Period
preceding such Distribution Date: (a) that portion of all collections on
Receivables allocable to principal (exclusive of Payaheads allocable to
principal that have not been applied as payments under the related Receivables
in such Collection Period and inclusive of Payaheads allocable to principal
that have been applied as payments under the related Receivables in such
Collection Period), (b) all Liquidation Proceeds attributable to the principal
amount of Receivables that became Liquidated Receivables during such
Collection Period in accordance with the Servicer's customary servicing
procedures, plus the amount of Realized Losses with respect to such Liquidated
Receivables, (c) all Precomputed Advances made by the Servicer of principal
due on the Precomputed Receivables, (d) to the extent attributable to
principal, the Purchase Amount of each Receivable that became a Purchased
Receivable during such Collection Period, (e) partial prepayments on
Precomputed Receivables relating to refunds of extended warranty protection
plan costs or of physical damage, credit life or disability insurance policy
premiums, but only if such costs or premiums were financed by the respective
Obligors thereon as of the date of the original contract and only to the
extent not included under clause (a) above, and (f) on the Final Scheduled
Distribution Date, any amounts advanced by the Servicer on such Final
Scheduled Distribution Date with respect to principal on the Receivables;
provided, however, that in calculating the Regular Principal Distribution
Amount the following will be excluded: (i) amounts received on Precomputed
Receivables to the extent that the Servicer has previously made an
unreimbursed Precomputed Advance of principal, (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any
unreimbursed Precomputed Advances of principal, (iii) all payments and
proceeds (including Liquidation Proceeds) of any Purchased Receivables the
Purchase Amount of which has been included in the Principal Distribution
Amount in a prior Collection Period, and (iv) Recoveries.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means an amount equal to the Specified
Reserve Account Balance on the Closing Date (which is equal to $82,499,518).
"Scheduled Payment" on a Precomputed Receivable means that portion of
the payment required to be made by the Obligor during the respective
Collection Period sufficient to amortize the Principal Balance under the
actuarial method over the term of the Receivable and to provide interest at
the APR.
"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.
"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 C.
"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 1.00% per annum.
16
"Simple Interest Advance" means the amount of interest, as of the close
of business on the last day of a Collection Period, which the Servicer is
required to advance on the Simple Interest Receivables pursuant to Section
5.04(b).
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made and
the remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, 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 Account Balance" means, with respect to any
Distribution Date, the sum of (i) 1.00% of the Original Pool Balance as of
such date and (ii) 4.50% of the Original Pool Balance as of such date;
provided, however, that with respect to the portion of the Specified Reserve
Account Balance set forth in clause (ii) above, so long as on any Distribution
Date (except the first Distribution Date) the sum of (x) the outstanding
principal balance of the Notes and the Certificate Balance (after giving
effect to all distributions made on the prior Distribution Date) and (y) the
aggregate amount of Payaheads that have been collected but not yet applied as
payments under the related Receivables as of the first day of the related
Collection Period is less than or equal to 98.00% of the Pool Balance on the
first day of the related Collection Period, then the portion of the Specified
Reserve Account Balance set forth in clause (ii) above will be reduced to an
amount equal to the product of (I) the Pool Balance on the first day of the
related Collection Period and (II) the percentage (which shall not be greater
than 3.50% or less than zero) equal to (X) the percentage derived from the
fraction, the numerator of which is the sum of (x) the outstanding principal
balance of the Notes and the Certificate Balance (after giving effect to all
distributions made on the prior Distribution Date) and (y) the aggregate
amount of Payaheads that have been collected but not yet applied as payments
under the related Receivables as of the first day of the related Collection
Period, and the denominator of which is such Pool Balance less (Y) 94.50%. The
portion of the Specified Reserve Account Balance specified in clause (ii)
above may be invested in Eligible Investment Receivables.
"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.
"Subsequent Cutoff Date" means the date as of which particular Eligible
Investment Receivables are conveyed to the Trust pursuant to Section 2.05.
"Total Distribution Amount" means, for each Distribution Date, the sum
of the applicable Interest Distribution Amount and the applicable Regular
Principal Distribution Amount (other than the portion thereof attributable to
Realized Losses).
"Transfer Date" means any date on which Eligible Investment Receivables
are to be transferred to the Issuer and an Eligible Investment Receivables
Transfer Assignment is
17
executed and delivered to the Owner Trustee and the Indenture Trustee pursuant
to Section 2.05.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust 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.
"Trust Accounts" has the meaning assigned thereto in Section 5.01.
"Trust Agreement" means the Amended and Restated Trust Agreement dated
as of August 1, 1996, among the Seller, the Company and the Owner Trustee.
"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.
18
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
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 $1,499,991,236.33 less
the amount to be deposited to the Reserve Account on the Closing Date, 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 due thereon on or after
September 1, 1996, in the case of Precomputed Receivables (including
such payments due on or after September 1, 1996 and collected after
August 9, 1996 and before September 1, 1996), and all moneys received
thereon on and after August 9, 1996, in the case of Simple Interest
Receivables;
(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 Trust Accounts, including the Reserve Account
Initial Deposit and the Certificate Distribution Account, and in all
investments and proceeds thereof (including all income thereon); and
(g) the proceeds of any and all of the foregoing.
SECTION 2.02. [Reserved]
SECTION 2.03. Conveyance of Fixed Value Payments. 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, all monies due and
to
19
become due and all amounts received with respect thereto and all proceeds
thereof, subject to Section 5.03(b).
SECTION 2.04. 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,
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 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; and provided, further, that the obligation of
the Issuer to purchase such Fixed Value Payments 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;
(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.
20
(b) Except as described in Section 10.04, the Seller will not sell,
transfer, assign, set over or otherwise convey the Fixed Value Payments other
than to the Issuer pursuant to paragraph (a).
SECTION 2.05. Purchase of Eligible Investment Receivables. (a) Pursuant
to Section 5.01(b), the Indenture Trustee may invest funds in the Reserve
Account in Eligible Investment Receivables, but only up to the portion of the
Specified Reserve Account Balance specified in clause (ii) of the definition
"Specified Reserve Account Balance". Eligible Investment Receivables shall be
part of the Reserve Account and shall not be Receivables hereunder or under
the Indenture, and collections and Investment Earnings on and Purchase Amounts
in respect of Eligible Investment Receivables shall be applied as part of the
Reserve Account pursuant to Section 5.07 and shall not be part of the Interest
Distribution Amount. Upon delivery by the Indenture Trustee to the Seller of
an amount equal to the aggregate Principal Balance of the Eligible Investment
Receivables then being purchased by the Indenture Trustee on behalf of the
Issuer, the Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Issuer, without recourse (subject to the obligations herein),
all right, title and interest of the Seller in and to:
(1) the Eligible Investment Receivables listed on Schedule C to
the related Eligible Investment Receivables Transfer Assignment, and all
moneys due thereon on or after the related Subsequent Cutoff Date, in
the case of Precomputed Receivables, and all moneys received thereon on
and after the related Subsequent Cutoff Date, in the case of Simple
Interest Receivables;
(2) the security interests in the Financed Vehicles granted by
Obligors pursuant to such Eligible Investment Receivables and any other
interest of the Seller in such Financed Vehicles;
(3) any proceeds with respect to such Eligible Investment
Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors;
(4) any proceeds with respect to such Eligible Investment
Receivables from recourse to Dealers thereon with respect to which the
Servicer has determined in accordance with its customary servicing
procedures that eventual payment in full is unlikely;
(5) any Financed Vehicle that shall have secured any such Eligible
Investment Receivable and shall have been acquired by or on behalf of
the Seller, the Servicer, the Company or the Trust; and
(6) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Issuer the Eligible Investment
Receivables and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions precedent on or prior to the related Transfer Date:
(i) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee a duly executed Eligible Investment Receivables
Transfer Assignment substantially in the
21
form of Exhibit F, which shall include supplements to Schedule C listing
the Eligible Investment Receivables;
(ii) the Seller shall, to the extent required by Section 5.02,
have deposited in the Reserve Account all amounts (A) due on or after
the applicable Subsequent Cutoff Date in respect of Eligible Investment
Receivables that are Precomputed Receivables or (b) received on or after
the applicable Subsequent Cutoff Date in respect of the Eligible
Investment Receivables that are Simple Interest Receivables;
(iii) as of each Transfer Date, (A) the Seller was not insolvent
and will not become insolvent as a result of the transfer of Eligible
Investment Receivables on such Transfer Date, (B) the Seller did not
intend to incur or believe that it would incur debts that would be
beyond the Seller's ability to pay as such debts matured, (C) such
transfer was not made with actual intent to hinder, delay or defraud any
Person and (D) the assets of the Seller did not constitute unreasonably
small capital to carry out its business as conducted;
(iv) each of the representations and warranties made by the Seller
pursuant to Section 3.01 (other than clauses (v) and (aa)) shall be true
and correct with respect to the Eligible Investment Receivables as of
the related Transfer Date, and the Seller shall have performed all
obligations to be performed by it hereunder on or prior to such Transfer
Date;
(v) not more than 40% of the Principal Balances of the Eligible
Investment Receivables in the Reserve Account, including the Eligible
Investment Receivables to be conveyed to the Trust on such Transfer Date
(based on the characteristics of the Eligible Investment Receivables on
the related Subsequent Cutoff Date) represent previously titled
vehicles;
(vi) the Seller shall, at its own expense, on or prior to the
related Transfer Date indicate in its computer files that the Eligible
Investment Receivables identified in the Eligible Investment Receivables
Transfer Assignment have been sold to the Issuer pursuant to this
Agreement and the related Eligible Investment Receivables Transfer
Assignment;
(vii) the Seller shall have taken any action required to maintain
the first perfected ownership interest of the Issuer in the Owner Trust
Estate and the first perfected security interest of the Indenture
Trustee in the Collateral;
(viii) no selection procedures believed by the Seller to be
adverse to the interests of the Certificateholders or the Noteholders
shall have been utilized in selecting the Eligible Investment
Receivables;
(ix) the addition of any such Eligible Investment Receivables will
not result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(x) the Seller shall have delivered (A) to the Rating Agencies an
Opinion of Counsel with respect to the transfer of such Eligible
Investment Receivables in the form of the Opinion of Counsel delivered
to the Rating Agencies on the Closing Date and (B) to the Owner Trustee
and Indenture Trustee the Opinion of Counsel required by Section
10.02(i)(1); provided that the Opinions of Counsel referred to in
clauses (A) and (B) shall
22
only be delivered on or before the 15th day of the month following the
Transfer Date on which the aggregate Principal Balance (calculated as of
the respective Subsequent Cutoff Dates) of the Eligible Investment
Receivables delivered under this Section 2.05 and not previously covered
by an Opinion of Counsel required by this proviso equals or exceeds
$5,000,000; and
(xi) the Seller shall have delivered to the Indenture Trustee and
the Owner Trustee an Officers' Certificate confirming the
satisfaction of each condition specified in this paragraph (b).
(c) Promptly following the transfer to the Issuer of Eligible Investment
Receivables on any Transfer Date, the Issuer shall, without further action
hereunder or thereunder, be deemed to sell, transfer, assign, set over and
otherwise convey to the Seller, effective as of the related Transfer Date,
without recourse, representation or warranty, all the right, title and
interest of the Issuer in and to the related Fixed Value Payments, all monies
due and to become due and all amounts received with respect thereto and all
proceeds thereof, subject to Section 5.03(b).
(d) Except as described in Section 10.04, the Seller will not sell,
transfer, assign, set over or otherwise convey Fixed Value Payments derived
from Eligible Investment Fixed Value Receivables.
(e) Except as otherwise provided herein, all of the provisions of this
Agreement (exclusive of Section 3.01(v) and Section 5.04) applicable to a
Receivable shall also apply to the Eligible Investment Receivables, except
that, pursuant to Section 5.02, collections and Investment Earnings on and
Purchase Amounts in respect of the Eligible Investment Receivables shall be
deposited into the Reserve Account at the time when collections on and
Purchase Amounts in respect of the Receivables are required to be deposited
into the Collection Account. For purposes of calculating the amount in the
Reserve Account, the amount represented by an Eligible Investment Receivable
shall be its Principal Balance. The Servicer shall receive a Servicing Fee in
respect of the Eligible Investment Receivables calculated in the manner
specified in Section 4.08 and payable out of any collections on the Eligible
Investment Receivables allocable to interest.
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of the 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
23
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, (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 Financed by maturity
and yield interest at the Annual Percentage Rate and (E) in the case of
Precomputed Receivables, in the event that such contract is prepaid,
provides for a prepayment that fully pays the Principal Balance and
includes a full month's interest, in the month of prepayment, at the
Annual Percentage Rate. The Obligor on each OMSC Receivable was in the
services of the United States of America military at the time such OMSC
Receivable was originated. 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 and Schedule C to any Eligible Investment
Receivables Transfer Assignment 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
the 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 and each
Eligible Investment Receivables Transfer Assignment 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
24
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.
(h) No Waiver. No provision of a Standard Receivable or Fixed
Value Receivable has been waived.
(i) 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 except for increases resulting
from the inclusion of any premiums for forced placed physical damage
insurance covering the Financed Vehicle.
(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 the Obligor has 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
25
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.
(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, any Eligible Investment Receivables Transfer
Assignment 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 Receivables 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 August 31,
2002.
(s) Scheduled Payments. (A) Each Standard Receivable and Fixed
Value Receivable has a first Scheduled Payment due, in the case of
Precomputed Receivables, or a scheduled due date, in the case of Simple
Interest Receivables, 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 gross balance of at least
$1,000.
(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 having filed for
bankruptcy, 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 and warranties of the Seller in
Section 6.01 are true and correct.
26
(aa) Financing. As of the Initial Cutoff Date, approximately
28.00% of the aggregate principal balance of the Receivables,
constituting 33.04% of the number of Receivables, represents previously
titled vehicles; approximately 77.01% of the aggregate principal balance
of the Receivables represents financing of vehicles manufactured or
distributed by Chrysler Corporation; approximately 8.47% of the
aggregate principal balance of the Receivables represents Precomputed
Receivables and the remainder represents Simple Interest Receivables; by
aggregate principal balance, approximately 1.6% of the Receivables are
Fixed Value Receivables. The aggregate principal balance of the
Receivables, as of the Initial Cutoff Date (in the case of Precomputed
Receivables, exclusive of Scheduled Payments due on or after the Initial
Cutoff Date and before September 1, 1996), is $1,499,991,236.33. For the
purposes of this subparagraph (aa), 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 5.05. 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 (in the case of the Receivables) and the
applicable Transfer Date (in the case of Eligible Investment Receivables) 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.
27
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.
SECTION 3.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
and shall continue in full force and effect until terminated pursuant to this
Section. If CFC shall resign as Servicer in accordance with the provisions of
this Agreement or if all of the rights and obligations of any
28
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 or by
Certificateholders evidencing not less than 25% of the Certificate Balance, in
the same manner as the Indenture Trustee or such Holders may terminate the
rights and obligations of the Servicer under Section 8.01. 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, furnishing
monthly and annual statements to the Owner Trustee and the Indenture Trustee
with respect to distributions and making Advances pursuant to Section 5.04.
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 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
29
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 Scheduled Payments on a Precomputed Receivable or the original
due dates or amounts of the originally scheduled payments of interest on
Simple Interest Receivables; 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 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 Receivable. The Servicer shall
not agree to any alteration of the interest rate on any Receivable or of the
amount of any Scheduled Payment on Precomputed Receivables or the originally
scheduled payments on Simple Interest Receivables.
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 the 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.
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
30
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 5.05. For purposes of this Section,
the Purchase Amount shall consist in part of a release by the Servicer of all
rights of reimbursement with respect to Outstanding Precomputed Advances and
Outstanding Simple Interest Advances on the Receivable. 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 Distribution Date
shall equal the product of (a) one-twelfth, (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
(including, in the case of a Receivable that provides for payments according
to the "Rule of 78s" and that is prepaid in full, the difference between the
Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the "Rule of 78s"), 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
Distribution Date pursuant to Sections 5.06 and 5.07 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 or C, as
applicable).
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, 1997, an Officers'
Certificate, dated as of December 31 of the preceding 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, Certificate Owner, 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,
31
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, 1997, 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 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
32
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 Trust Accounts. (a) (i) 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 "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(ii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Note Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders.
(iii) 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 "Reserve Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders and the
Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account and the Reserve Account (collectively the "Trust Accounts") 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. 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 or the Noteholders, as applicable;
provided, that (i) on each Payment Determination Date all interest and other
investment income (net of losses and investment expenses) on funds on deposit
in the Trust Accounts other than interest or other investment income on
Eligible Investment Receivables shall be deposited into the Collection Account
and shall be deemed to constitute a portion of the Interest Distribution
Amount for the related Distribution Date and (ii) any interest and other
investment income on Eligible Investment Receivables shall remain in the
Reserve Account and will be available for application and distribution
pursuant to
33
Section 5.07. Other than as permitted by the Rating Agencies, funds on deposit
in the Collection Account, the Reserve Account and the Note Distribution
Account shall be invested in Eligible Investments that will mature (A) not
later than the Business Day immediately preceding the next Distribution Date
or (B) on such next Distribution Date if either (x) such investment is held in
the trust department of the institution with which the Collection Account, the
Reserve Account, the Note Distribution Account or the Certificate Distribution
Account, as applicable, is then maintained and is invested in a time deposit
of the Indenture Trustee rated at least A-1 by Standard & Poor's and P-1 by
Moody's (such account being maintained within the trust department of the
Indenture Trustee) or (y) the Indenture Trustee (so long as the short-term
unsecured debt obligations of the Indenture Trustee are either (i) rated at
least P-1 by Moody's and A-1 by Standard & Poor's on the date such investment
is made or (ii) guaranteed by an entity whose short-term unsecured debt
obligations are rated at least P-1 by Moody's and A-1 by Standard & Poor's on
the date such investment is made) has agreed to advance funds on such
Distribution Date to the Note Distribution Account and the Certificate
Distribution Account in the amount payable on such investment on such
Distribution Date pending receipt thereof to the extent necessary to make
distributions on such Distribution Date; provided that Eligible Investment
Receivables need not satisfy such maturity requirements. The guarantee
referred to in clause (y) of the preceding sentence shall be subject to the
Rating Agency Condition. For the purpose of the foregoing, unless the
Indenture Trustee affirmatively agrees in writing to make such advance with
respect to such investment prior to the time an investment is made, it shall
not be deemed to have agreed to make such advance. Funds deposited in a Trust
Account on a day which immediately precedes a Distribution Date upon the
maturity of any Eligible Investments are not required to be invested
overnight.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
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 Trust Accounts shall be under the sole dominion and control
of the Indenture Trustee for the benefit of the Noteholders or the
Noteholders and the Certificateholders, as the case may be. If, at any
time, any of the Trust Accounts 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 Trust Account as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Trust 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 financial intermediary (as such term is defined in
Section 8- 313(4) of the UCC) acting solely for the Indenture
Trustee;
34
(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 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 Trust Accounts for the purpose of permitting the
Servicer or the Owner Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties
under the Indenture.
SECTION 5.02. Collections. The Servicer shall remit within two Business
Days of receipt thereof to the Collection 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) and all Liquidation
Proceeds, both as collected during the Collection Period. Notwithstanding the
foregoing, for so long as (i) CFC remains the Servicer, (ii) no Servicer
Default shall have occurred and be continuing and (iii)(x) CFC maintains a
short-term rating of at least A-1 by Standard & Poor's and P-1 by Moody's (and
for five Business Days following a reduction in either such rating) or (y)
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), the Servicer shall remit
such collections with respect to the preceding calendar month to the
Collection Account on the Payment Determination Date immediately preceding the
related Distribution Date. 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.
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
first, in the case of Precomputed Receivables, to reduce Outstanding
Precomputed Advances as described in Section 5.04(a) and, in the case of
Simple Interest Receivables, to reduce Outstanding Simple Interest
Advances to the extent described in Section 5.04(b). Next, any excess
shall be applied, in the case of Precomputed Receivables, to the
Scheduled Payment and, in the case of Simple Interest Receivables, to
interest and principal in accordance with the Simple Interest Method.
With respect to Precomputed Receivables, any remaining excess shall be
added to the Payahead Balance, and shall be applied to prepay the
Precomputed Receivable, but only if the sum of such excess and the
previous Payahead Balance shall be sufficient to prepay the Receivable
in full. Otherwise, any such remaining excess payments shall constitute
a Payahead and shall increase the Payahead Balance.
35
(b) 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. Advances. (a) As of the close of business on the last day
of each Collection Period, if the payments by or on behalf of the Obligor on a
Precomputed Receivable (other than a Purchased Receivable) shall be less than
the Scheduled Payment, the Payahead Balance shall be applied by the Servicer
to the extent of the shortfall and such Payahead Balance shall be reduced
accordingly. Next, the Servicer shall advance any remaining shortfall (such
amount, a "Precomputed Advance"), to the extent that the Servicer, at its sole
discretion, shall determine that the Precomputed Advance shall be recoverable
from the Obligor, the Purchase Amount, Liquidation Proceeds or proceeds of any
other Precomputed Receivables. With respect to each Precomputed Receivable,
the Precomputed Advance shall increase Outstanding Precomputed Advances.
Outstanding Precomputed Advances shall be reduced by subsequent payments by or
on behalf of the Obligor, collections of Liquidation Proceeds in respect of
such Precomputed Receivables or payments of the Purchase Amount with respect
to such Precomputed Receivables.
If the Servicer shall determine that an Outstanding Precomputed Advance
with respect to any Precomputed Receivable shall not be recoverable as
aforesaid, the Servicer shall be reimbursed from any collections made on other
Precomputed Receivables in the Trust and Outstanding Precomputed Advances with
respect to such Precomputed Receivables shall be reduced accordingly.
(b) As of the close of business on the last day of each Collection
Period, the Servicer shall advance an amount equal to the amount of interest
due on the Simple Interest Receivables at their respective APR's for the
related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to the absolute value of such negative number shall be paid to the
Servicer and the amount of Outstanding Simple Interest Advances shall be
reduced by such amount. In addition, in the event that a Simple Interest
Receivable becomes a Liquidated Receivable, Liquidation Proceeds with respect
to such Simple Interest Receivable attributable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer to reduce Outstanding Simple Interest Advances,
but only to the extent of any Outstanding Simple Interest Advances. The
Servicer shall not make any advance in respect of principal of Simple Interest
Receivables or in respect of Eligible Investment Receivables.
SECTION 5.05. Additional Deposits. The Servicer shall deposit in the
Collection Account on the Payment Determination Date for the related
Collection Period the aggregate Advances pursuant to Section 5.04. To the
extent that the Servicer fails to make a Simple Interest Advance pursuant to
Section 5.04(b) on the date required, the Servicer shall notify the Indenture
Trustee to withdraw such amount (or, if determinable, such portion of such
amount as does not represent advances for delinquent interest) from the
Reserve Account and deposit such amount in the Collection Account. The
Servicer and the Seller shall deposit or cause to be deposited in the
Collection Account the aggregate Purchase Amount with respect
36
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 5.06. Distributions. (a) So long as (i) the long-term unsecured
indebtedness of CFC is rated Baa3 or better by Moody's or (ii) the Rating
Agency Condition is otherwise satisfied, the Servicer will be entitled to
receive the payment of the Servicing Fee in respect of a Collection Period
(and all unpaid Servicing Fees from prior Collection Periods) at the beginning
of each Collection Period from payments on the Receivables received during
such Collection Period.
(b) (i) On each Payment Determination Date, the Servicer shall
calculate all amounts required to be deposited in the Note Distribution
Account and the Certificate Distribution Account.
(ii) On each Distribution 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 deposits and distributions for
receipt by the Servicer or deposit in the applicable account by 11:00
A.M. (New York time), to the extent of the Total Distribution Amount, in
the following order of priority:
(A) to the extent the Servicer has not received the payment
of the Servicing Fee at the beginning of the related Collection
Period pursuant to clause (a) above, to the Servicer, from the
Interest Distribution Amount, the Servicing Fee (and all unpaid
Servicing Fees from prior Collection Periods);
(B) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clause (A), the Noteholders' Interest Distributable
Amount;
(C) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) and (B), the Noteholders' Principal
Distributable Amount;
(D) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) through (C), the Certificateholders'
Interest Distributable Amount;
(E) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) through (D), the Certificateholders'
Principal Distributable Amount;
(F) to the Reserve Account, from the Total Distribution
Amount remaining after the application of Section 5.06(a) and
clauses (A) through (E) (it being understood that the Accelerated
Principal Distribution Amount is a function of and subject to the
amount required to be deposited in the Reserve Account pursuant to
this clause (F)), the amount, if any, necessary to reinstate the
balance in the Reserve Account up to the Specified Reserve Account
Balance; and
37
(G) to the Reserve Account, the portion, if any, of the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) through (F).
Notwithstanding that the Notes have been paid in full, the Indenture Trustee
shall continue to maintain the Collection Account hereunder until the
Certificate Balance is reduced to zero.
SECTION 5.07. Reserve Account. (a) On the Closing Date, the Owner
Trustee will deposit, on behalf of the Seller, the Reserve Account Initial
Deposit into the Reserve Account from the net proceeds of the sale of the
Notes and the Certificates.
(b) (i) After giving effect to clause (ii) below, if the amount on
deposit in the Reserve Account on any Distribution Date (after giving
effect to all deposits thereto or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance
for such Distribution Date, the Servicer shall instruct the Indenture
Trustee to distribute the amount of such excess to the Seller, which
distribution may include Eligible Investment Receivables.
(ii) On each Distribution Date subsequent to any reduction or
withdrawal by any Rating Agency of its rating of any Class of Notes,
unless such rating has been restored, if the amount on deposit in the
Reserve Account (after taking into account any deposits thereto pursuant
to Section 5.06(b) and withdrawals therefrom pursuant to Section
5.07(c), (d) or (e) on such date) is greater than the Specified Reserve
Account Balance for such Distribution Date, then the Servicer shall
instruct the Indenture Trustee to include the amount of such excess in
the Noteholders' Monthly Principal Distribution Amount and to deposit
the amount of such excess (up to the amount of cash or cash equivalents
in the Reserve Account) to the Collection Account for deposit to the
Note Distribution Account for distribution to Noteholders as an
accelerated payment of principal on such Distribution Date; provided,
that the amount of such deposit shall not exceed the outstanding
principal balance of the Notes after giving effect to all other payments
of principal to be made on such date.
(c) If the Servicer determines pursuant to Section 5.04 that it is
required to make an Advance on a Payment Determination Date and does not do so
from its own funds, the Servicer shall instruct the Indenture Trustee to
withdraw funds from the Reserve Account and deposit them in the Collection
Account to cover any shortfall. Such payment shall be deemed to have been made
by the Servicer pursuant to Section 5.04 for purposes of making distributions
pursuant to this Agreement, but shall not otherwise satisfy the Servicer's
obligation to deliver the amount of the Advances, and the Servicer shall
within two Business Days replace any funds in the Reserve Account so used.
(d) (i) In the event that the Noteholders' Distributable Amount
for a Distribution Date exceeds the sum of the amounts deposited into
the Note Distribution Account pursuant to Section 5.06(b)(ii)(B) and (C)
on such Distribution Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Distribution Date
an amount equal to such excess, to the extent of funds available therein
up to the Available Amount, and deposit such amount into the Note
Distribution Account.
(ii) In the event that the Noteholders' Principal Distributable
Amount on the Class A-1 Final Scheduled Distribution Date, the Class A-2
Final Scheduled Distribution Date,
38
the Class A-3 Final Scheduled Distribution Date or the Class A-4 Final
Scheduled Distribution Date exceeds the amount deposited into the Note
Distribution Account pursuant to Section 5.06(b)(ii)(C) on such
Distribution Date, the Servicer shall instruct the Indenture Trustee to
withdraw from the Reserve Account on such Distribution Date an amount
equal to such excess, to the extent of funds available therein up to the
Available Amount, and deposit such amount into the Note Distribution
Account.
(e) (i) In the event that the Certificateholders' Distributable
Amount for a Distribution Date exceeds the sum of the amounts deposited
into the Certificate Distribution Account pursuant to Section
5.06(b)(ii)(D) and (E) on such Distribution Date, the Servicer shall
instruct the Indenture Trustee to withdraw from the Reserve Account on
such Distribution Date an amount equal to such excess, to the extent of
funds available therein up to the Available Amount after giving effect
to paragraphs (c) and (d) above, and deposit such amount into the
Certificate Distribution Account on such Distribution Date.
(ii) In the event that the Certificateholders' Monthly Interest
Distributable Amount for a Distribution Date exceeds the amount
deposited in the Certificate Distribution Account pursuant to Section
5.06(b)(ii)(D), the Servicer shall instruct the Indenture Trustee to
withdraw from the Reserve Account on such Distribution Date an amount
equal to such excess, to the extent of funds available therein, after
giving effect to paragraphs (d)(i) and (e)(i) above, up to the
Certificate Interest Reserve Amount with respect to such Distribution
Date, and deposit such amount into the Certificate Distribution Account.
(iii) In the event that the Certificateholders' Principal
Distributable Amount on the Final Scheduled Distribution Date exceeds
the amount deposited in the Certificate Distribution Account pursuant to
Section 5.06(b)(ii)(E), the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Distribution Date
an amount equal to such excess, to the extent of funds available therein
after giving effect to paragraphs (d) and (e)(i) above, and deposit such
amount into the Certificate Distribution Account.
(f) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.06(b) following payment in full of the Outstanding
Amount of the Notes and the Certificate Balance until the Pool Balance is
reduced to zero. Following the payment in full of the aggregate Outstanding
Amount of the Notes and the Certificate Balance and of all other amounts owing
or to be distributed hereunder or under the Indenture or the Trust Agreement
to Noteholders and Certificateholders and the termination of the Trust, any
amount remaining on deposit in the Reserve Account (including any Eligible
Investment Receivables) shall be distributed to the Seller.
(g) On the Final Scheduled Distribution Date, if the amount of funds
remaining in the Reserve Account (after all other distributions to be made
from the Reserve Account pursuant to this Section have been made, other than
paragraphs (b)(i) and (f)) is in excess of the amounts described below, a
portion of such excess according to the following schedule shall be deposited
in the Certificate Distribution Account for distribution to
Certificateholders:
(i) with respect to all such funds in the Reserve Account in
excess of $35,000,000 but which do not exceed $37,000,000, 20% of such
amount;
39
(ii) with respect to all such funds in the Reserve Account in
excess of $37,000,000 but which do not exceed $38,000,000, 40% of such
amount;
(iii) with respect to all such funds in the Reserve Account in
excess of $38,000,000 but which do not exceed $38,500,000, 60% of such
amount;
(iv) with respect to all such funds in the Reserve Account in
excess of $38,500,000 but which do not exceed $39,000,000, 80% of such
amount; and
(v) with respect to all such funds in the Reserve Account in
excess of $39,000,000, 100% of such amount.
The amounts to be deposited in the Certificate Distribution Account pursuant
to the preceding sentence are in excess of all amounts otherwise required to
be deposited in the Certificate Distribution Account pursuant to this
Agreement, notwithstanding anything to the contrary contained herein.
SECTION 5.08. [Reserved]
SECTION 5.09. Statements to Certificateholders and Noteholders. On each
Distribution 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 Exhibits A and B,
respectively, setting forth at least the following information as to the Notes
and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal
allocable to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to interest
allocable to each Class of Notes and to the Certificates;
(iii) the outstanding principal balance of each Class of Notes,
the Note Pool Factor for each such Class, the Certificate Balance and
the Certificate Pool Factor as of the close of business on the last day
of the preceding Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above;
(iv) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(v) the amount of Realized Losses, if any, with respect to the
related Collection Period;
(vi) the balance of the Reserve Account on such Payment
Determination Date after giving effect to deposits and withdrawals to be
made on the next following Distribution Date, if any;
(vii) the aggregate Payahead Balance; and
40
(viii) 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.
Each amount set forth on the Distribution 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 Certificate or Note, as applicable.
SECTION 5.10. 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, aggregate
Advances 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. Similarly, the Servicer may cause a single net transfer to be made
from the Collection Account to the Payahead Account, or vice versa. 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.
SECTION 5.11. Transfer of the Class A-1 Notes. In the event any Holder
of a Class A-1 Note shall wish to transfer such Note, the Seller shall provide
to such Holder and any prospective transferee designated by such Holder
information regarding the Class A-1 Notes and the Receivables and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Class A-1 Note without
registration thereof under the Securities Act of 1933, as amended, pursuant to
the exemption from registration provided by Rule 144A.
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, in the case of the Receivables, and
as of the applicable Transfer Date, in the case of the Eligible Investment
Receivables, 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 corporation in good standing under the laws of
the State of Michigan, with the corporate power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the corporate power, authority and legal right to
acquire and own the Standard Receivables and Fixed Value Receivables.
(b) Due Qualification. The Seller is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall
require such qualifications.
(c) Power and Authority. The Seller has the corporate power and
authority to execute and deliver this Agreement and any Eligible
Investment Receivables Transfer
41
Assignment and to carry out their respective terms; the Seller has full
power and authority to sell and assign the property to be sold and
assigned to and deposited with the Issuer, and the Seller shall have
duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this
Agreement has been, and the execution, delivery and performance of each
Eligible Investment Receivables Transfer Assignment will be on or before
the related Transfer Date, duly authorized by the Seller by all
necessary corporate action.
(d) Binding Obligation. This Agreement constitutes, and each
Eligible Investment Receivables Transfer Assignment when executed and
delivered by the Seller will constitute, 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 incorporation or bylaws 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 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. Corporate Existence. During the term of this Agreement,
the Seller will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation 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:
42
(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 Eligible
Investment 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 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 the
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
43
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.
SECTION 6.06. Seller May Own Certificates or Notes. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or 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.
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, in the case of the
Receivables, and as of the applicable Transfer Date, in the case of the
Eligible Investment Receivables, 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 corporation in good standing under the laws of
the state of its incorporation, with the corporate power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is
44
presently conducted, and had at all relevant times, and has, the
corporate 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 corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Standard Receivables and the Fixed Value
Receivables as required by this Agreement) shall require such
qualifications.
(c) Power and Authority. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery and performance of this Agreement
have been duly authorized by the Servicer by all necessary corporate
action.
(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 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:
45
(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 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 the
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 corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by Chrysler
Corporation, 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
46
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 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. 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:
47
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts or the Certificate
Distribution Account any required payment or to direct the Indenture
Trustee to make any required distributions therefrom, which failure
continues unremedied for a period of three 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 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 or Certificates, as applicable, evidencing not less
than 25% of the Outstanding Amount of the Notes or 25% of the
outstanding 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
48
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 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. Repayment of Advances. If the Servicer shall change, the
predecessor Servicer shall be entitled to receive reimbursement for
Outstanding Advances pursuant to Sections 5.03 and 5.04 with respect to all
Advances made by the predecessor Servicer.
SECTION 8.04. 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 8.05. Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes or the Holders
(as defined in the Trust Agreement) of Certificates evidencing not less than a
majority of the outstanding Certificate Balance (in the case of any default
which does not adversely affect the Indenture Trustee or the Noteholders) may,
on behalf of all Noteholders and Certificateholders, 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 deposits to or
payments from any of the Trust Accounts 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.
49
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables. (a) As of the last
day of any Collection Period immediately preceding a Distribution 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 Trust Accounts and the Certificate Distribution
Account; provided, however, that, unless Moody's agrees otherwise, the
Servicer may not effect any such purchase if the rating of CFC'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 5.05 in the
Collection 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 Trust Accounts and the
Certificate Distribution Account, such value to be determined by an appraiser
mutually agreed upon by the Servicer, the Owner Trustee and the Indenture
Trustee, 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 Collection 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 and all
accrued but unpaid interest (including any overdue interest and premium)
thereon.
(b) Upon any sale of the assets of the Trust pursuant to Section 9.02 of
the Trust Agreement, the Servicer shall instruct the Indenture Trustee to
deposit the proceeds from such sale after all payments and reserves therefrom
have been made (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a
Distribution Date, on the Distribution Date immediately following such
deposit), the Servicer shall instruct the Indenture Trustee to make the
following deposits (after the application on such Distribution Date of the
Total Distribution Amount and funds on deposit in the Reserve Account pursuant
to Sections 5.06 and 5.07) from the Insolvency Proceeds and any funds
remaining on deposit in the Reserve Account (including the proceeds of any
sale of investments therein as described in the following sentence):
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into
the Note Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the outstanding principal
balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the deposits
made in the Note Distribution Account on such Distribution Date and on
prior Distribution Dates);
(iii) to the Certificate Distribution Account, any portion of the
Certificateholders' Interest Distributable Amount not otherwise
deposited into the Certificate Distribution Account on such Distribution
Date;
50
(iv) to the Certificate Distribution Account, the Certificate
Balance (after giving effect to the reduction in the Certificate Balance
to result from the deposits made in the Certificate Distribution Account
on such Distribution Date); and
(v) any remaining amount to the Reserve Account.
Any investments on deposit in the Reserve Account or Note Distribution Account
which will not mature on or before such Distribution Date shall be sold by the
Indenture Trustee at such time as will result in the Indenture Trustee
receiving the proceeds from such sale not later than the Payment Determination
Date preceding such Distribution Date. Any Insolvency Proceeds remaining in
the Reserve Account after the deposits described in clauses (i) through (v)
above shall be paid to the Seller.
(c) 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.
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder
other than Section 5.07(b) and the Owner Trustee will succeed to the rights
of, and assume the obligations of, the Indenture Trustee pursuant to this
Agreement.
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 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 and the consent of the Holders (as defined in
the Trust Agreement) of outstanding Certificates evidencing not less than a
majority of the outstanding Certificate Balance, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, 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 and the Certificate Balance, the Holders of which are
required to consent to any such
51
amendment, without the consent of the Holders of all the outstanding Notes and
the Holders (as defined in the Trust Agreement) of all the outstanding
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.
(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
Receivable, including payments and recoveries made and payments owing (and the
nature of each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Receivable and the amounts from time to time deposited
in the Collection Account and the Payahead Account in respect of such
Receivable.
52
(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 a 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 such 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 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:
(1) promptly after the execution and delivery of this Agreement
and of each amendment hereto and on certain Distribution Dates as
required by Section 2.05(b)(x)(B), 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 Initial 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.
53
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 Certificates and 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 Corporation, 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 Investors
Service, L.P., 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 (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 5.06 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
54
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 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,
55
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 Bank of New York, not in its individual
capacity but solely as Indenture Trustee and in no event shall The Bank of New
York 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.
56
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 1996-4
By: CHASE MANHATTAN BANK DELAWARE, not in its
individual capacity but solely as Owner
Trustee on behalf of the Trust
By: /s/ X. X. Xxxxxx
-------------------
Name: Xxxx X. Xxxxxx
Title: Senior Trust Officer
CHRYSLER FINANCIAL CORPORATION,
Seller and Servicer
By: /s/ Xxxxx X. Xxxxx
----------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Treasurer
Acknowledged and accepted as of the day and year first above written:
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
SCHEDULE A
Schedule of Receivables
-----------------------
Delivered to the Owner Trustee at Closing
SCHEDULE B
Location of Receivable Files
----------------------------
Chrysler Financial Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
SCHEDULE C
Schedule of Eligible Investment Receivables
-------------------------------------------
To be delivered on each Transfer Date on which
Eligible Investment Receivables are transferred to the Trust
EXHIBIT A
Form of Distribution Statement to Certificateholders
----------------------------------------------------
Chrysler Financial Corporation
Premier Auto Trust 1996-4 Distribution Date Statement to Certificateholders
---------------------------------------------------------------------------
Principal Distribution Amount
Principal Per $1,000 Certificate
Interest Distribution Amount
Interest Per $1,000 Certificate
Note Balance:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Note Pool Factor:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Certificate Balance
Certificate Pool Factor
Servicing Fee
Servicing Fee Per $1,000 Certificate
Pool Balance
Realized Losses
Reserve Account Balance
Payahead Balance
---------------------------------------------------------------------------
A-1
EXHIBIT B
Form of Distribution Statement to Noteholders
---------------------------------------------
Chrysler Financial Corporation
Premier Auto Trust 1996-4 Distribution Date Statement to Noteholders
-------------------------------------------------------------------------
Principal Distribution Amount
Class A-1 Notes: ($ 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 $1,000 original principal amount)
Interest Distribution Amount
Class A-1 Notes: ($ 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)
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Certificate Balance
Servicing Fee
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
Payahead Balance
B-1
EXHIBIT C
Form of Servicer's Certificate
------------------------------
Chrysler Financial Corporation
Premier Auto Trust 1996-4 Monthly Servicer's Certificate
--------------------------------------------------------
Period
Distribution 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
Principal Distribution Amount
____________________________________________________________________
Principal Collections
+ Repurchases
+ Liquidation Proceeds
+ Realized Losses
Interest Distribution Amount
____________________________________________________________________
Collections - Precomputed Contracts
+ Collections - Simple Interest Contracts
+ Simple Interest Advances
+ Investment Earnings (exclusive of Investment Earnings
in respect of Eligible Investment Receivables)
Total Distribution Amount
____________________________________________________________________
Principal Distribution Amount
+ Interest Distribution Amount
-- Realized Losses
Total Distribution Amount:
Loss & Delinquency
C-1
Account Activity
----------------
Beginning Ending Interest/Interest
Balance Balance Change Factor Servicing Shortfall
--------- ------- ------ ------ --------- ----------------
Initial Pool
Principal Paydown
Payaheads
Advance
Reserve
Available Amount
Certificate Interest Reserve
Certificate Interest
Reserve Draw
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Certificates
Over Collateralization
Principal Allocation
-------------------------------------
Mandatory
Regular Accelerated Redemption/ Total Principal
Principal Principal Repayment Principal Shortfall
--------- --------- ----------- --------- ---------
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Certificates
Total
Miscellaneous
-------------
Noteholders' Percentage
Certificateholders' Percentage
Maximum Excess Principal
Available Excess Principal
Specified Reserve Account Balance
Certificate Interest Reserve Draw
Distribution Account to Seller
Servicing Fee to Servicer
Allocation of Funds
--------------------
Sources
-------
Principal Distribution Amount
Interest Distribution Amount
Available Amount
Certificate Interest Reserve
Reserve Deposit from PFA
Redemption/Prepay Amt.
Total Sources
C-2
EXHIBIT D
[Reserved]
D-1
EXHIBIT E
[Reserved]
E-1
EXHIBIT F
Form of Assignment for Eligible Investment Receivables
------------------------------------------------------
Eligible Investment Receivables Transfer Assignment No._____
For value received, in accordance with and subject to the Sale and
Servicing Agreement (the Sale and Servicing Agreement") dated as of___, 199__,
between Chrysler Financial Corporation, a Michigan corporation, as seller (in
such capacity, the "Seller") and as servicer (in such capacity, the
"Servicer"), and Premier Auto Trust 199__-__, a Delaware business trust (the
"Issuer"), the Seller does hereby sell, assign, transfer and otherwise convey
unto the Issuer, without recourse (except as expressly provided in the Sale
and Servicing Agreement), all right, title and interest of the Seller in and
to (i) the Eligible Investment Receivables, having an aggregate Principal
Balance equal to $_____, set forth on Schedule C hereto (which shall supplement
Schedule C to the Sale and Servicing Agreement) and all monies due thereon on
or after the date hereof (the "Cutoff Date"), in the case of Precomputed
Receivables, and all monies received thereon on and after the Cutoff Date, in
the case of Simple Interest Receivables; (ii) the security interests in the
Financed Vehicles granted by the Obligors pursuant to such Eligible Investment
Receivables and any other interest of the Seller in such Financed Vehicles,
(iii) any proceeds with respect to such Eligible Investment Receivables from
claims on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors; (iv) any proceeds with respect to such
Eligible Investment Receivables from recourse to Dealers thereon with respect
to which the Servicer has determined in accordance with its customary
servicing procedures that eventual payment in full is unlikely, (v) any
Financed Vehicle that shall have secured any such Eligible Investment
Receivables and that shall have been acquired by or on behalf of the Seller,
the Servicer, the Company or the Issuer, and (vi) the proceeds of any and all
of the foregoing. The foregoing sale does not constitute and is not intended
to result in any assumption by the Issuer of any obligation of the Seller to
the Obligors, insurers or any other person in connection with the Eligible
Investment Standard Receivables, Eligible Investment Fixed Value Receivables,
Receivables Files, any insurance policies or any agreement or instrument
relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the Seller contained in the Sale and
Servicing Agreement (including the Officers' Certificate of the Seller
accompanying this Assignment, in the form of Annex A hereto) and is to be
governed in all respects by the Sale and Servicing Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of __________________, 199_.
CHRYSLER FINANCIAL CORPORATION
By:
___________________________
Name:
Title:
F-1
SCHEDULE C TO
Eligible Investment Receivables Transfer Assignment No.____
Schedule of Eligible Investment Receivables
-------------------------------------------
F-2
ANNEX A TO
Eligible Investment Receivables Transfer Assignment No.___
CHRYSLER FINANCIAL CORPORATION
OFFICER'S CERTIFICATE
The undersigned_______________, and_____________________________ the
duly qualified and elected____________________and__________________of Chrysler
Financial Corporation (the "Seller"), in connection with the conveyance of
Eligible Receivables to Premier Auto Trust 199 __- __(the "Trust") pursuant to
Section 2.05(b)(x) of the Sale and Servicing Agreement dated as of_______ ,
199___ , between Chrysler Financial Corporation, as seller and servicer, and
the Trust (the "Sale and Servicing Agreement") and Eligible Investment
Receivables Transfer Assignment No.____ dated as of the date hereof from the
Seller, hereby certify that, as of their respective Cutoff Dates:
(a)__ % of the Principal Balances of the Eligible Investment
Receivables in the Reserve Account on the date hereof (including the
Eligible Investment Receivables conveyed to the Reserve Account on the
date hereof) represent receivables secured by previously titled
vehicles.
(b) All other conditions precedent set forth in Section
2.05(b)(1) of the Sale and Servicing Agreement relating to the
conveyance of Eligible Investment Receivables to the Reserve Account
have been satisfied.
All capitalized terms used but not otherwise defined herein shall have
the meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this____ day
of___ ,___ 199__ .
_________________________________
Name:
Title:
_________________________________
Name:
Title:
F-3
