As filed with the Securities and Exchange Commission on January 26, 1999
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
CHRYSLER FINANCIAL COMPANY L.L.C.
(Exact name of Registrant as specified in its charter)
MICHIGAN 52-2109803
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27777 FRANKLIN ROAD
SOUTHFIELD, MICHIGAN 48034-8286
(248) 948-3060
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
CHRISTOPHER A. TARAVELLA, ESQ.
CHRYSLER FINANCIAL COMPANY L.L.C.
27777 FRANKLIN ROAD
SOUTHFIELD, MICHIGAN 48034-8286
(248) 948-3060
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------
With a Copy to:
RENWICK D. MARTIN, ESQ.
BROWN & WOOD LLP
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 839-5319
------------------------------------
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective as determined
by market conditions.
------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
__________________.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / _________________.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
------------------------------------
CALCULATION OF REGISTRATION FEE
==========================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(2) OFFERING PRICE REGISTRATION FEE
============================== =================== ================ ================ ==================
Asset Backed Securities... $4,000,000,000.00(1) 100% $4,000,000,000.00(2) $1,112,000.00
============================== =================== ================ ================= ==================
(1) $931,300,210.82 aggregate principal amount of Asset Backed Securities
registered under Registration Statement No. 333-31093 referred to below
and not previously sold is carried forward in this Registration Statement
pursuant to Rule 429. A registration fee of $282,183.96 in connection
with such unsold amount of Asset Backed Securities was paid previously
under the foregoing Registration Statement.
(2) Estimated solely for the purpose of calculating the registration fee.
------------------------------------
Pursuant to Rule 429 and Rule 414, the prospectus and forms of prospectus
supplement contained in this Registration Statement also relate to, and this
Registration Statement constitutes a post-effective amendment to, Registration
Statement No. 333-31093, which was filed on July 11, 1997, by Chrysler
Financial Corporation and any unsold securities registered thereunder. The
Registrant is the successor to Chrysler Financial Corporation, a Michigan
corporation, as a result of a merger of Chrysler Financial Corporation into
the Registrant. The merger was effective as of October 25, 1998. The
Registrant expressly adopts Registration Statement No. 333-31093 as its own
registration statement for all purposes of the Securities Act of 1933 and the
Securities Exchange Act of 1934.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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INTRODUCTORY NOTE
This Registration Statement contains (i) a form of Prospectus relating to
the offering of series of Asset Backed Notes and/or Asset Backed Certificates by
various Premier Auto Trusts created from time to time by Chrysler Financial
Company L.L.C. and (ii) two forms of Prospectus Supplement relating to the
offering by Premier Auto Trust ___-_ of the particular series of Asset Backed
Certificates or of Asset Backed Notes described therein. Each form of Prospectus
Supplement relates only to the securities described therein and is a form which
may be used, among others, by Chrysler Financial Company L.L.C. to offer Asset
Backed Notes and/or Asset Backed Certificates under this Registration Statement.
The features applicable to any actual series of Asset Backed Securities may
include any features specified in the Prospectus.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT TO THE ACCOMPANYING PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion, dated ____________.
Prospectus Supplement
(To Prospectus dated , )
----
$
PREMIER AUTO TRUST -
$ % ASSET BACKED CERTIFICATES, CLASS A
[$ % ASSET BACKED CERTIFICATES, CLASS B]
CHRYSLER FINANCIAL COMPANY L.L.C.,
SELLER AND SERVICER
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BEFORE YOU DECIDE TO INVEST IN ANY OF THE CERTIFICATES, PLEASE READ THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS, ESPECIALLY THE SPECIAL CONSIDERATIONS
BEGINNING ON PAGE S-8 OF THIS PROSPECTUS SUPPLEMENT AND PAGE 7 OF THE
PROSPECTUS.
The Certificates will evidence interests in the Trust only. Chrysler Financial
Company L.L.C. and its affiliates will not be obligated to make payments on
the Certificates or the assets of the Trust.
GENERAL:
o Premier Auto Trust ___-_ will issue the Certificates, which will
evidence interests in the Trust. The Trust's main source of funds for
making distributions on the Certificates will be collections on the
retail installment contracts owned by the Trust.
o Interest and principal will be payable on the ___ of each month,
unless the ___ is not a Business Day, in which case, the payment will
be made on the following Business Day. The first payment will be due
___________, ____.
CREDIT ENHANCEMENTS:
o A reserve fund and, for the Class A Certificates, the subordination
of the Class B Certificates.
=====================================================================================================================
ORIGINAL UNDERWRITING PROCEEDS TO
PRINCIPAL AMOUNT PRICE TO PUBLIC(1) DISCOUNT SELLER(1)(2)
- ----------------------------------- -------------------- -------------------- -------------------- ------------------
Per Class A Certificate.......... $______________ ________% ________% ________%
- ----------------------------------- -------------------- -------------------- -------------------- ------------------
- ----------------------------------- -------------------- -------------------- -------------------- ------------------
Per Class B Certificate.......... $______________ ________% ________% __________%
- ----------------------------------- -------------------- -------------------- -------------------- ------------------
Total............................ $______________ $_____________ $______________ $_____________
=====================================================================================================================
(1) Plus accrued interest, if any from ________ __, ____.
(2) Before deducting expenses, estimated to be $__________.
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We expect that delivery of the Certificates will be made in book-entry
form only through the facilities of The Depository Trust Company and Cedelbank
and the Euroclear System on or about ______________.
Neither the SEC nor any state securities commission has approved or
disapproved the Certificates or determined that this Prospectus Supplement and
Prospectus are accurate or complete. Any representation to the contrary is a
criminal offense.
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[UNDERWRITERS]
- -----------------------------------------------------------------------------
The date of this Prospectus Supplement is .
CONTENT OF PROSPECTUS SUPPLEMENT AND PROSPECTUS
You should rely only on the information contained in this document. We
have not authorized anyone to provide you with different information. You
should not assume that the information in the Prospectus Supplement or the
Prospectus is accurate as of any date other than the date on the front of this
document.
We provide information to you about the Certificates in two separate
documents that provide varying levels of detail: (a) this Prospectus
Supplement, which describes the specific terms of the Certificates, and (b)
the Prospectus, which provides general information, some of which may not
apply to the Certificates.
If the terms of the Certificates described in this Prospectus Supplement
vary with the accompanying Prospectus, you should rely on the information in
this Prospectus Supplement.
We include cross-references in this Prospectus Supplement and the
Prospectus to captions in these materials where you can find further related
discussions. The Table of Contents on the back cover of this document provides
the pages on which these captions are located.
You can find a listing of the pages where capitalized terms used in this
Prospectus Supplement and the Prospectus are defined under the caption "Index
of Terms" on page S-27 in this Prospectus Supplement and under the caption
"Index of Terms" beginning on page 60 in the Prospectus.
LIMITATIONS ON OFFERS OR SOLICITATIONS
We do not intend this document to be an offer or solicitation:
(A) if used in a jurisdiction in which such offer or solicitation is not
authorized;
(B) if the person making such offer or solicitation is not qualified to do
so; or
(C) if such offer or solicitation is made to anyone to whom it is unlawful to
make such offer or solicitation.
TRANSACTIONS THAT MAY AFFECT THE PRICE OF THE CERTIFICATES
Certain persons participating in this offering may engage in transactions
that stabilize, maintain, or otherwise affect the price of the Certificates.
Such transactions may include stabilizing and the purchase of Certificates to
cover syndicate short positions.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, Chrysler Financial
Company L.L.C., as servicer, will send monthly and annual unaudited reports
containing information concerning the Receivables only to Cede & Co. ("Cede"),
as nominee of The Depository Trust Company ("DTC") and registered holder of
the Certificates. See "Certain Information Regarding the Securities --
Book-Entry Registration" and "-- Reports to Securityholders" in the
Prospectus. Such reports will not constitute financial statements prepared in
accordance with generally accepted accounting principles. Chrysler Financial
Company L.L.C., as originator of the Trust, will file with the SEC such
periodic reports as are required under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC.
TABLE OF CONTENTS
PAGE
----
REPORTS TO CERTIFICATEHOLDERS...................... S-2
SUMMARY OF TERMS................................... S-4
Issuer.......................................... S-4
Seller of the Receivables to the Trust.......... S-4
Servicer of the Receivables..................... S-4
Trustee......................................... S-4
Certificates.................................... S-4
Receivables..................................... S-4
Closing Date.................................... S-4
Terms of the Certificates....................... S-4
Payment Dates................................. S-4
Per Annum Interest Rates...................... S-4
Class A Interest.............................. S-5
Class A Principal............................. S-5
Class B Interest.............................. S-5
Class B Principal............................. S-5
Subordination of Class B Certificates........... S-5
Optional Prepayment............................. S-5
Mandatory Repurchase............................ S-5
Pre-Funding Account............................. S-6
Reserve Account................................. S-6
Priority of Payments............................ S-6
Tax Status...................................... S-6
ERISA Considerations............................ S-7
Rating of the Offered Certificates.............. S-7
SPECIAL CONSIDERATIONS............................. S-8
Limited Liquidity............................... S-8
Servicing....................................... S-8
Subordination of the Class B Certificates....... S-8
Sources of Funds................................ S-8
Ratings of the Certificates..................... S-9
There May Not be Sufficient
Eligible Subsequent Receivables
Originated During the Pre-Funding
Period. This Will Cause a
Prepayment to be Made on
the Certificates.............................. S-9
Financial Information for Chrysler Financial
Company L.L.C................................. S-10
Risks Associated with Computer
Systems and the Year 2000..................... S-11
THE TRUST.......................................... S-12
General......................................... S-12
THE RECEIVABLES POOL............................... S-12
CFC's Performance History....................... S-16
CHRYSLER FINANCIAL
COMPANY L.L.C................................... S-17
WEIGHTED AVERAGE LIFE OF THE
CERTIFICATES................................... S-18
DESCRIPTION OF THE
CERTIFICATES.................................... S-18
General......................................... S-18
Mandatory Repurchase............................ S-19
Optional Prepayment............................. S-19
Sale and Assignment of
Receivables; Subsequent Receivables........... S-19
Accounts........................................ S-20
Servicing Compensation
and Payment of Expenses....................... S-20
Distributions................................... S-20
Subordination of the Class B
Certificates; Reserve Account................. S-24
CERTAIN FEDERAL INCOME TAX CONSEQUENCES............ S-25
ERISA CONSIDERATIONS............................... S-25
The Class A Certificates........................ S-25
The Class B Certificates........................ S-25
UNDERWRITING....................................... S-25
LEGAL OPINIONS..................................... S-26
INDEX OF TERMS..................................... S-27
ANNEX I............................................ A-1
SUMMARY OF TERMS
The following summary is a short, concise description of the main terms of
the Certificates. For this reason, the summary does not contain all the
information that may be important to you. You will find a detailed description
of the terms of the Certificates following this summary and in the Prospectus.
Issuer........................................... Premier Auto Trust _______ (the "Trust" or the
"Issuer"), a Delaware business trust.
Seller of the Receivables to the Trust........... Chrysler Financial Company L.L.C. (the "Seller" or
"CFC").
Servicer of the Receivables...................... CFC (in such capacity, the "Servicer").
Trustee.......................................... __________________________, as trustee under the
Agreement (the "Trustee").
Certificates..................................... The Trust will issue the Certificates described on the
cover page.[The Class B Certificates are not being
offered.] The Certificates will be secured by the
assets of the Trust.
Receivables...................................... The Trust's main source of funds for making payments on
the Certificates will be collections on its motor
vehicle retail installment sales contracts (the
"Receivables"). Initially, the Trust will acquire
Receivables with a total principal balance of
$________________ (the "Initial Pool Balance") as of
_____________(the "Cutoff Date"). As of the Cutoff
Date, the weighted average annual percentage rate of
the Receivables was approximately ____%, the weighted
average remaining maturity of the Receivables was
approximately _____ months, and the weighted average
original maturity of the Receivables was approximately
____ months. No Receivable has a scheduled maturity
later than _____________. See "The Receivables Pool"
herein.
Closing Date..................................... The "Closing Date" is _______________________.
Terms of the Certificates
A. Payment Dates......................... Payments of interest and principal on the Certificates
will be made on the _______ day of each month, unless
the _____ is not a Business Day, in which case, the
payment will be made on the following Business Day
(each, a "Payment Date"). The first Payment Date will
be ______________.
B.Per Annum Interest Rates............... Class A Rate ____%
Class B Rate ____%
C. Class A Interest...................... On each Payment Date, the Class A Certificateholders
are entitled to receive one month's interest at the
Class A Rate on the balance of the Class A
Certificates. The funds available to pay such interest
are described under "Description of the
Certificates--Distributions."
D. Class A Principal..................... In general, on each Payment Date, the Trustee will
distribute pro rata to Class A Certificateholders an
amount equal to the Class A Percentage of the Principal
Distribution Amount for the Collection Period preceding
such Payment Date. The funds available for such
distribution are described under "Description of the
Certificates--Distributions."
E. Class B Interest................... On each Payment Date, the Class B Certificateholders
are entitled to receive one month's interest at the
Class B Rate on the balance of the Class B
Certificates. The funds available to pay such interest
are described under "Description of the
Certificates--Distributions."
F. Class B Principal..................... In general, on each Payment Date, the Trustee will
distribute pro rata to Class B Certificateholders an
amount equal to the Class B Percentage of the Principal
Distribution Amount for the Collection Period preceding
such Payment Date. The funds available for such
distribution are described under "Description of the
Certificates--Distributions."
Subordination of Class B Certificates............ On each Payment Date, the Class A Certificateholders
are entitled to full payment of the amount due to them
before the Class B Certificateholders receive any
payment.
Optional Prepayment.............................. The Trust may redeem the outstanding Class A
Certificates and Class B Certificates in whole, if the
Servicer exercises its option to purchase the
Receivables. The Servicer may purchase the Receivables
when their aggregate principal balance has declined to
10% or less of their initial aggregate principal
balance.
Mandatory Repurchase............................. If there is any money left in the Pre-Funding Account
at the end of the Funding Period, the Certificates will
be prepaid, in part, on the following Payment Date.
The aggregate principal amount of Certificates to be
prepaid will be an amount equal to the amount then on
deposit in the Pre-Funding Account.
A mandatory prepayment premium (the "Certificate
Prepayment Premium") may be paid to the
Certificateholders if the aggregate principal amount of
Certificates to be prepaid pursuant to a Mandatory
Repurchase exceeds $ .
Pre-Funding Account.............................. A pre-funding account will be established to purchase
additional Receivables after the Closing Date. The
Pre-Funded Amount will initially equal approximately $ ,
and will be reduced by the amount used to purchase
Receivables and the amount required to be deposited in
the Reserve Account. The Seller expects that the
Pre-Funded Amount will be reduced to less than $ by the
Date. Any Pre-Funded Amount remaining at the end of the
Funding Period will be paid to the Certificateholders.
Reserve Account.................................. A reserve account was established to protect you against
losses on your certificates, up to $________________.
[Each time a subsequent Receivable is purchased, ___% of
the purchase price will be deposited into the reserve
account.] The amounts in the reserve account will
increase, decrease or stay the same depending on the
level of losses and excess collections.
The Trustee will apply funds in the reserve account to
make payments due on the Certificates that are not
covered by collections on the Receivables. Amounts in
the reserve account on any Payment Date in excess of the
required amount will be released to __________ and will
no longer be available to make payments on the
Certificates.
Priority of Payments............................. In general, the Servicer will be required to remit
collections received with respect to the Receivables
within two Business Days of receipt to a collection
account. The Trustee will withdraw funds from such
account and apply such funds on each Payment Date to:
(i) the Servicing Fee any overdue Servicing Fees to the
Servicer, (ii) the Class A Distributable Amount to the
Class A Certificateholders, (iii) the Class B
Distributable Amount to the Class B Certificateholders,
and (iv) the Reserve Account.
Tax Status....................................... In the opinion of Brown & Wood LLP, the Trust will be
treated as a grantor trust for federal income tax
purposes, will not be subject to federal income tax and
will not be characterized as an association (or a
publicly traded partnership) taxable as a corporation.
See "Certain Federal Income Tax Consequences" herein and
"Certain Federal Income Tax Consequences" and "Certain
State Tax Consequences" in the Prospectus.
ERISA Considerations............................. Subject to the considerations discussed under "ERISA
Considerations" herein and in the Prospectus, the Class
A Certificates are eligible for purchase by employee
benefit plans.
Rating of the Certificates....................... At the Closing Date, at least two nationally recognized
rating agencies will rate the Class A Certificates in
the highest investment rating category. [The Class B
Certificates will be rated at least "____" or its
equivalent by at least two nationally recognized rating
agencies.]
SPECIAL CONSIDERATIONS
LIMITED LIQUIDITY There is currently no secondary market
for the Certificates. Each Underwriter
currently intends to participate in
making a secondary market in the
Certificates, but it is under no
obligation to do so. There is no
assurance that a secondary market will
develop. If a secondary market does
develop, there is no assurance that it
will continue or that you will be able
to resell your Certificates.
SERVICING CFC is not obligated to make any
payments in respect of the Certificates
or the Receivables. However, if CFC
were to cease acting as Servicer,
delays in processing payments on the
Receivables and information in respect
of the Receivables could occur and
result in delays in payments to you.
SUBORDINATION OF THE CLASS B Distributions of interest and principal
CERTIFICATES on the Class B Certificates will be
subordinated in priority of payment to
interest and principal due on the Class
A Certificates. Consequently, the Class
B Certificateholders will not receive
any distributions with respect to a
Collection Period until the full amount
of interest and principal due on the
Class A Certificates on such Payment
Date has been distributed to the Class
A Certificateholders. Such
subordination has the effect of
increasing the likelihood of payment on
the Class A Certificates and therefore
decreasing the likelihood of payment on
the Class B Certificates.
SOURCES OF FUNDS The Trust will not have any significant
assets or sources of funds to make
payments on the Certificates other than
the Receivables, the Pre-Funding
Account and the Reserve Account. You
must rely for repayment of your
Certificates upon payments on the
Receivables and amounts, if any, on
deposit in the Pre-Funding Account and
the Reserve Account. The Pre-Funding
Account will be available only during
the Funding Period and is designed
solely to cover obligations of the
Trust relating to a portion of its
funds not invested in Receivables and
is not designed to cover losses on the
Receivables. Similarly, although funds
in the Reserve Account may be available
on each Payment Date to cover
shortfalls in distributions of interest
and principal on the Certificates,
amounts in the Reserve Account are
limited. If the Reserve Account is
depleted, the Trust will depend solely
on current collections on the
Receivables to make distributions on
the Certificates.
RATINGS OF THE CERTIFICATES On the Closing Date at least two
nationally recognized rating agencies
(the "Rating Agencies") will rate the
Class A Certificates in the highest
rating category, and the Class B
Certificates at least in the "______"
or its equivalent. A rating is not a
recommendation to purchase, hold or
sell Certificates, inasmuch as such
rating does not comment as to market
price or suitability for a particular
investor. The ratings of the
Certificates address the likelihood of
the payment of principal and interest
on the Certificates pursuant to their
terms. However, the Rating Agencies do
not evaluate, and the ratings of the
Certificates do not address, the
likelihood that the Certificate
Prepayment Premium will be paid. There
can be no assurance that a Rating
Agency will not lower or withdraw its
rating if in its judgment circumstances
in the future so warrant.
THERE MAY NOT BE SUFFICIENT
ELIGIBLE SUBSEQUENT
RECEIVABLES ORIGINATED
DURING THE PRE-FUNDING
PERIOD. THIS WILL CAUSE A
PREPAYMENT TO BE MADE ON
THE CERTIFICATES On the Closing Date, the Seller will
transfer to the Trust approximately
$_______ representing the Pre-Funded
Amount. If the principal amount of
eligible Receivables originated by CFC
during the Funding Period is less than
the Pre-Funded Amount, the Seller will
have insufficient Receivables to sell
to the Trust Subsequent Transfer Dates,
thereby resulting in a prepayment of
principal to the Certificateholders as
described in the following paragraph.
In addition, any conveyance of
Subsequent Receivables is subject to
the satisfaction of the following
conditions precedent, among others: (i)
each Subsequent Receivable must satisfy
the eligibility criteria specified in
the Agreement; (ii) the Seller will not
select such Subsequent Receivables in a
manner that it believes is adverse to
the interests of the
Certificateholders; (iii) the
Receivables in the Trust at that time,
including the Subsequent Receivables,
must satisfy the parameters described
under "The Receivables Pool" herein;
(iv) the applicable Reserve Account
Deposit must be made; and (v) the
Seller must execute and deliver to the
Trustee a written assignment conveying
such Subsequent. Moreover, any such
conveyance of Subsequent Receivables
will also be subject to the
satisfaction of the following
conditions subsequent, among others:
(a) the Seller will deliver certain
opinions of counsel with respect to the
validity of the conveyance of all such
Subsequent Receivables; (b) the Trustee
shall have received written
confirmation from a firm of certified
independent public accountants that the
Receivables in the Trust at that time,
including the Subsequent Receivables,
satisfied the parameters described
under "The Receivables Pool"; and (c)
the Rating Agencies shall have each
notified the Seller in writing that,
following the addition of all such
Subsequent Receivables, the
Certificates will be rated by the
Rating Agencies in the same respective
rating categories in which they were
rated on the Closing Date. The Seller
will immediately repurchase any
Subsequent Receivable, at a price equal
to the Repurchase Amount thereof, upon
the failure of the Seller to satisfy
any of the foregoing conditions. Such
confirmation of the ratings of the
Certificates may depend on factors
other than the characteristics of the
Subsequent Receivables, including the
delinquency, repossession and net loss
experience on the automobile and light
duty truck receivables in the portfolio
serviced by CFC.
To the extent that amounts in the
Pre-Funding Account have not been fully
used to purchase Subsequent Receivables
by the end of the Funding Period, the
Certificateholders will receive, on the
Payment Date on or immediately
following the last day of the Funding
Period, a prepayment of principal in an
amount equal to the Pre-Funded Amount
remaining in the Pre-Funding Account.
It is anticipated that the principal
amount of Subsequent Receivables sold
to the Trust will not be exactly equal
to the amount on deposit in the
Pre-Funding Account and that therefore
there will be at least a nominal amount
of principal prepaid to the
Certificateholders.
Each Subsequent Receivable must satisfy
the eligibility criteria specified in
the Agreement at the time of its
addition. However, Subsequent
Receivables may have been originated by
CFC at a later date using credit
criteria different from those which
were applied to the Initial Receivables
and may be of a different credit
quality and seasoning. In addition, an
increasing percentage of the Subsequent
Receivables may be Fixed Value
Receivables or Receivables generated
under the Market Value Pricing program.
Therefore, following the transfer of
Subsequent Receivables to the Trust,
the characteristics of the entire
Receivables Pool included in the Trust
may vary significantly from those of
the Initial Receivables. See "The
Receivables Pool" herein and "The
Receivables Pools" in the Prospectus.
FINANCIAL INFORMATION FOR
CHRYSLER FINANCIAL COMPANY L.L.C.
Chrysler Financial Company L.L.C. and
its consolidated subsidiaries' net
earnings were $116 million and $344
million for the three and nine months
ended September 30, 1998, compared to
$111 million and $307 million for the
three and nine months ended September
30, 1997. The increase in net earnings
primarily reflects higher gains and
servicing fees from sales of automotive
receivables, a decrease in provision
for credit losses, and gains from sales
of certain nonautomotive assets. Net
earnings for the first nine months of
1997 reflect a one-time benefit from
the adoption of Statement of Financial
Accounting Standards No. 125.
Pursuant to a plan of merger, dated as
of October 22, 1998, effective as of
October 25, 1998, Chrysler Financial
Corporation merged with and into
Chrysler Financial Company L.L.C. with
Chrysler Financial Company L.L.C. being
the surviving entity. The purpose of
the merger was to change the form of
organization of Chrysler Financial
Corporation from a corporation into a
limited liability company. Prior to the
merger, Chrysler Financial Company
L.L.C. had no operations and had
nominal assets and liabilities. In
connection with the merger, Chrysler
Financial Company L.L.C. succeeded to
all of the assets and liabilities of
Chrysler Financial Corporation.
On November 12, 1998, the Company's
parent, Chrysler Corporation, became a
wholly-owned subsidiary of
DaimlerChrysler Aktiengesellscchaft
("Daimler") and on November 17, 1998,
Chrysler Corporation changed its name
to DaimlerChrysler Corporation
("Chrysler").
RISKS ASSOCIATED WITH COMPUTER
SYSTEMS AND THE YEAR 2000 CFC has conducted an evaluation of the
actions necessary to ensure that its
business critical computer systems will
function without disruption with
respect to the application of dating
systems in the Year 2000. As a result
of this evaluation, CFC is engaged in
the process of upgrading, replacing and
testing certain of its information and
other computer systems. While CFC's
remedial actions are scheduled to be
completed during the third quarter of
1999, there can be no assurance that
the remedial actions being implemented
by CFC will be completed in time to
avoid dating systems problems. If CFC
is unable to complete its remedial
actions in the planned timeframe,
contingency plans will be developed to
address those business critical systems
that may not be Year 2000 compliant.
In addition, disruptions with respect
to computer systems of vendors or
customers, which are outside the
control of CFC, could impair the
ability of CFC to obtain necessary
services or to provide services to its
customers. CFC has a process in place
to assess the Year 2000 readiness of
its business critical vendors and
customers. As part of the assessment
process, CFC will develop contingency
plans for those business critical
vendors who are either unable or
unwilling to develop remediation plans
to become Year 2000 compliant. Although
these plans have yet to be developed,
CFC expects that these plans will
include selective resourcing of
services to Year 2000 compliant
vendors. CFC expects that vendors in
this category will represent an
insignificant part of its total service
base. It is expected that these plans
will be in place by the third quarter
of 1999.
THE TRUST
GENERAL
The Seller will establish the Trust by selling and assigning the Trust
property, as described below, to the Trustee in exchange for the Certificates.
The Trust will be governed by a Pooling and Servicing Agreement dated as of
____________ (as amended and supplemented from time to time, the "Agreement").
The Servicer will service the Receivables pursuant to the Agreement and will
be compensated for acting as the Servicer. See "Description of the
Certificates--Servicing Compensation and Payment of Expenses". To facilitate
servicing and to minimize administrative burden and expense, the Servicer will
be appointed custodian for the Receivables by the Trustee, but will not stamp
the Receivables to reflect the sale and assignment of the Receivables to the
Trust or amend the certificates of title of the Financed Vehicles. In the
absence of amendments to the certificates of title, the Trustee may not have
perfected security interests in the Financed Vehicles securing the Receivables
originated in some states. See "Certain Legal Aspects of the Receivables" in
the Prospectus.
If the protection provided to the Certificateholders by the Reserve
Account and, in the case of the Class A Certificateholders, the subordination
of the Class B Certificates is insufficient, the Trust will look only to the
Obligors on the Receivables and the proceeds from the repossession and sale of
Financed Vehicles which secure defaulted Receivables. In such event, certain
factors, such as the Trust's not having first priority perfected security
interests in some of the Financed Vehicles, may affect the Trust's ability to
realize on the collateral securing the Receivables, and thus may reduce the
proceeds to be distributed to Certificateholders with respect to the
Certificates. See "Description of the Certificates--Distributions" and
"--Reserve Account" herein anD "Certain Legal Aspects of the Receivables" in
the Prospectus.
Each Certificate represents a fractional undivided ownership interest in
the Trust. The Trust property includes retail installment sale contracts
between Dealers and Obligors, and all payments due thereunder on or after the
related Cutoff Date with respect to the Precomputed Receivables and all
payments received thereunder on or after the related Cutoff Date with respect
to the Simple Interest Receivables. The Trust property also includes (i) such
amounts as from time to time may be held in one or more trust accounts
established and maintained by the Servicer pursuant to the Agreement, as
described below; (ii) security interests in the Financed Vehicles and any
accessions thereto; (iii) the rights to proceeds with respect to the
Receivables from claims on physical damage, credit life and disability
insurance policies covering the Financed Vehicles or the Obligors, as the case
may be; (iv) the interest of the Seller in any proceeds with respect to the
Receivables from recourse to Dealers on Receivables or Financed Vehicles with
respect to which the Servicer has determined that eventual repayment in full
is unlikely; (v) any property that shall have secured a Receivable and that
shall have been acquired by the Trustee; (vi) the Pre-Funded Account and (vii)
any and all proceeds of the foregoing. The Reserve Account will be maintained
by the Trustee for the benefit of the Certificateholders, but will not be part
of the Trust.
THE RECEIVABLES POOL
The pool of Receivables (the "Receivables Pool") will include the Initial
Receivables purchased as of the Initial Cutoff Date and will include any
Subsequent Receivables purchased as of any Subsequent Cutoff Date (the Initial
Cutoff Date or any Subsequent Cutoff Date being individually referred to
herein as a "Cutoff Date").
The Initial Receivables were purchased, and the Subsequent Receivables
were or will be purchased, by the Servicer from Dealers in the ordinary course
of business, and were or will be selected from the Seller's portfolio for
inclusion in the Receivables Pool by several criteria, some of which are set
forth in the Prospectus under "The Receivables Pools", as well as the
requirement that each Receivable (i) has an outstanding gross balance of at
least [$_____] and (ii) as of the applicable Cutoff Date, was not or will not
be more than 30 days past due. As of the applicable Cutoff Date, no Obligor on
any Receivable was or will have been noted in the related records of the
Servicer as being the subject of a bankruptcy proceeding, and no Obligor on
any Receivable will have financed a Financed Vehicle under CFC's "New-Finance
Buyer Plan" program. No selection procedures believed by the Seller to be
adverse to Certificateholders were or will be used in selecting the
Receivables.
The obligation of the Trust to purchase the Subsequent Receivables on a
Subsequent Transfer Date will be subject to the Receivables in the Trust,
including the Subsequent Receivables to be conveyed to the Trust on such
Subsequent Transfer Date, meeting the following criteria: (i) not more than %
of the principal balances of the Receivables in the Trust will represent
vehicles financed at CFC's used vehicle rates, and (ii) the weighted average
APR of the Receivables in the Trust will not be less than %, unless the Seller
increases the Reserve Account Initial Deposit by certain specified amounts. In
addition, such obligation will be subject to the Receivables, including the
Subsequent Receivables to be transferred to the Trust on such Subsequent
Transfer Date, having a weighted average remaining term not greater than
months. Such criteria will be based on the characteristics of the Initial
Receivables on the Initial Cutoff Date and any Subsequent Receivables on the
related Subsequent Cutoff Dates. In addition, no Receivable will be sold to
the Trust if such Receivable has been repurchased by the Seller through the
exercise of optional repurchase provisions contained in other securitization
transactions.
The Initial Receivables will represent approximately % of the aggregate
initial principal balance of the Certificates. However, except for the
criteria described in the preceding paragraphs, there will be no required
characteristics of the Subsequent Receivables. Therefore, following the
transfer of Subsequent Receivables to the Trust, the aggregate characteristics
of the entire Receivables Pool, including the composition of the Receivables,
the distribution by annual percentage rate ("APR") and the geographic
distribution described in the following tables, may vary significantly from
those of the Initial Receivables.
The composition, distribution by APR and geographic distribution of the
Initial Receivables as of the Initial Cutoff Date are as set forth in the
following tables.
COMPOSITION OF THE INITIAL RECEIVABLES AS OF THE
INITIAL CUTOFF DATE
WEIGHTED WEIGHTED
WEIGHTED AVERAGE AVERAGE AVERAGE
AVERAGE APR OF AGGREGATE NUMBER OF REMAINING ORIGINAL PRINCIPAL
RECEIVABLES PRINCIPAL BALANCE RECEIVABLES TERM TERM BALANCE
- ---------------- ---------------------- ---------------- ---------------- ---------------- -------------
% $ months months $
DISTRIBUTION BY APR
OF THE INITIAL RECEIVABLES
AS OF THE INITIAL CUTOFF DATE
PERCENT OF
AGGREGATE
NUMBER OF AGGREGATE PRINCIPAL
APR RANGE RECEIVABLES PRINCIPAL BALANCE BALANCE
- ------------------------------------------- ------------------ ------------------ ------------
0.00% to 3.00%.......................
3.01% to 4.00%.......................
4.01% to 5.00%.......................
5.01% to 6.00%.......................
6.01% to 7.00%.......................
7.01% to 8.00%.......................
8.01% to 9.00%.......................
9.01% to 10.00%......................
10.01% to 11.00%.....................
11.01% to 12.00%.....................
12.01% to 13.00%.....................
13.01% to 14.00%.....................
14.01% to 15.00%.....................
15.01% to 16.00%.....................
16.01% to 17.00%.....................
17.01% to 18.00%.....................
18.01% to 19.00%.....................
19.01% to 20.00%.....................
Greater than 20.00%.................. ------
Totals........................... 100.0%
======
GEOGRAPHIC DISTRIBUTION OF THE INITIAL RECEIVABLES
AS OF THEIR RESPECTIVE INITIAL CUTOFF DATES
State(1) Percent of Aggregate State(1) Percent of Aggregate
Principal Balance(2) Principal Balance(2)
- ----------------------------- ---------------------- ------------------------------ ------------------------
Alabama..................... Montana......................
Alaska...................... Nebraska.....................
Arizona..................... Nevada.......................
Arkansas.................... New Hampshire................
California.................. New Jersey...................
Colorado.................... New Mexico...................
Connecticut................. New York.....................
Delaware.................... North Carolina...............
District of Columbia........ North Dakota.................
Georgia..................... Oklahoma.....................
Hawaii...................... Oregon.......................
Idaho....................... Pennsylvania.................
Illinois.................... Rhode Island.................
Indiana..................... South Carolina...............
Iowa........................ South Dakota.................
Kansas...................... Tennessee....................
Kentucky.................... Texas........................
Louisiana................... Utah.........................
Maine....................... Vermont......................
Maryland.................... Virginia.....................
Massachusetts............... Washington...................
Michigan.................... West Virginia................
Minnesota................... Wisconsin....................
Mississippi................. Wyoming......................
Missouri.................... _______
Total................ 100%
=======
- ------------------------
(1) Based on physical addresses of the Dealers originating the Receivables.
(2) Percentages may not add to 100.0% because of rounding.
By aggregate principal balance, approximately % of the Initial Receivables
constitute Precomputed Receivables, % of the Initial Receivables constitute
Simple Interest Receivables and % constitute Fixed Value Receivables. See "The
Receivables Pools" in the Prospectus for a further description of the
characteristics of Precomputed Receivables, Simple Interest Receivables and
Fixed Value Receivables.
By aggregate principal balance, approximately % of the Initial
Receivables, constituting % of the number of Initial Receivables, as of the
Initial Cutoff Date, represent vehicles financed at CFC's new vehicle rates,
which apply to new and certain previously owned vehicles; the remainder
represent vehicles financed at CFC's used vehicle rates. Approximately % of
the aggregate principal balance of the Initial Receivables represent financing
of vehicles manufactured or distributed by Chrysler.
CFC'S PERFORMANCE HISTORY
Set forth below is certain information concerning the experience of the
Seller and its United States subsidiaries pertaining to retail new and used
automobile and light duty truck receivables, including those previously sold
which CFC continues to service. There can be no assurance that the
delinquency, repossession and net loss experience on the Receivables will be
comparable to that set forth below.
DELINQUENCY EXPERIENCE(1)
(DOLLARS IN MILLIONS)
AT SEPTEMBER 30,
--------------------------------------------
1998 1997
------------------------ -------------------
NUMBER NUMBER
OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT
----------- ------ --------- ------
Portfolio...................... 1,786,809 $ 24,700 1,700,645 $ 21,749
Period of Delinquency
31-60 Days................... 41,473 $ 484 52,839 $ 656
61 Days or More.............. 3,935 51 8,202 119
----------- -------- ---------- --------
Total Delinquencies............ 45,408 $ 535 61,041 $ 775
====== === ====== ===
Total Delinquencies as a
Percent of the Portfolio.... 2.54% 2.17% 3.59% 3.56%
AT DECEMBER 31,
----------------------------------------------
1997 1996
------------------------ -------------------
NUMBER NUMBER
OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT
----------- ------ --------- ------
Portfolio...................... 1,697,755 $ 21,879 1,679,880 $ 21,197
Period of Delinquency
31-60 Days................... 58,421 $ 708 65,297 $ 843
61 Days or More.............. 7,360 102 8,175 118
----------- -------- --------- --------
Total Delinquencies............ 65,781 $ 810 73,472 $ 961
====== === ====== ===
Total Delinquencies as a
Percent of the Portfolio.... 3.87% 3.70% 4.37% 4.53%
AT DECEMBER 31,
--------------------------------------------------------------------
1995 1994 1993
------------------------ ------------------------ --------------------
NUMBER NUMBER NUMBER
OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
--------- ------ --------- ------ --------- ------
Portfolio...................... 1,653,533 $20,913 1,444,736 $16,977 1,352,218 $14,116
Period of Delinquency
31-60 Days................... 55,507 $ 720 25,888 $ 293 16,350 $ 153
61 Days or More.............. 6,792 100 2,085 27 1,383 15
---------- ------- ---------- ------- ---------- -------
Total Delinquencies............ 62,299 $ 820 27,973 $ 320 17,733 $ 168
====== === ====== === ====== ===
Total Delinquencies as a Percent of
the Portfolio................ 3.77% 3.92% 1.94% 1.88% 1.31% 1.19%
- ----------
(1) All amounts and percentages are based on the gross amount scheduled to
be paid on each contract, including estimated unearned finance and
other charges. The information in the table includes an immaterial
amount of retail installment sale contracts on vehicles other than
automobiles and light duty trucks and includes previously sold
contracts which CFC continues to service.
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
(DOLLARS IN MILLIONS)
NINE MONTHS
ENDED SEPTEMBER 30,
-------------------
1998 1997
----- ----
Average Amount Outstanding During
the Period ................................... $23,214 $21,394
Average Number of Contracts
Outstanding During the Period.............. 1,736,375 1,686,274
Percent of Contracts Acquired During
The Period with Recourse to the Dealer... 8.98% 10.14%
Repossessions as a Percent of
Average Number of Contracts
Outstanding(2)............................... 2.82 3.32%
Net Losses as a Percent of
Liquidations(3)(4)........................... 2.80 2.98%
Net Losses as a Percent of Average
Amount Outstanding(2)(3)..................... 1.41 1.64%
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ --------
Average Amount Outstanding During
the Period........................... $21,485 $21,062 $19,4486 $15,517 $12,882
Average Number of Contracts
Outstanding During the Period..... 1,688,525 1,671,405 1,572,963 1,396,497 1,341,084
Percent of Contracts Acquired During
The Period with Recourse to the
Dealer............................... 10.91 9.05% 14.80% 17.00% 16.20%
Repossessions as a Percent of
Average Number of Contracts
Outstanding(2)........................ 3.40 3.82% 3.05% 2.36% 2.15%
Net Losses as a Percent of
Liquidations(3)(4)................... 3.36 3.17% 2.25% 1.38% 1.34%
Net Losses as a Percent of Average
Amount Outstanding(2)(3)............ 1.80 1.68% 1.16% 0.73% 0.75%
- ----------
(1) Except as indicated, all amounts and percentages are based on the gross
amount scheduled to be paid on each contract, including estimated
unearned finance and other charges. The information in the table includes
an immaterial amount of retail installment sales contracts on vehicles
other than automobiles and light duty trucks and includes previously sold
contracts that CFC continues to service.
(2) Percentages have been annualized for the nine months ended September 30,
1998 and 1997 and are not necessarily indicative of the experience for
the year.
(3) Net losses are equal to the aggregate of the balances of all contracts
which are determined to be uncollectible in the period, less any
recoveries on contracts charged off in the period or any prior periods,
including any losses resulting from disposition expenses and any losses
resulting from the failure to recover commissions to dealers with respect
to contracts that are prepaid or charged off.
(4) Liquidations represent a reduction in the outstanding balances of the
contracts as a result of monthly cash payments and charge-offs.
Notwithstanding the improvement in credit losses for the nine months ended
September 30, 1998, higher credit losses could be experienced in the near
term. No assurance can be given as to future results.
The net loss figures above reflect the fact that the Seller had recourse
to Dealers on a portion of its retail installment sale contracts.
Approximately % of the aggregate principal balance of the Initial Receivables
as of the Initial Cutoff Date represents contracts with recourse to Dealers.
This factor was taken into consideration in determining the principal balances
of the Class A and Class B Certificates and the Specified Reserve Account
Balance. The Seller applies underwriting standards to the purchase of
contracts without regard to whether recourse to Dealers is provided. Based on
its experience, the Seller believes that there is no material difference
between the rates of delinquency and repossession on contracts with recourse
against Dealers as compared to contracts without recourse against Dealers.
However, the net loss experience of contracts without recourse against Dealers
is higher than that of contracts with recourse against Dealers because, under
its recourse obligation, the Dealer is responsible to the Seller for payment
of the unpaid balance of the contract, provided the Seller retakes the vehicle
from the retail buyer and returns it to the Dealer within a specified time. In
the event of a Dealer's bankruptcy, a bankruptcy trustee might attempt to
characterize recourse sales of contracts as loans to the Dealer secured by the
contracts. Such an attempt, if successful, could result in payment delays or
losses on the affected Receivables.
CHRYSLER FINANCIAL COMPANY L.L.C.
Certain information regarding the Seller is set forth under "Chrysler
Financial Company L.L.C." in the Prospectus. In addition, as of September 30,
1998, the Seller had nearly 3,400 employees and was managing $46.8 billion in
finance receivables and provided financial services to automobile dealers and
their customers through 29 zone offices in the United States. During the first
nine months of 1998, the Seller financed or leased approximately 738,000 new
and used vehicles at retail, including approximately 563,000 new Chrysler
passenger cars and light duty trucks, representing 30% of Chrysler's U.S.
retail and fleet deliveries. The Seller also financed at wholesale
approximately 1,338,000 new Chrysler passenger cars and light duty trucks,
representing 69% of Chrysler's U.S. factory unit sales for the nine months
ended September 30, 1998. Wholesale vehicle financing accounted for 69% of the
total automotive financing volume of the Seller in the first nine months of
1998 and represented 22% of net automotive finance receivables and leases
outstanding at September 30, 1998.
Chrysler Financial Corporation converted from a corporation to a limited
liability company ("LLC") on October 25, 1998. The conversion to an LLC had,
and will continue to have, no effect on the day-to-day operations of Chrysler
Financial Corporation. The new LLC is the surviving legal entity of a merger
between Chrysler Financial Company L.L.C., a newly created Michigan limited
liability company, and Chrysler Financial Corporation. DaimlerChrysler
Corporation, which owned all of the capital stock of Chrysler Financial
Corporation, is the sole member (owner) of Chrysler Financial Company L.L.C.
Chrysler Financial Company L.L.C. succeeded to the operations of Chrysler
Financial Corporation upon the completion of the conversion and acquired its
assets and assumed its debt and other obligations.
WEIGHTED AVERAGE LIFE OF THE CERTIFICATES
Information regarding certain maturity and prepayment considerations with
respect to the Certificates is set forth under "Weighted Average Life of the
Securities" in the Prospectus. As the rate of payment of principal of each
class of Certificates depends on the rate of payment (including prepayments
and liquidations due to default) of the principal balance of the Receivables,
the final distribution in respect of the Certificates could occur
significantly earlier than the Final Scheduled Payment Date.
Certificateholders will bear the risk of being able to reinvest principal
payments on the Certificates at yields at least equal to the yield on their
respective Certificates.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued pursuant to the terms of the Agreement, a
form of which has been filed as an exhibit to the Registration Statement. A
copy of the Agreement will be filed with the Commission following the issuance
of the Certificates. The following summary describes certain terms of the
Certificates and the Agreement. The summary does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all the
provisions of the Certificates and the Agreement. The following summary
supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Certificates of any
given series and the related Agreement set forth in the Prospectus, to which
description reference is hereby made.
GENERAL
In general, it is intended that Class A Certificateholders receive, on
each Payment Date, the Class A Percentage of the Principal Distribution Amount
plus interest at the Class A Pass Through Rate on the Class A Principal
Balance. Subject to the prior rights of the Class A Certificateholders, it is
intended that the Class B Certificateholders receive, on each Payment Date,
the Class B Percentage of the Principal Distribution Amount plus interest at
the Class B Pass Through Rate on the Class B Principal Balance.
The Certificates will evidence interests in the Trust created pursuant to
the Agreement. The Class A Certificates will evidence in the aggregate an
undivided ownership interest (the "Class A Percentage") of approximately % of
the Trust and the Class B Certificates will evidence in the aggregate an
undivided ownership interest (the "Class B Percentage") of approximately % of
the Trust. [The Class B Certificates, which are not being offered hereby,
initially will be held by the Company.]
MANDATORY REPURCHASE
Cash distributions to Certificateholders will be made, on a pro rata
basis, on the Payment Date on or immediately following the last day of the
Funding Period in the event that the amount on deposit in the Pre-Funding
Account after giving effect to the purchase of all Subsequent Receivables,
including any such purchase on such date, exceeds $ (a "Mandatory
Repurchase").
The Certificate Prepayment Premium will be payable by the Trust to the
Certificateholders pursuant to a Mandatory Repurchase if the amount on deposit
in the Pre-Funding Account exceeds $ . The Certificate Prepayment Premium will
equal the excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the remaining Pre-Funded Amount (the
"Certificate Prepayment Amount") at the Class A Pass Through Rate or the Class
B Pass Through Rate, as applicable, during the period commencing on and
including the Payment Date on which such Certificate Prepayment Amount is
required to be distributed to Certificateholders to but excluding over (ii)
the amount of interest that would have accrued on such Certificate Prepayment
Amount over the same period at a per annum rate of interest equal to the bond
equivalent yield to maturity on the Determination Date preceding such Payment
Date on the . Such excess shall be discounted to present value to such Payment
Date at the yield described in clause (ii) above. The Trust's obligation to
pay the Certificate Prepayment Premium shall be limited to funds that are
received from the Seller under the Agreement as liquidated damages for the
failure to deliver Subsequent Receivables having an aggregate principal amount
equal to the Pre-Funded Amount. No other assets of the Trust will be available
for the purpose of making such payment.
OPTIONAL PREPAYMENT
If the Servicer exercises its option to purchase the Receivables when the
Pool Balance declines to 10% or less of the Initial Pool Balance, the Class A
Certificateholders will receive an amount in respect of the Class A
Certificates equal to the outstanding Class A Certificate Balance together
with accrued interest at the Class A Pass Through Rate, the Class B
Certificateholders will receive an amount in respect of the Class B
Certificates equal to the outstanding Class B Certificate Balance together
with accrued interest at the Class B Pass Through Rate, which distributions
shall effect early retirement of the Certificates. See "Description of the
Transfer and Servicing Agreements -- Termination" in the Prospectus.
SALE AND ASSIGNMENT OF RECEIVABLES; SUBSEQUENT RECEIVABLES
Certain information with respect to the conveyance of the Initial
Receivables from the Seller to the Trust on the Closing Date pursuant to the
Agreement is set forth under "Description of the Transfer and Servicing
Agreements -- Sale and Assignment of Receivables" in the Prospectus. In
addition, during the Funding Period, pursuant to the Agreement, the Seller
will be obligated to sell to the Trust Subsequent Receivables having an
aggregate principal balance equal to approximately $ (such amount being equal
to the initial Pre-Funded Amount) to the extent that such Subsequent
Receivables are available.
During the Funding Period on each Subsequent Transfer Date, subject to the
conditions described below, the Seller will sell and assign to the Trust,
without recourse, the Seller's entire interest in the Subsequent Receivables
designated by the Seller as of the related Subsequent Cutoff Date and
identified in a schedule attached to a subsequent transfer assignment relating
to such Subsequent Receivables executed on such date by the Seller. It is
expected that on the Closing Date, subject to the conditions described below,
certain of the Subsequent Receivables designated by the Seller and arising
between the Initial Cutoff Date and the Closing Date will be conveyed to the
Trust. Upon the conveyance of Subsequent Receivables to the Trust on a
Subsequent Transfer Date, (i) the Pool Balance will increase in an amount
equal to the aggregate principal balance of the Subsequent Receivables, (ii)
an amount equal to % of the aggregate principal balance of such Subsequent
Receivables will be withdrawn from the Pre-Funding Account and will be
deposited in the Reserve Account and (iii) an amount equal to the excess of
the aggregate principal balance of such Subsequent Receivables over the amount
described in clause (ii) will be withdrawn from the Pre-Funding Account and
paid to the Seller.
Any conveyance of Subsequent Receivables is subject to the satisfaction,
on or before the related Subsequent Transfer Date, of the following conditions
precedent, among others: (i) each such Subsequent Receivable must satisfy the
eligibility criteria specified in the Agreement (including that such
Subsequent Receivable has not been repurchased by the Seller through the
exercise of optional repurchase provisions contained in another securitization
transaction); (ii) the Seller will not have selected such Subsequent
Receivables in a manner that it believes is adverse to the interests of the
Certificateholders; (iii) as of the related Subsequent Cutoff Date, the
Receivables, including any Subsequent Receivables conveyed by the Seller as of
such Subsequent Cutoff Date, satisfy the criteria described under "The
Receivables Pool" herein and "The Receivables Pools" in the Prospectus; (iv)
the applicable Reserve Account Initial Deposit for such Subsequent Transfer
Date shall have been made; and (v) the Seller shall have executed and
delivered to the Trustee a written assignment conveying such Subsequent
Receivables to the Trust (including a schedule identifying such Subsequent
Receivables). Moreover, any such conveyance of Subsequent Receivables made
during any Collection Period will also be subject to the satisfaction, on or
about the fifteenth day of the month following the end of such Collection
Period, of the following conditions subsequent, among others: (i) the Seller
will have delivered certain opinions of counsel to the Trustee and the Rating
Agencies with respect to the validity of the conveyance of all such Subsequent
Receivables conveyed during such Collection Period; (ii) the Trustee shall
have received written confirmation from a firm of certified independent public
accountants that, as of each applicable Subsequent Cutoff Date, the
Receivables in the Trust at that time, including the Subsequent Receivables
conveyed by the Seller as of such Subsequent Cutoff Date, satisfied the
parameters described under "The Receivables Pool" herein and under "The
Receivables Pools" in the Prospectus; and (iii) the Rating Agencies shall have
each notified the Seller in writing that, following the addition of all such
Subsequent Receivables, the Class A Certificates and the Class B Certificates
are rated in the same respective rating categories in which they were rated at
the Closing Date. The Seller will immediately repurchase any Subsequent
Receivable, at a price equal to the Repurchase Amount thereof, upon the
failure of the Seller to satisfy any of the foregoing conditions subsequent
with respect thereto.
Subsequent Receivables may have been originated by CFC at a later date
using credit criteria different from those which were applied to the Initial
Receivables. See "Special Considerations--The Receivables and the Pre-Funding
Account" and "The Receivables Pool" herein.
ACCOUNTS
In addition to the Accounts referred to under "Description of the Transfer
and Servicing Agreements--Accounts" in the Prospectus, the Servicer will also
establish and will maintain with the Trustee, the Payahead Account, the
Pre-Funding Account and the Reserve Account, in the name of the Trustee on
behalf of the Certificateholders. The Reserve Account will not be part of the
Trust.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicing Fee Rate with respect to the Servicing Fee for the Servicer
will be 1.00% per annum of the Pool Balance as of the first day of the
Collection Period (after giving effect to distributions to be made on the
following Payment Date). The Servicing Fee (together with any portion of the
Servicing Fee that remains unpaid from prior Payment Dates) will be paid on
each Payment Date solely to the extent of the Interest Distribution Amount.
See "Description of the Transfer and Servicing Agreements--Servicing
Compensation and Payment of Expenses" in the Prospectus.
DISTRIBUTIONS
Deposits to Collection Account. On or about the Business Day of each month
(the "Determination Date"), the Servicer will provide the Trustee with certain
information with respect to the preceding Collection Period, including the
amount of aggregate collections on the Receivables, the aggregate Advances to
be made by the Servicer and the aggregate Repurchase Amount of Receivables to
be repurchased by the Seller or to be purchased by the Servicer (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).
On or before each Payment Date, the Servicer shall cause to be transferred
from the Payahead Account to the Collection Account scheduled payments due
during the related Collection Period or as may be applied to full prepayments
on the Precomputed Receivables.
On or before each Payment Date, the Servicer will cause the Total
Distribution Amount to be deposited into the Collection Account. The "Total
Distribution Amount" for a Payment Date shall be the sum of the Interest
Distribution Amount and the Principal Distribution Amount (other than the
portion thereof attributable to Realized Losses). "Realized Losses" means the
excess of the principal balance of any Liquidated Receivable over Liquidation
Proceeds to the extent allocable to principal received in the Collection
Period in which the Receivable became a Liquidated Receivable.
The "Interest Distribution Amount" for a Payment Date generally will be
the sum of the following amounts with respect to the preceding Collection
Period: (i) that portion of all collections on the Receivables (including
amounts withdrawn from the Payahead Account but excluding amounts deposited
into the Payahead Account) allocable to interest; (ii) all proceeds of the
liquidation of defaulted Receivables ("Liquidated Receivables"), net of
expenses incurred by the Servicer in connection with such liquidation and any
amounts required by law to be remitted to the Obligor on such Liquidated
Receivables ("Liquidation Proceeds"), to the extent attributable to interest
due thereon in accordance with the Servicer's customary servicing procedures,
and all recoveries in respect of Liquidated Receivables which were written off
in prior Collection Periods; (iii) all Advances made by the Servicer of
interest due on the Receivables; (iv) the Repurchase Amount of each Receivable
that was repurchased by the Seller or purchased by the Servicer under an
obligation which arose during the related Collection Period, to the extent
attributable to accrued interest thereon; and (v) Investment Earnings for such
Payment Date.
The "Principal Distribution Amount" for a Payment Date generally will be
the sum of the following amounts with respect to the preceding Collection
Period: (i) that portion of all collections on the Receivables (including
amounts withdrawn from the Payahead Account but excluding amounts deposited
into the Payahead Account) allocable to principal; (ii) all Liquidation
Proceeds attributable to the principal amount of Receivables which 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; (iii) all Precomputed Advances
made by the Servicer of principal due on the Precomputed Receivables; (iv) to
the extent attributable to principal, the Repurchase Amount received with
respect to each Receivable repurchased by the Seller or purchased by the
Servicer under an obligation which arose during the related Collection Period;
(v) partial prepayments 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
Obligor as of the date of the original contract; and (vi) on the Final
Scheduled Payment Date, any amounts advanced by the Servicer with respect to
principal on the Receivables.
The Interest Distribution Amount and the Principal Distribution Amount on
any Payment Date shall exclude the following:
(i) amounts received on Precomputed Receivables to the
extent that the Servicer has previously made an unreimbursed
Precomputed Advance;
(ii) Liquidation Proceeds with respect to a particular
Precomputed Receivable to the extent of any unreimbursed Precomputed
Advances thereon;
(iii) all payments and proceeds (including Liquidation
Proceeds) of any Receivables the Repurchase Amount of which has been
included in the Total Distribution Amount in a prior Collection
Period;
(iv) amounts received in respect of interest on Simple
Interest Receivables during the preceding Collection Period in excess
of the amount of interest that would have been due during the
Collection Period on Simple Interest Receivables at their respective
APRs (assuming that a payment is received on each Simple Interest
Receivable on the due date thereof);
(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; and
(vi) amounts released from the Pre-Funding Account.
The Interest Distribution Amount and Principal Distribution Amount with
respect to any Payment Date will not be determined on the basis of the
reconciliation methodology described under "Description of the Transfer and
Servicing Agreements--Distributions--Allocation of Collections on Receivables;
Reconciliation".
Calculation of Distributable Amounts. The "Class A Distributable Amount"
with respect to a Payment Date shall be an amount equal to the sum of (i) the
"Class A Principal Distributable Amount", consisting of the Class A Percentage
of the Principal Distribution Amount, plus (ii) the "Class A Interest
Distributable Amount", consisting of thirty (30) days' interest at the Class A
Pass Through Rate on the Class A Certificate Balance as of the close of
business on the last day of the preceding Collection Period. In addition, on
the Final Scheduled Payment Date, the Class A Principal Distributable Amount
will include the lesser of (A) the Class A Percentage of any payments of
principal due and remaining unpaid on each Receivable in the Trust as of the
last day of the preceding Collection Period and (B) the portion of such amount
necessary (after giving effect to the other amounts described above to be
distributed to the Class A Certificateholders on such Payment Date and
allocable to principal) to reduce the Class A Certificate Balance to zero.
The "Class A Certificate Balance" shall equal, initially, $ and,
thereafter, shall equal the initial Class A Certificate Balance reduced by all
amounts previously distributed to Class A Certificateholders and allocable to
principal.
The "Class B Distributable Amount" with respect to a Payment Date shall be
an amount equal to the sum of (i) the "Class B Principal Distributable
Amount", consisting of the Class B Percentage of the Principal Distribution
Amount plus (ii) the "Class B Interest Distributable Amount", consisting of
thirty (30) days' interest at the Class B Pass Through Rate on the Class B
Certificate Balance as of the close of business on the last day of the
preceding Collection Period. In addition, on the Final Scheduled Payment Date,
the principal required to be distributed to the Class B Certificateholders
will include the lesser of (i) the Class B Percentage of any payments of
principal due and remaining unpaid with respect to the Receivables in the
Trust as of the last day of the preceding Collection Period and (ii) the
portion of the amount in clause (i) above that is necessary (after giving
effect to all other amounts distributed to Class A and Class B
Certificateholders on such Payment Date and allocable to principal) to reduce
the Class B Certificate Balance to zero.
The "Class B Certificate Balance" shall equal, initially, $ and,
thereafter, shall equal the initial Class B Certificate Balance, reduced by
all amounts previously distributed to Class B Certificateholders (or deposited
in the Reserve Account, but not including the Reserve Account Initial Deposit)
and allocable to principal and by Realized Losses.
Calculation of Amounts to Be Distributed. Prior to each Payment Date, the
Servicer will calculate the Total Distribution Amount, the Class A
Distributable Amount and the Class B Distributable Amount.
The holders of the Class A Certificates will receive on any Payment Date,
to the extent of available funds, the Class A Distributable Amount and any
outstanding Class A Interest Carryover Shortfall and Class A Principal
Carryover Shortfall (each as defined below) as of the close of the preceding
Payment Date. On each Payment Date on which the sum of the Class A Interest
Distributable Amount and any outstanding Class A Interest Carryover Shortfall
from the preceding Payment Date (plus interest on such Class A Interest
Carryover Shortfall at the Class A Pass Through Rate from such preceding
Payment Date to the current Payment Date, to the extent permitted by law)
exceeds the Class A Percentage of the Interest Distribution Amount (after
payment of the Servicing Fee) on such Payment Date, the Class A
Certificateholders shall be entitled generally to receive such amounts, first,
from the Class B Percentage of the Interest Distribution Amount; second, if
such amounts are insufficient, from the amounts available in the Reserve
Account; and third, if such amounts are insufficient, from the Class B
Percentage of the Principal Distribution Amount (other than the portion
thereof attributable to Realized Losses). The "Class A Interest Carryover
Shortfall" as of the close of any Payment Date means the excess of the Class A
Interest Distributable Amount for such Payment Date, plus any outstanding
Class A Interest Carryover Shortfall from the preceding Payment Date, plus
interest on such outstanding Class A Interest Carryover Shortfall, to the
extent permitted by law, at the Class A Pass Through Rate from such preceding
Payment Date through the current Payment Date, over the amount of interest
that the holders of the Class A Certificates actually received on such current
Payment Date.
On each Payment Date on which the sum of the Class A Principal
Distributable Amount and any outstanding Class A Principal Carryover Shortfall
from the preceding Payment Date exceeds the Class A Percentage of the
Principal Distribution Amount on such Payment Date, the Class A
Certificateholders shall be entitled to receive such amounts first, from the
Class B Percentage of the Principal Distribution Amount (other than the
portion thereof attributable to Realized Losses); second, if such amounts are
insufficient, from amounts available in the Reserve Account; and third, if
such amounts are insufficient, from the Class B Percentage of the Interest
Distribution Amount. The "Class A Principal Carryover Shortfall" as of the
close of any Payment Date means the excess of the Class A plus any Principal
Distributable Amount outstanding Class A Principal Carryover Shortfall from
the preceding Payment Date over the amount of principal that the holders of
the Class A Certificates actually received on such current Payment Date.
The holders of the Class B Certificates will receive on any Payment Date,
to the extent of available funds, the Class B Distributable Amount and any
outstanding Class B Interest Carryover Shortfall and Class B Principal
Carryover Shortfall (each as defined below) as of the close of the preceding
Payment Date. On each Payment Date on which the sum of the Class B Interest
Distributable Amount and any outstanding Class B Interest Carryover Shortfall
from the preceding Payment Date (plus interest on such Class B Interest
Carryover Shortfall at the Class B Pass Through Rate from such preceding
Payment Date to the current Payment Date, to the extent permitted by law)
exceeds the Class B Percentage of the Interest Distribution Amount (after
payment of the Servicing Fee) on such Payment Date less any portion thereof
required to be distributed to the Class A Certificateholders pursuant to their
prior rights as described above, the Class B Certificateholders shall be
entitled generally to receive such amounts, first, from the Class A Percentage
of the Interest Distribution Amount that is not otherwise required to be
distributed to the Class A Certificateholders as described above and, second,
from the amount, if any, available in the Reserve Account (after giving effect
to any withdrawals therefrom for distribution to the Class A
Certificateholders on such Payment Date). The "Class B Interest Carryover
Shortfall" as of the close of any Payment Date means the excess of the Class B
Interest Distributable Amount for such Payment Date, plus any outstanding
Class B Interest Carryover Shortfall from the preceding Payment Date, plus
interest on such outstanding Class B Interest Carryover Shortfall, to the
extent permitted by law, at the Class B Pass Through Rate from such preceding
Payment Date through the current Payment Date, over the amount of interest
that the holders of the Class B Certificates actually received on such current
Payment Date.
On each Payment Date on which the sum of the Class B Principal
Distributable Amount and any outstanding Class B Principal Carryover Shortfall
from the preceding Payment Date exceeds the Class B Percentage of the
Principal Distribution Amount on such Payment Date less any portion thereof
required to be distributed to the Class A Certificateholders pursuant to their
prior rights as described above, the Class B Certificateholders shall be
entitled to receive such amounts, first, from the Interest Distribution Amount
that is not otherwise required to be distributed to the Class A or Class B
Certificateholders as described above and, second, from amounts available in
the Reserve Account (after giving effect to any withdrawals therefrom on such
Payment Date for distribution to the Class A Certificateholders and for
distribution of interest to the Class B Certificateholders). The "Class B
Principal Carryover Shortfall" as of the close of any Payment Date means the
excess of the Class B Principal Distributable Amount plus any outstanding
Class B Principal Carryover Shortfall from the preceding Payment Date over the
amount of principal that the holders of Class B Certificates actually received
on such current Payment Date.
SUBORDINATION OF THE CLASS B CERTIFICATES; RESERVE ACCOUNT
The rights of the Class B Certificateholders to receive distributions with
respect to the Receivables generally will be subordinated to the rights of the
Class A Certificateholders in the event of defaults and delinquencies on the
Receivables as described herein and provided in the Agreement. The protection
afforded to the Class A Certificateholders through subordination will be
effected both by the preferential right of the Class A Certificateholders to
receive current distributions with respect to the Receivables and by the
establishment of the Reserve Account. The Reserve Account will be created with
an initial deposit by the Seller of the Reserve Account Initial Deposit and
will be augmented by deposit therein on each Payment Date of the amount, if
any, remaining from the Total Distribution Amount after the distributions due
to the Certificateholders have been made until the amount in the Reserve
Account reaches the Specified Reserve Account Balance for such Payment Date.
The Reserve Account will not be part of or otherwise includible in the
Trust and will be a segregated trust account held by the Trustee. On each
Payment Date, (i) if the amounts on deposit in the Reserve Account are less
than the Specified Reserve Account Balance for such Payment Date, the Trustee
will, after payment of any amounts required to be distributed to
Certificateholders and the payment of the Servicing Fee due with respect to
the related Collection Period (including any unpaid Servicing Fees with
respect to prior Collection Periods) withdraw from the Collection Account and
deposit in the Reserve Account the amount remaining in the Collection Account
that would otherwise be distributed to the Company, or such lesser portion
thereof as is sufficient to restore the amount in the Reserve Account to such
Specified Reserve Account Balance for such Payment Date, and (ii) if the
amount on deposit in the Reserve Account on such Payment Date (after giving
effect to all deposits or withdrawals therefrom on such Payment Date) is
greater than the Specified Reserve Account Balance for such Payment Date, the
Trustee will release and distribute any such excess to the Company. Upon any
such distribution to the Company, the Certificateholders will have no rights
in, or claims to, such amounts.
Amounts held from time to time in the Reserve Account will continue to be
held for the benefit of holders of the Class A Certificates and holders of the
Class B Certificates. Funds in the Reserve Account shall be invested as
provided in the Agreement in Eligible Investments. The Company shall be
entitled to receive all investment earnings on amounts in the Reserve Account.
Investment income on amounts in the Reserve Account will not be available for
distribution to the Certificateholders or otherwise subject to any claims or
rights of the Certificateholders.
The time necessary for the Reserve Account to reach and maintain the
Specified Reserve Account Balance at any time after the Closing Date will be
affected by the delinquency, credit loss, repossession and prepayment
experience of the Receivables and, therefore, cannot be accurately predicted.
The subordination of the Class B Certificates and the Reserve Account
described above are intended to enhance the likelihood of receipt by Class A
Certificateholders of the full amount of principal and interest on the
Receivables due them and to decrease the likelihood that the Class A
Certificateholders will experience losses. However, in certain circumstances,
the Reserve Account could be depleted and shortfalls could result.
If on any Payment Date the holders of the Class A Certificates do not
receive the sum of the Class A Distributable Amount, the Class A Interest
Carryover Shortfall and the Class A Principal Carryover Shortfall for such
Payment Date (after giving effect to any amounts withdrawn from the Reserve
Account and the Class B Percentage of the Total Distribution Amount and
applied to such deficiency, as described above), the holders of the Class B
Certificates generally will not receive any portion of the Total Distribution
Amount. While the Class B Certificateholders are entitled to receive amounts
from the Reserve Account as described above, such entitlement is subordinated
to the rights of the Class A Certificateholders to receive amounts from the
Reserve Account as described above. If the Reserve Account becomes depleted,
the Class B Certificateholders may experience shortfalls in the distributions
due them and incur a loss on their investment.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Brown & Wood LLP, the Trust will be treated as a grantor
trust for federal income tax purposes, will not be subject to federal income
tax and will not be characterized as an association (or a publicly traded
partnership) taxable as a corporation. See "Certain Federal Income Tax
Consequences" and "Certain State Tax Consequences" in the Prospectus.
ERISA CONSIDERATIONS
THE CLASS A CERTIFICATES
Subject to the considerations set forth under "ERISA
Considerations--Senior Certificates Issued By Trusts" in the Prospectus, the
Class A Certificates may be purchased by or with assets of an employee benefit
plan or an individual retirement account (a "Plan") subject to ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"). A
fiduciary of a Plan must determine that the purchase of a Class A Certificate
is consistent with its fiduciary duties under ERISA and does not result in a
nonexempt prohibited transaction as defined in Section 406 of ERISA or Section
4975 of the Code. For additional information regarding treatment of the Class
A Certificates under ERISA, see "ERISA Considerations" in the Prospectus.
THE CLASS B CERTIFICATES
The Class B Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions
of Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or
(c) any entity whose underlying assets include plan assets by reason of a
plan's investment in the entity. By its acceptance of a Class B Certificate,
each Class B Certificateholder will be deemed to have represented and
warranted that it is not subject to the foregoing limitation. For additional
information regarding treatment of the Class B Certificates under ERISA, see
"ERISA Considerations" in the Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
(the "Underwriting Agreement"), the Seller has agreed to cause the Trust to
sell to each of the Underwriters named below (the "Underwriters"), and each of
the Underwriters has severally agreed to purchase, the principal amount of
[Class A] Certificates set forth opposite its name below:
PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF
UNDERWRITERS CLASS A CERTIFICATES CLASS B CERTIFICATES
- ------------ --------------------- --------------------
$ $
Total...... $ $
The Seller has been advised by the Underwriters that they propose
initially to offer the [Class A] Certificates to the public at the prices set
forth herein, and to certain dealers at such price less the initial concession
not in excess of % per [Class A] Certificate. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of % per [Class A]
Certificate to certain other dealers. After the initial public offering of the
[Class A] Certificates, the public offering prices and such concessions may be
changed.
LEGAL OPINIONS
In addition to the legal opinions described in the Prospectus, certain
legal matters relating to the Certificates will be passed upon for the
Underwriters and certain federal income tax and other matters will be passed
upon for the Trust by [ ]. [ may from time to time render legal services to
CFC and its affiliates].
INDEX OF TERMS
Agreement..............................................................S-12
APR....................................................................S-13
Cede....................................................................S-2
Certificate Prepayment Amount..........................................S-19
Certificate Prepayment Premium..........................................S-5
CFC.....................................................................S-4
Chrysler...............................................................S-11
Class A Certificate Balance............................................S-22
Class A Distributable Amount...........................................S-22
Class A Interest Carryover Shortfall...................................S-23
Class A Interest Distributable Amount..................................S-22
Class A Percentage.....................................................S-18
Class A Principal Carryover Shortfall..................................S-23
Class A Principal Distributable Amount.................................S-22
Class B Certificate Balance............................................S-22
Class B Distributable Amount...........................................S-22
Class B Interest Carryover Shortfall...................................S-23
Class B Interest Distributable Amount..................................S-22
Class B Percentage.....................................................S-18
Class B Principal Carryover Shortfall..................................S-24
Class B Principal Distributable Amount.................................S-22
Closing Date............................................................S-4
Code...................................................................S-25
Cutoff Date............................................................S-12
Daimler................................................................S-11
Determination Date.....................................................S-21
DTC.....................................................................S-2
Initial Pool Balance....................................................S-4
Interest Distribution Amount...........................................S-21
Issuer..................................................................S-4
Liquidated Receivables.................................................S-21
Liquidation Proceeds...................................................S-21
LLC....................................................................S-18
Mandatory Repurchase...................................................S-19
Payment Date............................................................S-4
Plan...................................................................S-25
Principal Distribution Amount..........................................S-21
Rating Agencies.........................................................S-9
Realized Losses........................................................S-21
Receivables.............................................................S-4
Receivables Pool.......................................................S-12
Seller..................................................................S-4
Servicer................................................................S-4
Total Distribution Amount..............................................S-21
Trust...................................................................S-4
Trustee.................................................................S-4
Underwriters...........................................................S-25
Underwriting Agreement.................................................S-25
- ---------------------------------------------------------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Reports to Certificateholders........................ S-2
Table of Contents.................................... S-3
Summary of Terms..................................... S-4
Special Considerations............................... S-8
The Trust............................................ S-12
The Receivables Pool................................. S-12
Chrysler Financial Company L.L.C..................... S-17
Weighted Average Life of the Certificates............ S-18
Description of the Certificates...................... S-18
Certain Federal Income Tax Consequences.............. S-25
ERISA Considerations................................. S-25
Underwriting......................................... S-25
Legal Opinions....................................... S-26
Index of Terms....................................... S-27
PROSPECTUS
Available Information................................ 3
Incorporation of Certain Documents by Reference...... 3
Summary of Terms..................................... 4
Special Considerations............................... 7
The Trusts........................................... 11
The Receivables Pools................................ 12
Weighted Average Life of the Securities.............. 14
Pool Factors for Securities and Trading Information.. 14
Use of Proceeds...................................... 15
Chrysler Financial Company L.L.C..................... 15
Description of the Notes............................. 16
Description of the Certificates...................... 20
Certain Information Regarding the Securities......... 21
Description of the Transfer and Servicing Agreements. 31
Certain Legal Aspects of the Receivables............. 41
Certain Federal Income Tax Consequences.............. 44
Certain State Tax Consequences....................... 55
ERISA Considerations................................. 55
Plan of Distribution................................. 59
Legal Opinions....................................... 59
Index of Terms....................................... 60
DEALERS WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS
UNDERWRITERS OF THE OFFERED NOTES AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS
OR SUBSCRIPTIONS. IN ADDITION, ALL DEALERS SELLING OFFERED NOTES WILL DELIVER
A PROSPECTUS SUPPLEMENT AND PROSPECTUS UNTIL 90 DAYS AFTER THE DATE OF THIS
PROSPECUTS SUPPLEMENT.
==============================================================================
$-------------
PREMIER AUTO TRUST
-------
$----------
__% ASSET BACKED CERTIFICATES, CLASS A
$----------
[__% ASSET BACKED CERTIFICATES, CLASS B]
CHRYSLER FINANCIAL
COMPANY L.L.C.
SELLER AND SERVICER
---------------
PROSPECTUS SUPPLEMENT
DATED ______________
---------------
[UNDERWRITERS]
==============================================================================
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
Subject to Completion, dated .
------------
Prospectus Supplement
(To Prospectus dated ___________, ____)
$_______________
PREMIER AUTO TRUST ____-_
$____________ CLASS A-2, ____% ASSET BACKED NOTES, DUE _________
$____________ CLASS A-3, ____% ASSET BACKED NOTES, DUE _________
$____________ CLASS A-4, ____% ASSET BACKED NOTES, DUE _________
CHRYSLER FINANCIAL COMPANY L.L.C.,
SELLER AND SERVICER
____________________
BEFORE YOU DECIDE TO INVEST IN ANY OF THE OFFERED NOTES,
PLEASE READ THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS,
ESPECIALLY THE SPECIAL CONSIDERATIONS BEGINNING ON PAGE S-8
OF THIS PROSPECTUS SUPPLEMENT AND PAGE 7 OF THE PROSPECTUS.
The Notes will be obligations of the Trust only, and neither
the Notes nor the assets of the Trust will represent
interests in or obligations of Chrysler Financial Company
L.L.C. or any of its affiliates.
GENERAL:
o Premier Auto Trust ____-_ will issue the above Offered Notes to obtain
funds for the purchase of a pool of motor vehicle retail installment
contracts. The securities represent obligations of the Trust, and the
Trust's main source of funds for making payments on the securities is
collections on the retail installment contracts.
o Interest and principal will be payable on the ___ of each month,
unless the ____________ is not a Business Day, in which case, the
payment will be made on the following Business Day. The first payment
will be due ___________, ____.
o Principal will be paid on the notes in sequence. All principal will be
paid on the Class A-1 Notes until they are fully paid, then on Class
A-2 Notes until fully paid, etc.
TOTAL SECURITIES ISSUED:
=================================== ==================== ==================== ==================== ==================
ORIGINAL UNDERWRITING PROCEEDS TO
PRINCIPAL AMOUNT PRICE TO PUBLIC(2) DISCOUNT SELLER(2)(3)
- ----------------------------------- -------------------- -------------------- -------------------- ------------------
Class A-1 Notes(1)............... $______________ n/a n/a n/a
Class A-2 Notes.................. $______________ ________% ________% __________%
Class A-3 Notes.................. $______________ ________% ________% __________%
Class A-4 Notes.................. $______________ ________% ________% __________%
Certificates (Subordinated)(1)... $______________ n/a n/a n/a
- ----------------------------------- -------------------- -------------------- -------------------- ------------------
Total............................ $______________ $_____________ $______________ $_____________
=================================== ==================== ==================== ==================== ==================
(1) Not being offered hereby.
(2) Plus accrued interest, if any from ________ __, ____.
(3) Before deducting expenses, estimated to be $__________.
INITIAL CREDIT ENHANCEMENT (1):
==================================================== ===================== ===================== =====================
INITIAL CERTIFICATES CASH
OVERCOLLATERALIZATION (SUBORDINATED) RESERVE FUND
- ---------------------------------------------------- --------------------- --------------------- ---------------------
Amount............................................ $_____________ $_______________ $____________
Percent of Initial Securities Amount.............. ____% ____% ____%
==================================================== ===================== ===================== =====================
(1) Excess Spread, if any, may also provide credit enhancement.
___________________
We expect that delivery of the Offered Notes will be made in book-entry
form only through the facilities of The Depository Trust Company and Cedelbank,
and the Euroclear System on or about ___________________.
Neither the SEC nor any state securities commission has approved or
disapproved the Offered Notes or determined that this Prospectus Supplement and
Prospectus are accurate or complete. Any representation to the contrary is a
criminal offense.
___________________
[UNDERWRITERS]
------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS _______________
Application will be made to list the Offered Notes on the Luxembourg Stock
Exchange.
CONTENT OF PROSPECTUS SUPPLEMENT AND PROSPECTUS
You should rely only on the information contained in this document. We have
not authorized anyone to provide you with different information. You should not
assume that the information in the Prospectus Supplement or the Prospectus is
accurate as of any date other than the date at the bottom of the front page of
this document.
We provide information to you about the Offered Notes in two separate
documents that provide varying levels of detail: (a) this Prospectus Supplement,
which describes the specific terms of the Offered Notes, and (b) the Prospectus,
which provides general information, some of which may not apply to the Offered
Notes.
If the terms of the Offered Notes described in this Prospectus Supplement
vary with the accompanying Prospectus, you should rely on the information in the
Prospectus Supplement.
We include cross-references in this Prospectus Supplement and the Prospectus
to captions in these documents where you can find further related discussions.
The Table of Contents on the back cover of this document provides the pages on
which these captions are located.
You can find a listing of the pages where capitalized terms used in this
Prospectus Supplement and the Prospectus are defined under the caption "Index of
Terms" on page S-25 in this Prospectus Supplement and under the caption "Index
of Terms" beginning on page 60 in the Prospectus.
LIMITATIONS ON OFFERS OR SOLICITATIONS
We do not intend this document to be an offer or solicitation:
(A) if used in a jurisdiction in which such offer or
solicitation is not authorized;
(B) if the person making such offer or solicitation is not
qualified to do so; or
(C) if such offer or solicitation is made to anyone to whom it
is unlawful to make such offer or solicitation.
TRANSACTIONS THAT MAY AFFECT THE PRICE OF THE OFFERED NOTES
The Underwriters may engage in transactions that stabilize, maintain, or
otherwise affect the price of the Offered Notes. Such transactions may include
stabilizing and the purchase of Offered Notes to cover syndicate short
positions. For a description of these activities, see "Underwriting" herein.
S-2
REPORTS TO NOTEHOLDERS
If and when Definitive Notes are issued, Chrysler Financial Company L.L.C.,
as servicer, will send monthly and annual unaudited reports containing
information concerning the Receivables to the Indenture Trustee to be delivered
to Cede & Co. ("Cede"), as nominee of The Depository Trust Company ("DTC") and
registered holder of the Offered Notes. See "Certain Information Regarding the
Securities -- Book-Entry Registration" and "-- Reports to Securityholders" in
the Prospectus. Such reports will not constitute financial statements prepared
in accordance with generally accepted accounting principles. Chrysler Financial
Company L.L.C., as originator of the Trust, will file with the SEC such periodic
reports as are required under the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder.
S-3
TABLE OF CONTENTS
PAGE
----
REPORTS TO NOTEHOLDERS............................. S-3
SUMMARY OF TERMS................................... S-5
Issuer.......................................... S-5
Seller of the Receivables to the Trust.......... S-5
Servicer of the Receivables..................... S-5
Indenture Trustee............................... S-5
Owner Trustee................................... S-5
Offered Notes................................... S-5
Certificates.................................... S-5
Receivables..................................... S-5
Closing Date.................................... S-5
Terms of the Notes.............................. S-5
Payment Date.................................. S-5
Per Annum Interest Rates...................... S-6
Interest Accrual Period for the Notes......... S-6
Principal..................................... S-6
Credit Enhancement.............................. S-7
Initial Overcollateralization; Use of
Excess Spread to Increase
Overcollateralization....................... S-7
Reserve Account............................... S-7
Priority of Payments; Subordination of
Certificates................................ S-7
Tax Status...................................... S-7
ERISA Considerations............................ S-7
Rating of the Offered Notes..................... S-7
SPECIAL CONSIDERATIONS............................. S-8
Limited Liquidity............................... S-8
Servicing....................................... S-8
Sources of Funds................................ S-8
Ratings of the Offered Notes.................... S-8
Financial Information for Chrysler Financial
Company L.L.C................................. S-8
Risks Associated with Computer Systems
and the Year 2000............................. S-10
THE TRUST.......................................... S-11
General......................................... S-11
Capitalization of the Trust..................... S-11
The Owner Trustee............................... S-11
THE RECEIVABLES POOL............................... S-12
CFC's Performance History....................... S-13
CHRYSLER FINANCIAL
COMPANY L.L.C.................................... S-14
WEIGHTED AVERAGE LIFE OF THE
NOTES............................................ S-15
DESCRIPTION OF THE NOTES........................... S-15
General......................................... S-15
Payments of Interest............................ S-15
Payments of Principal........................... S-16
Optional Redemption............................. S-16
Book-Entry Registration......................... S-17
DESCRIPTION OF THE
CERTIFICATES..................................... S-17
DESCRIPTION OF THE TRANSFER
AND SERVICING AGREEMENTS........................ S-17
Sale and Assignment of Receivables.............. S-17
Accounts........................................ S-17
Servicing Compensation and Payment of
Expenses...................................... S-17
Distributions................................... S-18
Deposits to Collection Account................ S-18
Allocations and Distributions................. S-18
Payments to Noteholders....................... S-20
Overcollateralization and Release of the
Initial Overcollateralization Amount.......... S-20
Reserve Account................................. S-21
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES..................................... S-22
ERISA CONSIDERATIONS............................... S-22
UNDERWRITING....................................... S-22
LEGAL OPINIONS..................................... S-24
INDEX OF TERMS..................................... S-25
ANNEX I............................................ A-1
S-4
SUMMARY OF TERMS
The following summary is a short, concise description of the main terms of
the Offered Notes. For this reason, the summary does not contain all the
information that may be important to you. You will find a detailed description
of the terms of the Offered Notes following this summary and in the Prospectus.
Issuer................................... Premier Auto Trust ____-__ (The
"Trust" or the "Issuer"), a Delaware
business trust.
Seller of the Receivables
to the Trust.......................... Chrysler Financial Company L.L.C.
(the "Seller" or "CFC").
Servicer of the Receivables.............. CFC (in such capacity, the
"Servicer").
Indenture Trustee........................ ____________________________________
(the "Indenture Trustee").
Owner Trustee............................ ____________________________________
(the "Owner Trustee").
Offered Notes............................ The "Offered Notes" include only
the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes, as
described on the cover page. The
Trust will also issue $____________
principal amount of Class A-1 ____%
Asset Backed Notes. The "Notes"
include the Offered Notes and the
Class A-1 Notes.
Certificates............................. The Trust will also issue $_________
principal amount of Asset Backed
Certificates (the "Certificates").
The Certificates will represent
fractional undivided interests in
the Trust. The Certificates are not
being offered hereby. The
Certificates will not bear interest.
No principal will be paid on the
Certificates until the Notes have
been paid in full. The "Securities"
include the Notes and the
Certificates.
Receivables.............................. The Trust's main source of funds for
making payments on the Securities
will be collections on its motor
vehicle retail installment sales
contracts (the "Receivables").
Initially, the Trust will acquire
Receivables with a total principal
balance of $________________ (the
"Initial Pool Balance") as of
____________ (the "Cutoff Date"). As
of the Cutoff Date, the weighted
average annual percentage rate of
the Receivables was approximately
____%, the weighted average
remaining maturity of the
Receivables was approximately _____
months, and the weighted average
original maturity of the Receivables
was approximately _____ months. No
Receivable has a scheduled maturity
later than ______________. See "The
Receivables Pool" herein.
Closing Date............................. The "Closing Date" is _______ __,
____.
Terms of the Notes
A. Payment Date..................... Payments of interest and principal
on the Notes will be made on the
_____ day of each month, unless the
_____ is not a Business Day, in
which case, the payment will be made
on the following Business Day (each,
a "Payment Date). The first Payment
Date will be ______________.
S-5
B. Per Annum Interest Rates......... Class A-1 Rate ____%
Class A-2 Rate ____%
Class A-3 Rate ____%
Class A-4 Rate ____%
C. Interest Accrual Period for the
Notes........................... Monthly, as described under
"Description of the Notes--Payments
of Interest". However, the first
interest accrual period will begin
on the Closing Date.
D. Principal
(i) Sequential Payment
among Classes................ No principal payments will be made
(i) on the Class A-2 Notes until the
Class A-1 Notes have been paid in
full; (ii) on the Class A-3 Notes
until the Class A-2 Notes have been
paid in full and; (iii) on the Class
A-4 Notes until the Class A-3 Notes
have been paid in full.
(ii) Final Scheduled Payment
Date......................... The Trust must pay the outstanding
principal amount of each Class of
Notes by the Final Scheduled Payment
Date indicated below:
FINAL SCHEDULED
CLASS PAYMENT DATE
----- ---------------
A-1 ______________
A-2 ______________
A-3 ______________
A-4 ______________
(iii) Amount of Principal Pay-
able on Each Payment
Date......................... In general, the Trust will make
payments of principal of the Notes
on each Payment Date in an amount
equal to the excess of the total
amount collected on the Receivables
over Servicing Fees and interest on
the Notes. If certain conditions are
met, amounts that would otherwise be
paid as principal on the Notes will
instead be released to the Company
until the Company has received
$_____________ (the "Initial
Overcollateralization Amount"),
which is the amount of the initial
overcollateralization supporting the
Securities. Once the Company has
received the Initial
Overcollateralization Amount, the
Trust will resume making principal
payments in the manner described
above.
For a description of the amounts to
be released to the Company and the
timing of such releases, see
"Description of the Transfer and
Servicing Agreements --
Overcollateralization and Release of
Initial Overcollateralization
Amount" herein.
(iv) Optional
Redemption................... The Trust may, but is not obligated
to, redeem at par the outstanding
Class A-4 Notes in whole, but not in
part, on any Payment Date on which
the Servicer exercises its option to
purchase the Receivables. The
Servicer may purchase the
Receivables once the aggregate
principal balance of the Receivables
has declined to 10% or less of the
Initial Pool Balance.
S-6
Credit Enhancement
A. Initial Overcollateralization;
Use of Excess
Spread to Increase
Overcollateralization............ The Initial Pool Balance of
$_________________ will exceed the
$________________ initial aggregate
principal amount of the Securities
by the Initial Overcollateralization
Amount of $____________, which is
approximately ____% of the initial
aggregate principal amount of the
Securities. Unless offset by losses
on the Receivables or the release of
cash to the Company as described
above, the use of Excess Spread to
pay principal of the Notes will
cause the outstanding principal
amount of the Notes to decrease
faster than the principal balance of
the Receivables decreases, thereby
increasing overcollateralization and
the overcollateralization
percentage.
"Excess Spread" is the excess of
interest collections on the
Receivables (exclusive of certain
amounts) over Servicing Fees and
interest on the Notes. This amount
will be used first to offset net
losses on the Receivables, then, if
necessary, to increase the Reserve
Account to the required amount and
finally to pay principal on the
Notes or, in certain circumstances,
release cash to the Company.
B. Reserve Account.................. The initial amount in the "Reserve
Account" will be $___________, which
is ____% of the Initial Securities
Principal Balance. The Indenture
Trustee will apply funds in the
Reserve Account to make payments due
on the Notes that are not covered by
collections on the Receivables. In
subsequent periods, the Reserve
Account will be reinstated to its
required amount with Excess Spread,
if available.
C. Priority of Payments;
Subordination of
Certificates..................... On each Payment Date, the Indenture
Trustee will apply the Trust's
available funds (as described in
this document), first, to pay
interest on the Notes and, second,
to pay the outstanding principal
amount of the Notes in the order
described herein and/or to release
cash to the Company as described
above. This subordination of
payments on the Certificates is
intended to decrease the likelihood
that the Trust will default in
making payments due on the Notes.
Tax Status............................... In the opinion of Brown & Wood LLP,
for federal income tax purposes, the
Offered Notes will be characterized
as debt, and the Trust will not be
characterized as an association (or
a publicly traded partnership)
taxable as a corporation. See
"Certain Federal Income Tax
Consequences" herein and "Certain
Federal Income Tax Consequences" and
"Certain State Tax Consequences" in
the Prospectus.
ERISA Considerations..................... Subject to the considerations
discussed under "ERISA
Considerations" herein and in the
Prospectus, the Offered Notes are
eligible for purchase by employee
benefit plans.
Rating of the Offered Notes.............. At the Closing Date, at least two
nationally recognized rating
agencies will rate the Offered Notes
in the highest investment rating
category.
S-7
SPECIAL CONSIDERATIONS
LIMITED LIQUIDITY There is currently no secondary
market for the Offered Notes. Each
Underwriter currently intends to
participate in making a secondary
market in the Offered Notes, but it is
under no obligation to do so. There is
no assurance that a secondary market
will develop. If a secondary market
does develop, there is no assurance
that it will continue or that you will
be able to resell your Offered Notes.
SERVICING CFC is not obligated to make any
payments in respect of the Notes or the
Receivables. However, if CFC were to
cease acting as Servicer, delays in
processing payments on the Receivables
and information in respect of the
Receivables could occur and result in
delays in payments to you.
SOURCES OF FUNDS The Trust will not have any significant
assets or sources of funds to make
payments on the Notes other than the
Receivables and the Reserve Account.
You must rely for repayment of your
Notes upon payments on the Receivables
and amounts, if any, in the Reserve
Account. Although funds in the Reserve
Account may be available on each
Payment Date to cover shortfalls in
distributions of interest and principal
on the Notes, the amounts available in
the Reserve Account are limited. If the
Reserve Account becomes depleted, the
Trust will depend solely on current
collections on the Receivables to make
payments on the Notes.
RATINGS OF THE On the Closing Date at least two
OFFERED NOTES nationally recognized rating agencies
(the "Rating Agencies") will rate the
Offered Notes in the highest investment
rating category. A rating is not a
recommendation to purchase, hold or
sell Notes, and it does not comment as
to market price or suitability for a
particular investor. The ratings of the
Offered notes address the likelihood of
the payment of principal and interest
on the Offered Notes pursuant to their
terms. There is no assurance that a
rating will remain for any given period
of time or that a Rating Agency will
not lower or withdraw its rating if in
its judgment circumstances in the
future so warrant.
FINANCIAL INFORMATION FOR Chrysler Financial Company L.L.C. and
CHRYSLER FINANCIAL its consolidated subsidiaries' net
COMPANY L.L.C. earnings were $116 million and $344
million for the three and nine months
ended September 30, 1998, compared to
$111 million and $307 million for the
three and nine months ended September
30, 1997. The increase in net earnings
primarily reflects higher gains and
servicing fees from sales of automotive
receivables, a decrease in provision
for credit losses, and gains from sales
of certain nonautomotive assets. Net
earnings for the first nine months of
1997 reflect a one-time benefit from
the adoption of Statement of Financial
Accounting Standards No. 125.
Pursuant to a plan of merger, dated as
of October 22, 1998, effective as of
October 25, 1998, Chrysler Financial
Corporation merged with and into
Chrysler Financial Company L.L.C. with
Chrysler Financial Company L.L.C. being
the surviving entity. The purpose of
the merger was to change the form of
organization of Chrysler Financial
Corporation from a corporation into a
limited liability company. Prior to the
merger, Chrysler Financial Company
L.L.C. had no operations and had
nominal assets and liabilities. In
connection with the merger, Chrysler
Financial Company L.L.C. succeeded to
all of the assets and liabilities of
Chrysler Financial Corporation.
S-8
On November 12, 1998, the Company's
parent, Chrysler Corporation, became a
wholly-owned subsidiary of
Daimler Chrysler Aktiengesellscchaft
("Daimler") and on November 17, 1998,
Chrysler Corporation changed its name
to DaimlerChrysler Corporation
("Chrysler").
RISKS ASSOCIATED WITH CFC has conducted an evaluation of the
COMPUTER SYSTEMS AND THE actions necessary to ensure that its
YEAR 2000 business critical computer systems will
function without disruption with
respect to the application of dating
systems in the Year 2000. As a result
of this evaluation, CFC is engaged in
the process of upgrading, replacing and
testing certain of its information and
other computer systems. While CFC's
remedial actions are scheduled to be
completed during the third quarter of
1999, there can be no assurance that
the remedial actions being implemented
by CFC will be completed in time to
avoid dating systems problems. If CFC
is unable to complete its remedial
actions in the planned timeframe,
contingency plans will be developed to
address those business critical systems
that may not be Year 2000 compliant.
In addition, disruptions with respect
to computer systems of vendors or
customers, which are outside the
control of CFC, could impair the
ability of CFC to obtain necessary
services or to provide services to its
customers. CFC has a process in place
to assess the Year 2000 readiness of
its business critical vendors and
customers. As part of the assessment
process, CFC will develop contingency
plans for those business critical
vendors who are either unable or
unwilling to develop remediation plans
to become Year 2000 compliant. Although
these plans have yet to be developed,
it is expected that these plans will be
in place by the third quarter of 1999.
S-9
THE TRUST
GENERAL
The Issuer, Premier Auto Trust _______, is a business trust formed under the
laws of the State of Delaware pursuant to the Trust Agreement for the
transactions described in this Prospectus Supplement. The Trust will be governed
by an Amended and Restated Trust Agreement dated as of _____________ (as amended
and supplemented from time to time, the "Trust Agreement"), among the Seller,
the Owner Trustee and Premier Receivables L.L.C. (the "Company"), a Michigan
limited liability company that is indirectly wholly-owned by the Seller, for the
transactions described in this Prospectus Supplement. The Trust will not engage
in any activity other than (i) acquiring, holding and managing the Receivables
and the other assets of the Trust and proceeds therefrom, (ii) issuing the Notes
and the Certificates, (iii) making payments on the Notes and the Certificates
and (iv) engaging in other activities that are necessary, suitable or incidental
to do those things.
The Trust will initially be capitalized with equity (exclusive of the
amounts deposited in the Reserve Account) equal to $_________________, which is
the difference between the aggregate principal amount of the Receivables as of
the Cutoff Date and the initial aggregate principal amount of the Notes. The
equity in the Trust (including the right to receive distributions from the
Reserve Account) will be evidenced by the Certificates and additional
certificates issued by the Trust to the Company, which may thereafter hold such
equity or sell or otherwise transfer it. In the case of any such sale or
transfer to another entity, such entity may become the "Company" with respect to
the Trust. The net proceeds from the sale of the Notes will be used by the Trust
to purchase the Receivables from the Seller pursuant to a Sale and Servicing
Agreement.
If the protection provided to the investment of the Noteholders by the
Reserve Account is insufficient, the Trust will look only to the Obligors on the
Receivables and the proceeds from the repossession and sale of Financed Vehicles
which secure defaulted Receivables. In such event, certain factors, such as the
Trust's not having first priority perfected security interests in some of the
Financed Vehicles, may affect the Trust's ability to realize on the collateral
securing the Receivables, and thus may reduce the proceeds to be distributed to
Noteholders with respect to the Notes. See "Description of the Transfer and
Servicing Agreements -- Distributions" and "-- Reserve Account" herein and
"Certain Legal Aspects of the Receivables" in the Prospectus.
The Trust's principal offices are in _____________, Delaware, in care of
____________________________, as Owner Trustee, at the address listed below
under "-- The Owner Trustee".
CAPITALIZATION OF THE TRUST
The following table illustrates the capitalization of the Trust as of the
Closing Date, as if the issuance and sale of the Notes had taken place on such
date:
Class A-1 Notes $________________
Class A-2 Notes _________________
Class A-3 Notes _________________
Class A-4 Notes _________________
Certificates _________________
Equity......... _________________
Total....... $
=================
THE OWNER TRUSTEE
________________________ is the Owner Trustee under the Trust Agreement.
________________________ is a Delaware banking corporation and its principal
offices are located at _________________________, Delaware _____. The Seller and
its affiliates may maintain normal commercial banking relations with the Owner
Trustee and its affiliates.
S-10
THE RECEIVABLES POOL
The pool of Receivables (the "Receivables Pool") will include only the
Receivables purchased on the Closing Date having an Initial Pool Balance of
approximately $________ as of the Cutoff Date. The Receivables were purchased,
directly or indirectly, by the Seller from Dealers in the ordinary course of
business and were selected from the Seller's portfolio for inclusion in the
Receivables Pool by several criteria, some of which are set forth in the
Prospectus under "The Receivables Pools", as well as the requirement that, as of
the Cutoff Date, each Receivable (i) had a principal balance of at least
$_________ and (ii) was not more than 30 days past due (an account is not
considered past due if the amount past due is less than 10% of the scheduled
monthly payment). As of the Cutoff Date, no Obligor on any Receivable was noted
in the related records of the Seller as being the subject of a bankruptcy
proceeding, and no Obligor on any Receivable financed a Financed Vehicle under
the Seller's "New-Finance Buyer Plan" program. No selection procedures believed
by the Seller to be adverse to Noteholders were used in selecting the
Receivables. No Receivable has a scheduled maturity later than _________ __,
____.
Set forth in the following tables is information concerning the composition,
distribution by annual percentage rate ("APR") and the geographic distribution
of the Receivables Pool as of the Cutoff Date.
PREMIER AUTO TRUST _______
COMPOSITION OF THE RECEIVABLES POOL
WEIGHTED WEIGHTED
WEIGHTED AVERAGE AGGREGATE NUMBER AVERAGE AVERAGE AVERAGE
APR OF PRINCIPAL OF REMAINING ORIGINAL PRINCIPAL
RECEIVABLES BALANCE RECEIVABLES TERM TERM BALANCE
- ---------------- --------- ----------- -------------- ------------- ---------
____% $________ _________ _____ months _____ months $________
Approximately _____% of the Initial Pool Balance, constituting _____% of the
number of the Receivables, represent new vehicles, and approximately _____% of
the Initial Pool Balance, constituting _____% of the number of the Receivables,
represent used vehicles. Approximately _____% of the Initial Pool Balance
represents financing of vehicles manufactured or distributed by Chrysler and
approximately _____% of the Initial Pool Balance represents financing of
vehicles manufactured or distributed by vehicle manufacturers other than
Chrysler.
All of the Receivables are Simple Interest Receivables. See "The Receivables
Pools" in the Prospectus for a further description of the characteristics of
Simple Interest Receivables.
S-11
PREMIER AUTO TRUST _______
DISTRIBUTION BY APR OF THE RECEIVABLES POOL
NUMBER OF AGGREGATE PERCENT OF AGGREGATE
APR RANGE RECEIVABLES PRINCIPAL BALANCE PRINCIPAL BALANCE(1)
- -------------------------- ----------- ----------------- ---------------------
0.00% to 5.00%....... $ %
5.01% to 6.00%.......
6.01% to 7.00%.......
7.01% to 8.00%.......
8.01% to 9.00%.......
9.01% to 10.00%.......
10.01% to 11.00%.......
11.01% to 12.00%.......
12.01% to 13.00%.......
13.01% to 14.00%.......
14.01% to 15.00%.......
15.01% to 16.00%.......
16.01% to 17.00%.......
17.01% to 18.00%.......
Greater than 18.00%.....
----------- ----------------- ---------------------
Totals................... $ 100%
=========== ================= =====================
______________
(1) Percentages may not add to 100.0% because of rounding.
PREMIER AUTO TRUST ________
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES POOL(1)(2)
PERCENT OF PERCENT OF
AGGREGATE AGGREGATE
STATE PRINCIPAL BALANCE STATE PRINCIPAL BALANCE
- ----- ----------------- ----- -----------------
Alabama....................... Montana....................
Alaska........................ Nebraska...................
Arizona....................... Nevada.....................
Arkansas...................... New Hampshire..............
California.................... New Jersey.................
Colorado...................... New Mexico.................
Connecticut................... New York...................
Delaware...................... North Carolina.............
District of Columbia.......... North Dakota...............
Florida....................... Ohio.......................
Georgia....................... Oklahoma...................
Hawaii........................ Oregon.....................
Idaho......................... Pennsylvania...............
Illinois...................... Rhode Island...............
Indiana....................... South Carolina.............
Iowa.......................... South Dakota...............
Kansas........................ Tennessee..................
Kentucky...................... Texas......................
Louisiana..................... Utah.......................
Maine......................... Vermont....................
Maryland...................... Virginia...................
Massachusetts................. Washington.................
Michigan...................... West Virginia..............
Minnesota..................... Wisconsin..................
Mississippi................... Wyoming....................
Missouri...................... ______
Total................... 100.0%
======
______________
(1) Based on physical addresses of the dealers originating the receivables.
(2) Percentages may not add to 100.0% because of rounding.
S-12
CFC'S PERFORMANCE HISTORY
Set forth below is certain information concerning the experience of the
Seller and its United States subsidiaries pertaining to retail new and used
automobile and light duty truck receivables, including those previously sold
which CFC continues to service. There can be no assurance that the delinquency,
repossession and net loss experience on the Receivables will be comparable to
that set forth below.
DELINQUENCY EXPERIENCE(1)
(DOLLARS IN MILLIONS)
AT SEPTEMBER 30,
------------------------------------------------
1998 1997
------------------------ ----------------------
NUMBER NUMBER
OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT
----------- -------- ----------- --------
Portfolio..................... 1,786,809 $ 24,700 1,700,645 $ 21,749
Period of Delinquency
31-60 Days.................. 41,473 $ 484 52,839 $ 656
61 Days or More............. 3,935 51 8,202 119
----------- -------- ----------- --------
Total Delinquencies........... 45,408 $ 535 61,041 $ 775
=========== ======== =========== ========
Total Delinquencies as a
Percent of the Portfolio... 2.54% 2.17% 3.59% 3.56%
(TABLE CONTINUED)
AT DECEMBER 31,
------------------------------------------------
1997 1996
------------------------ ----------------------
NUMBER NUMBER
OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT
----------- -------- ----------- --------
Portfolio..................... 1,697,755 $ 21,879 1,679,880 $ 21,197
Period of Delinquency
31-60 Days.................. 58,421 $ 708 65,297 $ 843
61 Days or More............. 7,360 102 8,175 118
----------- -------- ----------- --------
Total Delinquencies........... 65,781 $ 810 73,472 $ 961
=========== ======== =========== ========
Total Delinquencies as a
Percent of the Portfolio... 3.87% 3.70% 4.37% 4.53%
AT DECEMBER 31,
-------------------------------------------------------------------------
1995 1994 1993
------------------------ ------------------------ -----------------------
NUMBER NUMBER NUMBER
OF OF OF
CONTRACTS AMOUNT CONTRACTS AMOUNT CONTRACTS AMOUNT
----------- ----------- ----------- ----------- ----------- ---------
Portfolio...................... 1,653,533 $ 20,913 1,444,736 $ 16,977 1,352,218 $ 14,116
Period of Delinquency
31-60 Days................... 55,507 $ 720 25,888 $ 293 16,350 $ 153
61 Days or More.............. 6,792 100 2,085 27 1,383 15
----------- ----------- ----------- ----------- ----------- ---------
Total Delinquencies............ 62,299 $ 820 27,973 $ 320 17,733 $ 168
=========== =========== =========== =========== =========== =========
Total Delinquencies as a Percent
of the Portfolio................ 3.77% 3.92% 1.94% 1.88% 1.31% 1.19%
______________
(1) All amounts and percentages are based on the gross amount scheduled to be
paid on each contract, including estimated unearned finance and other
charges. The information in the table includes an immaterial amount of
retail installment sale contracts on vehicles other than automobiles and
light duty trucks and includes previously sold contracts which CFC continues
to service.
S-13
CREDIT LOSS/REPOSSESSION EXPERIENCE(1)
(DOLLARS IN MILLIONS)
NINE MONTHS
ENDED SEPTEMBER 30,
------------------------
1998 1997
----------- ------------
Average Amount Outstanding During
the Period ........................ $23,214 $21,394
Average Number of Contracts
Outstanding During the Period ..... 1,736,375 1,686,274
Percent of Contracts Acquired
During the Period with Recourse to
the Dealer ........................ 8.98% 10.14%
Repossessions as a Percent of
Average Number of Contracts
Outstanding(2) .................... 2.82% 3.32%
Net Losses as a Percent
of Liquidations(3)(4) ............. 2.80% 2.98%
Net Losses as a Percent of
Average Amount Outstanding(2)(3)... 1.41% 1.64%
(Table Continued)
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ------------ ---------- -----------
Average Amount Outstanding During
the Period ........................ $21,485 $21,062 $19,486 $15,517 $12,882
Average Number of Contracts
Outstanding During the Period ..... 1,688,525 1,671,405 1,572,963 1,396,497 1,341,084
Percent of Contracts Acquired
During the Period with Recourse to
the Dealer ........................ 10.91% 9.05% 14.80% 17.00% 16.20%
Repossessions as a Percent of
Average Number of Contracts
Outstanding(2) .................... 3.40% 3.82% 3.05% 2.36% 2.15%
Net Losses as a Percent
of Liquidations(3)(4) ............. 3.36% 3.17% 2.25% 1.38% 1.34%
Net Losses as a Percent of
Average Amount Outstanding(2)(3) .. 1.80% 1.68% 1.16% 0.73% 0.75%
______________
(1) Except as indicated, all amounts and percentages are based on the gross
amount scheduled to be paid on each contract, including estimated unearned
finance and other charges. The information in the table includes an
immaterial amount of retail installment sales contracts on vehicles other
than automobiles and light duty trucks and includes previously sold
contracts that CFC continues to service.
(2) Percentages have been annualized for the nine months ended September 30,
1998 and 1997 and are not necessarily indicative of the experience for the
year.
(3) Net losses are equal to the aggregate of the balances of all contracts which
are determined to be uncollectible in the period, less any recoveries on
contracts charged off in the period or any prior periods, including any
losses resulting from disposition expenses and any losses resulting from the
failure to recover commissions to dealers with respect to contracts that are
prepaid or charged off.
(4) Liquidations represent a reduction in the outstanding balances of the
contracts as a result of monthly cash payments and charge-offs.
Notwithstanding the improvement in credit losses for the nine months ended
September 30, 1998, higher credit losses could be experienced in the near term.
No assurance can be given as to future results.
The net loss figures above reflect the fact that the Seller had recourse to
Dealers on a portion of its retail installment sale contracts. By aggregate
principal balance, approximately ____% of the Receivables represent contracts
with recourse to Dealers. The Seller applies underwriting standards to the
purchase of contracts without regard to whether recourse to Dealers is provided.
Based on its experience, the Seller believes that there is no material
difference between the rates of delinquency and repossession on contracts with
recourse against Dealers as compared to contracts without recourse against
Dealers. However, the net loss experience of contracts without recourse against
Dealers is higher than that of contracts with recourse against Dealers because,
under its recourse obligation, the Dealer is responsible to the Seller for
payment of the unpaid balance of the contract, provided that the Seller
repossesses the vehicle from the retail buyer and returns it to the Dealer
within a specified time. In the event of a Dealer's bankruptcy, a bankruptcy
trustee might attempt to characterize recourse sales of contracts as loans to
the Dealer secured by the contracts. Such an attempt, if successful, could
result in payment delays or losses on the affected Receivables.
CHRYSLER FINANCIAL COMPANY L.L.C.
Certain information regarding the Seller is set forth under "Chrysler
Financial Company L.L.C." in the Prospectus. In addition, as of September 30,
1998, the Seller had nearly 3,400 employees and was managing $46.8 billion in
finance receivables and provided financial services to automobile dealers and
their customers through 29 zone offices in the United States. During the first
nine months of 1998, the Seller financed or leased approximately 738,000 new and
used vehicles at retail, including approximately 563,000 new Chrysler passenger
cars and light duty trucks, representing 30% of Chrysler's U.S. retail and fleet
deliveries. The Seller also financed at wholesale approximately 1,338,000 new
Chrysler passenger cars and light duty trucks, representing 69% of Chrysler's
U.S. factory unit sales for the nine months ended September 30, 1998. Wholesale
vehicle financing accounted for 69% of the total automotive financing volume of
the Seller in the first nine months of 1998 and represented 22% of net
automotive finance receivables and leases outstanding at September 30, 1998.
Chrysler Financial Corporation converted from a corporation to a limited
liability company ("LLC") on October 25, 1998. The conversion to an LLC had, and
will continue to have, no effect on the day-to-day operations of
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Chrysler Financial Corporation. The new LLC is the surviving legal entity of a
merger between Chrysler Financial Company L.L.C., a newly created Michigan
limited liability company, and Chrysler Financial Corporation. DaimlerChrysler
Corporation, which owned all of the capital stock of Chrysler Financial
Corporation, is the sole member (owner) of Chrysler Financial Company L.L.C.
Chrysler Financial Company L.L.C. succeeded to the operations of Chrysler
Financial Corporation upon the completion of the conversion and acquired its
assets and assumed its debt and other obligations.
WEIGHTED AVERAGE LIFE OF THE NOTES
Information regarding certain maturity and prepayment considerations with
respect to the Securities is set forth under "Weighted Average Life of the
Securities" in the Prospectus. No principal payments will be made on the Class
A-2 Notes until all Class A-1 Notes have been paid in full; no principal
payments will be made on the Class A-3 Notes until all Class A-2 Notes have been
paid in full; and no principal payments will be made on the Class A-4 Notes
until all Class A-3 Notes have been paid in full. See "Description of the Notes
- -- Payments of Principal" herein. As the rate of payment of principal of each
class of Notes depends primarily on the rate of payment (including prepayments)
of the principal balance of the Receivables, final payment of any class of the
Notes could occur significantly earlier than their respective final scheduled
Payment Dates. In addition, the rate of payment of principal of each class of
Notes will be affected by the Accelerated Principal Distribution Amounts applied
to the payment of the principal of the Notes and, during the Release Period, the
reduction in the amount that is applied to the payment of principal of the
Notes. Noteholders will bear the risk of being able to reinvest principal
payments on the Notes at yields at least equal to the yields on their respective
Notes.
DESCRIPTION OF THE NOTES
GENERAL
The Notes will be issued pursuant to the terms of the Indenture to be dated
_____________ between the Trust and the Indenture Trustee (as amended and
supplemented from time to time, the "Indenture"), a form of which has been filed
as an exhibit to the Registration Statement. A copy of the Indenture will be
filed with the Securities and Exchange Commission (the "Commission") following
the issuance of the Notes. The following summary describes certain terms of the
Notes and the Indenture. The summary does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of the Notes and the Indenture. The following summary supplements, and to the
extent inconsistent therewith, replaces the description of the general terms and
provisions of the Notes of any given series and the related Indenture set forth
in the Prospectus, to which description reference is hereby made.
______________________________ will be the Indenture Trustee under the
Indenture.
PAYMENTS OF INTEREST
Each class of Notes will constitute Fixed Rate Securities, as such term is
defined under "Certain Information Regarding the Securities -- Fixed Rate
Securities" in the Prospectus. Interest on the principal balances of the classes
of the Notes will accrue at their respective per annum Interest Rates and will
be payable to holders of record of the Notes (the "Noteholders") monthly on each
Payment Date, commencing _____________. Payments will be made to the Noteholders
of record as of the day immediately preceding such Payment Date or, if
Definitive Notes are issued, as of the ___ day of the preceding month. Interest
on the outstanding principal amount of the Notes, other than the Class A-1
Notes, will accrue at the applicable Interest Rate from the Closing Date (in the
case of the first Payment Date) or from the ________ day of the month preceding
the month of a Payment Date to and including the _________ day of the month of
the Payment Date (each, an "Interest Accrual Period"). Interest on the
outstanding principal amount of the Class A-1 Notes will accrue at the Class A-1
Rate from the Closing Date (in the case of the first Payment Date) or from the
most recent Payment Date on which interest has been paid to but excluding the
following Payment Date (each, a "Class A-1 Interest Accrual Period"). Interest
on each class of the Notes, other than the Class A-1 Notes, will be calculated
on the basis of a 360-day year consisting of twelve 30-day months. Interest on
the Class A-1 Notes will be calculated on the basis of the actual number of days
in the Class A-1 Interest Accrual Period divided by 360. Interest payments on
the Notes will generally be derived from the Total Distribution Amount remaining
after the payment of the Servicing Fee and amounts from the Reserve Account. See
"Description of the Transfer and Servicing Agreements --Distributions" and "--
Reserve Account" herein.
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Interest payments to all classes of Noteholders will have the same priority.
Under certain circumstances, the amount available for interest payments could be
less than the amount of interest payable on the Notes on any Payment Date, in
which case each class of Noteholders will receive their ratable share (based
upon the aggregate amount of interest due to such class of Noteholders) of the
aggregate amount available to be distributed in respect of interest on the
Notes.
PAYMENTS OF PRINCIPAL
Principal payments will be made to the Noteholders on each Payment Date in
an amount generally equal to the sum of (i) the Regular Principal Distribution
Amount (during the Release Period, the Release Period Noteholders' Principal
Distributable Amount) plus (ii) except during the Release Period, the
Accelerated Principal Distribution Amount. The "Regular Principal Distribution
Amount" with respect to any Payment Date will generally equal the sum of
principal payments received with respect to the Receivables during the calendar
month (the "Collection Period") preceding such Payment Date (in the case of the
first Payment Date, the period from and including __________ to and including
___________), plus the principal balances of defaulted Receivables written off
in respect of such Collection Period, subject to certain limitations. The
"Accelerated Principal Distribution Amount" with respect to any Payment Date
will equal the portion, if any, of the Total Distribution Amount for the related
Collection Period that remains after payment of (a) the Servicing Fee, (b) the
Noteholders' Interest Distributable Amount, (c) the Regular Principal
Distribution Amount, and (d) the amount, if any, required to be deposited in the
Reserve Account on such Payment Date. During the Release Period, the only
principal payable on the Notes on each Payment Date will be the Release Period
Noteholders' Principal Distributable Amount. Principal payments on the Notes
will generally be derived from the Total Distribution Amount and the amount, if
any, in the Reserve Account remaining after the payment of the Servicing Fee and
the Noteholders' Interest Distributable Amount and, in the case of any
Accelerated Principal Distribution Amount, the amount, if any, required to be
deposited into the Reserve Account. See "Description of the Transfer and
Servicing Agreements -- Distributions" and "-- Reserve Account" herein.
On the Business Day immediately preceding each Payment Date (a
"Determination Date"), the Indenture Trustee shall determine the amount in the
Collection Account for the related Collection Period allocable to interest and
the amount allocable to principal on an actual basis, and payments to
Noteholders on the following Payment Date will be based on such allocation. A
"Business Day" is a day other than a Saturday, a Sunday or a day on which
banking institutions in the City of New York are authorized by law, regulation
or executive order to be closed.
On each Payment Date, principal payments on the Notes will be applied in the
following order of priority: (i) to the principal balance of the Class A-1 Notes
until the principal balance of the Class A-1 Notes is reduced to zero; (ii) to
the principal balance of the Class A-2 Notes until the principal balance of the
Class A-2 Notes is reduced to zero; (iii) to the principal balance of the Class
A-3 Notes until the principal balance of the Class A-3 Notes is reduced to zero;
and (iv) to the principal balance of the Class A-4 Notes until the principal
balance of the Class A-4 Notes is reduced to zero. It is expected that some or
all of the Class A-1 Notes, which are not being offered hereby, will be held or
sold by CFC. The principal balance of the Class A-1 Notes, to the extent not
previously paid, will be due on the Payment Date (the "Class A-1 Final Scheduled
Payment Date"); the principal balance of the Class A-2 Notes, to the extent not
previously paid, will be due on the Payment Date (the "Class A-2 Final Scheduled
Payment Date"); the principal balance of the Class A-3 Notes, to the extent not
previously paid, will be due on the Payment Date (the "Class A-3 Final Scheduled
Payment Date"); the principal balance of the Class A-4 Notes, to the extent not
previously paid, will be due on the Payment Date (the "Class A-4 Final Scheduled
Payment Date"). The actual date on which the aggregate outstanding principal
amount of any class of Notes is paid may be earlier than the respective Final
Scheduled Payment Dates set forth above based on a variety of factors, including
those described under "Weighted Average Life of the Securities" herein and in
the Prospectus.
OPTIONAL REDEMPTION
The outstanding Class A-4 Notes will be subject to redemption in whole, but
not in part, on any Payment Date on which the Servicer exercises its option to
purchase the Receivables. The Servicer may purchase the Receivables when the
Pool Balance shall have declined to 10% or less of the Initial Pool Balance, as
described in the Prospectus under "Description of the Transfer and Servicing
Agreements -- Termination". The redemption price of the Class A-4 Notes will be
equal to the unpaid principal amount of such Notes plus accrued and unpaid
interest thereon (the
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"Redemption Price"). The "Pool Balance" will represent the aggregate principal
balance of the Receivables at the end of a Collection Period, after giving
effect to all payments received from Obligors, Repurchase Amounts to be remitted
by the Servicer or Seller, as the case may be, all for such Collection Period,
and all losses realized on Receivables liquidated during such Collection Period.
BOOK-ENTRY REGISTRATION
Holders of the Offered Notes may hold through DTC (in the United States) or
Cedelbank or Euroclear (in Europe) if they are participants of such systems, or
indirectly through organizations that are participants in such systems. See
"Certain Information Regarding the Securities -- Book-Entry Registration" and
"-- Definitive Securities" in the Prospectus.
DESCRIPTION OF THE CERTIFICATES
The Trust will also issue Asset Backed Certificates (the "Certificates" and,
together with the Notes, the "Securities") with an aggregate initial Certificate
Balance of $________. The Certificates will represent fractional undivided
interests in the Trust and will be issued pursuant to the Trust Agreement. The
Certificates are not being offered hereby and will initially be held by the
Company, which may thereafter sell the Certificates. The Certificates will not
bear interest. No principal will be paid on the Certificates until the Notes
have been paid in full.
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of the Sale and Servicing
Agreement, the Administration Agreement and the Trust Agreement (collectively,
the "Transfer and Servicing Agreements"). Forms of the Transfer and Servicing
Agreements have been filed as exhibits to the Registration Statement. A copy of
the Sale and Servicing Agreement will be filed with the Commission following the
issuance of the Notes. The summary does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all the provisions of
the Transfer and Servicing Agreements. The following summary supplements, and to
the extent inconsistent therewith replaces, the description of the general terms
and provisions of the Transfer and Servicing Agreements set forth in the
Prospectus, to which description reference is hereby made.
SALE AND ASSIGNMENT OF RECEIVABLES
Certain information regarding the conveyance of the Receivables by the
Seller to the Trust on the Closing Date pursuant to the Sale and Servicing
Agreement to be dated as of ___________ (as amended and supplemented from time
to time, the "Sale and Servicing Agreement") is set forth in the Prospectus
under "Description of the Transfer and Servicing Agreements -- Sale and
Assignment of Receivables".
ACCOUNTS
No Payahead Account will be established in relation to the Trust because all
of the Receivables are Simple Interest Receivables. The assets of the Trust also
will not include a Pre-Funding Account. All other Accounts referred to under
"Description of the Transfer and Servicing Agreements -- Accounts" in the
Prospectus, as well as a Reserve Account, will be established by the Servicer
and maintained with the Indenture Trustee in the name of the Indenture Trustee
on behalf of the Noteholders.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicing Fee Rate with respect to the Servicing Fee for the Servicer
will be 1.00% per annum of the Pool Balance as of the first day of the related
Collection Period. The Servicing Fee in respect of a Collection Period (together
with any portion of the Servicing Fee that remains unpaid from prior Payment
Dates) will be paid on the Payment Date following such Collection Period out of
collections for such Collection Period. See "Description of the Transfer and
Servicing Agreements -- Servicing Compensation and Payment of Expenses" in the
Prospectus.
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DISTRIBUTIONS
Deposits to Collection Account. On or before each Payment Date, the Servicer
will cause all collections and other amounts constituting the Total Distribution
Amount (net of the Servicing Fee for such Payment Date and any previously unpaid
Servicing Fees and any other distributable amounts that are to be released to
the Company) to be deposited into the Collection Account. The "Total
Distribution Amount" for a Payment Date shall be the sum of the Interest
Distribution Amount and the Regular Principal Distribution Amount (other than
the portion thereof attributable to Realized Losses). "Realized Losses" means
the excess of the principal balance of any Liquidated Receivable over
Liquidation Proceeds to the extent allocable to principal.
The "Interest Distribution Amount" on any Payment Date will generally be the
sum of the following amounts with respect to the preceding Collection Period:
(i) that portion of all collections on the Receivables allocable to interest;
(ii) all proceeds of the liquidation of defaulted Receivables ("Liquidated
Receivables"), net of expenses incurred by the Servicer in connection with such
liquidation and any amounts required by law to be remitted to the Obligor on
such Liquidated Receivables ("Liquidation Proceeds"), to the extent attributable
to interest due thereon in accordance with the Servicer's customary servicing
procedures, and all recoveries in respect of Liquidated Receivables which were
written off in prior Collection Periods; (iii) the Repurchase Amount of each
Receivable that was repurchased by the Seller or purchased by the Servicer under
an obligation which arose during the related Collection Period, to the extent
attributable to accrued interest thereon; and (iv) Investment Earnings for such
Payment Date. The Interest Distribution Amount shall be determined on the
related Determination Date on an actual basis.
The "Regular Principal Distribution Amount" on any Payment Date will
generally be the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on the Receivables
allocable to principal; (ii) all Liquidation Proceeds attributable to the
principal amount of Receivables which 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; (iii) to the extent attributable to principal, the Repurchase
Amount received with respect to each Receivable repurchased by the Seller or
purchased by the Servicer under an obligation which arose during the related
Collection Period; and (iv) partial prepayments 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 Obligor as of the date of the original contract. The Regular
Principal Distribution Amount is the reduction in the aggregate principal
balance of the Receivables in a Collection Period and will be determined on the
related Determination Date on an actual basis.
The Interest Distribution Amount and the Regular Principal Distribution
Amount on any Payment Date shall exclude all payments and proceeds (including
Liquidation Proceeds) of any Receivables, the Repurchase Amount of which has
been included in the Total Distribution Amount in a prior Collection Period.
Allocations and Distributions. On each Payment Date, the Servicer will
instruct the Indenture Trustee to make the following allocations and
distributions, to the extent of the amount then on deposit in the Collection
Account (exclusive of the amount allocated to the Reserve Account), in the
following order of priority:
(i) allocate to the Noteholders as described below, from the Total
Distribution Amount remaining after the deduction of the unpaid Servicing
Fees, the Noteholders' Interest Distributable Amount;
(ii) allocate to the Noteholders as described below, from the Total
Distribution Amount remaining after the application of clause (i) and the
deduction of the unpaid Servicing Fees, the Noteholders' Principal
Distributable Amount (during the Release Period, the Release Period
Noteholders' Principal Distributable Amount);
(iii) allocate to the Reserve Account, from the Total Distribution
Amount remaining after the application of clauses (i) through (ii) and the
deduction of the unpaid Servicing Fees, the excess, if any, of the Specified
Reserve Amount over the amount then allocated to the Reserve Account;
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(iv) distribute to the Company (to the extent not already retained and
distributed as provided above), from the Total Distribution Amount remaining
after the application of clauses (i) through (iii) and the deduction of the
unpaid Servicing Fees, during the Release Period, the Cash Release Amount;
(v) distribute to the Certificateholders, from the Total Distribution
Amount remaining after the application of clauses (i) through (iv) and the
deduction of unpaid Servicing Fees and only after the Notes have been paid
in full, until the Certificate balance has been reduced to zero; and
(vi) distribute to the Company the remaining balance, if any.
For purposes hereof, the following terms shall have the following meanings:
"Noteholders' Distributable Amount" means, with respect to any Payment Date,
the sum of the Noteholders' Interest Distributable Amount and the Noteholders'
Principal Distributable Amount (during the Release Period, the Release Period
Noteholders' Principal Distributable Amount).
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Payment Date, the excess of the Noteholders' Monthly Interest Distributable
Amount for the preceding Payment Date and any outstanding Noteholders' Interest
Carryover Shortfall on such preceding Payment Date, over the amount in respect
of interest that is actually paid on the Notes on such preceding Payment Date,
plus interest on the amount of interest due but not paid to Noteholders on the
preceding Payment Date, to the extent permitted by law, at the respective
Interest Rates borne by each class of the Notes for the related Interest Accrual
Period.
"Noteholders' Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Noteholders' Monthly Interest Distributable Amount
for such Payment Date and the Noteholders' Interest Carryover Shortfall for such
Payment Date.
"Noteholders' Monthly Interest Distributable Amount" means, with respect to
any Payment Date, interest accrued for the related Interest Accrual Period [(in
the case of the Class A-1 Notes, the Class A-1 Interest Accrual Period)] 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
Payment Date (or, in the case of the first Payment Date, on the Closing Date),
after giving effect to all payments of principal to the Noteholders of such
class on or prior to such Payment Date.
"Noteholders' Monthly Principal Distributable Amount" means, with respect to
each Payment Date, the sum of (i) the Regular Principal Distribution Amount and
(ii) the Accelerated Principal Distribution Amount.
"Noteholders' Principal Carryover Shortfall" means, as of the close of any
Payment Date, the excess of the Noteholders' Monthly Principal Distributable
Amount and any outstanding Noteholders' Principal Carryover Shortfall from the
preceding Payment Date over the amount in respect of principal that is actually
distributed to the Noteholders on such Payment Date.
"Noteholders' Principal Distributable Amount" means, with respect to any
Payment Date, the sum of the Noteholders' Monthly Principal Distributable Amount
for such Payment Date and the Noteholders' Principal Carryover Shortfall as of
the close of the preceding Payment Date; provided, however, that the
Noteholders' Principal Distributable Amount shall not exceed the outstanding
principal balance of the Notes; and provided, further, that (i) the Noteholders'
Principal Distributable Amount on the Class A-1 Final Scheduled Payment Date
shall not be less than the amount that is necessary (after giving effect to
other amounts to be deposited in the Note Distribution Account on such Payment
Date and allocable to principal) to reduce the outstanding principal balance of
the Class A-1 Notes to zero; (ii) the Noteholders' Principal Distributable
Amount on the Class A-2 Final Scheduled Payment Date shall not be less than the
amount that is necessary (after giving effect to other amounts to be deposited
in the Note Distribution Account on such Payment Date and allocable to
principal) to reduce the outstanding principal balance of the Class A-2 Notes to
zero; (iii) on the Class A-3 Final Scheduled Payment Date the Noteholders'
Principal Distributable Amount shall not be less than the amount that is
necessary (after giving effect to other amounts to be deposited in the Note
Distribution Account on such Payment Date and allocable to
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principal) to reduce the outstanding principal balance of the Class A-3 Notes to
zero; and (iv) on the Class A-4 Final Scheduled Payment Date the Noteholders'
Principal Distributable Amount shall not be less than the amount that is
necessary (after giving effect to other amounts to be deposited in the Note
Distribution Account on such Payment Date and allocable to principal) to reduce
the outstanding principal balance of the Class A-4 Notes to zero.
"Release Period Noteholders' Principal Distributable Amount" is defined
below under "-- Overcollateralization and Release of Initial
Overcollateralization Amount".
Payments to Noteholders. On each Payment Date, all amounts allocated to the
Noteholders will be generally paid in the following order of priority:
(i) to the applicable Noteholders, accrued and unpaid interest on the
outstanding principal balance of the applicable class of Notes at the applicable
Interest Rate;
(ii) the Noteholders' Principal Distributable Amount (during the Release
Period, the Release Period Noteholders' Principal Distributable Amount) in the
following order of priority:
(a) to the Class A-1 Noteholders in reduction of principal until the
principal balance of the Class A-1 Notes has been reduced to zero;
(b) to the Class A-2 Noteholders in reduction of principal until the
principal balance of the Class A-2 Notes has been reduced to zero;
(c) to the Class A-3 Noteholders in reduction of principal until the
principal balance of the Class A-3 Notes has been reduced to zero; and
(d) to the Class A-4 Noteholders in reduction of principal until the
principal balance of the Class A-4 Notes has been reduced to zero.
Notwithstanding the foregoing, on the Last Release Payment Date, the amount
of principal distributable to the Noteholders pursuant to clause (ii) above will
be the Noteholders' Principal Distributable Amount for the Last Release Payment
Date less the Cash Release Amount paid to the Company on the Last Release
Payment Date.
OVERCOLLATERALIZATION AND RELEASE OF THE INITIAL OVERCOLLATERALIZATION AMOUNT
The Initial Pool Balance, $___________________, will exceed the
$_________________ initial aggregate principal amount of the Notes and the
Certificates (the "Initial Securities Principal Balance") by an amount equal to
$_______________ (the "Initial Overcollateralization Amount"), which amount is
approximately ____% of the Initial Securities Principal Balance. Unless offset
by losses on the Receivables or the release of cash during the Release Period as
described below, the distribution of the Accelerated Principal Distribution
Amount, if any, on a Payment Date is expected to cause the aggregate principal
amount of the Notes to decrease faster than the Pool Balance decreases, thereby
increasing the Overcollateralization Amount and the Overcollateralization
Percentage.
The "Overcollateralization Amount" in respect of a Payment Date is equal to
(a) the Pool Balance as of the end of the related Collection Period (the
"Related Pool Balance") minus (b) the aggregate outstanding principal amount of
the Securities after giving effect to payments made on the Securities on such
Payment Date (the "Securities Amount"). The "Overcollateralization Percentage"
in respect of a Payment Date is the percentage derived from a fraction, the
numerator of which is the Overcollateralization Amount for such Payment Date and
the denominator of which is the Related Pool Balance.
Subject to the conditions set forth below, on each Payment Date during the
Release Period (as defined below), the amount of principal distributable on the
Notes will be the Release Period Noteholders' Principal Distributable Amount
rather than the Noteholders' Principal Distributable Amount. The "Release Period
Noteholders' Principal Distributable Amount" shall equal, on any Payment Date
during the Release Period, the excess of (a) the Securities Amount on such
Payment Date (prior to giving effect to any distributions on such Payment Date)
over (b) the
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product of (1) ____% and (2) the Related Pool Balance. The effect of such
distribution calculation is to maintain the Overcollateralization Percentage at
___% during the Release Period. On each Payment Date during the Release Period,
any portion of the Total Distributable Amount which remains after payment of (a)
the Servicing Fee, (b) the Noteholders' Interest Distributable Amount, (c) the
Release Period Noteholders' Principal Distributable Amount and (d) any amount
required to increase the amount in the Reserve Account to the Specified Reserve
Amount will be released to the Company (such released amount being the "Cash
Release Amount" or "Cash Release"). The cumulative amount of all Cash Releases
during the Release Period shall not exceed the Initial Overcollateralization
Amount.
The release of cash to the Company as described above is subject to the
satisfaction of all of the following conditions:
(1) no Cash Release will be permitted until the date (the "First
Release Payment Date") that is the later of:
(i) the Payment Date following the Payment Date on which the
Overcollateralization Amount is at least equal to the
[Initial Overcollateralization Amount]
plus
[2% x (Related Pool Balance for such preceding Payment Date
minus
Initial Overcollateralization Amount)]; and
(ii) the Payment Date following the Payment Date on which the Class
A-1 Notes have been repaid in full;
(2) the amount in the Reserve Account shall be equal to the Specified
Reserve Amount; and
(3) the cumulative amount of the Cash Releases will not exceed
the Initial Overcollateralization Amount.
On the Payment Date (the "Last Release Payment Date") on which the
cumulative amount of the Cash Releases equals the Initial Overcollateralization
Amount, the amount of principal distributable to the Noteholders will be the
Noteholders' Principal Distributable Amount less the Cash Release Amount
released on such Payment Date. On each Payment Date thereafter, the full
Noteholders' Principal Distributable Amount will be distributable as principal
to the Noteholders. The "Release Period" is the period from and including the
First Release Payment Date to and including the Last Release Payment Date. Any
Cash Release released to the Company will not be available to make payments on
the Notes.
RESERVE ACCOUNT
The protection afforded to the Noteholders will be effected both by the
Overcollateralization Amount and by the establishment of the Reserve Account.
The Reserve Account will be created with an initial deposit to the Collection
Account by the Seller on the Closing Date of cash or Eligible Investments in the
amount of $________________ (the "Specified Reserve Amount"), which is ____% of
the Initial Securities Principal Balance.
Amounts allocated from time to time to the Reserve Account will continue to
be held for the benefit of Noteholders. On each Payment Date, funds will be
withdrawn from the Reserve Account to the extent that the Total Distribution
Amount (after the payment of the Servicing Fee) with respect to any Collection
Period is less than the Noteholders' Distributable Amount and will be paid to
the Noteholders. On each Payment Date, the Reserve Account will be reinstated up
to the Specified Reserve Amount to the extent of the portion, if any, of the
Total Distribution Amount remaining after payment of the Servicing Fee and the
payment of the Noteholders' Distributable Amount.
If the amount allocated to the Reserve Account on any Payment Date (after
giving effect to all deposits therein or other withdrawals therefrom on such
Payment Date) is greater than the Specified Amount for such Payment Date,
S-21
except as described below and subject to certain limitations, such excess amount
will be distributed to the Company. Upon any distribution to the Company of such
amounts, the Noteholders will not have any rights in, or claims to, such
amounts. Subsequent to any reduction or withdrawal by any Rating Agency of its
rating of any class of Notes, unless such rating has been restored, any such
excess will on a Payment Date be paid to Noteholders as an accelerated payment
of principal on such Payment Date.
After the payment in full, or the provision for such payment, of (i) all
accrued and unpaid interest on the Notes and (ii) the outstanding principal
balance of the Securities, any funds allocated to in the Reserve Account,
subject to certain limitations, will be paid to the Company.
The Certificates, the Overcollateralization Amount and the Reserve Account
are intended to enhance the likelihood of receipt by Noteholders of the full
amount of principal and interest due them and to decrease the likelihood that
the Noteholders will experience losses. However, in certain circumstances, the
Reserve Account could be depleted. If the amount required to be withdrawn from
the Reserve Account to cover shortfalls in collections on the Receivables
exceeds the amount then allocated to the Reserve Account, Noteholders could
incur losses or a temporary shortfall in the amounts distributed to the
Noteholders could result, which could, in turn, increase the average life of the
Notes.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Brown & Wood LLP, counsel for the Underwriters and special
tax counsel for the Trust, for federal income tax purposes, the Offered Notes
will be characterized as debt, and the Trust will not be characterized as an
association (or a publicly traded partnership) taxable as a corporation. See
"Certain Federal Income Tax Consequences" and "Certain State Tax Consequences"
in the Prospectus.
ERISA CONSIDERATIONS
The Offered Notes may be purchased by an employee benefit plan or an
individual retirement account (a "Plan") subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"). A fiduciary of a Plan
must determine that the purchase of an Offered Note is consistent with its
fiduciary duties under ERISA and does not result in a nonexempt prohibited
transaction as defined in Section 406 of ERISA or Section 4975 of the Code. For
additional information regarding treatment of the Offered Notes under ERISA, see
"ERISA Considerations" in the Prospectus.
The Offered Notes may not be purchased with the assets of a Plan if the
Seller, the Indenture Trustee, the Owner Trustee or any of their affiliates (a)
has investment or administrative discretion with respect to such Plan assets;
(b) has authority or responsibility to give, or regularly gives, investment
advice with respect to such Plan assets for a fee and pursuant to an agreement
or understanding that such advice (i) will serve as a primary basis for
investment decisions with respect to such Plan assets and (ii) will be based on
the particular investment needs for such Plan; or (c) is an employer maintaining
or contributing to such Plan.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
(the "Underwriting Agreement"), the Seller has agreed to cause the Trust to sell
to each of the Underwriters named below (collectively, the "Underwriters"), and
each of the Underwriters has severally agreed to purchase, the principal amount
of the Offered Notes set forth opposite its name below:
CLASS A-2 NOTES
PRINCIPAL
AMOUNT
-------------
S-22
CLASS A-3 NOTES
PRINCIPAL
AMOUNT
-------------
CLASS A-4 NOTES
PRINCIPAL
AMOUNT
-------------
The Seller has been advised by the Underwriters that they propose initially
to offer the Offered Notes to the public at the prices set forth herein, and to
certain dealers at such prices less the initial concession not in excess of
______% per Class A-2 Note, ______% per Class A-3 Note and ______% per Class A-4
Note. The Underwriters may allow and such dealers may reallow a concession not
in excess of ______% per Class A-2 Note, ______% per Class A-3 Note and ______%
per Class A-4 Note to certain other dealers. After the initial public offering
of the Offered Notes, the public offering price and such concessions may be
changed.
Until the distribution of the Offered Notes is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the Offered Notes. As an exception to these
rules, the Underwriters are permitted to engage in certain transactions that
stabilize the price of the Offered Notes. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Offered Notes.
If the Underwriters create a short position in the Offered Notes in
connection with the offering, i.e., if they sell more Offered Notes than are set
forth on the cover page of this Prospectus Supplement, the Underwriters may
reduce that short position by purchasing Offered Notes in the open market.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.
Neither the Seller nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the prices of the Offered Notes. In addition,
neither the Seller nor any of the Underwriters makes any representation that the
Underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
Each Underwriter has represented and agreed that (a) it has not offered or
sold, and will not offer or sell, any Offered Notes to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances that do not
constitute an offer to the public in the United Kingdom for the purposes of the
Public Offers of Securities Regulations 1995, (b) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 of
Great Britain with respect to anything done by it in relation to the Offered
Notes in, from or otherwise involving the United Kingdom and (c) it has only
issued or passed on and will only issue or pass on in the United Kingdom any
document in connection with the issue of the Offered Notes to a person who is of
a kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom the document may
otherwise lawfully be issued or passed on.
Upon receipt of a request by an investor who has received an electronic
Prospectus Supplement and Prospectus from an Underwriter or a request by such
investor's representative within the period during which there is an obligation
to deliver a Prospectus Supplement and Prospectus, the Seller or the Underwriter
will promptly deliver, or cause to be delivered, without charge, a paper copy of
the Prospectus Supplement and Prospectus.
S-23
LEGAL OPINIONS
In addition to the legal opinions described in the Prospectus, certain legal
matters relating to the Offered Notes will be passed upon for the Underwriters
and certain federal income tax and other matters will be passed upon for the
Trust by Brown & Wood LLP, New York, New York. Brown & Wood LLP may from time to
time render legal services to Chrysler Financial Company L.L.C. and its
affiliates.
S-24
INDEX OF TERMS
Accelerated Principal Distribution Amount................................S-16
APR......................................................................S-11
Business Day.............................................................S-16
Cash Release.............................................................S-21
Cash Release Amount......................................................S-21
Cede......................................................................S-3
Certificates........................................................S-5, S-17
CFC.......................................................................S-5
Chrysler..................................................................S-9
Class A-1 Final Scheduled Payment Date...................................S-16
Class A-1 Interest Accrual Period........................................S-15
Class A-2 Final Scheduled Payment Date...................................S-16
Class A-3 Final Scheduled Payment Date...................................S-16
Class A-4 Final Scheduled Payment Date...................................S-16
Closing Date..............................................................S-5
Code.....................................................................S-22
Commission...............................................................S-15
Company..................................................................S-10
Cutoff Date...............................................................S-5
Daimler...................................................................S-9
Determination Date.......................................................S-16
DTC.......................................................................S-3
ERISA....................................................................S-22
Excess Spread.............................................................S-7
First Release Payment Date...............................................S-21
Global Securities.........................................................S-1
Indenture................................................................S-15
Indenture Trustee.........................................................S-5
Initial Overcollateralization Amount................................S-6, S-20
Initial Pool Balance......................................................S-5
Initial Securities Principal Balance.....................................S-20
Interest Accrual Period..................................................S-15
Interest Distribution Amount.............................................S-18
Issuer....................................................................S-5
Last Release Payment Date................................................S-21
Liquidated Receivables...................................................S-18
Liquidation Proceeds.....................................................S-18
LLC......................................................................S-14
Noteholders..............................................................S-15
Noteholders' Distributable Amount........................................S-19
Noteholders' Interest Carryover Shortfall................................S-19
Noteholders' Interest Distributable Amount...............................S-19
Noteholders' Monthly Interest Distributable Amount.......................S-19
Noteholders' Monthly Principal Distributable Amount......................S-19
Noteholders' Principal Carryover Shortfall...............................S-19
Noteholders' Principal Distributable Amount..............................S-19
Notes.....................................................................S-5
Offered Notes.............................................................S-5
Overcollateralization Amount.............................................S-20
Overcollateralization Percentage.........................................S-20
Owner Trustee.............................................................S-5
Payment Date..............................................................S-5
Plan.....................................................................S-22
Pool Balance.............................................................S-17
S-26
Rating Agencies...........................................................S-8
Realized Losses..........................................................S-18
Receivables...............................................................S-5
Receivables Pool.........................................................S-11
Redemption Price.........................................................S-17
Regular Principal Distribution Amount..............................S-16, S-18
Related Pool Balance.....................................................S-20
Release Period...........................................................S-21
Release Period Noteholders' Principal Distributable Amount...............S-20
Reserve Account...........................................................S-7
Sale and Servicing Agreement.............................................S-17
Securities..........................................................S-5, S-17
Securities Amount.......................................................S-20
Seller....................................................................S-5
Servicer..................................................................S-5
Specified Reserve Amount.................................................S-21
Total Distribution Amount................................................S-18
Transfer and Servicing Agreements........................................S-17
Trust.....................................................................S-5
Trust Agreement..........................................................S-10
U.S. Person...............................................................S-3
Underwriters.............................................................S-22
Underwriting Agreement...................................................S-22
S-25
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Offered Notes
(the "Global Securities") will be available only in book-entry form. Investors
in the Global Securities may hold such Global Securities through any of DTC,
Cedelbank or Euroclear. The Global Securities will be tradable as home market
instruments in both the European and U.S. domestic markets. Initial settlement
and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities through
Cedelbank and Euroclear will be conducted in the ordinary way in accordance with
their normal rules and operating procedures and in accordance with conventional
eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities through
DTC will be conducted according to the rules and procedures applicable to U.S.
corporate debt obligations.
Secondary cross-market trading between Cedelbank or Euroclear and DTC
Participants holding Offered Notes will be effected on a
delivery-against-payment basis through the respective Depositaries of Cedelbank
and Euroclear (in such capacity) and DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities will
be represented through financial institutions acting on their behalf as direct
and indirect Participants in DTC. As a result, Cedelbank and Euroclear will hold
positions on behalf of their participants through their respective Depositaries,
which in turn will hold such positions in accounts as DTC Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to prior debt issues. Investors' securities
custody accounts will be credited with their holdings against payment in
same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedelbank or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payments in same-day
funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to book-entry
securities in same-day funds.
Trading between Cedelbank and/or Euroclear Participants. Secondary market
trading between Cedelbank Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
A-1
Trading between DTC seller and Cedelbank or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a Cedelbank Participant or a Euroclear Participant, the purchaser
will send instructions to Cedelbank or Euroclear through a Cedelbank Participant
or Euroclear Participant at least one business day prior to settlement.
Cedelbank or Euroclear, as applicable, will instruct its Depositary to receive
the Global Securities against payment. Payment will include interest accrued on
the Global Securities from and including the last coupon payment date to and
excluding the settlement date. Payment will then be made by such Depositary to
the DTC Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
applicable clearing system and by the clearing system, in accordance with its
usual procedures, to the Cedelbank Participant's or Euroclear Participant's
account. The Global Securities credit will appear the next day (European time)
and the cash debit will be back-valued to, and the interest on the Global
Securities will accrue from, the value date (which would be the preceding day
when settlement occurred in New York). If settlement is not completed on the
intended value date (i.e., the trade fails), the Cedelbank or Euroclear cash
debit will be valued instead as of the actual settlement date.
Cedelbank Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to pre-position
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Cedelbank or Euroclear. Under
this approach, they may take on credit exposure to Cedelbank or Euroclear until
the Global Securities are credited to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of credit
to them, Cedelbank Participants or Euroclear Participants can elect not to
pre-position funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, Cedelbank Participants or Euroclear
Participants purchasing Global Securities would incur overdraft charges for one
day, assuming they cleared the overdraft when the Global Securities were
credited to their accounts. However, interest on the Global Securities would
accrue from the value date. Therefore, in many cases the investment income on
the Global Securities earned during that one-day period may substantially reduce
or offset the amount of such overdraft charges, although this result will depend
on each Cedelbank Participant's or Euroclear Participant's particular cost of
funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of Cedelbank Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between Cedelbank or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, Cedelbank Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing systems,
through their respective Depositaries, to a DTC Participant. The seller will
send instructions to Cedelbank or Euroclear through a Cedelbank Participant or
Euroclear Participant at least one business day prior to settlement. In these
cases, Cedelbank or Euroclear will instruct their respective Depositaries, as
appropriate, to deliver the bonds to the DTC Participant's account against
payment. Payment will include interest accrued on the Global Securities from and
including the last coupon payment date to and excluding the settlement date. The
payment will then be reflected in the account of the Cedelbank Participant or
Euroclear Participant the following day, and receipt of the cash proceeds in the
Cedelbank Participant's or Euroclear Participant's account would be back-valued
to the value date (which would be the preceding day, when settlement occurred in
New York). Should the Cedelbank Participant or Euroclear Participant have a line
of credit with its clearing system and elect to be in debit in anticipation of
receipt of the sale proceeds in its account, the back-valuation will extinguish
any overdraft charges incurred over that one-day period. If settlement is not
completed on the intended value date (i.e., the trade fails), receipt of the
cash proceeds in the Cedelbank Participant's or Euroclear Participant's account
would instead be valued as of the actual settlement date. Finally, day traders
that use Cedelbank or Euroclear and that purchase Global Securities from DTC
Participants for delivery to Cedelbank Participants or Euroclear Participants
should note that these trades would automatically fail on the sale side unless
affirmative action were taken. At least three techniques should be readily
available to eliminate this potential problem:
A-2
(a) borrowing through Cedelbank or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedelbank or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant
no later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their Cedelbank or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC Participant is at least
one day prior to the value date for the sale to the Cedelbank Participant or
Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through Cedelbank
or Euroclear (or through DTC if the holder has an address outside the U.S.) will
be subject to the 30% U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (i) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(ii) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
Exemption of non-U.S. Persons (Form W-8). Beneficial owners of Offered
Notes that are non-U.S. Persons generally can obtain a complete exemption
from the withholding tax by filing a signed Form W-8 (Certificate of Foreign
Status). If the information shown on Form W-8 changes, a new Form W-8 must
be filed within 30 days of such change.
Exemption for non-U.S. Person with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a
U.S. branch, for which the interest income is effectively connected with its
conduct of a trade or business in the United States can obtain an exemption
from the withholding tax by filing Form 4224 (Exemption from Withholding of
Tax on Income Effectively Connected with the Conduct of a Trade or Business
in the United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are beneficial owners of
Offered Notes residing in a country that has a tax treaty with the United
States can obtain an exemption or reduced tax rate (depending on the treaty
terms) by filing Form 1001 (Ownership, Exemption or Reduced Rate
Certificate). If the treaty provides only for a reduced rate, withholding
tax will be imposed at that rate unless the filer alternatively files Form
W-8. Form 1001 may be filed by the beneficial owner of Offered Notes or such
owner's agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's
Request for Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The beneficial owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, such
owner's agent, files by submitting the appropriate form to the person
through whom it holds the security (the clearing agency, in the case of
persons holding directly on the books of the clearing agency). Form W-8 and
Form 1001 are effective for three calendar years and Form 4224 is effective
for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the United
States or any political subdivision thereof, (iii) an estate the income of which
is includible in gross income for United States tax purposes, regardless of its
source, or (iv) a trust if a court within the United States is able to exercise
primary supervision of the administration of the trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
the trust. This summary does not deal with all aspects of U.S. federal income
tax withholding that may be relevant to foreign holders of the Global
A-3
Securities. Investors are advised to consult their own tax advisors for specific
tax advice concerning their holding and disposing of the Global Securities.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion, dated .
------------
PROSPECTUS
PREMIER AUTO TRUSTS
ASSET BACKED NOTES
ASSET BACKED CERTIFICATES
_____________________
CHRYSLER FINANCIAL COMPANY L.L.C.
Seller and Servicer
_____________________
o Chrysler Financial Company L.L.C. may form Trusts at various
times. It will sell motor vehicle installment sale contracts
("Receivables") originated by it to a Trust, which will
issue Securities to fund its purchase.
o The main source of funds for making payments on the Trust's
Securities will be collections on its Receivables. o
Securities issued by a Trust
o may consist of one or more classes of Notes and/or
Certificates;
o will be payable only from the assets of that Trust;
o will be entitled to receive payments that will vary by
class as to timing, amount and priority, as described
in the related Prospectus Supplement; and
o may have the benefit of some form of credit or other
enhancement.
The Securities will be obligations solely of the Trust that issues them.
Neither Chrysler Financial Company L.L.C., nor or any of its affiliates, will be
obligated to make payments on the Securities, and neither the Securities nor the
Receivables represent interests in Chrysler Financial Company L.L.C. or any of
its affiliates.
BEFORE YOU DECIDE TO INVEST IN ANY SECURITIES, READ THIS PROSPECTUS AND
THE RELATED PROSPECTUS SUPPLEMENT, ESPECIALLY THE CONSIDERATIONS BEGINNING ON
PAGE 7 OF THE PROSPECTUS.
Neither the SEC nor any state securities commission has approved or
disapproved the Securities or determined that this Prospectus or any Prospectus
Supplement is accurate or complete. Any representation to the contrary is a
criminal offense.
_____________________
The date of this Prospectus is ___________________, ____.
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We provide information to you about the Securities in two separate
documents that provide varying levels of detail: (a) this Prospectus, which
provides general information, some of which may not apply to a particular series
of Securities, including your Securities, and (b) the accompanying Prospectus
Supplement, which will describe the specific terms of your Securities.
IF THE TERMS OF THE SECURITIES DESCRIBED IN THIS PROSPECTUS VARY FROM
THE PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
You should rely only on the information provided in this Prospectus and
the accompanying Prospectus Supplement, including any information incorporated
by reference. We have not authorized anyone to provide you with different
information. You should not assume that the information in this Prospectus or
the accompanying Prospectus Supplement is accurate as of any date other than the
dates stated on their respective covers.
We include cross-references in this Prospectus and in the accompanying
Prospectus Supplement to captions in these materials where you can find further
related discussions. The Table of Contents on the back cover page specifies the
pages on which these captions are located.
You can find a listing of the pages where capitalized terms used in this
Prospectus are defined under the caption "Index of Terms for Prospectus"
beginning on page 60 in this Prospectus.
2
AVAILABLE INFORMATION
Chrysler Financial Company L.L.C., as originator of each Trust, has filed
with the Securities and Exchange Commission (the "Commission") a Registration
Statement (together with all amendments and exhibits thereto, referred to herein
as the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to any Notes and the Certificates offered
pursuant to this Prospectus. For further information, reference is made to the
Registration Statement which may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549; and at the Commission's regional offices at Citicorp Center, 500
West Madison Street, 14th Floor, Chicago, Illinois 60661 and Seven World Trade
Center, New York, New York 10048. Copies of the Registration Statement may be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants, including
Chrysler Financial Company L.L.C., that file electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by Chrysler Financial Company L.L.C., as originator of
the Trust referred to in the accompanying Prospectus Supplement, pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, subsequent to the date of this Prospectus and prior to the termination
of the offering of the Securities offered by such Trust shall be deemed to be
incorporated by reference in this Prospectus. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Chrysler Financial Company L.L.C. will provide without charge to each
person, including any beneficial owner of Securities, to whom a copy of this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated herein or in any related
Prospectus Supplement by reference, except the exhibits to such documents
(unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Assistant Secretary,
Chrysler Financial Company L.L.C., 27777 Franklin Road, Southfield, Michigan
48034-8286 (Telephone: 248-948-3067).
3
SUMMARY OF TERMS
The following summary is a short, concise description of the main structural
features that a class of Securities may have. For this reason, this summary does
not contain all the information that may be important to you or that describes
all of the terms of a Security. You will find a detailed description of the
possible terms of a Security following this summary.
Issuer.............................. Generally, each series of Securities
will be issued by a separate trust
(each, a "Trust"). Some Trusts may issue
more than one series of Securities.
Seller of Receivables to a Trust.... Chrysler Financial Company L.L.C. ("CFC"
or, in its capacity as seller, the
"Seller").
Servicer............................ Chrysler Financial Company L.L.C. (in
such capacity, the "Servicer").
Trustee............................. With respect to each series of
Securities, the Trustee specified in the
related Prospectus Supplement.
Indenture Trustee................... With respect to any applicable series of
Securities, the Indenture Trustee
specified in the related Prospectus
Supplement.
Securities.......................... A series of Securities may include one
or more classes of Notes and/or
Certificates. You will find the
following information about each class
of Securities in the Prospectus
Supplement:
o its principal amount;
o its interest rate, which may be
fixed or variable or a
combination thereof;
o the timing, amount and priority
or subordination of payments of
principal and interest on the
class;
o the method for calculating the
amount of principal payments;
o its final distribution date;
o whether it may be redeemed prior
to its final distribution date;
and
o other relevant factors.
Some classes of Securities may be
entitled to (i) principal distributions
with disproportionate, nominal or no
interest distributions or (ii) interest
distributions with disproportionate,
nominal or no principal distributions.
Trust Property...................... The property of each Trust will
include a pool of motor vehicle retail
installment sale contracts secured by
new or used automobiles or light duty
trucks (the "Receivables"), including
rights to receive certain payments made
with respect to such Receivables,
security interests in the vehicles
financed thereby, certain accounts and
the proceeds thereof and any proceeds
from claims on certain related insurance
policies. In addition, the property of a
Trust may include (i) notes and/or
certificates that were issued by a prior
Trust but were not then offered pursuant
to a prospectus and/or (ii) the right
4
to receive collections in respect of
Receivables owned by one or more prior
Trusts that would otherwise be released
to the Company. In the case of a Trust
that issues more than one series of
Securities, it will allocate a group of
its assets to a single series of its
Securities (as so allocated, "Series
Trust Property"). Series Trust Property
will support only the single series of
Securities to which it has been
allocated and will not benefit or result
in any payments on any other series of
Securities issued by that Trust or any
other Trust.
You will find a description of the
Receivables in the Prospectus
Supplement. CFC will have purchased the
Receivables from the originating motor
vehicle dealers and will sell them to
the Trust. If a Trust has not purchased
all of its Receivables at the time you
purchase your Securities, it will
purchase the remainder of its
Receivables from CFC over a period
specified in the Prospectus Supplement.
Some Trusts may, during a specified
period, use principal collections on its
Receivables to purchase additional
Receivables.
Enhancement......................... Certain classes of Securities may have
the benefit of any of the following
enhancements intended to increase the
likelihood of payments on those
Securities:
o subordination of one or more
classes of Securities;
o overcollateralization (i.e., the
principal amount of the
Receivables exceeds the
principal amount of all of the
Trust's Securities);
o excess spread (i.e., the excess
of interest collections on the
Receivables over servicing fees
and interest on the Trust's
Securities);
o reserve account, the funds in
which will be applied to cover
payments on the Securities not
covered by collections on the
Receivables;
o letter of credit or other credit
facility;
o surety bond;
o liquidity arrangements;
o swaps (including currency swaps)
and other derivative instruments
and interest rate protection
agreements;
o repurchase or put obligations;
o yield supplement agreements; and
o other arrangements similar to
those described above.
The Prospectus Supplement will describe
the limitation of any enhancement that
applies to the Securities. Enhancements
cannot guarantee that losses will not be
incurred on the Securities.
Tax Status.......................... If the Securities are Notes, federal tax
counsel to the Trust will deliver an
opinion at the time of initial issuance
that for federal income tax purposes:
(i) the Securities will be characterized
as debt and (ii) the Trust will not be
characterized as an association (as a
publicly traded partnership) taxable as
a corporation. If the Securities are
Certificates, you will find a discussion
of the federal income tax
characterization of the Securities and
the related Trust in this Prospectus and
the Prospectus Supplement.
See "Certain Federal Income Tax
Consequences" and "Certain State Tax
Consequences" for additional information
concerning the application of federal
and state tax laws to the Securities.
5
ERISA Considerations................ If you are an employee benefit plan, you
should review the considerations
discussed under "ERISA Considerations"
herein and in the related Prospectus
Supplement before investing in the
Securities. In general, subject to those
considerations and to certain conditions
described in those sections, and unless
otherwise specified in the Prospectus
Supplement, you may purchase the Notes
of any series, and any Certificates
issued by a Trust that is a grantor
trust if those Certificates are not
subordinated to any other class of
Certificates.
Form and Denomination............... You may purchase Securities only in
book-entry form. Your purchase must be
in a minimum amount of $1,000.
6
SPECIAL CONSIDERATIONS
CERTAIN LEGAL ASPECTS -- In connection with the sale of
TRUSTS MAY NOT HAVE A Receivables to a Trust, the Seller will
PERFECTED SECURITY INTEREST IN assign the security interests in the
CERTAIN FINANCED VEHICLES vehicles (the "Financed Vehicles")
securing those Receivables to the Trust
at the time of sale. Due to
administrative burden and expense, the
certificates of title to the Financed
Vehicles will not be amended to reflect
the assignment to the Trust. In the
absence of such an amendment, the Trust
may not have a perfected security
interest in the Financed Vehicles
securing its Receivables in some states.
Unless otherwise provided in the related
Prospectus Supplement, the Seller will
be obligated to repurchase any
Receivable sold to a Trust as to which a
perfected security interest in the name
of the Seller in the Financed Vehicle
securing the Receivable shall not exist
as of the date the Receivable is
transferred to the Trust, if the lack of
perfection shall materially adversely
affect the interest of the Trust in such
Receivable and if the lack of perfection
shall not have been cured within a
specified period. If a Trust does not
have a perfected security interest in a
Financed Vehicle, its ability to realize
on such Financed Vehicle in a default
may be adversely affected. To the extent
the security interest is perfected, a
Trust will have a prior claim over
subsequent purchasers of the Financed
Vehicle and holders of subsequently
perfected security interests. However, a
Trust may not have a prior security
interest against liens for repairs of
Financed Vehicles or for taxes unpaid by
an Obligor under a Receivable, and a
Trust could lose its security interest
(or its priority) through fraud or
negligence. Neither the Seller nor the
Servicer will have any obligation to
repurchase a Receivable as to which any
of the aforementioned occurrences result
in such Trust's losing the priority of
its security interest or its security
interest in a Financed Vehicle after the
Trust purchases the Receivable.
CERTAIN LEGAL ASPECTS - Federal and state consumer protection
FAILURE TO COMPLY WITH laws impose requirements upon creditors
CONSUMER PROTECTION LAW in connection with extensions of credit
REQUIREMENTS MAY MAKE A and collections of retail installment
TRUST LIABLE loans and certain of these laws make an
assignee of such a loan (such as a
Trust) liable to the obligor thereon for
any violation by the lender. Unless
otherwise specified in the related
Prospectus Supplement, the Seller will
be obligated to repurchase any
Receivable which fails to comply with
such requirements.
CERTAIN LEGAL ASPECTS -- The Seller will warrant to each Trust
INSOLVENCY MAY RESULT IN that the sale of the Receivables by the
DELAYS OR REDUCTIONS OF Seller to the Trust is a valid sale of
PAYMENTS TO SECURITYHOLDERS the Receivables to such Trust. Notwith-
standing the foregoing, if the Seller
were to become a debtor in a bankruptcy
case and a creditor or
trustee-in-bankruptcy of such debtor or
such debtor itself were to take the
position that the transfer of
Receivables to such Trust should be
treated not as a sale, but instead as a
pledge of such Receivables to secure a
borrowing of such debtor, delays in
payments of collections of Receivables
to the related Securityholders could
occur or (should the court rule in favor
of any such trustee, debtor or creditor)
reductions in the amounts of such
payments could result. If the transfer
of Receivables to a Trust is treated as
a pledge instead of a sale, a tax or
government lien on the property of the
Seller arising before the transfer of a
Receivable to such Trust may have
priority over such Trust's interest in
such Receivable. If the transactions
contemplated herein are treated as a
sale, the Receivables would not be part
of the Seller's bankruptcy estate and
would not be available to the Seller's
creditors.
7
A case decided by the United States
Court of Appeals for the Tenth Circuit
contains language to the effect that
accounts sold by an entity that
subsequently became bankrupt remained
property of the debtor's bankruptcy
estate because the sale of accounts is
treated as a "security interest" that
must be perfected under the Uniform
Commercial Code ("UCC"). Although the
contracts representing the Receivables
constitute chattel paper rather than
accounts under the UCC, sale of chattel
paper, like sales of accounts, must be
perfected under Article 9 of the UCC. If
CFC were to become a debtor under any
insolvency law and a court were to
follow the reasoning of the Tenth
Circuit Court of Appeals and apply such
reasoning to chattel paper, the Trust
could experience a delay in or reduction
of collections on the Receivables, and
you could incur a loss on your
investment as a result.
RELIANCE ON REPRESENTATIONS Neither CFC, DaimlerChrysler
AND WARRANTIES BY THE SELLER Corporation ("Chrysler") nor any of
OR THE SERVICER WHICH PROVES their affiliates is generally obligated
TO BE INADEQUATE MAY RESULT to make any payments in respect of any
IN LOSSES TO SECURITYHOLDERS Securities or any Receivables.
However, in connection with the sale
of Receivables by the Seller to a Trust,
the Seller will make representations and
warranties with respect to the
characteristics of such Receivables. In
certain circumstances, the Seller may be
required to repurchase Receivables with
respect to which such representations
and warranties have been breached. See
"Description of the Transfer and
Servicing Agreements --Sale and
Assignment of Receivables." In addition,
under certain circumstances, the
Servicer may be required to purchase
Receivables from a Trust. See
"Description of the Transfer and
Servicing Agreements -- Servicing
Procedures". Moreover, if CFC were to
cease acting as Servicer, delays in
processing payments on the Receivables
and information in respect thereof could
occur and result in delays in payments
to the Securityholders.
SUBORDINATION OF CERTAIN To the extent specified in the
SECURITIES MAY RESULT IN related Prospectus Supplement,
REDUCED PAYMENTS TO THOSE distributions of interest and principal
SECURITIES on one or more classes of Securities of
a series may be subordinated in priority
of payment to distributions of interest
and principal due on one or more other
classes of Securities of such series.
Such subordination of a class of
Securities has the effect of increasing
the likelihood of payment on the senior
classes of Securities in that series and
decreasing the likelihood of payment on
that subordinated class of Securities.
8
A TRUST'S ONLY SOURCES OF A Trust will not have any significant
FUNDS TO MAKE PAYMENTS ON assets or sources of funds other than
ITS SECURITIES ARE COLLECTIONS its Receivables and, to the extent
ON ITS RECEIVABLES AND ANY provided in the related Prospectus
ENHANCEMENT THAT IT MAY HAVE Supplement, enhancement. The Securities
of any series will represent obligations
of or interests in the related Trust
only. The Securities of any series will
not be insured or guaranteed by CFC, the
applicable Trustee, any Indenture
Trustee or any other person or entity.
Moreover, in the case of a Trust that
issues more than one series of
Securities, the Securities of a series
issued by such Trust will be supported
solely by the Series Trust Property
allocated to such series and will not
have any rights in or claim on, or
receive any payments from, the Series
Trust Property allocated to any other
series of Securities issued by such
Trust. Consequently, investors must rely
for payment of Securities of any series
solely upon payments on the Receivables
allocated to such series and, if and to
the extent available, any enhancement
for such series, all as specified in the
related Prospectus Supplement.
RISK THAT PREPAYMENTS WILL An obligor may prepay a Receivable,
ADVERSELY AFFECT AVERAGE LIFE in whole or in part, at any time. In
AND YIELDS OF THE SECURITIES addition, the Servicer may deem it
necessary in certain circumstances to
repossess and liquidate a Financed
Vehicle. Furthermore, the Servicer or
Seller may be required to purchase, or
repurchase, as the case may be, a
Receivable from the Trust. In any of the
above instances, each referred to herein
as a "prepayment", the principal amount
of a Receivable may be repaid (or
charged off) in advance of the related
payment schedule. While a certain
prepayment rate may be used for the
purpose of pricing the Securities, there
can be no assurance that the actual
prepayment rate will be faster or slower
than the assumed prepayment rate. The
prepayment rate on the Receivables may
be influenced by a variety of economic,
social and other factors. Any
reinvestment risks resulting from a
faster or slower incidence of prepayment
of Receivables will be borne entirely by
the Securityholders of the related
series. See also "Description of the
Transfer and Servicing Agreements --
Termination" regarding the Servicer's
option to purchase the Receivables of a
Trust.
ISSUANCE OF A SUBSEQUENT A single Trust may issue more than
SERIES OF SECURITIES MAY one series of Securities. The provisions
ADVERSELY AFFECT ANY PRIOR of the governing documents for a
SERIES OF SECURITIES subsequent series of securities issued
by a Trust will not be subject to the
consent of or prior review by the
holders of a series of Securities that
have been previously issued by such
Trust. However, the issuance of a
subsequent series of Securities by a
Trust will be subject to the condition
that each Rating Agency that rated a
prior series of Securities issued by
such Trust must indicate that the
issuance of such subsequent series of
Securities will not cause such Rating
Agency to reduce or withdraw its rating
of any such prior series of Securities.
There can be no assurance, however, that
the issuance of a subsequent series of
Securities by a Trust will not have some
effect on a prior series of Securities
issued by such Trust.
9
COMMINGLING OF MONIES BY The Servicer will generally be
THE SERVICER MAY LEAD TO required to deposit all collections and
FUNDS NOT BEING AVAILABLE proceeds from the Receivables into the
FOR DISTRIBUTION Collection Account for the applicable
series on or before the business day
preceding each Distribution Date.
However, in the event that CFC ceases to
satisfy certain requirements for monthly
remittances, CFC will be required to
deposit such amounts into the Collection
Account for such series within two
business days of receipt thereof. The
Servicer will deposit the aggregate
Repurchase Amount of Receivables
repurchased by the Seller, or purchased
by the Servicer, into the applicable
Collection Account on or before the
business day preceding each Distribution
Date. Pending deposit into such
Collection Account, collections may be
invested by the Servicer at its own risk
and for its own benefit and will not be
segregated from funds of the Servicer.
If the Servicer were unable to remit
such funds, the applicable
Securityholders might incur a loss. To
the extent set forth in the related
Prospectus Supplement, the Servicer may,
in order to satisfy the requirements
described above, obtain a letter of
credit or other security for the benefit
of the related Trust to secure timely
remittances of collections on the
related Receivables and payment of the
aggregate Repurchase Amount with respect
to Receivables purchased by the
Servicer.
NOTEHOLDERS HAVE THE RIGHT TO Unless otherwise provided in the
TAKE CERTAIN ACTIONS IN THE related Prospectus Supplement for a
CASE OF A SERVICER DEFAULT series that includes Notes and
WHICH MAY ADVERSELY AFFECT Certificates, if a Servicer Default
THE CERTIFICATEHOLDERS occurs, the Indenture Trustee or the
Noteholders of such series, as described
under "Description of the Transfer and
Servicing Agreements -- Rights upon
Servicer Default", may remove the
Servicer without the consent of the
Trustee of the Trust or any of the
Certificateholders of such series. The
Trustee of the Trust or the
Certificateholders of such series will
not have the ability to remove the
Servicer if a Servicer Default occurs.
In addition, the Noteholders of such
series have the ability, with certain
specified exceptions, to waive defaults
by the Servicer, including defaults that
could materially adversely affect the
Certificateholders, if any, of such
series. See "Description of the Transfer
and Servicing Agreements --Waiver of
Past Defaults".
BOOK-ENTRY REGISTRATION MAY Unless otherwise specified in the
REDUCE THE LIQUIDITY OF THE related Prospectus Supplement, each
SECURITIES class of a series of Securities will be
initially represented by one or more
certificates registered in the name of
Cede & Co. ("Cede"), or any other
nominee for DTC set forth in the related
Prospectus Supplement (Cede, or such
other nominee, "DTC's Nominee").
Securities will not be registered in the
investor's name or in the name of an
investor's nominee. Because of this,
unless and until Definitive Securities
are issued, investors will not be
recognized by the Trustee or any
applicable Indenture Trustee as a
"Certificateholder" or a "Noteholder",
as the case may be. Consequently, unless
and until Definitive Securities are
issued, investors will only be able to
exercise the rights of a Securityholder
indirectly through DTC and its
participating organizations. See
"Certain Information Regarding the
Securities -- Book-Entry Registration"
and "-- Definitive Securities".
10
THE TRUSTS
The Seller will establish a separate Trust pursuant to a trust agreement (a
"Trust Agreement") or a pooling and servicing agreement (a "Pooling and
Servicing Agreement"), as applicable, for the transactions described herein and
in the related Prospectus Supplement. The property of each Trust allocated to a
series of Securities issued by such Trust will include a pool of motor vehicle
retail installment sales contracts (a "Receivables Pool") (and, with respect to
Fixed Value Receivables (as defined below), the right to certain payments on
retail installment sale contracts) between retail sellers of new and used
automobiles and light duty trucks (the "Dealers") and installment purchasers
thereof (the "Obligors") and all payments due thereunder on and after the
applicable Cutoff Date (as specified in the related Prospectus Supplement, a
"Cutoff Date") in the case of Precomputed Receivables and all payments received
thereunder on and after the applicable Cutoff Date in the case of Simple
Interest Receivables. The Receivables of each Receivables Pool were or will be
originated by the Dealers and purchased by CFC, directly or indirectly, pursuant
to CFC's agreements with Dealers ("Dealer Agreements"). Such Receivables will
continue to be serviced by the Servicer and evidence indirect financing made
available by the Seller to the Obligors. On the applicable Closing Date, after
the issuance of the Securities of a series, the Seller will sell the Initial
Receivables of the applicable Receivables Pool to the Trust to the extent, if
any, specified in the related Prospectus Supplement. To the extent so provided
in the related Prospectus Supplement, Subsequent Receivables allocable to such
series of Securities will be conveyed to the Trust as frequently as daily during
the Funding Period and Additional Receivables allocable to such series of
Securities may be conveyed to the Trust during the Revolving Period. Any
Subsequent Receivables or Additional Receivables so conveyed will also be assets
of the applicable Trust allocated solely to such series of Securities, subject
to the prior rights of the related Indenture Trustee and the related
Noteholders, if any, therein. The property of each Trust allocated to a series
of Securities issued by such Trust will also include (i) such amounts as from
time to time may be held in separate trust accounts established and maintained
pursuant to the related sale and servicing agreement (a "Sale and Servicing
Agreement") or Pooling and Servicing Agreement and the proceeds of such
accounts, as described herein and in the related Prospectus Supplement; (ii)
security interests in the Financed Vehicles and any other interest of the Seller
in such Financed Vehicles; (iii) the rights to proceeds from claims on certain
physical damage, credit life and disability insurance policies covering the
Financed Vehicles or the Obligors, as the case may be; (iv) the interest of the
Seller in any proceeds from recourse to Dealers on Receivables or Financed
Vehicles with respect to which the Servicer has determined that eventual
repayment in full is unlikely; (v) any property that shall have secured a
Receivable and that shall have been acquired by the applicable Trust; and (vi)
any and all proceeds of the foregoing (as allocated to such series of
Securities, and together with the Receivables Pool allocated to such series and
payments thereon, the "Series Trust Property"). To the extent specified in the
related Prospectus Supplement, a Pre-Funding Account, a Reserve Account or other
form of credit enhancement or Previously Issued Securities may be a part of the
Series Trust Property in a Trust or may be held by the Trustee or an Indenture
Trustee for the benefit of holders of the related Securities. If a Trust issues
more than one series of Securities, the Securities of a series will be supported
solely by the Series Trust Property allocated to such series and will not have
any rights in or claim on, or receive any payments from, the Series Trust
Property allocated to any other series of Securities issued by such Trust.
Additionally, pursuant to contracts between the Seller and the Dealers, the
Dealers have an obligation after origination to repurchase Receivables as to
which Dealers have made certain misrepresentations.
The Servicer will continue to service the Receivables held by each Trust and
will receive fees for such services. See "Description of the Transfer and
Servicing Agreements -- Servicing Compensation and Payment of Expenses" herein
and in the related Prospectus Supplement. To facilitate the servicing of the
Receivables, each Trustee will authorize the Servicer to retain physical
possession of the Receivables held by each Trust and other documents relating
thereto as custodian for each such Trust. To avoid undue administrative burden
and expense, the certificates of title to the Financed Vehicles will not be
amended to reflect the sale and assignment of the security interest in the
Financed Vehicles to each Trust. In the absence of such an amendment, any Trust
may not have a perfected security interest in the Financed Vehicles in all
states. See "Certain Legal Aspects of the Receivables" and "Description of the
Transfer and Servicing Agreements -- Sale and Assignment of Receivables".
If the protection provided to any Noteholders of a series by the
subordination of the related Certificates, if any, and by the Reserve Account,
if any, or other credit enhancement for such series or the protection provided
to the related Certificateholders by any such Reserve Account or other credit
enhancement is insufficient, such Noteholders or Certificateholders, as the case
may be, would have to look principally to the Obligors on the Receivables in the
related Series Trust Property, the proceeds from the repossession and sale of
Financed Vehicles
11
which secure defaulted Receivables in the related Series Trust Property and the
proceeds from any recourse against Dealers with respect to such Receivables for
payment on the Securities. In such event, certain factors, such as the
applicable Trust's not having perfected security interests in the Financed
Vehicles in all states, may affect the Servicer's ability to repossess and sell
the collateral securing such Receivables, and thus may reduce the proceeds to be
distributed to the holders of the Securities of such series. See "Description of
the Transfer and Servicing Agreements -- Distributions", "-- Credit and Cash
Flow Enhancement" and "Certain Legal Aspects of the Receivables".
The principal offices of each Trust and the related Trustee will be
specified in the applicable Prospectus Supplement.
THE TRUSTEE
The Trustee for each Trust will be specified in the related Prospectus
Supplement. The Trustee's liability in connection with the issuance and sale of
the related Securities is limited solely to the express obligations of such
Trustee set forth in the related Trust Agreement and the Sale and Servicing
Agreement or the related Pooling and Servicing Agreement, as applicable. A
Trustee may resign at any time, in which event the Servicer, or its successor,
will be obligated to appoint a successor trustee. The Administrator of a Trust
that is not a grantor trust and the Servicer in respect of a Trust that is a
grantor trust may also remove the Trustee if the Trustee ceases to be eligible
to continue as Trustee under the related Trust Agreement or Pooling and
Servicing Agreement, as applicable, or if the Trustee becomes insolvent. In such
circumstances, the Administrator or Servicer, as applicable, will be obligated
to appoint a successor trustee. Any resignation or removal of a Trustee will not
become effective until acceptance of the appointment by the successor trustee.
THE RECEIVABLES POOLS
GENERAL
The Receivables in each Receivables Pool have been or will be purchased by
the Seller, directly or indirectly, from Dealers in the ordinary course of
business through its zone offices located in the United States. Most of the
Dealers sell products manufactured and/or distributed by Chrysler. The retail
installment sale contracts are purchased pursuant to the Dealer Agreements. The
Seller purchases contracts in accordance with its credit standards which are
based upon the vehicle buyer's ability and willingness to repay the obligation,
the value of the vehicle being financed, as well as other factors.
The Receivables to be held by a Trust and allocated to a series of
Securities will be selected from the Seller's portfolio for inclusion in the
related Receivables Pool by several criteria, including that, unless otherwise
provided in the related Prospectus Supplement, each Receivable (i) is secured by
a new or used vehicle, (ii) was originated in the United States, (iii) provides
for level monthly payments (except for the last payment, which may be minimally
different from the level payments or which, in the case of Fixed Value
Receivables, may be a final fixed value payment) that fully amortize the amount
financed over its original term to maturity, (iv) is a Precomputed Receivable or
a Simple Interest Receivable and (v) satisfies the other criteria, if any, set
forth in the related Prospectus Supplement. No selection procedures believed by
the Seller to be adverse to the Securityholders of any series were or will be
used in selecting the related Receivables.
"Precomputed Receivables" consist of either (i) monthly actuarial
receivables ("Actuarial Receivables") or (ii) receivables that provide for
allocation of payments according to the "Rule of 78's" method ("Rule of 78's
Receivables"). An Actuarial Receivable provides for amortization of the loan
over a series of fixed level payment monthly installments. Each monthly
installment, including the monthly installment representing the final payment on
the Receivable, consists of an amount of interest equal to 1/12 of the APR of
the loan multiplied by the unpaid principal balance of the loan, and an amount
of principal equal to the remainder of the monthly payment. A Rule of 78's
Receivable provides for the payment by the obligor of a specified total amount
of payments, payable in equal monthly installments on each due date, which total
represents the principal amount financed and add-on interest in an amount
calculated on the stated APR for the term of the receivable. The rate at which
such amount of add-on interest is earned and, correspondingly, the amount
12
of each fixed monthly payment allocated to reduction of the outstanding
principal are calculated in accordance with the "Rule of 78's".
"Fixed Value Receivables" are monthly receivables originated under CFC's
Gold Key Plus program and secured by new automobiles or light duty trucks with a
final payment which is materially greater than the scheduled monthly payments. A
Fixed Value Receivable provides for amortization of the loan over a series of
fixed level payment monthly installments like an Actuarial Receivable, but also
requires a final fixed value payment due after payment of such monthly
installments. The fixed value payment may be satisfied by (i) payment in full in
cash of such amount, (ii) transfer of the vehicle to CFC provided certain
conditions are satisfied or (iii) refinancing the fixed value payment in
accordance with certain conditions. With respect to Fixed Value Receivables,
unless otherwise provided in the related Prospectus Supplement, only the
principal and interest payments due prior to the final fixed value payment and
not the final fixed value payment will be included in such Trust; the final
fixed value payment will be sold by the Seller to the applicable Company.
However, in the case of a Trust that is not a grantor trust, such Company will
have the option to transfer the final fixed value payments with respect to the
related Fixed Value Receivables retained by such Company to such Trust and to
cause such Trust to issue certificates representing interests in such final
fixed value payments or indebtedness secured by such final fixed value payments.
"Simple Interest Receivables" are receivables that provide for the
amortization of the amount financed over a series of fixed level monthly
payments. However, unlike the monthly payment under an Actuarial Receivable,
each monthly payment is generally allocated first to interest and the remainder
to principal. The interest allocation is calculated on the basis of the
outstanding principal balance of the receivable multiplied by the stated APR and
further multiplied by the period elapsed (as a fraction of a calendar year)
since the preceding payment of interest was made. Accordingly, if an obligor
pays a fixed monthly installment before its scheduled due date, the portion of
the payment allocable to interest will be less than it would have been had the
payment been made as scheduled, and the portion of the payment applied to
principal will be correspondingly greater. Conversely, if an obligor pays a
fixed monthly installment after its scheduled due date, the portion of the
payment allocable to interest will be greater than it would have been had the
payment been made as scheduled, and the portion applied to principal will be
correspondingly less. In either case, the obligor generally pays a fixed monthly
installment until the final scheduled payment date, at which time the amount of
the final installment is increased or decreased as necessary to repay the
outstanding principal balance and any finance charges up to the date of final
payment.
In the event of the prepayment in full (voluntarily or by acceleration) of a
Rule of 78's Receivable, under the terms of the contract, a "refund" or "rebate"
will be made to the obligor of the portion of the total amount of payments then
due and payable under the contract allocable to "unearned" add-on interest,
calculated in accordance with a method equivalent to the Rule of 78's. If an
Actuarial Receivable is prepaid in full, with minor variations based upon state
law, the Actuarial Receivable requires that the rebate be calculated on the
basis of a constant interest rate. If a Simple Interest Receivable is prepaid,
rather than receive a rebate, the obligor is required to pay interest only to
the date of prepayment. The amount of a rebate under a Rule of 78's Receivable
generally will be less than the amount of a rebate on an Actuarial Receivable
and generally will be less than the remaining scheduled payments of interest
that would have been due under a Simple Interest Receivable for which all
payments were made on schedule.
Unless otherwise provided in the related Prospectus Supplement, each Trust
will account for the Rule of 78's Receivables as if such Receivables were
Actuarial Receivables. Amounts received upon prepayment in full of a Rule of
78's Receivable in excess of the then outstanding principal balance of such
Receivable and accrued interest thereon (calculated pursuant to the actuarial
method) will not be paid to the Noteholders or passed through to the
Certificateholders of the applicable series but will be paid to the Servicer as
additional servicing compensation.
Information with respect to each Receivables Pool will be set forth in the
related Prospectus Supplement, including, to the extent appropriate, the
composition, the distribution by APR and by the states of origination, the
portion of such Receivables Pool consisting of Precomputed Receivables and of
Simple Interest Receivables and the portion of such Receivables Pool secured by
new vehicles and by used vehicles.
13
CFC'S PERFORMANCE HISTORY
Certain information concerning the experience of the Seller and its United
States subsidiaries pertaining to delinquencies, repossessions and net losses
with respect to new and used retail automobile and light duty truck receivables
(including receivables previously sold which CFC continues to service) will be
set forth in each Prospectus Supplement. There can be no assurance that the
delinquency, repossession and net loss experience on any Receivables Pool will
be comparable to prior experience or to such information.
WEIGHTED AVERAGE LIFE OF THE SECURITIES
The weighted average life of the Securities will generally be influenced by
the rate at which the principal balances of the related Receivables are paid,
which payment may be in the form of scheduled amortization or prepayments. For
this purpose, the term "prepayments" includes prepayments in full, partial
prepayments including those related to rebates of extended warranty contract
costs and insurance premiums, liquidations due to default, as well as receipts
of proceeds from physical damage, credit life and disability insurance policies
and certain other Receivables repurchased by the Seller or the Servicer for
administrative reasons. All of the Receivables are prepayable at any time
without penalty to the Obligor. The rate of prepayment of automotive receivables
is influenced by a variety of economic, social and other factors, including the
fact that an Obligor generally may not sell or transfer the Financed Vehicle
securing a Receivable without the consent of the Seller. The rate of prepayment
on the Receivables may also be influenced by the structure of the loan. In
addition, under certain circumstances, the Seller will be obligated to
repurchase Receivables from a Trust pursuant to the related Sale and Servicing
Agreement or Pooling and Servicing Agreement as a result of breaches of
representations and warranties and the Servicer will be obligated to purchase
Receivables from such Trust pursuant to such Sale and Servicing Agreement or
Pooling and Servicing Agreement as a result of breaches of certain covenants.
See "Description of the Transfer and Servicing Agreements -- Sale and Assignment
of Receivables" and "-- Servicing Procedures". See also "Description of the
Transfer and Servicing Agreements -- Termination" regarding the Servicer's
option to purchase the Receivables from a Trust and "-- Insolvency Event"
regarding the possible sale (if provided for in the related Prospectus
Supplement) of the Receivables owned by a Trust that is not a grantor trust if
an Insolvency Event with respect to the Company applicable to such Trust occurs.
In addition, a Prospectus Supplement may provide for a Revolving Period
during which principal collections in respect of the Receivables allocated to
the related series will be applied to purchase Additional Receivables for
inclusion in the related Series Trust Property rather than applied to make
distributions on the related Securities. Any such application would increase the
weighted average life of such Securities. Moreover, a Prospectus Supplement may
provide for a liquidity facility or similar arrangement under which collections
of principal may be invested in certain Eligible Investments and distributed on
the related Securities in planned amounts on scheduled Distribution Dates.
In light of the above considerations, there can be no assurance as to the
amount of principal payments to be made on the Notes, if any, or the
Certificates, if any, of a given series on each Payment Date or Distribution
Date, as applicable, since such amount will depend, in part, on the amount of
principal collected on the related Receivables Pool during the applicable
Collection Period. Any reinvestment risks resulting from a faster or slower
incidence of prepayment of Receivables will be borne entirely by the
Noteholders, if any, and the Certificateholders, if any, of a given series. The
related Prospectus Supplement may set forth certain additional information with
respect to the maturity and prepayment considerations applicable to the
particular Receivables Pool and the related series of Securities.
POOL FACTORS FOR SECURITIES AND TRADING INFORMATION
The "Note Pool Factor" for each class of Notes will be a seven-digit decimal
which the Servicer will compute prior to each distribution with respect to such
class of Notes indicating the remaining outstanding principal balance of such
class of Notes, as of the applicable Payment Date (after giving effect to
payments to be made on such Payment Date), as a fraction of the initial
outstanding principal balance of such class of Notes. The "Certificate Pool
Factor" for each class of Certificates will be a seven-digit decimal which the
Servicer will compute prior to each distribution with respect to such class of
Certificates indicating the remaining Certificate Balance of such class of
Certificates, as of the applicable Distribution Date (after giving effect to
distributions to be made on such
14
Distribution Date), as a fraction of the initial Certificate Balance of such
class of Certificates. Each Note Pool Factor and each Certificate Pool Factor
will initially be 1.0000000 and thereafter will decline to reflect reductions in
the outstanding principal balance of the applicable class of Notes, or the
reduction of the Certificate Balance of the applicable class of Certificates, as
the case may be. A Noteholder's portion of the aggregate outstanding principal
balance of the related class of Notes is the product of (i) the original
denomination of such Noteholder's Note and (ii) the applicable Note Pool Factor.
A Certificateholder's portion of the aggregate outstanding Certificate Balance
for the related class of Certificates is the product of (a) the original
denomination of such Certificateholder's Certificate and (b) the applicable
Certificate Pool Factor.
Unless otherwise provided in the related Prospectus Supplement with respect
to a series, the Noteholders, if any, and the Certificateholders, if any, of
such series will receive reports on or about each Payment Date with respect to
the related Collection Period, payments received on the related Receivables, the
Pool Balance (as such term is defined in the related Prospectus Supplement, the
"Pool Balance") as of the last day of the related Collection Period, and the
last day of the Collection Period next preceding the related Collection Period,
or in the case of the initial Collection Period, as of the Cutoff Date, each
Certificate Pool Factor or Note Pool Factor, as applicable, and various other
items of information. In addition, Securityholders of record during any calendar
year will be furnished information for tax reporting purposes not later than the
latest date permitted by law. See "Certain Information Regarding the Securities
- -- Reports to Securityholders".
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement, the net
proceeds from the sale of the Securities of a series will be applied by the
applicable Trust (i) to the purchase of the Receivables and, if applicable, any
Previously Issued Securities from the Seller, (ii) to make the initial deposit
into the Reserve Account, if any, and (iii) to make the deposit of the
Pre-Funded Amount into the Pre-Funding Account, if any. Unless otherwise
specified in the related Prospectus Supplement, the Seller will use the proceeds
it receives with respect to such series of Securities for general corporate
purposes.
CHRYSLER FINANCIAL COMPANY L.L.C.
On October 25, 1998, Chrysler Financial Corporation merged with and into
CFC, with CFC being the surviving entity. The purpose of the merger was to
change the form of organization of Chrysler Financial Corporation from a
Michigan corporation into a Michigan limited liability company. Prior to the
merger, CFC had no operations and had nominal assets and liabilities. In
connection with the merger, CFC succeeded by operation of law to all of the
assets and liabilities of Chrysler Financial Corporation. Unless the context
otherwise requires, for the periods prior to October 25, 1998 the term "CFC" as
used herein shall mean Chrysler Financial Corporation and after the merger shall
mean Chrysler Financial Company L.L.C., as successor to Chrysler Financial
Corporation. CFC's executive offices are located at 27777 Franklin Road,
Southfield, Michigan 48034-9296, and its telephone number is (248) 948-3067.
Chrysler is the sole member (owner) of CFC. CFC is a financial services
organization, engaged in automotive retail, wholesale and fleet financing,
commercial lending and leasing, secured small business financing, property,
casualty and other insurance operations, and automotive dealership facility
development and management. CFC's business is substantially dependent upon the
operations of Chrysler. In particular, lower levels of production and sale of
Chrysler's automotive products could result in a reduction in the level of
finance and insurance operations of CFC. See "Special Considerations --
Financial Information for Chrysler Financial Company L.L.C." in the related
Prospectus Supplement. The related Prospectus Supplement will set forth certain
additional information with respect to CFC.
CFC will warrant to each Trust in the related Sale and Servicing Agreement
or Pooling and Servicing Agreement that the sale of the applicable Receivables
by CFC to such Trust is a valid sale of such Receivables to such Trust. In
addition, CFC and such Trust will treat the transactions described herein and in
the related Prospectus Supplement as a sale of such Receivables to such Trust
and CFC will take all actions that are required to perfect the Trust's ownership
interest in such Receivables. Notwithstanding the foregoing, if CFC were to
become a debtor in a bankruptcy case and a creditor or trustee in bankruptcy of
such debtor or such debtor itself were to take the position that the transfer of
Receivables to a Trust should be treated not as a sale, but instead as a pledge
of such Receivables
15
to secure a borrowing of such debtor, then delays in payments of collections of
such Receivables could occur or (should the court rule in favor of any such
trustee, debtor or creditor) reductions in the amount of such payments could
result. If the transfer of Receivables to a Trust is treated as a pledge instead
of a sale, a tax or government lien on the property of CFC arising before the
transfer of Receivables to such Trust may have priority over such Trust's
interest in such Receivables. If the transactions contemplated herein are
treated as a sale, the Receivables would not be part of CFC's bankruptcy estate
and would not be available to CFC's creditors.
DESCRIPTION OF THE NOTES
GENERAL
With respect to each Trust that issues Notes, one or more classes of Notes
of the related series will be issued pursuant to the terms of an Indenture, the
form of which has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The following summary does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Notes and the Indenture.
If a Trust issues more than one series of Notes, each such series may be
issued pursuant to a master Indenture. In such a case, the Notes of a series
will be secured solely by the Series Trust Property allocated to such series and
will not have any rights in or claims on, or receive any payments from, the
Series Trust Property allocated to any other series of Securities issued by such
Trust.
Unless otherwise specified in the related Prospectus Supplement, each class
of Notes will initially be represented by one or more Notes, in each case
registered in the name of the nominee of DTC (together with any successor
depository selected by the Trust, the "Depository") except as set forth below.
Unless otherwise specified in the related Prospectus Supplement, the Notes will
be available for purchase in denominations of $1,000 in book-entry form only.
The Seller has been informed by DTC that DTC's nominee will be Cede, unless
another nominee is specified in the related Prospectus Supplement. Accordingly,
such nominee is expected to be the holder of record of the Notes of each class.
Unless and until Definitive Notes are issued under the limited circumstances
described herein or in the related Prospectus Supplement, no Noteholder will be
entitled to receive a physical certificate representing a Note. All references
herein and in the related Prospectus Supplement to actions by Noteholders refer
to actions taken by DTC upon instructions from its participating organizations
(the "Participants") and all references herein and in the related Prospectus
Supplement to distributions, notices, reports and statements to Noteholders
refer to distributions, notices, reports and statements to DTC or its nominee,
as the registered holder of the Notes, for distribution to Noteholders in
accordance with DTC's procedures with respect thereto. See "Certain Information
Regarding the Securities -- Book-Entry Registration" and "--Definitive
Securities".
PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, allocations of losses,
Interest Rate and amount of or method of determining payments of principal and
interest with respect to each class of Notes of a series will be described in
the related Prospectus Supplement. The right of holders of any class of Notes of
a series to receive payments of principal and interest may be senior or
subordinate to the rights of holders of any other class or classes of Notes of
such series, as described in the related Prospectus Supplement. Unless otherwise
provided in the related Prospectus Supplement, payments of interest on the Notes
of such series will be made prior to payments of principal thereon. To the
extent provided in the related Prospectus Supplement, a series may include one
or more classes of Strip Notes entitled to (i) principal payments with
disproportionate, nominal or no interest payments or (ii) interest payments with
disproportionate, nominal or no principal payments. Each class of Notes may have
a different Interest Rate, which may be a fixed, variable or adjustable Interest
Rate (and which may be zero for certain classes of Strip Notes), or any
combination of the foregoing. The related Prospectus Supplement will specify the
Interest Rate for each class of Notes of a series or the method for determining
such Interest Rate. See also "Certain Information Regarding the Securities --
Fixed Rate Securities" and "-- Floating Rate Securities". One or more classes of
Notes of a series may be redeemable in whole or in part under the circumstances
specified in the related Prospectus Supplement, including at the end of the
Funding Period (if any) or as a result of the Servicer's exercising its option
to purchase the related Receivables Pool.
16
To the extent specified in any Prospectus Supplement, one or more classes of
Notes of a given series may have fixed principal payment schedules, as set forth
in such Prospectus Supplement; Noteholders of such Notes would be entitled to
receive as payments of principal on any given Payment Date the applicable
amounts set forth on such schedule with respect to such Notes, in the manner and
to the extent set forth in the related Prospectus Supplement. The aggregate
initial principal amount of the Notes and Certificates, if any, of a series may,
after giving effect to the purchase of all Subsequent Receivables, if any, be
greater or less than the aggregate initial principal balance of the Receivables
in that series.
To the extent specified in the related Prospectus Supplement, payments of
interest to holders of two or more classes of Notes within a series may have the
same priority. Under certain circumstances, the amount available for such
payments could be less than the amount of interest payable on such Notes on any
of the dates specified for payments in the related Prospectus Supplement (each,
a "Payment Date", which may be the same date as each Distribution Date as
specified in the related Prospectus Supplement), in which case the holders of
such classes of Notes will receive its ratable share (based upon the aggregate
amount of interest due to such classes of Noteholders) of the aggregate amount
available to be distributed in respect of interest on such Notes. See
"Description of the Transfer and Servicing Agreements -- Distributions" and "--
Credit and Cash Flow Enhancement".
In the case of a series of Notes which includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal and
interest, and any schedule or formula or other provisions applicable to the
determination thereof, of each such class will be set forth in the related
Prospectus Supplement. Payments in respect of principal and interest of any
class of Notes will be made on a pro rata basis among all the Noteholders of
such class. A series with Notes may provide for a Revolving Period, during which
collections of principal in respect of the Receivables are not applied to
payments of principal of such Notes, or may provide for a liquidity facility or
similar arrangement that permits one or more classes of Notes to be paid in
planned amounts on scheduled Distribution Dates.
THE INDENTURE
Master Indenture. If a Trust issues more than one series of Notes, each such
series may be issued pursuant to a base indenture and a series supplement
related thereto (such base indenture together with such series supplement being
collectively referred to herein as an "Indenture").
Modification of Indenture. With respect to each Trust that has issued Notes
pursuant to an Indenture, the Trust and the Indenture Trustee may, with the
consent of the holders of a majority of the outstanding Notes of the related
series, execute a supplemental indenture to add provisions to, change in any
manner or eliminate any provisions of, the related Indenture, or modify (except
as provided below) in any manner the rights of the related Noteholders.
Unless otherwise specified in the related Prospectus Supplement with respect
to a series of Notes, without the consent of the holder of each such outstanding
Note affected thereby. However, no supplemental indenture will: (i) change the
due date of any installment of principal of or interest on any such Note or
reduce the principal amount thereof, the interest rate specified thereon or the
redemption price with respect thereto or change any place of payment where or
the coin or currency in which any such Note or any interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of certain
provisions of the related Indenture regarding payment; (iii) reduce the
percentage of the aggregate amount of the outstanding Notes of such series, the
consent of the holders of which is required for any such supplemental indenture
or the consent of the holders of which is required for any waiver of compliance
with certain provisions of the related Indenture or of certain defaults
thereunder and their consequences as provided for in such Indenture; (iv) modify
or alter the provisions of the related Indenture regarding the voting of Notes
held by the applicable Trust, any other obligor on such Notes, the Seller or an
affiliate of any of them; (v) reduce the percentage of the aggregate outstanding
amount of such Notes, the consent of the holders of which is required to direct
the related Indenture Trustee to sell or liquidate the Receivables allocated to
such series if the proceeds of such sale would be insufficient to pay the
principal amount and accrued but unpaid interest on the outstanding Notes of
such series; (vi) decrease the percentage of the aggregate principal amount of
such Notes required to amend the sections of the related Indenture which specify
the applicable percentage of aggregate principal amount of the Notes of such
series necessary to amend such Indenture or certain other related agreements; or
(vii) permit the creation of any lien ranking prior to or on a parity with the
lien of the related Indenture with respect to any of the Series Trust Property
securing such Notes or, except as otherwise permitted or contemplated in
17
such Indenture, terminate the lien of such Indenture on any such collateral or
deprive the holder of any such Note of the security afforded by the lien of such
Indenture.
Unless otherwise provided in the applicable Prospectus Supplement, the Trust
and the applicable Indenture Trustee may also enter into supplemental
indentures, without obtaining the consent of the Noteholders of the related
series, for the purpose of, among other things, adding any provisions to or
changing in any manner or eliminating any of the provisions of the related
Indenture or of modifying in any manner the rights of such Noteholders; provided
that such action will not materially and adversely affect the interest of any
such Noteholder.
Events of Default; Rights upon Event of Default. With respect to the Notes
of a series, unless otherwise specified in the related Prospectus Supplement,
"Events of Default" under the related Indenture will consist of: (i) a default
for five days (or for such other longer period specified in the related
Prospectus Supplement) or more in the payment of any interest on any such Note;
(ii) a default in the payment of the principal of or any installment of the
principal of any such Note when the same becomes due and payable; (iii) a
default in the observance or performance of any covenant or agreement of the
applicable Trust made in the related Indenture and the continuation of any such
default for a period of 30 days after notice thereof is given to such Trust by
the applicable Indenture Trustee or to such Trust and such Indenture Trustee by
the holders of at least 25% in principal amount of such Notes then outstanding;
(iv) any representation or warranty made by such Trust in the related Indenture
or in any certificate delivered pursuant thereto or in connection therewith
having been incorrect in a material respect as of the time made, and such breach
not having been cured within 30 days after notice thereof is given to such Trust
by the applicable Indenture Trustee or to such Trust and such Indenture Trustee
by the holders of at least 25% in principal amount of such Notes then
outstanding; or (v) certain events of bankruptcy, insolvency, receivership or
liquidation of the applicable Trust. The amount of principal required to be paid
to Noteholders of such series under the related Indenture will generally be
limited to amounts available to be deposited in the applicable Note Distribution
Account. Therefore, unless otherwise specified in the related Prospectus
Supplement, the failure to pay principal on a class of Notes generally will not
result in the occurrence of an Event of Default until the final scheduled
Payment Date for such class of Notes.
In the case of a Trust that issues more than one series of Notes, an Event
of Default with respect to one such series of Notes will not of itself
constitute an Event of Default with respect to any such other series of Notes.
If an Event of Default with respect to the Notes of any series should occur
and continue, the related Indenture Trustee or holders of a majority in
principal amount of such Notes then outstanding may declare the principal of
such Notes to be immediately due and payable. Unless otherwise specified in the
related Prospectus Supplement, such declaration may, under certain
circumstances, be rescinded by the holders of a majority in principal amount of
such Notes then outstanding.
If the Notes of any series are due and payable following an Event of Default
with respect thereto, the related Indenture Trustee may institute proceedings to
collect amounts due or foreclose on Series Trust Property allocated to such
series, exercise remedies as a secured party, sell the Receivables included in
such Series Trust Property or elect to have the applicable Trust maintain
possession of such Receivables and continue to apply collections on such
Receivables as if there had been no declaration of acceleration. Unless
otherwise specified in the related Prospectus Supplement, however, such
Indenture Trustee is prohibited from selling the related Receivables following
an Event of Default, other than a default in the payment of any principal of or
a default for five days (or such longer period specified in the related
Indenture) or more in the payment of any interest on any Note of such series,
unless (i) the holders of all the outstanding Notes of such series consent to
such sale, (ii) the proceeds of such sale are sufficient to pay in full the
principal of and the accrued interest on such outstanding Notes at the date of
such sale or (iii) such Indenture Trustee determines that the proceeds of such
Receivables would not be sufficient on an ongoing basis to make all payments on
such Notes as such payments would have become due if such obligations had not
been declared due and payable, and such Indenture Trustee obtains the consent of
the holders of 66 2/3% of the aggregate outstanding amount of such Notes.
If a Trust issues more than one series of Notes, each such series of Notes
will be secured solely by the Series Trust Property allocated to such series and
will not have any rights in or claims on, or receive any payments from, the
Series Trust Property allocated to any other series of Securities issued by such
Trust.
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Subject to the provisions of the applicable Indenture relating to the duties
of the related Indenture Trustee, if an Event of Default occurs and is
continuing with respect to a series of Notes, such Indenture Trustee will be
under no obligation to exercise any of the rights or powers under such Indenture
at the request or direction of any of the holders of such Notes, if such
Indenture Trustee reasonably believes it will not be adequately indemnified
against the costs, expenses and liabilities which it might incur in complying
with such request. Subject to the provisions for indemnification and certain
limitations contained in the related Indenture, the holders of a majority in
principal amount of the outstanding Notes of a series will have the right to
direct the time, method and place of conducting any proceeding or any remedy
available to the applicable Indenture Trustee in respect of such series, and the
holders of a majority in principal amount of such Notes then outstanding may, in
certain cases, waive any default with respect to such Notes, except a default in
the payment of principal or interest or a default in respect of a covenant or
provision of such Indenture that cannot be modified without the waiver or
consent of all the holders of such outstanding Notes.
Unless otherwise specified in the related Prospectus Supplement, no holder
of a Note of any series will have the right to institute any proceeding with
respect to the related Indenture, unless (i) such holder has given to the
applicable Indenture Trustee prior written notice of a continuing Event of
Default, (ii) the holders of not less than 25% in principal amount of the
outstanding Notes of such series have made written request to such Indenture
Trustee to institute such proceeding in its own name as Indenture Trustee, (iii)
such holder or holders have offered such Indenture Trustee reasonable indemnity,
(iv) such Indenture Trustee has for 60 days failed to institute such proceeding
and (v) no direction inconsistent with such written request has been given to
such Indenture Trustee during such 60-day period by the holders of a majority in
principal amount of such outstanding Notes.
In addition, each Indenture Trustee and the holders of a series of Notes, by
accepting such Notes, will covenant, to the extent legally enforceable, that
they will not at any time institute against the applicable Trust any bankruptcy,
reorganization or other proceeding under any federal or state bankruptcy or
similar law and that they do not have and will not assert any claims against any
Series Trust Property allocated to any other series of Notes issued by such
Trust.
With respect to any series of Notes issued by a Trust, neither the related
Indenture Trustee nor the related Trustee in its individual capacity, nor any
holder of a Certificate representing an ownership interest in such Trust nor any
of their respective owners, beneficiaries, agents, officers, directors,
employees, affiliates, successors or assigns will, in the absence of an express
agreement to the contrary, be personally liable for the payment of the principal
of or interest on such Notes or for the agreements of such Trust contained in
the applicable Indenture.
Certain Covenants. Each Indenture will provide that the related Trust may
not consolidate with or merge into any other entity, unless (i) the entity
formed by or surviving such consolidation or merger is organized under the laws
of the United States, any state or the District of Columbia, (ii) such entity
expressly assumes such Trust's obligation to make due and punctual payments upon
the Notes of the related series and the performance or observance of every
agreement and covenant of such Trust under the Indenture, (iii) no Event of
Default shall have occurred and be continuing immediately after such merger or
consolidation, (iv) such Trust has been advised that the rating of the Notes or
the Certificates of such series then in effect would not be reduced or withdrawn
by the Rating Agencies as a result of such merger or consolidation and (v) such
Trust has received an opinion of counsel to the effect that such consolidation
or merger would have no material adverse federal income tax consequence to the
Trust or to any related Noteholder or Certificateholder.
With respect to each series of Notes issued by a Trust, such Trust will not,
among other things, (i) except as expressly permitted by the applicable
Indenture, the applicable Transfer and Servicing Agreements or certain related
documents with respect to such Trust and such series (collectively, the "Related
Documents"), sell, transfer, exchange or otherwise dispose of any of the Series
Trust Property allocated to such series, (ii) claim any credit on or make any
deduction from the principal and interest payable in respect of the Notes of
such series (other than amounts withheld under the Code or applicable state law)
or assert any claim against any present or former holder of such Notes because
of the payment of taxes levied or assessed upon such Trust, (iii) dissolve or
liquidate in whole or in part, (iv) permit the validity or effectiveness of the
related Indenture to be impaired or permit any person to be released from any
covenants or obligations with respect to such Notes under such Indenture except
as may be expressly permitted thereby or (v) permit any lien, charge, excise,
claim, security interest, mortgage or other
19
encumbrance to be created on or extend to or otherwise arise upon or burden such
Series Trust Property or any part thereof, or any interest therein or the
proceeds thereof.
No Trust may engage in any activity other than as specified under the
section of the related Prospectus Supplement entitled "The Trust". No Trust will
incur, assume or guarantee any indebtedness other than indebtedness incurred
pursuant to one or more series of Notes issued by it and the related Indentures,
pursuant to any Advances made to it by the Servicer or otherwise in accordance
with the Related Documents.
Annual Compliance Statement. Each Trust will be required to file annually
with the related Indenture Trustee a written statement as to the fulfillment of
its obligations under the Indenture.
Indenture Trustee's Annual Report. The Indenture Trustee for each series of
Notes will be required to mail each year to all related Noteholders a brief
report relating to its eligibility and qualification to continue as Indenture
Trustee under the related Indenture, any amounts advanced by it under the
Indenture, the amount, interest rate and maturity date of certain indebtedness
owing by the related Trust to the applicable Indenture Trustee in its individual
capacity, the property and funds physically held by such Indenture Trustee as
such and any action taken by it that materially affects the related Notes and
that has not been previously reported.
Satisfaction and Discharge of Indenture. An Indenture will be discharged
with respect to the Series Trust Property securing the related Notes upon the
delivery to the related Indenture Trustee for cancellation of all such Notes or,
with certain limitations, upon deposit with such Indenture Trustee of funds
sufficient for the payment in full of all such Notes.
THE INDENTURE TRUSTEE
The Indenture Trustee for a series of Notes will be specified in the related
Prospectus Supplement. The Indenture Trustee for any series may resign at any
time, in which event the Issuer will be obligated to appoint a successor trustee
for such series. The Issuer may also remove any such Indenture Trustee if such
Indenture Trustee ceases to be eligible to continue as such under the related
Indenture or if such Indenture Trustee becomes insolvent. In such circumstances,
the Issuer will be obligated to appoint a successor trustee for the applicable
series of Notes. Any resignation or removal of the Indenture Trustee for any
series of Notes does not become effective until acceptance of the appointment by
the successor trustee for such series.
DESCRIPTION OF THE CERTIFICATES
GENERAL
With respect to each Trust, if so specified in the related Prospectus
Supplement, one or more classes of Certificates of the related series will be
issued pursuant to the terms of a Trust Agreement or a Pooling and Servicing
Agreement, a form of each of which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
summary does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Certificates and the
Trust Agreement or Pooling and Servicing Agreement, as applicable.
Unless otherwise specified in the related Prospectus Supplement and except
for the Certificates, if any, of a series purchased by the applicable Company,
each class of Certificates will initially be represented by one or more
Certificates registered in the name of the Depository, except as set forth
below. Unless otherwise specified in the related Prospectus Supplement and
except for the Certificates, if any, of a given series purchased by the
applicable Company, the Certificates will be available for purchase in minimum
denominations of $1,000 in book-entry form only. The Seller has been informed by
DTC that DTC's nominee will be Cede, unless another nominee is specified in the
related Prospectus Supplement. Accordingly, such nominee is expected to be the
holder of record of the Certificates of any series that are not purchased by the
related Company. Unless and until Definitive Certificates are issued under the
limited circumstances described herein or in the related Prospectus Supplement,
no Certificateholder (other than the applicable Company) will be entitled to
receive a physical certificate representing a Certificate. All references herein
and in the related Prospectus Supplement to actions by Certificateholders refer
to
20
actions taken by DTC upon instructions from the Participants and all references
herein and in the related Prospectus Supplement to distributions, notices,
reports and statements to Certificateholders refer to distributions, notices,
reports and statements to DTC or its nominee, as the case may be, as the
registered holder of the Certificates, for distribution to Certificateholders in
accordance with DTC's procedures with respect thereto. See "Certain Information
Regarding the Securities -- Book-Entry Registration" and "-- Definitive
Securities". Any Certificates of a given series owned by the applicable Company
or its affiliates will be entitled to equal and proportionate benefits under the
applicable Trust Agreement, except that such Certificates will be deemed not to
be outstanding for the purpose of determining whether the requisite percentage
of Certificateholders have given any request, demand, authorization, direction,
notice, consent or other action under the Related Documents (other than the
commencement by the related Trust of a voluntary proceeding in bankruptcy as
described under "Description of the Transfer and Servicing Agreements --
Insolvency Event").
If a Trust issues more than one series of Certificates, Certificates of a
series will be supported solely by the Series Trust Property allocated to such
series and will not have any rights in or claims on, or receive any payments
from, the Series Trust Property allocated to any other series of Securities
issued by such Trust.
DISTRIBUTIONS OF PRINCIPAL AND INTEREST
The timing and priority of distributions, seniority, allocations of losses,
Pass Through Rate and amount of or method of determining distributions with
respect to principal and interest of each class of Certificates will be
described in the related Prospectus Supplement. Distributions of interest on
such Certificates will be made on the dates specified in the related Prospectus
Supplement (each, a "Distribution Date") and will be made prior to distributions
with respect to principal of such Certificates. To the extent provided in the
related Prospectus Supplement, a series may include one or more classes of Strip
Certificates entitled to (i) distributions in respect of principal with
disproportionate, nominal or no interest distributions or (ii) interest
distributions with disproportionate, nominal or no distributions in respect of
principal. Each class of Certificates may have a different Pass Through Rate,
which may be a fixed, variable or adjustable Pass Through Rate (and which may be
zero for certain classes of Certificates) or any combination of the foregoing.
The related Prospectus Supplement will specify the Pass Through Rate for each
class of Certificates of a series or the method for determining such Pass
Through Rate. See also "Certain Information Regarding the Securities -- Fixed
Rate Securities" and "-- Floating Rate Securities". Unless otherwise provided in
the related Prospectus Supplement, distributions in respect of the Certificates
of a series that includes Notes may be subordinate to payments in respect of the
Notes of such series as more fully described in the related Prospectus
Supplement. Distributions in respect of interest on and principal of any class
of Certificates will be made on a pro rata basis among all the
Certificateholders of such class.
In the case of a series of Certificates which includes two or more classes
of Certificates, the timing, sequential order, priority of payment or amount of
distributions in respect of interest and principal, and any schedule or formula
or other provisions applicable to the determination thereof, of each such class
shall be as set forth in the related Prospectus Supplement. A series with
Certificates may provide for a Revolving Period, during which collections of
principal on the Receivables are not applied to distributions on the related
Securities, or may provide for a liquidity facility or similar arrangement that
permits one or more classes of the related Securities to be paid in planned
amounts on scheduled Distribution Dates. The aggregate initial principal amount
of the Certificates and the Notes, if any, of a series may, after giving effect
to the purchase of all Subsequent Receivables, if any, for such series be
greater or less than the aggregate initial principal balance of the Receivables
in that series.
CERTAIN INFORMATION REGARDING THE SECURITIES
FIXED RATE SECURITIES
Each class of Securities (other than certain classes of Strip Notes or Strip
Certificates) may bear interest at a fixed rate per annum ("Fixed Rate
Securities") or at a variable or adjustable rate per annum ("Floating Rate
Securities"), as more fully described below and in the applicable Prospectus
Supplement. Each class of Fixed Rate Securities will bear interest at the
applicable per annum Interest Rate or Pass Through Rate, as the case may be,
specified in the applicable Prospectus Supplement. Unless otherwise set forth in
the applicable Prospectus Supplement, interest on each class of Fixed Rate
Securities will be computed on the basis of a 360-day year
21
consisting of twelve 30-day months. See "Description of the Notes -- Principal
and Interest on the Notes" and "Description of the Certificates -- Distributions
of Principal and Interest".
FLOATING RATE SECURITIES
Each class of Floating Rate Securities will bear interest for each
applicable Interest Reset Period (as such term is defined in the related
Prospectus Supplement with respect to a class of Floating Rate Securities, the
"Interest Reset Period") at a rate per annum determined by reference to an
interest rate basis (the "Base Rate"), plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any, in each case as specified in the
related Prospectus Supplement. The "Spread" is generally a stated number of
basis points (one basis point equals one one-hundredth of a percentage point),
and the "Spread Multiplier" is generally a number expressed as a percentage. The
Interest Reset Period may be referred to as an "Interest Accrual Period" in a
Prospectus Supplement.
The applicable Prospectus Supplement will designate one of the following
Base Rates as applicable to a given Floating Rate Security: (i) LIBOR (a "LIBOR
Security"), (ii) the Commercial Paper Rate (a "Commercial Paper Rate Security"),
(iii) the Treasury Rate (a "Treasury Rate Security"), (iv) the Federal Funds
Rate (a "Federal Funds Rate Security"), (v) the CD Rate (a "CD Rate Security")
or (vi) such other Base Rate as is set forth in such Prospectus Supplement. The
"Index Maturity" for any class of Floating Rate Securities is the period of
maturity of the instrument or obligation from which the Base Rate is calculated.
"H.15(519)" means the publication entitled "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication, published by the Board of
Governors of the Federal Reserve System. "Composite Quotations" means the daily
statistical release entitled "Composite 3:30 p.m. Quotations for U.S. Government
Securities" published by the Federal Reserve Bank of New York. "Interest Reset
Date" will be the first day of the applicable Interest Reset Period, or such
other day as may be specified in the related Prospectus Supplement with respect
to a class of Floating Rate Securities.
As specified in the applicable Prospectus Supplement, Floating Rate
Securities of a given class may also have either or both of the following (in
each case expressed as a rate per annum): (i) a maximum limitation, or ceiling,
on the rate at which interest may accrue during any interest period and (ii) a
minimum limitation, or floor, on the rate at which interest may accrue during
any interest period. In addition to any maximum interest rate that may be
applicable to any class of Floating Rate Securities, the interest rate
applicable to any class of Floating Rate Securities will in no event be higher
than the maximum rate permitted by applicable law, as the same may be modified
by United States law of general application.
Each Trust with respect to which a class of Floating Rate Securities will be
issued will appoint, and enter into agreements with, a calculation agent (each,
a "Calculation Agent") to calculate interest rates on each such class of
Floating Rate Securities issued with respect thereto. The applicable Prospectus
Supplement will identify the Calculation Agent for each such class of Floating
Rate Securities of a given series. The Calculation Agent may be either the
related Trustee or Indenture Trustee with respect to such series. All
determinations of interest by the Calculation Agent shall, in the absence of
manifest error, be conclusive for all purposes and binding on the holders of
Floating Rate Securities of a given class. Unless otherwise specified in the
applicable Prospectus Supplement, all percentages resulting from any calculation
of the rate of interest on a Floating Rate Security will be rounded, if
necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths
of a percentage point rounded upward.
CD Rate Securities. Each CD Rate Security will bear interest for each
Interest Reset Period at the interest rate calculated with reference to the CD
Rate and the Spread or Spread Multiplier, if any, specified in such Security and
in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the "CD
Rate" for each Interest Reset Period shall be the rate as of the second business
day prior to the Interest Reset Date for such Interest Reset Period (a "CD Rate
Determination Date") for negotiable certificates of deposit having the Index
Maturity designated in the applicable Prospectus Supplement as published in
H.15(519) under the heading "CDs (Secondary Market)". In the event that such
rate is not published prior to 3:00 p.m., New York City time, on the Calculation
Date (as defined below) pertaining to such CD Rate Determination Date, then the
"CD Rate" for such Interest Reset Period will be the rate on such CD Rate
Determination Date for negotiable certificates of deposit of the Index Maturity
designated in the applicable Prospectus Supplement as published in Composite
Quotations under the heading "Certificates of Deposit". If by 3:00 p.m., New
York City time, on such Calculation Date such rate is not yet published in
either
22
H.15(519) or Composite Quotations, then the "CD Rate" for such Interest Reset
Period will be calculated by the Calculation Agent for such CD Rate Security and
will be the arithmetic mean of the secondary market offered rates as of 10:00
a.m., New York City time, on such CD Rate Determination Date, of three leading
nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of
New York selected by the Calculation Agent for such CD Rate Security for
negotiable certificates of deposit of major United States money center banks of
the highest credit standing (in the market for negotiable certificates of
deposit) with a remaining maturity closest to the Index Maturity designated in
the related Prospectus Supplement in a denomination of $5,000,000; provided,
however, that if the dealers selected as aforesaid by such Calculation Agent are
not quoting the aforementioned offered rates, the "CD Rate" for such Interest
Reset Period will be the same as the CD Rate for the immediately preceding
Interest Reset Period.
The "Calculation Date" pertaining to any CD Rate Determination Date shall be
either (a) the tenth calendar day after such CD Rate Determination Date or, if
such day is not a business day, the next succeeding business day or (b) the
second business day preceding the date any payment is required to be made for
any period following the applicable Interest Reset Date, whichever is earlier.
Commercial Paper Rate Securities. Each Commercial Paper Rate Security will
bear interest for each Interest Reset Period at the interest rate calculated
with reference to the Commercial Paper Rate and the Spread or Spread Multiplier,
if any, specified in such Security and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Commercial Paper Rate" for each Interest Reset Period will be determined by the
Calculation Agent for such Commercial Paper Rate Security as of the second
business day prior to the Interest Reset Date for such Interest Reset Period (a
"Commercial Paper Rate Determination Date") and shall be the Money Market Yield
(as defined below) on such Commercial Paper Rate Determination Date of the rate
for commercial paper having the Index Maturity specified in the applicable
Prospectus Supplement, as such rate shall be published in H.15(519) under the
heading "Commercial Paper". In the event that such rate is not published prior
to 3:00 p.m., New York City time, on the Calculation Date (as defined below)
pertaining to such Commercial Paper Rate Determination Date, then the
"Commercial Paper Rate" for such Interest Reset Period shall be the Money Market
Yield on such Commercial Paper Rate Determination Date of the rate for
commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper". If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for such
Interest Reset Period shall be the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 a.m., New York City time, on such Commercial
Paper Rate Determination Date of three leading dealers of commercial paper in
The City of New York selected by the Calculation Agent for such Commercial Paper
Rate Security for commercial paper of the specified Index Maturity placed for an
industrial issuer whose bonds are rated "AA" or the equivalent by a nationally
recognized rating agency; provided, however, that if the dealers selected as
aforesaid by such Calculation Agent are not quoting offered rates as mentioned
in this sentence, the "Commercial Paper Rate" for such Interest Reset Period
will be the same as the Commercial Paper Rate for the immediately preceding
Interest Reset Period.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
+--- ---+
| D x 360 |
Money Market Yield = | ------- | x 100
| 360 - (D x M) |
+--- ---+
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the specified Index Maturity.
The "Calculation Date" pertaining to any Commercial Paper Rate Determination
Date shall be either (a) the tenth calendar day after such Commercial Paper Rate
Determination Date or, if such day is not a business day, the next succeeding
business day or (b) the second business day preceding the date any payment is
required to be made for any period following the applicable Interest Reset Date,
whichever is earlier.
23
Federal Funds Rate Securities. Each Federal Funds Rate Security will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any,
specified in such Security and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Federal Funds Rate" for each Interest Reset Period shall be the effective rate
on the Interest Reset Date for such Interest Reset Period (a "Federal Funds Rate
Determination Date") for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date (as
defined below) pertaining to such Federal Funds Rate Determination Date, the
"Federal Funds Rate" for such Interest Reset Period shall be the rate on such
Federal Funds Rate Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate". If by 3:00 p.m., New York City time,
on such Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, then the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Federal Funds Rate Determination Date made
publicly available by the Federal Reserve Bank of New York which is equivalent
to the rate which appears in H.15(519) under the heading "Federal Funds
(Effective)"; provided, however, that if such rate is not made publicly
available by the Federal Reserve Bank of New York by 3:00 p.m., New York City
time, on such Calculation Date, the "Federal Funds Rate" for such Interest Reset
Period will be the same as the Federal Funds Rate in effect for the immediately
preceding Interest Reset Period. In the case of a Federal Funds Rate Security
that resets daily, the interest rate on such Security for the period from and
including a Monday to but excluding the succeeding Monday will be reset by the
Calculation Agent for such Security on such second Monday (or, if not a business
day, on the next succeeding business day) to a rate equal to the average of the
Federal Funds Rates in effect with respect to each such day in such week.
The "Calculation Date" pertaining to any Federal Funds Rate Determination
Date shall be the next succeeding business day.
LIBOR Securities. Each LIBOR Security will bear interest for each Interest
Reset Period at the interest rate calculated with reference to LIBOR and the
Spread or Spread Multiplier, if any, specified in such Security and in the
applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, with
respect to LIBOR indexed to the offered rates for U.S. dollar deposits, "LIBOR"
for each Interest Reset Period will be determined by the Calculation Agent for
any LIBOR Security as follows:
On the second London Banking Day prior to the Interest Reset Date for
such Interest Reset Period (a "LIBOR Determination Date"), the Calculation
Agent for such LIBOR Security will determine the arithmetic mean of the
offered rates for deposits in U.S. dollars for the period of the Index
Maturity specified in the applicable Prospectus Supplement, commencing on
such Interest Reset Date, which appear on Telerate Page 3750 at
approximately 11:00 a.m., London time, on such LIBOR Determination Date.
"Telerate Page 3750" means the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that
service, or such other service as may be nominated as the information
vendor, for the purpose of displaying London interbank offered rates of
major banks). If such rate appears on Telerate Page 3750, LIBOR will be such
rate. "LIBOR Business Day" as used herein means a day that is both a
Business Day (as defined in the Indenture or Pooling and Servicing
Agreement) and a day on which banking institutions in the City of London,
England are not required or authorized by law to be closed. If on any LIBOR
Determination Date the offered rate does not appear on Telerate Page 3750,
the Calculation Agent will request each of the reference banks (which shall
be major banks that are engaged in transactions in the London interbank
market selected by the Calculation Agent) to provide the Calculation Agent
with its offered quotation for United States dollar deposits for the period
of the specified Index Maturity to prime banks in the London interbank
market as of 11:00 a.m., London time, on such date. If at least two
reference banks provide the Calculation Agent with such offered quotations,
LIBOR on such date will be the arithmetic mean, rounded upwards, if
necessary, to the nearest 1/100,000 of 1% (.0000001), with five
one-millionths of a percentage point rounded upward, of all such quotations.
If on such date fewer than two of the reference banks provide the
Calculation Agent with such offered quotations, LIBOR on such date will be
the arithmetic mean, rounded upwards, if necessary, to the nearest 1/100,000
of 1% (.0000001), with five one-millionths of a percentage point rounded
upward, of the offered per annum rates that one or more leading banks in The
City of New York selected by the Calculation
24
Agent are quoting as of 11:00 a.m., New York City time, on such date to
leading European banks for United States dollar deposits for the period of
the specified Index Maturity; provided, however, that if such banks are not
quoting as described above, LIBOR for such date will be LIBOR applicable to
the Interest Reset Period immediately preceding such Interest Reset Period.
Treasury Rate Securities. Each Treasury Rate Security will bear interest for
each Interest Reset Period at the interest rate calculated with reference to the
Treasury Rate and the Spread or Spread Multiplier, if any, specified in such
Security and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, the
"Treasury Rate" for each Interest Period will be the rate for the auction held
on the Treasury Rate Determination Date (as defined below) for such Interest
Reset Period of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified in the applicable Prospectus Supplement, as
such rate shall be published in H.15(519) under the heading "U.S. Government
Securities -- Treasury bills -- auction average (investment)" or, in the event
that such rate is not published prior to 3:00 p.m., New York City time, on the
Calculation Date (as defined below) pertaining to such Treasury Rate
Determination Date, the auction average rate (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) on such Treasury Rate Determination Date as otherwise announced by the
United States Department of the Treasury. In the event that the results of the
auction of Treasury bills having the specified Index Maturity are not published
or reported as provided above by 3:00 p.m., New York City time, on such
Calculation Date, or if no such auction is held on such Treasury Rate
Determination Date, then the "Treasury Rate" for such Interest Reset Period
shall be calculated by the Calculation Agent for such Treasury Rate Security and
shall be the yield to maturity (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on such Treasury Rate Determination Date, of three
leading primary United States government securities dealers selected by such
Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the specified Index Maturity; provided, however, that if the dealers
selected as aforesaid by such Calculation Agent are not quoting bid rates as
mentioned in this sentence, then the "Treasury Rate" for such Interest Reset
Period will be the same as the Treasury Rate for the immediately preceding
Interest Reset Period.
The "Treasury Rate Determination Date" for each Interest Reset Period will
be the day of the week in which the Interest Reset Date for such Interest Reset
Period falls on which Treasury bills would normally be auctioned. Treasury bills
are normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is normally held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Treasury Rate Determination Date pertaining to the Interest Reset
Period commencing in the next succeeding week. If an auction date shall fall on
any day that would otherwise be an Interest Reset Date for a Treasury Rate
Security, then such Interest Reset Date shall instead be the business day
immediately following such auction date.
The "Calculation Date" pertaining to any Treasury Rate Determination Date
shall be either (a) the tenth calendar day after such Treasury Rate
Determination Date or, if such a day is not a business day, the next succeeding
business day or (b) the second business day preceding the date any payment is
required to be made for any period following the applicable Interest Reset Date,
whichever is earlier.
INDEXED SECURITIES
To the extent so specified in any Prospectus Supplement, any class of
Securities of a given series may consist of Securities ("Indexed Securities") in
which the principal amount payable at the final scheduled Payment Date or
Distribution Date, as the case may be, for such class (the "Indexed Principal
Amount") is determined by reference to a measure (the "Index") which will be
related to (i) the difference in the rate of exchange between United States
dollars and a currency or composite currency (the "Indexed Currency") specified
in the applicable Prospectus Supplement (such Indexed Securities, "Currency
Indexed Securities"); (ii) the difference in the price of a specified commodity
(the "Indexed Commodity") on specified dates (such Indexed Securities,
"Commodity Indexed Securities"); or (iii) the difference in the level of a
specified stock index (the "Stock Index"), which may be based on U.S. or foreign
stocks, on specified dates (such Indexed Securities, "Stock Indexed
Securities"); or (iv) such other objective price or economic measures as are
described in the applicable Prospectus Supplement. The manner of
25
determining the Indexed Principal Amount of an Indexed Security and historical
and other information concerning the Indexed Currency, the Indexed Commodity,
the Stock Index or other price or economic measures used in such determination
will be set forth in the applicable Prospectus Supplement, together with
information concerning tax consequences to the holders of such Indexed
Securities.
If the determination of the Indexed Principal Amount of an Indexed Security
is based on an Index calculated or announced by a third party and such third
party either suspends the calculation or announcement of such Index or changes
the basis upon which such Index is calculated (other than changes consistent
with policies in effect at the time such Indexed Security was issued and
permitted changes described in the applicable Prospectus Supplement), then such
Index shall be calculated for purposes of such Indexed Security by an
independent calculation agent named in the applicable Prospectus Supplement on
the same basis, and subject to the same conditions and controls, as applied to
the original third party. If for any reason such Index cannot be calculated on
the same basis and subject to the same conditions and controls as applied to the
original third party, then the Indexed Principal Amount of such Indexed Security
shall be calculated in the manner set forth in the applicable Prospectus
Supplement. Any determination of such independent calculation agent shall in the
absence of manifest error be binding on all parties.
Unless otherwise specified in the applicable Prospectus Supplement, interest
on an Indexed Security will be payable based on the amount designated in the
applicable Prospectus Supplement as the "Face Amount" of such Indexed Security.
The applicable Prospectus Supplement will describe whether the principal amount
of the related Indexed Security, if any, that would be payable upon redemption
or repayment prior to the applicable final scheduled Payment Date or
Distribution Date, as the case may be, will be the Face Amount of such Indexed
Security, the Indexed Principal Amount of such Indexed Security at the time of
redemption or repayment or another amount described in such Prospectus
Supplement.
BOOK-ENTRY REGISTRATION
DTC is a limited purpose trust company organized under the laws of the State
of New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York UCC and a "clearing agency" registered
pursuant to Section 17A of the Exchange Act. DTC was created to hold securities
for its Participants and to facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entries,
thereby eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the DTC system also is available to others such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("Indirect Participants").
Unless otherwise specified in the related Prospectus Supplement,
Securityholders that are not Participants or Indirect Participants but desire to
purchase, sell or otherwise transfer ownership of, or other interests in,
Securities may do so only through Participants and Indirect Participants. In
addition, Securityholders will receive all distributions of principal and
interest from the related Indenture Trustee or the related Trustee, as
applicable (the "Applicable Trustee"), through Participants. Under a book-entry
format, Securityholders may experience some delay in their receipt of payments,
since such payments will be forwarded by the Applicable Trustee to DTC's
Nominee. DTC will forward such payments to its Participants, which thereafter
will forward them to Indirect Participants or Securityholders. Except to the
extent the applicable Company holds Certificates with respect to any series of
Securities, it is anticipated that the only "Securityholder", "Noteholder" and
"Certificateholder" will be DTC's Nominee. Noteholders will not be recognized by
each Indenture Trustee as Noteholders, as such term is used in each Indenture,
and Noteholders will be permitted to exercise the rights of Noteholders only
indirectly through DTC and its Participants. Similarly, Certificateholders will
not be recognized by each Trustee as Certificateholders as such term is used in
each Trust Agreement or Pooling and Servicing Agreement, and Certificateholders
will be permitted to exercise the rights of Certificateholders only indirectly
through DTC and its Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Securities among Participants on whose behalf it acts with respect to the
Securities and to receive and transmit distributions of principal of, and
interest on, the Securities. Participants and Indirect Participants with which
Securityholders have accounts with respect to the Securities similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Securityholders.
26
Accordingly, although Securityholders will not possess Securities, the Rules
provide a mechanism by which Participants will receive payments and will be able
to transfer their interests.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a
Securityholder to pledge Securities to persons or entities that do not
participate in the DTC system, or to otherwise act with respect to such
Securities, may be limited due to the lack of a physical certificate for such
Securities.
DTC has advised the Seller that it will take any action permitted to be
taken by a Noteholder under the related Indenture or a Certificateholder under
the related Trust Agreement or Pooling and Servicing Agreement only at the
direction of one or more Participants to whose accounts with DTC the applicable
Notes or Certificates are credited. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are taken
on behalf of Participants whose holdings include such undivided interests.
Except as required by law, neither the Administrator, if any, the applicable
Trustee nor the applicable Indenture Trustee, if any, will have any liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of the Securities of any series held by DTC's
Nominee, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Cedelbank ("Cedelbank") is incorporated under the laws of Luxembourg as a
professional depository. Cedelbank holds securities for its participating
organizations ("Cedelbank Participants") and facilitates the clearance and
settlement of securities transactions between Cedelbank Participants through
electronic book-entry changes in accounts of Cedelbank Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled in Cedelbank in any of 28 currencies, including United States dollars.
Cedelbank provides to its Cedelbank Participants, among other things, services
for safekeeping, administration, clearance and settlement of internationally
traded securities and securities lending and borrowing. Cedelbank interfaces
with domestic markets in several countries. As a professional depository,
Cedelbank is subject to regulation by the Luxembourg Monetary Institute.
Cedelbank Participants are recognized financial institutions around the world,
including underwriters, securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations and may include the
Underwriters. Indirect access to Cedelbank is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedelbank Participant, either directly or
indirectly.
The Euroclear System was created in 1968 to hold securities for participants
of the Euroclear System ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Transactions may now be settled in Euroclear in any of 32
currencies, including United States dollars. The Euroclear System includes
various other services, including securities lending and borrowing, and
interfaces with domestic markets in several countries generally similar to the
arrangements for cross-market transfers with DTC. The Euroclear System is
operated by Morgan Guaranty Trust Company of New York, Brussels, Belgium office
(the "Euroclear Operator" or "Euroclear"), under contract with Euroclear
Clearance System, S.C., a Belgian cooperative corporation (the "Cooperative").
All operations are conducted by the Euroclear Operator, and all Euroclear
securities clearance accounts and Euroclear cash accounts are accounts with the
Euroclear Operator, not the Cooperative. The Cooperative establishes policy for
the Euroclear System on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the Underwriters.
Indirect access to the Euroclear System is also available to other firms that
clear through or maintain a custodial relationship with a Euroclear Participant,
either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of
27
securities and cash within the Euroclear System, withdrawal of securities and
cash from the Euroclear System, and receipts of payments with respect to
securities in the Euroclear System. All securities in the Euroclear System are
held on a fungible basis without attribution of specific certificates to
specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear Participants and has no record
of or relationship with persons holding through Euroclear Participants.
Distributions with respect to Securities held through Cedelbank or Euroclear
will be credited to the cash accounts of Cedelbank Participants or Euroclear
Participants in accordance with the relevant system's rules and procedures, to
the extent received by its Depositary. Such distributions will be subject to tax
reporting in accordance with relevant United States tax laws and regulations.
See "Certain Federal Income Tax Consequences" in this Prospectus and "Global
Clearance, Settlement and Tax Documentation Procedures" in Annex I to the
related Prospectus Supplement. Cedelbank or the Euroclear Operator, as the case
may be, will take any other action permitted to be taken by a Securityholder
under the Indenture, Trust Agreement or Pooling and Servicing Agreement, as
applicable, on behalf of a Cedelbank Participant or Euroclear Participant only
in accordance with its relevant rules and procedures and subject to its
Depositary's ability to effect such actions on its behalf through DTC.
Cede, as nominee for DTC, will hold the Securities. Cedelbank and Euroclear
will hold omnibus positions in the Securities on behalf of the Cedelbank
Participants and the Euroclear Participants, respectively, through customers'
securities accounts in Cedelbank's and Euroclear's names on the books of their
respective depositaries (collectively, the "Depositaries"), which in turn will
hold such positions in customers' securities accounts in the Depositaries' names
on the books of DTC.
Transfers between DTC's participating organizations (the "Participants")
will occur in accordance with DTC rules. Transfers between Cedelbank
Participants and Euroclear Participants will occur in the ordinary way in
accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedelbank
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by its Depositary; however, such cross-market transactions will
require delivery of instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its rules and
procedures and within its established deadlines (European time). The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its Depositary to take action
to effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Cedelbank Participants and
Euroclear Participants may not deliver instructions directly to the
Depositaries.
Because of time-zone differences, credits of securities in Cedelbank or
Euroclear as a result of a transaction with a Participant will be made during
the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant
Cedelbank Participant or Euroclear Participant on such business day. Cash
received in Cedelbank or Euroclear as a result of sales of securities by or
through a Cedelbank Participant or a Euroclear Participant to a Participant will
be received with value on the DTC settlement date but will be available in the
relevant Cedelbank or Euroclear cash account only as of the business day
following settlement in DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Securities among participants of
DTC, Cedelbank and Euroclear, they are under no obligation to perform or
continue to perform such procedures and such procedures may be discontinued at
any time.
In the event that any of DTC, Cedelbank or Euroclear should discontinue its
services, the Administrator would seek an alternative depository (if available)
or cause the issuance of Definitive Securities to the owners thereof or their
nominees in the manner described in the Prospectus under "Certain Information
Regarding the Securities -- Definitive Securities".
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DEFINITIVE SECURITIES
Unless otherwise specified in the related Prospectus Supplement, the Notes,
if any, and the Certificates of a given series will be issued in fully
registered, certificated form ("Definitive Notes" and "Definitive Certificates",
respectively, and collectively referred to herein as "Definitive Securities") to
Noteholders or Certificateholders or their respective nominees, rather than to
DTC or its nominee, only if (i) the related Administrator or Trustee, as
applicable, determines that DTC is no longer willing or able to discharge
properly its responsibilities as depository with respect to such Securities and
such Administrator or Trustee is unable to locate a qualified successor (and if
it is an Administrator that has made such determination, such Administrator so
notifies the Applicable Trustee in writing), (ii) the Administrator or Trustee,
as applicable, at its option, elects to terminate the book-entry system through
DTC or (iii) after the occurrence of an Event of Default or a Servicer Default
with respect to such Securities, holders representing at least a majority of the
outstanding principal amount of the Notes or the Certificates, as the case may
be, of such series advise the Applicable Trustee through DTC in writing that the
continuation of a book-entry system through DTC (or a successor thereto) with
respect to such Notes or Certificates is no longer in the best interest of the
holders of such Securities.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Applicable Trustee will be required to notify all applicable
Securityholders of a given series through Participants of the availability of
Definitive Securities. Upon surrender by DTC of the definitive certificates
representing the corresponding Securities and receipt of instructions for
re-registration, the Applicable Trustee will reissue such Securities as
Definitive Securities to such Securityholders.
Distributions of principal of, and interest on, such Definitive Securities
will thereafter be made by the Applicable Trustee in accordance with the
procedures set forth in the related Indenture or the related Trust Agreement or
Pooling and Servicing Agreement, as applicable, directly to holders of
Definitive Securities in whose names the Definitive Securities were registered
at the close of business on the applicable Record Date specified for such
Securities in the related Prospectus Supplement. Such distributions will be made
by check mailed to the address of such holder as it appears on the register
maintained by the Applicable Trustee. The final payment on any such Definitive
Security, however, will be made only upon presentation and surrender of such
Definitive Security at the office or agency specified in the notice of final
distribution to the applicable Securityholders.
Definitive Securities will be transferable and exchangeable at the offices
of the Applicable Trustee or of a registrar named in a notice delivered to
holders of Definitive Securities. No service charge will be imposed for any
registration of transfer or exchange, but the Applicable Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge
imposed in connection therewith.
LIST OF SECURITYHOLDERS
Unless otherwise specified in the related Prospectus Supplement with respect
to the Notes of any series, three or more holders of the Notes of such series or
one or more holders of such Notes evidencing not less than 25% of the aggregate
outstanding principal balance of such Notes may, by written request to the
related Indenture Trustee, obtain access to the list of all Noteholders
maintained by such Indenture Trustee for the purpose of communicating with other
Noteholders with respect to their rights under the related Indenture or under
such Notes. Such Indenture Trustee may elect not to afford the requesting
Noteholders access to the list of Noteholders if it agrees to mail the desired
communication or proxy, on behalf of and at the expense of the requesting
Noteholders, to all Noteholders of such series.
Unless otherwise specified in the related Prospectus Supplement with respect
to the Certificates of any series, three or more holders of the Certificates of
such series or one or more holders of such Certificates evidencing not less than
25% of the Certificate Balance of such Certificates may, by written request to
the related Trustee, obtain access to the list of all Certificateholders
maintained by such Trustee for the purpose of communicating with other
Certificateholders with respect to their rights under the related Trust
Agreement or Pooling and Servicing Agreement or under such Certificates.
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REPORTS TO SECURITYHOLDERS
With respect to each series of Securities that includes Notes, on or prior
to each Payment Date, the Servicer will prepare and provide to the related
Indenture Trustee a statement to be delivered to the related Noteholders on such
Payment Date. With respect to each series of Securities that includes
Certificates, on or prior to each Distribution Date, the Servicer will prepare
and provide to the related Trustee a statement to be delivered to the related
Certificateholders. With respect to each series of Securities, each such
statement to be delivered to Noteholders, if any, will include (to the extent
applicable) the following information (and any other information so specified in
the related Prospectus Supplement) as to the Notes of such series with respect
to such Payment Date or the period since the previous Payment Date, as
applicable, and each such statement to be delivered to Certificateholders, if
any, will include (to the extent applicable) the following information (and any
other information so specified in the related Prospectus Supplement) as to the
Certificates of such series with respect to such Distribution Date or the period
since the previous Distribution Date, as applicable:
(i) the amount of the distribution allocable to principal of each
class of such Notes and to the Certificate Balance of each class of such
Certificates;
(ii) the amount of the distribution allocable to interest on or with
respect to each class of Securities of such series;
(iii) the Pool Balance as of the close of business on the last day of
the related Collection Period and the Collection Period next preceding the
related Collection Period;
(iv) the aggregate outstanding principal balance and the Note Pool
Factor for each class of such Notes, and the Certificate Balance and the
Certificate Pool Factor for each class of such Certificates, each before
and after giving effect to all payments reported under clause (i) above on
such date;
(v) the amount of the Servicing Fee paid to the Servicer with respect
to the related Collection Period or Collection Periods, as the case may be;
(vi) the Interest Rate or Pass Through Rate for the current and
following Interest Reset Periods for any class of Notes or Certificates of
such series with variable or adjustable rates;
(vii) the amount of the aggregate realized losses, if any, for the
related Collection Period;
(viii) the Noteholders' Interest Carryover Shortfall, the Noteholders'
Principal Carryover Shortfall, the Certificateholders' Interest Carryover
Shortfall and the Certificateholders' Principal Carryover Shortfall (each
as defined in the related Prospectus Supplement), if any, in each case as
applicable to each class of Securities, and the change in such amounts from
the preceding statement;
(ix) the aggregate Repurchase Amounts, if any, for Receivables that
were repurchased by the Seller or the Servicer during such Collection
Period;
(x) the balance of the related Reserve Account and the Specified
Reserve Account Balance (as defined in the related Prospectus Supplement),
if applicable, on such date, after giving effect to changes therein on such
date;
(xi) for each such date during the related Funding Period (if any),
the related remaining Pre-Funded Amount; and
(xii) for the first such date that is on or immediately following the
end of the Funding Period (if any), the amount of any related remaining
Pre-Funded Amount that has not been used to fund the purchase of Subsequent
Receivables and is being passed through as payments of principal on the
Securities of such series.
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Each amount set forth pursuant to subclauses (i), (ii), (v) and (viii) with
respect to the Notes or the Certificates of any series will be expressed both in
total and as a dollar amount per $1,000 of the initial principal balance of such
Notes or the initial Certificate Balance of such Certificates, as applicable.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of each Trust, the Applicable Trustee
will mail to each person who at any time during such calendar year has been a
Securityholder with respect to such Trust and received any payment thereon a
statement containing certain information for the purposes of such
Securityholder's preparation of federal income tax returns. See "Certain Federal
Income Tax Consequences".
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of each Sale and Servicing
Agreement or Pooling and Servicing Agreement pursuant to which a Trust will
purchase Receivables from the Seller with respect to a series of Securities and
the Servicer will agree to service such Receivables, each Trust Agreement (in
the case of a grantor trust, the Pooling and Servicing Agreement) pursuant to
which a Trust will be created and Certificates, if any, will be issued and each
Administration Agreement pursuant to which CFC will undertake certain
administrative duties with respect to a series of Notes (collectively, the
"Transfer and Servicing Agreements"). Forms of the Transfer and Servicing
Agreements have been filed as exhibits to the Registration Statement of which
this Prospectus forms a part. This summary does not purport to be complete and
is subject to, and qualified in its entirety by reference to, all the provisions
of the Transfer and Servicing Agreements.
SALE AND ASSIGNMENT OF RECEIVABLES
On the Closing Date specified with respect to any series of Securities in
the related Prospectus Supplement (the "Closing Date"), the Seller will, if so
specified in such Prospectus Supplement, transfer and assign to the applicable
Trustee, without recourse, pursuant to a Sale and Servicing Agreement or a
Pooling and Servicing Agreement, as applicable, its entire interest in the
Initial Receivables, if any, of the related Receivables Pool, including its
security interests in the related Financed Vehicles. Each such Receivable will
be identified in a schedule appearing as an exhibit to such Pooling and
Servicing Agreement or Sale and Servicing Agreement (a "Schedule of
Receivables"). The applicable Trustee will, concurrently with such transfer and
assignment, execute and deliver the related Notes and/or Certificates, as
applicable. Unless otherwise provided in the related Prospectus Supplement, the
net proceeds received from the sale of the Certificates and the Notes of a
series will be applied to the purchase of the related Receivables from the
Seller and, to the extent specified in the related Prospectus Supplement, to the
deposit of the Pre-Funded Amount for such series into the related Pre-Funding
Account. The related Prospectus Supplement for a series of Securities will
specify whether, and the terms, conditions and manner under which, Subsequent
Receivables for such series will be sold by the Seller to the applicable Trust
from time to time during any Funding Period for such series on each date
specified as a transfer date in the related Prospectus Supplement (each, a
"Subsequent Transfer Date").
In each Sale and Servicing Agreement or Pooling and Servicing Agreement, the
Seller will represent and warrant to the applicable Trust, among other things,
that: (i) the information provided in the related Schedule of Receivables is
correct in all material respects; (ii) the Obligor on each related Receivable is
required to maintain physical damage insurance covering the Financed Vehicle in
accordance with the Seller's normal requirements; (iii) as of the applicable
Closing Date or the applicable Subsequent Transfer Date, if any, to the best of
its knowledge, the related Receivables are free and clear of all security
interests, liens, charges and encumbrances and no offsets, defenses or
counterclaims have been asserted or threatened; (iv) as of the Closing Date or
the applicable Subsequent Transfer Date, if any, each of such Receivables is or
will be secured by a first perfected security interest in favor of the Seller in
the Financed Vehicle; (v) each related Receivable, at the time it was
originated, complied and, as of the Closing Date or the applicable Subsequent
Transfer Date, if any, complies in all material respects with applicable federal
and state laws, including, without limitation, consumer credit, truth in
lending, equal credit opportunity and disclosure laws; and (vi) any other
representations and warranties that may be set forth in the related Prospectus
Supplement.
Unless otherwise provided in the related Prospectus Supplement, as of the
last day of the second (or, if the Seller elects, the first) month following the
discovery by or notice to the Seller of a breach of any representation or
warranty of the Seller that materially and adversely affects the interests of
the related Trust in any Receivable, the
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Seller, unless the breach is cured, will repurchase such Receivable from such
Trust at a price equal to the unpaid principal balance owed by the Obligor
thereon plus interest thereon at the respective APR to the last day of the month
of repurchase (the "Repurchase Amount"). The repurchase obligation constitutes
the sole remedy available to the Certificateholders or the Trustee and any
Noteholders or Indenture Trustee in respect of the related series for any such
uncured breach.
Pursuant to each Sale and Servicing Agreement or Pooling and Servicing
Agreement, to assure uniform quality in servicing the Receivables and to reduce
administrative costs, each Trust will designate the Servicer as custodian to
maintain possession, as such Trust's agent, of the related motor vehicle retail
installment sale contracts and any other documents relating to the Receivables.
The Seller's accounting records and computer systems will reflect the sale and
assignment of the related Receivables to the applicable Trust, and Uniform
Commercial Code ("UCC") financing statements reflecting such sale and assignment
will be filed.
ACCOUNTS
With respect to each Trust that issues one or more series of Notes, the
Servicer will establish and maintain with the related Indenture Trustee one or
more accounts, in the name of the Indenture Trustee on behalf of the Noteholders
and Certificateholders, if any, of such series, into which all payments made on
or with respect to the Receivables included in the Series Trust Property for
such series will be deposited (the "Collection Account"). The Servicer will, if
so specified in the related Prospectus Supplement, establish and maintain with
such Indenture Trustee an account, in the name of such Indenture Trustee on
behalf of such Noteholders, into which amounts released from the Collection
Account and any Pre-Funding Account, Reserve Account or other credit enhancement
for such series for payment to such Noteholders will be deposited and from which
all distributions to such Noteholders will be made (the "Note Distribution
Account"). The Servicer will, if so specified in the related Prospectus
Supplement, establish and maintain with the related Trustee an account, in the
name of such Trustee on behalf of such Certificateholders, into which amounts
released from the Collection Account and any Pre-Funding Account, Reserve
Account or other credit or cash flow enhancement for such series for
distribution to such Certificateholders will be deposited and from which all
distributions to such Certificateholders will be made (the "Certificate
Distribution Account"). With respect to each Trust that does not issue Notes,
the Servicer will also establish and maintain the Collection Account and any
other Trust Account in the name of the related Trustee on behalf of the related
Certificateholders. The Trust Accounts relating to a series of Securities will
not contain funds relating to any other series of Securities.
If so provided in the related Prospectus Supplement, the Servicer will
establish for each series an additional account (the "Payahead Account"), in the
name of the related Indenture Trustee or Trustee, into which, to the extent
required by the Sale and Servicing Agreement, early payments by or on behalf of
Obligors on Precomputed Receivables allocated to such series will be deposited
until such time as the payment becomes due. Until such time as payments are
transferred from the Payahead Account to the Collection Account for such series,
they will not constitute collected interest or collected principal and will not
be available for distribution to the applicable Noteholders or
Certificateholders. The Payahead Account will initially be maintained with the
applicable Indenture Trustee or, in the case of each Trust that does not issue
Notes, the applicable Trustee.
The Servicer will establish and maintain any other accounts to be
established with respect to a series of Securities, including any Pre-Funding
Account or any Reserve Account, as specified in the related Prospectus
Supplement.
For any series of Securities, funds in the Collection Account, the Note
Distribution Account and any Pre-Funding Account, Reserve Account and other
accounts identified as such in the related Prospectus Supplement (collectively,
the "Trust Accounts") will be invested as provided in the related Sale and
Servicing Agreement or Pooling and Servicing Agreement in Eligible Investments.
"Eligible Investments" are generally limited to investments acceptable to the
Rating Agencies rating such Securities as being consistent with the rating of
such Securities and may include motor vehicle retail sale contracts. Except as
described below or in the related Prospectus Supplement, Eligible Investments
are limited to obligations or securities that mature on or before the date of
the next distribution for such series. However, to the extent permitted by the
Rating Agencies for a series, funds in any Reserve Account for such series may
be invested in securities that will not mature prior to the date of the next
distribution with respect to the Certificates or Notes of such series and will
not be sold to meet any shortfalls. Thus,
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the amount of cash in any Reserve Account at any time may be less than the
balance of the Reserve Account. If the amount required to be withdrawn from any
Reserve Account to cover shortfalls in collections on the Receivables allocated
to the related series (as provided in the related Prospectus Supplement) exceeds
the amount of cash in the Reserve Account, a temporary shortfall in the amounts
distributed to the related Noteholders or Certificateholders of such series
could result, which could, in turn, increase the average life of the Notes or
the Certificates of such series. Except as otherwise specified in the related
Prospectus Supplement, investment earnings on funds deposited in the Trust
Accounts, net of losses and investment expenses (collectively, "Investment
Earnings"), shall be deposited in the applicable Collection Account on each
Distribution Date or Payment Date and shall be treated as collections of
interest on the related Receivables.
The Trust Accounts will be maintained as Eligible Deposit Accounts.
"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 have a credit rating from each Rating
Agency in one of its generic rating categories which signifies investment grade.
"Eligible Institution" means, with respect to a Trust, (a) the corporate trust
department of the related Indenture Trustee or the related Trustee, as
applicable, 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), (i) which has either (A) a
long-term unsecured debt rating acceptable to the Rating Agencies or (B) a
short-term unsecured debt rating or certificate of deposit rating acceptable to
the Rating Agencies and (ii) whose deposits are insured by the FDIC.
SERVICING PROCEDURES
The Servicer will make reasonable efforts to collect all payments due with
respect to the Receivables held by any Trust in respect of a series and will,
consistent with the related Sale and Servicing Agreement or Pooling and
Servicing Agreement, follow such collection procedures as it follows with
respect to comparable motor vehicle retail installment sale contracts it
services for itself or others. Consistent with its normal procedures, the
Servicer may, in its discretion, arrange with the Obligor on a Receivable to
extend or modify the payment schedule, but no such arrangement will, for
purposes of any Sale and Servicing Agreement or Pooling and Servicing Agreement,
modify the original due dates or the amount of the scheduled payments or extend
the final payment date of any Receivable beyond the Final Scheduled Maturity
Date (as such term is defined with respect to any Receivables Pool in the
related Prospectus Supplement) for the related series. Some of such arrangements
may result in the Servicer purchasing the Receivable for the Repurchase Amount,
while others may result in the Servicer making Advances. The Servicer may sell
the Financed Vehicle securing the respective Receivable at public or private
sale, or take any other action permitted by applicable law. See "Certain Legal
Aspects of the Receivables".
COLLECTIONS
With respect to each series, the Servicer will deposit all payments on the
related Receivables (from whatever source) and all proceeds of such Receivables
collected during each collection period specified in the related Prospectus
Supplement (each, a "Collection Period") into the related Collection Account
within two business days after receipt thereof. However, so long as (i) CFC is
the Servicer, (ii) there exists no Servicer Default and (iii) each other
condition to making deposits less frequently than daily as may be specified by
the Rating Agencies or set forth in the related Prospectus Supplement is
satisfied, the Servicer may deposit such amounts into the Collection Account on
or before the applicable Distribution Date or Payment Date. Pending deposit into
the Collection Account, collections may be invested by the Servicer at its own
risk and for its own benefit and will not be segregated from its own funds. If
the Servicer were unable to remit such funds, Securityholders might incur a
loss. To the extent set forth in the related Prospectus Supplement, the Servicer
may, in order to satisfy the requirements described above, obtain a letter of
credit or other security for the benefit of the related Trust to secure timely
remittances of collections on the related Receivables and payment of the
aggregate Repurchase Amount with respect to Receivables purchased by the
Servicer.
Collections on a Precomputed Receivable made during a Collection Period
shall be applied first to repay any outstanding Precomputed Advances made by the
Servicer with respect to such Receivable (as described below), and
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to the extent that collections on a Precomputed Receivable during a Collection
Period exceed the outstanding Precomputed Advances, the collections shall then
be applied to the scheduled payment on such Receivable. If any collections
remaining after the scheduled payment is made are insufficient to prepay the
Precomputed Receivable in full, then, unless otherwise provided in the related
Prospectus Supplement, generally such remaining collections (the "Payaheads")
shall be transferred to and kept in the Payahead Account, until such later
Collection Period as the collections may be transferred to the Collection
Account and applied either to the scheduled payment or to prepay such Receivable
in full.
ADVANCES
If so provided in the related Prospectus Supplement, to the extent the
collections of interest and principal on a Precomputed Receivable with respect
to a Collection Period fall short of the respective scheduled payment, the
Servicer will make a Precomputed Advance of the shortfall. The Servicer will be
obligated to make a Precomputed Advance on a Precomputed Receivable only to the
extent that the Servicer, in its sole discretion, expects to recoup such advance
from subsequent collections or recoveries on such Receivable or other
Precomputed Receivables in the related Receivables Pool. The Servicer will
deposit the Precomputed Advance in the applicable Collection Account on or
before the business day preceding the applicable Distribution Date or Payment
Date. The Servicer will recoup its Precomputed Advance from subsequent payments
by or on behalf of the respective Obligor or from insurance or liquidation
proceeds with respect to the Receivable and will release its right to
reimbursement in conjunction with its purchase of the Receivable as Servicer,
or, upon the determination that reimbursement from the preceding sources is
unlikely, will recoup its Precomputed Advance from any collections made on other
Precomputed Receivables in the related Receivables Pool.
If so provided in the related Prospectus Supplement, on or before the
business day prior to each applicable Distribution Date or Payment Date, the
Servicer shall deposit into the related Collection Account as a Simple Interest
Advance an amount equal to the amount of interest that would have been due on
the Simple Interest Receivables allocated to a series at their respective APRs
for the related Collection Period (assuming that such Simple Interest
Receivables are paid on their respective due dates) minus the amount of interest
actually received on such Simple Interest Receivables during the related
Collection Period. If such calculation results in a negative number, an amount
equal to such amount shall be paid to the Servicer in reimbursement of
outstanding Simple Interest Advances. In addition, in the event that a Simple
Interest Receivable allocated to a series becomes a Liquidated Receivable (as
such term is defined in the related Prospectus Supplement), the amount of
accrued and unpaid interest thereon (but not including interest for the then
current Collection Period) shall be withdrawn from the Collection Account for
such series and paid to the Servicer in reimbursement of outstanding Simple
Interest Advances. No advances of principal will be made with respect to Simple
Interest Receivables.
As used herein, "Advances" means both Precomputed Advances and Simple
Interest Advances.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the Prospectus Supplement with respect to any
series, the Servicer will be entitled to receive the Servicing Fee for each
Collection Period in an amount equal to specified percentage per annum (as set
forth in the related Prospectus Supplement, the "Servicing Fee Rate") of the
Pool Balance for such series as of the first day of the related Collection
Period (the "Servicing Fee"). The Servicing Fee (together with any portion of
the Servicing Fee that remains unpaid from prior Distribution Dates or Payment
Dates) will be paid solely to the extent of the Interest Distribution Amount for
such series. However, the Servicing Fee will be paid prior to the distribution
of any portion of the Interest Distribution Amount to the Noteholders or the
Certificateholders of such series.
Unless otherwise provided in the related Prospectus Supplement with respect
to a given Trust, the Servicer will also collect and retain any late fees,
prepayment charges and other administrative fees or similar charges allowed by
applicable law with respect to the related Receivables and will be entitled to
reimbursement from such Trust for certain liabilities. Payments by or on behalf
of Obligors will be allocated to scheduled payments and late fees and other
charges in accordance with the Servicer's normal practices and procedures.
The Servicing Fee will compensate the Servicer for performing the functions
of a third party servicer of motor vehicle receivables as an agent for their
beneficial owner, including collecting and posting all payments, responding
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to inquiries of Obligors on the Receivables, investigating delinquencies,
sending payment coupons to Obligors, reporting tax information to Obligors,
paying costs of collections and disposition of defaults and policing the
collateral. The Servicing Fee also will compensate the Servicer for
administering the particular Receivables Pool, including making Advances,
accounting for collections and furnishing monthly and annual statements to the
related Trustee and Indenture Trustee with respect to distributions and
generating federal income tax information for such Trust and for the related
Noteholders and Certificateholders. The Servicing Fee also will reimburse the
Servicer for certain taxes, the fees of the related Trustee and Indenture
Trustee, if any, accounting fees, outside auditor fees, data processing costs
and other costs incurred in connection with administering the applicable
Receivables Pool.
DISTRIBUTIONS
With respect to each series of Securities, beginning on the Payment Date or
Distribution Date, as applicable, specified in the related Prospectus
Supplement, distributions of principal and interest (or, where applicable, of
principal or interest only) on each class of such Securities entitled thereto
will be made by the Applicable Trustee to the Noteholders and the
Certificateholders of such series. The timing, calculation, allocation, order,
source, priorities of and requirements for all payments to each class of
Noteholders and all distributions to each class of Certificateholders of such
series will be set forth in the related Prospectus Supplement.
With respect to each series, on each Payment Date and Distribution Date, as
applicable, collections on the related Receivables will be transferred from the
Collection Account to the Note Distribution Account, if any, and the Certificate
Distribution Account, if any, for distribution to Noteholders, if any, and
Certificateholders, if any, to the extent provided in the related Prospectus
Supplement or, if so specified in the related Prospectus Supplement,
distributions to Securityholders may be made directly from the Collection
Account. Credit enhancement, such as a Reserve Account, will be available to
cover any shortfalls in the amount available for distribution on such date to
the extent specified in the related Prospectus Supplement. As more fully
described in the related Prospectus Supplement, and unless otherwise specified
therein, distributions in respect of principal of a class of Securities of a
given series will be subordinate to distributions in respect of interest on such
class, and distributions in respect of one or more classes of Certificates of
such series may be subordinate to payments in respect of Notes, if any, of such
series or other classes of Certificates of such series.
In the case of a Trust that issues more than one series of Securities, the
distributions on the Securities of any such series will be made solely from
funds in the Series Trust Property allocated to such series and not from any
other Series Trust Property.
Allocation of Collections on Receivables. Distributions of principal on the
Securities of a series may be based on the amount of principal collected or due,
or the amount of Realized Losses incurred, in a Collection Period. If so
specified in a Prospectus Supplement, the amounts of collections on the
Receivables of a series that are allocable to interest and principal,
respectively, will first be determined in the following manner with the
following effect on the distributions on the related Securities.
On the Business Day immediately preceding each Distribution Date or Payment
Date (a "Determination Date"), the Indenture Trustee, if any, or, otherwise, the
Trustee shall determine the amount in the Collection Account available for
distribution on the related Distribution Date or Payment Date (excluding amounts
retained in the Collection Account from prior periods, as described below). Such
amount shall be allocated first to interest, including the amount related to the
investment earnings on the Trust Accounts, if any, maintained with the Indenture
Trustee or the Trustee, as applicable, in accordance with the Sale and Servicing
Agreement or Pooling and Servicing Agreement, as applicable, and then any
remaining amount in the Collection Account shall be allocated to principal.
Payments to Securityholders shall be distributed on each Distribution Date or
Payment Date in accordance with such allocations, together with a payment notice
setting forth the amount of such payment allocable to interest and the amount
allocable to principal.
CREDIT AND CASH FLOW ENHANCEMENT; LIQUIDITY ARRANGEMENTS
The amounts and types of credit and cash flow enhancement arrangements and
the provider thereof, if applicable, with respect to each class of Securities of
a given series, if any, will be set forth in the related Prospectus Supplement.
If and to the extent provided in the related Prospectus Supplement, credit and
cash flow enhancement
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may be in the form of subordination of one or more classes of Securities of a
series, Reserve Accounts, overcollateralization, letters of credit, credit or
liquidity facilities, surety bonds, guaranteed investment contracts, swaps
(including without limitation currency swaps), other interest rate protection
agreements, repurchase obligations (including without limitation put options),
yield supplement agreements, other agreements with respect to third party
payments or other support, cash deposits or such other arrangements as may be
described in the related Prospectus Supplement or any combination of two or more
of the foregoing. If specified in the applicable Prospectus Supplement, credit
or cash flow enhancement or any such other arrangement for a class of Securities
may cover one or more other classes of Securities of the same series, and credit
or cash flow enhancement or any such other arrangement for a series of
Securities may cover one or more other series of Securities.
The presence of a Reserve Account and other forms of credit enhancement for
the benefit of any class or series of Securities is intended to enhance the
likelihood of receipt by the Securityholders of such class or series of the full
amount of principal and interest due thereon and to decrease the likelihood that
such Securityholders will experience losses. Unless otherwise specified in the
related Prospectus Supplement, the credit enhancement for a class or series of
Securities will not provide protection against all risks of loss and will not
guarantee repayment of the entire principal balance and interest thereon. If
losses occur which exceed the amount covered by any credit enhancement or which
are not covered by any credit enhancement, Securityholders of any class or
series will bear their allocable share of deficiencies, as described in the
related Prospectus Supplement. In addition, if a form of credit enhancement
covers more than one series of Securities, Securityholders of any such series
will be subject to the risk that such credit enhancement will be exhausted by
the claims of Securityholders of other series.
Reserve Account. If so provided in the related Prospectus Supplement,
pursuant to the related Sale and Servicing Agreement or Pool and Servicing
Agreement, the Seller will establish for a series or class of Securities an
account, as specified in the related Prospectus Supplement (the "Reserve
Account"), which will be maintained with the related Trustee or Indenture
Trustee, as applicable. Unless otherwise provided in the related Prospectus
Supplement, the Reserve Account will be funded by an initial deposit by the
Seller on the Closing Date in the amount set forth in the related Prospectus
Supplement and, if the related series has a Funding Period, will also be funded
on each Subsequent Transfer Date to the extent described in the related
Prospectus Supplement. As further described in the related Prospectus
Supplement, the amount on deposit in the Reserve Account will be increased on
each Distribution Date or Payment Date thereafter up to the Specified Reserve
Account Balance (as defined in the related Prospectus Supplement) by the deposit
therein of the amount of collections on the related Receivables remaining on
each such Distribution Date or Payment Date after the payment of all other
required payments and distributions on such date. The related Prospectus
Supplement will describe the circumstances and manner under which distributions
may be made out of the Reserve Account, either to holders of the Securities
covered thereby or to the applicable Company.
NET DEPOSITS
As an administrative convenience, unless the Servicer is required to remit
collections daily (see "-- Collections" above), the Servicer will be permitted
to make the deposit of collections, aggregate Advances and Repurchase Amounts
for any Trust for or with respect to the related Collection Period net of
distributions to be made to the Servicer for such Trust with respect to such
Collection Period. The Servicer may cause to be made a single, net transfer from
the Collection Account to the related Payahead Account, if any, or vice versa.
The Servicer, however, will account to the Trustee, any Indenture Trustee, the
Noteholders, if any, and the Certificateholders with respect to each series as
if all deposits, distributions and transfers were made individually. With
respect to any Trust that issues both Certificates and Notes, if the related
Payment Dates do not coincide with Distribution Dates, all distributions,
deposits or other remittances made on a Payment Date will be treated as having
been distributed, deposited or remitted on the Distribution Date for the
applicable Collection Period for purposes of determining other amounts required
to be distributed, deposited or otherwise remitted on such Distribution Date.
STATEMENTS TO TRUSTEES AND TRUST
Prior to each Distribution Date or Payment Date with respect to each series
of Securities, the Servicer will provide to the applicable Indenture Trustee, if
any, and the applicable Trustee as of the close of business on the last day of
the related Collection Period a statement setting forth substantially the same
information as is required to be provided in the periodic reports provided to
Securityholders of such series described under "Certain Information Regarding
the Securities -- Reports to Securityholders".
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EVIDENCE AS TO COMPLIANCE
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
provide that a firm of independent public accountants will furnish to the
related Trust and Indenture Trustee or Trustee, as applicable, annually a
statement as to compliance by the Servicer during the preceding twelve months
(or, in the case of the first such certificate, from the applicable Closing
Date) with certain standards relating to the servicing of the applicable
Receivables, the Servicer's accounting records and computer files with respect
thereto and certain other matters.
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
also provide for delivery to the related Trust and Indenture Trustee or Trustee,
as applicable, substantially simultaneously with the delivery of such
accountants' statement referred to above, of a certificate signed by an officer
of the Servicer stating that the Servicer has fulfilled its obligations under
the Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, throughout the preceding twelve months (or, in the case of the first
such certificate, from the Closing Date) or, if there has been a default in the
fulfillment of any such obligation, describing each such default. The Servicer
has agreed to give each Indenture Trustee and each Trustee notice of certain
Servicer Defaults under the related Sale and Servicing Agreement or Pooling and
Servicing Agreement, as applicable.
Copies of such statements and certificates may be obtained by
Securityholders by a request in writing addressed to the Applicable Trustee.
CERTAIN MATTERS REGARDING THE SERVICER
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
provide that CFC may not resign from its obligations and duties as Servicer
thereunder, except upon determination that CFC's performance of such duties is
no longer permissible under applicable law. No such resignation will become
effective until the related Indenture Trustee or Trustee, as applicable, or a
successor servicer has assumed CFC's servicing obligations and duties under such
Sale and Servicing Agreement or Pooling and Servicing Agreement.
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
further provide that neither the Servicer nor any of its directors, officers,
employees and agents will be under any liability to the related Trust or the
related Noteholders or Certificateholders for taking any action or for
refraining from taking any action pursuant to such Sale and Servicing Agreement
or Pooling and Servicing Agreement or for errors in judgment; except that
neither the Servicer nor any such person will be protected against any liability
that would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of the Servicer's duties thereunder or by reason
of reckless disregard of its obligations and duties thereunder. In addition,
each Sale and Servicing Agreement and Pooling and Servicing Agreement will
provide that the Servicer is under no obligation to appear in, prosecute or
defend any legal action that is not incidental to the Servicer's servicing
responsibilities under such Sale and Servicing Agreement or Pooling and
Servicing Agreement and that, in its opinion, may cause it to incur any expense
or liability.
Under the circumstances specified in each Sale and Servicing Agreement and
Pooling and Servicing Agreement, any entity into which the Servicer may be
merged or consolidated, or any entity resulting from any merger or consolidation
to which the Servicer is a party, or any entity succeeding to the business of
the Servicer or, with respect to its obligations as Servicer, any corporation
50% or more of the voting stock of which is owned, directly or indirectly, by
Chrysler, which corporation or other entity in each of the foregoing cases
assumes the obligations of the Servicer, will be the successor of the Servicer
under such Sale and Servicing Agreement or Pooling and Servicing Agreement.
SERVICER DEFAULT
Except as otherwise provided in the related Prospectus Supplement, "Servicer
Default" under each Sale and Servicing Agreement and Pooling and Servicing
Agreement will consist of (i) any failure by the Servicer to deliver to the
Applicable Trustee for deposit in any of the related Trust Accounts or the
related Certificate Distribution Account any required payment or to direct the
Applicable Trustee to make any required distributions therefrom, which failure
continues unremedied for five business days after written notice from the
Applicable Trustee is
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received by the Servicer or after discovery of such failure by the Servicer;
(ii) any failure by the Servicer or the Seller, as the case may be, duly to
observe or perform in any material respect any other covenant or agreement in
such Sale and Servicing Agreement or Pooling and Servicing Agreement, which
failure materially and adversely affects the rights of the Noteholders or the
Certificateholders of the related series and which continues unremedied for 60
days after the giving of written notice of such failure (A) to the Servicer or
the Seller, as the case may be, by the Applicable Trustee or (B) to the Servicer
or the Seller, as the case may be, and to the Applicable Trustee by holders of
Notes or Certificates of such series, as applicable, evidencing not less than
25% in principal amount of such outstanding Notes or of such Certificate
Balance; and (iii) the occurrence of an Insolvency Event with respect to the
Servicer, the Seller or any related Company. "Insolvency Event" means, with
respect to any Person, any of the following events or actions: certain events of
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings with respect to such Person and certain actions by such
Person indicating its insolvency, reorganization pursuant to bankruptcy
proceedings or inability to pay its obligations.
RIGHTS UPON SERVICER DEFAULT
In the case of any Trust that has issued Notes, unless otherwise provided in
the related Prospectus Supplement, as long as a Servicer Default under a Sale
and Servicing Agreement remains unremedied, the related Indenture Trustee or
holders of Notes of the related series evidencing not less than 25% of principal
amount of such Notes then outstanding may terminate all the rights and
obligations of the Servicer under such Sale and Servicing Agreement, whereupon
such Indenture Trustee or a successor servicer appointed by such Indenture
Trustee will succeed to all the responsibilities, duties and liabilities of the
Servicer under such Sale and Servicing Agreement and will be entitled to similar
compensation arrangements. In the case of any Trust that has not issued Notes,
unless otherwise provided in the related Prospectus Supplement, as long as a
Servicer Default under the related Pooling and Servicing Agreement remains
unremedied, the related Trustee or holders of Certificates of the related series
evidencing not less than 25% of the principal amount of such Certificates then
outstanding may terminate all the rights and obligations of the Servicer under
such Pooling and Servicing Agreement, whereupon such Trustee or a successor
servicer appointed by such Trustee will succeed to all the responsibilities,
duties and liabilities of the Servicer under such Pooling and Servicing
Agreement and will be entitled to similar compensation arrangements. If,
however, a bankruptcy trustee or similar official has been appointed for the
Servicer, and no Servicer Default other than such appointment has occurred, such
trustee or official may have the power to prevent such Indenture Trustee, such
Noteholders, such Trustee or such Certificateholders from effecting a transfer
of servicing. In the event that such Indenture Trustee or Trustee is unwilling
or unable to so act, it may appoint, or petition a court of competent
jurisdiction for the appointment of, a successor with a net worth of at least
$100,000,000 and whose regular business includes the servicing of motor vehicle
receivables. Such Indenture Trustee or Trustee may make such arrangements for
compensation to be paid, which in no event may be greater than the servicing
compensation to the Servicer under such Sale and Servicing Agreement or Pooling
and Servicing Agreement.
WAIVER OF PAST DEFAULTS
With respect to each Trust that has issued Notes, unless otherwise provided
in the related Prospectus Supplement, the holders of Notes of a series
evidencing at least a majority in principal amount of the then outstanding Notes
of such series (or the holders of the Certificates of such series evidencing not
less than a majority of the outstanding Certificate Balance, in the case of any
Servicer Default which does not adversely affect the related Indenture Trustee
or such Noteholders) may, on behalf of all such Noteholders and
Certificateholders, waive any default by the Servicer in the performance of its
obligations under the related Sale and Servicing Agreement and its consequences,
except a Servicer Default in making any required deposits to or payments from
any of the Trust Accounts or to the Certificate Distribution Account for such
series in accordance with such Sale and Servicing Agreement. With respect to
each Trust that has not issued Notes, holders of Certificates of a series
evidencing not less than a majority of the principal amount of such Certificates
then outstanding may, on behalf of all such Certificateholders, waive any
default by the Servicer in the performance of its obligations under the related
Sale and Servicing Agreement or Pooling and Servicing Agreement, except a
Servicer Default in making any required deposits to or payments from the
Certificate Distribution Account or the Trust Accounts for such series in
accordance with such Pooling and Servicing Agreement. No such waiver will impair
such Noteholders' or Certificateholders' rights with respect to subsequent
defaults.
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AMENDMENT
Unless otherwise provided in the related Prospectus Supplement, each of the
Transfer and Servicing Agreements may be amended by the parties thereto, without
the consent of the related Noteholders or Certificateholders, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of such Transfer and Servicing Agreements or of modifying in any
manner the rights of such Noteholders or Certificateholders; provided that such
action will not, in the opinion of counsel satisfactory to the related Trustee
or Indenture Trustee, as applicable, materially and adversely affect the
interest of any such Noteholder or Certificateholder. Unless otherwise specified
in the related Prospectus Supplement, the Transfer and Servicing Agreements may
also be amended by the Seller, the Servicer, the related Trustee and any related
Indenture Trustee with the consent of the holders of Notes evidencing at least a
majority in principal amount of then outstanding Notes, if any, of the related
series and the holders of the Certificates of such series evidencing at least a
majority of the principal amount of such Certificates then outstanding, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of such Transfer and Servicing Agreements or of modifying in
any manner the rights of such Noteholders or Certificateholders; provided,
however, that no such amendment may (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on the
related Receivables or distributions that are required to be made for the
benefit of such Noteholders or Certificateholders or (ii) reduce the aforesaid
percentage of the Notes or Certificates of such series which are required to
consent to any such amendment, without the consent of the holders of all the
outstanding Notes or Certificates, as the case may be, of such series.
INSOLVENCY EVENT
Subject to the following paragraph, with respect to a Trust that is not a
grantor trust, if the related Prospectus so provides, upon the occurrence of an
Insolvency Event with respect to the Company in respect of such Trust, the
related Receivables of such Trust will be liquidated and the Trust will be
terminated 90 days after the date of such Insolvency Event, unless, before the
end of such 90-day period, the related Trustee shall have received written
instructions from (i) holders of each class of the Certificates (other than such
Company) of each series with respect to such Trust representing more than 50% of
the aggregate unpaid principal amount of each such class (not including the
principal amount of such Certificates held by such Company), (ii) holders of
each class of Notes, if any, of each series with respect to such Trust
representing more than 50% of the aggregate unpaid principal amount of each such
class and (iii) holders, if any, of certificates representing more than 50% of
the aggregate unpaid principal amount of certificates representing interests in,
or indebtedness secured by, final fixed value payments with respect to the Fixed
Value Receivables, if any, initially purchased by such Company and subsequently
added to such Trust (such certificates or indebtedness being referred to herein
as "Fixed Value Securities"), to the effect that each such party disapproves of
the liquidation of such Receivables and termination of such Trust. Promptly
after the occurrence of an Insolvency Event with respect to such Company, notice
thereof is required to be given to such Noteholders, Certificateholders and
holders of Fixed Value Securities; provided that any failure to give such
required notice will not prevent or delay termination of such Trust. Upon
termination of any Trust, the related Trustee shall, or shall direct the related
Indenture Trustee to, promptly sell the assets of such Trust (other than the
Trust Accounts and Certificate Distribution Accounts) in a commercially
reasonable manner and on commercially reasonable terms. The proceeds from any
such sale, disposition or liquidation of the Receivables of such Trust allocable
to each series issued by such Trust will be treated as collections on such
Receivables and deposited in the related Collection Account for such series.
With respect to any series of such Trust, if the proceeds from the liquidation
of the Receivables allocated to such series and any amounts on deposit in the
Reserve Account (if any), the Payahead Account (if any), the Note Distribution
Account (if any) and the Certificate Distribution Account for such series are
not sufficient to pay the Notes, if any, and the Certificates of such series in
full, the amount of principal returned to Noteholders and Certificateholders of
such series will be reduced and some or all of such Noteholders and
Certificateholders will incur a loss.
Each Trust Agreement will provide that the applicable Trustee does not have
the power to commence a voluntary proceeding in bankruptcy with respect to the
related Trust without the unanimous prior approval of all Certificateholders
(including the applicable Company) of such Trust and the delivery to such
Trustee by each such Certificateholder (including such Company) of a certificate
certifying that such Certificateholder reasonably believes that such Trust is
insolvent.
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PAYMENT OF NOTES
Upon the payment in full of all outstanding Notes of a series and the
satisfaction and discharge of the related Indenture, the related Trustee will
succeed to all the rights of the Indenture Trustee, and the Certificateholders
of such series will succeed to all the rights of the Noteholders of such series,
under the related Sale and Servicing Agreement, except as otherwise provided
therein.
COMPANY LIABILITY
If the related Prospectus Supplement so provides, the applicable Company
with respect to the related Trust will agree under the related Trust Agreement
to be liable directly to an injured party for the entire amount of any losses,
claims, damages or liabilities (other than those incurred by a Noteholder or a
Certificateholder in the capacity of an investor with respect to such Trust)
arising out of or based on the arrangement created by such Trust Agreement as
though such arrangement created a partnership under the Delaware Revised Uniform
Limited Partnership Act in which such Company was a general partner.
TERMINATION
With respect to each series, the obligations of the Servicer, the Seller,
the related Trustee and the related Indenture Trustee, if any, pursuant to the
Transfer and Servicing Agreements will terminate upon the earlier of (i) the
maturity or other liquidation of the last related Receivable included in the
Series Trust Property allocated to such series and the disposition of any
amounts received upon liquidation of any such remaining Receivables, (ii) the
payment to Noteholders, if any, and Certificateholders of such series of all
amounts required to be paid to them pursuant to the Transfer and Servicing
Agreements and (iii) the occurrence of either event described below.
Unless otherwise provided in the related Prospectus Supplement, in order to
avoid excessive administrative expense, the Servicer will be permitted at its
option to purchase from each Trust, as of the end of any applicable Collection
Period, if the then outstanding Pool Balance with respect to the Receivables
included in Series Trust Property allocated to a series is 10% or less of the
Initial Pool Balance (as defined in the related Prospectus Supplement, the
"Initial Pool Balance") of such series, all such remaining Receivables at a
price equal to the aggregate of the Repurchase Amounts thereof as of the end of
such Collection Period.
If and to the extent provided in the related Prospectus Supplement with
respect to a Trust, the Applicable Trustee will, within ten days following a
Distribution Date or Payment Date as of which the Pool Balance of such series is
equal to or less than the percentage of the Initial Pool Balance of such series
specified in the related Prospectus Supplement, solicit bids for the purchase of
such Receivables remaining in such Trust and allocated to such series, in the
manner and subject to the terms and conditions set forth in such Prospectus
Supplement. If the Applicable Trustee receives satisfactory bids as described in
such Prospectus Supplement, then such remaining Receivables will be sold to the
highest bidder.
As more fully described in the related Prospectus Supplement, any
outstanding Notes of the related series will be redeemed concurrently with
either of the events specified above, and the subsequent distribution to the
related Certificateholders of all amounts required to be distributed to them
pursuant to the applicable Trust Agreement or Pooling and Servicing Agreement
will effect early retirement of the Certificates of such series.
ADMINISTRATION AGREEMENT
CFC, in its capacity as administrator (the "Administrator"), will enter into
an agreement (as amended and supplemented from time to time, an "Administration
Agreement") with each Trust that issues Notes and the related Indenture Trustee
pursuant to which the Administrator will agree, to the extent provided in such
Administration Agreement, to provide the notices and to perform other
administrative obligations required by the related Indenture. Unless otherwise
specified in the related Prospectus Supplement with respect to any such Trust,
as compensation for the performance of the Administrator's obligations under the
applicable Administration Agreement and as reimbursement for its expenses
related thereto, the Administrator will be entitled to a monthly administration
fee in
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an amount equal to $200 per month with respect to each series of Notes, or such
other amount as may be set forth in the related Prospectus Supplement (the
"Administration Fee"), which fee will be paid by the Servicer.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTEREST IN VEHICLES
In states in which retail installment sale contracts such as the Receivables
evidence the credit sale of automobiles and light duty trucks by dealers to
obligors, the contracts also constitute personal property security agreements
and include grants of security interests in the vehicles under the applicable
UCC. Perfection of security interests in the automobiles and light duty trucks
financed by the Seller is generally governed by the motor vehicle registration
laws of the state in which the vehicle is located. In all states in which the
Receivables have been originated, a security interest in automobiles and light
duty trucks is perfected by obtaining the certificate of title to the Financed
Vehicle or notation of the secured party's lien on the vehicles' certificate of
title (in addition, in Louisiana, a copy of the installment sale contract must
be filed with the appropriate governmental recording office).
All contracts originated or acquired by the Seller name the Seller as
obligee or assignee and as the secured party. The Seller also takes all actions
necessary under the laws of the state in which the financed vehicle is located
to perfect the Seller's security interest in the financed vehicle, including,
where applicable, having a notation of its lien recorded on such vehicle's
certificate of title. Because the Seller continues to service the contracts, the
obligors on the contracts will not be notified of the sale to the Trust, and no
action will be taken to record the transfer of the security interest from the
Seller to the Trust by amendment of the certificates of title for the Financed
Vehicles or otherwise.
The Seller will assign its interests in the Financed Vehicles securing the
related Receivables to each Trust pursuant to the related Sale and Servicing
Agreement or Pooling and Servicing Agreement (as applicable). However, because
of the administrative burden and expense, neither the Seller nor the related
Trustee will amend any certificate of title to identify the Trust as the new
secured party on the certificate of title relating to a Financed Vehicle. Also,
the Seller will continue to hold any certificates of title relating to the
vehicles in its possession as custodian for the Trust pursuant to the related
Sale and Servicing Agreement or Pooling and Servicing Agreement. See
"Description of the Transfer and Servicing Agreements -- Sale and Assignment of
Receivables".
In most states, an assignment such as that under each Sale and Servicing
Agreement or Pooling and Servicing Agreement is an effective conveyance of a
security interest without amendment of any lien noted on a vehicle's certificate
of title, and the assignee succeeds thereby to the assignor's rights as secured
party. However, by not identifying a Trust as the secured party on the
certificate of title, the security interest of such Trust in the vehicle could
be defeated through fraud or negligence. In such states, in the absence of fraud
or forgery by the vehicle owner or the Seller or administrative error by state
or local agencies, the notation of the Seller's lien on the certificates of
title will be sufficient to protect a Trust against the rights of subsequent
purchasers of a Financed Vehicle or subsequent lenders who take a security
interest in a Financed Vehicle. If there are any Financed Vehicles as to which
the Seller failed to obtain or assign to the Trust a perfected security
interest, the security interest of the Trust would be subordinate to, among
others, the interests of subsequent purchasers of the Financed Vehicles and
holders of perfected security interests therein. Such a failure, however, would
constitute a breach of the warranties of the Seller under the related Sale and
Servicing Agreement or Pooling and Servicing Agreement and would create an
obligation of the Seller to repurchase the related Receivable unless the breach
were cured. See "Description of the Transfer and Servicing Agreements -- Sale
and Assignment of Receivables" and "Special Considerations -- Certain Legal
Aspects -- Security Interests in Financed Vehicles".
Under the laws of most states, the perfected security interest in a vehicle
would continue for four months after the vehicle is moved to a state other than
the state in which it is initially registered and thereafter until the owner
thereof re-registers the vehicle in the new state. A majority of states
generally require surrender of a certificate of title to re-register a vehicle.
Accordingly, a secured party must surrender possession if it holds the
certificate of title to the vehicle or, in the case of a vehicle registered in a
state providing for the notation of a lien on the certificate of title but not
possession by the secured party, the secured party would receive notice of
surrender if the security interest is noted on the certificate of title. Thus,
the secured party would have the opportunity to re-perfect its security interest
in the vehicle in the state of relocation. In states that do not require a
certificate of title for
41
registration of a motor vehicle, re-registration could defeat perfection. In the
ordinary course of servicing motor vehicle receivables, the Servicer takes steps
to effect re-perfection upon receipt of notice of re-registration or information
from the obligor as to relocation. Similarly, when an obligor sells a vehicle,
the Servicer must surrender possession of the certificate of title or will
receive notice as a result of its lien noted thereon and accordingly will have
an opportunity to require satisfaction of the related Receivable before release
of the lien. Under each Sale and Servicing Agreement and Pooling and Servicing
Agreement, the Servicer is obligated to take appropriate steps, at the
Servicer's expense, to maintain perfection of security interests in the Financed
Vehicles and is obligated to purchase the related Receivable if it fails to do
so.
Under the laws of most states, liens for repairs performed on a motor
vehicle and liens for unpaid taxes take priority over even a perfected security
interest in a financed vehicle. The Code also grants priority to certain federal
tax liens over the lien of a secured party. The laws of certain states and
federal law permit the confiscation of vehicles by governmental authorities
under certain circumstances if used in unlawful activities, which may result in
the loss of a secured party's perfected security interest in the confiscated
vehicle. Under each Sale and Servicing Agreement and Pooling and Servicing
Agreement, the Seller will represent to the related Trust that, as of the date
the related Receivable is sold to such Trust, each security interest in a
Financed Vehicle is or will be prior to all other present liens (other than tax
liens and other liens that arise by operation of law) upon and security
interests in such Financed Vehicle. However, liens for repairs or taxes could
arise, or the confiscation of a Financed Vehicle could occur, at any time during
the term of a Receivable. No notice will be given to the Trustee, any Indenture
Trustee, any Noteholders or the Certificateholders in respect of a given Trust
if such a lien arises or confiscation occurs.
REPOSSESSION
In the event of default by vehicle purchasers, the holder of the motor
vehicle retail installment sale contract has all the remedies of a secured party
under the UCC, except where specifically limited by other state laws. Among the
UCC remedies, the secured party has the right to perform self-help repossession
unless such act would constitute a breach of the peace. Self-help is the method
employed by the Servicer in most cases and is accomplished simply by retaking
possession of the financed vehicle. In the event of default by the obligor, some
jurisdictions require that the obligor be notified of the default and be given a
time period within which he may cure the default prior to repossession.
Generally, the right of reinstatement may be exercised on a limited number of
occasions in any one-year period. In cases where the obligor objects or raises a
defense to repossession, or if otherwise required by applicable state law, a
court order must be obtained from the appropriate state court, and the vehicle
must then be repossessed in accordance with that order.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and other state laws require the secured party to provide the
obligor with reasonable notice of the date, time and place of any public sale
and/or the date after which any private sale of the collateral may be held. The
obligor has the right to redeem the collateral prior to actual sale by paying
the secured party the unpaid principal balance of the obligation plus reasonable
expenses for repossessing, holding and preparing the collateral for disposition
and arranging for its sale, plus, in some jurisdictions, reasonable attorneys'
fees, or, in some states, by payment of delinquent installments or the unpaid
balance.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the vehicles generally will be applied first to
the expenses of resale and repossession and then to the satisfaction of the
indebtedness. While some states impose prohibitions or limitations on deficiency
judgments if the net proceeds from resale do not cover the full amount of the
indebtedness, a deficiency judgment can be sought in those states that do not
prohibit or limit such judgments. However, the deficiency judgment would be a
personal judgment against the obligor for the shortfall, and a defaulting
obligor can be expected to have very little capital or sources of income
available following repossession. Therefore, in many cases, it may not be useful
to seek a deficiency judgment or, if one is obtained, it may be settled at a
significant discount.
Occasionally, after resale of a vehicle and payment of all expenses and all
indebtedness, there is a surplus of funds. In that case, the UCC requires the
creditor to remit the surplus to any holder of a lien with respect to the
42
vehicle or if no such lienholder exists or there are remaining funds, the UCC
requires the creditor to remit the surplus to the former owner of the vehicle.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related regulations
impose substantial requirements upon lenders and servicers involved in consumer
finance. These laws include the Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Federal Trade Commission Act, the Fair Credit Billing Act,
the Fair Credit Reporting Act, the Fair Debt Collection Procedures Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B and Z, the
Soldiers' and Sailors' Civil Relief Act of 1940, the Texas Consumer Credit Code,
state adoptions of the National Consumer Act and of the Uniform Consumer Credit
Code and state motor vehicle retail installment sales acts, retail installment
sales acts and other similar laws. Also, state laws impose finance charge
ceilings and other restrictions on consumer transactions and require contract
disclosures in addition to those required under federal law. These requirements
impose specific statutory liabilities upon creditors who fail to comply with
their provisions. In some cases, this liability could affect an assignee's
ability to enforce consumer finance contracts such as the Receivables.
The so-called "Holder-in-Due-Course" Rule of the Federal Trade Commission
(the "FTC Rule"), the provisions of which are generally duplicated by the
Uniform Consumer Credit Code, other statutes or the common law, has the effect
of subjecting a seller in a consumer credit transaction (and certain related
creditors and their assignees) to all claims and defenses which the obligor in
the transaction could assert against the seller of the goods. Liability under
the FTC Rule is limited to the amounts paid by the obligor under the contract
and the holder of the contract may also be unable to collect any balance
remaining due thereunder from the obligor.
Most of the Receivables will be subject to the requirements of the FTC Rule.
Accordingly, each Trust, as holder of the related Receivables, will be subject
to any claims or defenses that the purchaser of the applicable Financed Vehicle
may assert against the seller of the Financed Vehicle. Such claims are limited
to a maximum liability equal to the amounts paid by the Obligor on the
Receivable. If an Obligor were successful in asserting any such claim or
defense, such claim or defense would constitute a breach of the Seller's
warranties under the related Sale and Servicing Agreement or Pooling and
Servicing Agreement and would create an obligation of the Seller to repurchase
the Receivable unless the breach is cured. See "Description of the Transfer and
Servicing Agreements -- Sale and Assignment of Receivables".
Courts have applied general equitable principles to secured parties pursuing
repossession and litigation involving deficiency balances. These equitable
principles may have the effect of relieving an obligor from some or all of the
legal consequences of a default.
In several cases, consumers have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the United
States. Courts have generally upheld the notice provisions of the UCC and
related laws as reasonable or have found that the repossession and resale by the
creditor do not involve sufficient state action to afford constitutional
protection to borrowers.
Under each Sale and Servicing Agreement and Pooling and Servicing Agreement,
the Seller will warrant to the related Trust that each Receivable complies with
all requirements of law in all material respects. Accordingly, if an Obligor has
a claim against such Trust for violation of any law and such claim materially
and adversely affects such Trust's interest in a Receivable, such violation
would constitute a breach of the warranties of the Seller under such Sale and
Servicing Agreement or Pooling and Servicing Agreement and would create an
obligation of the Seller to repurchase the Receivable unless the breach is
cured. See "Description of the Transfer and Servicing Agreements -- Sale and
Assignment of Receivables".
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a secured party
to
43
realize upon collateral or to enforce a deficiency judgment. For example, in a
Chapter 13 proceeding under the federal bankruptcy law, a court may prevent a
creditor from repossessing a vehicle, and, as part of the rehabilitation plan,
reduce the amount of the secured indebtedness to the market value of the vehicle
at the time of bankruptcy (as determined by the court), leaving the creditor as
a general unsecured creditor for the remainder of the indebtedness. A bankruptcy
court may also reduce the monthly payments due under a contract or change the
rate of interest and time of repayment of the indebtedness.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of certain federal income tax
consequences of the purchase, ownership and disposition of the Notes and the
Certificates. The summary does not purport to deal with federal income tax
consequences applicable to all categories of holders, some of which may be
subject to special rules. For example, it does not discuss the tax treatment of
Noteholders or Certificateholders that are insurance companies, regulated
investment companies or dealers in securities. Moreover, there are no cases or
Internal Revenue Service ("IRS") rulings on similar transactions involving both
debt and equity interests issued by a trust with terms similar to those of the
Notes and the Certificates. As a result, the IRS may disagree with all or a part
of the discussion below. Prospective investors are urged to consult their own
tax advisors in determining the federal, state, local, foreign and any other tax
consequences to them of the purchase, ownership and disposition of the Notes and
the Certificates.
The following summary is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
promulgated thereunder and judicial or ruling authority, all of which are
subject to change, which change may be retroactive. Each Trust will be provided
with an opinion of special Federal tax counsel to each Trust specified in the
related Prospectus Supplement ("Federal Tax Counsel"), regarding certain federal
income tax matters discussed below. An opinion of Federal Tax Counsel, however,
is not binding on the IRS or the courts. No ruling on any of the issues
discussed below will be sought from the IRS. For purposes of the following
summary, references to the Trust, the Notes, the Certificates and related terms,
parties and documents shall be deemed to refer, unless otherwise specified
herein, to each Trust and the Notes, Certificates and related terms, parties and
documents applicable to such Trust.
The federal income tax consequences to Certificateholders will vary
depending on whether (i) an election is made to treat the Trust as a partnership
under the Code, (ii) all the certificates are retained by the Seller or an
affiliate thereof, or (iii) whether the Trust will be treated as a grantor
trust. The Prospectus Supplement for each series of Certificates will specify
whether a partnership election will be made or the Trust will be treated as a
grantor trust.
TRUSTS FOR WHICH A PARTNERSHIP ELECTION IS MADE
TAX CHARACTERIZATION OF THE TRUST AS A PARTNERSHIP
Federal Tax Counsel will deliver its opinion that a Trust for which a
partnership election is made will not be an association (or publicly traded
partnership) taxable as a corporation for federal income tax purposes. This
opinion will be based on the assumption that the terms of the Trust Agreement
and related documents will be complied with, and on counsel's conclusions that
the nature of the income of the Trust will exempt it from the rule that certain
publicly traded partnerships are taxable as corporations.
TAX CONSEQUENCES TO HOLDERS OF THE NOTES
Treatment of the Notes as Indebtedness. The Seller will agree, and the
Noteholders will agree by their purchase of Notes, to treat the Notes as debt
for federal income tax purposes. Federal Tax Counsel will, except as otherwise
provided in the related Prospectus Supplement, advise the Trust that the Notes
will be classified as debt for federal income tax purposes. The discussion below
assumes this characterization of the Notes is correct.
OID, Indexed Securities, etc. The discussion below assumes that all payments
on the Notes are denominated in U.S. dollars, and that the Notes are not Indexed
Securities or Strip Notes. Moreover, the discussion assumes that the interest
formula for the Notes meets the requirements for "qualified stated interest"
under Treasury regulations (the
44
"OID regulations") relating to original issue discount ("OID"), and that any OID
on the Notes (i.e., any excess of the principal amount of the Notes over their
issue price) does not exceed a de minimis amount (i.e., 1/4% of their principal
amount multiplied by the number of full years included in their term), all
within the meaning of the OID regulations. If these conditions are not satisfied
with respect to any given series of Notes, additional tax considerations with
respect to such Notes will be disclosed in the applicable Prospectus Supplement.
Interest Income on the Notes. Based on the above assumptions, except as
discussed in the following paragraph, the Notes will not be considered issued
with OID. The stated interest thereon will be taxable to a Noteholder as
ordinary interest income when received or accrued in accordance with such
Noteholder's method of tax accounting. Under the OID regulations, a holder of a
Note issued with a de minimis amount of OID must include such OID in income, on
a pro rata basis, as principal payments are made on the Note. It is believed
that any prepayment premium paid as a result of a mandatory redemption will be
taxable as contingent interest when it becomes fixed and unconditionally
payable. A purchaser who buys a Note for more or less than its principal amount
will generally be subject, respectively, to the premium amortization or market
discount rules of the Code.
A holder of a Note that has a fixed maturity date of not more than one year
from the issue date of such Note (a "Short-Term Note") may be subject to special
rules. An accrual basis holder of a Short-Term Note (and certain cash method
holders, including regulated investment companies, as set forth in Section 1281
of the Code) generally would be required to report interest income as interest
accrues on a straight-line basis over the term of each interest period. Other
cash basis holders of a Short-Term Note would, in general, be required to report
interest income as interest is paid (or, if earlier, upon the taxable
disposition of the Short-Term Note). However, a cash basis holder of a
Short-Term Note reporting interest income as it is paid may be required to defer
a portion of any interest expense otherwise deductible on indebtedness incurred
to purchase or carry the Short-Term Note until the taxable disposition of the
Short-Term Note. A cash basis taxpayer may elect under Section 1281 of the Code
to accrue interest income on all nongovernment debt obligations with a term of
one year or less, in which case the taxpayer would include interest on the
Short-Term Note in income as it accrues, but would not be subject to the
interest expense deferral rule referred to in the preceding sentence. Certain
special rules apply if a Short-Term Note is purchased for more or less than its
principal amount.
Sale or Other Disposition. If a Noteholder sells a Note, the holder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the holder's adjusted tax basis in the Note. The
adjusted tax basis of a Note to a particular Noteholder will equal the holder's
cost for the Note, increased by any market discount, acquisition discount, OID
(including de minimis OID) and gain previously included by such Noteholder in
income with respect to the Note and decreased by the amount of bond premium (if
any) previously amortized and by the amount of principal payments previously
received by such Noteholder with respect to such Note. Any such gain or loss
will be capital gain or loss if the Note was held as a capital asset, except for
gain representing accrued interest and accrued market discount not previously
included in income. Any capital gain recognized upon a sale, exchange or other
disposition of a Note will be long-term capital gain if the seller's holding
period is more than one year and will be short-term capital gain if the seller's
holding period is one year or less. The deductibility of capital losses is
subject to certain limitations. Prospective investors should consult with their
own tax advisors concerning the U.S. federal tax consequences of the sale,
exchange or other disposition of a Note.
Foreign Holders. Interest payments made (or accrued) to a Noteholder who is
a nonresident alien, foreign corporation or other non-U.S. person (a "foreign
person") generally will be considered "portfolio interest", and generally will
not be subject to United States federal income tax and withholding tax, if the
interest is not effectively connected with the conduct of a trade or business
within the United States by the foreign person and the foreign person (i) is not
actually or constructively a "10 percent shareholder" of the Trust or the Seller
(including a holder of 10% of the outstanding Certificates) or a "controlled
foreign corporation" with respect to which the Trust or the Seller is a "related
person" within the meaning of the Code and (ii) provides the Trustee or other
person who is otherwise required to withhold U.S. tax with respect to the Notes
with an appropriate statement (on Form W-8 or a similar form), signed under
penalties of perjury, certifying that the beneficial owner of the Note is a
foreign person and providing the foreign person's name and address. If a Note is
held through a securities clearing organization or certain other financial
institutions, the organization or institution may provide the relevant signed
statement to the withholding agent; in that case, however, the signed statement
must be accompanied by a Form W-8 or substitute form provided by the foreign
person that owns the Note. If such interest is not portfolio interest, then it
will be subject to United States federal income at graduated rates (if received
by a non-U.S. person with effectively
45
connected income) and withholding tax at a rate of 30 percent, unless reduced or
eliminated pursuant to an applicable tax treaty.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a foreign person will be exempt from United
States federal income and withholding tax, provided that (i) such gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and (ii) in the case of an individual foreign
person, the foreign person is not present in the United States for 183 days or
more in the taxable year and does not otherwise have a "tax home" within the
United States.
Backup Withholding. Each holder of a Note (other than an exempt holder such
as a corporation, tax-exempt organization, qualified pension and profit-sharing
trust, individual retirement account or nonresident alien who provides
certification as to status as a nonresident) will be required to provide, under
penalties of perjury, a certificate containing the holder's name, address,
correct federal taxpayer identification number and a statement that the holder
is not subject to backup withholding. Should a nonexempt Noteholder fail to
provide the required certification, the Trust will be required to withhold 31
percent of the amount otherwise payable to the holder, and remit the withheld
amount to the IRS as a credit against the holder's federal income tax liability.
New Withholding Regulations. Recently, the Treasury Department issued new
regulations (the "New Regulations") which make certain modifications to
withholding, backup withholding and information reporting rules. The New
Regulations attempt to unify certification requirements and modify reliance
standards. The New Regulations will generally be effective for payments made
after December 31, 1999, subject to certain transition rules. Prospective
investors are urged to consult their own tax advisors regarding the New
Regulations.
Possible Alternative Treatments of the Notes. If, contrary to the opinion of
Federal Tax Counsel, the IRS successfully asserted that one or more of the Notes
did not represent debt for federal income tax purposes, the Notes might be
treated as equity interests in the Trust. If so treated, the Trust might be
treated as a publicly traded partnership taxable as a corporation with
potentially adverse tax consequences (and the publicly traded partnership
taxable as a corporation would not be able to reduce its taxable income by
deductions for interest expense on Notes recharacterized as equity).
Alternatively, and most likely in the view of Federal Tax Counsel, the Trust
would be treated as a publicly traded partnership that would not be taxable as a
corporation because it would meet certain qualifying income tests. Nonetheless,
treatment of the Notes as equity interests in such a partnership could have
adverse tax consequences to certain holders. For example, income to certain
tax-exempt entities (including pension funds) would be "unrelated business
taxable income", income to foreign holders generally would be subject to U.S.
tax and U.S. tax return filing and withholding requirements, and individual
holders might be subject to certain limitations on their ability to deduct their
share of Trust expenses.
TAX CONSEQUENCES TO HOLDERS OF THE CERTIFICATES
Treatment of the Trust as a Partnership. The Seller and the Servicer will
agree, and the Certificateholders will agree by their purchase of Certificates,
to treat the Trust and each separate Series Trust Property as a partnership for
purposes of federal and state income tax, franchise tax and any other tax
measured in whole or in part by income, with the assets of the partnership being
the assets held by the Trust, the partners of the partnership being the
Certificateholders (including the Company in its capacity as recipient of
distributions from the Reserve Account), and the Notes being debt of the related
partnership. However, the proper characterization of the arrangement involving
the Trust, the Certificates, the Notes, the Seller, the Company and the Servicer
is not clear because there is no authority on transactions closely comparable to
that contemplated herein.
A variety of alternative characterizations are possible. For example,
because the Certificates have certain features characteristic of debt, the
Certificates might be considered debt of the Company or the Trust. Any such
characterization would not result in materially adverse tax consequences to
Certificateholders as compared to the consequences from treatment of the
Certificates as equity in a partnership, described below. The following
discussion assumes that the Certificates represent equity interests in a
partnership.
Indexed Securities, etc. The following discussion assumes that all payments
on the Certificates are denominated in U.S. dollars, none of the Certificates
are Indexed Securities or Strip Certificates, and that a series of Securities
includes a single class of Certificates. If these conditions are not satisfied
with respect to any given series of
46
Certificates, additional tax considerations with respect to such Certificates
will be disclosed in the applicable Prospectus Supplement.
Partnership Taxation. As a partnership, the Trust will not be subject to
federal income tax. Rather, each Certificateholder will be required to
separately take into account such holder's allocated share of income, gains,
losses, deductions and credits of the Trust. The Trust's income will consist
primarily of interest and finance charges earned on the Receivables (including
appropriate adjustments for market discount, OID and bond premium) and any gain
upon collection or disposition of Receivables. The Trust's deductions will
consist primarily of interest accruing with respect to the Notes, servicing and
other fees, and losses or deductions upon collection or disposition of
Receivables.
The tax items of a partnership are allocable to the partners in accordance
with the Code, Treasury regulations and the partnership agreement (here, the
Trust Agreement and related documents). The Trust Agreement will provide, in
general, that the Certificateholders will be allocated taxable income of the
Trust for each month equal to the sum of (i) the interest that accrues on the
Certificates in accordance with their terms for such month, including interest
accruing at the Pass Through Rate for such month and interest on amounts
previously due on the Certificates but not yet distributed; (ii) any Trust
income attributable to discount on the Receivables that corresponds to any
excess of the principal amount of the Certificates over their initial issue
price; (iii) prepayment premium payable to the Certificateholders for such
month; and (iv) any other amounts of income payable to the Certificateholders
for such month. Such allocation will be reduced by any amortization by the Trust
of premium on Receivables that corresponds to any excess of the issue price of
Certificates over their principal amount. All remaining taxable income of the
Trust will be allocated to the Company. Based on the economic arrangement of the
parties, this approach for allocating Trust income should be permissible under
applicable Treasury regulations, although no assurance can be given that the IRS
would not require a greater amount of income to be allocated to
Certificateholders. Moreover, even under the foregoing method of allocation,
Certificateholders may be allocated income equal to the entire Pass Through Rate
plus the other items described above even though the Trust might not have
sufficient cash to make current cash distributions of such amount. Thus, cash
basis holders will in effect be required to report income from the Certificates
on the accrual basis and Certificateholders may become liable for taxes on Trust
income even if they have not received cash from the Trust to pay such taxes. In
addition, because tax allocations and tax reporting will be done on a uniform
basis for all Certificateholders but Certificateholders may be purchasing
Certificates at different times and at different prices, Certificateholders may
be required to report on their tax returns taxable income that is greater or
less than the amount reported to them by the Trust.
All of the taxable income allocated to a Certificateholder that is a
pension, profit sharing or employee benefit plan or other tax-exempt entity
(including an individual retirement account) will constitute "unrelated business
taxable income" generally taxable to such a holder under the Code.
An individual taxpayer's share of expenses of the Trust (including fees to
the Servicer but not interest expense) would be miscellaneous itemized
deductions. Such deductions might be disallowed to the individual in whole or in
part and might result in such holder being taxed on an amount of income that
exceeds the amount of cash actually distributed to such holder over the life of
the Trust.
The Trust intends to make all tax calculations relating to income and
allocations to Certificateholders on an aggregate basis. If the IRS were to
require that such calculations be made separately for each Receivable, the Trust
might be required to incur additional expense but it is believed that there
would not be a material adverse effect on Certificateholders.
Discount and Premium. It is believed that the Receivables were not issued
with OID, and, therefore, the Trust should not have OID income. However, the
purchase price paid by the Trust for the Receivables may be greater or less than
the remaining principal balance of the Receivables at the time of purchase. If
so, the Receivables will have been acquired at a premium or discount, as the
case may be. (As indicated above, the Trust will make this calculation on an
aggregate basis, but might be required to recompute it on a
Receivable-by-Receivable basis.)
If the Trust acquires the Receivables at a market discount or premium, the
Trust will elect to include any such discount in income currently as it accrues
over the life of the Receivables or to offset any such premium against
47
interest income on the Receivables. As indicated above, a portion of such market
discount income or premium deduction may be allocated to Certificateholders.
Section 708 Termination. Under Section 708 of the Code, the Trust will be
deemed to terminate for federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a
12-month period. Pursuant to final Treasury regulations issued on May 9, 1997,
if such a termination occurs, the Trust will be considered to have contributed
the assets of the Trust (the "old partnership") to a new partnership (the "new
partnership") in exchange for interests in the partnership. Such interests would
be deemed distributed to the partners of the old partnership in liquidation
thereof, which would not constitute a sale or exchange.
Disposition of Certificates. Generally, capital gain or loss will be
recognized on a sale of Certificates in an amount equal to the difference
between the amount realized and the seller's tax basis in the Certificates sold.
A Certificateholder's tax basis in a Certificate will generally equal the
holder's cost increased by the holder's share of Trust income (includible in
income) and decreased by any distributions received with respect to such
Certificate. In addition, both the tax basis in the Certificates and the amount
realized on a sale of a Certificate would include the holder's share of the
Notes and other liabilities of the Trust. A holder acquiring Certificates at
different prices may be required to maintain a single aggregate adjusted tax
basis in such Certificates, and, upon sale or other disposition of some of the
Certificates, allocate a portion of such aggregate tax basis to the Certificates
sold (rather than maintaining a separate tax basis in each Certificate for
purposes of computing gain or loss on a sale of that Certificate).
Any gain on the sale of a Certificate attributable to the holder's share of
unrecognized accrued market discount on the Receivables would generally be
treated as ordinary income to the holder and would give rise to special tax
reporting requirements. The Trust does not expect to have any other assets that
would give rise to such special reporting requirements. Thus, to avoid those
special reporting requirements, the Trust will elect to include market discount
in income as it accrues.
If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Certificates that exceeds the aggregate
cash distributions with respect thereto, such excess will generally give rise to
a capital loss upon the retirement of the Certificates.
Allocations Between Transferors and Transferees. In general, the Trust's
taxable income and losses will be determined monthly and the tax items for a
particular calendar month will be apportioned among the Certificateholders in
proportion to the principal amount of Certificates owned by them as of the close
of the last day of such month. As a result, a holder purchasing Certificates may
be allocated tax items (which will affect its tax liability and tax basis)
attributable to periods before the actual transaction.
The use of such a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or losses
of the Trust might be reallocated among the Certificateholders. The Company is
authorized to revise the Trust's method of allocation between transferors and
transferees to conform to a method permitted by future regulations.
Section 754 Election. In the event that a Certificateholder sells its
Certificates at a profit (or loss), the purchasing Certificateholder will have a
higher (or lower) basis in the Certificates than the selling Certificateholder
had. The tax basis of the Trust's assets will not be adjusted to reflect that
higher (or lower) basis unless the Trust were to file an election under Section
754 of the Code. In order to avoid the administrative complexities that would be
involved in keeping accurate accounting records, as well as potentially onerous
information reporting requirements, the Trust will not make such an election. As
a result, Certificateholders might be allocated a greater or lesser amount of
Trust income than would be appropriate based on their own purchase price for the
Certificates.
Administrative Matters. The Owner Trustee is required to keep or have kept
complete and accurate books of the Trust. Such books will be maintained for
financial reporting and tax purposes on an accrual basis and the fiscal year of
the Trust will be the calendar year. The Trustee will file a partnership
information return (IRS Form 1065) with the IRS for each taxable year of the
Trust and will report each Certificateholder's allocable share of items of Trust
income and expense to holders and the IRS on Schedule K-1. The Trust will
provide the Schedule K-1 information
48
to nominees that fail to provide the Trust with the information statement
described below and such nominees will be required to forward such information
to the beneficial owners of the Certificates. Generally, holders must file tax
returns that are consistent with the information return filed by the Trust or be
subject to penalties unless the holder notifies the IRS of all such
inconsistencies.
Under Section 6031 of the Code, any person that holds Certificates as a
nominee at any time during a calendar year is required to furnish the Trust with
a statement containing certain information on the nominee, the beneficial owners
and the Certificates so held. Such information includes (i) the name, address
and taxpayer identification number of the nominee and (ii) as to each beneficial
owner (x) the name, address and identification number of such person, (y)
whether such person is a United States person, a tax-exempt entity or a foreign
government, an international organization, or any wholly owned agency or
instrumentality of either of the foregoing, and (z) certain information on
Certificates that were held, bought or sold on behalf of such person throughout
the year. In addition, brokers and financial institutions that hold Certificates
through a nominee are required to furnish directly to the Trust information as
to themselves and their ownership of Certificates. A clearing agency registered
under Section 17A of the Exchange Act is not required to furnish any such
information statement to the Trust. The information referred to above for any
calendar year must be furnished to the Trust on or before the following January
31. Nominees, brokers and financial institutions that fail to provide the Trust
with the information described above may be subject to penalties.
The Company will be designated as the tax matters partner in the related
Trust Agreement and, as such, will be responsible for representing the
Certificateholders in any dispute with the IRS. The Code provides for
administrative examination of a partnership as if the partnership were a
separate and distinct taxpayer. Generally, the statute of limitations for
partnership items does not expire before three years after the date on which the
partnership information return is filed. Any adverse determination following an
audit of the return of the Trust by the appropriate taxing authorities could
result in an adjustment of the returns of the Certificateholders, and, under
certain circumstances, a Certificateholder may be precluded from separately
litigating a proposed adjustment to the items of the Trust. An adjustment could
also result in an audit of a Certificateholder's returns and adjustments of
items not related to the income and losses of the Trust.
Tax Consequences to Foreign Certificateholders. It is not clear whether the
Trust would be considered to be engaged in a trade or business in the United
States for purposes of federal withholding taxes with respect to non-U.S.
persons because there is no clear authority dealing with that issue under facts
substantially similar to those described herein. Although it is not expected
that the Trust would be engaged in a trade or business in the United States for
such purposes, the Trust will withhold as if it were so engaged in order to
protect the Trust from possible adverse consequences of a failure to withhold.
The Trust expects to withhold on the portion of its taxable income that is
allocable to foreign Certificateholders pursuant to Section 1446 of the Code, as
if such income were effectively connected to a U.S. trade or business, at a rate
of 35% for foreign holders that are taxable as corporations and 39.6% for all
other foreign holders. Subsequent adoption of Treasury regulations or the
issuance of other administrative pronouncements may require the Trust to change
its withholding procedures. In determining a holder's withholding status, the
Trust may rely on IRS Form W-8, IRS Form W-9 or the holder's certification of
nonforeign status signed under penalties of perjury.
Each foreign holder might be required to file a U.S. individual or corporate
income tax return (including, in the case of a corporation, the branch profits
tax) on its share of the Trust's income. Each foreign holder must obtain a
taxpayer identification number from the IRS and submit that number to the Trust
on Form W-8 (or substantially identical form) in order to assure appropriate
crediting of the taxes withheld. A foreign holder generally would be entitled to
file with the IRS a claim for refund with respect to taxes withheld by the
Trust, taking the position that no taxes were due because the Trust was not
engaged in a U.S. trade or business. However, interest payments made (or
accrued) to a Certificateholder who is a foreign person generally will be
considered guaranteed payments to the extent such payments are determined
without regard to the income of the Trust. If these interest payments are
properly characterized as guaranteed payments, then the interest will not be
considered "portfolio interest". As a result, Certificateholders will be subject
to United States federal income tax and withholding tax at a rate of 30%, unless
reduced or eliminated pursuant to an applicable treaty. In such case, a foreign
holder would only be entitled to claim a refund for that portion of the taxes in
excess of the taxes that should be withheld with respect to the guaranteed
payments.
49
Backup Withholding. Distributions made on the Certificates and proceeds from
the sale of the Certificates will be subject to a "backup" withholding tax of
31% if, in general, the Certificateholder fails to comply with certain
identification procedures, unless the holder is an exempt recipient under
applicable provisions of the Code.
New Withholding Regulations. Recently, the Treasury Department issued the
New Regulations which attempt to unify certification requirements and modify
reliance standards. The New Regulations will generally be effective for payments
made after December 31, 1999, subject to certain transition rules.
Prospective investors are urged to consult their own tax advisors regarding the
New Regulations.
TRUSTS IN WHICH ALL CERTIFICATES ARE RETAINED BY THE SELLER OR AN AFFILIATE OF
THE SELLER
TAX CHARACTERIZATION OF THE TRUST
Federal Tax Counsel will deliver its opinion that a Trust which issues one
or more classes of Notes to investors and all the Certificates of which are
retained by Seller or an affiliate thereof will not be an association (or
publicly traded partnership) taxable as a corporation for federal income tax
purposes. This opinion will be based on the assumption that the terms of the
Trust Agreement and related documents will be complied with, and on counsel's
conclusions that the Trust will constitute a mere security arrangement for the
issuance of debt by the single Certificateholder.
Treatment of the Notes as Indebtedness. The Seller will agree, and the
Noteholders will agree by their purchase of Notes, to treat the Notes as debt
for federal income tax purposes. Federal Tax Counsel will, except as otherwise
provided in the related Prospectus Supplement, advise the Trust that the Notes
will be classified as debt for federal income tax purposes. Assuming such
characterization of the Notes is correct, the federal income tax consequences to
Noteholders described above under the heading "TRUSTS FOR WHICH A PARTNERSHIP
ELECTION IS MADE -- Tax Consequences to Holders of the Notes" would apply to the
Noteholders.
If, contrary to the opinion of Federal Tax Counsel, the IRS successfully
asserted that one or more classes of Notes did not represent debt for federal
income tax purposes, such class or classes of Notes might be treated as equity
interests in the Trust. If so treated, the Trust might be treated as a publicly
traded partnership taxable as a corporation with potentially adverse tax
consequences (and the publicly traded partnership taxable as a corporation would
not be able to reduce its taxable income by deductions for interest expense on
Notes recharacterized as equity). Alternatively, and more likely in the view of
Federal Tax Counsel, the Trust would most likely be treated as a publicly traded
partnership that would not be taxable as a corporation because it would meet
certain qualifying income tests. Nonetheless, treatment of Notes as equity
interests in such a partnership could have adverse tax consequences to certain
holders of such Notes. For example, income to certain tax-exempt entities
(including pension funds) would be "unrelated business taxable income", income
to foreign holders may be subject to U.S. withholding tax and U.S. tax return
filing requirements, and individual holders might be subject to certain
limitations on their ability to deduct their share of Trust expenses. In the
event one or more classes of Notes were treated as interests in a partnership,
the consequences governing the Certificates as equity interests in a partnership
described above under "TRUSTS FOR WHICH A PARTNERSHIP ELECTION IS MADE -- Tax
Consequences to Holders of the Certificates" would apply to the holders of such
Notes.
TRUSTS TREATED AS GRANTOR TRUSTS
TAX CHARACTERIZATION OF THE TRUST AS A GRANTOR TRUST
If a partnership election is not made, Federal Tax Counsel will deliver its
opinion that the Trust will not be classified as an association taxable as a
corporation and that such Trust will be classified as a grantor trust under
subpart E, part I, subchapter J, chapter 1 of subtitle A of the Code. In this
case, owners of Certificates (referred to herein as "Grantor Trust
Certificateholders") will be treated for federal income tax purposes as owners
of a portion of the Trust's assets as described below. The Certificates issued
by a Trust that is treated as a grantor trust are referred to herein as "Grantor
Trust Certificates".
50
Characterization. Each Grantor Trust Certificateholder will be treated as
the owner of a pro rata undivided interest in the interest and principal
portions of the Trust represented by the Grantor Trust Certificates and will be
considered the equitable owner of a pro rata undivided interest in each of the
Receivables in the Trust. Any amounts received by a Grantor Trust
Certificateholder in lieu of amounts due with respect to any Receivable because
of a default or delinquency in payment will be treated for federal income tax
purposes as having the same character as the payments they replace.
Each Grantor Trust Certificateholder will be required to report on its
federal income tax return in accordance with such Grantor Trust
Certificateholder's method of accounting its pro rata share of the entire income
from the Receivables in the Trust represented by Grantor Trust Certificates,
including interest, OID, if any, prepayment fees, assumption fees, any gain
recognized upon an assumption and late payment charges received by the Servicer.
Under Sections 162 or 212 each Grantor Trust Certificateholder will be entitled
to deduct its pro rata share of servicing fees, prepayment fees, assumption
fees, any loss recognized upon an assumption and late payment charges retained
by the Servicer, provided that such amounts are reasonable compensation for
services rendered to the Trust. Grantor Trust Certificateholders that are
individuals, estates or trusts will be entitled to deduct their share of
expenses only to the extent such expenses plus all other Section 212 expenses
exceed two percent of its adjusted gross income. A Grantor Trust
Certificateholder using the cash method of accounting must take into account its
pro rata share of income and deductions as and when collected by or paid to the
Servicer. A Grantor Trust Certificateholder using an accrual method of
accounting must take into account its pro rata share of income and deductions as
they become due or are paid to the Servicer, whichever is earlier. If the
servicing fees paid to the Servicer are deemed to exceed reasonable servicing
compensation, the amount of such excess could be considered as an ownership
interest retained by the Servicer (or any person to whom the Servicer assigned
for value all or a portion of the servicing fees) in a portion of the interest
payments on the Receivables. The Receivables would then be subject to the
"coupon stripping" rules of the Code discussed below.
Premium. The price paid for a Grantor Trust Certificate by a holder will be
allocated to such holder's undivided interest in each Receivable based on each
Receivable's relative fair market value, so that such holder's undivided
interest in each Receivable will have its own tax basis. A Grantor Trust
Certificateholder that acquires an interest in Receivables at a premium may
elect to amortize such premium under a constant interest method. Amortizable
bond premium will be treated as an offset to interest income on such Grantor
Trust Certificate. The basis for such Grantor Trust Certificate will be reduced
to the extent that amortizable premium is applied to offset interest payments.
It is not clear whether a reasonable prepayment assumption should be used in
computing amortization of premium allowable under Section 171. A Grantor Trust
Certificateholder that makes this election for a Grantor Trust Certificate that
is acquired at a premium will be deemed to have made an election to amortize
bond premium with respect to all debt instruments having amortizable bond
premium that such Grantor Trust Certificateholder acquires during the year of
the election or thereafter.
If a premium is not subject to amortization using a reasonable prepayment
assumption, the holder of a Grantor Trust Certificate acquired at a premium
should recognize a loss if a Receivable prepays in full, equal to the difference
between the portion of the prepaid principal amount of such Receivable that is
allocable to the Grantor Trust Certificate and the portion of the adjusted basis
of the Grantor Trust Certificate that is allocable to such Receivable. If a
reasonable prepayment assumption is used to amortize such premium, it appears
that such a loss would be available, if at all, only if prepayments have
occurred at a rate faster than the reasonable assumed prepayment rate. It is not
clear whether any other adjustments would be required to reflect differences
between an assumed prepayment rate and the actual rate of prepayments.
On December 30, 1997 the Internal Revenue Service ("IRS") issued final
regulations (the "Amortizable Bond Premium Regulations") dealing with
amortizable bond premium. These regulations specifically do not apply to
prepayable debt instruments subject to Code section 1272(a)(6). Absent further
guidance from the IRS, the Trustee intends to account for amortizable bond
premium in the manner described above. It is recommended that prospective
purchasers of the Certificates consult their tax advisors regarding the possible
application of the Amortizable Bond Premium Regulations.
51
STRIPPED BONDS AND STRIPPED COUPONS
Although the tax treatment of stripped bonds is not entirely clear, based on
recent guidance by the IRS, each purchaser of a Grantor Trust Certificate will
be treated as the purchaser of a stripped bond which generally should be treated
as a single debt instrument issued on the day it is purchased for purposes of
calculating any original issue discount. Generally, under recently issued
Treasury regulations (the "Section 1286 Treasury Regulations"), if the discount
on a stripped bond is larger than a de minimis amount (as calculated for
purposes of the OID rules of the Code) such stripped bond will be considered to
have been issued with OID. See "Original Issue Discount." Based on the preamble
to the Section 1286 Treasury Regulations, Federal Tax Counsel is of the opinion
that, although the matter is not entirely clear, the interest income on the
Certificates at the sum of the Pass Through Rate and the portion of the
Servicing Fee Rate that does not constitute excess servicing will be treated as
"qualified stated interest" within the meaning of the Section 1286 Treasury
Regulations and such income will be so treated in the Trustee's tax information
reporting.
Original Issue Discount. The IRS has stated in published rulings that, in
circumstances similar to those described herein, the special rules of the Code
relating to "original issue discount" (currently Sections 1271 through 1273 and
1275) will be applicable to a Grantor Trust Certificateholder's interest in
those Receivables meeting the conditions necessary for these sections to apply.
Generally, a Grantor Trust Certificateholder that acquires an undivided interest
in a Receivable issued or acquired with OID must include in gross income the sum
of the "daily portions," as defined below, of the OID on such Receivable for
each day on which it owns a Certificate, including the date of purchase but
excluding the date of disposition. In the case of an original Grantor Trust
Certificateholder, the daily portions of OID with respect to a Receivable
generally would be determined as follows. A calculation will be made of the
portion of OID that accrues on the Receivable during each successive monthly
accrual period (or shorter period in respect of the date of original issue or
the final Distribution Date). This will be done, in the case of each full
monthly accrual period, by adding (i) the present value of all remaining
payments to be received on the Receivable under the prepayment assumption used
in respect of the Receivables and (ii) any payments received during such accrual
period, and subtracting from that total the "adjusted issue price" of the
Receivable at the beginning of such accrual period. No representation is made
that the Receivables will prepay at any prepayment assumption. The "adjusted
issue price" of a Receivable at the beginning of the first accrual period is its
issue price (as determined for purposes of the OID rules of the Code) and the
"adjusted issue price" of a Receivable at the beginning of a subsequent accrual
period is the "adjusted issue price" at the beginning of the immediately
preceding accrual period plus the amount of OID allocable to that accrual period
and reduced by the amount of any payment (other than "qualified stated
interest") made at the end of or during that accrual period. The OID accruing
during such accrual period will then be divided by the number of days in the
period to determine the daily portion of OID for each day in the period. With
respect to an initial accrual period shorter than a full monthly accrual period,
the daily portions of OID must be determined according to an appropriate
allocation under either an exact or approximate method set forth in the OID
Regulations, or some other reasonable method, provided that such method is
consistent with the method used to determine the yield to maturity of the
Receivables.
With respect to the Receivables, the method of calculating OID as described
above will cause the accrual of OID to either increase or decrease (but never
below zero) in any given accrual period to reflect the fact that prepayments are
occurring at a faster or slower rate than the prepayment assumption used in
respect of the Receivables. Subsequent purchasers that purchase Receivables at
more than a de minimis discount should consult their tax advisors with respect
to the proper method to accrue such OID.
Market Discount. A Grantor Trust Certificateholder that acquires an
undivided interest in Receivables may be subject to the market discount rules of
Sections 1276 through 1278 to the extent an undivided interest in a Receivable
is considered to have been purchased at a "market discount." Generally, the
amount of market discount is equal to the excess of the portion of the principal
amount of such Receivable allocable to such holder's undivided interest over
such holder's tax basis in such interest. Market discount with respect to a
Grantor Trust Certificate will be considered to be zero if the amount allocable
to the Grantor Trust Certificate is less than 0.25% of the Grantor Trust
Certificate's stated redemption price at maturity multiplied by the weighted
average maturity remaining after the date of purchase. Treasury regulations
implementing the market discount rules have not yet been issued; therefore,
investors should consult their own tax advisors regarding the application of
these rules and the advisability of making any of the elections allowed under
Code Sections 1276 through 1278.
52
The Code provides that any principal payment (whether a scheduled payment or
a prepayment) or any gain on disposition of a market discount bond shall be
treated as ordinary income to the extent that it does not exceed the accrued
market discount at the time of such payment. The amount of accrued market
discount for purposes of determining the tax treatment of subsequent principal
payments or dispositions of the market discount bond is to be reduced by the
amount so treated as ordinary income.
The Code also grants the Treasury Department authority to issue regulations
providing for the computation of accrued market discount on debt instruments,
the principal of which is payable in more than one installment. While the
Treasury Department has not yet issued regulations, rules described in the
relevant legislative history will apply. Under those rules, the holder of a
market discount bond may elect to accrue market discount either on the basis of
a constant interest rate or according to one of the following methods. If a
Grantor Trust Certificate is issued with OID, the amount of market discount that
accrues during any accrual period would be equal to the product of (i) the total
remaining market discount and (ii) a fraction, the numerator of which is the OID
accruing during the period and the denominator of which is the total remaining
OID at the beginning of the accrual period. For Grantor Trust Certificates
issued without OID, the amount of market discount that accrues during a period
is equal to the product of (i) the total remaining market discount and (ii) a
fraction, the numerator of which is the amount of stated interest paid during
the accrual period and the denominator of which is the total amount of stated
interest remaining to be paid at the beginning of the accrual period. For
purposes of calculating market discount under any of the above methods in the
case of instruments (such as the Grantor Trust Certificates) that provide for
payments that may be accelerated by reason of prepayments of other obligations
securing such instruments, the same prepayment assumption applicable to
calculating the accrual of OID will apply. Because the regulations described
above have not been issued, it is impossible to predict what effect those
regulations might have on the tax treatment of a Grantor Trust Certificate
purchased at a discount or premium in the secondary market.
A holder who acquired a Grantor Trust Certificate at a market discount also
may be required to defer a portion of its interest deductions for the taxable
year attributable to any indebtedness incurred or continued to purchase or carry
such Grantor Trust Certificate purchased with market discount. For these
purposes, the de minimis rule referred above applies. Any such deferred interest
expense would not exceed the market discount that accrues during such taxable
year and is, in general, allowed as a deduction not later than the year in which
such market discount is includible in income. If such holder elects to include
market discount in income currently as it accrues on all market discount
instruments acquired by such holder in that taxable year or thereafter, the
interest deferral rule described above will not apply.
Election to Treat All Interest as OID. The OID regulations permit a Grantor
Trust Certificateholder to elect to accrue all interest, discount (including de
minimis market or original issue discount) and premium in income as interest,
based on a constant yield method. If such an election were to be made with
respect to a Grantor Trust Certificate with market discount, the
Certificateholder would be deemed to have made an election to include in income
currently market discount with respect to all other debt instruments having
market discount that such Grantor Trust Certificateholder acquires during the
year of the election or thereafter. Similarly, a Grantor Trust Certificateholder
that makes this election for a Grantor Trust Certificate that is acquired at a
premium will be deemed to have made an election to amortize bond premium with
respect to all debt instruments having amortizable bond premium that such
Grantor Trust Certificateholder owns or acquires. See "-- Premium" herein. The
election to accrue interest, discount and premium on a constant yield method
with respect to a Grantor Trust Certificate is irrevocable.
Sale or Exchange of a Grantor Trust Certificate. Sale or exchange of a
Grantor Trust Certificate prior to its maturity will result in gain or loss
equal to the difference, if any, between the amount received and the owner's
adjusted basis in the Grantor Trust Certificate. Such adjusted basis generally
will equal the seller's purchase price for the Grantor Trust Certificate,
increased by the OID included in the seller's gross income with respect to the
Grantor Trust Certificate, and reduced by principal payments on the Grantor
Trust Certificate previously received by the seller. Such gain or loss will be
capital gain or loss to an owner for which a Grantor Trust Certificate is a
"capital asset" within the meaning of Section 1221, and will be long-term or
short-term depending on whether the Grantor Trust Certificate has been owned for
the long-term capital gain holding period (currently more than twelve months).
53
Grantor Trust Certificates will be "evidences of indebtedness" within the
meaning of Section 582(c)(1), so that gain or loss recognized from the sale of a
Grantor Trust Certificate by a bank or a thrift institution to which such
section applies will be treated as ordinary income or loss.
Non-U.S. Persons. Generally, to the extent that a Grantor Trust Certificate
evidences ownership in underlying Receivables that were issued on or before July
18, 1984, interest or OID paid by the person required to withhold tax under
Section 1441 or 1442 to (i) an owner that is not a U.S. Person (as defined
below) or (ii) a Grantor Trust Certificateholder holding on behalf of an owner
that is not a U.S. Person will be subject to federal income tax, collected by
withholding, at a rate of 30% or such lower rate as may be provided for interest
by an applicable tax treaty. Accrued OID recognized by the owner on the sale or
exchange of such a Grantor Trust Certificate also will be subject to federal
income tax at the same rate. Generally, such payments would not be subject to
withholding to the extent that a Grantor Trust Certificate evidences ownership
in Receivables issued after July 18, 1984, by natural persons if such Grantor
Trust Certificateholder complies with certain identification requirements
(including delivery of a statement, signed by the Grantor Trust
Certificateholder under penalties of perjury, certifying that such Grantor Trust
Certificateholder is not a U.S. Person and providing the name and address of
such Grantor Trust Certificateholder). Additional restrictions apply to
Receivables of where the obligor is not a natural person in order to qualify for
the exemption from withholding.
As used herein, a "U.S. Person" means a citizen or resident of the United
States, a corporation or a partnership organized in or under the laws of the
United States or any political subdivision thereof, an estate or trust, the
income of which from sources outside the United States is includible in gross
income for federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States, or a trust if a court
within the United States is able to exercise primary supervision of the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust.
Information Reporting and Backup Withholding. The Servicer will furnish or
make available, within a reasonable time after the end of each calendar year, to
each person who was a Grantor Trust Certificateholder at any time during such
year, such information as may be deemed necessary or desirable to assist Grantor
Trust Certificateholders in preparing their federal income tax returns, or to
enable holders to make such information available to beneficial owners or
financial intermediaries that hold Grantor Trust Certificates as nominees on
behalf of beneficial owners. If a holder, beneficial owner, financial
intermediary or other recipient of a payment on behalf of a beneficial owner
fails to supply a certified taxpayer identification number or if the Secretary
of the Treasury determines that such person has not reported all interest and
dividend income required to be shown on its federal income tax return, 31%
backup withholding may be required with respect to any payments. Any amounts
deducted and withheld from a distribution to a recipient would be allowed as a
credit against such recipient's federal income tax liability.
New Withholding Regulations. Recently, the Treasury Department issued the
New Regulations which attempt to unify certification requirements and modify
reliance standards. The New Regulations will generally be effective for payments
made after December 31, 1999, subject to certain transition rules. Prospective
investors are urged to consult their own tax advisors regarding the New
Regulations.
FASITs
The Small Business and Job Protection Act of 1996 added sections 860H
through 860L to the Code (the "FASIT provisions"), which provide for a new type
of entity for United States federal income tax purposes known as a "financial
asset securitization investment trust" (a "FASIT"). The legislation providing
for the new FASIT entity became effective on September 1, 1997, but many
technical issues are to be addressed in Treasury regulations yet to be drafted.
In general, the FASIT legislation will enable trusts such as the Issuer to be
treated as a pass through entity not subject to United States federal
entity-level income tax (except with respect to certain prohibited transactions)
and to issue securities that would be treated as debt for United States federal
income tax purposes. A FASIT election may be made with respect to the Issuer in
connection with the issuance of future Series of securities, upon satisfaction
of certain conditions, delivery by the Issuer of appropriate legal opinions and
a determination by the Issuer that such election will have no adverse impact on
holders of then-existing classes of securities of the Issuer.
CERTAIN STATE TAX CONSEQUENCES
The activities of servicing and collecting the Receivables will be
undertaken by the Servicer, which is a Michigan corporation. Because of the
variation in each state's tax laws based in whole or in part upon income, it is
impossible to predict tax consequences to holders of Notes and Certificates in
all of the state taxing jurisdictions in which they are already subject to tax.
Noteholders and Certificateholders are urged to consult their own tax advisors
with respect to state tax consequences arising out of the purchase, ownership
and disposition of Notes and Certificates.
* * *
THE FEDERAL AND STATE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A NOTEHOLDER'S
OR CERTIFICATEHOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES AND CERTIFICATES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension, profit
sharing or other employee benefit or other plan (such as an individual
retirement account and certain types of Keogh Plans) that is subject to Title I
of ERISA or to Section 4975 of the Code from engaging in certain transactions
involving "plan assets" with persons that are "parties in interest" under ERISA
or "disqualified person" under the Code with respect to the plan. Certain
governmental plans, although not subject to ERISA or the Code, are subject to
federal, state or local laws ("Similar Law") that impose similar requirements
(such plans subject to ERISA, Section 4975, or Similar Law referred to herein as
"Plans"). A violation of these "prohibited transaction" rules may generate
excise tax and other liabilities under ERISA and the Code or under Similar Law
for such persons.
Depending on the relevant facts and circumstances, certain prohibited
transaction exemptions may apply to the purchase or holding of the
Securities--for example, Prohibited Transaction Class Exemption ("PTE") 96-23,
which exempts certain transactions effected on behalf of a Plan by an "in-house
asset manager"; PTE 95-60, which exempts certain transactions between insurance
company general accounts and parties in interest; PTE 91-38, which exempts
certain transactions between bank collective investment funds and parties in
interest; PTE 90-1, which exempts certain transactions between insurance company
pooled separate accounts and parties in interest; or PTE 84-14, which exempts
certain transactions effected on behalf of a Plan by a "qualified professional
asset manager". There can be no assurance that any of these exemptions will
apply with respect to any Plan's investment in the Securities, or that such an
exemption, if it did apply, would apply to all prohibited transactions that may
occur in connection with such investment. Furthermore, these exemptions would
not apply to transactions involved in operation of the Trust if, as described
below, the assets of the Trust were considered to include Plan assets.
ERISA also imposes certain duties on persons who are fiduciaries of Plans
subject to ERISA, including the requirements of investment prudence and
diversification, and the requirement that such a Plan's investments be made in
accordance with the documents governing the Plan. Under ERISA, any person who
exercises any authority or control respecting the management or disposition of
the assets of a Plan is considered to be a fiduciary of such
55
Plan. Plan fiduciaries must determine whether the acquisition and holding of
Securities and the operations of the Trust would result in prohibited
transactions if Plans that purchase the Securities were deemed to own an
interest in the underlying assets of the Trust under the rules discussed below.
There may also be an improper delegation of the responsibility to manage Plan
assets if Plans that purchase the Securities are deemed to own an interest in
the underlying assets of the Trust.
Pursuant to Department of Labor Regulation Section 2510.3-101 (the "Plan
Assets Regulation"), in general when a Plan acquires an equity interest in an
entity such as the Trust and such interest does not represent a "publicly
offered security" or a security issued by an investment company registered under
the Investment Company Act of 1940, as amended, the Plan's assets include both
the equity interest and an undivided interest in each of the underlying assets
of the entity, unless it is established either that the entity is an "operating
company" or that equity participation in the entity by "benefit plan investors"
is not "significant". In general, an "equity interest" is defined under the Plan
Assets Regulation as any interest in an entity other than an instrument which is
treated as indebtedness under applicable local law and which has no substantial
equity features. The likely treatment in this context of Notes and Certificates
of a given series will be discussed in the related Prospectus Supplement.
However, it is anticipated that the Certificates will be considered equity
interests in the Trust for purposes of the Plan Assets Regulation, and that the
assets of the Trust may therefore constitute plan assets if Certificates are
acquired by Plans. In such event, the fiduciary and prohibited transaction
restrictions of ERISA and section 4975 of the Code would apply to transactions
involving the assets of the Trust.
As a result, except in the case of Senior Certificates with respect to which
the Exemption is available (as described below), Certificates generally shall
not be transferred and the Trustee shall not register any proposed transfer of
Certificates unless it receives (i) a representation substantially to the effect
that the proposed transferee is not a Plan and is not acquiring the Certificates
on behalf of or with the assets of a Plan (including assets that may be held in
an insurance company's separate or general accounts where assets in such
accounts may be deemed "plan assets" for purposes of ERISA), or (ii) an opinion
of counsel in form and substance satisfactory to the Trustee and the Depositor
that the purchase or holding of the Certificates by or on behalf of a Plan will
not constitute a prohibited transaction and will not result in the assets of the
Trust being deemed to be "plan assets" and subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of
ERISA and the Code or any Similar Law or subject any Trustee, the Certificate
Administrator or the Depositor to any obligation in addition to those undertaken
in the Trust Agreement.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA)
are not subject to ERISA requirements. However, any such governmental or church
plan which is qualified under section 401(a) of the Code and exempt from
taxation under Section 501(a) of the Code is subject to the prohibited
transaction rules in Section 503 of the Code.
A fiduciary of a Plan considering the purchase of Securities of a given
series should consult its tax and/or legal advisors regarding whether the assets
of the related Trust would be considered plan assets, the possibility of
exemptive relief from the prohibited transaction rules and other issues and
their potential consequences.
SENIOR CERTIFICATES ISSUED BY TRUSTS
Unless otherwise specified in the related Prospectus Supplement, the
following discussion applies only to nonsubordinated Certificates (referred to
herein as "Senior Certificates") issued by a Trust.
The U.S. Department of Labor (the "DOL") has granted to the lead Underwriter
named in the Prospectus Supplement an exemption (the "Exemption") from certain
of the prohibited transaction rules of ERISA with respect to the initial
purchase, the holding and the subsequent resale by Plans of certificates
representing interests in asset-backed pass-through trusts that consist of
certain receivables, loans and other obligations that meet the conditions and
requirements of the Exemption. The receivables covered by the Exemption include
motor vehicle installment sales contracts such as the Receivables. The Exemption
will apply to the acquisition, holding and resale of the Senior Certificates by
a Plan, provided that certain conditions (certain of which are described below)
are met.
Among the conditions which must be satisfied for the Exemption to apply to
the Senior Certificates are the following:
56
(1) The acquisition of the Senior Certificates by a Plan is on terms
(including the price for the Senior Certificates) that are at least as
favorable to the Plan as they would be in an arm's length transaction with
an unrelated party;
(2) The rights and interests evidenced by the Senior Certificates
acquired by the Plan are not subordinated to the rights and interests
evidenced by other certificates of the Trust;
(3) The Senior Certificates acquired by the Plan have received a rating
at the time of such acquisition that is in one of the three highest generic
rating categories from either Standard & Poor's Corporation, Moody's
Investors Service, Inc., Duff & Phelps Inc. or Fitch IBCA, Inc.;
(4) The Trustee is not an affiliate of any other member of the
Restricted Group (as defined below);
(5) The sum of all payments made to the Underwriters in connection with
the distribution of the Senior Certificates represents not more than
reasonable compensation for underwriting the Senior Certificates; the sum of
all payments made to and retained by the Seller pursuant to the sale of the
Contracts to the Trust represents not more than the fair market value of
such Contracts; and the sum of all payments made to and retained by the
Servicer represents not more than reasonable compensation for the Servicer's
services under the Agreement and reimbursement of the Servicer's reasonable
expenses in connection therewith; and
(6) The Plan investing in the Senior Certificates is an "accredited
investor" as defined in Rule 501(a)(1) of Regulation D of the Securities and
Exchange Commission under the Securities Act of 1933.
On July 21, 1997, the DOL published in the Federal Register an amendment to
the Exemption, which extends exemptive relief to certain mortgage-backed and
asset-backed securities transactions using pre-funding accounts for trusts
issuing pass-through certificates. The amendment generally allows mortgage loans
or other secured receivables (the "Obligations") supporting payments to
certificateholders, and having a value equal to no more than twenty-five percent
(25%) of the total principal amount of the certificates being offered by the
trust, to be transferred to the trust within a 90-day or three-month period
following the closing date (the "Pre-Funding Period"), instead of requiring that
all such Obligations be either identified or transferred on or before the
Closing Date. The relief is available when the following conditions are met:
(1) The ratio of the amount allocated to the pre-funding
account to the total principal amount of the certificates
being offered (the "Pre-Funding Limit") must not exceed
twenty-five percent (25%).
(2) All Obligations transferred after the Closing Date
(the "Additional Obligations") must meet the same terms and
conditions for eligibility as the original Obligations used to
create the trust, which terms and conditions have been
approved by a Rating Agency.
(3) The transfer of such Additional Obligations to the
trust during the Pre-Funding Period must not result in the
certificates to be covered by the Exemption receiving a lower
credit rating from a Rating Agency upon termination of the
Pre-Funding Period than the rating that was obtained at the
time of the initial issuance of the certificates by the trust.
(4) Solely as a result of the use of pre-funding, the
weighted average annual percentage interest rate for all of
the Obligations in the trust at the end of the Pre-Funding
Period must not be more than 100 basis points lower than the
average interest rate for the Obligations transferred to the
trust on the Closing Date.
(5) In order to insure that the characteristics of the
Additional Obligations are substantially similar to the
original Obligations which were transferred to the Trust Fund:
57
(i) the characteristics of the Additional
Obligations must be monitored by an insurer or other
credit support provider that is independent of the
depositor; or
(ii) an independent accountant retained by
the depositor must provide the depositor with a
letter (with copies provided to each Rating Agency
rating the certificates, the related underwriter and
the related trustee) stating whether or not the
characteristics of the Additional Obligations conform
to the characteristics described in the related
prospectus or prospectus supplement and/or pooling
and servicing agreement. In preparing such letter,
the independent accountant must use the same type of
procedures as were applicable to the Obligations
transferred to the trust as of the Closing Date.
(6) The Pre-Funding Period must end no later than three
months or 90 days after the Closing Date or earlier in certain
circumstances if the pre-funding account falls below the
minimum level specified in the pooling and servicing agreement
or an Event of Default occurs.
(7) Amounts transferred to any pre-funding account and/or
capitalized interest account used in connection with the
pre-funding may be invested only in certain permitted
investments ("Permitted Investments").
(8) The related prospectus or prospectus supplement must
describe:
(i) any pre-funding account and/or
capitalized interest account used in connection with
a pre-funding account;
(ii) the duration of the Pre-Funding Period;
(iii) the percentage and/or dollar amount of
the Pre-Funding Limit for the trust; and
(iv) that the amounts remaining in the
pre-funding account at the end of the Pre-Funding
Period will be remitted to certificateholders as
repayments of principal.
(9) The related pooling and servicing agreement must
describe the Permitted Investments for the pre-funding account
and/or capitalized interest account and, if not disclosed in
the related prospectus or prospectus supplement, the terms and
conditions for eligibility of Additional Obligations.
The Exemption would also provide relief from certain
self-dealing/conflict of interest or prohibited transactions that may occur
when the Plan fiduciary causes a Plan to acquire certificates in a trust
when the fiduciary (or its affiliate) is an obligor on receivables held in
the trust only if, among other requirements, (i) in the case of the
acquisition of Senior Certificates in connection with the initial issuance,
at least fifty (50) percent of the Senior Certificates are acquired by
persons independent of the Restricted Group (as defined below), (ii) such
fiduciary (or its affiliate) is an obligor with respect to five percent (5%)
or less of the fair market value of the obligations contained in the trust,
(iii) the Plan's investment in Senior Certificates does not exceed
twenty-five (25) percent of all of the Senior Certificates outstanding at
the time of the acquisition, and (iv) immediately after the acquisition, no
more than twenty-five (25) percent of the assets of any Plan with respect to
which the fiduciary has discretionary authority or renders investment advice
are invested in certificates representing an interest in one or more trusts
containing assets sold or serviced by the same entity. The Exemption does
not apply to Plans sponsored by the Seller, any Underwriter, the Trustee,
the Servicer, any obligor with respect to Contracts included in the Trust
constituting more than five percent of the aggregate unamortized principal
balance of the assets in the Trust, or any affiliate of such parties (the
"Restricted Group").
The Prospectus Supplement for each Series of Securities will indicate the
classes of Securities, if any, offered thereby to which it is expected that the
Exemption will apply.
58
Any Plan fiduciary which proposes to cause a Plan to purchase Securities
should consult with counsel concerning the impact of ERISA and the Code, the
applicability of the Exemption (as amended) and the potential consequences in
their specific circumstances, prior to making such investment. Moreover, each
Plan fiduciary should determine whether, under the general fiduciary standards
of investment prudence and diversification, an investment in the Securities is
appropriate for the Plan, taking into account the overall investment policy of
the Plan and the composition of the Plan's investment portfolio.
PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement with
respect to the Notes, if any, of a series and an underwriting agreement with
respect to the Certificates of such series (collectively, the "Underwriting
Agreements"), the Seller will agree to cause the related Trust to sell to the
underwriters named therein and in the related Prospectus Supplement, and each of
such underwriters will severally agree to purchase, the principal amount of each
class of Notes and Certificates, as the case may be, of the related series set
forth therein and in the related Prospectus Supplement.
In each of the Underwriting Agreements with respect to any given series of
Securities, the several underwriters will agree, subject to the terms and
conditions set forth therein, to purchase all the Notes and Certificates, as the
case may be, described therein which are offered hereby and by the related
Prospectus Supplement if any of such Notes and Certificates, as the case may be,
are purchased.
Each Prospectus Supplement will either (i) set forth the price at which each
class of Notes and Certificates, as the case may be, being offered thereby will
be offered to the public and any concessions that may be offered to certain
dealers participating in the offering of such Notes and Certificates or (ii)
specify that the related Notes and Certificates, as the case may be, are to be
resold by the underwriters in negotiated transactions at varying prices to be
determined at the time of such sale. After the initial public offering of any
such Notes and Certificates, such public offering prices and such concessions
may be changed.
Each Underwriting Agreement will provide that the Seller will indemnify the
underwriters against certain civil liabilities, including liabilities under the
Securities Act, or contribute to payments the several underwriters may be
required to make in respect thereof.
Each Trust may, from time to time, invest the funds in its Trust Accounts in
Eligible Investments acquired from such underwriters or from the Seller.
Pursuant to each Underwriting Agreement with respect to a given series of
Securities, the closing of the sale of any class of Securities subject to such
Underwriting Agreement will be conditioned on the closing of the sale of all
other such classes of Securities of that series.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered will be set forth in the related Prospectus Supplement.
LEGAL OPINIONS
Certain legal matters relating to the Securities of any series will be
passed upon for the related Trust and the Seller by the General Counsel of the
Seller.
59
INDEX OF TERMS
Act...........................................................................54
Actuarial Receivables.........................................................12
Administration Agreement......................................................40
Administration Fee............................................................41
Administrator.................................................................40
Advances......................................................................34
Amortizable Bond Premium Regulations..........................................51
Applicable Trustee............................................................26
Base Rate.....................................................................22
Calculation Agent.............................................................22
Calculation Date......................................................23, 24, 25
CD Rate.......................................................................22
CD Rate Determination Date....................................................22
CD Rate Security..............................................................22
Cede..........................................................................10
Cedelbank.....................................................................27
Cedelbank Participants........................................................27
Certificate Distribution Account..............................................32
Certificate Pool Factor.......................................................14
Certificateholder.............................................................10
CFC............................................................................4
Chrysler.......................................................................8
Closing Date..................................................................31
Code..........................................................................44
Collection Account............................................................32
Collection Period.............................................................33
Commercial Paper Rate.........................................................23
Commercial Paper Rate Determination Date......................................23
Commercial Paper Rate Security................................................22
Commission.....................................................................3
Commodity Indexed Securities..................................................25
Composite Quotations..........................................................22
Cooperative...................................................................27
Currency Indexed Securities...................................................25
Cutoff Date...................................................................11
Dealer Agreements.............................................................11
Dealers.......................................................................11
Definitive Certificates.......................................................29
Definitive Notes..............................................................29
Definitive Securities.........................................................29
Depositaries..................................................................28
Depository....................................................................16
Determination Date............................................................35
Distribution Date.............................................................21
DOL...........................................................................56
DTC's Nominee.................................................................10
Eligible Deposit Account......................................................33
Eligible Institution..........................................................33
Eligible Investments..........................................................32
Euroclear.....................................................................27
Euroclear Operator............................................................27
Euroclear Participants........................................................27
Events of Default.............................................................18
60
Exemption.....................................................................56
Face Amount...................................................................26
Federal Funds Rate............................................................24
Federal Funds Rate Determination Date.........................................24
Federal Funds Rate Security...................................................22
Federal Tax Counsel...........................................................44
Financed Vehicles..............................................................7
Fixed Rate Securities.........................................................21
Fixed Value Receivables.......................................................13
Fixed Value Securities........................................................39
Floating Rate Securities......................................................21
FTC Rule......................................................................43
Grantor Trust Certificateholders..............................................50
Grantor Trust Certificates....................................................50
H.15(519).....................................................................22
Indenture.....................................................................17
Index.........................................................................25
Index Maturity................................................................22
Indexed Commodity.............................................................25
Indexed Currency..............................................................25
Indexed Principal Amount......................................................25
Indexed Securities............................................................25
Indirect Participants.........................................................26
Initial Pool Balance..........................................................40
Insolvency Event..............................................................38
Interest Reset Date...........................................................22
Interest Reset Period.........................................................22
Investment Earnings...........................................................33
IRS...........................................................................44
LIBOR.........................................................................24
LIBOR Business Day............................................................24
LIBOR Determination Date......................................................24
LIBOR Security................................................................22
Money Market Yield............................................................23
New Regulations...............................................................46
Note Distribution Account.....................................................32
Note Pool Factor..............................................................14
Noteholder....................................................................10
Obligors......................................................................11
OID...........................................................................45
OID regulations...............................................................45
Participants..............................................................16, 28
Payahead Account..............................................................32
Payaheads.....................................................................34
Payment Date..................................................................17
Plan Assets Regulation........................................................56
Plans.........................................................................55
Pool Balance..................................................................15
Pooling and Servicing Agreement...............................................11
Precomputed Receivables.......................................................12
PTE...........................................................................55
Receivables.................................................................1, 4
Receivables Pool..............................................................11
Registration Statement.........................................................3
Related Documents.............................................................19
Repurchase Amount.............................................................32
61
Reserve Account...............................................................36
Restricted Group..............................................................58
Rule of 78's Receivables......................................................12
Rules.........................................................................26
Sale and Servicing Agreement..................................................11
Schedule of Receivables.......................................................31
Section 1286 Treasury Regulations.............................................52
Securities Act.................................................................3
Seller.........................................................................4
Senior Certificates...........................................................56
Series Trust Property......................................................4, 11
Servicer.......................................................................4
Servicer Default..............................................................37
Servicing Fee.................................................................34
Servicing Fee Rate............................................................34
Short-Term Note...............................................................45
Similar Law...................................................................55
Simple Interest Receivables...................................................13
Spread........................................................................22
Spread Multiplier.............................................................22
Stock Index...................................................................25
Stock Indexed Securities......................................................25
Subsequent Transfer Date......................................................31
Telerate Page 3750............................................................24
Terms and Conditions..........................................................27
Transfer and Servicing Agreements.............................................31
Treasury bills................................................................25
Treasury Rate.................................................................25
Treasury Rate Determination Date..............................................25
Treasury Rate Security........................................................22
Trust..........................................................................4
Trust Accounts................................................................32
Trust Agreement...............................................................11
U.S. Person...................................................................54
UCC........................................................................8, 32
Underwriting Agreements.......................................................59
62
_________________
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Reports to Noteholders......................................................S-3
Table of Contents...........................................................S-4
Summary of Terms............................................................S-5
Special Considerations......................................................S-9
The Trust...................................................................S-12
The Receivables Pool........................................................S-13
Chrysler Financial Company L.L.C............................................S-17
Weighted Average Life of the Notes..........................................S-18
Description of the Notes....................................................S-18
Description of the Certificates.............................................S-20
Description of the Transfer and Servicing Agreements........................S-20
Certain Federal Income Tax Consequences.....................................S-25
ERISA Considerations........................................................S-25
Underwriting................................................................S-26
Legal Opinions..............................................................S-27
Index of Terms..............................................................S-28
PROSPECTUS
Available Information.........................................................3
Incorporation of Certain Documents by Reference...............................3
Summary of Terms..............................................................4
Special Considerations........................................................7
The Trusts....................................................................11
The Receivables Pools.........................................................12
Weighted Average Life of the Securities.......................................14
Pool Factors for Securities and Trading Information...........................14
Use of Proceeds...............................................................15
Chrysler Financial Company L.L.C..............................................15
Description of the Notes......................................................16
Description of the Certificates...............................................20
Certain Information Regarding the Securities..................................21
Description of the Transfer and Servicing Agreements .........................31
Certain Legal Aspects of the Receivables......................................41
Certain Federal Income Tax Consequences.......................................44
Certain State Tax Consequences................................................55
ERISA Considerations..........................................................55
Plan of Distribution..........................................................59
Legal Opinions................................................................59
Index of Terms................................................................60
DEALERS WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS
UNDERWRITERS OF THE OFFERED NOTES AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS. IN ADDITION, ALL DEALERS SELLING OFFERED NOTES WILL DELIVER A
PROSPECTUS SUPPLEMENT AND PROSPECTUS UNTIL 90 DAYS AFTER THE DATE OF THIS
PROSPECTUS SUPPLEMENT.
================================================================================
$______________
PREMIER AUTO TRUST
________________
$__________
____% ASSET BACKED NOTES, CLASS A-2
$__________
____% ASSET BACKED NOTES, CLASS A-3
$__________
____% ASSET BACKED NOTES, CLASS A-4
$__________
CHRYSLER FINANCIAL
COMPANY L.L.C.
SELLER AND SERVICER
________________
PROSPECTUS SUPPLEMENT
DATED ______________
________________
[UNDERWRITERS]
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following is an itemized list of the estimated expenses to be
incurred in connection with the offering of the securities being offered
hereunder other than underwriting discounts and commissions.
Registration Fee..............................................$1,112,000.00
Printing Expenses................................................112,500.00
Trustee Fees and Expenses.........................................86,250.00
Legal Fees and Expenses...........................................75,000.00
Accountants' Fees and Expenses....................................75,000.00
Rating Agencies' Fees............................................750,000.00
Miscellaneous........................................................257.00
------------
Total............................................... $2,211,007.00
=============
- ---------------
* All amounts except registration fee are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 3.5 of the Operating Agreement of the Registrant provides
that to the fullest extent permitted by the Michigan Limited Liability Company
Act, the Registrant to the extent of its assets legally available for such
purpose, will indemnify and hold harmless each person who is or was a manager,
officer, committee member, employee, member, or who serves or may have served
at the Registrant's request as a member, director, manager, officer, or
employee of any company or corporation that the Registrant owns directly or
indirectly, and any member's respective shareholders, directors, officers,
agents, affiliates and professional or other advisors (collectively, the
"Indemnified Persons") from and against any and all loss, cost, damage,
expense (including, without limitation, fees and expenses of attorneys and
other advisors and any court costs incurred by any Indemnified Person) or
liability by reason of anything any Indemnified Person does or refrains from
doing for, or in connection with the business or affairs of, the Registrant
and its subsidiaries and affiliates, except to the extent that it is finally
judicially determined by a court of competent jurisdiction that the loss,
cost, damage, expense or liability resulted primarily from the Indemnified
Person's negligence, misconduct in the performance of her or her duty, or
willful breach of a material provision of the Operating Agreement which in any
event causes actual material damage to the Registrant. The Registrant may pay
in advance or reimburse reasonable expenses (including advancing the
reasonable cost of defense) incurred by an Indemnified Person who is, or is
threatened to be, named or made a defendant or a respondent in a proceeding
concerning the business affairs of the Registrant. Reference is made to
Exhibit 3.2 to this Registration Statement for the complete texts of Section
3.5 of the Operating Agreement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 by the Registrant may be permitted to directors,
officers and controlling persons of the Registrant under the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in said Act and therefore may be unenforceable. If
a claim for indemnification against such liabilities (except insofar as it
provides for the payment by the Registrant of expenses incurred or paid by a
director or officer in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by a director, officer or
controlling person in connection with the securities offered hereby and the
Securities and Exchange Commission is still of the same opinion, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether or not such indemnification by it is against
public policy as expressed in the Act, and will be governed by the final
adjudication of such issue.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS
(a) All financial statements, schedules and historical financial
information have been omitted as they are not applicable.
1.1 Form of Underwriting Agreement for the Notes.
1.2 Form of Underwriting Agreement for the Certificates.
2.1 Copy of Plan of Merger, dated October 22, 1998, between Chrysler
Financial Corporation and Chrysler Financial Company L.L.C.
3.1 Copy of Articles of Organization of Chrysler Financial Company
L.L.C.
3.2 Copy of Amended and Restated Operating Agreement of Chrysler
Financial Company L.L.C.
3.3 Form of Certificate of Trust for Premier Auto Trusts (included in
Exhibit 4.2).
4.1 Form of Indenture between the Trust and the Indenture Trustee
(including forms of Notes).
4.2 Form of Amended and Restated Trust Agreement among the
Registrant, the Company and the Trustee (including forms of Certificates).
4.3 Form of Trust Agreement (for issuance of more than one Series of
Certificates) among the Registrant, the Company and the Trustee (including
forms of Certificates).
4.4 Form of Pooling and Servicing Agreement, including the Form of
Standard Terms and Conditions of Agreement, among the Registrant, the Servicer
and the Trustee (including forms of Certificates).
5.1 Opinion of Brown & Wood LLP with respect to legality.
5.2 Opinion of Richards, Layton & Finger with respect to legality.
8.1 Opinion of Brown & Wood LLP with respect to federal tax matters.
23.1 Consent of Brown & Wood LLP (included in its opinions filed as
Exhibits 5.1 and 8.1).
23.2 Consent of Richards, Layton & Finger (included in its opinion
filed as Exhibit 5.2).
24.1 Powers of Attorney.
25.1 Form of T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago.
25.2 Form of T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York.
99.1 Form of Sale and Servicing Agreement among the Registrant and
the Trust.
99.2 Form of Administration Agreement among the Trust, the
Administrator and the Indenture Trustee.
99.3 Form of Purchase Agreement between the Company and the
Registrant.
ITEM 17. UNDERTAKINGS
(a) As to Rule 415:
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective
amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to
such information in this Registration Statement;
provided, however, that the undertakings set forth in clauses (i) and
(ii) above do not apply if the information required to be included in
a post-effective amendment by those clauses is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended, that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, as amended, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section 305(b)(2)
of that Act.
(c) As to documents subsequently filed that are incorporated
by reference:
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated
by reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(d) As to indemnification:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers
and controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Southfield and State of Michigan, on
the 25th day of January, 1999.
CHRYSLER FINANCIAL COMPANY L.L.C.,
By: /s/ D.L. DAVIS
---------------------------
D.L. Davis
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Principal Executive Officer:
/s/ D.L. DAVIS Chairman of the Board January 25, 1999
- ---------------
D.L. Davis
Principal Financial Officer:
/s/ T.F. GILMAN Vice President and
- ---------------- Chief Financial Officer January 25, 1999
T.F. Gilman
Principal Accounting Officer:
/s/ D.H. OLSEN Vice Presindent and January 25, 1999
- --------------- Controller
D.H. Olsen
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
1.1 Form of Underwriting Agreement for the Notes.
1.2 Form of Underwriting Agreement for the Certificates.
2.1 Copy of Plan of Merger, dated October 22, 1998, between
Chrysler Financial Corporation and Chrysler Financial
Company L.L.C.
3.1 Copy of Articles of Organization of Chrysler Financial
Company L.L.C.
3.2 Copy of Amended and Restated Operating Agreement of Chrysler
Financial Company L.L.C.
3.3 Form of Certificate of Trust for Premier Auto Trusts
(included in Exhibit 4.2).
4.1 Form of Indenture between the Trust and the Indenture
Trustee (including forms of Notes).
4.2 Form of Amended and Restated Trust Agreement among the
Registrant, the Company and the Trustee (including forms of
Certificates).
4.3 Form of Trust Agreement (for issuance of more than one
Series of Certificates) among the Registrant, the Company
and the Trustee (including forms of Certificates).
4.4 Form of Pooling and Servicing Agreement, including the Form
of Standard Terms and Conditions of Agreement, among the
Registrant, the Servicer and the Trustee (including forms of
Certificates).
5.1 Opinion of Brown & Wood LLP with respect to legality.
5.2 Opinion of Richards, Layton & Finger with respect to
legality.
8.1 Opinion of Brown & Wood LLP with respect to federal tax
matters.
23.1 Consent of Brown & Wood LLP (included in its opinions filed
as Exhibits 5.1 and 8.1).
23.2 Consent of Richards, Layton & Finger (included in its
opinion filed as Exhibit 5.2).
24.1 Powers of Attorney.
25.1 Form of T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The First National Bank of Chicago.
25.2 Form of T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The Bank of New York.
99.1 Form of Sale and Servicing Agreement among the Registrant
and the Trust.
99.2 Form of Administration Agreement among the Trust, the
Administrator and the Indenture Trustee.
99.3 Form of Purchase Agreement between the Company and the
Registrant.
EXHIBIT 1.1
[FORM OF UNDERWRITING AGREEMENT]
PREMIER AUTO TRUST ___-_
[__]% ASSET BACKED NOTES, CLASS A-2
[__]% ASSET BACKED NOTES, CLASS A-3
[__]% ASSET BACKED NOTES, CLASS A-4
CHRYSLER FINANCIAL COMPANY L.L.C.
UNDERWRITING AGREEMENT
----------------------
[___________], 199_
[----------------]
as Representative of the Several Underwriters
[----------------]
[----------------]
[----------------]
Ladies and Gentlemen:
1. Introductory. Chrysler Financial Company L.L.C., a Michigan limited
------------
liability company ("CFC" or the "Seller"), proposes to cause Premier Auto Trust
___-_ (the "Trust") to issue and sell $[____] principal amount of its [__]%
Asset Backed Notes, Class A-2 (the "Class A-2 Notes"), $[____] principal amount
of its [__]% Asset Backed Notes, Class A-3 (the "Class A-3 Notes"), and $[____]
principal amount of its [__]% Asset Backed Notes, Class A-4 (the "Class A-4
Notes" and, together with the Class A-2 Notes and the Class A-3 Notes, the
"Offered Notes"), to the several Underwriters named in Schedule I hereto
(collectively, the "Underwriters"), for whom you are acting as representative
(the "Representative"). The Trust also will issue $[____] principal amount of
its [__]% Asset Backed Notes, Class A-1 (the "Class A-1 Notes" and, together
with the Offered Notes, the "Notes"), which Class A-1 Notes will be purchased by
the Seller on the Closing Date (as defined below). The assets of the Trust will
include, among other things, a pool of motor vehicle retail installment sale
contracts (the "Standard Receivables") and the right to receive Amortizing
Payments with respect to Fixed Value Receivables (the Standard Receivables and
the Amortizing Payments with respect to the Fixed Value Receivables are referred
to herein collectively as the "Receivables") and the related collateral. The
Standard Receivables and the Fixed Value Receivables will be sold to the Trust
by the Seller. The Receivables will be serviced for the Trust by CFC (in such
capacity, the "Servicer"). The Notes will be issued pursuant to an Indenture to
be dated as of [___________], 199_ (as amended and supplemented from time to
time, the "Indenture"), between the Trust and [_____________], as indenture
trustee "Indenture Trustee").
Simultaneously with the issuance and sale of the Notes as contemplated
herein, the Trust will issue the sum of $[____] and $[____] of its Asset Backed
Certificates (the "Certificates"), each representing a fractional undivided
ownership interest in the Trust, pursuant to the Amended and Restated Trust
Agreement to be dated as of [___________], 199_ (as amended and supplemented
from time to time, the "Trust Agreement"), among the Seller, [_______], a
[_______] [_______] (the "Company"), and [_____________], as owner trustee (the
"Owner Trustee").
The Seller acknowledges that it will have furnished to the
Underwriters, for distribution to potential investors in the Offered Notes prior
to the date on which the Prospectus (as defined in Section 2(a) below) is made
available to such potential investors, a term sheet in the form of Exhibit A
hereto (the "Collateral Materials").
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Sale and Servicing Agreement to be dated as of
[___________], 199_ (as amended and supplemented from time to time, the "Sale
and Servicing Agreement"), between the Trust and CFC, as Seller and Servicer,
or, if not defined therein, in the Indenture or in the Trust Agreement.
Simultaneously with the issuance and sale of the Notes as contemplated herein,
the Trust will issue the Certificates referred to in the Trust Agreement (the
"Certificates") to the Company.
2. Representations and Warranties of the Seller. The Seller represents
--------------------------------------------
and warrants to, and agrees with, each Underwriter that:
(a) The Seller meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
(Registration No. 333-31093) on such Form, including a related preliminary base
prospectus and a preliminary prospectus supplement, for the registration under
the Act of the offering and sale of the Offered Notes. The Seller may have filed
one or more amendments thereto, each of which amendments has previously been
furnished to you. The Seller will next file with the Commission (i) prior to the
effectiveness of such registration statement, an amendment thereto (including
the form of final base prospectus and the form of final prospectus supplement
relating to the Offered Notes) or (ii) after effectiveness of such registration
statement, either (A) a final base prospectus in accordance with Rules 430A and
424(b)(1) or (4) under the Act or (B) a final base prospectus and a final
prospectus supplement relating to the Offered Notes in accordance with Rules 415
and 424(b)(2) or (5). The Seller has filed with the Commission in a report on
Form 8-K the Collateral Materials within two business days after they were first
delivered to an Underwriter.
In the case of clauses (ii)(A) and (B) above, the Seller has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the rules
thereunder to be included in the Prospectus with respect to the Offered Notes
and the offering thereof. As filed, such amendment and form of final prospectus
supplement, or such final prospectus supplement, shall include all Rule 430A
Information, together with all other such required information, with respect to
the Offered Notes and the offering thereof and, except to the extent that the
Underwriters shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest preliminary base prospectus and preliminary prospectus supplement, if
any, that have previously been furnished to you) as the Seller has advised you,
prior to the Execution Time, will be included or made therein. If the
Registration Statement contains the undertaking specified by Regulation S-K Item
512(a), the Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
For purposes of this Agreement, "Effective Time" means the date and
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, and
"Effective Date" means the date of the Effective Time. "Execution Time" shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto. Such registration statement, as amended at the Effective Time,
including all information deemed to be a part of such registration statement as
of the Effective Time pursuant to Rule 430A(b) under the Act, and including the
exhibits thereto and any material incorporated by reference therein, is
hereinafter referred to as the "Registration Statement". "Base Prospectus" shall
mean any prospectus referred to above contained in the Registration Statement at
the Effective Date, including any Preliminary Prospectus Supplement.
"Preliminary Prospectus Supplement" shall mean the preliminary prospectus
supplement, if any, to the Base Prospectus which describes the Offered Notes and
the offering thereof and is used prior to filing of the Prospectus. "Prospectus"
shall mean the prospectus supplement relating to the Offered Notes that is first
filed pursuant to Rule 424(b) after the Execution Time, together with the Base
Prospectus, as amended at the time of such filing, or, if no filing pursuant to
Rule 424(b) is required, shall mean the prospectus supplement relating to the
Offered Notes, including the Base Prospectus, included in the Registration
Statement at the Effective Date. "Rule 430A Information" means information with
respect to the Offered Notes and the offering of the Offered Notes permitted to
be omitted from the Registration Statement when it becomes effective pursuant to
Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to
such rules or regulations under the Act. Any reference herein to the
Registration Statement, the Base Prospectus, a Preliminary Prospectus Supplement
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the Effective Date of the Registration Statement or the
issue date of the Base Prospectus, such Preliminary Prospectus Supplement or the
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus Supplement or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue date of the
Base Prospectus, any Preliminary Prospectus Supplement or the Prospectus, as the
case may be, deemed to be incorporated therein by reference.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement did or will, and, when the Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the respective rules and
regulations of the Commission thereunder (the "Rules and Regulations"); on the
Effective Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed pursuant to
Rule 424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Seller makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Seller by any Underwriter through you
specifically for use in connection with the preparation of the Registration
Statement or the Prospectus (or any supplement thereto). As of the Closing Date,
the Seller's representations and warranties in the Sale and Servicing Agreement
and the Trust Agreement will be true and correct.
(c) This Agreement has been duly authorized, executed and delivered by
the Seller.
(d) The Seller's assignment and delivery of the Standard Receivables
and the Fixed Value Receivables to the Trust will vest in the Trust all of the
Seller's right, title and interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(e) The Trust's assignment of the Standard Receivables and the Fixed
Value Receivables to the Indenture Trustee pursuant to the Indenture will vest
in the Indenture Trustee, for the benefit of the Noteholders, a first priority
perfected security interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(f) None of the Seller, the Company or anyone acting on behalf of the
Seller or the Company has taken any action that would require qualification of
the Trust Agreement under the Trust Indenture Act or require registration of the
Seller, the Company or the Trust under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), nor will the Seller or the Company act,
nor has either of them authorized, nor will either of them authorize, any person
to act in such a manner.
3. Representations and Warranties of the Underwriters. Each Underwriter
--------------------------------------------------
represents and warrants to, and agrees with, the Seller that:
(a) It has not offered or sold, and will not offer or sell, any Offered
Notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances that do not constitute an offer to the public in the
United Kingdom for the purposes of the Public Offers of Securities Regulations
1995.
(b) It has complied and will comply with all applicable provisions of
the Financial Services Act of 1986 of Great Britain with respect to anything
done by it in relation to the Offered Notes in, from or otherwise involving the
United Kingdom.
(c) It has only issued or passed on and will only issue or pass on in
the United Kingdom any document in connection with the issue of the Offered
Notes to a person who is of a kind described in Article 11(3) of the Financial
Services Act of 1986 (Investment Advertisements) (Exemptions) Order 1995 or is a
person to whom the document may otherwise lawfully be issued or passed on.
4. Purchase, Sale, and Delivery of the Offered Notes. On the basis of
--------------------------------------------------
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Seller agrees to cause the Trust
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Trust: (i) at a purchase price of [____]% of the
principal amount thereof, the respective principal amount of the Class A-2 Notes
set forth opposite the name of such Underwriter in Schedule I hereto, (ii) at a
purchase price of [____]% of the principal amount thereof, the respective
principal amount of the Class A-3 Notes set forth opposite the name of such
Underwriter in Schedule I hereto, and (iii) at a purchase price of [____]% of
the principal amount thereof, the respective principal amount of the Class A-4
Notes set forth opposite the name of such Underwriter in Schedule I hereto.
Delivery of and payment for the Offered Notes shall be made at the office of
[___________], [_______], [____], [____], on [___________], 199_ (the "Closing
Date"). Delivery of the Offered Notes shall be made against payment of the
purchase price in immediately available funds drawn to the order of the Seller.
The Offered Notes to be so delivered will be represented initially by one or
more Notes registered in the name of Cede & Co., the nominee of The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Offered Notes
will be represented by book entries on the records of DTC and participating
members thereof. Definitive Notes will be available only under limited
circumstances.
5. Offering by Underwriters. It is understood that, after the
--------------------------
Registration Statement becomes effective, the Underwriters propose to offer the
Offered Notes for sale to the public (which may include selected dealers), as
set forth in the Prospectus.
6. Covenants of the Seller. The Seller covenants and agrees with each
-----------------------
of the Underwriters that:
(a) The Seller will use its best efforts to cause the Registration
Statement, and any amendment thereto, if not effective at the Execution Time, to
become effective. Prior to the termination of the offering of the Offered Notes,
the Seller will not file any amendment of the Registration Statement or
supplement to the Prospectus unless the Seller has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing sentence, if
the Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b), the
Seller will file the Prospectus, properly completed, and any supplement thereto,
with the Commission pursuant to and in accordance with the applicable paragraph
of Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to you of such timely filing.
(b) The Seller will advise you promptly of any proposal to amend or
supplement the Registration Statement as filed or the related Prospectus and
will not effect such amendment or supplement without your consent, which consent
will not unreasonably be withheld; the Seller will also advise you promptly of
any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information; and
the Seller also will advise you promptly of the effectiveness of the
Registration Statement (unless the Registration Statement has become effective
prior to Execution Time) and any amendment thereto, when the Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant to Rule
424(b) and of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threat of any
proceeding for that purpose, and the Seller will use its best efforts to prevent
the issuance of any such stop order and to obtain as soon as possible the
lifting of any issued stop order.
(c) If, at any time when a prospectus relating to the Offered Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, the Seller promptly will
notify you and will prepare and file, or cause to be prepared and filed, with
the Commission, subject to the second sentence of paragraph (a) of this Section
6, an amendment or supplement that will correct such statement or omission or
effect such compliance. Any such filing shall not operate as a waiver or
limitation of any right of any Underwriter hereunder.
(d) As soon as practicable, but not later than fourteen months after
the Closing Date, the Seller will cause the Trust to make generally available to
holders of the Offered Notes an earnings statement of the Trust covering a
period of at least twelve months beginning after the Closing Date that will
satisfy the provisions of Section 11(a) of the Act.
(e) The Seller will furnish to the Underwriters copies of the
Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus (including the Preliminary
Prospectus Supplement, if any), the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Underwriters request.
(f) The Seller will arrange for the qualification of the Offered Notes
for sale under the laws of such jurisdictions in the United States as you may
reasonably designate and will continue such qualifications in effect so long as
required for the distribution.
(g) For a period from the date of this Agreement until the retirement
of the Offered Notes or until such time as the Underwriters shall cease to
maintain a secondary market in the Offered Notes, whichever occurs first, the
Seller will deliver to you the annual statements of compliance and the annual
independent certified public accountants' reports furnished to the Indenture
Trustee or the Owner Trustee pursuant to the Sale and Servicing Agreement, as
soon as such statements and reports are furnished to the Indenture Trustee or
the Owner Trustee.
(h) So long as any of the Offered Notes is outstanding, the Seller will
furnish to you (i) as soon as practicable after the end of the fiscal year all
documents required to be distributed to holders of the Offered Notes or filed
with the Commission pursuant to the Exchange Act or any order of the Commission
thereunder and (ii) from time to time, any other information concerning the
Seller filed with any government or regulatory authority that is otherwise
publicly available, as you may reasonably request.
(i) On or before the Closing Date, CFC shall cause its computer records
relating to the Receivables to be marked to show the Trust's absolute ownership
of the Receivables and, from and after the Closing Date, CFC shall not take any
action inconsistent with the Trust's ownership of such Receivables, other than
as permitted by the Sale and Servicing Agreement.
(j) To the extent, if any, that the ratings provided with respect to
the Offered Notes by the rating agency or agencies that initially rate the
Offered Notes are conditional upon the furnishing of documents or the taking of
any other actions by the Seller, the Seller shall furnish such documents and
take any such other actions.
(k) For the period beginning on the date of this Agreement and ending
on the Closing Date, unless waived by the Underwriters, neither the Seller nor
any trust originated, directly or indirectly, by the Seller will offer to sell
or sell notes (other than the Notes) collateralized by, or certificates
evidencing an ownership interest in, receivables generated pursuant to retail
automobile or light duty truck installment sale contracts in such a manner as
would constitute a public offering to persons in the United States.
7. Payment of Expenses. The Seller will pay all expenses incident to
-------------------
the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the preparation of this Agreement, (iii) the
preparation, issuance and delivery of the Offered Notes to the Underwriters,
(iv) the fees and disbursements of the Seller's counsel and accountants, (v) the
qualification of the Offered Notes under securities laws in accordance with the
provisions of Section 6(f), including filing fees and the fees and disbursements
of counsel for you in connection therewith and in connection with the
preparation of any blue sky or legal investment survey, (vi) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, (vii) the printing and delivery
to the Underwriters of copies of any blue sky or legal investment survey
prepared in connection with the Offered Notes, (viii) any fees charged by rating
agencies for the rating of the Notes, (ix) the fees and expenses, if any,
incurred with respect to any filing with the National Association of Securities
Dealers, Inc., and (x) the fees and expenses of [_______] in its role as counsel
to the Trust incurred as a result of providing the opinions required by Section
8(g) and the second sentence of Section 8(h) hereof.
8. Conditions to the Obligations of the Underwriters. The obligations
--------------------------------------------------
of the Underwriters to purchase and pay for the Offered Notes will be subject to
the accuracy of the representations and warranties on the part of the Seller
herein, to the accuracy of the statements of officers of the Seller made
pursuant to the provisions hereof, to the performance by the Seller of its
obligations hereunder and to the following additional conditions precedent:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Underwriters agree in writing to a later time, the
Registration Statement shall have become effective not later than (i) 6:00 P.M.
New York City time on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 P.M. New York City time on such
date or (ii) 12:00 noon on the business day following the day on which the
public offering price was determined, if such determination occurred after 3:00
P.M. New York City time on such date.
(b) The Prospectus and any supplements thereto shall have been filed
(if required) with the Commission in accordance with the Rules and Regulations
and Section 6(a) hereof, and prior to the Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or you, shall be contemplated by the Commission or by any authority
administering any state securities or blue sky law.
(c) On or prior to the Closing Date, you shall have received a letter,
dated as of the Closing Date, of [_______], certified public accountants,
substantially in the form of the drafts to which you have previously agreed and
otherwise in form and substance satisfactory to you and your counsel.
(d) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereto) and the Prospectus (exclusive of
any supplement thereto), there shall not have occurred (i) any change or any
development involving a prospective change in or affecting particularly the
business or properties of the Trust, the Seller, the Company or DaimlerChrysler
Corporation which, in the judgment of the Underwriters, materially impairs the
investment quality of the Offered Notes or makes it impractical or inadvisable
to market the Offered Notes; (ii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange; (iii) any suspension of trading of any
securities of DaimlerChrysler Corporation or the Seller on any exchange or in
the over-the-counter market; (iv) any banking moratorium declared by federal or
New York authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if, in the
judgment of the Underwriters, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Offered Notes.
(e) You shall have received an opinion of [_______], Esq., [Vice
President and General Counsel] of CFC and the Company, addressed to you and the
Indenture Trustee, dated the Closing Date and satisfactory in form and substance
to you and your counsel, to the effect that:
(i) CFC has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the State
of Michigan with full power and authority to own its properties and
conduct its business as presently conducted by it, and to enter into
and perform its obligations under this Agreement, the Sale and
Servicing Agreement, the Purchase Agreement, the Trust Agreement, and
the Administration Agreement, and had at all times, and now has, the
power, authority and legal right to acquire, own, sell and service the
Standard Receivables and the Fixed Value Receivables.
(ii) The Company has been duly organized and is validly existing
as a [_____________] in good standing under the laws of [_____________]
with full power and authority to own its properties and conduct its
business as presently conducted by it and to enter into and perform its
obligations under the Trust Agreement and the Purchase Agreement, and
had at all times, and now has, the power, authority and legal right to
acquire, own, sell and hold the excess cash flow from the Reserve
Account and the Fixed Value Payments.
(iii) Each of CFC and the Company is duly qualified to do business
and is in good standing, and has obtained all necessary licenses and
approvals, in each jurisdiction in which failure to qualify or to
obtain such licenses or approvals would render any Standard Receivable
or Fixed Value Receivable unenforceable by the Seller, the Owner
Trustee or the Indenture Trustee.
(iv) The direction by the Seller to the Owner Trustee to
authenticate the Certificates has been duly authorized by the Seller
and, when the Certificates have been duly executed, authenticated and
delivered by the Owner Trustee in accordance with the Trust Agreement
and delivered, the Certificates will be duly issued and entitled to the
benefits and security afforded by the Trust Agreement, subject as to
the enforcement of remedies (x) to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and (y) to general principles of equity (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law).
(v) The direction by the Seller to the Indenture Trustee to
authenticate the Notes has been duly authorized by the Seller and, when
the Notes have been duly executed and delivered by the Owner Trustee
and when authenticated by the Indenture Trustee in accordance with the
Indenture and delivered and paid for pursuant to this Agreement, the
Notes will be duly issued and entitled to the benefits and security
afforded by the Indenture, subject as to the enforcement of remedies
(x) to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights generally and (y) to
general principles of equity (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
(vi) The Purchase Agreement, the Trust Agreement, the Sale and
Servicing Agreement and the Administration Agreement have been duly
authorized, executed and delivered by CFC, and are legal, valid and
binding obligations of CFC enforceable against CFC in accordance with
their terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights and (y)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(vii) This Agreement has been duly authorized, executed and
delivered by CFC.
(viii) The Purchase Agreement and the Trust Agreement have been
duly authorized, executed and delivered by the Company and are the
legal, valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except (x) the
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (y) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(ix) Neither the transfer of the Standard Receivables and the
Fixed Value Receivables from the Seller to the Trust, nor the
assignment of the Owner Trust Estate to the Trust, nor the grant of the
security interest in the Collateral to the Indenture Trustee pursuant
to the Indenture, nor the execution and delivery of this Agreement, the
Purchase Agreement, the Trust Agreement, the Administration Agreement,
or the Sale and Servicing Agreement by CFC, nor the execution and
delivery of the Trust Agreement and the Purchase Agreement by the
Company, nor the consummation of any transactions contemplated in this
Agreement, the Purchase Agreement, the Trust Agreement, the Indenture,
the Administration Agreement or the Sale and Servicing Agreement (such
agreements, excluding this Agreement, being, collectively, the "Basic
Documents"), nor the fulfillment of the terms thereof by CFC, the
Company or the Trust, as the case may be, will conflict with, or result
in a breach, violation or acceleration of, or constitute a default
under, any term or provision of the articles of organization or
operating agreement of the Seller or the Company, or of any indenture
or other agreement or instrument to which CFC or the Company is a party
or by which either of them is bound, or result in a violation of or
contravene the terms of any statute, order or regulation applicable to
CFC or the Company of any court, regulatory body, administrative agency
or governmental body having jurisdiction over either of them.
(x) There are no actions, proceedings or investigations pending
or, to the best of such counsel's knowledge after due inquiry,
threatened before any court, administrative agency or other tribunal
(1) asserting the invalidity of the Trust or any of the Basic
Documents, (2) seeking to prevent the consummation of any of the
transactions contemplated by any of the Basic Documents or the
execution and delivery thereof, (3) that might materially and adversely
affect the performance by CFC of its obligations under, or the validity
or enforceability of, this Agreement, the Purchase Agreement, the Trust
Agreement, the Sale and Servicing Agreement, or the Administration
Agreement, or (4) that might materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, the Purchase Agreement or the Trust Agreement.
(xi) To the best knowledge of such counsel and except as set forth
in the Prospectus (and any supplement thereto), no default exists and
no event has occurred which, with notice, lapse of time or both, would
constitute a default in the due performance and observance of any term,
covenant or condition of any agreement to which the Seller or the
Company is a party or by which either of them is bound, which default
has or would have a material adverse effect on the financial condition,
earnings, prospects, business or properties of the Seller and its
subsidiaries, taken as a whole.
(xii) Nothing has come to such counsel's attention that would lead
such counsel to believe that the representations and warranties of (x)
the Company contained in the Purchase Agreement and the Trust Agreement
are other than as stated therein or (y) CFC contained in this
Agreement, the Trust Agreement, the Purchase Agreement or the Sale and
Servicing Agreement are other than as stated therein.
(xiii) The Seller is the sole owner of all right, title and
interest in, and has good and marketable title to, the Standard
Receivables and Fixed Value Receivables and the other property to be
transferred by it to the Trust. The assignment of the Standard
Receivables and Fixed Value Receivables, all documents and instruments
relating thereto and all proceeds thereof to the Trust, pursuant to the
Sale and Servicing Agreement, vests in the Trust all interests that are
purported to be conveyed thereby, free and clear of any liens, security
interests or encumbrances except as specifically permitted pursuant to
the Sale and Servicing Agreement or any other Basic Document.
(xiv) Immediately prior to the transfer of the Standard
Receivables and Fixed Value Receivables to the Trust, the Seller's
interest in the Standard Receivables and Fixed Value Receivables, the
security interests in the Financed Vehicles securing the Standard
Receivables and Fixed Value Receivables and the proceeds of each of the
foregoing was perfected and constituted a perfected first priority
interest therein.
(xv) The Indenture constitutes a grant by the Trust to the
Indenture Trustee of a valid security interest in the Standard
Receivables and Fixed Value Receivables, the security interests in the
Financed Vehicles securing the Standard Receivables and Fixed Value
Receivables and the proceeds of each of the foregoing, which security
interest will be perfected upon the filing of the UCC-1 financing
statements with the Secretary of State of the State of Michigan and the
State of Delaware and will constitute a first priority perfected
security interest therein. No filing or other action, other than the
filing of the UCC-1 financing statements with the Secretary of State of
the State of Michigan and the State of Delaware referred to above, is
necessary to perfect and maintain the interest or the security interest
of the Indenture Trustee in the Standard Receivables and Fixed Value
Receivables, the security interests in the Financed Vehicles securing
the Receivables and the proceeds of each of the foregoing against third
parties.
(xvi) The Standard Receivables and Fixed Value Receivables are
chattel paper as defined in the UCC.
(xvii) The Sale and Servicing Agreement, the Trust Agreement, the
Indenture, the Purchase Agreement and the Administration Agreement
conform in all material respects with the descriptions thereof
contained in the Prospectus (and any supplement thereto).
(xviii) The statements in the Prospectus under the headings
"Special Considerations -- Certain Legal Aspects -- Security Interests
in Financed Vehicles" and "-- Bankruptcy Considerations" and "Certain
Legal Aspects of the Receivables", to the extent they constitute
matters of law or legal conclusions with respect thereto, have been
reviewed by such counsel and are correct in all material respects.
(xix) The statements contained in the Prospectus and any
supplement thereto under the headings "Description of the Notes",
"Description of the Certificates" and "Description of the Transfer and
Servicing Agreements", insofar as such statements constitute a summary
of the Notes, the Certificates, the Indenture, the Administration
Agreement, the Purchase Agreement, the Sale and Servicing Agreement and
the Trust Agreement, constitute a fair summary of such documents.
(xx) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation of the transactions contemplated in the Basic Documents,
except such filings with respect to the transfer of the Standard
Receivables and Fixed Value Receivables to the Trust pursuant to the
Sale and Servicing Agreement, the grant of a security interest in the
Collateral to the Indenture Trustee pursuant to the Indenture and such
other approvals as have been obtained and filings as have been made.
(xxi) Such counsel is familiar with the Seller's standard
operating procedures relating to the Seller's acquisition of a
perfected first priority security interest in the vehicles financed by
the Seller pursuant to retail automobile and light duty truck
installment sale contracts in the ordinary course of the Seller's
business. Assuming that the Seller's standard procedures are followed
with respect to the perfection of security interests in the Financed
Vehicles (and such counsel has no reason to believe that the Seller has
not followed or will not continue to follow its standard procedures in
connection with the perfection of security interests in the Financed
Vehicles), the Seller has acquired or will acquire a perfected first
priority security interest in the Financed Vehicles.
(xxii) All actions required to be taken and all filings required
to be made under the Act and the Exchange Act prior to the sale of the
Notes have been duly taken or made. Neither the Certificates nor the
Class A-1 Notes are required to be registered under the Act.
(xxiii) The Trust Agreement is not required to be qualified under
the Trust Indenture Act and the Trust is not required to be registered
under the Investment Company Act.
(xxiv) The Indenture has been duly qualified under the Trust
Indenture Act.
(xxv) The Seller is not, and will not as a result of the offer and
sale of the Notes as contemplated in the Prospectus (and any supplement
thereto) and this Agreement become, an "investment company" as defined
in the Investment Company Act or a company "controlled by" an
"investment company" within the meaning of the Investment Company Act.
(xxvi) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
that are required to be disclosed in the Registration Statement, other
than those disclosed therein.
(xxvii) To the best of such counsel's knowledge and information,
there are no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions thereof or references
thereto are correct, and no default exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument so described, referred to, filed or
incorporated by reference.
(xxviii) Registration Statement has become effective under the
Act, any required filing of the Base Prospectus, any preliminary Base
Prospectus, any Preliminary Prospectus Supplement and the Prospectus,
and any supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b) and, to
the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act, the Exchange Act,
the Trust Indenture Act and the Rules and Regulations.
(xxix) Such counsel has examined the Registration Statement and
the Prospectus and nothing has come to such counsel's attention that
would lead such counsel to believe that the Registration Statement or
the Prospectus or any amendment or supplement thereto as of the
respective dates thereof (other than the financial statements and other
financial and statistical information contained therein, as to which
such counsel need not express any view) contains an untrue statement of
a material fact or omits to state a material fact necessary in order to
make the statements therein not misleading.
(xxx) The Trust has been duly formed and is validly existing as a
statutory business trust and is in good standing under the laws of the
State of Delaware, with full power and authority to execute, deliver
and perform its obligations under the Sale and Servicing Agreement, the
Indenture, the Administration Agreement, the Notes and the
Certificates.
(xxxi) The Indenture, the Sale and Servicing Agreement and the
Administration Agreement have been duly authorized and, when duly
executed and delivered by the Owner Trustee, will constitute the legal,
valid and binding obligations of the Trust, enforceable against the
Trust in accordance with their terms, except (x) the enforceability
thereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and (y) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(f) You shall have received an opinion of [_____________], Esq., [Vice
President and General Counsel] of CFC and the Company, addressed to you and the
Indenture Trustee, dated the Closing Date and satisfactory in form and substance
to you and your counsel, to the effect that:
(i) the Trust will not be characterized as an association (or a
publicly traded partnership) taxable as a corporation for Michigan tax
purposes; and
(ii) if the Notes are treated as debt for federal income tax
purposes, then for Michigan income and single business tax purposes,
the Notes will be characterized as debt.
(g) You shall have received an opinion addressed to you of
[_____________], in its capacity as federal tax counsel to the Trust, to the
effect that the statements in the Base Prospectus under the heading "Certain
Federal Income Tax Consequences" and in the Prospectus Supplement under the
headings "Summary of Terms -- Tax Status" (to the extent relating to federal
income tax consequences) and "Certain Federal Income Tax Consequences"
accurately describe the material federal income tax consequences to holders of
the Notes.
(h) You shall have received an opinion addressed to you of
[_____________], in its capacity as special counsel to the Underwriters, dated
the Closing Date, with respect to the validity of the Notes and the Certificates
and such other related matters as you shall require, and the Seller shall have
furnished or caused to be furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
[_____________], in its capacity as special ERISA counsel to the Trust, shall
have delivered an opinion with respect to the characterization of the transfer
of the Receivables and to the effect that the statements in the Base Prospectus
and in the Prospectus Supplement under the heading "ERISA Considerations", to
the extent that they constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or reviewed by such counsel
and accurately describe the material consequences to holders of the Notes under
ERISA.
(i) You shall have received an opinion addressed to you and CFC of
[_____________], Esq., [Vice President and Senior Counsel] to the Corporate
Trust Services Division of the Indenture Trustee, dated the Closing Date and
satisfactory in form and substance to you and your counsel, to the effect that:
(i) The Indenture Trustee has been duly incorporated and is
validly existing as a [_____________] in good standing under the laws
of [_____________], with full power and authority ([corporate] or
other) to enter into and perform its obligations under the Indenture,
the Sale and Servicing Agreement and the Administration Agreement.
(ii) The execution and delivery of the Indenture and the
Administration Agreement and the acceptance of the Sale and Servicing
Agreement and the performance by the Indenture Trustee of its
obligations under the Indenture, the Sale and Servicing Agreement and
the Administration Agreement have been duly authorized by all necessary
corporate action of the Indenture Trustee and each has been duly
executed and delivered by the Indenture Trustee.
(iii) Assuming due authorization, execution and delivery thereof
by the other parties thereto, the Indenture, the Sale and Servicing
Agreement and the Administration Agreement constitute the legal, valid
and binding agreements of the Indenture Trustee enforceable against the
Indenture Trustee in accordance with their terms, except as the
enforceability thereof may be (a) limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, or other similar
laws affecting the rights of creditors generally, and (b) subject to
general principles of equity.
(iv) The execution and delivery by the Indenture Trustee of the
Indenture and the Administration Agreement and the acceptance of the
Sale and Servicing Agreement do not require any consent, approval or
authorization of, or any registration or filing with, any Illinois or
United States federal governmental authority.
(v) Each of the Notes has been duly authenticated by the Indenture
Trustee.
(vi) Neither the consummation by the Indenture Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture or the Administration Agreement nor the fulfillment of the
terms thereof by the Indenture Trustee will conflict with, result in a
breach or violation of, or constitute a default under any law or the
charter, bylaws or other organizational documents of the Indenture
Trustee or the terms of any indenture or other agreement or instrument
known to such counsel to which the Indenture Trustee or any of its
subsidiaries is a party or is bound or any judgment, order or decree
known to such counsel to be applicable to the Indenture Trustee or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Indenture Trustee or any of its subsidiaries.
(vii) To the knowledge of such counsel, there is no action, suit
or proceeding pending or threatened against the Indenture Trustee (as
trustee under the Indenture or in its individual capacity) before or by
any governmental authority that, if adversely decided, would materially
adversely affect the ability of the Indenture Trustee to perform its
obligations under the Indenture, the Sale and Servicing Agreement or
the Administration Agreement.
(viii) The execution, delivery and performance by the Indenture
Trustee of the Sale and Servicing Agreement, the Indenture and the
Administration Agreement will not subject any of the property or assets
of the Trust or any portion thereof to any lien created by or arising
under the Indenture Trustee that is unrelated to the transactions
contemplated in such Agreements.
(j) You shall have received an opinion addressed to you and CFC of
[___________], counsel to the Owner Trustee, dated the Closing Date and
satisfactory in form and substance to you and your counsel, to the effect that:
(i) The Owner Trustee is a [_____________] duly incorporated and
validly existing under the laws of [____________].
(ii) The Owner Trustee has the full corporate trust power to
accept the office of owner trustee under the Trust Agreement and to
enter into and perform its obligations under the Trust Agreement and,
on behalf of the Trust, under the Indenture, the Sale and Servicing
Agreement and the Administration Agreement.
(iii) The execution and delivery of the Trust Agreement and, on
behalf of the Trust, of the Indenture, the Sale and Servicing
Agreement, the Administration Agreement, the Certificates and the Notes
and the performance by the Owner Trustee of its obligations under the
Trust Agreement, the Indenture, the Sale and Servicing Agreement and
the Administration Agreement have been duly authorized by all necessary
corporate action of the Owner Trustee and each has been duly executed
and delivered by the Owner Trustee.
(iv) The Trust Agreement, the Sale and Servicing Agreement, the
Indenture and the Administration Agreement constitute valid and binding
obligations of the Owner Trustee enforceable against the Owner Trustee
in accordance with their terms under the laws of the State of New York,
the State of Delaware and the federal law of the United States.
(v) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture, the Sale and
Servicing Agreement and the Administration Agreement do not require any
consent, approval or authorization of, or any registration or filing
with, any Delaware or United States federal governmental authority.
(vi) The Certificates have been duly executed and delivered by the
Owner Trustee as owner trustee and authenticating agent. Each of the
Notes has been duly executed and delivered by the Owner Trustee, on
behalf of the Trust.
(vii) Neither the consummation by the Owner Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture, the Trust Agreement or the Administration Agreement nor the
fulfillment of the terms thereof by the Owner Trustee will conflict
with, result in a breach or violation of, or constitute a default under
any law or the charter, bylaws or other organizational documents of the
Owner Trustee or the terms of any indenture or other agreement or
instrument known to such counsel to which the Owner Trustee or any of
its subsidiaries is a party or is bound, or any judgment, order or
decree known to such counsel to be applicable to the Owner Trustee or
any of its subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Owner Trustee or any of its subsidiaries.
(viii) To the knowledge of such counsel, there is no action, suit
or proceeding pending or threatened against the Owner Trustee (as owner
trustee under the Trust Agreement or in its individual capacity) before
or by any governmental authority that, if adversely decided, would
materially adversely affect the ability of the Owner Trustee to perform
its obligations under the Trust Agreement.
(ix) The execution, delivery and performance by the Owner Trustee
(as trustee under the Trust Agreement or in its individual capacity, as
the case may be) of the Sale and Servicing Agreement, the Indenture,
the Trust Agreement or the Administration Agreement will not subject
any of the property or assets of the Trust or any portion thereof to
any lien created by or arising under the Owner Trustee that is
unrelated to the transactions contemplated in such Agreements.
(k) You shall have received a certificate dated the Closing Date of any
of the Chairman of the Board, the President, the Executive Vice President, any
Vice President, the Treasurer, any Assistant Treasurer, the principal financial
officer or the principal accounting officer of each of the Seller and a member
of the Company, in which such officers shall state that, to the best of their
knowledge after reasonable investigation, (i) the representations and warranties
of CFC or the Company, as the case may be, contained in the Trust Agreement, the
Purchase Agreement and the Sale and Servicing Agreement, as applicable, are true
and correct in all material respects; that CFC or the Company, as the case may
be, has complied with all agreements and satisfied all conditions on its part to
be performed or satisfied under such agreements at or prior to the Closing Date;
that no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and (ii) since [____], 199_, except as may be
disclosed in the Prospectus (and any supplement thereto) or, in the case of
DaimlerChrysler Corporation, as may be disclosed publicly by DaimlerChrysler
Corporation prior to the Execution Time, no material adverse change or any
development involving a prospective material adverse change in or affecting
particularly the business or properties of the Trust, CFC, the Company or
DaimlerChrysler Corporation has occurred.
(l) You shall have received evidence satisfactory to you that, on or
before the Closing Date, UCC-1 financing statements have been or are being filed
in the office of the Secretary of State of the States of Michigan and Delaware
reflecting the transfer of the interest of the Seller in the Standard
Receivables and Fixed Value Receivables and the proceeds thereof to the Trust
and the grant of the security interest by the Trust in the Standard Receivables
and Fixed Value Receivables and the proceeds thereof to the Indenture Trustee.
(m) The Offered Notes shall have been rated "AAA" by Standard & Poor's
and "Aaa" by Moody's.
(n) The issuance of the Notes and the Certificates shall not have
resulted in a reduction or withdrawal by any Rating Agency of the current rating
of any outstanding securities issued or originated by the Seller or any of its
affiliates.
(o) On the Closing Date, the sum of $[____] and $[____] aggregate
principal amount of the Certificates shall have been issued to the Company.
(p) On the Closing Date, the Seller shall have purchased and fully paid
for all of the Class A-1 Notes.
The Seller will provide or cause to be provided to you such conformed
copies of such opinions, certificates, letters and documents as you reasonably
request.
9. Indemnification and Contribution. (a) The Seller will indemnify and
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hold each Underwriter harmless against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the preliminary Base Prospectus, the
Collateral Materials, the Preliminary Prospectus Supplement (if any), the Base
Prospectus or the Prospectus or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein (in
the case of the Collateral Materials, when read together with the Prospectus) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Seller will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the Seller
by any Underwriter through you specifically for use therein.
For all purposes contemplated hereby, the Seller and the Underwriters
each acknowledge that the Collateral Materials were prepared by the Seller.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Seller against any losses, claims, damages or liabilities
to which the Seller may become subject, under the Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the preliminary Base Prospectus, Preliminary Prospectus Supplement (if any), the
Base Prospectus or the Prospectus or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information relating to such Underwriter furnished to the Seller by such
Underwriter through you specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Seller in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability that it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by the indemnified party of the counsel appointed
by the indemnifying party, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Seller on the
one hand and the Underwriters on the other from the offering of the Offered
Notes or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Seller on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Seller on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Seller bear to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Seller or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim that is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter (except as
may be provided in the agreement among Underwriters relating to the offering of
the Offered Notes) shall be required to contribute any amount in excess of the
underwriting discount or commission applicable to the Offered Notes purchased by
such Underwriter hereunder. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Seller under this Section shall be in
addition to any liability the Seller may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any of the
Underwriters within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller, to each officer of the Seller
who has signed the Registration Statement and to each person, if any, who
controls the Seller within the meaning of the Act.
10. Defaults of Underwriters. If any Underwriter or Underwriters
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default in their obligations to purchase the Offered Notes hereunder on the
Closing Date and arrangements satisfactory to the Representative and the Seller
for the purchase of such Offered Notes by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any nondefaulting Underwriter or the Seller, except as provided in
Section 12. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
11. No Bankruptcy Petition. Each Underwriter covenants and agrees that,
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prior to the date which is one year and one day after the payment in full of all
securities issued by the Seller or by a trust for which the Seller was the
depositor which securities were rated by any nationally recognized statistical
rating organization, it will not institute against, or join any other Person in
instituting against, the Seller any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings under any federal or
state bankruptcy or similar law.
12. Survival of Representations and Obligations. The respective
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indemnities, agreements, representations, warranties and other statements of the
Seller or the Company or any of their officers, and each of the Underwriters set
forth in or made pursuant to this Agreement or contained in certificates of
officers of the Seller submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation or statement as to the
results thereof made by or on behalf of any Underwriter or the Seller or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered Notes. If for
any reason the purchase of the Offered Notes by the Underwriters is not
consummated, the Seller shall remain responsible for the expenses to be paid or
reimbursed by the Seller pursuant to Section 7 and the respective obligations of
the Seller and the Underwriters pursuant to Section 9 shall remain in effect. If
for any reason the purchase of the Offered Notes by the Underwriters is not
consummated (other than because of a failure to satisfy the conditions set forth
in items (ii), (iv) and (v) of Section 8(d)), the Seller will reimburse any
Underwriter, upon demand, for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by it in connection with the
offering of the Offered Notes. Nothing contained in this Section 12 shall limit
the recourse of the Seller against the Underwriters.
13. Notices. All communications hereunder will be in writing and, if
-------
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representative at [______________], [______________], [_____], [_____],
[_____], Attention: Asset Backed Group; if sent to the Seller, will be mailed,
delivered or telegraphed, and confirmed to it at Chrysler Financial Company
L.L.C., 27777 Franklin Road, 25th Floor, Southfield, Michigan 48034, Attention:
Assistant Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 9 will be mailed, delivered or telegraphed and confirmed to
such Underwriter. Any such notice will take effect at the time of receipt.
14. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 9, and no other
person will have any right or obligations hereunder.
15. Representation of Underwriters. You will act for the several
--------------------------------
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by you will be binding upon all the
Underwriters.
16. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
17. Applicable Law. This Agreement will be governed by, and construed
---------------
in accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Seller and the several Underwriters
in accordance with its terms.
Very truly yours,
CHRYSLER FINANCIAL COMPANY L.L.C.
By:________________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of the
date first written above:
[----------------]
as Representative of the Several Underwriters
By: ____________________________________
Name:
Title:
SCHEDULE I
CLASS A-2 NOTES
PRINCIPAL AMOUNT OF
THE CLASS A-2 NOTES
-------------------
[----------------]......................................................$[----]
[----------------]......................................................$[----]
[----------------]......................................................$[----]
[----------------]......................................................$[----]
Total...................$[________]
CLASS A-3 NOTES
PRINCIPAL AMOUNT OF
THE CLASS A-3 NOTES
-------------------
[----------------]......................................................$[----]
[----------------]......................................................$[----]
[----------------]......................................................$[----]
[----------------]......................................................$[----]
Total...................$[________]
CLASS A-4 NOTES
PRINCIPAL AMOUNT OF
THE CLASS A-4 NOTES
-------------------
[----------------]......................................................$[----]
[----------------]......................................................$[----]
[----------------]......................................................$[----]
[----------------]......................................................$[----]
Total...................$[________]
EXHIBIT A
Collateral Materials
EXHIBIT 1.2
[FORM OF CERTIFICATE UNDERWRITING AGREEMENT]
PREMIER AUTO TRUST ____-_
[___]% ASSET BACKED CERTIFICATES
CHRYSLER FINANCIAL COMPANY L.L.C.
CERTIFICATE UNDERWRITING AGREEMENT
----------------------------------
[______], 199_
[_____________]
as Representative of
the Several Underwriters
[_____________]
[_____________]
Ladies and Gentlemen:
1. Introductory. Chrysler Financial Company L.L.C., a Michigan limited
-----------
liability company ("CFC" or the "Seller"), proposes to cause Premier Auto Trust
____-_ (the "Trust") to issue and sell $[______] principal amount of its [___]%
Asset Backed Certificates (the "Certificates") to the several Underwriters named
in Schedule I hereto (the "Underwriters"), for whom you are acting as
representative (the "Representative"). The assets of the Trust will include,
among other things, a pool of motor vehicle retail installment sale contracts
(the "Standard Receivables") and the right to receive Amortizing Payments with
respect to Fixed Value Receivables (the Standard Receivables and the Amortizing
Payments with respect to the Fixed Value Receivables are referred to herein
collectively as the "Receivables") and the related collateral. The Receivables
will be serviced for the Trust by CFC (in such capacity, the "Servicer"). The
Certificates will be issued pursuant to the Amended and Restated Trust Agreement
to be dated as of [_____], 199_ (as amended and supplemented from time to time,
the "Trust Agreement"), among the Seller, as Depositor, [__________], a
[__________] [__________] (the "Company"), and [__________], as owner trustee
(the "Owner Trustee").
[Simultaneously with the issuance and sale of the Certificates as
contemplated herein, the Trust will issue $[______] principal amount of its
[___]% Asset Backed Notes, Class A-1 (the "Class A-1 Notes"), $[______]
principal amount of its Floating Rate Asset Backed Notes, Class A-2 (the "Class
A-2 Notes"), $[______] principal amount of its [___]% Asset Backed Notes, Class
A-3 (the "Class A-3 Notes"), and $[______] principal amount of its [___]% Asset
Backed Notes, Class A-4 (the "Class A-4 Notes" and, together with the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes, the "Notes"). The Class A-2
Notes, Class A-3 Notes and Class A-4 Notes (the "Offered Notes") will be sold
pursuant to an underwriting agreement dated the date hereof (the "Note
Underwriting Agreement") between the Seller and the underwriters named in
Schedule I thereto. The Offered Notes and Certificates are sometimes referred to
collectively herein as the "Offered Securities".]
The Seller acknowledges that it will have furnished to the
Underwriters, for distribution to potential investors in the Certificates prior
to the date on which the Prospectus (as defined in Section 2(a) below) is made
available to such potential investors, a term sheet in the form of Exhibit A
hereto (the "Collateral Materials").
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Sale and Servicing Agreement to be dated as of
[_______], 199_ (as amended and supplemented from time to time, the "Sale and
Servicing Agreement"), between the Trust and CFC, as Seller and Servicer, or, if
not defined therein, in the Trust Agreement or in the Indenture to be dated as
of [______], 199_ (as amended and supplemented from time to time, the
"Indenture"), between the Trust and [__________], as indenture trustee (the
"Indenture Trustee").
2. Representations and Warranties of the Seller. The Seller represents
--------------------------------------------
and warrants to, and agrees with, each Underwriter that:
(a) The Seller meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Commission a registration statement (Registration No. 33-55789) on such Form,
including a related preliminary basic prospectus and a preliminary prospectus
supplement, for the registration under the Act of the offering and sale of the
Offered Securities. The Seller may have filed one or more amendments thereto,
each of which amendments has previously been furnished to you. The Seller will
next file with the Commission (i) prior to the effectiveness of such
registration statement, an amendment thereto (including the form of final basic
prospectus and the form of final prospectus supplement relating to the Offered
Securities) or (ii) after the effectiveness of such registration statement,
either (A) a final basic prospectus and a final prospectus supplement relating
to the Offered Securities in accordance with Rules 430A and 424(b)(1) or (4)
under the Act or (B) a final basic prospectus and a final prospectus supplement
relating to the Offered Securities in accordance with Rules 415 and 424(b)(2) or
(5).
In the case of clauses (ii) (A) and (B), the Seller has included in
such registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules thereunder
to be included in the Prospectus with respect to the Offered Securities and the
offering thereof. As filed, such amendment and form of final prospectus
supplement, or such final prospectus supplement, shall include all Rule 430A
Information, together with all other required information, with respect to the
Offered Notes and the Certificates and the offering thereof and, except to the
extent that the Underwriters shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that contained in
the latest preliminary basic prospectus and preliminary prospectus supplement,
if any, that have previously been furnished to you) as the Seller has advised
you, prior to the Execution Time, will be included or made therein. If the
Registration Statement contains the undertaking specified by Regulation S-K Item
512(a), the Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
For purposes of this Agreement, "Effective Time" means the date and
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, and
"Effective Date" means the date of the Effective Time. "Execution Time" shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto. Such registration statement, as amended at the Effective Time,
including all information deemed to be a part of such registration statement as
of the Effective Time pursuant to Rule 430A(b) under the Act, and including the
exhibits thereto and any material incorporated by reference therein, is
hereinafter referred to as the "Registration Statement". "Basic Prospectus"
shall mean any prospectus referred to above contained in the Registration
Statement at the Effective Date, including any Preliminary Prospectus
Supplement. "Preliminary Prospectus Supplement" shall mean the preliminary
prospectus supplement, if any, to the Basic Prospectus which describes the
Offered Securities and the offering thereof and is used prior to the filing of
the Prospectus. "Prospectus" shall mean the prospectus supplement relating to
the Offered Securities that is first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus, as amended at the time of
such filing, or, if no filing pursuant to Rule 424(b) is required, shall mean
the prospectus supplement relating to the Offered Securities, including the
Basic Prospectus, included in the Registration Statement at the Effective Date.
"Rule 430A Information" means information with respect to the Offered Securities
and the offering of the Offered Securities permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A. "Rule
415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to such rules or
regulations under the Act. Any reference herein to the Registration Statement, a
Preliminary Prospectus Supplement or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, such
Preliminary Prospectus Supplement or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement, the Basic Prospectus, any Preliminary Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Prospectus Supplement or the Prospectus, as the case may be, deemed
to be incorporated therein by reference.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement did or will, and, when the Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the respective rules and
regulations of the Commission thereunder (the "Rules and Regulations"); on the
Effective Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed pursuant to
Rule 424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Seller makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Prospectus or any supplement thereto in reliance upon and in conformity with
information furnished in writing to the Seller by any Underwriter through you
specifically for use in connection with preparation of the Registration
Statement or the Prospectus or any supplement thereto. As of the Closing Date,
the Seller's representations and warranties in the Sale and Servicing Agreement
and the Trust Agreement will be true and correct.
(c) This Agreement has been duly authorized, executed and delivered by
the Seller.
(d) The Seller's assignment and delivery of the Standard Receivables
and the Fixed Value Receivables to the Trust will vest in the Trust all of the
Seller's right, title and interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(e) The Trust's assignment of the Standard Receivables and the Fixed
Value Receivables to the Indenture Trustee pursuant to the Indenture will vest
in the Indenture Trustee, for the benefit of the Noteholders, a first priority
perfected security interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(f) None of the Seller, the Company or anyone acting on behalf of the
Seller or the Company has taken any action that would require qualification of
the Trust Agreement under the Trust Indenture Act, or require registration of
the Seller, the Company or the Trust under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), nor will the Seller, or the Company
act, nor has either of them authorized or will either of them authorize any
person to act, in such manner.
3. Purchase, Sale, and Delivery of the Certificates. On the basis of
--------------------------------------------------
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Seller agrees to cause the Trust
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Trust, at a purchase price of [________]% of the
principal amount thereof, the respective principal amount of the Certificates
set forth opposite the name of such Underwriter in Schedule I hereto. Delivery
of and payment for the Certificates shall be made at the office of [______],
[______], [______], [______], on [______], 199_ (the "Closing Date"). Delivery
of the Certificates shall be made against payment of the purchase price in
immediately available funds drawn to the order of the Seller. The Certificates
to be so delivered will be initially represented by one or more Certificates
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC"). The interests of beneficial owners of the Certificates will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Certificates will be available only under limited
circumstances.
4. Offering by Underwriters. It is understood that, after the
--------------------------
Registration Statement becomes effective, the Underwriters propose to offer the
Certificates for sale to the public (which may include selected dealers), as set
forth in the Prospectus.
5. Covenants of the Seller. The Seller covenants and agrees with each
-----------------------
of the Underwriters that:
(a) The Seller will use its best efforts to cause the Registration
Statement, and any amendment thereto, if not effective at the Execution Time, to
become effective. Prior to the termination of the offering of the Certificates,
the Seller will not file any amendment to the Registration Statement or
supplement to the Prospectus unless the Seller has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing sentence, if
the Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b), the
Seller will file the Prospectus, properly completed, and any supplement thereto,
with the Commission pursuant to and in accordance with the applicable paragraph
of Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to you of such timely filing.
(b) The Seller will advise you promptly of any proposal to amend or
supplement the Registration Statement, as filed, or the related Prospectus and
will not effect such amendment or supplement without your consent, which consent
will not unreasonably be withheld; the Seller will also advise you promptly of
any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information; and
the Seller will also advise you promptly of the effectiveness of the
Registration Statement (unless the Registration Statement has become effective
prior to Execution Time) and any amendment thereto, when the Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant to Rule
424(b) and of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threat of any
proceeding for that purpose, and the Seller will use its best efforts to prevent
the issuance of any such stop order and to obtain as soon as possible the
lifting of any issued stop order.
(c) If, at any time when a prospectus relating to the Certificates and
the Offered Notes is required to be delivered under the Act, any event occurs as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Seller promptly
will notify you and will prepare and file, or cause to be prepared and filed,
with the Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement that will correct such statement or
omission or effect such compliance. Any such filing shall not operate as a
waiver or limitation of any right of any Underwriter hereunder.
(d) As soon as practicable, but not later than sixteen months after the
Closing Date, the Seller will cause the Trust to make generally available to
Certificateholders an earnings statement of the Trust covering a period of at
least twelve months beginning after the Closing Date that will satisfy the
provisions of Section 11(a) of the Act.
(e) The Seller will furnish to the Underwriters copies of the
Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus (including the Preliminary
Prospectus Supplement, if any), the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Underwriters request.
(f) The Seller will arrange for the qualification of the Certificates
for sale under the laws of such jurisdictions in the United States as you may
reasonably designate and will continue such qualifications in effect so long as
required for the distribution.
(g) For a period from the date of this Agreement until the retirement
of the Certificates, or until such time as the Underwriters shall cease to
maintain a secondary market in the Certificates, whichever occurs first, the
Seller will deliver to you the annual statements of compliance and the annual
independent certified public accountants' reports furnished to the Indenture
Trustee or the Owner Trustee pursuant to the Sale and Servicing Agreement, as
soon as such statements and reports are furnished to the Indenture Trustee or
the Owner Trustee.
(h) So long as any of the Certificates is outstanding, the Seller will
furnish to you (i) as soon as practicable after the end of the fiscal year all
documents required to be distributed to Certificateholders or filed with the
Commission pursuant to the Exchange Act or any order of the Commission
thereunder and (ii) from time to time, any other information concerning the
Seller filed with any government or regulatory authority that is otherwise
publicly available, as you may reasonably request.
(i) On or before the Closing Date, the Seller shall cause its computer
records relating to the Receivables to be marked to show the Trust's absolute
ownership of the Receivables, and from and after any Closing Date, the Seller
shall not take any action inconsistent with the Trust's ownership of such
Receivables, other than as permitted by the Sale and Servicing Agreement.
(j) To the extent, if any, that the rating provided with respect to the
Certificates by the rating agency or agencies that initially rate the
Certificates is conditional upon the furnishing of documents or the taking of
any other actions by the Seller, the Seller shall furnish such documents and
take any such other actions.
(k) For the period beginning on the date of this Agreement and ending
on the Closing Date, unless waived by the Underwriters, neither the Seller nor
any trust originated, directly or indirectly, by the Seller will offer to sell
or sell notes (other than the Notes) collateralized by, or certificates (other
than the Certificates) evidencing an ownership interest in, receivables
generated pursuant to retail automobile or light duty truck installment sale
contracts in such a manner as would constitute a public offering to persons in
the United States.
6. Payment of Expenses. The Seller will pay all expenses incident to
-------------------
the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the preparation of this Agreement, (iii) the
preparation, issuance and delivery of the Certificates to the Underwriters, (iv)
the fees and disbursements of the Seller's counsel and accountants, (v) the
qualification of the Certificates under securities laws in accordance with the
provisions of Section 5(f), including filing fees and the fees and disbursements
of counsel for you in connection therewith and in connection with the
preparation of any blue sky or legal investment survey, (vi) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, (vii) the printing and delivery
to the Underwriters of copies of any blue sky or legal investment survey
prepared in connection with the Certificates, (viii) any fees charged by rating
agencies for the rating of the Certificates, (ix) the fees and expenses, if any,
incurred with respect to any filing with the National Association of Securities
Dealers, Inc., and (x) the fees and expenses of [________] in its role as
counsel to the Trust incurred as a result of providing the opinions required by
Section 7(g) and the second sentence of Section 7(h) hereof.
7. Conditions to the Obligations of the Underwriters. The obligations
--------------------------------------------------
of the Underwriters to purchase and pay for the Certificates will be subject to
the accuracy of the representations and warranties on the part of the Seller
herein, to the accuracy of the statements of officers of the Seller made
pursuant to the provisions hereof, to the performance by the Seller of its
obligations hereunder and to the following additional conditions precedent:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Underwriters agree in writing to a later time, the
Registration Statement shall have become effective not later than (i) 6:00 P.M.
New York City time on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 P.M. New York City time on such
date or (ii) 12:00 noon on the business day following the day on which the
public offering price was determined, if such determination occurred after 3:00
P.M. New York City time on such date.
(b) The Prospectus and any supplements thereto shall have been filed
(if required) with the Commission in accordance with the Rules and Regulations
and Section 5(a) hereof, and prior to the Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or you, shall be contemplated by the Commission or by any authority
administering any state securities or blue sky law.
(c) On or prior to the Closing Date, you shall have received a letter,
dated as of the Closing Date, of [__________], certified public accountants,
substantially in the form of the drafts to which you have previously agreed and
otherwise in form and substance satisfactory to you and your counsel.
(d) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereto) and the Prospectus (exclusive of
any supplement thereto), there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting particularly the
business or properties of the Trust, the Seller, the Company or DaimlerChrysler
Corporation which, in the judgment of the Underwriters, materially impairs the
investment quality of the Certificates or makes it impractical or inadvisable to
market the Certificates; (ii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange or any setting of minimum
prices for trading on such exchange; (iii) any suspension of trading of any
securities of DaimlerChrysler Corporation or the Seller on any exchange or in
the over-the-counter market; (iv) any banking moratorium declared by federal or
New York authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if, in the
judgment of the Underwriters, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Certificates.
(e) You shall have received an opinion of [__________], [Vice President
and General Counsel] of CFC and the Company, addressed to you and the Indenture
Trustee, dated the Closing Date and satisfactory in form and substance to you
and your counsel, to the effect that:
(i) CFC has been duly organized and is validly existing as a limited
liability company in good standing under the laws of the State of
Michigan with full power and authority to own its properties and
conduct its business as presently conducted by it, and to enter into
and perform its obligations under this Agreement, the Note
Underwriting Agreement, the Sale and Servicing Agreement, the
Purchase Agreement, the Trust Agreement and the Administration
Agreement, and had at all times, and now has, the power, authority
and legal right to acquire, own, sell and service the Standard
Receivables and the Fixed Value Receivables.
(ii) The Company has been duly organized and is validly existing as
a [__________] in good standing under the laws of the State of
[__________] with full power and authority to own its properties and
conduct its business as presently conducted by it, and to enter into
and perform its obligations under the Trust Agreement and the
Purchase Agreement, and had at all times, and now has, the power,
authority and legal right to acquire, own, sell and hold the excess
cash flow from the Reserve Account and the Fixed Value Payments.
(iii) Each of CFC and the Company is duly qualified to do business
and is in good standing, and has obtained all necessary licenses and
approvals, in each jurisdiction in which failure to qualify or to
obtain such licenses or approvals would render any Standard
Receivable or Fixed Value Receivable unenforceable by the Seller,
the Owner Trustee or the Indenture Trustee.
(iv) The direction by the Seller to the Owner Trustee to
authenticate the Certificates has been duly authorized by the Seller
and, when the Certificates have been duly executed, authenticated
and delivered by the Owner Trustee in accordance with the Trust
Agreement and delivered and paid for pursuant to this Agreement, the
Certificates will be duly issued and entitled to the benefits and
security afforded by the Trust Agreement, subject as to the
enforcement of remedies (x) to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
creditors' rights generally and (y) to general principles of equity
(regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(v) The direction by the Seller to the Indenture Trustee to
authenticate the Notes has been duly authorized by the Seller, and
when the Notes have been duly executed and delivered by the Owner
Trustee and authenticated by the Indenture Trustee in accordance
with the Indenture and delivered and paid for pursuant to the Note
Underwriting Agreement, the Notes will be duly issued and entitled
to the benefits and security afforded by the Indenture, subject as
to the enforcement of remedies (x) to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and (y) to general principles
of equity (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(vi) The Purchase Agreement, the Trust Agreement, the Sale and
Servicing Agreement, and the Administration Agreement have been duly
authorized, executed and delivered by CFC and are legal, valid and
binding obligations of CFC enforceable against the CFC in accordance
with their terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights and (y) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding
therefor may be brought.
(vii) This Agreement and the Note Underwriting Agreement have been
duly authorized, executed and delivered by the Seller.
(viii) The Purchase Agreement and the Trust Agreement have been duly
authorized, executed and delivered by the Company and are the legal,
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except (x) the
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (y) the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(ix) Neither the transfer of the Standard Receivables and the Fixed
Value Receivables from the Seller to the Trust, nor the assignment
of the Owner Trust Estate to the Trust, nor the grant of the
security interest in the Collateral to the Indenture Trustee
pursuant to the Indenture, nor the execution and delivery of the
Note Underwriting Agreement, this Agreement, the Purchase Agreement,
the Trust Agreement, the Sale and Servicing Agreement or the
Administration Agreement by CFC, nor the execution and delivery of
the Trust Agreement and the Purchase Agreement by the Company, nor
the consummation of any transactions contemplated in the Note
Underwriting Agreement, this Agreement, the Purchase Agreement, the
Trust Agreement, the Indenture, the Administration Agreement or the
Sale and Servicing Agreement (such agreements, excluding the Note
Underwriting Agreement and this Agreement, being, collectively, the
"Basic Documents"), nor the fulfillment of the terms thereof by CFC,
the Company or the Trust, as the case may be, will conflict with, or
result in a breach, violation or acceleration of, or constitute a
default under, any term or provision of the articles of organization
or operating agreement of the Seller or the Company, or of any
indenture or other agreement or instrument to which the Seller or
the Company is a party or by which either of them is bound, or
result in a violation of or contravene the terms of any statute,
order or regulation applicable to the Seller or the Company of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over either of them.
(x) There are no actions, proceedings or investigations pending or,
to the best of such counsel's knowledge after due inquiry,
threatened before any court, administrative agency or other tribunal
(1) asserting the invalidity of the Trust or any of the Basic
Documents, (2) seeking to prevent the consummation of any of the
transactions contemplated by any of the Basic Documents or the
execution and delivery thereof, (3) that might materially and
adversely affect the performance by CFC of its obligations under, or
the validity or enforceability of, the Note Underwriting Agreement,
this Agreement, the Purchase Agreement, the Trust Agreement, the
Sale and Servicing Agreement, or the Administration Agreement, or,
(4) that might materially and adversely affect the performance by
the Company of its obligations under, or the validity or
enforceability of, the Purchase Agreement or the Trust Agreement.
(xi) To the best knowledge of such counsel and except as set forth
in the Prospectus (and any supplement thereto), no default exists
and no event has occurred which, with notice, lapse of time or both,
would constitute a default in the due performance and observance of
any term, covenant or condition of any agreement to which the Seller
or the Company is a party or by which either of them is bound, which
default is or would have a material adverse effect on the financial
condition, earnings, prospects, business or properties of the Seller
and its subsidiaries, taken as a whole.
(xii) Nothing has come to such counsel's attention that would lead
such counsel to believe that the representations and warranties of
(x) the Company contained in the Purchase Agreement and the Trust
Agreement are other than as stated therein or (y) CFC contained in
this Agreement, the Note Underwriting Agreement, the Trust Agreement
or the Sale and Servicing Agreement are other than as stated
therein.
(xiii) The Seller is the sole owner of all right, title and interest
in, and has good and marketable title to, the Standard Receivables
and Fixed Value Receivables and the other property to be transferred
by it to the Trust. The assignment of the Standard Receivables and
Fixed Value Receivables, all documents and instruments relating
thereto and all proceeds thereof to the Trust, pursuant to the Sale
and Servicing Agreement, vests in the Trust all interests that are
purported to be conveyed thereby, free and clear of any liens,
security interests or encumbrances except as specifically permitted
pursuant to the Sale and Servicing Agreement or any other Basic
Document.
(xiv) Immediately prior to the transfer of the Standard Receivables
and Fixed Value Receivables to the Trust, the Seller's interest in
the Standard Receivables and Fixed Value Receivables, the security
interests in the Financed Vehicles securing the Standard Receivables
and Fixed Value Receivables and the proceeds of each of the
foregoing was perfected and constituted a perfected first priority
interest therein.
(xv) The Indenture constitutes a grant by the Trust to the Indenture
Trustee of a valid security interest in the Standard Receivables and
Fixed Value Receivables, the security interests in the Financed
Vehicles securing the Standard Receivables and Fixed Value
Receivables and the proceeds of each of the foregoing, which
security interest will be perfected upon the filing of the UCC-1
financing statements with the Secretary of State of the State of
Michigan and the State of Delaware and will constitute a first
priority perfected security interest therein. No filing or other
action, other than the filing of the UCC-1 financing statements with
the Secretary of State of the State of Michigan and the State of
Delaware referred to above, is necessary to perfect and maintain the
interest or the security interest of the Indenture Trustee in the
Standard Receivables and Fixed Value Receivables, the security
interests in the Financed Vehicles securing the Receivables and the
proceeds of each of the foregoing against third parties.
(xvi) The Standard Receivables and Fixed Value Receivables are
chattel paper as defined in the UCC.
(xvii) The Sale and Servicing Agreement, the Trust Agreement, the
Indenture, the Purchase Agreement and the Administration Agreement
conform in all material respects with the descriptions thereof
contained in the Prospectus (and any supplement thereto).
(xviii) The statements in the Prospectus under the headings "Special
Considerations -- Certain Legal Aspects -- Security Interests in
Financed Vehicles" and "-- Bankruptcy Considerations" and "Certain
Legal Aspects of the Receivables", to the extent they constitute
matters of law or legal conclusions with respect thereto, have been
reviewed by such counsel and are correct in all material respects.
(xix) The statements contained in the Prospectus and any supplement
thereto under the headings "Description of the Notes", "Description
of the Certificates" and "Description of the Transfer and Servicing
Agreements", insofar as such statements constitute a summary of the
Certificates, the Notes, the Indenture, the Administration
Agreement, the Purchase Agreement, the Sale and Servicing Agreement
and the Trust Agreement, constitute a fair summary of such
documents.
(xx) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation of the transactions contemplated in the Basic
Documents, except such filings with respect to the transfer of the
Standard Receivables and Fixed Value Receivables to the Trust
pursuant to the Sale and Servicing Agreement, the grant of a
security interest in the Collateral to the Indenture Trustee
pursuant to the Indenture and such other approvals as have been
obtained and filings as have been made.
(xxi) Such counsel is familiar with the Seller's standard operating
procedures relating to the Seller's acquisition of a perfected first
priority security interest in the vehicles financed by the Servicer
pursuant to retail automobile and light duty truck installment sale
contracts in the ordinary course of the Seller's business. Assuming
that the Seller's standard procedures are followed with respect to
the perfection of security interests in the Financed Vehicles (and
such counsel has no reason to believe that the Seller has not
followed or will not continue to follow its standard procedures in
connection with the perfection of security interests in the Financed
Vehicles), the Seller has acquired or will acquire a perfected first
priority security interest in the Financed Vehicles.
(xxii) All actions required to be taken and all filings required to
be made under the Act and the Exchange Act prior to the sale of the
Certificates have been duly taken or made.
(xxiii) The Trust Agreement is not required to be qualified under
the Trust Indenture Act and the Trust is not required to be
registered under the Investment Company Act.
(xxiv) The Indenture has been duly qualified under the Trust
Indenture Act.
(xxv) The Seller is not, and will not as a result of the offer and
sale of the Certificates as contemplated in the Prospectus (and any
supplement thereto) and this Agreement or of the Notes as
contemplated in the Prospectus (and any supplement thereto) and the
Note Underwriting Agreement become, an "investment company" as
defined in the Investment Company Act or a company "controlled by"
an "investment company" within the meaning of the Investment Company
Act.
(xxvi) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
that are required to be disclosed in the Registration Statement,
other than those disclosed therein.
(xxvii) To the best of such counsel's knowledge and information,
there are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto, the descriptions
thereof or references thereto are correct, and no default exists in
the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
so described, referred to, filed or incorporated by reference.
(xxviii) The Registration Statement has become effective under the
Act, any required filing of the Basic Prospectus, any preliminary
Basic Prospectus, any Preliminary Prospectus Supplement and the
Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule
424(b), and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act, and the Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates, complied
as to form in all material respects with the requirements of the
Act, the Exchange Act, the Trust Indenture Act and the Rules and
Regulations.
(xxix) Such counsel has examined the Registration Statement and the
Prospectus and nothing has come to such counsel's attention that
would lead such counsel to believe that the Registration Statement
or the Prospectus or any amendment or supplement thereto as of the
respective dates thereof (other than the financial statements and
other financial and statistical information contained therein, as to
which such counsel need not express any view) contains an untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not misleading.
(xxx) The Trust has been duly formed and is validly existing as a
statutory business trust and is in good standing under the laws of
the State of Delaware, with full power and authority to execute,
deliver and perform its obligations under the Sale and Servicing
Agreement, the Indenture, the Administration Agreement, and the
Notes and the Certificates.
(xxxi) The Indenture, the Sale and Servicing Agreement and the
Administration Agreement have been duly authorized and, when duly
executed and delivered by the Owner Trustee, will constitute the
legal, valid and binding obligations of the Trust, enforceable
against the Trust in accordance with their terms, except (x) the
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (y) the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(f) You shall have received an opinion of [__________], [Vice President
and General Counsel] of CFC and the Company, addressed to you and the Indenture
Trustee, dated the Closing Date and satisfactory in form and substance to you
and your counsel, to the effect that the statements in the Basic Prospectus
under the heading "Certain State Tax Consequences with respect to Trusts for
which a Partnership Election Is Made" and in the Prospectus Supplement under the
heading "Summary of Terms -- Tax Status" (to the extent relating to Michigan tax
consequences) accurately describe the material Michigan tax consequences to
holders of the Securities.
(g) You shall have received an opinion addressed to you of
[__________], in its capacity as federal tax counsel to the Trust, to the effect
that the statements in the Basic Prospectus under the headings "Certain Federal
Income Tax Consequences" and in the Prospectus Supplement under the heading
"Summary of Terms -- Tax Status" (to the extent relating to federal income tax
consequences) and "Certain Federal Tax Consequences" accurately describe the
material federal income tax consequences to holders of the Securities.
(h) You shall have received an opinion addressed to you of
[__________], in its capacity as special counsel to the Underwriters, dated the
Closing Date, with respect to the validity of the Certificates and the Notes and
such other related matters as you shall require, and the Seller shall have
furnished or caused to be furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
[__________], in its capacity as special ERISA counsel to the Trust, shall also
have delivered an opinion with respect to the characterization of the transfer
of the Receivables and to the effect that the statements in the Basic Prospectus
and in the Prospectus Supplement under the heading "ERISA Considerations", to
the extent that they constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or reviewed by such counsel
and accurately describe the material consequences to holders of the Securities
under ERISA.
(i) You shall have received an opinion addressed to you and CFC of
[__________], counsel to the Owner Trustee, dated the Closing Date and
satisfactory in form and substance to you and your counsel, to the effect that:
(i) The Owner Trustee is a [__________] duly incorporated and
validly existing under the laws of [__________].
(ii) The Owner Trustee has the full corporate trust power to
accept the office of owner trustee under the Trust Agreement and
to enter into and perform its obligations under the Trust
Agreement and, on behalf of the Trust, under the Indenture, the
Sale and Servicing Agreement and the Administration Agreement.
(iii) The execution and delivery of the Trust Agreement and, on
behalf of the Trust, of the Indenture, the Sale and Servicing
Agreement, the Administration Agreement, the Certificates and the
Notes and the performance by the Owner Trustee of its obligations
under the Trust Agreement, the Indenture, the Sale and Servicing
Agreement and the Administration Agreement have been duly
authorized by all necessary corporate action of the Owner Trustee
and each has been duly executed and delivered by the Owner
Trustee.
(iv) The Trust Agreement, the Sale and Servicing Agreement, the
Indenture and the Administration Agreement constitute valid and
binding obligations of the Owner Trustee enforceable against the
Owner Trustee in accordance with their terms under the laws of the
State of New York, the State of Delaware and the federal law of
the United States.
(v) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture, the Sale
and Servicing Agreement and the Administration Agreement do not
require any consent, approval or authorization of, or any
registration or filing with, any Delaware or United States federal
governmental authority.
(vi) Each of the Certificates has been duly executed and delivered
by the Owner Trustee as owner trustee and authenticating agent.
Each of the Notes has been duly executed and delivered by the
Owner Trustee, on behalf of the Trust.
(vii) Neither the consummation by the Owner Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture, the Trust Agreement or the Administration Agreement nor
the fulfillment of the terms thereof by the Owner Trustee will
conflict with, result in a breach or violation of, or constitute a
default under any law or the charter, bylaws or other
organizational documents of the Owner Trustee or the terms of any
indenture or other agreement or instrument known to such counsel
to which the Owner Trustee or any of its subsidiaries is a party
or is bound, or any judgment, order or decree known to such
counsel to be applicable to the Owner Trustee or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Owner
Trustee or any of its subsidiaries.
(viii) To the knowledge of such counsel there is no action, suit
or proceeding pending or threatened against the Owner Trustee (as
owner trustee under the Trust Agreement or in its individual
capacity) before or by any governmental authority that, if
adversely decided, would materially adversely affect the ability
of the Owner Trustee to perform its obligations thereunder.
(ix) The execution, delivery and performance by the Owner Trustee
(as trustee under the Trust Agreement or in its individual
capacity, as the case may be) of the Sale and Servicing Agreement,
the Indenture, the Trust Agreement or the Administration Agreement
will not subject any of the property or assets of the Trust or any
portion thereof to any lien created by or arising under the Owner
Trustee that is unrelated to the transactions contemplated in such
Agreements.
(j) You shall have received a certificate dated the Closing Date of any
of the Chairman of the Board, the President, the Executive Vice President, any
Vice President, the Treasurer, any Assistant Treasurer, the principal financial
officer or the principal accounting officer of each of the Seller and the
Company, in which such officers shall state that, to the best of their knowledge
after reasonable investigation, (i) the representations and warranties of CFC or
the Company, as the case may be, contained in the Trust Agreement, the Purchase
Agreement and the Sale and Servicing Agreement, as applicable, are true and
correct, that CFC or the Company, as the case may be, has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
under such agreements at or prior to the Closing Date, that no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are contemplated by the
Commission and (ii) since [______], 199_, except as may be disclosed in the
Prospectus (and any supplement thereto) or, in the case of DaimlerChrysler
Corporation, as may be disclosed publicly by DaimlerChrysler Corporation prior
to the Execution Time, no material adverse change, or any development involving
a prospective material adverse change, in or affecting particularly the business
or properties of the Trust, CFC, the Company or DaimlerChrysler Corporation has
occurred.
(k) You shall have received evidence satisfactory to you that, on or
before the Closing Date, UCC-1 financing statements have been or are being filed
in the office of the Secretary of State of the States of Michigan and Delaware
reflecting the transfer of the interest of the Seller in the Standard
Receivables and Fixed Value Receivables and the proceeds thereof to the Trust
and the grant of the security interest by the Trust in the Standard Receivables
and Fixed Value Receivables and the proceeds thereof to the Indenture Trustee.
(l) The Certificates shall have been rated "_" by Standard & Poor's and
by Moody's Investors Service, Inc.
(m) The issuance of the Notes and the Certificates shall not have
resulted in a reduction or withdrawal by any Rating Agency of the current rating
of any outstanding securities issued or originated by the Seller or any of its
affiliates.
[(n) On the Closing Date, $[______] aggregate principal amount of the
Offered Notes shall have been issued and sold.]
(o) On the Closing Date, the Seller shall have purchased and fully paid
for all of the Class A-1 Notes.
The Seller will provide or cause to be provided to you such conformed
copies of such opinions, certificates, letters and documents as you reasonably
request.
8. Indemnification and Contribution. (a) The Seller will indemnify and
--------------------------------
hold each Underwriter harmless against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the preliminary Basic Prospectus, the
Collateral Materials, the Preliminary Prospectus Supplement (if any), the Basic
Prospectus or the Prospectus or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein (in
the case of the Collateral Materials, when read together with the Prospectus) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Seller will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the Seller
by any Underwriter through you specifically for use therein.
For all purposes contemplated hereby, the Seller and the Underwriters
each acknowledge that the Collateral Materials were prepared by the Seller.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Seller against any losses, claims, damages or liabilities
to which the Seller may become subject, under the Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the preliminary Basic Prospectus, the Preliminary Prospectus Supplement (if
any), the Basic Prospectus or the Prospectus or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information relating to such Underwriter furnished to the Seller by such
Underwriter through you specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Seller in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability that it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by the indemnified party of the counsel appointed
by the indemnifying party, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Seller on the
one hand and the Underwriters on the other from the offering of the Certificates
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Seller on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Seller on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Seller bear to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Seller or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim that is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter (except as
may be provided in the agreement among Underwriters relating to the offering of
the Certificates) shall be required to contribute any amount in excess of the
underwriting discount or commission applicable to the Certificates purchased by
such Underwriter hereunder. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Seller under this Section shall be in
addition to any liability that the Seller may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any of
the Underwriters within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller, to each officer of the Seller
who has signed the Registration Statement and to each person, if any, who
controls the Seller within the meaning of the Act.
9. Defaults of Underwriters. If any Underwriter or Underwriters default
------------------------
in their obligations to purchase the Certificates hereunder on the Closing Date
and arrangements satisfactory to the Representative and the Seller for the
purchase of such Certificates by other persons are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any nondefaulting Underwriter or the Seller, except as provided in Section
11. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
10. No Bankruptcy Petition. Each Underwriter covenants and agrees that,
-----------------------
prior to the date which is one year and one day after the payment in full of all
securities issued by the Seller or by a trust for which the Seller was the
depositor which securities were rated by any nationally recognized statistical
rating organization, it will not institute against, or join any other Person in
instituting against, the Seller any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings under any federal or
state bankruptcy or similar law.
11. Survival of Representations and Obligations. The respective
-----------------------------------------------
indemnities, agreements, representations, warranties and other statements of the
Seller or the Company or any of their officers, and each of the Underwriters set
forth in or made pursuant to this Agreement or contained in certificates of
officers of the Seller submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation or statement as to the
results thereof made by or on behalf of any Underwriter or the Seller or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Certificates. If for
any reason the purchase of the Certificates by the Underwriters is not
consummated, the Seller shall remain responsible for the expenses to be paid or
reimbursed by the Seller pursuant to Section 6 and the respective obligations of
the Seller and the Underwriters pursuant to Section 8 shall remain in effect. If
for any reason the purchase of the Certificates by the Underwriters is not
consummated (other than because of a failure to satisfy the conditions set forth
in items (ii), (iv) and (v) of Section 7(d)), the Seller will reimburse any
Underwriter, upon demand, for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by it in connection with the
offering of the Certificates. Nothing contained in this Section 11 shall limit
the recourse of the Seller against the Underwriters.
12. Notices. All communications hereunder will be in writing and, if
-------
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representative at [__________], [__________], [______], [______],
Attention: Asset Backed Securities Group; if sent to the Seller, will be mailed,
delivered or telegraphed, and confirmed to it at Chrysler Financial Company
L.L.C., 27777 Franklin Road, Southfield, Michigan 48034, Attention: Assistant
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8 will be mailed, delivered or telegraphed and confirmed to such
Underwriter. Any such notice will take effect at the time of receipt.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligations hereunder.
14. Representation. You will act for the several Underwriters in
--------------
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by you will be binding upon all the Underwriters.
15. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
16. Applicable Law. This Agreement will be governed by, and construed
---------------
in accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Seller and the several Underwriters
in accordance with its terms.
Very truly yours,
CHRYSLER FINANCIAL COMPANY L.L.C.
By:
Name:
Title:
The foregoing Certificate
Underwriting Agreement is
hereby confirmed and accepted
as of the date first written above:
[_________________________________]
as Representative of the Several Underwriters
By: _______________________________
Name:
Title:
SCHEDULE I
PRINCIPAL AMOUNT
CERTIFICATE UNDERWRITERS OF CERTIFICATES
-----------------
[_________________]..............................................$[____________]
[_________________]..............................................$[____________]
Total...................................................$[____________]
Exhibit 2.1
PLAN OF MERGER
PLAN OF MERGER, dated as of October 22, 1998 between CHRYSLER FINANCIAL
CORPORATION, a Michigan corporation ("Financial"), and CHRYSLER FINANCIAL
COMPANY L.L.C., a Michigan limited liability company ("LLC") ("Plan of
Merger").
PREAMBLE
WHEREAS, the parties hereto desire that Financial merge into LLC, with
LLC being the surviving entity, upon the terms and conditions herein set forth
(the "Merger");
WHEREAS, the outstanding capital stock of Financial consists of 250,000
shares of Common Stock, par value $100 per share, all of which are issued and
outstanding and entitled to vote on this Plan of Merger;
WHEREAS, the outstanding capitalization of LLC consists of $100,000 and
Financial, as sole member of LLC, is entitled to vote on this Plan of Merger;
WHEREAS, Financial desires to change its form of organization from a
Michigan corporation to a Michigan limited liability company;
WHEREAS, it is the express intention of Financial and LLC that Chrysler
Corporation, a Delaware corporation ("Chrysler"), as the sole shareholder of
Financial, become the sole member of LLC as a result of the Merger and this
Plan of Merger; and
WHEREAS, Financial desires to generally accomplish such changes by
merging into LLC in accordance with the procedures and subject to the terms
and conditions of this Plan of Merger.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
MERGER
1.1 Merger and Surviving Company. At the Effective Time (as such term is
defined in Section 1.2), Financial shall be merged into LLC in accordance with
Section 705(a) of the Michigan Limited Liability Company Act and Section 736
of the Michigan Business Corporation Act, and the separate existence and
organization of Financial shall cease. LLC shall be the surviving entity
(herein sometimes referred to as the "Surviving Entity") and shall continue
existence under the laws of the State of Michigan and shall succeed to all
property (real, personal, and mixed), rights, assets, liabilities, and
obligations of Financial in consideration for a corresponding increased
membership interest of Financial in LLC, which membership interest is received
by Chrysler upon the Merger. The street address of the Surviving Entity's
principal place of business is 27777 Franklin Road, Southfield, Michigan 48034
and the Surviving Entity shall be a Michigan limited liability company.
1.2. Effective Time. The merger of Financial into LLC shall become
effective as of the close of business on October 25, 1998 (the "Effective
Time").
1.3 Elimination of Unknown Shareholders. Chrysler is the sole shareholder
of Financial and shall be the only person to receive a membership (or other
equity) interest in LLC. Any other person claiming to be a shareholder of
Financial in addition to Chrysler, or claiming any other equity interest in
Financial, shall receive no membership (or other equity) interest in LLC, and
shall be entitled solely to monetary compensation in an amount equal to the
fair market value of the stock or other equity in Financial.
ARTICLE II
ARTICLES OF ORGANIZATION; OPERATING AGREEMENT; MANAGERS; OFFICERS
2.1 Articles of Organization. The Articles of Organization of LLC in
effect immediately prior to the Effective Time shall continue as the Articles
of Organization of the Surviving Entity without amendment or modification.
2.2 Operating Agreement. The Amended and Restated Operating Agreement of
LLC in effect immediately prior to the Effective Time shall continue as the
Amended and Restated Operating Agreement of the Surviving Entity without
amendment or modification. The Amended and Restated Operating Agreement may be
amended at any time by the Member as prescribed in Section 8.1 thereof.
2.3 Managers and Officers. The managers and officers of LLC immediately
prior to the Effective Time shall continue as the managers and officers of the
Surviving Entity, to hold office subject to the Articles of Organization and
the Amended and Restated Operating Agreement of the Surviving Entity and the
Michigan Limited Liability Company Act.
ARTICLE III
CONVERSION OF SHARES OF STOCK
3.1 Conversion of Common Stock of Financial. The total aggregate net
worth of Financial at the Effective Time shall be converted into an additional
capital amount of the Surviving Entity and the common stock of Financial shall
be retired and Chrysler Corporation, the holder of the common stock of
Financial, shall, at the Effective Time, become the sole member of the
Surviving Entity, replacing Financial as the sole member, and no cash or
securities or other property shall be issued in respect of such amount.
ARTICLE IV
MISCELLANEOUS
4.1 Termination. This Plan of Merger and all obligations hereunder may be
terminated and abandoned at any time prior to the Effective Time by the mutual
consent of the Board of Directors of Financial and the managers of LLC.
4.2 Counterparts. This Plan of Merger may be executed in one or more
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Plan of
Merger to be executed by its duly authorized officers as of the date first
above written.
ATTEST: CHRYSLER FINANCIAL CORPORATION
By: /s/ B. C. Babbish By: /s/ D. L. Davis
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ATTEST: CHRYSLER FINANCIAL COMPANY L.L.C.
By: /s/ B. C. Babbish By: /s/ D. L. Davis
----------------- ---------------
EXHIBIT 3.1
C&S 700 (Rev. (8/96)
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
Date Received (FOR BUREAU USE ONLY)
Name Michigan Runner Service
Attn: Cheryl Bixby
Address P.O. Box 266
1467 1/2 S. Main Street
City Eaton Rapids, Michigan 48827
EFFECTIVE DATE:
Document will be returned to the name and address you enter above.
ARTICLES OF ORGANIZATION
For use by Domestic Limited Liability Companies
(Please read information and instructions on last page)
B ____________
Pursuant to the provisions of Act 23, Public Acts of
1993, the undersigned execute the following Articles:
ARTICLE I
The name of the limited liability company is: Chrysler Financial Company
L.L.C.
ARTICLE II
The purpose or purposes for which the limited liability company is formed
is to engage in any activity within the purposes for which a limited
liability company may be formed under the Limited Liability Company Act
of Michigan.
ARTICLE III
The duration of the limited liability company is: Perpetual.
ARTICLE IV
1. The street address of the registered office is:
c/o The Corporation Company 30600 Telegraph Rd. (Street Address)
Bingham Farms, Michigan 48025
(City) (Zip Code)
2. The mailing address of the registered office if different than above:
_____________________________________________ , Michigan ______________
(P.O. Box) (City) (ZIP Code)
3. The name of the resident agent at the registered office is: The
Corporation Company.
ARTICLE V (Insert any desired additional provision authorized by the Act;
attach additional pages if needed.)
The business of the limited liability company is to be managed by
managers instead of by its member.
Signed this 30th day of June, 1998
By: /s/ Byron C. Babbish __________________ __________________
(Signature) (Signature) (Signature)
(MICH. - LLC 3290 - 5/2/97)
Name of Person or Organization Preparer's Name and Business
Remitting Fees: Telephone Number:
______________________ ______________________
______________________ ______________________
INFORMATION AND INSTRUCTIONS
1. The articles of organization cannot be filed until this form, or a
comparable document, is submitted.
2. Submit one original of this document. Upon filing, the document will
be added to the records of the Corporation, Securities and Land
Development Bureau. The original will be returned to the address you
enter in the box on the front as evidence of filing.
Since this document will be maintained on optical disk media, it is
important that the filing be legible. Documents with poor black and
white contrast, or otherwise illegible, will be rejected.
3. This document is to be used pursuant to the provisions of Act 23,
P.A. of 1993, by two or more persons for the purpose of forming a
domestic limited liability company. Use form 701 if the Limited
Liability Company will be providing a personal service for which a
license or legal authorization is required pursuant to Article 9 of
the Act.
4. Article I - The name of a domestic limited liability company is
required to contain one of the following words or abbreviations:
"Limited Liability Company", "L.L.C.", "L.C.", "LLC", or "LC".
5. Article II - Under section 203(b) of the Act, it is sufficient to
state substantially, alone or with specifically enumerated purposes,
that the limited liability company is formed to engage in any
activity within the purposes for which a limited liability company
may be formed under the Act.
6. Article III - The term of existence of the limited liability company
must be reflected as a specific date, a number of years, or
perpetual.
7. Article IV - A post office box may not be designated as the address
of the registered office.
8. Article V - Section 401 of the Act specifically states the business
shall be managed by members unless the Articles of Organization
state the business will be managed by managers. If the limited
liability company is to be managed by managers instead of by
members, insert a statement to that effect in Article V.
9. This document is effective on the date endorsed "Filed" by the
Bureau. A later effective date, no more than 90 days after the date
of delivery, may be stated as an additional article.
10. The Articles must be signed in ink by two or more of the persons who
will be members. Names of person signing shall be stated beneath
their signatures.
11. If more space is needed, attach additional pages. All pages should
be numbered.
12. NONREFUNDABLE FEE: Make remittance payable to the State of Michigan.
Include limited liability company name on check or money
order..$50.00
13. Mail form and fee to:
Michigan Department of Consumer and Industry Service
Corporation, Securities and Land Development Bureau
Corporation Division
P.O. Box 30054
Lansing, MI 48909-7554
The office is located at:
6546 Mercantile Way
Lansing, MI 48910
(517) 334-6302
The exclusive right to use a name may be transferred to another person.
To request a transfer, complete the following:
NOTICE OF TRANSFER OF NAME RESERVATION
Pursuant to Section 215(3), Act 284, Public Acts of 1972; Section 215(3),
Act 162, Public Acts of 1982; Section 103(b), Act 213, Public Acts of 1982; or
Section 205(2), Act 23, Public Acts of 1993, the undersigned hereby transfers
to:
Byron C. Babbish
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c/o The Corporation Company, 30600 Telegraph Rd., Bingham Farms, MI 48025
(Name and Address of Transferee)
the right to exclusive use of the name Chrysler Financial Company L.L.C..
MRS/CHERYL J. BIXBY, AS ACTING AGENT
(Name of Original Applicant)
By X /s/ Cheryl J. Bixby
(Signature)
INFORMATION AND INSTRUCTIONS
1. Submit one original of this Application, or a comparable document,
to apply for a name reservation. A true copy will be returned to the
address you enter in the box on the front as evidence of filing.
2. If the name is available, the administrator shall reserve it for
exclusive use of the applicant.
Professional Services Corporations, Nonprofit Corporations, or
Limited Partnerships: The Administrator, for good cause shown, may
extend the reservation for periods of not more than two calendar
months each. No more than two extensions shall be granted. Extension
requests must be received in writing by the Bureau prior to the
expiration of the reservation period.
Profit Corporations and Limited Liability Companies: Upon
expiration, the name may again be reserved by filing another
application and fee.
3. Act 284, Public Acts of 1972; Act 192, Public Acts of 1962; Act 213,
Public Acts of 1993 require certain words or abbreviations be
included or excluded from the name of profit corporations, limited
partnerships, or limited liability companies. Those required are:
a. Company, Corporation, Incorporated, Limited, Co., Corp., Inc.,
or Ltd. in the name of domestic (non-professional service)
corporations.
b. Professional Corporation or P.C. in the name of professional
service corporations.
c. Limited Partnership in the name of limited partnerships.
d. Limited Liability Company, L.L.C., or L.C. in the name of
(non-professional service) limited liability companies.
e. Professional Limited Liability Company, P.L.L.C., or P.L.C. in
the name of professional service limited liability companies.
Those excluded are: Corporation, Incorporated, Corp., Inc. in the
name of limited partnerships and limited liability companies.
4. The application for reservation of name and the notice of transfer
of name reservation must be signed in ink by the applicant.
5. FEES: Make remittance payable to the State of Michigan. No fee for
transfer or extension of reservation. Nonrefundable filing fee
CORPORATION OR LIMITED PARTNERSHIP $10.00
LIMITED LIABILITY COMPANY $25.00
6. Mail form and fee to: The Office is located at:
Michigan Department of Commerce 6546 Mercantile Way
Corporation and Securities Bureau Lansing, MI 48909-7554
Corporate Division (517) 334-6302
P.O. Box 30054 P.O. box 30054
Lansing, MI 48909-7554 Lansing, MI 48909-7554
EXHIBIT 3.2
CHRYSLER FINANCIAL COMPANY L.L.C.
---------------------------------
AMENDED AND RESTATED
--------------------
OPERATING AGREEMENT
-------------------
The undersigned, Chrysler Financial Corporation, a Michigan
corporation (the "Member"), hereby adopts this Amended and Restated Operating
Agreement (the "Agreement") as of the 22nd day of October, 1998, in connection
with the formation of Chrysler Financial Company L.L.C., a limited liability
company (the "Company"). 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.
WHEREAS, the Member has caused the Company to be formed by the filing
of Articles of Organization with the State of Michigan on July 1, 1998 and
desires to provide certain terms for the governance of the Company and the
conduct of its business.
NOW, THEREFORE, the Member declares as follows:
I. FORMATION OF THE COMPANY
------------------------
1.1 Name and Formation. The name of the Company is Chrysler Financial
------------------
Company L.L.C. The Company is a limited liability company organized under the
Michigan Limited Liability Company Act (the "Act"). The Company is a separate
legal entity. The Company and all ownership interests in the Company will be
governed by this Agreement and, except as modified by this Agreement, by the
Act. This Agreement is intended to constitute an "Operating Agreement" as
defined under the Act.
1.2 Membership Interest. The equity of the Company (representing the
------------------
ownership of the Company) will be evidenced by a single interest designated as
the "Membership Interest." The Membership Interest is personal property and
the owner of the Membership Interest has no interest in specific property of
the Company. See Section 5.1 of this Agreement with respect to limitations on
the transferability of the Membership Interest.
1.3 Offices. The address of the registered office and the name and
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address of the agent of the Company for service of process is CT Corporation,
30600 Telegraph Road, Bingham Farms, Michigan 48025. The address of the
Company is 27777 Franklin Road, Southfield, Michigan 48034. The Company may
have such offices or places of business as the Member may designate or as the
business of the Company may from time to time require. The principal office,
registered office and the registered agent may be changed from time to time by
written action of the Member.
1.4 Term of the Company. The Company will have perpetual existence,
--------------------
unless sooner terminated in accordance with the provisions of this Agreement.
1.5 Business Purpose. The Company is organized for the purpose of
-----------------
engaging in any lawful act or activity for which limited liability companies
may be organized under the Act. Except as otherwise provided in the Act or by
other applicable law, the Company will have the power to do all things
necessary or convenient to effect any or all of its business purposes.
1.6 Tax Classification. It is the Member's express intention that, in
-------------------
accordance with Treasury Regulation ss.301.7701-3(a) (and any successor
provision), as well as the corresponding provisions of applicable state tax
law, the Company will remain eligible, at all times, to be disregarded as an
entity separate from the Member for all income and franchise tax purposes. Any
action that would terminate the Company's eligibility to be a disregarded
entity (for example, the transfer or issuance of a Membership Interest that
results in the Company having more than one member) shall be null and void. If
IRS Form 8832 ("Entity Classification Election") is filed to treat the Company
as disregarded, (i) all of the Company's items of income, gain, deduction,
loss and credit on and after the effective date specified in Form 8832 shall
be included directly in the federal (and applicable state) income and
franchise tax returns of the Member as if the Company were a branch or
division of the Member, and (ii) no election shall be subsequently made that
would terminate the Company's status as a disregarded entity (for example,
causing it to become an association taxable as a corporation within the
meaning of Treasury Regulation ss.301.7701-2(b)(2)).
II. CAPITAL CONTRIBUTIONS
---------------------
2.1 Initial Capital Contribution. As of August 19, 1998, the Member
-----------------------------
was credited with making an initial contribution to the capital of the Company
in the amount of $100,000 in cash as reflected on the Company's books and
records (the "Initial Capital Contribution"). Only the owner of the Membership
Interest shall be entitled to recover this contribution.
2.2 Additional Capital Contributions. Additional contributions to the
--------------------------------
capital of the Company (the "Additional Capital Contributions") may be made at
such times and in such amounts as the Member may decide from time to time. In
the event of a merger of the Member into the Company where the Member is a
corporation (a "Merger"), the assets transferred to the Company in connection
with the Merger (whether in consideration for an increased Membership Interest
or otherwise) will constitute an Additional Capital Contribution. Only the
owner of the Membership Interest shall be entitled to recover amounts received
by the Company pursuant to this Section.
2.3 Advances from the Member. Any advance other than the Initial
-------------------------
Capital Contribution or Additional Capital Contributions made by the Member to
the Company will not be deemed a capital contribution to, or be reflected on
the balance of, any capital account of the Company. The amount of any such
advance will be a debt due from the Company to the Member and, except as
otherwise expressly provided in this Agreement, will be repaid as soon as
practicable to the Member. Advances from the Member may not be sold, pledged,
assigned, or otherwise transferred (each a "Transfer"), except to the
transferee permitted under Section 5.1 in connection with a corresponding
permitted Transfer of the Membership Interest under that Section. Any Transfer
of the Membership Interest permitted under Section 5.1 must be accompanied by
a corresponding Transfer of all advances to the same transferee.
2.4 No Interest. No interest will be paid by the Company (a) on any
-----------
capital contribution, or (b) unless otherwise agreed to by the Member, on any
advance to the Company from the Member.
III. MANAGEMENT AND OPERATIONS
-------------------------
3.1 Management by Managers. All management powers over the business
----------------------
and affairs of the Company, other than the power to amend this Agreement, will
be vested in one or more managers who shall be appointed by the Member (the
"Managers"). Until otherwise established by the Member, the initial number of
Managers of the Company shall be five (5). The Managers will have no ownership
interest in the Company. The Managers will conduct, direct, and exercise full
control over all activities of the Company. Each Manager shall hold office
until his or her successor is appointed or until his or her earlier
resignation or removal by the Member. A majority of the Managers will
constitute a quorum and the majority vote of the Managers at a meeting at
which a quorum is present will be the act of the Managers. Any Manager of the
Company may be removed or replaced without cause by the Member.
3.2 Officers. The Managers, by written resolution, may designate such
--------
officers ("Officers") of the Company as they deem necessary or proper in the
conduct of the affairs of the Company, delegating to such Officers the titles,
duties, responsibilities, and authorities reflected in such resolutions. The
Officers so designated may be appointed or removed by the Managers. At all
times, the actions of the Officers will be subject to the review, delegation,
redetermination, direction, and control of the Managers. Each Officer shall
hold office until his or her resignation or removal by the Managers. Any
Officer of the Company may be removed or replaced with or without cause by the
Managers.
3.3 Committees. The Managers, by written resolution, may designate
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one or more committees (a "Committee") consisting of one or more Managers. A
Committee will have and may exercise powers to the extent provided in the
applicable resolution. Except as may be otherwise provided in a resolution
adopted by the Managers, a majority of the members of a Committee will
constitute a quorum and the majority vote of the Committee members at a
meeting at which a quorum is present will be the act of the Committee. A
Committee will keep minutes of its meetings and will remain an active
Committee consisting of the appointed members thereof until otherwise directed
or reconstituted by written resolution of the Managers.
3.4 Action by the Member, Managers, Officers or Committees.
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3.4.1 Ordinary Course Transactions. Except as provided in
------------------------------
Section 3.4.2, any action required to, or which may, be taken by the Member,
Managers, Officers, or Committee may be taken without a meeting by telephone
conference call among a majority of the members thereof or by consent thereto
in writing, setting forth the action so taken, and unanimously signed by the
Member, Managers, Officers, or the Committees.
3.4.2 Restrictions on Transfers of Certain Leasehold
----------------------------------------------------
Interests. Proper inquiry and appropriate due diligence will be excercised in
- ---------
light of potential adverse tax consequences to effect a Transfer of any
position or interest held (directly or indirectly) (i) in which the LLC
participates as an investor in a leasing transaction involving property (a)
located outside of the United States or (b) owned by any State, possession of
the United States, District of Columbia, or the United States (or any agency,
instrumentality, or political subdivision of any of the foregoing), or (ii) in
a Foreign sales Corporation (within the meaning of Sections 921 et. Seq. Of
the Internal Revenue Code of 1986).
3.5 Indemnity.
---------
3.5.1 Indemnity of the Member and Managers. To the fullest
------------------------------------
extent permitted by law, the Company, to the extent of its assets legally
available for that purpose, will indemnify and hold harmless (i) each person
who is or was a Manager, Officer, Committee member, employee, agent, or the
Member, (ii) each person who serves or may have served at the Company's
request as a member, director, manager, officer, or employee of any company or
corporation that the Company owns directly or indirectly, and (iii) the
Member's respective shareholders, directors, officers, agents, affiliates, and
professional or other advisors (collectively, the "Indemnified Persons") from
and against any and all loss, cost, damage, expense (including, without
limitation, fees and expenses of attorneys and other advisors and any court
costs incurred by any Indemnified Person) or liability by reason of anything
any Indemnified Person does or refrains from doing for, or in connection with
the business or affairs of, the Company and its subsidiaries and affiliates,
except to the extent that it is finally judicially determined by a court of
competent jurisdiction that the loss, cost, damage, expense or liability
resulted primarily from the Indemnified Person's negligence, misconduct in the
performance of his or her duty, or willful breach of a material provision of
this Agreement which in any event causes actual material damage to the
Company. The Company may pay in advance or reimburse reasonable expenses
(including advancing the reasonable cost of defense) incurred by an
Indemnified Person who is, or is threatened to be, named or made a defendant
or a respondent in a proceeding concerning the business and affairs of the
Company.
3.5.2 Insurance. The Company may purchase and maintain
---------
insurance on behalf of the Indemnified Persons against any liability or
expense asserted against or incurred by them in any capacity or arising out of
their status as Indemnified Persons, whether or not the Company could under
this Agreement indemnify them against liability.
3.5.3 Future Laws. To the extent future enactments or
------------
judicial decisions permit an expansion of the rights of indemnification
afforded to the Indemnified Persons by the Company, then it is the Member's
express intention and agreement that this Section 3.5 immediately and
automatically will be deemed to be amended so as to permit and authorize the
indemnification of the Indemnified Persons by the Company to the maximum
extent permitted by law.
3.6 Limitations on Indemnity.
------------------------
3.6.1 Additional Indemnity. The Company, at the discretion
---------------------
of the Member, may indemnify any of the Indemnified Persons for any loss,
cost, damage, expense, or liability for which the Indemnified Persons would
not be entitled to mandatory indemnification under Section 3.5.
3.6.2 Waiver of Indemnity Rights. Indemnified Persons may
---------------------------
waive the benefits of indemnification under Section 3.5, but only by an
instrument in writing executed by such Indemnified Person.
3.6.3 Certain Related Rights. The rights to indemnification
----------------------
under Section 3.5 do not in any way limit, and are not exclusive of, other
rights which any Indemnified Person may otherwise have at law or in equity,
including without limitation common law rights to indemnification or
contribution. Nothing in Section 3.5 or this Section 3.6 will affect the
rights or obligations of any Indemnified Person (or the limitations on those
rights or obligations) under any other agreement or instrument to which that
Indemnified Person is a party.
3.7 Company Liabilities. All of the liabilities of the Company,
--------------------
including without limitation indemnity obligations under Section 3.5, will be
liabilities of the Company as an entity and will be paid or satisfied from the
assets of the Company only. No liability of the Company will be payable in
whole or in part by the Member in its capacity as a Member or by any manager,
shareholder, director, officer, agent, affiliate, employee, or advisor of the
Member or any of its subsidiaries or affiliates.
3.8 Mandated Formalities. Except as specifically set forth in this
---------------------
Agreement, there are no mandated formalities required in the management of the
Company.
IV. DISTRIBUTIONS
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4.1 Distributions. Distributions may be made from time to time as the
-------------
Managers may decide provided that such distributions may be made only if,
after the distribution, the assets of the Company will not be less than all
liabilities of the Company.
4.2 Reimbursements. All of the Company's expenses will be billed
--------------
directly to and paid by the Company. The Company is specifically authorized to
make reimbursements to the Member should the Member provide, at market rates,
goods, materials, or services used for or by the Company.
V. TRANSFER OR ISSUANCE OF MEMBERSHIP INTEREST AND WITHDRAWAL OF MEMBER
--------------------------------------------------------------------
5.1 Transfer of Membership Interest. The Member cannot Transfer the
--------------------------------
Membership Interest to any other person except upon (i) Merger or (ii) a
Transfer of the entire Membership Interest by the Member to another
corporation or other legal entity in a transfer to which Section 381 of the
Internal Revenue Code of 1986 applies (a "Reorganizational Exchange"). The
shareholder of the Member following a Merger, or the transferee corporation
following a Reorganizational Exchange (each, as the case may be, the
"Successor Member"), shall become the sole owner of the Membership Interest
and shall agree to be bound by the terms and conditions of this Agreement.
References in this Agreement to the Member shall thereafter be references to
the Successor Member and the Successor Member shall be subject to the
comparable limitations on Transfer of the Membership Interest and will be
bound by the terms of this Agreement. As provided in Section 2.3, any
permitted Transfer must be accompanied by a corresponding Transfer of all
advances to the same transferee.
5.2 Records of the Company; Void Transfers or Issuance. The Company
---------------------------------------------------
will not record a Transfer of the Membership Interest or any advance from the
Member, or record the issuance of a new equity interest in the Company, on its
books, except for Transfers permitted under Sections 2.3 and 5.1. Any
purported Transfer of the Membership Interest or an advance from the Member,
or the issuance of a new equity interest, that is not in compliance with the
terms and conditions of this Agreement is null and void, and the transferee
under any purported Transfer or issuance will acquire no title or ownership
thereby.
5.3 Withdrawal. The Member may resign from the Company, effect a
----------
partial or complete withdrawal from the Company, or effect a voluntary
dissolution or voluntary bankruptcy of the Company only if there is a
Successor Member to succeed its interests in the Company.
5.4 Only One Member. It is the intent of the Company that the Member
---------------
(or the Successor Member) shall be the only member and that only one
Membership Interest shall exist at any time.
VI. DISSOLUTION AND LIQUIDATION
---------------------------
6.1 Dissolution. Notwithstanding anything in Article V to the
-----------
contrary, this Agreement will terminate, and the Company will be dissolved,
upon the written agreement of the Member. The dissolution or bankruptcy of the
Member will not affect the status of or cause the dissolution or liquidation
of the Company and will not cause the Member to cease being the Member of the
Company. There cannot be a voluntary filing of bankruptcy by the Company
without the consent of the Member.
6.2 Certificate of Dissolution. In accordance with the Act, as soon
---------------------------
as possible following the occurrence of the actions specified in Section 6.1
effecting the dissolution of the Company, the Member will cause to be executed
and filed a Certificate of Dissolution to dissolve the Company in such form as
is prescribed by the Act.
6.3 Procedures.
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6.3.1 Liquidation of Assets. In the event of the
------------------------
dissolution of the Company, the Member or the person required by law to wind
up the Company's affairs (the Member or such other person being referred to in
this Agreement as the "Liquidating Agent") will commence to wind up the
affairs of the Company and liquidate its assets as promptly as is consistent
with obtaining the fair value thereof. In connection with any such winding up
and liquidation, a financial statement of the Company as of the date of
dissolution will be prepared and furnished to the Member by the Liquidating
Agent.
6.3.2 Authority of Liquidating Agent. In connection with
-------------------------------
the winding up and dissolution of the Company, the Liquidating Agent will have
all of the rights and powers with respect to the assets and liabilities of the
Company that a Member or a Manager would have pursuant to the Act or any other
applicable law.
6.3.3 Distribution of Assets. Following the payment of, or
----------------------
provision for, all debts and liabilities of the Company and all expenses of
liquidation, and subject to the right of the Liquidating Agent to set up such
cash reserves as the Liquidating Agent may deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the Company, the
proceeds of the liquidation and any other funds (or other remaining assets) of
the Company will be distributed to the Member.
6.4 Termination of the Company. Upon the completion of the
-----------------------------
liquidation of the Company and the distribution of all Company funds and other
assets, the Company and this Agreement will terminate and the Liquidating
Agent will have the authority to take or cause to be taken such actions as are
necessary or reasonable in order to obtain a certificate of dissolution of the
Company as well as any and all other documents required by the Act or any
other applicable law to effectuate the dissolution and termination of the
Company.
VII. FISCAL AND ADMINISTRATIVE MATTERS
---------------------------------
7.1 Fiscal Year. The fiscal year of the Company will be the calendar
-----------
year unless otherwise determined by the Managers.
7.2 Deposit. All funds of the Company will be deposited from time to
-------
time to the credit of the Company in such banks, trust companies, or other
depositories as the Managers or Officers may select.
7.3 Checks, Drafts, Etc. All checks, drafts or other orders for the
--------------------
payment of money, and all notes or other evidences of indebtedness issued in
the name of the Company, will be signed by an Officer or any other person
selected by the Managers.
7.4 Books and Records. The Company will keep or cause to be kept
------------------
accurate and complete minutes and records of the meetings or consents in lieu
of meeting of the Member, the Managers, and any Committee of the Managers, and
books and records of account of the Company, which will be kept at the
principal place of business of the Company or at such other places as the
Managers will from time to time determine. The Member will have the right to
examine at any reasonable time or times for any purpose, the minutes and
records of the Managers and the books and records of account of the Company,
and to make copies thereof.
VIII. MISCELLANEOUS
-------------
8.1 Amendments. The Member and the Company may at any time and
----------
without limitation, vary, modify, or change this Agreement by, and only by, a
written amendment duly adopted by both the Member and the Company.
8.2 Effect of Headings. The Section headings herein are for
--------------------
convenience only and shall not affect the construction hereof.
8.3 Successors and Assigns. All terms and conditions in this
------------------------
Agreement shall bind the Company's successors and assigns, whether expressed
or not.
8.4 Severability Clause. In case any provision in this Agreement
--------------------
shall be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
8.5 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Michigan, as though fully
performed therein, without reference to its conflict of laws provisions.
8.6 Effectiveness. This Agreement shall take effect on the date first
-------------
written above.
8.7 Entire Agreement. This Agreement constitutes the entire Operating
----------------
Agreement of the Company and supersedes all other prior Operating Agreements.
IN WITNESS WHEREOF, this Agreement has been adopted as of the day and
year first above written.
CHRYSLER FINANCIAL CORPORATION
By: /s/ D. L. Davis
---------------
Name: D. L. Davis
---------------
Title: Chairman of the Board
Acknowledged and Approved By:
CHRYSLER FINANCIAL COMPANY L.L.C.
By: /s/ D. L. Davis
Name: D. L. Davis
---------------
Title: Chairman of the Board
EXHIBIT 4.1
[FORM OF INDENTURE]
===============================================================================
INDENTURE
between
PREMIER AUTO TRUST [___-_],
as Issuer
and
[INDENTURE TRUSTEE],
as Indenture Trustee
Dated as of [________] 1, [___]
===============================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions..................................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............8
SECTION 1.03. Rules of Construction........................................9
ARTICLE II
The Notes
SECTION 2.01. Form.........................................................9
SECTION 2.02. Execution, Authentication and Delivery......................10
SECTION 2.03. Temporary Notes.............................................10
SECTION 2.04. [Reserved]..................................................11
SECTION 2.05. Registration; Registration of Transfer and Exchange.........11
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes..................12
SECTION 2.07. Persons Deemed Owner........................................13
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest.......13
SECTION 2.09. Cancellation................................................14
SECTION 2.10. Release of Collateral.......................................14
SECTION 2.11. Book-Entry Notes............................................14
SECTION 2.12. Notices to Clearing Agency..................................15
SECTION 2.13. Definitive Notes............................................15
SECTION 2.14. Tax Treatment...............................................16
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest...........................16
SECTION 3.02. Maintenance of Office or Agency.............................16
SECTION 3.03. Money for Payments To Be Held in Trust......................16
SECTION 3.04. Existence...................................................18
SECTION 3.05. Protection of Trust Estate..................................18
SECTION 3.06. Opinions as to Trust Estate.................................18
SECTION 3.07. Performance of Obligations; Servicing of Receivables........19
SECTION 3.08. Negative Covenants..........................................21
SECTION 3.09. Annual Statement as to Compliance...........................21
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.........22
SECTION 3.11. Successor or Transferee.....................................23
SECTION 3.12. No Other Business...........................................23
SECTION 3.13. No Borrowing................................................23
SECTION 3.14. Servicer's Obligations......................................23
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities...........24
SECTION 3.16. Capital Expenditures........................................24
SECTION 3.17. Removal of Administrator....................................24
SECTION 3.18. Restricted Payments.........................................24
SECTION 3.19. Notice of Events of Default.................................24
SECTION 3.20. Further Instruments and Acts................................24
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture.....................24
SECTION 4.02. Application of Trust Money..................................26
SECTION 4.03. Repayment of Moneys Held by Paying Agent....................26
ARTICLE V
Remedies
SECTION 5.01. Events of Default...........................................26
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment..........27
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee......................................28
SECTION 5.04. Remedies; Priorities........................................30
SECTION 5.05. Optional Preservation of the Receivables....................31
SECTION 5.06. Limitation of Suits.........................................32
SECTION 5.07. Unconditional Rights of Noteholders To Receive
Principal and Interest....................................32
SECTION 5.08. Restoration of Rights and Remedies..........................33
SECTION 5.09. Rights and Remedies Cumulative..............................33
SECTION 5.10. Delay or Omission Not a Waiver..............................33
SECTION 5.11. Control by Noteholders......................................33
SECTION 5.12. Waiver of Past Defaults.....................................34
SECTION 5.13. Undertaking for Costs.......................................34
SECTION 5.14. Waiver of Stay or Extension Laws............................34
SECTION 5.15. Action on Notes.............................................35
SECTION 5.16. Performance and Enforcement of Certain Obligations..........35
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee.................................35
SECTION 6.02. Rights of Indenture Trustee.................................36
SECTION 6.03. Individual Rights of Indenture Trustee......................37
SECTION 6.04. Indenture Trustee's Disclaimer..............................37
SECTION 6.05. Notice of Defaults..........................................37
SECTION 6.06. Reports by Indenture Trustee to Holders.....................37
SECTION 6.07. Compensation and Indemnity..................................38
SECTION 6.08. Replacement of Indenture Trustee............................38
SECTION 6.09. Successor Indenture Trustee by Merger.......................39
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.........................................39
SECTION 6.11. Eligibility; Disqualification...............................40
SECTION 6.12. Preferential Collection of Claims Against Issuer............41
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act Licenses.......41
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders..................................41
SECTION 7.02. Preservation of Information; Communications to
Noteholders...............................................41
SECTION 7.03. Reports by Issuer...........................................41
SECTION 7.04. Reports by Indenture Trustee................................42
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money.........................................42
SECTION 8.02. Trust Accounts..............................................42
SECTION 8.03. General Provisions Regarding Accounts.......................43
SECTION 8.04. Release of Trust Estate.....................................44
SECTION 8.05. Opinion of Counsel..........................................45
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders......45
SECTION 9.02. Supplemental Indentures with Consent of Noteholders.........46
SECTION 9.03. Execution of Supplemental Indentures........................48
SECTION 9.04. Effect of Supplemental Indenture............................48
SECTION 9.05. Conformity with Trust Indenture Act.........................48
SECTION 9.06. Reference in Notes to Supplemental Indentures...............48
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption..................................................48
SECTION 10.02. Form of Redemption Notice...................................49
SECTION 10.03. Notes Payable on Redemption Date............................49
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc...................49
SECTION 11.02. Form of Documents Delivered to Indenture Trustee............51
SECTION 11.03. Acts of Noteholders.........................................52
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies..................52
SECTION 11.05. Notices to Noteholders; Waiver..............................53
SECTION 11.06. Alternate Payment and Notice Provisions.....................53
SECTION 11.07. Conflict with Trust Indenture Act...........................54
SECTION 11.08. Effect of Headings and Table of Contents....................54
SECTION 11.09. Successors and Assigns......................................54
SECTION 11.10. Separability................................................54
SECTION 11.11. Benefits of Indenture.......................................54
SECTION 11.12. Legal Holidays..............................................54
SECTION 11.13. GOVERNING LAW...............................................54
SECTION 11.14. Counterparts................................................54
SECTION 11.15. Recording of Indenture......................................55
SECTION 11.16. Trust Obligation............................................55
SECTION 11.17. No Petition.................................................55
SECTION 11.18. Inspection..................................................55
SCHEDULE A - Schedule of Receivables
EXHIBIT A-1 - Form of Class A-1 Note
EXHIBIT A-2 - Form of Class A-2 Note
EXHIBIT A-3 - Form of Class A-3 Note
EXHIBIT A-4 - Form of Class A-4 Note
EXHIBIT A-5 - Form of Class B Note
EXHIBIT B - Form of Note Depository Agreement
INDENTURE dated as of [________] 1, [___], between PREMIER AUTO TRUST
[___-_], a Delaware business trust (the "Issuer"), and [INDENTURE TRUSTEE], a
[____________________], as trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's Class A-1
[____%] Asset Backed Notes (the "Class A-1 Notes"), Class A-2 [____%] Asset
Backed Notes (the "Class A-2 Notes"), Class A-3 [____%] Asset Backed Notes
(the "Class A-3 Notes"), Class A-4 [____%] Asset Backed Notes (the "Class A-4
Notes" and, together with the Class A-1 Notes, the Class A-2 Notes and Class
A-3 Notes, the "Class A Notes") and Class B [____%] Asset Backed Notes (the
"Class B Notes" and, together with the Class A Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as Indenture Trustee for the benefit of the Holders of the Notes, all of
the Issuer's right, title and interest in and to (a) the Receivables and all
moneys received thereon on and after [________ __, ____]; (b) the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Issuer in such 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 with respect to the 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; (e) any Financed Vehicle that shall have secured a
Receivable and that shall have been acquired by or on behalf of the Seller,
the Servicer, the Company or the Issuer; (f) all funds on deposit from time to
time in the Trust Accounts, including the Reserve Account Initial Deposit, and
in all investments and proceeds thereof (including all income thereon); (g)
the Sale and Servicing Agreement (including the Issuer's right to cause the
Seller to repurchase Receivables from the Issuer under certain circumstances
described therein); and (h) all present and future claims, demands, causes of
action and chooses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms
of obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in
this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders
of the Notes, acknowledges such Grant, accepts the trusts under this Indenture
in accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that
the interests of the Holders of the Notes may be adequately and effectively
protected.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. (a) Definitions. Except as otherwise specified herein
or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated
as of [_________] 1, [___], among the Administrator, the Issuer and the
Indenture Trustee.
"Administrator" means Chrysler Financial Company L.L.C., a Michigan
limited liability company, or any successor Administrator under the
Administration Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer
of the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter) and, so long as the Administration Agreement is in effect, any
Vice President or more senior officer of the Administrator who is authorized
to act for the Administrator in matters relating to the Issuer and to be acted
upon by the Administrator pursuant to the Administration Agreement and who is
identified on the list of Authorized Officers delivered by the Administrator
to the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Basic Documents" means the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement, the Purchase Agreement, the
Administration Agreement, the Note Depository Agreement and other documents
and certificates delivered in connection therewith.
"Book-Entry Notes" means a beneficial interest in the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.11.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in The City of New York are
authorized or obligated by law, regulation or executive order to remain
closed.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 Notes.
"Class A-1 Interest Accrual Period" means the period from and
including the most recent Distribution Date on which interest has been paid
(or, in the case of the first Distribution Date, the Closing Date) to but
excluding the following Distribution Date.
"Class A-1 Interest Rate" means [____%] per annum (computed on the
basis of the actual number of days in the Class A-1 Interest Accrual Period
divided by 360).
"Class A-1 Notes" means the Class A-1 [____%] Asset Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-2 Interest Rate" means [____%] per annum (computed on the
basis of a 360-day year consisting of twelve 30-day months).
"Class A-2 Notes" means the Class A-2 [____%] Asset Backed Notes,
substantially in the form of Exhibit A-2.
"Class A-3 Interest Rate" means [____%] per annum (computed on the
basis of a 360 day year consisting of twelve 30-day months).
"Class A-3 Notes" means the Class A-3 [____%] Asset Backed Notes,
substantially in the form of Exhibit A-3.
"Class A-4 Interest Rate" means [____%] per annum (computed on the
basis of a 360-day year consisting of twelve 30-day months).
"Class A-4 Notes" means the Class A-4 [____%] Asset Backed Notes,
substantially in the form of Exhibit A-4.
"Class B Interest Rate" means [____%] per annum (computed on the
basis of a 360-day year consisting of twelve 30-day months).
"Class B Notes" means the Class B [____%] Asset Backed Notes,
substantially in the form of Exhibit A-5.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means [________ __, ____].
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Company" means Premier Receivables L.L.C., a Michigan limited
liability company, any successor in interest and any transferee of the Rights
(as defined in the Purchase Agreement) that becomes such transferee in
accordance with Section 5.06 of the Purchase Agreement.
"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 execution of this Agreement is
located at [__________________________________], Attention:
[____________________], or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders and the Issuer, or
the principal corporate trust office of any successor Indenture Trustee at the
address designated by such successor Indenture Trustee by notice to the
Noteholders and the Issuer.
"Default" means any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.11.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
"Grant" means mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and a right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring Proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indenture Trustee" means [Indenture Trustee], a
[___________________], as Indenture Trustee under this Indenture, or any
successor Indenture Trustee under this Indenture.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor on
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, made
by an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Interest Accrual Period" means, with respect to any Distribution
Date and the Notes, other than the Class A-1 Notes, the period from and
including the [_______] day of the month preceding the month of such
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date) to and including the [________] day of the month of such Distribution
Date.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2
Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate or the
Class B Interest Rate.
"Issuer" means Premier Auto Trust [___-_] until a successor replaces
it and, thereafter, means the successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the Notes.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Notes" means Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes or Class B Notes.
"Note Depository Agreement" means the agreement dated [________ __,
____], among the Issuer, the Administrator, the Indenture Trustee and The
Depository Trust Company, as the initial Clearing Agency, relating to the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes
and the Class B Notes, substantially in the form of Exhibit B.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.05.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Indenture Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel
who may, except as otherwise expressly provided in this Indenture, be an
employee of or counsel to the Issuer and who shall be satisfactory to the
Indenture Trustee, and which opinion or opinions shall be addressed to the
Indenture Trustee as Indenture Trustee, shall comply with any applicable
requirements of Section 11.01 and shall be in form and substance satisfactory
to the Indenture Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Holders of
such Notes (PROVIDED, HOWEVER, that if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision for such notice has been made, satisfactory to
the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any
such Notes are held by a bona fide purchaser;
PROVIDED, that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned
by the Issuer, any other obligor upon the Notes, the Seller or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall
be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that the Indenture Trustee
knows to be so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Issuer,
any other obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Notes, or Class of Notes, as applicable, Outstanding at the date of
determination.
"Owner Trustee" means [Owner Trustee], not in its individual capacity
but solely as Owner Trustee under the Trust Agreement, or any successor Owner
Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make payments to and distributions
from the Collection Account and the Note Distribution Account, including
payments of principal of or interest on the Notes on behalf of the Issuer.
"Payment Date" means a Distribution Date.
"Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency
or political subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced
by such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Purchase Agreement" means the Purchase Agreement dated as of
[________] 1, [___], between the Seller and the Company.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days (or such shorter period as is
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer and the Issuer in
writing that such action will not result in a reduction or withdrawal of the
then current rating of the Notes.
"Rating Agency" means Moody's Investor's Service ("Moody's") and
Standard & Poor's Ratings Services ("Standard & Poor's"). If no such
organization or successor is any longer in existence, "Rating Agency" shall be
a nationally recognized statistical rating organization or other comparable
Person designated by the Issuer, notice of which designation shall be given to
the Indenture Trustee, the Owner Trustee and the Servicer. Any notice required
to be given to a Rating Agency pursuant to this Agreement shall also be given
to Fitch IBCA, Inc. and Duff & Phelps Credit Rating Co., although, except as
set forth above, neither shall be deemed to be a Rating Agency for any
purposes of this Agreement.
"Record Date" means, with respect to a Distribution Date or
Redemption Date, the close of business on the day immediately preceding such
Distribution Date or Redemption Date or, if Definitive Notes have been issued
pursuant to Section 2.13, the 15th day of the preceding month.
"Redemption Date" means, in the case of a redemption of the Notes
pursuant to Section 10.01, the Distribution Date specified by the Servicer or
the Issuer pursuant to Section 10.01.
"Redemption Price" means in connection with a redemption of the Notes
pursuant to Section 10.01, an amount equal to the unpaid principal amount of
the Notes redeemed plus accrued and unpaid interest thereon at the weighted
average of the Interest Rates for each Class of Notes being so redeemed to but
excluding the Redemption Date.
"Registered Holder" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of [________] 1, [___], between the Issuer and Chrysler Financial
Company L.L.C., as Seller and Servicer.
"Schedule of Receivables" means the list of the Receivables set forth
in Schedule A (which Schedule may be in the form of microfiche).
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Chrysler Financial Company L.L.C., in its capacity as
seller under the Sale and Servicing Agreement, and its successor in interest.
"Servicer" means Chrysler Financial Company L.L.C., in its capacity
as servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"State" means any one of the 50 States of the United States of
America or the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Telerate Page 3750" means the page so designated on the Dow Jones
Telerate Service or such other page as may replace that page on that service,
or such other service as may be nominated as the information vendor, for the
purpose of displaying London interbank offered rates of major banks.
"Trust Estate" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of this Indenture for the benefit of the Noteholders (including,
without limitation, all property and interests Granted to the Indenture
Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from
time to time.
(b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein
have the respective meanings set forth in the Sale and Servicing Agreement for
all purposes of this Indenture.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to
its permitted successors and assigns.
ARTICLE II
The Notes
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes and the Class B Notes, in each case
together with the Indenture Trustee's certificate of authentication, shall be
in substantially the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3,
Exhibit A-4 and Exhibit A-5, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4 and
Exhibit A-5 are part of the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and
deliver Class A-1 Notes for original issue in an aggregate principal amount of
[$____________], Class A-2 Notes for original issue in an aggregate principal
amount of [$____________], Class A-3 Notes for original issue in an aggregate
principal amount of [$____________], Class A-4 Notes for original issue in an
aggregate principal amount of [$____________] and Class B Notes for original
issue in an aggregate principal amount of [$____________]. The aggregate
principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class
A-4 Notes and Class B Notes outstanding at any time may not exceed such
respective amounts except as provided in Section 2.06.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000
and in integral multiples thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated
and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Issuer shall cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Issuer to be maintained as provided in Section 3.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute, and the Indenture Trustee shall authenticate and
deliver in exchange therefor, a like principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
SECTION 2.04. [Reserved].
SECTION 2.05. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in which
the Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee initially shall be the "Note
Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture
Trustee shall have the right to inspect the Note Register at all reasonable
times and to obtain copies thereof, and the Indenture Trustee shall have the
right to rely upon a certificate executed on behalf of the Note Registrar by
an Executive Officer thereof as to the names and addresses of the Holders of
the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(a) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes
of the same Class in any authorized denominations, of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office
or agency. Whenever any Notes are so surrendered for exchange, if the
requirements of Section 8-401(a) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Exchange Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other
than exchanges pursuant to Section 2.03 or 9.06 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 and
8-406 of the UCC are met, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note of
the same Class; PROVIDED, HOWEVER, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall
be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note
was delivered or any assignee of such Person, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the
Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.07. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the owner of
such Note for the purpose of receiving payments of principal of and interest,
if any, on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and none of the Issuer, the Indenture Trustee or any
agent of the Issuer or the Indenture Trustee shall be affected by notice to
the contrary.
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes and the Class B Notes shall accrue interest at the Class A-1
Interest Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate, the
Class A-4 Interest Rate and the Class B Interest Rate, respectively, as set
forth in Exhibits A-1, A-2, A-3, A-4 and A-5, respectively, and such interest
shall be payable on each Distribution Date as specified therein, subject to
Section 3.01. Any installment of interest or principal payable on a Note that
is punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one
or more Predecessor Notes) is registered on the Record Date by check mailed
first-class postage prepaid to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.13, with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payment will be made by wire transfer in
immediately available funds to the account designated by such nominee and
except for the final installment of principal payable with respect to such
Note on a Distribution Date or on the applicable class final scheduled
Distribution Date (and except for the Redemption Price for any Note called for
redemption pursuant to Section 10.01) which shall be payable as provided
below. The funds represented by any such checks returned undelivered shall be
held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on
each Distribution Date as provided in the forms of the Notes set forth in
Exhibits A-1, A-2, A-3, A-4 and A-5. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable, if not
previously paid, on the date on which an Event of Default shall have occurred
and be continuing, if the Indenture Trustee or Holders of the Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02. All principal payments on each Class of Notes shall
be made pro rata to the Noteholders of such Class entitled thereto. The
Indenture Trustee shall notify the Person in whose name a Note is registered
at the close of business on the Record Date preceding the Distribution Date on
which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed or transmitted
by facsimile prior to such final Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the applicable Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are Noteholders
on a subsequent special record date, which date shall be at least five
Business Days prior to the payment date. The Issuer shall fix or cause to be
fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Issuer shall mail to each Noteholder
a notice that states the special record date, the payment date and the amount
of defaulted interest to be paid.
SECTION 2.09. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at
any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Notes may be
held or disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be returned to it; PROVIDED, that such
Issuer Order is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Section 314(c) and 314(d)(1) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates.
SECTION 2.11. Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Owner thereof will receive a
definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.13. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to such Note Owners pursuant
to Section 2.13:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole holder of the Notes, and shall have no obligation to the Note
Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency
and/or the Clearing Agency Participants pursuant to the Note
Depository Agreement. Unless and until Definitive Notes are issued
pursuant to Section 2.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest on the
Notes to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Note Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Notes and has delivered such instructions
to the Indenture Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.13, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.
SECTION 2.13. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-Entry
Notes and the Administrator is unable to locate a qualified successor, (ii)
the Administrator at its option advises the Indenture Trustee in writing that
it elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of an Event of Default or a Servicer Default,
Owners of the Book-Entry Notes representing beneficial interests aggregating
at least a majority of the Outstanding Amount of such Notes advise the
Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of such Note
Owners, then the Clearing Agency shall notify all Note Owners and the
Indenture Trustee of the occurrence of any such event and of the availability
of Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Notes representing the Book-Entry Notes
by the Clearing Agency, accompanied by registration instructions, the Issuer
shall execute and the Indenture Trustee shall authenticate the Definitive
Notes in accordance with the instructions of the Clearing Agency. None of the
Issuer, the Note Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive
Notes as Noteholders.
SECTION 2.14. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for all
purposes including federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness secured by the
Trust Estate. The Issuer, by entering into this Indenture, and each
Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance
of an interest in the applicable Book-Entry Note), agree to treat the Notes
for all purposes including federal, state and local income, single business
and franchise tax purposes as indebtedness of the Issuer.
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly
and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), the Issuer will cause to be
distributed all amounts on deposit in the Note Distribution Account on a
Distribution Date deposited therein pursuant to the Sale and Servicing
Agreement (i) for the benefit of the Class A-1 Notes, to the Class A-1
Noteholders, (ii) for the benefit of the Class A-2 Notes, to the Class A-2
Noteholders, (iii) for the benefit of the Class A-3 Notes, to the Class A-3
Noteholders, (iv) for the benefit of the Class A-4 Notes, to the Class A-4
Noteholders and (v) for the benefit of the Class B Notes, to the Class B
Noteholders; PROVIDED that on any Distribution Date no payment shall be made
on the Class B Notes until payments of interest then due on the Class A Notes
have been made. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of any such office or
agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee
as its agent to receive all such surrenders, notices and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Collection
Account and the Note Distribution Account pursuant to Section 8.02(c) shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Collection Account and the Note
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before the Business Day preceding each Distribution Date and
Redemption Date, the Issuer shall deposit or cause to be deposited in the Note
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the Notes, such sum to be held in trust for the benefit of
the Persons entitled thereto, and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee of its action or failure
so to act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to
the Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be
met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged
from such trust and be paid to the Issuer on Issuer Request; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; PROVIDED, HOWEVER,
that the Indenture Trustee or such Paying Agent, before being required to make
any such repayment, shall at the expense and direction of the Issuer cause to
be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer. The Indenture Trustee shall also adopt and employ, at
the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) 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 Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer will from time
to time execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust
Estate against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.05.
SECTION 3.06. Opinions as to Trust Estate. (a) On the Closing Date,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to
the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and
security interest of this Indenture and reciting the details of such action,
or stating that, in the opinion of such counsel, no such action is necessary
to make such lien and security interest effective.
(b) On or before March 31, in each calendar year, beginning in
[____], the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as is necessary to maintain the lien
and security interest created by this Indenture and reciting the details of
such action, or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until March 31 in
the following calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Receivables.
(a) The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate, including
but not limited to filing or causing to be filed all UCC financing statements
and continuation statements required to be filed by the terms of this
Indenture and the Sale and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without
the consent of the Indenture Trustee or the Holders of at least a majority of
the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof, and
shall specify in such notice the action, if any, the Issuer is taking with
respect to such default. If a Servicer Default shall arise from the failure of
the Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 8.01
of the Sale and Servicing Agreement, the Issuer shall appoint a successor
servicer (the "Successor Servicer"), and such Successor Servicer shall accept
its appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in
such event will be released from such duties and obligations, such release not
to be effective until the date a new servicer enters into a servicing
agreement with the Issuer as provided below. Upon delivery of any such notice
to the Issuer, the Issuer shall obtain a new servicer as the Successor
Servicer under the Sale and Servicing Agreement. Any Successor Servicer other
than the Indenture Trustee shall (i) be an established financial institution
having a net worth of not less than $100,000,000 and whose regular business
includes the servicing of Contracts and (ii) enter into a servicing agreement
with the Issuer having substantially the same provisions as the provisions of
the Sale and Servicing Agreement applicable to the Servicer. If within 30 days
after the delivery of the notice referred to above, the Issuer shall not have
obtained such a new servicer, the Indenture Trustee may appoint, or may
petition a court of competent jurisdiction to appoint, a Successor Servicer.
In connection with any such appointment, the Indenture Trustee may make such
arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Sale and
Servicing Agreement, and in accordance with Section 8.02 of the Sale and
Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing of the Receivables (such agreement to be in form
and substance satisfactory to the Indenture Trustee). If the Indenture Trustee
shall succeed to the Servicer's duties as servicer of the Receivables as
provided herein, it shall do so in its individual capacity and not in its
capacity as Indenture Trustee and, accordingly, the provisions of Article VI
hereof shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Servicer and the servicing of the Receivables. In case the
Indenture Trustee shall become successor to the Servicer under the Sale and
Servicing Agreement, the Indenture Trustee shall be entitled to appoint as
Servicer any one of its affiliates, provided that it shall be fully liable for
the actions and omissions of such affiliate in such capacity as Successor
Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Servicer is appointed, the Issuer
shall notify the Indenture Trustee of such appointment, specifying in such
notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without
the prior written consent of the Indenture Trustee or the Holders of at least
a majority in Outstanding Amount of the Notes, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement)
or the Basic Documents, or waive timely performance or observance by the
Servicer or the Seller under the Sale and Servicing Agreement; and (ii) that
any such amendment shall not (A) increase or reduce in any manner the amount
of, or accelerate or delay the timing of, distributions that are required to
be made for the benefit of the Noteholders or (B) reduce the aforesaid
percentage of the Notes that is required to consent to any such amendment,
without the consent of the Holders of all the Outstanding Notes. If any such
amendment, modification, supplement or waiver shall be so consented to by the
Indenture Trustee or such Holders, the Issuer agrees, promptly following a
request by the Indenture Trustee to do so, to execute and deliver, in its own
name and at its own expense, such agreements, instruments, consents and other
documents as the Indenture Trustee may deem necessary or appropriate in the
circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, the
Purchase Agreement or the Sale and Servicing Agreement, sell,
transfer, exchange or otherwise dispose of any of the properties or
assets of the Issuer, including those included in the Trust Estate,
unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or
assert any claim against any present or former Noteholder by reason
of the payment of the taxes levied or assessed upon any part of the
Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect
to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance (other than the lien
of this Indenture) to be created on or extend to or otherwise arise
upon or burden the Trust Estate or any part thereof or any interest
therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens that arise by operation of law, in each case on
any of the Financed Vehicles and arising solely as a result of an
action or omission of the related Obligor) or (C) permit the lien of
this Indenture not to constitute a valid first priority (other than
with respect to any such tax, mechanics' or other lien) security
interest in the Trust Estate.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year [____]), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year or, if there has
been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted (A) shall be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any State, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all
as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of
Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and
hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and
(E) expressly agrees by means of such supplemental indenture that
such Person (or if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse
federal income or Michigan income or single business tax consequence
to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Premier Auto Trust [___-_] will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice to the Indenture Trustee stating that Premier
Auto Trust [___-_] is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic
Documents and activities incidental thereto. The Issuer shall not fund the
purchase of any new Contracts.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 4.09, 4.10, 4.11 and 5.09(b) and Article IX
of the Sale and Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing
or otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make
any capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection
with such removal.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; PROVIDED, HOWEVER, that the Issuer may make, or cause to be made, (x)
distributions as contemplated by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement or the Trust Agreement
and (y) payments to the Indenture Trustee pursuant to Section 1(a)(ii) of the
Administration Agreement. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder, each default on the part of the Servicer or the Seller
of its obligations under the Sale and Servicing Agreement and each default on
the part of the Company or the Seller of its obligations under the Purchase
Agreement.
SECTION 3.20. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections
3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.02) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.06 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section
3.03) have been delivered to the Indenture Trustee for cancellation;
or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
a. have become due and payable,
b. will become due and payable at the Class B Final
Scheduled Distribution Date within one year, or
c. are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the
giving of notice of redemption by the Indenture Trustee in the
name, and at the expense, of the Issuer,
and the Issuer, in the case of a., b. or c. above, has
irrevocably deposited or caused to be irrevocably deposited with
the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when due to
the applicable final scheduled Distribution Date or Redemption
Date (if Notes shall have been called for redemption pursuant to
Section 10.01), as the case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the
TIA or the Indenture Trustee) an Independent Certificate from a firm
of certified public accountants, each meeting the applicable
requirements of Section 11.01(a) and, subject to Section 11.02, each
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied
with.
SECTION 4.02. Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to
the extent required herein or in the Sale and Servicing Agreement or required
by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of five days; PROVIDED that, prior to the Class B Final
Scheduled Distribution Date, a default in the payment of interest on
the Class B Notes shall not be an Event of Default until the
Outstanding Amount of the Class A-4 Notes has been reduced to zero;
or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due
and payable; or
(iii) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the
Issuer and the Indenture Trustee by the Holders of at least 25% of
the Outstanding Amount of the Notes, a written notice specifying such
default or incorrect representation or warranty and requiring it to
be remedied and stating that such notice is a notice of Default
hereunder; or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or ordering
the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of
60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Trust Estate, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii), its status and what action the Issuer
is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or the Holders of Notes representing not less than
a majority of the Outstanding Amount of the Notes may declare all the Notes to
be immediately due and payable, by a notice in writing to the Issuer (and to
the Indenture Trustee if given by Noteholders), and upon any such declaration
the unpaid principal amount of such Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately
due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Holders of Notes representing a majority of the Outstanding
Amount of the Notes, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon
such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, the Issuer will, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Holders of the Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest on the overdue principal and, to the extent payment at such rate of
interest shall be legally enforceable, on overdue installments of interest at
the rate borne by the Notes and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable; provided that, in the case of a default in the payment of interest, on
the Class B Notes, prior to the Class B Final Scheduled Distribution Date, the
Indenture Trustee shall not institute such Proceeding solely in respect of such
default unless the Outstanding Amount of the Class A-4 Notes has been reduced to
zero.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization, or
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any Proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay
to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained and collect
from the Issuer and any other obligor upon such Notes moneys adjudged
due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event
of Default described in Section 5.01(i) or (ii), unless (A) the Holders of
100% of the Outstanding Amount of the Notes consent thereto, (B) the proceeds
of such sale or liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for
principal and interest or (C) the Indenture Trustee determines that the Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee obtains
the consent of Holders of 66 2/3% of the Outstanding Amount of the Notes. In
determining such sufficiency or insufficiency with respect to clause (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national reputation
as to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall pay out the money or property in
the following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.07;
SECOND: to Holders of the Class A Notes for amounts due and
unpaid on the Class A Notes for interest (including any premium),
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class A Notes for interest
(including any premium);
THIRD: to Holders of the Class B Notes for amounts due and
unpaid on the Class B Notes for interest (including any premium),
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class B Notes for interest
(including any premium);
FOURTH: to the Class A Noteholders in the following order of
priority:
(a) to Holders of the Class A-1 Notes for amounts due and
unpaid on the Class A-1 Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Class A-1 Notes for principal, until the
Outstanding Amount of the Class A-1 Notes is reduced to zero;
(b) to Holders of the Class A-2 Notes for amounts due and
unpaid on the Class A-2 Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Class A-2 Notes for principal, until the
Outstanding Amount of the Class A-2 Notes is reduced to zero;
(c) to Holders of the Class A-3 Notes for amounts due and
unpaid on the Class A-3 Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Class A-3 Notes for principal, until the
Outstanding Amount of the Class A-3 Notes is reduced to zero; and
(d) to Holders of the Class A-4 Notes for amounts due and
unpaid on the Class A-4 Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Class A-4 Notes for principal, until the
Outstanding Amount of the Class A-4 Notes is reduced to zero;
FIFTH: to Holders of the Class B Notes for amounts due and
unpaid on the Class B Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Class B Notes for principal, until the
Outstanding Amount of the Class B Notes is reduced to zero; and
SIXTH: to the Issuer for distribution pursuant to the Trust
Agreement.
The Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least 15 days before such record
date, the Issuer shall mail to each Noteholder and the Indenture Trustee a
notice that states the record date, the payment date and the amount to be
paid.
SECTION 5.05. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Trust Estate. It is the desire of the parties hereto and the Noteholders
that there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the Trust
Estate. In determining whether to maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.06. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of
the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder; provided that, until the
Outstanding Amount of the Class A-4 Notes has been reduced to zero, the Holder
of any Class B Note shall have the right to receive payment of principal and
interest due on such Class B Note only to the extent that there are funds in the
Note Distribution Account after applying the funds therein to the payment of all
principal and interest then due on the Class A Notes.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Holders of a majority of
the Outstanding Amount of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; PROVIDED that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be
by Holders of Notes representing not less than 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Trust Estate shall be of
no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject
to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Noteholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences except
a Default (a) in payment of principal of or interest on any of the Notes or (b)
in respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such waiver,
the Issuer, the Indenture Trustee and the Holders of the Notes shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of a Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller or the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement or by
the Seller or the Company, as applicable, of each of their obligations under or
in connection with the Purchase Agreement, and to exercise any and all rights,
remedies, powers and privileges lawfully available to the Issuer under or in
connection with the Sale and Servicing Agreement to the extent and in the manner
directed by the Indenture Trustee, including the transmission of notices of
default on the part of the Seller or the Servicer thereunder and the institution
of legal or administrative actions or proceedings to compel or secure
performance by the Seller or the Servicer of each of their obligations under the
Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone (confirmed in writing promptly thereafter)) of the Holders of
66 2/3% of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or the
Servicer under or in connection with the Sale and Servicing Agreement, or
against the Company or the Seller under or in connection with the Purchase
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Servicer, or the Company or the
Seller, as the case may be, of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement or the Purchase
Agreement, as the case may be, and any right of the Issuer to take such action
shall be suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (a) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a) , (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, that the Indenture Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to each Noteholder notice of the Default within 90
days after it occurs. Except in the case of a Default in payment of principal of
or interest on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Indenture Trustee may withhold the notice if and
so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns.
SECTION 6.07. Compensation and Indemnity. The Issuer shall, or shall
cause the Administrator to, pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall, or shall cause the Administrator to, reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall, or shall cause the Administrator to,
indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which it
may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and
the Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder. The Issuer shall, or shall cause the Administrator to,
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall, or shall cause the Administrator to, pay the fees and expenses
of such counsel. Neither the Issuer nor the Administrator need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.01(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar
law.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Holders of a majority in
Outstanding Amount of the Notes may remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; PROVIDED, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor trustee and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition, and the
time deposits of the Indenture Trustee shall be rated at least A-1 by Standard
& Poor's and P-1 by Moody's. The Indenture Trustee shall comply with TIA ss.
310(b), including the optional provision permitted by the second sentence of
TIA Section 310(b)(9); PROVIDED, HOWEVER, that there shall be excluded from
the operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act Licenses.
The Indenture Trustee shall use its best efforts to maintain the effectiveness
of all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act
in connection with this Indenture and the transactions contemplated hereby until
the lien and security interest of this Indenture shall no longer be in effect in
accordance with the terms hereof.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Holders of Notes as of such Record Date, and (b) at such other times as
the Indenture Trustee may request in writing, within 30 days after receipt by
the Issuer of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; PROVIDED,
HOWEVER, that so long as the Indenture Trustee is the Note Registrar, no such
list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i)
and (ii) of this Section 7.03(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Indenture Trustee. If required by TIA ss.
313(a), within 60 days after each February 1 beginning with [________] 1,
[___], the Indenture Trustee shall mail to each Noteholder as required by TIA
ss. 313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Trust Accounts. (a) On or prior to the Closing Date,
the Issuer shall cause the Servicer to establish and maintain, in the name of
the Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 5.01 of the Sale
and Servicing Agreement.
(b) On or before each Distribution Date, the Total Distribution Amount
(net of the Servicing Fee for such Distribution Date and any previously unpaid
Servicing Fees and any other distributable amounts that are to be deposited into
the Certificate Account or released to the Seller or the Company) with respect
to the preceding Collection Period will be deposited in the Collection Account
as provided in Section 5.02 of the Sale and Servicing Agreement. On or before
each Distribution Date, all amounts required to be deposited in the Note
Distribution Account with respect to the preceding Collection Period pursuant to
Sections 5.06 and 5.07 of the Sale and Servicing Agreement will be transferred
from the Collection Account and/or the Reserve Account to the Note Distribution
Account.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Distribution Account
to Noteholders in respect of the Notes to the extent of amounts due and unpaid
on the Notes for principal and interest (including any premium) in the following
amounts and in the following order of priority (except as otherwise provided in
Section 5.04(b)):
(i) accrued and unpaid interest on the Class A Notes; PROVIDED,
that if there are not sufficient funds in the Note Distribution Account
to pay the entire amount of accrued and unpaid interest then due on the
Class A Notes, the amount in the Note Distribution Account shall be
applied to the payment of such interest on the Class A Notes pro rata
on the basis of the total such interest due on the Class A Notes;
(ii) accrued and unpaid interest on the Class B Notes; and
(iii) the Noteholders' Principal Distributable Amount (or on each
Distribution Date in the Release Period, the Release Period
Noteholders' Principal Distributable Amount) in the following order of
priority:
(1) to the Holders of the Class A-1 Notes on account of principal
until the Outstanding Amount of the Class A-1 Notes is reduced to zero;
(2) to the Holders of the Class A-2 Notes on account of principal
until the Outstanding Amount of the Class A-2 Notes is reduced to zero;
(3) to the Holders of the Class A-3 Notes on account of principal
until the Outstanding Amount of the Class A-3 Notes is reduced to zero;
(4) to the Holders of the Class A-4 Notes on account of principal
until the Outstanding Amount of the Class A-4 Notes is reduced to zero;
and
(5) to the Class B Noteholders until the Outstanding Amount of the
Class B Notes is reduced to zero.
SECTION 8.03. General Provisions Regarding Accounts. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and reinvested by the Indenture Trustee (or the investment manager
referred to in clause (2) of Section 5.01(b) of the Sale and Servicing
Agreement) upon Issuer Order, subject to the provisions of Section 5.01(b) of
the Sale and Servicing Agreement. All income or other gain from investments of
moneys deposited in the Trust Accounts shall be deposited by the Indenture
Trustee in the Collection Account, and any loss resulting from such investments
shall be charged to such account. The Issuer will not direct the Indenture
Trustee to make any investment of any funds or to sell any investment held in
any of the Trust Accounts unless the security interest Granted and perfected in
such account will continue to be perfected in such investment or the proceeds of
such sale, in either case without any further action by any Person, and, in
connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer (or the Servicer or any investment manager
pursuant to Section 5.01(b) of the Sale and Servicing Agreement) shall have
failed to give investment directions for any funds on deposit in the Trust
Accounts to the Indenture Trustee by 11:00 a.m. Eastern Time (or such other time
as may be agreed by the Issuer and Indenture Trustee) on any Business Day or
(ii) a Default or Event of Default shall have occurred and be continuing with
respect to the Notes but the Notes shall not have been declared due and payable
pursuant to Section 5.02 or (iii) if such Notes shall have been declared due and
payable following an Event of Default but amounts collected or receivable from
the Trust Estate are being applied in accordance with Section 5.05 as if there
had not been such a declaration, then the Indenture Trustee shall, to the
fullest extent practicable, invest and reinvest funds in the Trust Accounts in
one or more Eligible Investments.
SECTION 8.04. Release of Trust Estate. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and
when required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have
been paid, release any remaining portion of the Trust Estate that secured the
Notes from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Trust Accounts. The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.04(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.01.
(c) Upon the written notification from the Servicer pursuant to Section
5.06(a)(ii)(E) of the Sale and Servicing Agreement, on the related Distribution
Date the Issuer shall deliver to the Indenture Trustee an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.01, and upon its
receipt of such items on such Distribution Date the Indenture Trustee shall
deposit the Cash Release Amount (to the extent of funds available pursuant to
Section 5.06(a)(ii)(E) of the Sale and Servicing Agreement) in the Certificate
Distribution Account.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.04(c), as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; PROVIDED, HOWEVER, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of this Indenture, or to subject to the
lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption
by any such successor of the covenants of the Issuer herein and in the
Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with
any other provision herein or in any supplemental indenture or to make
any other provisions with respect to matters or questions arising under
this Indenture or in any supplemental indenture; PROVIDED, that such
action shall not adversely affect the interests of the Holders of the
Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add
to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but with
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies and with the consent of the Holders of
not less than a majority of the Outstanding Amount of the Notes, by Act of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
Interest Rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place
of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell
or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest
or principal due on any Note on any Distribution Date (including the
calculation of any of the individual components of such calculation) or
to affect the rights of the Holders of Notes to the benefit of any
provisions for the mandatory redemption of the Notes contained herein;
or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of
such supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption. The outstanding Class A-4 Notes and the
Class B Notes are subject to redemption in whole, but not in part, at the
direction of the Servicer pursuant to Section 9.01(a) of the Sale and Servicing
Agreement, on any Distribution Date on which the Servicer exercises its option
to purchase the Trust Estate pursuant to said Section 9.01(a), for a purchase
price equal to the Redemption Price; PROVIDED that the Issuer has available
funds sufficient to pay the Redemption Price. The Servicer or the Issuer shall
furnish the Rating Agencies notice of such redemption. If the outstanding Class
A-4 Notes and the Class B Notes are to be redeemed pursuant to this Section, the
Servicer or the Issuer shall furnish notice of such election to the Indenture
Trustee not later than 20 days prior to the Redemption Date and the Issuer shall
deposit by 10:00 A.M. New York City time on the Redemption Date with the
Indenture Trustee in the Note Distribution Account the Redemption Price of the
Class A-4 Notes and the Class B Notes to be redeemed, whereupon all such Class
A-4 Notes and Class B Notes shall be due and payable on the Redemption Date upon
the furnishing of a notice complying with Section 10.02 to each Holder of the
Notes.
SECTION 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not later than 10 days
prior to the applicable Redemption Date to each Holder of Notes, as of the close
of business on the Record Date preceding the applicable Redemption Date, at such
Holder's address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption as required by
Section 10.02, on the Redemption Date become due and payable at the Redemption
Price and (unless the Issuer shall default in the payment of the Redemption
Price) no interest shall accrue on the Redemption Price for any period after the
date to which accrued interest is calculated for purposes of calculating the
Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with, (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with and (iii)
(if required by the TIA) an Independent Certificate from a firm of certified
public accountants meeting the applicable requirements of this Section, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed
in Section 11.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the securities to be so deposited and of all other such securities made
the basis of any such withdrawal or release since the commencement of
the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii) above,
the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as
contemplated by clause (v) below or securities released from the lien
of this Indenture since the commencement of the then-current calendar
year, as set forth in the certificates required by clause (iii) above
and this clause (iv), equals 10% or more of the Outstanding Amount of
the Notes, but such certificate need not be furnished in the case of
any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.10 or any other provision of this
Section, the Issuer may, without compliance with the requirements of
the other provisions of this Section, (A) collect, liquidate, sell or
otherwise dispose of Receivables and Financed Vehicles as and to the
extent permitted or required by the Basic Documents and (B) make cash
payments out of the Trust Accounts as and to the extent permitted or
required by the Basic Documents, so long as the Issuer shall deliver to
the Indenture Trustee every six months, commencing [________ __, ____],
an Officer's Certificate of the Issuer stating that all the
dispositions of Collateral described in clauses (A) and (B) above that
occurred during the preceding six calendar months were in the ordinary
course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application
or at the effective date of such certificate or report (as the case may be),
of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Indenture Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or act of Noteholders is to be made upon, given or
furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at its Corporate
Trust Office, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and
mailed first-class, postage prepaid to the Issuer addressed to: Premier
Auto Trust [___-_], in care of [Owner Trustee],
[_____________________], Attention [_____________________], or at any
other address previously furnished in writing to the Indenture Trustee
by the Issuer or the Administrator. The Issuer shall promptly transmit
any notice received by it from the Noteholders to the Indenture
Trustee.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in the
case of Moody's, at the following address: Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007, (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., 25 Broadway
(15th Floor), New York, New York 10004, Attention of Asset Backed Surveillance
Department, (iii) in the case of Fitch IBCA, Inc., at the following address:
One State Street Plaza, New York, N.Y. 10004, and (iv) in the case of Duff &
Phelps Credit Rating Co., at the following address: 17 State Street, 12th
Floor, New York, N.Y. 10004; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Holder's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default
or Event of Default.
SECTION 11.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer will furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, 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 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Company or the
Issuer, or join in any institution against the Company or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall, and shall cause its representatives to, hold in confidence all
such information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
PREMIER AUTO TRUST [___-_],
by: [OWNER TRUSTEE], not in its individual capacity
but solely as Owner Trustee,
by:__________________________________
Name:
Title:
[INDENTURE TRUSTEE], not in its individual capacity but
solely as Indenture Trustee,
by:_________________________________________
Name:
Title:
SCHEDULE A
Provided to the Owner Trustee at Closing
EXHIBIT A-1
[FORM OF CLASS A-1 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $___________
No. R-__ CUSIP NO. ___________
PREMIER AUTO TRUST [___-_]
CLASS A-1 [____%] ASSET BACKED NOTES
Premier Auto Trust [___-_], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of ______________ DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $________________ and the denominator of
which is $____________ by (ii) the aggregate amount, if any, payable from the
Note Distribution Account in respect of principal on the Class A-1 Notes
pursuant to Section 3.01 of the Indenture dated as of [________] 1, [___] (the
"Indenture"), between the Issuer and [Indenture Trustee], a
[________________], as Indenture Trustee (the "Indenture Trustee"); PROVIDED,
HOWEVER, that the entire unpaid principal amount of this Note shall be due and
payable on the [________ ____] Distribution Date (the "Class A-1 Final
Scheduled Distribution Date"). Capitalized terms used but not defined herein
are defined in Article I of the Indenture, which also contains rules as to
construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture.
Interest on this Note will accrue for each Distribution Date from and
including the most recent Distribution Date on which interest has been paid
(in the case of the first Distribution Date, from the Closing Date) to but
excluding such current Distribution Date. Interest will be computed on the
basis of the actual number of days in the Class A-1 Interest Accrual Period
divided by 360. Such principal of and interest on this Note shall be paid in
the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST [___-_],
by: [OWNER TRUSTEE], not in its individual capacity
but solely as Owner Trustee under the Trust
Agreement,
by:___________________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [INDENTURE TRUSTEE], not in its individual capacity
but solely as Indenture Trustee,
by: _______________________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 [____%] Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-1 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (collectively, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor
as provided in the Indenture, subject to the subordination of the Class B
Notes as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
[________] day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing [________ __, ____].
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Class A-1 Final Scheduled Distribution Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or
more Predecessor Notes) on the Note Register as of the close of business on
each Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed or transmitted by facsimile prior to such
Distribution Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture and subject to the limitations set forth
therein and on the face hereof, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note
Owner by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture 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
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of [Owner Trustee] in its individual
capacity, [Indenture Trustee] in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
failure to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in
this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
_______________________________________________________________________________
(name and address of assignee)
_______________________________________________________________________________
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________________________________________ , attorney,
transfer said Note on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:______________________________ _________________________________*/
Signature Guaranteed:
___________________*/
- -------------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-2
[FORM OF CLASS A-2 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO.
PREMIER AUTO TRUST [___-_]
CLASS A-2 [____%] ASSET BACKED NOTES
Premier Auto Trust [___-_], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of __________________________________ DOLLARS
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $____________ and the
denominator of which is [$____________] by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the
Class A-2 Notes pursuant to Section 3.01 of the Indenture dated as of
[________] 1, [___] (the "Indenture"), between the Issuer and [Indenture
Trustee], a [__________________], as Indenture Trustee (the "Indenture
Trustee"); PROVIDED, HOWEVER, that the entire unpaid principal amount of this
Note shall be due and payable on the [________ ____] Distribution Date (the
"Class A-2 Final Scheduled Distribution Date"). No payments of principal of
the Class A-2 Notes shall be made until the Class A-1 Notes have been paid in
full. Capitalized terms used but not defined herein are defined in Article I
of the Indenture, which also contains rules as to construction that shall be
applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture.
Interest on this Note will accrue for each Distribution Date from the eighth
day of the month preceding the month of such Distribution Date (in the case of
the first Distribution Date, from the Closing Date) to and including the
seventh day of the month of such Distribution Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST [___-_],
by: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee under
the Trust Agreement,
by:_________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee,
by: ________________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 [____%] Asset Backed Notes (herein called the
"Class A-2 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-2 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (collectively, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor
as provided in the Indenture, subject to the subordination of the Class B
Notes as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
[________] day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing [________ __, ____].
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Class A-2 Final Scheduled Distribution Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
A-2 Notes shall be made pro rata to the Class A-2 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or
more Predecessor Notes) on the Note Register as of the close of business on
each Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed or transmitted by facsimile prior to such
Distribution Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note
Owner by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture 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
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of [Owner Trustee] in its individual
capacity, [Indenture Trustee] in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in
this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_____________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________________________________, attorney,
transfer said Note on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:____________________ __________________________________*/
Signature Guaranteed:
______________________*/
- ------------------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
EXHIBIT A-3
[FORM OF CLASS A-3 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO.
PREMIER AUTO TRUST [___-_]
CLASS A-3 [____%] ASSET BACKED NOTES
Premier Auto Trust [___-_], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of __________________________________ DOLLARS
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $____________ and the
denominator of which is [$____________] by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the
Class A-3 Notes pursuant to Section 3.01 of the Indenture dated as of
[________] 1, [___] (the "Indenture"), between the Issuer and [Indenture
Trustee], a [_______________], as Indenture Trustee (the "Indenture Trustee");
PROVIDED, HOWEVER, that the entire unpaid principal amount of this Note shall
be due and payable on the [________ ____] Distribution Date (the "Class A-3
Final Scheduled Distribution Date"). No payments of principal of the Class A-3
Notes shall be made until the Class A-1 Notes and the Class A-2 Notes have
been paid in full. Capitalized terms used but not defined herein are defined
in Article I of the Indenture, which also contains rules as to construction
that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture.
Interest on this Note will accrue for each Distribution Date from the eighth
day of the month preceding the month of such Distribution Date (in the case of
the first Distribution Date, from the Closing Date) to and including the
seventh day of the month of such Distribution Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST [___-_],
by: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee under
the Trust Agreement,
by:______________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee,
by:_________________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 [____%] Asset Backed Notes (herein called the
"Class A-3 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-3 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (collectively, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor
as provided in the Indenture, subject to the subordination of the Class B
Notes as provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
[________] day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing [________ __, ____].
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Class A-3 Final Scheduled Distribution Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
A-3 Notes shall be made pro rata to the Class A-3 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or
more Predecessor Notes) on the Note Register as of the close of business on
each Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed or transmitted by facsimile prior to such
Distribution Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note
Owner by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture 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
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of [Owner Trustee] in its individual
capacity, [Indenture Trustee] in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in
this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
____________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
_____________________________________________________________________________
(name and address of assignee)
_____________________________________________________________________________
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
____________________________________________________________________, attorney,
transfer said Note on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:_________________________ _____________________________*/
Signature Guaranteed:
__________________________*/
- -----------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
EXHIBIT A-4
[FORM OF CLASS A-4 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO.
PREMIER AUTO TRUST [___-_]
CLASS A-4 [____%] ASSET BACKED NOTES
Premier Auto Trust [___-_], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of __________________________________ DOLLARS
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $____________ and the
denominator of which is [$____________] by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the
Class A-4 Notes pursuant to Section 3.01 of the Indenture dated as of
[________] 1, [___] (the "Indenture"), between the Issuer and [Indenture
Trustee], a [________________], as Indenture Trustee (the "Indenture
Trustee"); PROVIDED, HOWEVER, that the entire unpaid principal amount of this
Note shall be due and payable on the [________ ____] Distribution Date (the
"Class A-4 Final Scheduled Distribution Date"). No payments of principal of
the Class A-4 Notes shall be made until the Class A-1 Notes, the Class A-2
Notes and the Class A-3 Notes have been paid in full. Capitalized terms used
but not defined herein are defined in Article I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture.
Interest on this Note will accrue for each Distribution Date from the eighth
day of the month preceding the month of such Distribution Date (in the case of
the first Distribution Date, from the Closing Date) to and including the
seventh day of the month of such Distribution Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST [___-_],
by: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement,
by________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee,
by:_______________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 [____%] Asset Backed Notes (herein called the
"Class A-4 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-4 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (collectively, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor
as provided in the Indenture, subject to the subordination of the Class B
Notes as provided in the Indenture.
Principal of the Class A-4 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
[________] day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing [________ __, ____].
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the Class A-4 Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
A-4 Notes shall be made pro rata to the Class A-4 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or
more Predecessor Notes) on the Note Register as of the close of business on
each Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed or transmitted by facsimile prior to such
Distribution Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-4 Notes may be redeemed in
whole but not in part at the option of the Servicer on any Distribution Date
on and after the date on which the Pool Balance is less than or equal to 10%
of the Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note
Owner by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture 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
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of [Owner Trustee] in its individual
capacity, [Indenture Trustee] in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in
this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_____________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________________________________, attorney,
transfer said Note on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:_________________________ _____________________________*/
Signature Guaranteed:
___________________________*/
- ------------------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
EXHIBIT A-5
[FORM OF CLASS B NOTE]
THE CLASS B NOTES ARE SUBORDINATED TO THE PAYMENT OF THE CLASS A NOTES.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
No. R-__ CUSIP NO.
PREMIER AUTO TRUST [___-_]
CLASS B [____%] ASSET BACKED NOTES
Premier Auto Trust [___-_], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of __________________ DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $____________ and the denominator of
which is [$____________] by (ii) the aggregate amount, if any, payable from
the Note Distribution Account in respect of principal on the Class B Notes
pursuant to Section 3.01 of the Indenture dated as of [________] 1, [___] (the
"Indenture"), between the Issuer and [Indenture Trustee], a
[________________], as Indenture Trustee (the "Indenture Trustee"); PROVIDED,
HOWEVER, that the entire unpaid principal amount of this Note shall be due and
payable on the earlier of the [________ ____] Distribution Date (the "Class B
Final Scheduled Distribution Date") and the Redemption Date, if any, pursuant
to Section 10.01 of the Indenture. No payments of principal of the Class B
Notes shall be made until the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes have been paid in full. Capitalized terms
used but not defined herein are defined in Article I of the Indenture, which
also contains rules as to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in the last sentence of Section 3.01 of the Indenture;
provided that until the Outstanding Amount of the Class A-4 Notes has been
reduced to zero, interest on the Class B Notes will be due and payable only to
the extent of funds in the Note Distribution Account after the application of
funds in the Note Distribution Account to the payment of interest then due and
payable on the Class A Notes. Interest on this Note will accrue for each
Distribution Date from the eighth day of the month preceding the month of such
Distribution Date (in the case of the first Distribution Date, from the
Closing Date) to and including the seventh day of the month of such
Distribution Date. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST [___-_],
by: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement,
by: ___________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [INDENTURE TRUSTEE], not in its individual capacity
but solely as Indenture Trustee,
by: _________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class B [____%] Asset Backed Notes (herein called the "Class
B Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class B Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes (collectively, the "Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor
as provided in the Indenture, subject to the subordination of the Class B
Notes as provided in the Indenture.
Principal of the Class B Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
[_______] day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing [________ __, ____].
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class B Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Holders of Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Class B Notes shall be made pro rata to the Class B
Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or
more Predecessor Notes) on the Note Register as of the close of business on
each Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed or transmitted by facsimile prior to such
Distribution Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class B Interest Rate to the extent lawful.
As provided in the Indenture, the Class B Notes may be redeemed in
whole but not in part at the option of the Servicer on any Distribution Date
on and after the date on which the Pool Balance is less than or equal to 10%
of the Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness secured by
the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note
Owner by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture 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
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of [Owner Trustee] in its individual
capacity, [Indenture Trustee] in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in
this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_____________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________________________________, attorney,
transfer said Note on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:___________________ ____________________________________*/
Signature Guaranteed:
______________________*/
- ------------------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
EXHIBIT B
[Form of Note Depository Agreement]
LETTER OF REPRESENTATIONS
[To be Completed by Issuer and Trustee]
[Name of Issuer]
[Name of Trustee]
[Date]
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: _______________________________________________________________
_______________________________________________________________
_______________________________________________________________
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee
will act as trustee with respect to the Securities pursuant to a trust
indenture dated _________________________ , 199 _____ (the "Document").
_____________________________________________________ (the "Underwriter") is
distributing the Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at
DTC, and to act in accordance with its Rules with respect to the Securities,
Issuer and Trustee make the following representations to DTC:
1. Prior to closing on the Securities on _____________________, 199_,
there shall be deposited with DTC one Security certificate registered in the
name of DTC's nominee, Cede & Co., for each stated maturity of the Securities
in the face amounts set forth on Schedule A hereto, the total of which
represents 100% of the principal amount of such Securities. If, however, the
aggregate principal amount of any maturity exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each Security certificate shall bear the following
legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration of
transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and
receipt of such notices shall be confirmed by telephoning (212) 709-6870.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to DTC's Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (E.G., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer
or Trustee shall forward such notice either in a separate secure transmission
for each CUSIP number or in a secure transmission for multiple CUSIP numbers
(if applicable) which includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Call Notification Department
at (516) 227-4039 or (516) 227-4190. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant
to this Paragraph by mail or by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or
Trustee to Security holders specifying the terms of the tender and the
Publication Date of such notice shall be sent to DTC by a secure means in the
manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and
receipt of such notices shall be confirmed by telephoning (212) 709-6884.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the
CUSIP number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices, which
shall also contain the current pool factor, and special adjustments to
principal/interest rates (e.g., adjustments due to deferred interest or
shortfall), and Trustee contact's name and telephone number, shall be sent by
telecopy to DTC's Dividend Department at (212) 709-1723, or if by mail or by
any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. [NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT
THE OTHER:] [The interest accrual period is record date to record date.] [The
interest accrual period is payment date to payment date.]
8. Trustee must provide DTC, no later than noon (Eastern Time) on the
payment date, CUSIP numbers for each issue for which payment is being sent, as
well as the dollar amount of the payment for each issue. Notification of
payment details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between
Issuer or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no such
service exists, Issuer or Trustee shall provide interest payment information
directly to DTC in advance of the interest payment date as soon as the
information is available. This information should be conveyed directly to DTC
electronically. If electronic transmission is not available, absent any other
arrangements between Trustee and DTC, such information should be sent by
telecopy to DTC's Dividend Department at (212) 709-1723 or (212) 709-1686, and
receipt of such notices shall be confirmed by telephoning (212) 709-1270.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30
p.m. (Eastern Time). Absent any other arrangements between Trustee and DTC,
such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS PAYING AGENT OPERATING PROCEDURES, a copy of which has previously
been furnished to Trustee.
11. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings,
or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or
address as the number or address to which notices or payments of interest or
principal may be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (E.G., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity, in
which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
14. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
15. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Trustee (at which time DTC will confirm with Issuer or
Trustee the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and
will not, communicate to its Participants or to any person having an interest
in the Securities any information contained in the Security certificate(s);
and (b) acknowledges that neither DTC's Participants nor any person having an
interest in the Securities shall be deemed to have notice of the provisions of
the Security certificates by virtue of submission of such certificate(s) to
DTC.
17. Nothing herein shall be deemed to require Trustee to advance
funds on behalf of Issuer.
Notes: Very truly yours,
A. If there is a Trustee (as defined in ________________________________
this Letter of Representations), Trustee (Issuer)
as well as Issuer must sign this Letter.
If there is no Trustee, in signing this By:_____________________________
Letter Issuer itself undertakes to (Authorized Officer's Signature)
perform all of the obligations set forth
herein.
________________________________
B. Schedule B contains statements that (Trustee)
DTC believes accurately describe DTC,
the method of effecting book-entry By:_____________________________
transfers of securities distributed (Authorized Officer's Signature)
through DTC, and certain related
matters.
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: ________________________
cc: Underwriter
Underwriter's Counsel
SCHEDULE A
_________________________________
_________________________________
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO CERTAIN ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered in the name of Cede &
Co. (DTC's partnership nominee). One fully-registered Security certificate
will be issued for [each issue of the Securities, [each] in the aggregate
principal amount of such issue, and will be deposited with DTC. [If, however,
the aggregate principal amount of [any] issue exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The Rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Securities are to be accomplished by entries made
on the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
Securities, except in the event that use of the book-entry system for the
Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than all
of the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on payable date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, Trustee, or
Issuer, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to DTC is the
responsibility of the Issuer or Trustee, disbursement of such payments to
Direct Participants shall be the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct
and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to Trustee [or
Tender/Remarketing Agent], and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee [or Tender/Remarketing Agent]. The
requirement for physical delivery of Securities in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership
rights in the Securities are transferred by Direct Participants on DTC's
records and followed by a book-entry credit of tendered Securities to Trustee
[or Tender/Remarketing Agent's] DTC account.]
10. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Agent. Under such circumstances, in the event that a
successor securities depository is not obtained, Security certificates are
required to be printed and delivered.
11. The Issuer may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor securities depository). In
that event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that Issuer believes to be
reliable, but Issuer takes no responsibility for the accuracy thereof.
EXHIBIT 4.2
===============================================================================
[FORM OF AMENDED AND RESTATED
TRUST AGREEMENT]
Among
CHRYSLER FINANCIAL COMPANY L.L.C.,
as Depositor,
[_____________________]
And
[_____________________],
as Owner Trustee
Dated as of [____________], 199__
===============================================================================
Table of Contents
Page
----
ARTICLE I
Definitions
SECTION 1.01.Capitalized Terms.......................................1
SECTION 1.02.Other Definitional Provisions...........................4
ARTICLE II
Organization
SECTION 2.01.Name ....................................................4
SECTION 2.02.Office ................................................. 5
SECTION 2.03.Purposes and Powers......................................5
SECTION 2.04.Appointment of Owner Trustee.............................5
SECTION 2.05.Initial Capital Contribution of Owner Trust Estate.......5
SECTION 2.06.Declaration of Trust.....................................5
SECTION 2.07.Liability of Owners......................................6
SECTION 2.08.Title to Trust Property..................................6
SECTION 2.09.Situs of Trust...........................................6
SECTION 2.10.Representations and Warranties of Depositor and Company..6
ARTICLE III
Certificates and Transfer of Interests
SECTION 3.01.Initial Ownership........................................8
SECTION 3.02.The Certificates.........................................8
SECTION 3.03.Authentication of Certificates...........................9
SECTION 3.04.Registration of Transfer and Exchange of Certificates;
Limitations on Transfer..................................9
SECTION 3.05.Mutilated, Destroyed, Lost or Stolen Certificates.......10
SECTION 3.06.Persons Deemed Owners...................................11
SECTION 3.07.Access to List of Certificateholders'
Names and Addresses.....................................11
SECTION 3.08.Maintenance of Office or Agency.........................11
SECTION 3.09.Appointment of Paying Agent.............................11
SECTION 3.10.Definitive Certificates.................................12
ARTICLE IV
Actions by Owner Trustee
SECTION 4.01.Prior Notice to Owners with Respect to Certain Matters..12
SECTION 4.02.Action by Owners with Respect to Certain Matters........13
SECTION 4.03.Action by Owners with Respect to Bankruptcy.............13
SECTION 4.04.Restrictions on Owners'Power............................13
SECTION 4.05.Majority Control........................................13
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01.Establishment of Collection Account.....................13
SECTION 5.02.Application of Trust Funds..............................13
SECTION 5.03.Method of Payment.......................................14
SECTION 5.04.[Reserved]..............................................14
SECTION 5.05.Accounting and Reports to Owners, Internal Revenue
Service and Others......................................14
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01.General Authority.......................................15
SECTION 6.02.General Duties..........................................15
SECTION 6.03.Action upon Instruction.................................15
SECTION 6.04.No Duties Except as Specified in this Agreement
or in Instructions......................................16
SECTION 6.05.No Action Except Under Specified Documents or
Instructions............................................16
SECTION 6.06.Restrictions............................................17
ARTICLE VII
Concerning Owner Trustee
SECTION 7.01.Acceptance of Trusts and Duties.........................17
SECTION 7.02.Furnishing of Documents.................................18
SECTION 7.03.Representations and Warranties..........................18
SECTION 7.04.Reliance; Advice of Counsel.............................18
SECTION 7.05.Not Acting in Individual Capacity.......................19
SECTION 7.06.Owner Trustee Not Liable for Certificates
or Receivables..........................................19
SECTION 7.07.Owner Trustee May Own Certificates and Notes............19
SECTION 7.08.Pennsylvania Motor Vehicle Sales Finance Act Licenses...20
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01.Owner Trustee's Fees and Expenses.......................20
SECTION 8.02.Indemnification.........................................20
SECTION 8.03.Payments to Owner Trustee...............................20
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01.Termination of Trust Agreement..........................21
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee.............22
SECTION 10.02. Resignation or Removal of Owner Trustee................22
SECTION 10.03. Successor Owner Trustee................................22
SECTION 10.04. Merger or Consolidation of Owner Trustee...............23
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee..........23
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments.............................24
SECTION 11.02. No Legal Title to Owner Trust Estate in Owners.........26
SECTION 11.03. Limitations on Rights of Others........................26
SECTION 11.04. Notices................................................26
SECTION 11.05. Severability...........................................26
SECTION 11.06. Separate Counterparts..................................26
SECTION 11.07. Successors and Assigns.................................26
SECTION 11.08. Covenants of Company...................................27
SECTION 11.09. No Petition............................................27
SECTION 11.10. No Recourse............................................27
SECTION 11.11. Headings...............................................27
SECTION 11.12. GOVERNING LAW..........................................27
SECTION 11.13. Certificate Transfer Restrictions......................27
SECTION 11.14. Depositor Payment Obligation...........................28
EXHIBITS
EXHIBIT A-1 Form of Trust Certificate...............................A-1-1
EXHIBIT A-2 Form of Overcollateralization Certificate...............A-2-1
EXHIBIT B Form of Certificate of Trust of Premier Auto
Trust ____-_..............................................B-1
EXHIBIT C Form of Transferor Certificate............................C-1
EXHIBIT D Form of Investment Letter.................................D-1
EXHIBIT E Form of Rule 144A Letter..................................E-1
AMENDED AND RESTATED TRUST AGREEMENT dated as of
[___________], 199_, among CHRYSLER FINANCIAL COMPANY L.L.C.,
a Michigan limited liability company, as depositor (the
"Depositor"), [___________________] (the "Company"), a
[___________________][___________________], and
[___________________], a
[___________________][___________________], as owner trustee.
WHEREAS, the Depositor, the Owner Trustee and the Company entered into
a Trust Agreement dated [___________________], 199_ (the "Trust Agreement");
WHEREAS, the Trust Agreement is being amended and restated as of
[___________________], 199_;
WHEREAS, the Depositor and the Company have entered into a Purchase
Agreement dated as of [___________________], 199_ (the "Purchase Agreement"),
pursuant to which the Depositor will assign to the Company any and all of the
Depositor's rights and interests with respect to the receipt of amounts from the
Reserve Account; and
WHEREAS, in connection therewith, the Company is willing to assume
certain obligations pursuant hereto;
NOW, THEREFORE, the Depositor, the Company and the Owner Trustee hereby
agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Capitalized Terms. For all purposes of this Agreement,
------------------
the following terms shall have the meanings set forth below:
"Administration Agreement" shall mean the Administration Agreement
-------------------------
dated as of [___________], 199_, among the Trust, the Indenture Trustee and CFC,
as Administrator.
"Agreement" shall mean this Amended and Restated Trust Agreement, as
---------
the same may be amended and supplemented from time to time.
"Basic Documents" shall mean the Purchase Agreement, the Sale and
----------------
Servicing Agreement, the Indenture, the Administration Agreement, the Note
Depository Agreement and the other documents and certificates delivered in
connection therewith.
"Benefit Plan" shall have the meaning assigned to such term in Section
------------
11.13.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
------------------------
Delaware Code, 12 Del. Codess. 3801 et seq., as the same may be amended from
time to time.
"Certificate Balance" shall mean the outstanding principal balance of
--------------------
the Overcollateralization Certificates and shall equal the Initial Certificate
Balance less the aggregate amount previously distributed to the Holders of the
Overcollateralization Certificates pursuant to Section 5.06(a)(ii)(E) of the
Sale and Servicing Agreement.
"Certificates" shall mean the Trust Certificates and the
------------
Overcollateralization Certificates.
"Certificate of Trust" shall mean the Certificate of Trust in the form
---------------------
of Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the
-------------------- ----------------------
register mentioned in and the registrar appointed pursuant to Section 3.04.
"Certificateholder" or "Holder" shall mean a Person in whose name a
----------------- ------
Certificate is registered.
"CFC" shall mean Chrysler Financial Company L.L.C., a Michigan limited
---
liability company, and any successor in interest.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
----
Treasury Regulations promulgated thereunder.
"Company" shall mean [___________________], a [___________________]
-------
[___________________], and any successor in interest.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee,
----------------------
the principal corporate trust office of the Owner Trustee located at
[___________________], [___________________], or at such other address as the
Owner Trustee may designate by notice to the Owners, the Depositor and the
Company, or the principal corporate trust office of any successor Owner Trustee
at the address designated by such successor Owner Trustee by notice to the
Owners, the Depositor and the Company.
"Depositor" shall mean CFC in its capacity as depositor hereunder.
---------
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
-----
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
-------------
amended.
"Expenses" shall have the meaning assigned to such term in Section
--------
8.02.
"Indemnified Parties" shall have the meaning assigned to such term in
--------------------
Section 8.02.
"Indenture" shall mean the Indenture dated as of [___________________],
---------
199_ between the Trust and [___________________], as Indenture Trustee.
"Initial Certificate Balance" shall mean $[___________________].
---------------------------
"Note Depository Agreement" shall mean the agreement dated
-----------------------------
[___________________], 199_ among the Trust, the Indenture Trustee, the
Administrator and The Depository Trust Company, as the initial Clearing Agency,
relating to the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes, as the same may be amended and supplemented from time to
time.
"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.
"Overcollateralization Certificate" shall mean a certificate evidencing
---------------------------------
the beneficial interest of an Owner in the Trust entitled to receive the
Certificate Balance pursuant to Section 5.06(a)(ii)(E) of the Sale and Servicing
Agreement, substantially in the form attached hereto as Exhibit A-2.
"Owner" shall mean each Holder of a Certificate.
-----
"Owner Trust Estate" shall mean all right, title and interest of the
-------------------
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Collection Account and all other property of the Trust from time
to time, including any rights of the Owner Trustee and the Trust pursuant to the
Sale and Servicing Agreement and the Administration Agreement.
"Owner Trustee" shall mean [___________________], a
-----------------
[___________________] [___________________], not in its individual capacity but
solely as owner trustee under this Agreement, and any successor Owner Trustee
hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent appointed
------------
pursuant to Section 3.09 and shall initially be the Indenture Trustee.
"Percentage Interest" means, as to any Trust Certificate, the
---------------------
percentage interest, specified on the face thereof, in the distributions on the
Trust Certificates pursuant to this Agreement.
"Record Date" shall mean, with respect to any Distribution Date, the
-----------
15th day of the month preceding such Distribution Date.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
------------------------------
Agreement dated as of [___________________], 199_, between the Trust, as issuer,
and the Depositor, as seller and servicer, as the same may be amended or
supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
-------------------
Delaware.
"Treasury Regulations" shall mean regulations, including proposed or
---------------------
temporary Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
----
"Trust Certificate" shall mean a certificate evidencing the beneficial
-----------------
interest of an Owner in the Trust, substantially in the form attached hereto as
Exhibit A-1.
SECTION 1.02 Other Definitional Provisions. (a) Capitalized terms used
-----------------------------
and not otherwise defined herein have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, 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; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
Organization
-------------
SECTION 2.01. Name. The Trust created hereby shall be known as "Premier
----
Auto Trust ____-_," in which name the Owner Trustee may conduct the business of
the Trust, make and execute contracts and other instruments on behalf of the
Trust and sue and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care of the
------
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Owners, the
Depositor and the Company.
SECTION 2.03. Purposes and Powers. The purpose of the Trust is to
---------------------
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement and to sell the Notes and the
Certificates;
(ii) with the proceeds of the sale of the Notes and the
Certificates, to purchase the Receivables, to fund the Reserve Account,
to pay the organizational, start-up and transactional expenses of the
Trust and to pay the balance to the Depositor pursuant to the Sale and
Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and
distribute to the Owners pursuant to the terms of the Sale and
Servicing Agreement any portion of the Trust Estate released from the
Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary or suitable to accomplish the foregoing
or are incidental thereto or connected therewith; and (vi) subject to
compliance with the Basic Documents, to engage in such other activities
as may be required in connection with conservation of the Owner Trust
Estate and the making of distributions to the Owners and the
Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.04. Appointment of Owner Trustee. The Depositor hereby
------------------------------
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.05. Initial Capital Contribution of Owner Trust Estate. The
---------------------------------------------------
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Collection Account. The Depositor shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby declares
--------------------
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Owners, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. It is the intention of the parties hereto that, solely for
income and franchise tax purposes, (i) so long as there is a sole Owner, the
Trust shall be treated as a security arrangement, with the assets of the Trust
being the Receivables and other assets held by the Trust, the owner of the
Receivables being the sole Owner and the Notes being non-recourse debt of the
sole Owner and (ii) if there is more than one Owner, the Trust shall be treated
as a partnership for income and franchise tax purposes, with the assets of the
partnership being the Receivables and other assets held by the Trust, the
partners of the partnership being the Owners (including the Company as assignee
of the Depositor pursuant to the Purchase Agreement, in its capacity as
recipient of distributions from the Reserve Account) and the Notes being debt of
the partnership. The parties agree that, unless otherwise required by
appropriate tax authorities, the Trust will file or cause to be filed annual or
other necessary returns, reports and other forms consistent with the
characterization of the Trust as provided in the preceding sentence for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and in the Business Trust Statute
with respect to accomplishing the purposes of the Trust.
SECTION 2.07. Liability of Owners. The Owners (including the Company)
-------------------
shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the general
corporation law of the State of Delaware.
SECTION 2.08. Title to Trust Property. Legal title to all the Owner
-----------------------
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
SECTION 2.09. Situs of Trust. The Trust will be located and
----------------
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. The Trust shall not have any employees in any state other
than Delaware; provided, however, that nothing herein shall restrict or prohibit
the Owner Trustee from having employees within or without the State of Delaware.
Payments will be received by the Trust only in Delaware or New York, and
payments will be made by the Trust only from Delaware or New York. The only
office of the Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of Depositor and Company.
-------------------------------------------------------
(a) The Depositor hereby represents and warrants to the Owner Trustee that:
(i) The Depositor is duly organized and validly existing as a
limited liability company in good standing under the laws of the State
of Michigan, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted.
(ii) The Depositor is duly qualified to do business as a foreign
limited liability company in good standing and has obtained all
necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business shall
require such qualifications.
(iii) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has
full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all
necessary corporate action; and the execution, delivery and performance
of this Agreement have been duly authorized by the Depositor by all
necessary corporate action.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of organization or operating agreement of the Depositor,
or any indenture, agreement or other instrument to which the Depositor
is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best
of the Depositor's knowledge, any order, rule or regulation applicable
to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties.
(v) To the Depositor'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 Depositor or its properties: (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the consummation
of any of the transactions contemplated by this Agreement or (C)
seeking any determination or ruling that might materially and adversely
affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement.
(vi) The representations and warranties of the Company and the
Depositor in Sections 3.01 and 3.02 of the Purchase Agreement are true
and correct.
(b) The Company hereby represents and warrants to the Owner Trustee
that:
(i) The Company has been duly organized and is validly existing as
a [___________________] in good standing under the laws of the
jurisdiction of its organization, with the power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is presently conducted.
(ii) The Company is duly qualified to do business as a foreign
[___________________] in good standing and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of its property or the conduct of its business shall require such
qualifications.
(iii) The Company has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Company has full
power and authority to purchase the Certificates; and the execution,
delivery and performance of this Agreement has been duly authorized by
the Company by all necessary action.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of organization or operating agreement of the Company, or
any indenture, agreement or other instrument to which the Company is a
party or by which it is bound; nor result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to
the Basic Documents); nor violate any law or, to the best of the
Company's knowledge, any order, rule or regulation applicable to the
Company of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties.
(v) There are no proceedings or investigations pending or, to the
Company's best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties: (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the consummation
of any of the transactions contemplated by this Agreement or (C)
seeking any determination or ruling that might materially and adversely
affect the performance by the Company of its obligations under, or the
validity or enforceability of, this Agreement.
ARTICLE III
Certificates and Transfer of Interests
--------------------------------------
SECTION 3.01. Initial Ownership. Upon the formation of the Trust by the
-----------------
contribution by the Depositor pursuant to Section 2.05 and until the issuance of
the Certificates, the Depositor shall be the sole beneficiary of the Trust.
SECTION 3.02. The Certificates. The Trust Certificates shall be issued
----------------
in minimum denominations of a one percent Percentage Interest in the Trust. The
Overcollateralization Certificates shall be issued in minimum denominations of
$1,000,000 principal amount of Certificate Balance. The Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefit of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Certificates or did not hold such
offices at the date of authentication and delivery of such Certificates.
A transferee of a Certificate shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 3.04.
SECTION 3.03. Authentication of Certificates. On the Closing Date, the
------------------------------
Owner Trustee shall cause the Trust Certificates in an aggregate Percentage
Interest equal to 100% and the Overcollateralization Certificates in an
aggregate principal amount equal to the Initial Certificate Balance to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by its chairman of the board, its
president, any vice president, secretary or any assistant treasurer, without
further corporate action by the Depositor, in the respective authorized
denominations. No Certificate shall entitle its Holder to any benefit under this
Agreement or be valid for any purpose unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A-1 with respect to the Trust Certificates and Exhibit A-2 with
respect to the Overcollateralization Certificates, executed by the Owner Trustee
or [___________], as the Owner Trustee's authenticating agent, by manual
signature; such authentication shall constitute conclusive evidence that such
Certificate shall have been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 3.04. Registration of Transfer and Exchange of Certificates;
--------------------------------------------------------
Limitations on Transfer. The Certificate Registrar shall keep or cause to be
- -----------------------
kept, at the office or agency maintained pursuant to Section 3.08, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Owner Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. [___________] shall
be the initial Certificate Registrar.
The Certificates have not been and will not be registered under the
Securities Act and will not be listed on any exchange. No transfer of a
Certificate shall be made unless such transfer is made pursuant to an effective
registration statement under the Securities Act and any applicable state
securities laws or is exempt from the registration requirements under the
Securities Act and such state securities laws. In the event that a transfer is
to be made in reliance upon an exemption from the Securities Act and state
securities laws, in order to assure compliance with the Securities Act and such
laws, the Holder desiring to effect such transfer and such Holder's prospective
transferee shall each certify to the Owner Trustee in writing the facts
surrounding the transfer in substantially the forms set forth in Exhibit C (the
"Transferor Certificate") and either Exhibit D (the "Investment Letter") or
Exhibit E (the "Rule 144A Letter"). Except in the case of a transfer as to which
the proposed transferee has provided a Rule 144A Letter, there shall also be
delivered to the Owner Trustee an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Securities Act and state securities laws,
which Opinion of Counsel shall not be an expense of the Trust or the Owner
Trustee; provided that such Opinion of Counsel in respect of the applicable
state securities laws may be a memorandum of law rather than an opinion if such
counsel is not licensed in the applicable jurisdiction. The Depositor shall
provide to any Holder of a Certificate and any prospective transferee designated
by any such Holder, information regarding the Certificates 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 Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. Each Holder of a Certificate
desiring to effect such a transfer shall, and does hereby agree to, indemnify
the Trust, the Owner Trustee, and the Depositor against any liability that may
result if the transfer is not so exempt or is not made in accordance with
federal and state securities laws. The Owner Trustee shall cause each
Certificate to contain a legend in the form set forth on the form of Certificate
attached hereto as Exhibit A-1 or Exhibit A-2, as applicable.
Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.08 and subject to the
satisfaction of the preceding paragraph, the Owner Trustee shall execute,
authenticate and deliver (or shall cause [___________________] as its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Certificates of like tenor and in
authorized denominations of a like aggregate Percentage Interest or principal
amount, as applicable, dated the date of authentication by the Owner Trustee or
any authenticating agent; provided that prior to such execution, authentication
and delivery, the Owner Trustee shall have received an Opinion of Counsel to the
effect that the proposed transfer will not cause the Trust to be characterized
as an association (or a publicly traded partnership) taxable as a corporation or
alter the tax characterization of the Notes for federal income tax purposes or
Michigan income and single business tax purposes. At the option of a Holder,
Certificates may be exchanged for other Certificates of like tenor and of
authorized denominations of a like aggregate Percentage Interest or principal
amount, as applicable, upon surrender of the Certificates to be exchanged at the
office or agency maintained pursuant to Section 3.08.
Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange shall be
cancelled and subsequently disposed of by the Owner Trustee in accordance with
its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of, Certificates for a period of 15 days preceding the
due date for any payment with respect to the Certificates.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
-------------------------------------------------
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar and the Owner Trustee such security or indemnity as
may be required by them to save each of them harmless, then in the absence of
notice that such Certificate has been acquired by a bona fide purchaser, the
Owner Trustee on behalf of the Trust shall execute and the Owner Trustee or
[___________], as the Owner Trustee's authenticating agent, shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and denomination. In
connection with the issuance of any new Certificate under this Section, the
Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
shall constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
SECTION 3.06. Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar or any Paying Agent may treat the Person in whose name any Certificate
is registered in the Certificate Register as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 5.02 and for all
other purposes whatsoever, and none of the Owner Trustee, the Certificate
Registrar or any Paying Agent shall be bound by any notice to the contrary.
SECTION 3.07. Access to List of Certificateholders' Names and
-------------------------------------------------------
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
- ---------
Servicer and the Depositor, within 15 days after receipt by the Owner Trustee of
a written request therefor from the Servicer or the Depositor, a list, in such
form as the Servicer or the Depositor may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. If a
Certificateholder applies in writing to the Owner Trustee, and such application
states that the applicant desires to communicate with other Certificateholders
with respect to their rights under this Agreement or under the Certificates,
then the Owner Trustee shall, within five Business Days after the receipt of
such application, afford such applicant access during normal business hours to
the current list of Certificateholders. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Company, the Certificate Registrar or the Owner Trustee accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
SECTION 3.08. Maintenance of Office or Agency. The Owner Trustee shall
-------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Owner Trustee
in respect of the Certificates and the Basic Documents may be served. The Owner
Trustee initially designates [___________], [___________], [___________]as its
office for such purposes. The Owner Trustee shall give prompt written notice to
the Company and to the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 3.09. Appointment of Paying Agent. The Paying Agent shall make
---------------------------
distributions to Certificateholders from the Collection Account pursuant to
Section 5.02 and shall report the amounts of such distributions to the Owner
Trustee. Subject to the provisions of Section 5.06 of the Sale and Servicing
Agreement, any Paying Agent shall have the revocable power to withdraw funds
from the Collection Account for the purpose of making the distributions referred
to above. The Owner Trustee may revoke such power and remove the Paying Agent if
the Owner Trustee determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect or that it is in the interest of the Certificateholders to do so. The
Paying Agent initially shall be the Indenture Trustee, and any co-paying agent
chosen by the Indenture Trustee and acceptable to the Owner Trustee. The Person
acting as Indenture Trustee shall not be permitted to resign as Paying Agent so
long as such Person is acting as the Indenture Trustee. The Owner Trustee shall
cause such successor Paying Agent or any additional Paying Agent appointed by
the Owner Trustee to execute and deliver to the Owner Trustee an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Owner Trustee that, as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. The
Paying Agent shall return all unclaimed funds to the Owner Trustee and upon
removal of a Paying Agent such Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 7.01, 7.03, 7.04 and
8.01 shall apply to the Owner Trustee also in its role as Paying Agent, for so
long as the Owner Trustee shall act as Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION 3.10. Definitive Certificates. The Certificates, upon original
-----------------------
issuance, will be issued in definitive, fully registered form.
ARTICLE IV
Actions by Owner Trustee
-------------------------
SECTION 4.01. Prior Notice to Owners with Respect to Certain Matters.
--------------------------------------------------------
With respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action and
the Owners shall not have notified the Owner Trustee in writing prior to the
30th day after such notice is given that such Owners have withheld consent or
provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of the Receivables) and
the compromise of any action, claim or lawsuit brought by or against the Trust
(except with respect to the aforementioned claims or lawsuits for collection of
the Receivables);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interests of the Owners;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any provision
in a manner or add any provision that would not materially adversely affect the
interests of the Owners; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar, or the consent to the assignment by the Note
Registrar, Paying Agent or Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
SECTION 4.02. Action by Owners with Respect to Certain Matters. The
-------------------------------------------------
Owner Trustee shall not have the power, except upon the direction of the Owners,
to (a) remove the Administrator under the Administration Agreement pursuant to
Section 8 thereof, (b) appoint a successor Administrator pursuant to Section 8
of the Administration Agreement, (c) remove the Servicer under the Sale and
Servicing Agreement pursuant to Section 8.01 thereof or (d) except as expressly
provided in the Basic Documents, sell the Receivables after the termination of
the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the Owners.
SECTION 4.03. Action by Owners with Respect to Bankruptcy. The Owner
--------------------------------------------
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the delivery to the Owner Trustee by each such Owner of a certificate
certifying that such Owner reasonably believes that the Trust is insolvent.
SECTION 4.04. Restrictions on Owners' Power. The Owners shall not
-------------------------------
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the Owner
Trustee under this Agreement or any of the Basic Documents or would be contrary
to Section 2.03, nor shall the Owner Trustee be obligated to follow any such
direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided herein,
----------------
any action that may be taken by the Owners under this Agreement may be taken by
the Holders of the Certificates that include the Holders of Trust Certificates
evidencing not less than a majority of the Percentage Interests evidenced by the
Trust Certificates and the Holders of Overcollateralization Certificates
evidencing not less than a majority of the Certificate Balance. Except as
expressly provided herein, any written notice of the Owners delivered pursuant
to this Agreement shall be effective if signed by the Holders of the
Certificates that include Holders of Trust Certificates evidencing not less than
a majority of the Percentage Interests evidenced by the Trust Certificates and
the Holders of Overcollateralization Certificates evidencing not less than a
majority of the Certificate Balance, in each case, at the time of the delivery
of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
------------------------------------------
SECTION 5.01. Establishment of Collection Account. The Collection
-------------------------------------
Account shall be established and maintained pursuant to Section 5.01 of the Sale
and Servicing Agreement. The Collection Account shall be under the sole dominion
and control of the Indenture Trustee for the benefit of Noteholders and the
Certificateholders, as applicable in accordance with the Sale and Servicing
Agreement.
SECTION 5.02. Application of Trust Funds. (a) On each Distribution
Date, the Servicer is obligated to instruct the Indenture Trustee to make
distributions and allocations in accordance with Section 5.06(a)(ii) of the Sale
and Servicing Agreement. Distributions to Certificateholders will be made in
accordance with Section 5.06(a)(ii) of the Sale and Servicing Agreement.
(b) [Reserved].
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to an Owner, such tax shall reduce the amount
otherwise distributable to the Owner in accordance with this Section. The Paying
Agent is hereby authorized and directed to retain from amounts otherwise
distributable to the Owners sufficient funds for the payment of any tax that is
legally owed by the Trust (but such authorization shall not prevent the Owner
Trustee from contesting any such tax in appropriate proceedings and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to an Owner
shall be treated as cash distributed to such Owner at the time it is withheld by
the Trust and remitted to the appropriate taxing authority. If there is a
possibility that withholding tax is payable with respect to a distribution (such
as a distribution to a non-U.S. Owner), the Paying Agent may in its sole
discretion withhold such amounts in accordance with this paragraph.
SECTION 5.03. Method of Payment. Subject to Section 9.01(c),
-------------------
distributions required to be made to Certificateholders on any Distribution Date
shall be made by the Paying Agent to each Certificateholder of record on the
preceding Record Date by wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior to
such Distribution Date, or, if not, by check mailed to such Certificateholder at
the address of such Holder appearing in the Certificate Register.
SECTION 5.04. [Reserved]
SECTION 5.05. Accounting and Reports to Owners, Internal Revenue
------------------------------------------------------
Service and Others. The Owner Trustee shall deliver to each Owner such
- --------------------
information, reports or statements as may be required by the Code and applicable
Treasury Regulations and as may be required to enable each Owner to prepare its
federal and state income tax returns. Consistent with the Trust's
characterization for tax purposes, as a security arrangement for the issuance of
non-recourse debt, no federal income tax return shall be filed on behalf of the
Trust unless either (i) the Owner Trustee shall receive an Opinion of Counsel
that, based on a change in applicable law occurring after the date hereof, or as
a result of a transfer by the Company permitted by Section 3.04, the Code
requires such a filing or (ii) the Internal Revenue Service shall determine that
the Trust is required to file such a return. Notwithstanding the preceding
sentence, the Owner Trustee shall file Internal Revenue Service Form 8832 and
elect for the Trust to be treated as a domestic eligible entity with a single
owner that is disregarded as a separate entity, which election shall remain in
effect so long as the Company or any other party is the sole Owner. In the event
that the Trust is required to file tax returns, the Owner Trustee shall prepare
or shall cause to be prepared any tax returns required to be filed by the Trust
and shall remit such returns to the Company (or if the Company no longer owns
any Certificates, the Owner designated for such purpose by the Company to the
Owner Trustee in writing) at least five (5) days before such returns are due to
be filed. The Company (or such designee Owner, as applicable) shall promptly
sign such returns and deliver such returns after signature to the Owner Trustee
and such returns shall be filed by the Owner Trustee with the appropriate tax
authorities. In no event shall the Owner Trustee or the Company (or such
designee Owner, as applicable) be liable for any liabilities, costs or expenses
of the Trust or the Noteholders arising out of the application of any tax law,
including federal, state, foreign or local income or excise taxes or any other
tax imposed on or measured by income (or any interest, penalty or addition with
respect thereto or arising from a failure to comply therewith) except for any
such liability, cost or expense attributable to any act or omission by the Owner
Trustee or the Company (or such designee Owner, as applicable), as the case may
be, in breach of its obligations under this Agreement.
ARTICLE VI
Authority and Duties of Owner Trustee
--------------------------------------
SECTION 6.01. General Authority. The Owner Trustee is authorized and
------------------
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and any
amendment or other agreement or instrument described in Section 3.11, in each
case, in such form as the Company shall approve, as evidenced conclusively by
the Owner Trustee's execution thereof. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust pursuant to the Basic Documents. The Owner Trustee is further
authorized from time to time to take such action as the Administrator recommends
with respect to the Basic Documents.
SECTION 6.02. General Duties. It shall be the duty of the Owner Trustee
--------------
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Basic Documents to which the Trust is a
party and to administer the Trust in the interest of the Owners, subject to the
Basic Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be held
liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement.
SECTION 6.03. Action upon Instruction. (a) Subject to Article IV and in
-----------------------
accordance with the terms of the Basic Documents, the Owners may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the Owners
pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or under
any Basic Document, the Owner Trustee shall promptly give notice (in such form
as shall be appropriate under the circumstances) to the Owners requesting
instruction as to the course of action to be adopted, and to the extent the
Owner Trustee acts in good faith in accordance with any written instruction of
the Owners received, the Owner Trustee shall not be liable on account of such
action to any Person. If the Owner Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of time
as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Agreement or the Basic Documents,
as it shall deem to be in the best interests of the Owners, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application
of any provision of this Agreement or any Basic Document or any such provision
is ambiguous as to its application, or is, or appears to be, in conflict with
any other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Owners requesting
instruction and, to the extent that the Owner Trustee acts or refrains from
acting in good faith in accordance with any such instruction received, the Owner
Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Owner Trustee shall not have received appropriate instruction
within 10 days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Agreement or the Basic Documents,
as it shall deem to be in the best interests of the Owners, and shall have no
liability to any Person for such action or inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement or in
-------------------------------------------------------
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
- ------------
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.03; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Agreement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens on any part of the
Owner Trust Estate that result from actions by, or claims against, the Owner
Trustee that are not related to the ownership or the administration of the Owner
Trust Estate.
SECTION 6.05. No Action Except Under Specified Documents or
------------------------------------------------------
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
- ------------
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.03.
SECTION 6.06. Restrictions. The Owner Trustee shall not take any action
------------
(a) that is inconsistent with the purposes of the Trust set forth in Section
2.03 or (b) that, to the actual knowledge of the Owner Trustee, would result in
the Trust's becoming taxable as a corporation for federal income tax purposes.
The Owners shall not direct the Owner Trustee to take action that would violate
the provisions of this Section.
ARTICLE VII
Concerning Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties. The Owner Trustee
----------------------------------
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts, but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct or negligence or (ii) in the case of
the inaccuracy of any representation or warranty contained in Section 7.03
expressly made by the Owner Trustee. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(a) The Owner Trustee shall not be liable for any error of judgment
made in good faith by the Owner Trustee;
(b) The Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Administrator or any Owner;
(c) No provision of this Agreement or any Basic Document shall require
the Owner Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder or under
any Basic Document if the Owner Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured or provided to it;
(d) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes or any amounts payable on the
Certificates;
(e) The Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by the
Depositor or the Company or for the form, character, genuineness, sufficiency,
value or validity of any of the Owner Trust Estate, or for or in respect of the
validity or sufficiency of the Basic Documents, other than the certificate of
authentication on the Certificates, and the Owner Trustee shall in no event
assume or incur any liability, duty or obligation to any Noteholder or to any
Owner, other than as expressly provided for herein or expressly agreed to in the
Basic Documents;
(f) The Owner Trustee shall not be liable for the default or misconduct
of the Administrator, CFC, as Seller or Depositor, the Company, the Indenture
Trustee or the Servicer under any of the Basic Documents or otherwise, and the
Owner Trustee shall have no obligation or liability to perform the obligations
of the Trust under this Agreement or the Basic Documents that are required to be
performed by the Administrator under the Administration Agreement, the Indenture
Trustee under the Indenture or the Servicer or CFC, as Depositor or as Seller,
under the Sale and Servicing Agreement; and
(g) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or direction of any of
the Owners, unless such Owners have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that
may be incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement or in any
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its negligence or willful misconduct in the
performance of any such act.
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall furnish
-----------------------
to the Owners, promptly upon receipt of a written request therefor, duplicates
or copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee under the
Basic Documents.
SECTION 7.03. Representations and Warranties. The Owner Trustee hereby
------------------------------
represents and warrants to the Company, for the benefit of the Owners, that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of [________]. It has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution or the delivery by it of this Agreement, nor
the consummation by it of the transactions contemplated hereby, nor compliance
by it with any of the terms or provisions hereof will contravene any federal or
Delaware law, governmental rule or regulation governing the banking or trust
powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or bylaws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall
----------------------------
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled Persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such Persons and not contrary to this Agreement or
any Basic Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as provided in
---------------------------------
this Article VII, in accepting the trusts hereby created [___________________]
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. Owner Trustee Not Liable for Certificates or Receivables.
---------------------------------------------------------
The recitals contained herein and in the Certificates (other than the signature
and countersignature of the Owner Trustee on the Certificates) shall be taken as
the statements of the Depositor and the Company, and the Owner Trustee assumes
no responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Basic Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) or the Notes, or of
any Receivable or related documents. The Owner Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Receivable, or the perfection and priority of any security
interest created by any Receivable in any Financed Vehicle or the maintenance of
any such perfection and priority, or for or with respect to the sufficiency of
the Owner Trust Estate or its ability to generate the payments to be distributed
to Certificateholders under this Agreement or the Noteholders under the
Indenture, including, without limitation: the existence, condition and ownership
of any Financed Vehicle; the existence and enforceability of any insurance
thereon; the existence and contents of any Receivable on any computer or other
record thereof; the validity of the assignment of any Receivable to the Trust or
of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor,
the Company or the Servicer with any warranty or representation made under any
Basic Document or in any related document or the accuracy of any such warranty
or representation, or any action of the Administrator, the Indenture Trustee or
the Servicer or any subservicer taken in the name of the Owner Trustee.
SECTION 7.07. Owner Trustee May Own Certificates and Notes. The Owner
--------------------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Depositor, the Company, the
Administrator, the Indenture Trustee and the Servicer in banking transactions
with the same rights as it would have if it were not Owner Trustee.
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act Licenses.
-------------------------------------------------------
The Owner Trustee, in its individual capacity, shall use its best efforts to
maintain, and the Owner Trustee, as Owner Trustee, shall cause the Trust to use
its best efforts to maintain, the effectiveness of all licenses required under
the Pennsylvania Motor Vehicle Sales Finance Act in connection with this
Agreement and the Basic Documents and the transactions contemplated hereby and
thereby until such time as the Trust shall terminate in accordance with the
terms hereof.
ARTICLE VIII
Compensation of Owner Trustee
-----------------------------
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
------------------------------------
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Depositor and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Depositor for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder.
SECTION 8.02. Indemnification. The Depositor shall be liable as primary
---------------
obligor for, and shall indemnify the Owner Trustee and its successors, assigns,
agents and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the Depositor shall not be
liable for or required to indemnify an Indemnified Party from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.01. The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the termination
of this Agreement. In any event of any claim, action or proceeding for which
indemnity will be sought pursuant to this Section, the Owner Trustee's choice of
legal counsel shall be subject to the approval of the Depositor, which approval
shall not be unreasonably withheld.
SECTION 8.03. Payments to Owner Trustee. Any amounts paid to the Owner
-------------------------
Trustee pursuant to this Article VIII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement. (a) This Agreement (other
------------------------------
than Article VIII) and the Trust shall terminate and be of no further force or
effect upon the final distribution by the Owner Trustee of all moneys or other
property or proceeds of the Owner Trust Estate in accordance with the terms of
the Indenture, the Sale and Servicing Agreement and Article V. The bankruptcy,
liquidation, dissolution, death or incapacity of any Owner shall not (x) operate
to terminate this Agreement or the Trust or (y) entitle such Owner's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or Owner Trust Estate or (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), none of the Depositor, the
Company or any Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which Certificateholders shall surrender their Certificates to the
Paying Agent for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Servicer given
pursuant to Section 9.01(c) of the Sale and Servicing Agreement, stating (i) the
Distribution Date upon or with respect to which final payment of the
Certificates shall be made upon presentation and surrender of the Certificates
at the office of the Paying Agent therein designated, (ii) the amount of any
such final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Paying Agent therein
specified. The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Paying Agent at the time such notice
is given to Certificateholders. Upon presentation and surrender of the
Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.02.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Subject to applicable escheat laws, any funds
remaining in the Trust after exhaustion of such remedies shall be distributed by
the Paying Agent to the Company.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee. The Owner
-------------------------------------------
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise corporate trust
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities; and
having (or having a parent that has) time deposits that are rated at least A-1
by Standard & Poor's and P-1 by Moody's. If such corporation shall publish
reports of condition at least annually pursuant to law or to the requirements of
the aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Owner Trustee
shall resign immediately in the manner and with the effect specified in Section
10.02.
SECTION 10.02. Resignation or Removal of Owner Trustee. The Owner
------------------------------------------
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Administrator. Upon receiving such
notice of resignation, the Administrator shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the successor
Owner Trustee. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the authority
of the immediately preceding sentence, the Administrator shall promptly appoint
a successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed and one
copy to the successor Owner Trustee, and shall pay all fees owed to the outgoing
Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Administrator shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.03. Successor Owner Trustee. Any successor Owner Trustee
------------------------
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or removal
of the predecessor Owner Trustee shall become effective, and such successor
Owner Trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
under this Agreement, with like effect as if originally named as Owner Trustee.
The predecessor Owner Trustee shall upon payment of its fees and expenses
deliver to the successor Owner Trustee all documents and statements and monies
held by it under this Agreement; and the Administrator and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies. If the Administrator shall fail to mail such notice within 10 days
after acceptance of such appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.
SECTION 10.04. Merger or Consolidation of Owner Trustee. Any
----------------------------------------------
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant to
Section 10.01 and, provided, further, that the Owner Trustee shall mail notice
of such merger or consolidation to the Rating Agencies.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
-----------------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Administrator and Owner Trustee to act as co-trustee, jointly
with the Owner Trustee, or as separate trustee or separate trustees, of all or
any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust or any part thereof and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Administrator and the Owner Trustee may consider necessary or desirable.
If the Administrator shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, the Owner Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee under
this Agreement shall be required to meet the terms of eligibility as a successor
Owner Trustee pursuant to Section 10.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Owner Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(b) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) The Administrator and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor co-trustee or separate trustee.
ARTICLE XI
Miscellaneous
-------------
SECTION 11.01. Supplements and Amendments. This Agreement may be
----------------------------
amended by the Depositor, the Company and the Owner Trustee, with prior written
notice to the Rating Agencies, without the consent of any of the Noteholders or
the Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement 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, 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 Depositor,
the Company and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of the Holders (as defined in the Indenture) of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes, the
consent of the Holders of Trust Certificates evidencing not less than a majority
of the Percentage Interests evidenced by the Trust Certificates and the consent
of the Holders of Overcollateralization Certificates evidencing not less than a
majority of the Certificate Balance, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (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 or of the
Percentage Interests evidenced by the Trust Certificates or of the principal
amount of the Certificate Balance with respect to the Overcollateralization
Certificates required to consent to any such amendment, without the consent of
the Holders of all the outstanding Notes, Trust Certificates and
Overcollateralization Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders,
Noteholders or the Indenture Trustee 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. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall not
be obligated to, enter into any such amendment that affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
In connection with the execution of any amendment to this Agreement or
any amendment of any other agreement to which the Issuer is a party, the Owner
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel to the effect that such amendment is authorized or permitted by the
Basic Documents and that all conditions precedent in the Basic Documents for the
execution and delivery thereof by the Issuer or the Owner Trustee, as the case
may be, have been satisfied.
SECTION 11.02. No Legal Title to Owner Trust Estate in Owners. The
------------------------------------------------
Owners shall not have legal title to any part of the Owner Trust Estate. The
Owners shall be entitled to receive distributions with respect to their
undivided ownership interest therein only in accordance with Articles V and IX.
No transfer, by operation of law or otherwise, of any right, title or interest
of the Owners to and in their ownership interest in the Owner Trust Estate shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.
SECTION 11.03. Limitations on Rights of Others. The provisions of this
-------------------------------
Agreement are solely for the benefit of the Owner Trustee, the Depositor, the
Company, the Owners, the Administrator and, to the extent expressly provided
herein, 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 11.04. Notices. (a) Unless otherwise expressly specified or
-------
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days after
mailing if mailed by certified mail, postage prepaid (except that notice to the
Owner Trustee shall be deemed given only upon actual receipt by the Owner
Trustee), if to the Owner Trustee, addressed to the Corporate Trust Office; if
to the Depositor, addressed to Chrysler Financial Company L.L.C., 27777 Franklin
Road, Southfield, Michigan 48034, Attention of Assistant Secretary; if to the
Company, addressed to [___________________], [___________________],
[___________________], Attention of Assistant Secretary; or, as to each party,
at such other address as shall be designated by such party in a written notice
to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
SECTION 11.05. Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.06. Separate Counterparts. This Agreement may be executed by
---------------------
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and agreements
-----------------------
contained herein shall be binding upon, and inure to the benefit of, each of the
Depositor, the Company and its permitted assignees, the Owner Trustee and its
successors and each Owner and its successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of such
Owner.
SECTION 11.08. Covenants of Company. In the event that any litigation
--------------------
with claims in excess of $1,000,000 to which the Company is a party which shall
be reasonably likely to result in a material judgment against the Company that
the Company will not be able to satisfy shall be commenced by an Owner, during
the period beginning nine months following the commencement of such litigation
and continuing until such litigation is dismissed or otherwise terminated (and,
if such litigation has resulted in a final judgment against the Company, such
judgment has been satisfied), the Company shall not make any distribution on or
in respect of its membership interests to any of its members, or repay the
principal amount of any indebtedness of the Company held by CFC, unless (i)
after giving effect to such distribution or repayment, the Company's liquid
assets shall not be less than the amount of actual damages claimed in such
litigation or (ii) the Rating Agency Condition shall have been satisfied with
respect to any such distribution or repayment. The Company will not at any time
institute against the Trust any bankruptcy proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Certificates, the Notes, this Agreement or any of the Basic
Documents.
SECTION 11.09. No Petition. The Owner Trustee, by entering into this
-----------
Agreement, each Certificateholder, by accepting a Certificate, and the Indenture
Trustee and each Noteholder, by accepting the benefits of this Agreement, hereby
covenant and agree that they will not at any time institute against the Company
or the Trust, or join in any institution against the Company or the Trust of,
any bankruptcy proceedings under any United States federal or state bankruptcy
or similar law in connection with any obligations relating to the Certificates,
the Notes, this Agreement or any of the Basic Documents.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a
------------
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, the Servicer, the Company, the Administrator, the
Owner Trustee, the Indenture Trustee or any Affiliate thereof and no recourse
may be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, the Certificates or the Basic
Documents.
SECTION 11.11. Headings. The headings of the various Articles and
---------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, 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 11.13. Certificate Transfer Restrictions. The Certificates may
---------------------------------
not be acquired by or for the account of (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding a
Certificate, the Holder thereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
SECTION 11.14. Depositor Payment Obligation. The Depositor shall be
------------------------------
responsible for payment of the Administrator's fees under the Administration
Agreement and shall reimburse the Administrator for all expenses and liabilities
of the Administrator incurred thereunder. In addition, the Depositor shall be
responsible for the payment of all fees and expenses of the Trust, the Owner
Trustee and the Indenture Trustee paid by any of them in connection with any of
their obligations under the Basic Documents to obtain or maintain any required
license under the Pennsylvania Motor Vehicle Sales Finance Act.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
CHRYSLER FINANCIAL COMPANY L.L.C.,
as Depositor
By: _________________________________
Name:
Title:
[_______________________]
By:[_________________________],
By: __________________________________
Name:
Title:
[______________________],
not in its individual capacity but solely
as Owner Trustee
By:___________________________________
Name:
Title:
EXHIBIT A-1
Form of Trust Certificate
-------------------------
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN
SECTION 3.04 OF THE TRUST AGREEMENT UNDER WHICH THIS CERTIFICATE IS ISSUED (A
COPY OF WHICH TRUST AGREEMENT IS AVAILABLE FROM THE OWNER TRUSTEE OR UPON
REQUEST), INCLUDING RECEIPT BY THE OWNER TRUSTEE OF AN INVESTMENT LETTER IN
WHICH THE TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
NUMBER Percentage
R-__ Interest: ____%
PREMIER AUTO TRUST ____-_
TRUST CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used automobiles and light duty trucks.
(This Trust Certificate does not represent an interest in or obligation of
Chrysler Financial Company L.L.C. or any of its affiliates, except to the extent
described below.)
THIS CERTIFIES THAT ______________________________________. is the
registered owner of a __________________________________ PERCENT nonassessable,
fully-paid, undivided percentage interest in Premier Auto Trust ___-_ (the
"Trust"), formed by Chrysler Financial Company L.L.C., a Michigan limited
liability company (the "Depositor"), and [___________________]., a [__________]
[___________________] (the "Company").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust
Agreement.
[____________________________________],
[____________________________________], or as Owner Trustee
as Owner Trustee
By: [____________________________],
as Authenticating Agent
by:___________________________________ by: ___________________________________
Authorized Signatory Authorized Signatory
The Trust was created pursuant to a Trust Agreement dated as of
[______________], 199_, as amended and restated by an Amended and Restated Trust
Agreement dated as of [______________], 199_, (as so amended and restated and
further amended or supplemented from time to time, the "Trust Agreement"), among
the Depositor, the Company and [______________], as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Trust Agreement or the
Sale and Servicing Agreement dated as of [______________], 199_ (as amended and
supplemented from time to time, the "Sale and Servicing Agreement"), between the
Trust and the Depositor, as seller and as servicer (in such capacity, the
"Servicer"), as applicable.
This Trust Certificate is one of the duly authorized class of
certificates designated as "Trust Certificates" (herein called the "Trust
Certificates"). Also issued under the Trust Agreement is a duly authorized class
of certificates designated as "Overcollateralization Certificates" (the
"Overcollateralization Certificates" and, together with the Trust Certificates,
the "Certificates"). Also issued under an Indenture dated as of
[______________], 199_ (the "Indenture"), between the Trust and
[______________], as indenture trustee, are the four classes of Notes designated
as "Class A-1 [___]% Asset Backed Notes," "Class A-2 [___]% Asset Backed Notes,"
"Class A-3 [___]% Asset Backed Notes" and "Class A-4 [___]% Asset Backed Notes"
(collectively, the "Notes"). This Trust Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the Holder of this Trust Certificate by virtue of its acceptance
hereof assents and by which such Holder is bound. The property of the Trust
consists of a pool of retail installment sale contracts for new and used
automobiles and light duty trucks (collectively, the "Receivables"), all monies
received on or after [___________], 199_, security interests in the vehicles
financed thereby, certain bank accounts and the proceeds thereof, proceeds from
claims on certain insurance policies and certain other rights under the Trust
Agreement and the Sale and Servicing Agreement and all proceeds of the
foregoing.
It is the intent of the Depositor, the Company, the Servicer and the
Certificateholder that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust will be treated as
a security arrangement for the issuance of debt by the sole Certificateholder.
The Company, by acceptance of the Trust Certificates, agrees to treat, and to
take no action inconsistent with the above treatment for so long as the Company
is the sole Owner.
Solely in the event the Certificates are held by more than a single
Owner, it is the intent of the Depositor, the Company, the Servicer and the
Certificateholders that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust will be treated as
a partnership and the Certificateholders (including the Company) will be treated
as partners in the partnership. The Company and the other Certificateholders, by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with the Treatment of, the Certificates for such tax purposes as partnership
interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate covenants
and agrees that such Certificateholder will not at any time institute against
the Company, or join in any institution against the Company of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Trust Certificates, the
Notes, the Trust Agreement or any of the Basic Documents.
Distributions on this Trust Certificate will be made as provided in the
Trust Agreement by the Paying Agent by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Trust Certificate or the making of any notation hereon.
Except as otherwise provided in the Trust Agreement and notwithstanding the
above, the final distribution on this Trust Certificate will be made after due
notice by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Trust Certificate at the office or agency
maintained for that purpose by the Paying Agent in the Borough of Manhattan, The
City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the Holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, 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.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Trust Certificate to be duly
executed.
PREMIER AUTO TRUST _____-_
by: [___________], not in its individual
capacity but solely as Owner Trustee
Dated: _________________ by: ____________________________________
Authorized Signatory
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Company, the Owner Trustee or any
affiliates of any of them and no recourse may be had against such parties or
their assets, except as expressly set forth or contemplated herein or in the
Trust Agreement or the Basic Documents. In addition, this Trust Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Receivables (and certain other amounts), all as more specifically set forth
herein and in the Sale and Servicing Agreement. A copy of each of the Sale and
Servicing Agreement and the Trust Agreement may be examined by any
Certificateholder upon written request during normal business hours at the
principal office of the Depositor and at such other places, if any, designated
by the Depositor.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Company and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor, the Company and the Owner Trustee
with the consent of the Holders of the Trust Certificates, the
Overcollateralization Certificates and the Notes, each voting as a class,
evidencing not less than a majority of the Percentage Interests evidenced by the
outstanding Trust Certificates, or a majority of the Certificate Balance
evidenced by the Overcollateralization Certificates or a majority of the
outstanding principal balance of the Notes of each such class. Any such consent
by the Holder of this Trust Certificate shall be conclusive and binding on such
Holder and on all future Holders of this Trust Certificate and of any Trust
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent is made upon this Trust
Certificate. The Trust Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in the
Certificate Register upon surrender of this Trust Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Borough of Manhattan, The City of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Trust Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is [___________],
[___________], [_______________].
Except as provided in the Trust Agreement, the Trust Certificates are
issuable only as registered Trust Certificates. As provided in the Trust
Agreement and subject to certain limitations therein set forth, Trust
Certificates are exchangeable for new Trust Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the Person in whose name this
Trust Certificate is registered as the owner hereof for all purposes, and none
of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the Sale and Servicing Agreement and the disposition of all property held as
part of the Owner Trust Estate. The Servicer of the Receivables may at its
option purchase the Owner Trust Estate at a price specified in the Sale and
Servicing Agreement, and such purchase of the Receivables and other property of
the Trust will effect early retirement of the Trust Certificates; provided,
however, such right of purchase is exercisable only as of the last day of any
Collection Period as of which the Pool Balance is less than or equal to 10% of
the Original Pool Balance.
The Trust Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity or which uses plan assets to acquire Trust Certificates
(each, a "Benefit Plan"). By accepting and holding this Trust Certificate, the
Holder hereof shall be deemed to have represented and warranted that it is not a
Benefit Plan.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, and hereby irrevocably
constitutes and appoints , attorney, to transfer said Trust Certificate on the
books of the Certificate Registrar, with full power of substitution in the
premises.
Dated: ________________________________________*/
Signature Guaranteed:
____________________________*/
- -----------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Trust
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be determined
by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
EXHIBIT A-2
Form of Overcollateralization Certificate
-----------------------------------------
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN
SECTION 3.04 OF THE TRUST AGREEMENT UNDER WHICH THIS CERTIFICATE IS ISSUED (A
COPY OF WHICH TRUST AGREEMENT IS AVAILABLE FROM THE OWNER TRUSTEE OR UPON
REQUEST), INCLUDING RECEIPT BY THE OWNER TRUSTEE OF AN INVESTMENT LETTER IN
WHICH THE TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
No. R-__ Initial Principal Balance: $____________
PREMIER AUTO TRUST _____-_
OVERCOLLATERALIZATION CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used automobiles and light duty trucks.
(This Overcollateralization Certificate does not represent an interest in or
obligation of Chrysler Financial Company L.L.C. or any of its affiliates, except
to the extent described below.)
THIS CERTIFIES THAT _________________________________ is the registered
owner of _______________________________________________ nonassessable,
fully-paid, fractional undivided interest in Premier Auto Trust ___-__ (the
"Trust"), formed by Chrysler Financial Company L.L.C., a Michigan limited
liability company (the "Depositor"), and [___________] , a [___________]
[___________] (the "Company").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Overcollateralization Certificates referred to in the
within-mentioned Trust Agreement.
[___________], as Owner Trustee [___________],
or as Owner Trustee
by: [___________],
as Authenticating Agent
by:________________________________
Authorized Signatory by: _____________________________
Authorized Signatory
The Trust was created pursuant to a Trust Agreement dated as of
[___________], 199_, as amended and restated by an Amended and Restated Trust
Agreement dated as of [___________], 199_, (as so amended and restated and
further amended or supplemented from time to time, the "Trust Agreement"), among
the Depositor, the Company and [___________], as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Trust Agreement or the
Sale and Servicing Agreement dated as of [___________], 199_ (as amended and
supplemented from time to time, the "Sale and Servicing Agreement"), between the
Trust and the Depositor, as seller and as servicer (in such capacity, the
"Servicer"), as applicable.
This Overcollateralization Certificate is one of the duly authorized
class of certificates designated as "Overcollateralization Certificates" (herein
called the "Overcollateralization Certificates"). Also issued under the Trust
Agreement is a duly authorized class of certificates designated as "Trust
Certificates" (the "Trust Certificates" and, together with the
Overcollateralization Certificates, the "Certificates"). Also issued under an
Indenture dated as of [___________], 199_ (the "Indenture"), between the Trust
and [__________], as indenture trustee, are the four classes of Notes designated
as "Class A-1 [___]% Asset Backed Notes," "Class A-2 [___]% Asset Backed Notes,"
"Class A-3 [___]% Asset Backed Notes" and "Class A-4 [___]% Asset Backed Notes"
(collectively, the "Notes"). This Overcollateralization Certificate is issued
under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the Holder of this Overcollateralization
Certificate by virtue of its acceptance hereof assents and by which such Holder
is bound. The property of the Trust consists of a pool of retail installment
sale contracts for new and used automobiles and light duty trucks (collectively,
the "Receivables"), all monies received on or after [___________], 199_,
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement and the Sale and Servicing
Agreement and all proceeds of the foregoing.
It is the intent of the Depositor, the Company, the Servicer and the
Certificateholder that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust will be treated as
a security arrangement for the issuance of debt by the sole Certificateholder.
The Company, by acceptance of the Overcollateralization Certificates, agrees to
treat, and to take no action inconsistent with the above treatment for so long
as the Company is the sole Owner.
Solely in the event the Certificates are held by more than a single
Owner, it is the intent of the Depositor, the Company, the Servicer and the
Certificateholders that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust will be treated as
a partnership and the Certificateholders (including the Company) will be treated
as partners in the partnership. The Company and the other Certificateholders, by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with the Treatment of, the Certificates for such tax purposes as partnership
interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate covenants
and agrees that such Certificateholder will not at any time institute against
the Company, or join in any institution against the Company of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Overcollateralization
Certificates, the Notes, the Trust Agreement or any of the Basic Documents.
Distributions on this Overcollateralization Certificate will be made as
provided in the Trust Agreement by the Paying Agent by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Overcollateralization Certificate or the
making of any notation hereon. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Overcollateralization Certificate will be made after due notice by the Owner
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Overcollateralization Certificate at the office or agency
maintained for that purpose by the Paying Agent in the Borough of Manhattan, The
City of New York.
Reference is hereby made to the further provisions of this
Overcollateralization Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Overcollateralization Certificate shall not entitle the Holder hereof to
any benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
THIS OVERCOLLATERALIZATION CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, 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.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Overcollateralization Certificate to
be duly executed.
PREMIER AUTO TRUST ____-_
by: [___________], not in its
individual capacity but solely
as Owner Trustee
Dated: _____________________ by: __________________________________
Authorized Signatory
[REVERSE OF OVERCOLLATERALIZATION CERTIFICATE]
The Overcollateralization Certificates do not represent an obligation
of, or an interest in, the Depositor, the Servicer, the Company, the Owner
Trustee or any affiliates of any of them and no recourse may be had against such
parties or their assets, except as expressly set forth or contemplated herein or
in the Trust Agreement or the Basic Documents. In addition, this
Overcollateralization Certificate is not guaranteed by any governmental agency
or instrumentality and is limited in right of payment to certain collections and
recoveries with respect to the Receivables (and certain other amounts), all as
more specifically set forth herein and in the Sale and Servicing Agreement. A
copy of each of the Sale and Servicing Agreement and the Trust Agreement may be
examined by any Certificateholder upon written request during normal business
hours at the principal office of the Depositor and at such other places, if any,
designated by the Depositor.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Company and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor, the Company and the Owner Trustee
with the consent of the Holders of the Trust Certificates, the
Overcollateralization Certificates and the Notes, each voting as a class,
evidencing not less than a majority of the Percentage Interests evidenced by the
outstanding Trust Certificates, or a majority of the Certificate Balance
evidenced by the Overcollateralization Certificates or a majority of the
outstanding principal balance of the Notes of each such class. Any such consent
by the Holder of this Overcollateralization Certificate shall be conclusive and
binding on such Holder and on all future Holders of this Overcollateralization
Certificate and of any Overcollateralization Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent is made upon this Overcollateralization Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Overcollateralization Certificate is
registerable in the Certificate Register upon surrender of this
Overcollateralization Certificate for registration of transfer at the offices or
agencies of the Certificate Registrar maintained by the Owner Trustee in the
Borough of Manhattan, The City of New York, accompanied by a written instrument
of transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Overcollateralization
Certificates of authorized denominations evidencing the same aggregate interest
in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is [___________],
[___________], [___________].
Except as provided in the Trust Agreement, the Overcollateralization
Certificates are issuable only as registered Overcollateralization Certificates
in minimum denominations of $1,000,000 principal amount of Certificate Balance
and in integral multiples of $1,000 in excess thereof. As provided in the Trust
Agreement and subject to certain limitations therein set forth,
Overcollateralization Certificates are exchangeable for new
Overcollateralization Certificates of authorized denominations evidencing the
same aggregate denomination, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the Person in whose name this
Overcollateralization Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar or any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the Sale and Servicing Agreement and the disposition of all property held as
part of the Owner Trust Estate. The Servicer of the Receivables may at its
option purchase the Owner Trust Estate at a price specified in the Sale and
Servicing Agreement, and such purchase of the Receivables and other property of
the Trust will effect early retirement of the Overcollateralization
Certificates; provided, however, such right of purchase is exercisable only as
of the last day of any Collection Period as of which the Pool Balance is less
than or equal to 10% of the Original Pool Balance.
The Overcollateralization Certificates may not be acquired by (a) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (b) a plan described in Section 4975(e)(1)
of the Code or (c) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity or which uses plan assets to acquire
Overcollateralization Certificates (each, a "Benefit Plan"). By accepting and
holding this Overcollateralization Certificate, the Holder hereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
the within Overcollateralization Certificate, and all rights thereunder, and
hereby irrevocably constitutes and appoints _____________, attorney, to transfer
said Overcollateralization Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated: ________________________________________*/
Signature Guaranteed:
____________________________*/
- -----------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within
Overcollateralization Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in addition
to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT B
Form of Certificate of Trust of Premier Auto Trust ___-_
--------------------------------------------------------
THIS Certificate of Trust of Premier Auto Trust ____-_ (the "Trust"),
dated ___________, 199_, is being duly executed and filed by [___________], a
[___________], as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. Code, ss. 3801 et seq.).
1. Name. The name of the business trust formed hereby is PREMIER AUTO
----
TRUST ____-_.
2. Delaware Trustee. The name and business address of the trustee of
-----------------
the Trust in the State of Delaware is [___________], [___________],[___________]
, Attention: Corporate Trustee Administration Department.
3. Effective Date. This Certificate of Trust shall be effective upon
---------------
its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
[-----------],
not in its individual capacity but
as owner trustee under the Trust Agreement
dated as of ____________, 199__-__
by:_______________________________________
Name:
Title:
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE
------------------------------
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust ____-_
[Trust] [Overcollateralization] Certificates
--------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-referenced [Trust]
[Overcollateralization] Certificates (the "Certificates") we certify that (a) we
understand that the Certificates have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being transferred by us in a
transaction that is exempt from the registration requirements of the Act and (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By:_______________________________________
Authorized Officer
EXHIBIT D
FORM OF INVESTMENT LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust ____-_
[Trust] [Overcollateralization] Certificates
--------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced [Trust]
[Overcollateralization] Certificates (the "Certificates") we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor,"
as defined in Regulation D under the Act, and have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of investments in the Certificates, (c) we have had the opportunity to
ask questions of and receive answers from the seller concerning the purchase of
the Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificates, (d) we are
acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (f) below), (e) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action that would result in a violation of Section 5 of the Act
or any state securities laws and (f) we will not sell, transfer or otherwise
dispose of any Certificates unless (1) such sale, transfer or other disposition
is made pursuant to an effective registration statement under the Act and in
compliance with any relevant state securities laws or is exempt from such
registration requirements and, if requested, we will at our expense provide an
Opinion of Counsel satisfactory to the addresses of this certificate that such
sale, transfer or other disposition may be made pursuant to an exemption from
the Act, (2) the purchaser or transferee of such Certificate has executed and
delivered to you a certificate to substantially the same effect as this
certificate and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Amended and Restated Trust dated as of
[___________], 199_, between Chrysler Financial Company L.L.C., as Depositor,
[___________] and [___________], as Owner Trustee.
Very truly yours,
[NAME OF TRANSFEROR]
By:___________________________________
Authorized Officer
EXHIBIT E
FORM OF RULE 144A LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust ___-_
[Trust] [Overcollateralization] Certificates
--------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced [Trust]
[Overcollateralization] Certificates (the "Certificates") we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of investments in the Certificates, (c) we have had the
opportunity to ask questions of and receive answers from the seller concerning
the purchase of the Certificates and all matters relating thereto or any
additional information deemed necessary to our decision to purchase the
Certificates, (d) we have not, nor has anyone acting on our behalf, offered,
transferred, pledged, sold or otherwise disposed of the Certificates or any
interest in the Certificates, or solicited any offer to buy, transfer, pledge or
otherwise dispose of the Certificates or any interest in the Certificates from
any person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action that would
constitute a distribution of the Certificates under the Act or that would render
the disposition of the Certificates a violation of Section 5 of the Act or any
state securities laws or require registration pursuant thereto, and we will not
act, or authorize any person to act, in such manner with respect to the
Certificates, (e) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Act. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A or (ii) pursuant to another exemption from registration under the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By:_________________________________________
Authorized Officer
EXHIBIT 4.3
==============================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
Chrysler Financial Company L.L.C.,
----------------------------------
as Depositor,
[ ]
-------------------------
and
[ ]
-------------------------
as Owner Trustee
Dated as of , 199
--------- -
==============================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms........................................ 1
SECTION 1.02. Other Definitional Provisions............................ 4
ARTICLE II
Organization
SECTION 2.01. Name..................................................... 4
SECTION 2.02. Office................................................... 4
SECTION 2.03. Purposes and Powers...................................... 5
SECTION 2.04. Appointment of Owner Trustee............................. 5
SECTION 2.05. Initial Capital Contribution of Series Owner Trust
Estate................................................... 6
SECTION 2.06. Declaration of Trust..................................... 6
SECTION 2.07. Liability of Owners...................................... 6
SECTION 2.08. Title to Trust Property.................................. 6
SECTION 2.09. Situs of Trust........................................... 6
SECTION 2.10. Subdivision.............................................. 7
SECTION 2.11. Representations and Warranties of Depositor and
Company.................................................. 8
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Ownership; Beneficial Interests in the Trust..... 10
SECTION 3.02. The Trust Certificates................................... 10
SECTION 3.03. Authentication of Trust Certificates..................... 10
SECTION 3.04. Registration of Transfer and Exchange of Trust
Certificates............................................. 10
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust
Certificates............................................. 12
SECTION 3.06. Persons Deemed Owners.................................... 12
SECTION 3.07. Access to List of Certificateholders' Names and
Addresses................................................ 12
SECTION 3.08. Maintenance of Office or Agency.......................... 13
SECTION 3.09. Appointment of Paying Agent.............................. 13
SECTION 3.10. Fixed Value Securities................................... 13
SECTION 3.11. Definitive Trust Certificates............................ 15
ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice to Owners with Respect to Certain Matters... 15
SECTION 4.02. Action by Owners with Respect to Certain Matters......... 15
SECTION 4.03. Action by Owners with Respect to Bankruptcy.............. 16
SECTION 4.04. Restrictions on Owners' Power............................ 16
SECTION 4.05. Majority Control......................................... 16
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account........................... 16
SECTION 5.02. Application of Trust Funds............................... 17
SECTION 5.03. Method of Payment........................................ 17
SECTION 5.04. No Segregation of Moneys; No Interest.................... 17
SECTION 5.05. Accounting and Reports to Owners, Internal Revenue
Service and Others....................................... 17
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority........................................ 18
SECTION 6.02. General Duties........................................... 18
SECTION 6.03. Action upon Instruction.................................. 19
SECTION 6.04. No Duties Except as Specified in this Agreement or in
Instructions............................................. 20
SECTION 6.05. No Action Except Under Specified Documents or
Instructions............................................. 20
SECTION 6.06. Restrictions............................................. 20
ARTICLE VII
Concerning Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties.......................... 20
SECTION 7.02. Furnishing of Documents.................................. 22
SECTION 7.03. Representations and Warranties........................... 22
SECTION 7.04. Reliance; Advice of Counsel.............................. 22
SECTION 7.05. Not Acting in Individual Capacity........................ 23
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or
Receivables.............................................. 23
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes....... 23
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act Licenses.... 23
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses........................ 24
SECTION 8.02. Indemnification.......................................... 24
SECTION 8.03. Payments to Owner Trustee................................ 24
ARTICLE IX
Dissolution and Termination of Trust Agreement
SECTION 9.01. Dissolution of the Trust and Termination of Trust
Agreement................................................ 24
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee............ 26
SECTION 10.02. Resignation or Removal of Owner Trustee............... 26
SECTION 10.03. Successor Owner Trustee............................... 26
SECTION 10.04. Merger or Consolidation of Owner Trustee.............. 27
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee......... 27
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments............................ 28
SECTION 11.02. No Legal Title to any Series Owner Trust Estate in
Owners................................................ 30
SECTION 11.03. Limitations on Rights of Others....................... 30
SECTION 11.04. Notices............................................... 30
SECTION 11.05. Severability.......................................... 30
SECTION 11.06. Separate Counterparts................................. 30
SECTION 11.07. Successors and Assigns................................ 31
SECTION 11.08. Covenants of Company.................................. 31
SECTION 11.09. No Petition........................................... 31
SECTION 11.10. No Recourse........................................... 31
SECTION 11.11. Headings.............................................. 31
SECTION 11.12. GOVERNING LAW......................................... 31
SECTION 11.13. Trust Certificate Transfer Restrictions............... 32
SECTION 11.14. Depositor Payment Obligation.......................... 32
EXHIBITS
EXHIBIT A Form of Trust Certificate...................................A-1
EXHIBIT B Form of Certificate of Trust of Premier Auto Trust - .....B-1
-- -
EXHIBIT C Form of Transferor Certificate..............................C-1
EXHIBIT D Form of Investment Letter...................................D-1
EXHIBIT E Form of Rule 144A Letter....................................E-1
EXHIBIT F Form of Supplement .........................................F-1
AMENDED AND RESTATED TRUST AGREEMENT dated as of , 199 , among
------- -
Chrysler Financial Company L.L.C., a Michigan limited liability company,
as depositor (the "Depositor"), [ ] (the
--------------------------
"Company"), a , and
----------------------------------
[ ], a , as owner
------------------------------ ----------- --------------
trustee (the "Owner Trustee").
WHEREAS, the Depositor, the Owner Trustee and the Company entered into a
Trust Agreement dated as of , 199 (the "Trust Agreement");
----------- -
WHEREAS, the Trust Agreement is being amended and restated as of ,
-------
199 ;
-
WHEREAS, the Trust may purchase Receivables from the Depositor from time
to time; each group of Receivables so purchased will support a separate series
of Notes and/or Certificate issued by the Trust from time to time;
WHEREAS, the Depositor and the Company may enter into separate Purchase
Agreements from time to time, pursuant to which the Depositor will assign to
the Company any and all of the Depositor's rights and interests with respect
to the receipt of amounts from the Reserve Account for a Series and with
respect to any Fixed Value Payments for a Series; and
WHEREAS, in connection therewith, the Company is willing to assume
certain obligations pursuant hereto;
NOW, THEREFORE, the Depositor, the Company and the Owner Trustee hereby
agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms. For all purposes of this Agreement, the
-----------------
following terms shall have the meanings set forth below:
"Administration Agreement:" with respect to a Series, as defined in the
-------------------------
related Supplement.
"Administration" shall mean Chrysler Financial Company L.L.C. and its
--------------
successors and permitted assigns.
"Agreement" shall mean this Amended and Restated Trust Agreement and all
---------
amendments hereof and supplements hereto, including each Supplement.
"Basic Documents" shall mean, with respect to a Series, the Purchase
----------------
Agreement, the Sale and Servicing Agreement, the Indenture, the Administration
Agreement and the Note Depository Agreement, each as defined in the related
Supplement, and the other documents and certificates delivered in connection
therewith.
"Benefit Plan" shall have the meaning assigned to such term in Section
-------------
11.13.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
------------------------
Delaware Code, 12 Del. Code Section 3801 et seq., as the same may be amended
---- ----
from time to time.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
--------------------
Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the
--------------------- ----------------------
register mentioned in and the registrar appointed pursuant to Section 3.04.
"Certificateholder" or "Holder" shall mean a Person in whose name a
----------------- ------
Trust Certificate is registered.
"CFC" shall mean Chrysler Financial Company L.L.C., a Michigan
---
limited liability company, and any successor in interest.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
----
Treasury Regulations promulgated thereunder.
"Company": with respect to a Series, as defined in the related
-------
Supplement.
"Corporate Trust Office" shall mean, with respect to the Owner
------------------------
Trustee, the principal corporate trust office of the Owner Trustee located at
______________________________, ______________, or at such other address as
the Owner Trustee may designate by notice to the Owners, the Depositor and the
Company, or the principal corporate trust office of any successor Owner
Trustee at the address designated by such successor Owner Trustee by notice to
the Owners, the Depositor and the Company.
"Depositor" shall mean CFC in its capacity as depositor hereunder.
---------
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
-------------
amended.
"Expenses" shall have the meaning assigned to such term in Section
--------
8.02.
"Indemnified Parties" shall have the meaning assigned to such term in
-------------------
Section 8.02.
"Indenture": with respect to a Series, as defined in the related
---------
Supplement.
"Note Depository Agreement": with respect to a Series, as defined in
-------------------------
the related Supplement.
"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.
2
"Owner" shall mean each Holder of a Trust Certificate.
-----
"Owner Trustee" shall mean _____________________________, a
---------------
___________________________ corporation, not in its individual capacity but
solely as owner trustee under this Agreement, and any successor Owner Trustee
hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent
-------------
appointed pursuant to Section 3.09 and shall initially be
________________________.
"Percentage Interest" means, as to any Trust Certificate of any
--------------------
Series, the percentage interest, specified on the face thereof, in the
distributions on the Trust Certificates of such Series pursuant to this
Agreement and the related Supplement.
"Record Date" shall mean, with respect to any Distribution Date, the
-----------
15th day of the month preceding such Distribution Date.
"Sale and Servicing Agreement": with respect to a Series, as defined
----------------------------
in the related Supplement.
"Secretary of State" shall mean the Secretary of State of the State
-------------------
of Delaware.
"Series" shall mean any series of Notes and/or Trust Certificates,
------
which may include a class or classes of Notes and/or Trust Certificates.
"Series Certificate Distribution Account" shall have the meaning
------------------------------------------
assigned to such term in Section 5.01.
"Series Owner Trust Estate": with respect to a Series, as defined in
-------------------------
the related Supplement.
"Subdivision" shall mean, with respect to a Series, a separate
-----------
subdivision of this Trust, within the meaning of Section 3806(b)(2) of the
Business Trust Statute, containing assets separate and apart from all other
assets of the Trust, all as specified in the related Supplement.
"Supplement" shall mean, with respect to a Series, a supplement to
----------
this Agreement executed in connection with the issuance of a Series of Notes
and/or Trust Certificates.
"Treasury Regulations" shall mean regulations, including proposed or
--------------------
temporary Regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
-----
"Trust Certificate" shall mean a certificate evidencing the
-------------------
beneficial interest of an Owner in the Trust, or, if specified in such
certificate, in a separate Subdivision for a Series substantially in the form
attached hereto as Exhibit A.
SECTION 1.02. Other Definitional Provisions. (a) With respect to a
-------------------------------
Series, capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Sale and Servicing Agreement for such Series
or, if not defined therein, in the Indenture for such Series.
(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; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
Organization
------------
SECTION 2.01. Name. The Trust created hereby shall be known as
----
"Premier Auto Trust ____-_," in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care of the
------
Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the Owners,
the Depositor and the Company.
SECTION 2.03. Purposes and Powers. (a) The purpose of the Trust is to
-------------------
engage in the following activities:
(i) to issue one or more Series of Notes pursuant to the
related Indenture or Indentures and one or more Series of the Trust
Certificates pursuant to this Agreement and the related Supplement or
Supplements and to sell the Notes and the Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the
Trust Certificates of a Series, to purchase the Receivables for such
Series, to fund the Reserve Account, if any, for such Series, and to
pay the balance to the Depositor pursuant to the Sale and Servicing
Agreement for such Series;
(iii) to pay the organizational, start-up and transactional
expenses of the Trust for each Series;
(iv) to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate of a Series pursuant to the Indenture for
such Series and to hold, manage and distribute to the Owners pursuant
to the terms of the Sale and Servicing Agreement for such Series any
portion of the Trust Estate of such Series released from the Lien of,
and remitted to the Trust pursuant to, such Indenture;
(v) to enter into and perform its obligations under the
Basic Documents for each Series to which it is to be a party;
(vi) to sell the Fixed Value Payments of a Series to the
Depositor and, if requested by the Company for such Series (as
assignee of the Depositor), subsequently to acquire the related Fixed
Value Payments and to issue and sell the Fixed Value Securities;
(vii) to engage in those activities, including entering
into agreements, that are necessary or suitable to accomplish the
foregoing or are incidental thereto or connected therewith; and
(viii) subject to compliance with the Basic Documents of
each Series, to engage in such other activities as may be required in
connection with conservation of the Series Owner Trust Estate for
such Series and the making of distributions to the related Owners and
the related Noteholders and in respect of the Fixed Value Securities
for such Series.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the Basic Documents for a Series.
SECTION 2.04. Appointment of Owner Trustee. The Depositor hereby
------------------------------
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein and in the
Business Trust Statute.
SECTION 2.05. Initial Capital Contribution of Series Owner Trust
-----------------------------------------------------
Estate. The Depositor hereby sells, assigns, transfers, conveys and sets over
- ------
to the Owner Trustee, as of the date hereof, the sum of $1. The Owner Trustee
hereby acknowledges receipt in trust from the Depositor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial
Series Owner Trust Estate and shall be deposited in the Certificate
Distribution Account. The Depositor shall pay organizational expenses of the
Trust as they may arise or shall, upon the request of the Owner Trustee,
promptly reimburse the Owner Trustee for any such expenses paid by the Owner
Trustee.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby declares
--------------------
that it will hold each Series Owner Trust Estate in trust upon and subject to
the conditions set forth herein and the related Supplement for the use and
benefit of the related Owners, subject to the obligations of the Trust under
the related Basic Documents. It is the intention of the parties hereto that
the Trust constitute a business trust under the Business Trust Statute and
that this Agreement constitute the governing instrument of such business
trust. It is the intention of the parties hereto that, solely for income and
franchise tax purposes, with respect to each Series and the related
Subdivision (i) so long as there is a sole Owner with respect to such
Subdivision, such Subdivision shall be treated as a security arrangement, with
the assets of such Subdivision being the Receivables and other assets held in
such Subdivision, the owner of such Receivables being the sole Owner and the
Notes of such Series being non-recourse debt of such sole Owner and (ii) if
there is more than one Owner, such Subdivision shall be treated as a
partnership for income and franchise tax purposes, with the assets of the
partnership being the related Receivables and other assets held by the Trust
in such Subdivision, the partners of the partnership being such Owners
(including the Company as assignee of the Depositor pursuant to the Purchase
Agreement for such Series, in its capacity as recipient of distributions from
the Reserve Account for such Series) and such Notes being debt of the
partnership. The parties agree that, unless otherwise required by appropriate
tax authorities, the Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the
characterization of the Trust and its Subdivisions as provided in the
preceding sentence for such tax purposes. Effective as of the date hereof, the
Owner Trustee shall have all rights, powers and duties set forth herein and in
the Business Trust Statute with respect to accomplishing the purposes of the
Trust.
SECTION 2.07. Liability of Owners. The Owners (including the Company)
-------------------
shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the general
corporation law of the State of Delaware.
SECTION 2.08. Title to Trust Property. Legal title to all of the
------------------------
Series Owner Trust Estate of each Series shall be vested at all times in the
Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of a Series Owner Trust Estate to be
vested in a trustee or trustees, in which case title shall be deemed to be
vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the
case may be.
SECTION 2.09. Situs of Trust. The Trust will be located and
----------------
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware
or the State of New York. The Trust shall not have any employees in any state
other than Delaware; provided, however, that nothing herein shall restrict or
prohibit the Owner Trustee from having employees within or without the State
of Delaware. Payments will be received by the Trust only in Delaware or New
York, and payments will be made by the Trust only from Delaware or New York.
The only office of the Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. Subdivision. (a) Each Supplement for a Series will
-----------
create a separate Subdivision, which shall contain the Series Owner Trust
Estate for such Series, which will consist of the Receivables and other assets
specified in such Supplement. The holders of the Notes and Trust Certificates
of a Series shall only have an interest in and rights and claims to the
Subdivision for such Series and the Series Owner Trust Estate for such
Subdivision, and shall not have, and hereby agree that they will not have, any
interest in or rights or claims to the Subdivision for any other Series and
the related Series Owner Trust Estate. The holders of the Trust Certificates
of any Series shall not have legal title to any part of the Series Owner Trust
Estate related to such Series of Trust Certificates.
(b) Upon the written direction of the Depositor, the Owner Trustee
and the Depositor shall enter into one or more Supplements, providing for the
issuance of separate Series of Trust Certificates. Each Series shall be a
separate Series of the Trust within the meaning of Section 3806(b)(2) of the
Business Trust Statute. Separate and distinct records (including tax records)
shall be maintained for each Series and the Series Owner Trust Estate
associated with each such Series shall be maintained for each Series and the
Series Owner Trust Estate associated with each such Series shall be held in
the Trust and accounted for separately from the Series Owner Trust Estate of
any other Series. Except as specified in this Agreement or in any Supplement,
the Series Owner Trust Estate of any Series shall not be subject to claims,
debts, liabilities, expenses or obligations arising from or with respect to
the Trust or any other Series. The debts, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the related Series Owner Trust Estate only and not
against the assets of the Trust generally or any other Series. Notice of this
limitation on inter-series liabilities shall be set forth in the Certificate
of Trust (whether originally or by amendment) as filed with the Secretary of
State pursuant to the Business Trust Statute, and upon the giving of such
notice in the Certificate of Trust, the statutory provisions of Section 3804
of the Business Trust Statute relating to limitations on inter-series
liabilities (and the statutory effect under Section 3804 of setting forth such
notice in the Certificate Trust) shall become applicable to the Trust and each
Series of Trust Certificates.
(c) Each Supplement shall contain provisions requiring that neither
the Depositor nor any Holder of a Trust Certificate of the related Series of
Trust Certificates shall direct the Owner Trustee to (i) take any action that
would cause the Series Owner Trust Estate of the related Series to be
substantively consolidated into any other Series Owner Trust Estate of any
other Series such that it will have its separate existence disregarded in the
event of an insolvency event with respect to any Certificateholder of such
Series, the Trust or another Series, (ii) to commingle any of the Series Owner
Trust Estate of the related Series with the Series Owner Trust Estate of any
other Series, (iii) to maintain the corporate, financial and accounting books
and records and statements of the related Series, if any, in a manner such
that they cannot be separated from those of any other Series, (iv) to take any
action that would cause (a) the funds and other assets of the related Series,
if any, not be identifiable or the bank accounts, corporate records and books
of account, if any, of the related Series not to be inseparable from those of
any other Series and (b) the Trust to pay, other than from assets of the
related Series, any obligations or indebtedness of any kind incurred by the
related Series and payable by the Trust pursuant to this agreement, (v) to
maintain the assets and liabilities of the related Series so that they are not
readily ascertainable from those of any other Series and subject to
segregation without requiring substantial time or expense to effect and
account for such segregated assets and liabilities, (vi) to take any actions
with respect to the related Series except in its capacity as Owner Trustee in
respect of such Series. The Administrator shall have the right to take any
action on behalf of the Trust to enforce the foregoing provisions of each
Supplement for the benefit of the Trust and of each Series.
SECTION 2.11. Representations and Warranties of Depositor and
----------------------------------------------------
Company. (a) The Depositor hereby represents and warrants, as of the date on
- -------
which this Agreement is executed and delivered and as of each date on which a
Supplement is executed and delivered, to the Owner Trustee that:
(i) The Depositor is duly organized and validly existing as
a limited liability company in good standing under the laws of the
State of Michigan, with power and authority to own its properties and
to conduct its business as such properties are currently owned and
such business is presently conducted.
(ii) The Depositor is duly qualified to do business as a
foreign limited liability company in good standing and has obtained
all necessary licenses and approvals in all jurisdictions in which
the ownership or lease of its property or the conduct of its business
shall require such qualifications.
(iii) The Depositor has the power and authority to execute
and deliver this Agreement and any Supplement and to carry out its
terms; the Depositor has full power and authority to sell and assign
the property to be sold and assigned to and deposited with the Trust
and the Depositor has duly authorized such sale and assignment and
deposit to the Trust by all necessary action; and the execution,
delivery and performance of this Agreement have been duly authorized
by the Depositor by all necessary action.
(iv) The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of
time) a default under, the articles of organization or operating
agreement of the Depositor, or any indenture, agreement or other
instrument to which the Depositor is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents for a
Series); nor violate any law or, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the Depositor
of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(v) To the Depositor'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 Depositor or its
properties: (A) asserting the invalidity of this Agreement or any
Supplement, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (C) seeking any
determination or ruling that might materially and adversely affect
the performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement or any Supplement.
(vi) The representations and warranties of the Company and
the Depositor in Sections 3.01 and 3.02 of the Purchase Agreement for
each Series are true and correct.
(b) The Company hereby represents and warrants, as of the date on
which this Agreement is executed and delivered and as of each date on which a
Supplement is executed and delivered, to the Owner Trustee that:
(i) The Company has been duly organized and is validly
existing as a [limited liability company] in good standing under the
laws of the jurisdiction of its organization, with the power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently
conducted.
(ii) The Company is duly qualified to do business as a
foreign [limited liability company] in good standing and has obtained
all necessary licenses and approvals in all jurisdictions in which
the ownership or lease of its property or the conduct of its business
shall require such qualifications.
(iii) The Company has the power and authority to execute
and deliver this Agreement and any Supplement and to carry out its
terms; the Company has full power and authority to purchase the Trust
Certificates; and the execution, delivery and performance of this
Agreement and any Supplement has been duly authorized by the Company
by all necessary action.
(iv) The consummation of the transactions contemplated by
this Agreement and any Supplement and the fulfillment of the terms
hereof and thereof do not conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without notice
or lapse of time) a default under, the articles of organization or
operating agreement of the Company, or any indenture, agreement or
other instrument to which the Company is a party or by which it is
bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic
Documents for a Series); nor violate any law or, to the best of the
Company's knowledge, any order, rule or regulation applicable to the
Company of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties.
(v) There are no proceedings or investigations pending or,
to the Company's best knowledge, threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Company or its
properties: (A) asserting the invalidity of this Agreement, (B)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (C) seeking any determination or
ruling that might materially and adversely affect the performance by
the Company of its obligations under, or the validity or
enforceability of, this Agreement.
ARTICLE III
Trust Certificates and Transfer of Interests
--------------------------------------------
SECTION 3.01. Initial Ownership; Beneficial Interests in the Trust.
------------------------------------------------------
(a) Upon the formation of the Trust by the contribution by the Depositor
pursuant to Section 2.05 and until the issuance of the Trust Certificates for
a Series, the Depositor shall be the sole beneficiary of the Trust.
(b) Each holder of a Trust Certificate of a Series shall hold an
exclusive, divided beneficial interest in the Series Owner Trust Estate of
such Series.
SECTION 3.02. The Trust Certificates. The Trust Certificates of a
-----------------------
Series shall be issued in minimum denominations of a one percent Percentage
Interest in the related Subdivision. A Trust Certificate shall be executed on
behalf of the Trust by manual or facsimile signature of an authorized officer
of the Owner Trustee. Trust Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall
have been affixed, authorized to sign on behalf of the Trust, shall be validly
issued and entitled to the benefit of this Agreement and the related
Supplement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Trust Certificates or did not hold such offices at the date of authentication
and delivery of such Trust Certificates.
A transferee of a Trust Certificate shall become a Certificateholder
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder and the related Supplement upon such transferee's
acceptance of a Trust Certificate duly registered in such transferee's name
pursuant to Section 3.04.
SECTION 3.03. Authentication of Trust Certificates. On the Closing
-------------------------------------
Date, the Owner Trustee shall cause the Trust Certificates of a Series in an
aggregate Percentage Interest equal to 100% to be executed on behalf of the
Trust, authenticated and delivered to or upon the written order of the
Depositor, signed by its chairman of the board, its president, any vice
president, secretary or any assistant treasurer, without further corporate
action by the Depositor, in authorized denominations. No Trust Certificate
shall entitle its Holder to any benefit under this Agreement or the related
Supplement or be valid for any purpose unless there shall appear on such Trust
Certificate a certificate of authentication substantially in the form set
forth in Exhibit A, executed by the Owner Trustee or ________________________,
as the Owner Trustee's authenticating agent, by manual signature; such
authentication shall constitute conclusive evidence that such Trust
Certificate shall have been duly authenticated and delivered hereunder. All
Trust Certificates shall be dated the date of their authentication.
SECTION 3.04. Registration of Transfer and Exchange of Trust
----------------------------------------------------
Certificates; Limitations on Transfer. The Certificate Registrar shall keep or
- -------------------------------------
cause to be kept, at the office or agency maintained pursuant to Section 3.08,
a Certificate Register for each Series in which, subject to such reasonable
regulations as it may prescribe, the Owner Trustee shall provide for the
registration of Trust Certificates of such Series and of transfers and
exchanges of such Trust Certificates as herein provided.
________________________ shall be the initial Certificate Registrar.
Unless otherwise provided in the related Supplement, the Trust
Certificates of a Series will not be registered under the Securities Act and
will not be listed on any exchange. No transfer of a Trust Certificate shall
be made unless such transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In the event that a transfer is to be made in reliance
upon an exemption from the Securities Act and state securities laws, in order
to assure compliance with the Securities Act and such laws, the Holder
desiring to effect such transfer and such Holder's prospective transferee
shall each certify to the Owner Trustee in writing the facts surrounding the
transfer in substantially the forms set forth in Exhibit C (the "Transferor
Certificate") and either Exhibit D (the "Investment Letter") or Exhibit E (the
"Rule 144A Letter"). Except in the case of a transfer as to which the proposed
transferee has provided a Rule 144A Letter, there shall also be delivered to
the Owner Trustee an Opinion of Counsel that such transfer may be made
pursuant to an exemption from the Securities Act and state securities laws,
which Opinion of Counsel shall not be an expense of the Trust or the Owner
Trustee; PROVIDED that such Opinion of Counsel in respect of the applicable
state securities laws may be a memorandum of law rather than an opinion if
such counsel is not licensed in the applicable jurisdiction. The Depositor
shall provide to any Holder of a Trust Certificate and any prospective
transferee designated by any such Holder, information regarding the Trust
Certificates 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 Trust Certificate without registration thereof under
the Securities Act pursuant to the registration exemption provided by Rule
144A. Each Holder of a Trust Certificate desiring to effect such a transfer
shall, and does hereby agree to, indemnify the Trust, the Owner Trustee, and
the Depositor against any liability that may result if the transfer is not so
exempt or is not made in accordance with federal and state securities laws.
The Owner Trustee shall cause each Trust Certificate to contain a legend in
the form set forth on the form of Trust Certificate attached hereto as Annex
A.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.08 and subject to the
satisfaction of the preceding paragraph, the Owner Trustee shall execute,
authenticate and deliver (or shall cause __________________________ as its
authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Trust Certificates of
the same Series in authorized denominations of a like aggregate Percentage
Interest dated the date of authentication by the Owner Trustee or any
authenticating agent; PROVIDED that, unless otherwise specified in the related
Supplement, prior to such execution, authentication and delivery, the Owner
Trustee shall have received an Opinion of Counsel to the effect that the
proposed transfer will not cause the Trust to be characterized as an
association (or a publicly traded partnership) taxable as a corporation or
alter the tax characterization of the Notes of such Series for federal income
tax purposes or Michigan income and single business tax purposes. At the
option of a Holder, Trust Certificates may be exchanged for other Trust
Certificates of such Series of authorized denominations of a like aggregate
Percentage Interest upon surrender of the Trust Certificates to be exchanged
at the office or agency maintained pursuant to Section 3.08.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Trust Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Owner Trustee in
accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of, Trust Certificates of a Series for a period of 15
days preceding the due date for any payment with respect to the Trust
Certificates of such Series.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust
---------------------------------------------------
Certificates. If (a) any mutilated Trust Certificate shall be surrendered to
- ------------
the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Certificate and (b) there shall be delivered to the Certificate Registrar and
the Owner Trustee such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Certificate has been acquired by a bona fide purchaser, the Owner Trustee on
behalf of the Trust shall execute and the Owner Trustee or
[______________________], as the Owner Trustee's authenticating agent, shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of the
same Series of like tenor and denomination. In connection with the issuance of
any new Trust Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Certificate of a Series issued pursuant to this Section
shall constitute conclusive evidence of ownership in the related Subdivision,
as if originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.
SECTION 3.06. Persons Deemed Owners. Prior to due presentation of a
---------------------
Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Paying Agent may treat the Person in whose name
any Trust Certificate is registered in the Certificate Register as the owner
of such Trust Certificate for the purpose of receiving distributions pursuant
to Section 5.02 and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar or any Paying Agent shall be bound by any
notice to the contrary.
SECTION 3.07. Access to List of Certificateholders' Names and
-----------------------------------------------------
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
- ---------
Servicer and the Depositor, within 15 days after receipt by the Owner Trustee
of a written request therefor from the Servicer or the Depositor, a list, in
such form as the Servicer or the Depositor may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record
Date. If a Certificateholder of a Series applies in writing to the Owner
Trustee, and such application states that the applicant desires to communicate
with other Certificateholders of such Series with respect to their rights
under this Agreement and the related Supplement or under the Trust
Certificates of such Series, then the Owner Trustee shall, within five
Business Days after the receipt of such application, afford such applicant
access during normal business hours to the current list of Certificateholders
of such Series. Each Holder, by receiving and holding a Trust Certificate,
shall be deemed to have agreed not to hold any of the Depositor, the Company,
the Certificate Registrar or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 3.08. Maintenance of Office or Agency. The Owner Trustee
--------------------------------
shall maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Trust Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Trust Certificates and the Basic Documents
may be served. The Owner Trustee initially designates _________
_________________________________________________________ as its office for
such purposes. The Owner Trustee shall give prompt written notice to the
Company and to the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 3.09. Appointment of Paying Agent. The Paying Agent shall
-----------------------------
make distributions to Certificateholders of a Series from the Certificate
Distribution Account of such Series pursuant to the related Supplement and
shall report the amounts of such distributions to the Owner Trustee. Any
Paying Agent shall have the revocable power to withdraw funds from a
Certificate Distribution Account for the purpose of making the distributions
referred to above. The Owner Trustee may revoke such power and remove the
Paying Agent if the Owner Trustee determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect. The Paying Agent initially shall be
________________________, and any co-paying agent chosen by _________
______________ and acceptable to the Owner Trustee. ________________________
shall be permitted to resign as Paying Agent upon 30 day's written notice to
the Owner Trustee. In the event that ________________________ shall no longer
be the Paying Agent, the Owner Trustee shall appoint a successor to act as
Paying Agent (which successor shall be a bank or trust company). The Owner
Trustee shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Owner Trustee to execute and deliver to the Owner Trustee an
instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Owner Trustee that, as Paying Agent, such successor
Paying Agent or additional Paying Agent will hold all sums, if any, held by it
for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Owner Trustee. The provisions of
Section 7.01, 7.03, 7.04 and 8.01 shall apply to the Owner Trustee also in its
role as Paying Agent, for so long as the Owner Trustee shall act as Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.
SECTION 3.10. Fixed Value Securities. Pursuant to the Sale and
------------------------
Servicing Agreement and the Purchase Agreement for a Series, promptly
following the sale of the Standard Receivables and Fixed Value Receivables for
such Series to the Trust on the Closing Date, the Trust will sell to the
Depositor the related Fixed Value Payments in accordance with such Sale and
Servicing Agreement. Neither the Depositor nor the Company (as assignee of the
Depositor) shall transfer such Fixed Value Payments to any Person other than
the Trust and except as contemplated by such Purchase Agreement. At any time
after the Trust sells the Fixed Value Payments of a Series to the Depositor,
at the option of the Company (as assignee of the Depositor) and upon 10 days
prior written notice to the Owner Trustee and the Indenture Trustee for such
Series, the Company will be permitted to sell to the Trust, and the Trust
shall be obligated to purchase from the Company (subject to the availability
of funds), all or any portion of such Fixed Value Payments due under the
Receivables for such Series, subject to the terms and conditions of such Sale
and Servicing Agreement. Upon any such sale, (i) the Depositor, the Company
and the Owner Trustee will enter into an amendment to this Agreement and the
related Supplement to provide for, at the election of the Company, the
issuance of certificates representing ownership interests in the related
Subdivision to the extent of such Fixed Value Payments due under such
Receivables or the issuance of indebtedness by the Trust secured by such Fixed
Value Payments due under such Receivables and to make any other provisions
herein that are necessary or desirable in connection therewith and (ii) the
Owner Trustee and the Depositor will enter into any other agreements or
instruments related thereto as may be requested by the Company; 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 Owner Trustee to enter into any such amendment or
other agreement or instrument is subject to the following conditions
precedent:
(a) 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 for such Series, such
Indenture Trustee, shall have been executed by each other party thereto and
delivered to the Owner Trustee;
(b) The Company shall have delivered to the Owner Trustee and such
Indenture Trustee an Officer's 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;
(c) The Rating Agency Condition shall have been satisfied with
respect to such sale and issuance;
(d) 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 of such Series, and the Company shall have
provided to the Owner Trustee and such Indenture Trustee an Officer's
Certificate to such effect;
(e) The Owner Trustee and such Indenture Trustee shall have received
an Opinion of Counsel to the effect that such sale and issuance will not have
any material adverse tax consequence to the Trust, the related Subdivision or
to any Noteholder or Certificateholder of such Series; and
(f) All filings and other actions required to continue the first
perfected interest of the Trust in the Series Owner Trust Estate and of such
Indenture Trustee in the related Trust Estate shall have been duly made or
taken by the Company.
SECTION 3.11. Definitive Trust Certificates. Unless otherwise
-------------------------------
provided in the related Supplement, the Trust Certificates of a Series, upon
original issuance, will be issued in definitive, fully registered form.
ARTICLE IV
Actions by Owner Trustee
------------------------
SECTION 4.01. Prior Notice to Owners with Respect to Certain Matters.
------------------------------------------------------
With respect to the following matters with respect to a Series and the related
Subdivision, the Owner Trustee shall not take action unless at least 30 days
before the taking of such action, the Owner Trustee shall have notified the
Certificateholders of such Series in writing of the proposed action and the
Owners shall not have notified the Owner Trustee in writing prior to the 30th
day after such notice is given that such Owners have withheld consent or
provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except
claims or lawsuits brought in connection with the collection of the
Receivables) and the compromise of any action, claim or lawsuit brought by or
against the Trust (except with respect to the aforementioned claims or
lawsuits for collection of the Receivables);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business
Trust Statute);
(c) the amendment of the Indenture for such Series by a supplemental
indenture in circumstances where the consent of any related Noteholder is
required;
(d) the amendment of the Indenture for such Series by a supplemental
indenture in circumstances where the consent of any related Noteholder is not
required and such amendment materially adversely affects the interests of the
Owners of such Series;
(e) the amendment, change or modification of the Administration
Agreement for such Series, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that would not
materially adversely affect the interests of the Owners of such Series; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee for such Series or pursuant to
this Agreement of a successor Certificate Registrar for such Series, or the
consent to the assignment by such Note Registrar, Paying Agent or Indenture
Trustee or Certificate Registrar of its obligations under the Indenture for
such Series or this Agreement, as applicable.
SECTION 4.02. Action by Owners with Respect to Certain Matters. The
------------------------------------------------
Owner Trustee shall not have the power, except upon the direction of the
Owners, to (a) remove the Administrator for a Series under the related
Administration Agreement pursuant to the terms thereof, (b) appoint a
successor Administrator pursuant to the terms of an Administration Agreement,
(c) remove the Servicer under a Sale and Servicing Agreement pursuant to the
terms thereof or (d) except as expressly provided in the Basic Documents of a
Series, sell the related Receivables after the termination of the related
Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the Owners of the
related Series.
SECTION 4.03. Action by Owners with Respect to Bankruptcy. The Owner
-------------------------------------------
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the delivery to the Owner Trustee by each such Owner of a
certificate certifying that such Owner reasonably believes that the Trust is
insolvent.
SECTION 4.04. Restrictions on Owners' Power. The Owners shall not
-------------------------------
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Basic Documents of any Series
or would be contrary to Section 2.03, nor shall the Owner Trustee be obligated
to follow any such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided herein,
----------------
any action that may be taken by the Owners of a Series under this Agreement
and the related Supplement may be taken by the Holders of Trust Certificates
of such Series evidencing not less than a majority of the Percentage Interests
evidenced by such Trust Certificates. Except as expressly provided herein or
the related Supplement, any written notice of the Owners of a Series delivered
pursuant to this Agreement and the related Supplement shall be effective if
signed by Holders of Trust Certificates of such Series evidencing not less
than a majority of the Percentage Interests evidenced by the Trust
Certificates of such Series at the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
------------------------------------------
SECTION 5.01. Establishment of Trust Account. The Owner Trustee, for
------------------------------
the benefit of the Certificateholders of each Series, shall establish and
maintain in the name of the Trust an Eligible Deposit Account for a single
Series or two or more Series, as specified in the related Supplements (the
"Series Certificate Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held solely for the benefit of
the Certificateholders of the specified Series.
The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in each Series Certificate Distribution
Account and in all proceeds thereof. Except as otherwise expressly provided
herein or the related Supplement, each Series Certificate Distribution Account
shall be under the sole dominion and control of the Owner Trustee solely for
the benefit of the Certificateholders of the related Series. If, at any time,
a Series Certificate Distribution Account ceases to be an Eligible Deposit
Account, the Owner Trustee (or the Depositor on behalf of the Owner Trustee,
if such Certificate Distribution Account is not then held by the Owner Trustee
or an affiliate thereof) 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 Series Certificate Distribution Account as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new Series
Certificate Distribution Account.
SECTION 5.02. Application of Trust Funds. (a) The holders of any
----------------------------
Series of Trust Certificates shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
the provisions of this Article V.
(b) With respect to each Series on each Distribution Date, the Owner
Trustee will distribute to Certificateholders of such Series, on the basis of
the Percentage Interest evidenced by their Trust Certificates, amounts
deposited in the Series Certificate Distribution Account for such Series
pursuant to the applicable provisions of the Sale and Servicing Agreement for
such Series with respect to such Distribution Date.
(c) On each Distribution Date for a Series, the Owner Trustee shall
send to each Certificateholder of such Series the statement or statements
provided to the Owner Trustee by the Servicer pursuant to the applicable
provisions of the Sale and Servicing Agreement for such Series with respect to
such Distribution Date.
(d) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to an Owner, such tax shall reduce the
amount otherwise distributable to such Owner in accordance with this Section.
The Owner Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Owners of a Series sufficient funds from the
related Series Certificate Distribution Account for the payment of any tax
that is legally owed by the Trust in respect of such Owners (but such
authorization shall not prevent the Owner Trustee from contesting any such tax
in appropriate proceedings and withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to an Owner shall be treated as cash
distributed to such Owner at the time it is withheld by the Trust and remitted
to the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution (such as a
distribution to a non-U.S. Owner), the Owner Trustee may in its sole
discretion withhold such amounts in accordance with this paragraph (c).
SECTION 5.03. Method of Payment. Subject to Section 9.01(c),
-------------------
distributions required to be made to Certificateholders on any Distribution
Date shall be made to each Certificateholder of record on the preceding Record
Date by wire transfer, in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Distribution Date, or, if not, by check mailed to such Certificateholder at
the address of such Holder appearing in the Certificate Register.
SECTION 5.04. No Segregation of Moneys; No Interest. Subject to
----------------------------------------
Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need
not be segregated in any manner except to the extent required by law or the
related Sale and Servicing Agreement and may be deposited under such general
conditions as may be prescribed by law, and the Owner Trustee shall not be
liable for any interest thereon.
SECTION 5.05. Accounting and Reports to Owners, Internal Revenue
-----------------------------------------------------
Service and Others. The Owner Trustee shall deliver to each Owner of a Series
- ------------------
such information, reports or statements with respect to such Series as may be
required by the Code and applicable Treasury Regulations and as may be
required to enable each Owner to prepare its federal and state income tax
returns. Unless otherwise provided in respect of a Series in the related
Supplement, consistent with the Trust's characterization for tax purposes, as
a security arrangement for the issuance of non-recourse debt, no federal
income tax return shall be filed on behalf of the Trust unless either (i) the
Owner Trustee shall receive an Opinion of Counsel that, based on a change in
applicable law occurring after the date hereof, or as a result of a transfer
by the Company permitted by Section 3.04, the Code requires such a filing or
(ii) the Internal Revenue Service shall determine that the Trust, or a
Subdivision, is required to file such a return. Notwithstanding the preceding
sentence, the Owner Trustee shall file Internal Revenue Service Form 8832 and
elect for the Trust and each Subdivision to be treated as a domestic eligible
entity with a single owner that is disregarded as a separate entity, which
election shall remain in effect so long as the Company or any other party is
the sole Owner. In the event that the Trust is required to file tax returns,
the Owner Trustee shall prepare or shall cause to be prepared any tax returns
required to be filed by the Trust and shall remit such returns to the Company
(or if the Company no longer owns any Certificates, the Owner designated for
such purpose by the Company to the Owner Trustee in writing) at least five (5)
days before such returns are due to be filed. The Company (or such designee
Owner, as applicable) shall promptly sign such returns and deliver such
returns after signature to the Owner Trustee and such returns shall be filed
by the Owner Trustee with the appropriate tax authorities. In no event shall
the Owner Trustee or the Company (or such designee Owner, as applicable) be
liable for any liabilities, costs or expenses of the Trust or the Noteholders
arising out of the application of any tax law, including federal, state,
foreign or local income or excise taxes or any other tax imposed on or
measured by income (or any interest, penalty or addition with respect thereto
or arising from a failure to comply therewith) except for any such liability,
cost or expense attributable to any act or omission by the Owner Trustee or
the Company (or such designee Owner, as applicable), as the case may be, in
breach of its obligations under this Agreement.
ARTICLE VI
Authority and Duties of Owner Trustee
-------------------------------------
SECTION 6.01. General Authority. The Owner Trustee is authorized and
-----------------
directed to execute and deliver the Basic Documents for each Series to which
the Trust is to be a party and each certificate or other document attached as
an exhibit to or contemplated by the Basic Documents of a Series to which the
Trust is to be a party and any amendment or other agreement or instrument
described in Section 3.10, in each case, in such form as the Company for the
related Series shall approve, as evidenced conclusively by the Owner Trustee's
execution thereof. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents of each Series. The Owner Trustee is
further authorized from time to time to take such action as the Administrator
recommends with respect to the Basic Documents for each Series.
SECTION 6.02. General Duties. It shall be the duty of the Owner
---------------
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement, each Supplement and the Basic
Documents for each Series to which the Trust is a party and to administer the
Trust in the interest of the Owners, subject to the Basic Documents for each
Series and in accordance with the provisions of this Agreement and each
Supplement. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under a
Supplement and the Basic Documents for each Series to the extent the
Administrator has agreed in the Administration Agreement for the related
Series to perform any act or to discharge any duty of the Owner Trustee
hereunder or under such Supplement and any Basic Document, and the Owner
Trustee shall not be held liable for the default or failure of the
Administrator to carry out its obligations under the Administration Agreement
for the related Series.
SECTION 6.03. Action upon Instruction. (a) Subject to Article IV and
-----------------------
in accordance with the terms of the Basic Documents of a Series and the
related Supplement, the Owners of such Series may by written instruction
direct the Owner Trustee in the management of the related Subdivision. Such
direction may be exercised at any time by written instruction of the Owners
pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Supplement or related Basic Document if the Owner
Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the part of the
Owner Trustee or is contrary to the terms hereof or of such Supplement or
Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any Supplement or related Basic Document, the Owner Trustee
shall promptly give notice (in such form as shall be appropriate under the
circumstances) to the Owners of the related Series requesting instruction as
to the course of action to be adopted, and to the extent the Owner Trustee
acts in good faith in accordance with any written instruction of such Owners
received, the Owner Trustee shall not be liable on account of such action to
any Person. If the Owner Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under
the circumstances) it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Agreement, the related
Supplement, or the related Basic Documents, as it shall deem to be in the best
interests of the Owners of such Series, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Supplement or related
Basic Document or any such provision is ambiguous as to its application, or
is, or appears to be, in conflict with any other applicable provision, or in
the event that this Agreement or a Supplement permits any determination by the
Owner Trustee or is silent or is incomplete as to the course of action that
the Owner Trustee is required to take with respect to a particular set of
facts, the Owner Trustee may give notice (in such form as shall be appropriate
under the circumstances) to the Owners of the related Series requesting
instruction and, to the extent that the Owner Trustee acts or refrains from
acting in good faith in accordance with any such instruction received, the
Owner Trustee shall not be liable, on account of such action or inaction, to
any Person. If the Owner Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under
the circumstances) it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Agreement or the related
Supplement and Basic Documents, as it shall deem to be in the best interests
of the Owners of the related Series, and shall have no liability to any Person
for such action or inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement or in
------------------------------------------------------
Instructions. The Owner Trustee shall not have any duty or obligation to
- ------------
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Series Owner Trust Estate of any Series, or to
otherwise take or refrain from taking any action under, or in connection with,
any document contemplated hereby or by any Supplement to which the Owner
Trustee is a party, except as expressly provided by the terms of this
Agreement or such Supplement or in any document or written instruction
received by the Owner Trustee pursuant to Section 6.03; and no implied duties
or obligations shall be read into this Agreement, any Supplement or any Basic
Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to prepare or file
any Securities and Exchange Commission filing for the Trust or any Subdivision
or to record this Agreement, any Supplement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense,
promptly take all action as may be necessary to discharge any liens on any
part of any Series Owner Trust Estate that result from actions by, or claims
against, the Owner Trustee that are not related to the ownership or the
administration of such Series Owner Trust Estate.
SECTION 6.05. No Action Except Under Specified Documents or
-----------------------------------------------------
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
- ------------
of or otherwise deal with any part of Series Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement or the related Supplement, (ii) in
accordance with the related Basic Documents and (iii) in accordance with any
document or instruction delivered to the Owner Trustee pursuant to Section
6.03.
SECTION 6.06. Restrictions. The Owner Trustee shall not take any
------------
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust or any Subdivision becoming taxable as a corporation for
federal income tax purposes. The Owners shall not direct the Owner Trustee to
take action that would violate the provisions of this Section.
ARTICLE VII
Concerning Owner Trustee
------------------------
SECTION 7.01. Acceptance of Trusts and Duties. The Owner Trustee
--------------------------------
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts, but only upon the terms of this Agreement and
each Supplement. The Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of any Series Owner Trust Estate upon the
terms of this Agreement and the related Supplement and Basic Documents. The
Owner Trustee shall not be answerable or accountable hereunder or under the
related Supplement and the related Basic Document under any circumstances,
except (i) for its own willful misconduct or negligence or (ii) in the case of
the inaccuracy of any representation or warranty contained in Section 7.03
expressly made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) The Owner Trustee shall not be liable for any error of judgment
made in good faith by the Owner Trustee;
(b) The Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Administrator or any Owner;
(c) No provision of this Agreement, any Supplement or any Basic
Document shall require the Owner Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its rights or
powers hereunder or under any Supplement or any Basic Document if the Owner
Trustee shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured or provided to it;
(d) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes of any Series;
(e) The Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or any Supplement or for the due
execution hereof by the Depositor or the Company or for the form, character,
genuineness, sufficiency, value or validity of any Series Owner Trust Estate,
or for or in respect of the validity or sufficiency of any Basic Documents,
other than the certificate of authentication on the Trust Certificates of any
Series, and the Owner Trustee shall in no event assume or incur any liability,
duty or obligation to any Noteholder or to any Owner, other than as expressly
provided for herein or expressly agreed to in the related Basic Documents;
(f) The Owner Trustee shall not be liable for the default or
misconduct of the Administrator, CFC, as Seller or Depositor, the Company, the
Indenture Trustee or the Servicer of any Series under any of the related Basic
Documents or otherwise, and the Owner Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Agreement, any
Supplement or any Basic Documents that are required to be performed by the
Administrator under the related Administration Agreement, the Indenture
Trustee under the related Indenture or the Servicer or CFC, as Depositor or as
Seller, under the related Sale and Servicing Agreement; and
(g) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or any Supplement, or to
institute, conduct or defend any litigation under this Agreement or any
Supplement or otherwise or in relation to this Agreement, any Supplement or
any Basic Document, at the request, order or direction of any of the Owners,
unless such Owners have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement, any
Supplement or any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of any such act.
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall
-------------------------
furnish to the Owners of a Series, promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents for such Series.
SECTION 7.03. Representations and Warranties. The Owner Trustee
--------------------------------
hereby represents and warrants, as of the date on which this Agreement is
executed and delivered and as of each date on which a Supplement is executed
and delivered, to the Depositor and the Company and for the benefit of the
Owners that:
(a) It is a banking corporation duly organized and validly existing
in good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and such Supplement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and such Supplement, and this
Agreement and such Supplement have been executed and delivered by one of its
officers who is duly authorized to execute and deliver this Agreement and such
Supplement on its behalf.
(c) Neither the execution or the delivery by it of this Agreement and
such Supplement, nor the consummation by it of the transactions contemplated
hereby or thereby, nor compliance by it with any of the terms or provisions
hereof or thereof will contravene any federal or Delaware law, governmental
rule or regulation governing the banking or trust powers of the Owner Trustee
or any judgment or order binding on it, or constitute any default under its
charter documents or bylaws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its properties may be
bound.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee
----------------------------
shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion,
bond, or other document or paper believed by it to be genuine and believed by
it to be signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to such fact
or matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement, any
Supplement or any Basic Documents, the Owner Trustee (i) may act directly or
through its agents or attorneys pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the conduct or
misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by the Owner Trustee with reasonable care, and (ii) may consult
with counsel, accountants and other skilled Persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
written opinion or advice of any such counsel, accountants or other such
Persons and not contrary to this Agreement, any Supplement or any Basic
Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as provided
----------------------------------
in this Article VII, in accepting the trusts hereby created
_____________________________ acts solely as Owner Trustee hereunder and under
each Supplement and not in its individual capacity, and all Persons having any
claim against the Owner Trustee by reason of the transactions contemplated by
this Agreement or any Basic Document shall look only to the applicable Series
Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or
-----------------------------------------------------
Receivables. The recitals contained herein and in any Supplement and the
- -----------
related Trust Certificates (other than the signature and countersignature of
the Owner Trustee on the Trust Certificates) shall be taken as the statements
of the Depositor and the Company, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Supplement or any Basic Document or of the Trust Certificates of any Series
(other than the signature and countersignature of the Owner Trustee on the
Trust Certificates) or the Notes of any series, or of any Receivable or
related documents. The Owner Trustee shall at no time have any responsibility
or liability for or with respect to the legality, validity and enforceability
of any Receivable, or the perfection and priority of any security interest
created by any Receivable in any Financed Vehicle or the maintenance of any
such perfection and priority, or for or with respect to the sufficiency of any
Series Owner Trust Estate or its ability to generate the payments to be
distributed to the related Certificateholders under this Agreement or the
related Supplement or the Noteholders under the Indenture for the related
Series, including, without limitation: the existence, condition and ownership
of any Financed Vehicle; the existence and enforceability of any insurance
thereon; the existence and contents of any Receivable on any computer or other
record thereof; the validity of the assignment of any Receivable to the Trust
or of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor,
the Company or the Servicer with any warranty or representation made under any
Basic Document or in any related document or the accuracy of any such warranty
or representation, or any action of the Administrator, the Indenture Trustee
or the Servicer for any Series or any subservicer taken in the name of the
Owner Trustee.
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes. The
--------------------------------------------------
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Company, the Administrator, the Indenture Trustee and the Servicer in banking
transactions with the same rights as it would have if it were not Owner
Trustee.
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act Licenses.
-----------------------------------------------------
The Owner Trustee, in its individual capacity, shall use its best efforts to
maintain, and the Owner Trustee, as Owner Trustee, shall cause the Trust to
use its best efforts to maintain, the effectiveness of all licenses required
under the Pennsylvania Motor Vehicle Sales Finance Act in connection with this
Agreement, each Supplement and the Basic Documents and the transactions
contemplated hereby and thereby until such time as the Trust shall terminate
in accordance with the terms hereof.
ARTICLE VIII
Compensation of Owner Trustee
-----------------------------
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
----------------------------------
shall receive as compensation for its services hereunder such fees as have
been separately agreed upon before the date hereof between the Depositor and
the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by
the Depositor for its other reasonable expenses hereunder and under each
Supplement, including the reasonable compensation, expenses and disbursements
of such agents, representatives, experts and counsel as the Owner Trustee may
employ in connection with the exercise and performance of its rights and its
duties hereunder.
SECTION 8.02. Indemnification. The Depositor shall be liable as
---------------
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from
and against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever (collectively, "Expenses") which may at any time be imposed
on, incurred by, or asserted against the Owner Trustee or any Indemnified
Party in any way relating to or arising out of this Agreement, any Supplement,
any Basic Documents, any Series Owner Trust Estate, the administration of any
Series Owner Trust Estate or the action or inaction of the Owner Trustee
hereunder or under any Supplement, except only that the Depositor shall not be
liable for or required to indemnify an Indemnified Party from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.01. The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the termination
of this Agreement or any Supplement. In any event of any claim, action or
proceeding for which indemnity will be sought pursuant to this Section, the
Owner Trustee's choice of legal counsel shall be subject to the approval of
the Depositor, which approval shall not be unreasonably withheld.
SECTION 8.03. Payments to Owner Trustee. Any amounts paid to the
--------------------------
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part
of any Series Owner Trust Estate immediately after such payment.
ARTICLE IX
Dissolution and Termination of Trust Agreement
----------------------------------------------
SECTION 9.01. Dissolution of the Trust and Termination of Trust
-----------------------------------------------------
Agreement. (a) This Agreement (other than Article VIII) and the Trust shall
- ---------
terminate and be of no further force or effect upon the final distribution by
the Owner Trustee of all moneys or other property or proceeds of each Series
Owner Trust Estate in accordance with the terms of the related Supplement,
Indenture, Sale and Servicing Agreement and Article V. The bankruptcy,
liquidation, dissolution, death or incapacity of any Owner shall not (x)
operate to terminate this Agreement, the Trust or the related Supplement or
Subdivision or (y) entitle such Owner's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or such Series Owner
Trust Estate or Subdivision or (z) otherwise affect the rights, obligations
and liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), none of the Depositor, the
Company or any Owner shall be entitled to revoke or terminate the Trust or any
Subdivision.
(c) Notice of any dissolution and termination of the Trust,
specifying the Distribution Date upon which Certificateholders of each Series
then outstanding shall surrender their Trust Certificates to the Paying Agent
for payment of the final distribution and cancellation, shall be given by the
Owner Trustee by letter to such Certificateholders mailed within five Business
Days of receipt of notice of such termination from the Servicer given pursuant
to each related Sale and Servicing Agreement, stating (i) the Distribution
Date upon or with respect to which final payment of such Trust Certificates
shall be made upon presentation and surrender of such Trust Certificates at
the office of the Paying Agent therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon
presentation and surrender of such Trust Certificates at the office of the
Paying Agent therein specified. The Owner Trustee shall give such notice to
the Certificate Registrar (if other than the Owner Trustee) and the Paying
Agent at the time such notice is given to such Certificateholders. Upon
presentation and surrender of such Trust Certificates, the Paying Agent shall
cause to be distributed to Certificateholders amounts distributable on such
Distribution Date pursuant to Section 5.02.
In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give
a second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this Agreement.
Subject to applicable escheat laws, any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Owner Trustee to the
Company for the related Series.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
------------------------------------------------------
SECTION 10.01. Eligibility Requirements for Owner Trustee. The Owner
------------------------------------------
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) time deposits that are
rated at least A-1 by Standard & Poor's and P-1 by Moody's. If such
corporation shall publish reports of condition at least annually pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.02.
SECTION 10.02. Resignation or Removal of Owner Trustee. The Owner
-----------------------------------------
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator. Upon receiving
such notice of resignation, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Owner Trustee may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Administrator shall
promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner Trustee, and
shall pay all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Administrator shall provide notice of
such resignation or removal of the Owner Trustee to each of the Rating
Agencies.
SECTION 10.03. Successor Owner Trustee. Any successor Owner Trustee
-----------------------
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or
removal of the predecessor Owner Trustee shall become effective, and such
successor Owner Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees
and expenses deliver to the successor Owner Trustee all documents and
statements and monies held by it under this Agreement; and the Administrator
and the predecessor Owner Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Owner Trustee all such rights, powers,
duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Administrator shall mail notice thereof to all
Certificateholders, each Indenture Trustee, the Noteholders of each Series and
the Rating Agencies. If the Administrator shall fail to mail such notice
within 10 days after acceptance of such appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at
the expense of the Administrator.
SECTION 10.04. Merger or Consolidation of Owner Trustee. Any
---------------------------------------------
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant to
Section 10.01 and, provided, further, that the Owner Trustee shall mail notice
of such merger or consolidation to the Rating Agencies.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
--------------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of any Series Owner Trust Estate or any Financed Vehicle may at the time
be located, the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Administrator and Owner Trustee to act as co-trustee,
jointly with the Owner Trustee, or as separate trustee or separate trustees,
of all or any part of any Series Owner Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust or any part thereof and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Administrator and the Owner Trustee may
consider necessary or desirable. If the Administrator shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
the Owner Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor Owner Trustee pursuant to Section
10.01 and no notice of the appointment of any co-trustee or separate trustee
shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by
the Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to any Series Owner
Trust Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(b) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement or any
Supplement; and
(c) The Administrator and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement or the related Supplement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Owner Trustee, to the extent permitted
by law, without the appointment of a new or successor co-trustee or separate
trustee.
ARTICLE XI
Miscellaneous
-------------
SECTION 11.01. Supplements and Amendments. This Agreement and any
----------------------------
Supplement may be amended by the Depositor, the applicable Company and the
Owner Trustee, with prior written notice to the Rating Agencies, without the
consent of any of the Noteholders or the Certificateholders of any Series, 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 of any Series;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement and any Supplement may also be amended from time to
time by the Depositor, the Company and the Owner Trustee, with prior written
notice to the Rating Agencies, with the consent of the Holders (as defined in
the related Indenture) of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes of each Series adversely affected thereby and
the consent of the Holders of Trust Certificates evidencing not less than a
majority of the Percentage Interests evidenced by the Trust Certificates of
each Series adversely affected thereby, 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 of a Series or distributions
that shall be required to be made for the benefit of the Noteholders or the
Certificateholders of a Series or (b) reduce the aforesaid percentage of the
Outstanding Amount of the Notes of a Series or of the Percentage Interests
evidenced by the Trust Certificates of a Series required to consent to any
such amendment, without the consent of the Holders of all the outstanding
Notes and Trust Certificates of a Series.
Promptly after the execution of any such amendment or consent in
respect of a Series, the Owner Trustee shall furnish written notification of
the substance of such amendment or consent to each Certificateholder of such
Series, the Indenture Trustee of such Series 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. The manner of obtaining such consents
(and any other consents of Certificateholders provided for in this Agreement,
any Supplement or any Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such
reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement, any
Supplement or the Certificate of Trust, the Owner Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement. The Owner Trustee may,
but shall not be obligated to, enter into any such amendment that affects the
Owner Trustee's own rights, duties or immunities under this Agreement, any
Supplement or otherwise.
In connection with the execution of any amendment to this Trust
Agreement, any Supplement or any amendment of any other agreement to which the
Issuer is a party, the Owner Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel to the effect that such amendment
is authorized or permitted by the related Basic Documents and that all
conditions precedent in such Basic Documents for the execution and delivery
thereof by the Trust or the Owner Trustee, as the case may be, have been
satisfied.
SECTION 11.02. No Legal Title to any Series Owner Trust Estate in
----------------------------------------------------
Owners. The Owners shall not have legal title to any part of any Series Owner
- ------
Trust Estate. The Owners shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and IX and the related Supplement. No transfer, by operation of law
or otherwise, of any right, title or interest of the Owners of a Series to and
in their ownership interest in the related Series Owner Trust Estate shall
operate to terminate this Agreement or the related Supplement or the trusts
hereunder or thereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of such Series Owner Trust Estate.
SECTION 11.03. Limitations on Rights of Others. Subject to Section
--------------------------------
2.10 the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Company, the Owners, the Administrator and, to the
extent expressly provided herein, each Indenture Trustee and the Noteholders
of each Series, 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 any Series Owner Trust Estate or under or in respect of
this Agreement or any covenants, conditions or provisions contained herein.
SECTION 11.04. Notices. (a) Unless otherwise expressly specified or
-------
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that notice
to the Owner Trustee shall be deemed given only upon actual receipt by the
Owner Trustee), if to the Owner Trustee, addressed to the Corporate Trust
Office; if to the Depositor, addressed to Chrysler Financial Company L.L.C.,
27777 Franklin Road, Southfield, Michigan 48034, Attention of Assistant
Secretary; if to the Company, addressed to [___________],
[______________________________________]; Attention of Assistant Secretary;
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the related Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.05. Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 11.06. Separate Counterparts. This Agreement may be executed
---------------------
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon, and inure to the benefit of, each of
the Depositor, the Company and its permitted assignees, the Owner Trustee and
its successors and each Owner and its successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of such
Owner.
SECTION 11.08. Covenants of Company. In the event that any litigation
--------------------
with claims in excess of $1,000,000 to which the Company is a party which
shall be reasonably likely to result in a material judgment against the
Company that the Company will not be able to satisfy shall be commenced by an
Owner, during the period beginning nine months following the commencement of
such litigation and continuing until such litigation is dismissed or otherwise
terminated (and, if such litigation has resulted in a final judgment against
the Company, such judgment has been satisfied), the Company shall not make any
distribution on or in respect of its membership interests to any of its
members, or repay the principal amount of any indebtedness of the Company held
by CFC, unless (i) after giving effect to such distribution or repayment, the
Company's liquid assets shall not be less than the amount of actual damages
claimed in such litigation or (ii) the Rating Agency Condition shall have been
satisfied with respect to any such distribution or repayment. The Company will
not at any time institute against the Trust any bankruptcy proceedings under
any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Trust Certificates, the Notes, the Trust
Agreement or any of the Basic Documents.
SECTION 11.09. No Petition. The Owner Trustee, by entering into this
-----------
Agreement, each Certificateholder, by accepting a Trust Certificate, and the
Indenture Trustee of each Series and each Noteholder of each Series, by
accepting the benefits of this Agreement, hereby covenant and agree that they
will not at any time institute against the Company or the Trust, or join in
any institution against the Company or the Trust of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Trust Certificates of any
Series, the Notes of any Series, this Agreement or any of the Basic Documents
for any Series.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a
-----------
Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the related Subdivision only
and do not represent interests in or obligations of the Depositor, the
Servicer, the Company, the Administrator, the Owner Trustee, the Indenture
Trustee of any Series or any Affiliate thereof and no recourse may be had
against such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement and the related Supplement, the related Trust
Certificates or the related Basic Documents.
SECTION 11.11. Headings. The headings of the various Articles and
--------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, 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 11.13. Trust Certificate Transfer Restrictions. Unless
------------------------------------------
otherwise specified in any Supplement, the Trust Certificates of any Series
may not be acquired by or for the account of (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding a
Trust Certificate, the Holder thereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
SECTION 11.14. Depositor Payment Obligation. The Depositor shall be
----------------------------
responsible for payment of the Administrator's fees under the Administration
Agreement for any Series and shall reimburse the Administrator for all
expenses and liabilities of the Administrator incurred thereunder. In
addition, the Depositor shall be responsible for the payment of all fees and
expenses of the Trust, the Owner Trustee and the Indenture Trustee for each
Series paid by any of them in connection with any of their obligations under
the related Basic Documents to obtain or maintain any required license under
the Pennsylvania Motor Vehicle Sales Finance Act.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
Chrysler Financial Company L.L.C.,
as Depositor
By: ______________________________
Name:
Title:
[___________________________]
By:
By: ______________________________
Name:
Title:
[___________________________]
not in its individual capacity but solely as
Owner Trustee
By: ______________________________
Name:
Title:
EXHIBIT A
Form of Trust Certificate
-------------------------
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN
SECTION 3.04 OF THE TRUST AGREEMENT UNDER WHICH THIS CERTIFICATE IS ISSUED (A
COPY OF WHICH TRUST AGREEMENT IS AVAILABLE FROM THE OWNER TRUSTEE OR UPON
REQUEST), INCLUDING RECEIPT BY THE OWNER TRUSTEE OF AN INVESTMENT LETTER IN
WHICH THE TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
NUMBER Percentage
R-__ Interest: _______%
PREMIER AUTO TRUST ___-_, Series ____-_
ASSET BACKED CERTIFICATE, Series ____-_
evidencing a fractional undivided interest in the Subdivision of the Trust for
Series 199_-_, as defined below, the property of which includes a pool of
retail installment sale contracts and the Amortizing Payments on the Fixed
Value Receivables (each, as defined herein) secured by new and used
automobiles and light duty trucks.
(This Trust Certificate does not represent an interest in or obligation of
Chrysler Financial Company L.L.C. or any of its affiliates, except to the
extent described below.)
THIS CERTIFIES THAT _______________________________ is the registered
owner of a ________________ PERCENT nonassessable, fully-paid, undivided
percentage interest in the Subdivision for Series 199_-_ of Premier Auto Trust
____-_ (the "Trust"), formed by Chrysler Financial Company L.L.C., a Michigan
limited liability (the "Depositor"), and [Premier Receivables L.L.C., a
Michigan limited liability company] (the "Company").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned
Trust Agreement.
______________________________, ______________________________,
as Owner Trustee or as Owner Trustee
by: ________________________,
as Authenticating Agent
by: ______________________________
Authorized Signatory
by: _____________________
Authorized Signatory
The Trust was created pursuant to a Trust Agreement dated as of
________ __, 199_, as amended and restated by an Amended and Restated Trust
Agreement dated as of ________, 199_ (as so amended and restated and further
amended or supplemented from time to time, the "Trust Agreement"), among the
Depositor, the Company and ____________________, as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. The Subdivision for Series 199_-_ of the Trust (the "Series
199_-_ Subdivision") was created pursuant to the Supplement (the "Series
199_-_ Supplement") dated ___________, 199_-_ to the Trust Agreement. To the
extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Trust Agreement, the Series 199_-_
Supplement or the Sale and Servicing Agreement dated as of _______, 199_ (as
amended and supplemented from time to time, the "Sale and Servicing
Agreement"), between the Trust and the Depositor, as seller and as servicer
(in such capacity, the "Servicer"), as applicable.
This Certificate is one of the duly authorized certificates
designated as "Asset Backed Certificates, Series 199_-_" (herein called the
"Series 199_-_ Trust Certificates"). Also issued under an Indenture dated as
of _______, 199_ (the "Indenture"), between the Trust and [______________], as
indenture trustee, are the five classes of Notes designated as "Class A-1
____% Asset Backed Notes," "Class A-2 ____% Asset Backed Notes," "Class A-3
____% Asset Backed Notes," "Class A-4 ____% Asset Backed Notes" and "Class B
____% Asset Backed Notes" (collectively, the "Series 199_-_ Notes"). This
Trust Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Series 199_-_ Trust Certificate by virtue of its acceptance hereof assents and
by which such Holder is bound. The property of the Series 199_-_ Subdivision
consists of a pool of retail installment sale contracts for new and used
automobiles and light duty trucks and the Amortizing Payments on the Fixed
Value Receivables (collectively, the "Receivables"), all monies received on or
after ________ __, 1997, security interests in the vehicles financed thereby,
certain bank accounts and the proceeds thereof, proceeds from claims on
certain insurance policies and certain other rights under the Trust Agreement,
the Series 199_-_ Supplement and the Sale and Servicing Agreement and all
proceeds of the foregoing. The term "Fixed Value Receivables" shall mean
retail sale contracts secured by new automobiles or light duty trucks with a
series of fixed level payment monthly installments (the "Amortizing Payments")
and a final fixed value payment that is greater than each Amortizing Payment.
Distributions, if any, in respect of this Series 199_-_ Trust Certificate will
be made pursuant to Section 5.02 of the Trust Agreement.
It is the intent of the Depositor, the Company, the Servicer and the
Certificateholder that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Series 199_-_
Subdivision will be treated as a security arrangement for the issuance of debt
by the sole Certificateholder. The Company, by acceptance of the Series 199_-_
Trust Certificates, agrees to treat, and to take no action inconsistent with
the above treatment for so long as the Company is the sole Owner.
Solely in the event the Series 199_-_ Trust Certificates are held by
more than a single Owner, it is the intent of the Depositor, the Company, the
Servicer and the Certificateholders that, for purposes of federal income,
state and local income and single business tax and any other income taxes, the
Series 199_-_ Subdivision will be treated as a partnership and the
Certificateholders (including the Company) will be treated as partners in the
partnership. The Company and the other Certificateholders, by acceptance of a
Series _-_ Trust Certificate, agree to treat, and to take no action
inconsistent with the Treatment of, the Series _-_ Trust Certificates for such
tax purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Company, or join in any institution against the Company
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Series _-_ Trust Certificates, the Series _-_ Notes, the Trust Agreement or
any of the Basic Documents.
The holders of the Series 199_ Trust Certificates shall not have
legal title to any part of the Series Owner Trust Estate of any other Series
of Trust Certificates.
Distributions on this Series 199_-_ Trust Certificate will be made as
provided in the Trust Agreement and the Series 199_-_ Supplement by the Owner
Trustee by wire transfer or check mailed to the Certificateholder of record in
the Certificate Register without the presentation or surrender of this Series
199_-_ Trust Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and the Series 199_-_ Supplement and
notwithstanding the above, the final distribution on this Series 199_-_ Trust
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this Series
199_-_ Trust Certificate at the office or agency maintained for that purpose
by the Owner Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Series
199_-_ Trust Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Series 199_-_ Trust Certificate shall not entitle the Holder hereof to
any benefit under the Trust Agreement, the Series 199_-_ Supplement or the
Sale and Servicing Agreement or be valid for any purpose.
THIS SERIES 199_-_ TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, 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.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Series 199_-_ Trust Certificate to
be duly executed.
PREMIER AUTO TRUST ____-_
By: _________________________________
Not in its individual capacity but
solely as Owner Trustee
Dated: By: ______________________________
Authorized Signatory
[REVERSE OF SERIES 199_-_ TRUST CERTIFICATE]
The Series 199_-_ Trust Certificates do not represent an obligation
of, or an interest in, the Depositor, the Servicer, the Company, the Owner
Trustee or any affiliates of any of them and no recourse may be had against
such parties or their assets, except as expressly set forth or contemplated
herein or in the Trust Agreement, the Series 199_-_ Supplement or the Basic
Documents. In addition, this Series 199_-_ Trust Certificate is not guaranteed
by any governmental agency or instrumentality and is limited in right of
payment to certain collections and recoveries with respect to the Receivables
(and certain other amounts), all as more specifically set forth herein and in
the Sale and Servicing Agreement. A copy of each of the Sale and Servicing
Agreement, the Trust Agreement and the Series 199_-_ Supplement may be
examined by any Certificateholder upon written request during normal business
hours at the principal office of the Depositor and at such other places, if
any, designated by the Depositor.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the Series 199_-_ Supplement and the
modification of the rights and obligations of the Depositor and the Company
and the rights of the Certificateholders under the Trust Agreement and the
Series 199_-_ Supplement at any time by the Depositor, the Company and the
Owner Trustee with the consent of the Holders of the Series 199_-_ Trust
Certificates and the Series 199_-_ Notes, each voting as a class, evidencing
not less than a majority of the Percentage Interests evidenced by the
outstanding Series 199_-_ Trust Certificates or a majority of the outstanding
principal balance of the Series 199_-_ Notes of each class. Any such consent
by the Holder of this Series 199_-_ Trust Certificate shall be conclusive and
binding on such Holder and on all future Holders of this Series 199_-_ Trust
Certificate and of any Series 199_-_ Trust Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent is made upon this Series 199_-_ Trust Certificate.
The Trust Agreement also permits the amendment thereof, and of the Series
199_-_ Supplement, in certain limited circumstances, without the consent of
the Holders of any of the Series 199_-_ Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Series 199_-_ Trust Certificate is
registerable in the Certificate Register upon surrender of this Series 199_-_
Trust Certificate for registration of transfer at the offices or agencies of
the Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Series 199_-_ Trust
Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is
________________________, New York, New York.
Except as provided in the Trust Agreement and the Series 199_-_
Supplement, the Series 199_-_ Trust Certificates are issuable only as
registered Trust Certificates. As provided in the Trust Agreement and subject
to certain limitations therein set forth, Series 199_-_ Trust Certificates are
exchangeable for new Series 199_-_ Trust Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
as they related to the Series 1997 _-_ Subdivision shall terminate upon the
payment to Series 199_-_ Certificateholders of all amounts required to be paid
to them pursuant to the Trust Agreement, the Series 199_-_ Supplement and the
Sale and Servicing Agreement and the disposition of all property held as part
of the Series Owner Trust Estate. The Servicer of the Receivables may at its
option purchase the Series Owner Trust Estate at a price specified in the Sale
and Servicing Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Trust Certificates;
provided, however, such right of purchase is exercisable only as of the last
day of any Collection Period as of which the Series 199_-_ Pool Balance is
less than or equal to 10% of the Series 199_-_ Original Pool Balance.
The Series 199_-_ Trust Certificates may not be acquired by (a) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (b) a plan described in Section 4975(e)(1)
of the Code or (c) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity or which uses plan assets to
acquire Trust Certificates (each, a "Benefit Plan"). By accepting and holding
this Series 199_-_ Trust Certificate, the Holder hereof shall be deemed to
have represented and warranted that it is not a Benefit Plan.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, and hereby
irrevocably constitutes and appoints _____________________________________
_______________________, attorney, to transfer said Trust Certificate on the
books of the Certificate Registrar, with full power of substitution in the
premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
- -----------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Trust Certificate in every particular, without alteration,
enlargement or any change whatever. Such signature must be guaranteed
by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as
may be determined by the Certificate Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
EXHIBIT B
Form of Certificate of Trust of Premier Auto Trust ____-_
---------------------------------------------------------
THIS Certificate of Trust of Premier Auto Trust ____-_ (the
"Trust"), dated ___________, 199_, is being duly executed and filed by
_____________________________, a Delaware banking corporation, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. Code,
----------
Section 3801 et seq.).
1. Name. The name of the business trust formed hereby is
----
PREMIER AUTO TRUST ____-_.
2. Delaware Trustee. The name and business address of the
-----------------
trustee of the Trust in the State of Delaware is
_____________________________, Attention: Corporate Trustee Administration
Department.
3. Series Trust. The Trust shall be a series trust and the
-------------
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular series shall be enforceable
against the assets of such series only, and not against the assets of the
Trust generally.
4. Effective Date. This Certificate of Trust shall be effective
--------------
upon its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust as of the date first above
written.
_____________________________________________
not in its individual capacity but solely as
owner trustee under the Trust Agreement dated
as of ____________, 199_-_
By: _______________________________________
Name:
Title:
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust ___-_
Asset Backed Certificates, Series 199_-_
----------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-referenced Asset Backed
Certificates Series 199_-_ (the "Series 199_-_ Certificates") we certify that
(a) we understand that the Series 199_-_ Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
transferred by us in a transaction that is exempt from the registration
requirements of the Act and (b) we have not offered or sold any Series 199_-_
Certificates to, or solicited offers to buy any Series 199_-_Certificates
from, any person, or otherwise approached or negotiated with any person with
respect thereto, in a manner that would be deemed, or taken any other action
which would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By: _______________________________
Authorized Officer
EXHIBIT D
FORM OF INVESTMENT LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust ____-_
Asset Backed Certificates Series ___-_
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Asset Backed
Certificates, Series 199_-_ (the "Series 199_-_ Certificates") we certify that
(a) we understand that the Series 199_-_ Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the Series
199_-_ Certificates, (c) we have had the opportunity to ask questions of and
receive answers from the seller concerning the purchase of the Series 199_-_
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Series 199_-_ Certificates,
(d) we are acquiring the Series 199_-_ Certificates for investment for our own
account and not with a view to any distribution of such Series 199_-_
Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Series 199_-_ Certificates in accordance with clause
(f) below), (e) we have not offered or sold any Series 199_-_ Certificates to,
or solicited offers to buy any Series 199_-_ Certificates from, any person, or
otherwise approached or negotiated with any person with respect thereto, or
taken any other action that would result in a violation of Section 5 of the
Act or any state securities laws and (f) we will not sell, transfer or
otherwise dispose of any Series 199_-_ Certificates unless (1) such sale,
transfer or other disposition is made pursuant to an effective registration
statement under the Act and in compliance with any relevant state securities
laws or is exempt from such registration requirements and, if requested, we
will at our expense provide an Opinion of Counsel satisfactory to the
addresses of this certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Series 199_-_ Certificate has executed and delivered to you
a certificate to substantially the same effect as this certificate and (3) the
purchaser or transferee has otherwise complied with any conditions for
transfer set forth in the Amended and Restated Trust dated as of _______,
199_, between Chrysler Financial Company L.L.C., as Depositor, Premier
Receivables L.L.C. and [____________], as Owner Trustee and the Series 199_-_
Series Supplement thereto dated as of ________________, 199_-_.
Very truly yours,
[NAME OF TRANSFEREE]
By: ____________________________
Authorized Officer
EXHIBIT E
FORM OF RULE 144A LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
Re: Premier Auto Trust 199_-_
Asset Backed Certificates, Series 199_-_
----------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Asset Backed
Certificates, Series 199_-_ (the "Series 199_-_ Certificates") we certify that
(a) we understand that the Series 199_-_ Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the Series
199_-_ Certificates, (c) we have had the opportunity to ask questions of and
receive answers from the seller concerning the purchase of the Series 199_-_
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Series 199_-_ Certificates,
(d) we have not, nor has anyone acting on our behalf, offered, transferred,
pledged, sold or otherwise disposed of the Series 199_-_ Certificates or any
interest in the Series 199_-_ Certificates, or solicited any offer to buy,
transfer, pledge or otherwise dispose of the Series 199_-_ Certificates or any
interest in the Series 199_-_ Certificates from any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action that would constitute a distribution of the
Series 199_-_ Certificates under the Act or that would render the disposition
of the Series 199_-_ Certificates a violation of Section 5 of the Act or any
state securities laws or require registration pursuant thereto, and we will
not act, or authorize any person to act, in such manner with respect to the
Series 199_-_ Certificates, and (e) we are a "qualified institutional buyer"
as that term is defined in Rule 144A under the Act. We are aware that the sale
to us is being made in reliance on Rule 144A. We are acquiring the Series
199_-_ Certificates for our own account or for resale pursuant to Rule 144A
and understand that such Series 199_-_ Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A or (ii) pursuant to another
exemption from registration under the Act.
Very truly yours,
[NAME OF TRANSFEREE]
By: __________________________
Authorized Officer
EXHIBIT F
[FORM OF SUPPLEMENT]
SERIES 199_-_ SUPPLEMENT, dated as of ____________, 199_ (this "Series
Supplement") among CHRYSLER FINANCIAL COMPANY L.L.C., a Michigan limited
liability company, as Depositor (the "Depositor"), ______________, a
____________ (the "Company") and _____________, a Delaware banking
corporation, as Owner Trustee (the "Owner Trustee") is made pursuant to the
Amended and Restated Trust Agreement dated as of ____________, 199_ (as
amended or supplemented from time to time, the "Trust Agreement") among the
Depositor, the Company and the Owner Trustee.
The Trust Agreement provides, among other things, that the parties
thereto may from time to time enter into a supplement to the Trust Agreement
to provide for the issuance by Trust of one or more Series of Notes and/or
Trust Certificates.
Pursuant to this Series Supplement, the Trust shall create a new series
of Trust Certificates and authorize the issuance of a new Series of Notes.
SECTION 1. Designation of Series 199_-_ Trust Certificates. There is
--------------------------------------------------
hereby created a Series of Trust Certificates to be issued under the Trust
Agreement and this Series Supplement that shall be known as the "Series 199_-_
Trust Certificates."
SECTION 2.1. Conflicts; Definitions. In the event that any term or
-----------------------
provision contained herein shall conflict with or be inconsistent with any
provision contained in the Trust Agreement, the terms and provisions of this
Series Supplement shall govern with respect to the Series 199_-_ Trust
Certificates. Each capitalized term defined herein shall relate only to the
Series 199_-_ Trust Certificates and no other Series of Trust Certificates
issued by the Trust.
"Administration Agreement" shall mean the Administration Agreement dated
-------------------------
as of ______________, 199_ among the Trust, the Indenture Trustee and CFC, as
Administrator.
"Administrator" shall mean CFC and its successors as Administrator
-------------
pursuant to the terms of the Administration Agreement.
"Company" shall mean ________, a __________ and any successor in
-------
interest.
"Series 199_ Note Depository Agreement" shall mean the Agreement dated as
-------------------------------------
of _______, 199_ among the Trust, the Indenture Trustee, the Administrator and
The Depository Trust Company, as the initial Clearing Agency, relating to the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes
and the Class B Notes, as the same may be amended and supplemented from time
to time.
"Series 199_ Indenture" shall mean the Indenture dated __________, 199_
---------------------
between the Trust and ____________, as Indenture Trustee.
"Series 199_ Owner Trust Estate" shall mean all right, title and interest
------------------------------
of the Trust in and to the property and rights assigned to the Trust pursuant
to Article II of the Sale and Servicing Agreement, all funds on deposit from
time to time in the Series 199_ Trust Accounts and the Series 199_ Certificate
Distribution Account and all other property of the Trust allocated to the
Series 199_ Subdivision from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement and the
Administration Agreement.
"Series 199_ Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement dated as of ________, 199_, between the Trust, as issuer,
and the Depositor, as seller and servicer, as the same may be amended or
supplemented from time to time.
SECTION 2.2. Other Definitional Provisions.
-----------------------------
(a) Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Trust Agreement and the Sale and Servicing
Agreement or, if not defined therein, in the Indenture.
(b) All terms defined in this Series Supplement 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 Series Supplement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Series Supplement or in any such certificate or other
document, and accounting terms partly 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 Series Supplement 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 Series Supplement shall refer to this Series
Supplement as a whole and not to any particular provisions of this Series
Supplement; and the term "including" and its variants shall mean "including
without limitation".
(e) The definitions contained in this Series Supplement are
applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplements and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
SECTION 3.1. Creation of Series 199_ Subdivision. There is hereby created
-----------------------------------
a Subdivision of the Trust for Series 199_ (the "Series 199_ Subdivision").
The Series 199_ Owner Trust Estate shall be the only assets of the Series 199_
Subdivision.
Separate and distinct records (including tax records) shall be maintained
for the Series 199_ Trust Certificates, the Series 199_ Subdivision and the
Series 199_ Owner Trust Estate, and the Series 199_ Owner Trust Estate shall
be maintained and accounted for separately from the Series Owner Trust Estate
of any other Series. The Series 199_ Owner Trust Estate shall not be subject
to claims, debts, liabilities, expenses or obligations arising from or with
respect to any other Series or the Trust generally. The debts, obligations and
expenses incurred, contracted for or otherwise existing with respect to the
Series 199_ Subdivision shall be enforceable against the Series 199_ Owner
Trust Estate only and not against the assets of the Trust generally or any
other Series. The statutory provisions of Section 3804 of the Business Trust
Statute relating to limitations on inter-series liabilities (and the statutory
effect under Section 3804 of setting forth such notice in the Certificate
Trust) are applicable to the Trust and each Series of Trust Certificates.
Neither the Depositor, the Company nor any Holder of a Series 199_ Trust
Certificate shall direct the Owner Trustee to (i) take any action that would
cause the Series 199_ Owner Trust Estate to be substantively consolidated into
any other Series Owner Trust Estate of any other Series such that it will have
its separate existence disregarded in the event of any insolvency event with
respect to any Certificateholder of such Series, the Trust or another Series,
(ii) to commingle any of the Series 199_ Owner Trust Estate with the Series
Owner Trust Estate of any other Series, (iii) to maintain the financial and
accounting books and records and statements of the Series 199_ Subdivision, if
any, in a manner such that they cannot be separated from those of any other
Series, (iv) to take any action that would cause (a) the funds and other
assets of the Series 199_ Subdivision, if any, not be identifiable or the bank
accounts, records and books of account, if any, of the Series 199_
Subdivision, not to be inseparable from those of any other Subdivision and (b)
the Trust to pay, other than from assets of the Series 199_ Subdivision, any
obligations or indebtedness of any kind incurred by the Series 199_
Subdivision and payable by the Trust pursuant to this Series Supplement, (v)
to maintain the assets and liabilities of the Series 199_ Subdivision so that
they are not readily ascertainable from those of any other Subdivision and
subject to segregation without requiring substantial time or expense to effect
and account for such segregated assets and liabilities, (vi) to take any
actions with respect to the Series 199_ Subdivision except in its capacity as
Owner Trustee in respect of such Subdivision. The Administrator shall have the
right to take any action on behalf of the Trust to enforce the foregoing
provisions of this Series Supplement for the benefit of the Trust and of the
Series 199_ Subdivision.
SECTION 3.2. Issuance of Series 199_ Trust Certificates. The Owner
----------------------------------------------
Trustee shall execute, authenticate and deliver to the Company the Series 199_
Trust Certificates in accordance with Article III of the Trust Agreement.
SECTION 4. Series 199_ Basic Documents. The Owner Trustee shall cause the
---------------------------
Trust to execute and deliver the Series 199_ Indenture, the Series 199_ Notes,
the Sale and Servicing Agreement and the Administration Agreement. The Trust
shall perform its obligations under such agreements.
SECTION 5. Application of Series 199_ Subdivision Funds. The Owner
------------------------------------------------
Trustee shall establish the Series 199_ Certificate Distribution Account in
accordance with Section 5.01 of the Trust Agreement. The Owner Trustee shall
distribute the funds deposited into the Series 199_ Certificate Distribution
Account pursuant to the Sale and Servicing Agreement to the Series 199_
Certificateholders in accordance with Section 5.02 on each Distribution Date.
SECTION 6. Ratification of Trust Agreement. As supplemented by this
---------------------------------
Series Supplement, the Trust Agreement is in all respects ratified and
confirmed and the Trust Agreement as so supplemented by this Series Supplement
shall be read, taken, and construed as one and the same instrument.
SECTION 7. Counterparts. This Series Supplement may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and
the same instrument.
SECTION 8. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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.
IN WITNESS WHEREOF, the parties hereto have caused this Series Supplement
to be duly executed by their respective officers hereunto duly authorized, as
of the day and year first above written.
CHRYSLER FINANCIAL COMPANY L.L.C.,
as Depositor
By:____________________________
Name:
Title:
[ ]
------------------------------
By:
By:____________________________
Name:
Title:
[ ]
------------------------------
not in its individual capacity by
solely as Owner Trustee
By:____________________________
Name:
Title:
EXHIBIT 4.4
[FORM OF POOLING AND SERVICING AGREEMENT]
among
CHRYSLER FINANCIAL COMPANY L.L.C.
as Seller and Servicer,
and
[ ]
-------------
as Trustee
on behalf of the Certificateholders
Dated as of [__________]
PREMIER AUTO TRUST ____-_
[___]% Asset Backed Certificates, Class A
[___]% Asset Backed Certificates, Class B
TABLE OF CONTENTS
Page
----
ARTICLE I
Special Definitions and Terms
SECTION 1.01. Special Definitions and Terms.................................1
ARTICLE II
Establishment of Trust
SECTION 2.01. Creation of Trust.............................................4
SECTION 2.02. Acceptance by Trustee.........................................4
ARTICLE III
Conveyance of Receivables
SECTION 3.01. Conveyance of Initial Standard Receivables....................4
SECTION 3.02. Conveyance of Subsequent Standard Receivables.................5
SECTION 3.03. Conveyance of Fixed Value Receivables to Agent................8
ARTICLE IV
Incorporation of Standard Terms and Conditions
SECTION 4.01. Incorporation of Standard Terms and Conditions
Agreement.....................................................9
ARTICLE V
Additional Representations and Warranties
SECTION 5.01. Additional Representations and Warranties of the
Seller........................................................9
ARTICLE VI
Additional Provisions Relating to the Servicer
SECTION 6.01. Chrysler Financial Company L.L.C. Not to Resign as
Servicer.....................................................10
SECTION 6.02. Additional Covenant of the Servicer..........................10
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
SCHEDULE C Schedule of Eligible Investment Receivables
POOLING AND SERVICING AGREEMENT dated as of [ ], among CHRYSLER
----------
FINANCIAL COMPANY L.L.C., a Michigan limited liability company, as seller (the
"Seller") and servicer (the "Servicer"), and [ ], a
--------------------
[ ] banking corporation, as trustee (the "Trustee").
----------------------
WHEREAS, the Seller owns or will acquire certain receivables arising in
connection with motor vehicle retail installment sale contracts (the
"Contracts") generated by Chrysler Financial Company L.L.C. in the ordinary
course of its business; and
WHEREAS, the Seller, the Servicer and the Trustee wish to set forth the
terms and conditions pursuant to which the Trust (as hereinafter defined) will
acquire the Contracts from the Seller, and the Servicer will service the
Contracts on behalf of the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Seller, the Servicer and the Trustee
agree as follows:
ARTICLE I.
Special Definitions and Terms
Section 1.01. Special Definitions and Terms. Capitalized terms used and
------------------------------
not defined herein have the meanings assigned thereto in the Standard Terms
and Conditions of Agreement. Whenever used in this Agreement and the Standard
Terms and Conditions of Agreement, the following words and phrases shall have
the following meanings:
"Agency Agreement" means the agreement dated as of the date hereof among
the Seller, the Servicer, the Trustee and the Agent.
"Agent" means , or a successor thereto.
----------------------
"Agreement" means this Pooling and Servicing Agreement, including the
Standard Terms and Conditions of Agreement of Premier Auto Grantor Trusts,
dated as of , in the form attached hereto.
----------
"Certificates" means the Class A Certificates and the Class B
Certificates.
"Class A Certificate" means a % Asset Backed Certificate, Class A,
---
evidencing a beneficial interest in the Trust, substantially in the form of
Exhibit A to the Standard Terms and Conditions of Agreement.
"Class A Pass-Through Rate" means %.
---
"Class A Percentage" means %.
---
"Class A Prepayment Premium" means an amount equal to the excess, if any,
discounted as described below, of (i) the amount of interest that would accrue
on the Pre-Funded Percentage with respect to the Class A Certificates of any
remaining Pre-Funded Amount (the "Class A Prepayment Amount") at the Class A
Pass-Through Rate during the period commencing on and including the
Distribution Date on which such Class A Prepayment Amount is required to be
deposited in the Distribution Account pursuant to Section 14.08(b) to but
excluding , over (ii) the amount of interest that would have
----------------
accrued on such Class A Prepayment Amount over the same period at a per annum
rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the
. Such excess shall be discounted on a monthly
- -----------------------------
basis to present value to such Distribution Date at the yield described in
clause (ii) above.
"Class B Certificate" means a % Asset Backed Certificate, Class B,
---
evidencing a beneficial interest in the Trust, substantially in the form of
Exhibit B to the Standard Terms and Conditions of Agreement.
"Class B Pass-Through Rate" means %.
---
"Class B Percentage" means %.
---
"Class B Prepayment Premium" means an amount equal to the excess, if any,
discounted as described below, of (i) the amount of interest that would accrue
on the Pre-Funded Percentage with respect to the Class B Certificates of any
remaining Pre-Funded Amount (the "Class B Prepayment Amount") at the Class B
Pass-Through Rate during the period commencing on and including the
Distribution Date on which such Class B Prepayment Amount is required to be
deposited in the Distribution Account pursuant to Section 14.08(b) to but
excluding , over (ii) the amount of interest that would have
----------------
accrued on such Class B Prepayment Amount over the same period at a per annum
rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the
. Such excess shall be discounted on a monthly
- -----------------------------
basis to present value to such Distribution Date at the yield described in
clause (ii) above.
"Closing Date" means .
----------------------
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, which at the time of execution of this agreement is
, Attention: .
- ---------------------- ------------
"Depository Agreement" means the agreement dated , among the
-------------
Trustee, the Administrator, and The Depository Trust Company, as the initial
Clearing Agency, substantially in the form attached as Exhibit C to the
Standard Terms and Conditions of Agreement.
"Distribution Date" means, with respect to each Collection Period, the
day of the following calendar month or, if such day is not a Business
- -------
Day, the immediately following Business Day, commencing on .
-----------------
"Final Scheduled Distribution Date" means .
----------------------
"Final Scheduled Maturity Date" means .
----------------------
"Funding Period" means the period beginning on and including the Closing
Date and ending on the first to occur of (a) the Determination Date on which
the amount on deposit in the Pre-Funding Account (after giving effect to any
transfers therefrom in connection with the transfer of Subsequent Receivables
to the Trustee on such Determination Date) is less than or equal to
$ , (b) the date on which an Event of Default occurs, (c) the date
-------------
on which an Insolvency Event occurs with respect to the Seller or the
Servicer, and (d) the Determination Date with respect to the
----------------
Distribution Date.
"Initial Certificate Balance" means $ .
----------------------
"Initial Class A Balance" means $ .
----------------------
"Initial Class B Balance" means $ .
----------------------
"Initial Collection Period" means the period beginning on, and including,
to and including .
- --------------- ----------------------
"Initial Cutoff Date" means with respect to
----------------------
Initial Receivables that are Precomputed Receivables and
with respect to Initial Receivables that are Simple
- ----------------------
Interest Receivables.
"Initial Receivable" means any Standard Receivable conveyed to the
Trustee hereunder on the Closing Date and any Fixed Value Receivable conveyed
to the Agent on the Closing Date pursuant to the Agency Agreement.
"Pre-Funded Amount" means, with respect to any Distribution Date, the
amount on deposit in the Pre-Funding Account, which initially shall be
$ .
----------------
"Reserve Account Initial Deposit" means, with respect to the Closing Date
and taking into account any transfer of Subsequent Receivables on such date,
an amount equal to the Specified Reserve Account Balance on the Closing Date
(which is equal to $ ) and, with respect to each Subsequent
----------------
Transfer Date after the Closing Date, an amount equal to % of the Principal
---
Balance of the Subsequent Receivables transferred to the Trust on such
Subsequent Transfer Date.
"Servicing Rate" means % per annum.
---
"Specified Reserve Account Balance" means [STATE FORMULA].
"Standard Terms and Conditions of Agreement" means the Standard Terms and
Conditions of Agreement of Premier Auto Grantor Trusts, dated as of
, in the form attached hereto.
- ----------------------
"Subsequent Receivable" means any Subsequent Standard Receivable conveyed
to the Trustee hereunder on a Subsequent Transfer Date and any Subsequent
Fixed Value Receivable conveyed to the Agent on a Subsequent Transfer Date
pursuant to the Agency Agreement.
"Trustee" means , a banking
---------------------- -------------------
corporation, its successors in interest and any successor Trustee hereunder.
ARTICLE II.
Establishment of Trust
Section 2.01. Creation of Trust. Upon the execution of this Agreement by
-----------------
the parties hereto, there is hereby created a separate trust, which shall be
known as Premier Auto Trust - (the "Trust"). The Trust shall be
---- -
administered pursuant to the provisions of this Agreement for the benefit of
the Certificateholders.
Section 2.02. Acceptance by Trustee. The Trustee hereby accepts all
----------------------
consideration conveyed by the Seller pursuant to Section 3.01 and declares
that it will hold such consideration upon the trusts set forth herein for the
benefit of the Certificateholders, subject to the terms and provisions of this
Agreement.
ARTICLE III.
Conveyance of Receivables
Section 3.01. Conveyance of Initial Standard Receivables. In
-------------------------------------------------
consideration of the Trustee's delivery on the Closing Date to or upon the
order of the Seller of Class A Certificates in an initial aggregate principal
amount equal to the Initial Class A Balance and Class B Certificates in an
initial aggregate principal amount equal to the Initial Class B Balance, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Trustee for the benefit of the Certificateholders, without recourse
(subject to the obligations set forth herein), all right, title and interest
of the Seller in and to:
(1) the Initial Standard Receivables, and all moneys due thereon on
or after , in the case of Precomputed Receivables, and all
----------
moneys received thereon on and after , in the case of
----------
Simple Interest Receivables;
(2) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Standard Receivables and any other
interest of the Seller in such Financed Vehicles;
(3) any proceeds with respect to the Initial Standard Receivables
from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors;
(4) any proceeds from recourse to Dealers on Initial Standard
Receivables 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 Initial
Standard Receivable and shall have been acquired by or on behalf of
the Seller, the Servicer or the Trust; and
(6) the proceeds of any and all of the foregoing.
Section 3.02. Conveyance of Subsequent Standard Receivables. (a) Subject
---------------------------------------------
to the conditions set forth in paragraph (b) below, in consideration of the
Trustee's delivery on the related Subsequent Transfer Date to or upon the
order of the Seller of the amount described in Section 14.08(a), the Seller
does hereby sell, transfer, assign, set over and otherwise convey to the
Trustee, for the benefit of the Certificateholders, without recourse (subject
to the obligations set forth herein), all right, title and interest of the
Seller in and to:
(1) the Subsequent Standard Receivables listed on Schedule A to the
related Subsequent 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 Subsequent Standard Receivables and any
other interest of the Seller in such Financed Vehicles;
(3) any proceeds with respect to such Subsequent Standard
Receivables from claims on any physical damage, credit life or
disability insurance policies covering the related Financed Vehicles
or Obligors;
(4) any proceeds from recourse to Dealers with respect to 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 Subsequent
Standard Receivable and shall have been acquired by or on behalf of
the Seller, the Servicer or the Trust; and
(6) the proceeds of any and all of the foregoing.
(b) (1) The Seller shall transfer to the Trustee, for the benefit of the
Certificateholders, the Subsequent Standard 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 Subsequent Transfer Date:
(i) the Seller shall have delivered to the Trustee a duly
executed Subsequent Transfer Assignment, which shall include
supplements to Schedule A listing the Subsequent Receivables;
(ii) the Seller shall have deposited in the Collection Account,
to the extent required by Section 14.02, all collections in respect
of the Subsequent Receivables;
(iii) as of each Subsequent Transfer Date, (A) the Seller shall
not be insolvent and shall not become insolvent as a result of the
transfer of Subsequent Receivables on such Subsequent Transfer Date,
(B) the Seller shall not intend to incur or believe that it shall
incur debts that would be beyond its ability to pay as such debts
mature, (C) such transfer shall not have been made with actual
intent to hinder, delay or defraud any Person and (D) the assets of
the Seller shall not constitute unreasonably small capital to carry
out its business as conducted;
(iv) the applicable Reserve Account Initial Deposit for such
Subsequent Transfer Date shall have been made pursuant to Section
14.08(a);
(v) the Funding Period shall not have terminated;
(vi) the Subsequent Receivables transferred to the Trustee
pursuant hereto and to the Agent pursuant to the Agency Agreement,
including the Subsequent Receivables to be so conveyed to the
Trustee and the Agent on such Subsequent Transfer Date, shall meet
the following criteria (based on the characteristics of the Initial
Receivables on the Initial Cutoff Date and the Subsequent
Receivables on the related Subsequent Cutoff Dates): (A) not more
than % of the Principal Balances of the Receivables transferred
---
to the Trustee and the Agent, as applicable, shall represent
vehicles financed at the Seller's used vehicle rates; and (B) the
weighted average APR of the Receivables transferred to the Trustee
and the Agent, as applicable, shall not be less than %, unless,
---
with the prior consent of the Rating Agencies, the Seller increases
the Reserve Account Initial Deposit by the Additional Amount solely
relating thereto; and the weighted average remaining term of the
Receivables transferred to the Trustee and the Agent, as applicable,
including the Subsequent Receivables to be conveyed to the Trustee
and the Agent on such Subsequent Transfer Date, shall not be greater
than months;
----
(vii) each of the representations and warranties made by the
Seller pursuant to Section 12.01 with respect to the Subsequent
Receivables shall be true and correct as of the related Subsequent
Transfer Date, and the Seller shall have performed all obligations
to be performed by it hereunder on or prior to such Subsequent
Transfer Date;
(viii) the Seller shall, at its own expense, on or prior to the
Subsequent Transfer Date indicate in its computer files that the
Subsequent Standard Receivables identified in the Subsequent
Transfer Assignment have been sold to the Trustee pursuant to this
Agreement;
(ix) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Trustee in
the Trust property;
(x) no selection procedures believed by the Seller to be
adverse to the interests of the Certificateholders shall have been
utilized in selecting the Subsequent Receivables;
(xi) the addition of any such Subsequent Receivables shall not
result in a material adverse tax consequence to the Trust or the
Certificateholders; and
(xii) the Seller shall have delivered to the Trustee an
Officers' Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b)(1).
(2) In addition, any such conveyance of Subsequent Standard
Receivables made on one or more Subsequent Transfer Dates occurring
during any Collection Period also will be subject to the
satisfaction, on or before the day of the month following
----------
the end of such Collection Period (or if such day is not
----------
a Business Day, then on the next succeeding Business Day), of the
following conditions subsequent:
(i) the Seller shall have delivered to the Trustee and the
Rating Agencies a statement listing the aggregate Principal Balance
of the Subsequent Standard Receivables so transferred to the Trustee
and the Subsequent Fixed Value Receivables transferred to the Agent
during the related Collection Period, and any other information
reasonably requested by any of the foregoing with respect to such
Subsequent Standard Receivables and Subsequent Fixed Value
Receivables;
(ii) each of the Rating Agencies shall have notified the Seller
in writing that, following the transfer of all such Subsequent
Standard Receivables to the Trustee and Subsequent Fixed Value
Receivables to the Agent, as applicable, during the related
Collection Period, the (Class A) Certificates continue to be rated
in the highest investment rating category by each such Rating
Agency;
(iii) the Seller shall have delivered (A) to the Rating
Agencies an Opinion of Counsel with respect to the transfer of such
Subsequent Standard Receivables and Subsequent Fixed Value
Receivables substantially in the form of the Opinion of Counsel
delivered to the Rating Agencies on the Closing Date and (B) to the
Trustee the Opinion of Counsel required by Section 21.02(i)(1);
(iv) the Seller shall have delivered to the Trustee a letter of
a firm of independent certified public accountants confirming that
the conditions set forth in Section 3.02(c)(1)(vi) were satisfied
with respect to those Subsequent Standard Receivables conveyed to
the Trustee and the Subsequent Fixed Value Receivables conveyed to
the Agent on each Subsequent Transfer Date during the related
Collection Period, covering substantially the same matters with
respect to such Subsequent Receivables as are set forth on Exhibit D
to the Standard Terms and Conditions of Agreement, and, if any of
such Subsequent Receivables are OMSC Receivables, setting forth the
aggregate Principal Balance thereof; and
(v) the Seller shall have delivered to the Trustee an Officers'
Certificate confirming the satisfaction of each condition specified
in this paragraph (b)(2).
The Seller covenants that in the event any of the foregoing conditions
subsequent are not satisfied with respect to any Subsequent Standard
Receivable on the date required as specified above, the Seller will
immediately repurchase such Subsequent Standard Receivable from the Trustee,
at a price equal to the Purchase Amount thereof, in the manner specified in
Section 14.05.
(c) The Seller covenants to transfer Subsequent Standard Receivables to
the Trustee pursuant to paragraph (a) above and/or Subsequent Fixed Value
Receivables to the Agent pursuant to the Agency Agreement with an aggregate
Principal Balance equal to $ . In the event that the Seller shall
----------
fail to deliver and sell to the Trustee and/or the Agent any or all of such
Subsequent Receivables by the date on which the Funding Period ends and the
Pre-Funded Amount is greater than $ on such date, the Seller shall
----------
be obligated to deposit an amount equal to the Prepayment Premium into the
Certificate Distribution Account on the Distribution Date on which the Funding
Period ends (or, if the Funding Period does not end on a Distribution Date, on
the first Distribution Date following the end of the Funding Period);
provided, however, that the foregoing shall be the sole remedy of the Trustee,
the Agent or the Certificateholders with respect to a failure of the Seller to
comply with such covenant.
Section 3.03. Conveyance of Fixed Value Receivables to Agent. The Seller
----------------------------------------------
hereby confirms that the Seller, on the date hereof, has sold, transferred,
assigned and otherwise conveyed and, during the Funding Period (subject to the
conditions set forth in Section 3.02 of the Agency Agreement), will sell,
transfer, assign and otherwise convey, to the Agent for the benefit of the
Trust and the Seller, without recourse, all right, title and interest of the
Seller in and to:
(1) the Initial Fixed Value Receivables and the Subsequent Fixed
Value Receivables, as applicable, and all moneys due thereon on or
after the related Cutoff Date, in the case of Precomputed
Receivables, and all moneys received thereon on and after the
related Cutoff Date, in the case of Simple Interest Receivables;
(2) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Fixed Value Receivables and the
Subsequent Fixed Value Receivables and any other interest of the
Seller in such Financed Vehicles;
(3) any proceeds with respect to the Initial Fixed Value Receivables
and the Subsequent Fixed Value Receivables from claims on any
physical damage, credit life or disability insurance policies
covering the related Financed Vehicles or Obligors;
(4) any proceeds from recourse to Dealers on Initial Fixed Value
Receivables with respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual
payment in full is unlikely; and
(5) the proceeds of any and all of the foregoing.
ARTICLE IV.
Incorporation of Standard Terms and Conditions
Section 4.01. Incorporation of Standard terms and Conditions of
--------------------------------------------------------
Agreement. This Pooling and Servicing Agreement does hereby incorporate by
- ---------
reference the Standards Terms and Conditions of Agreement for Premier Auto
Grantor Trusts dated as of (the "Standard Terms and
----------------------
Conditions of Agreement"), in the form attached hereto.
ARTICLE V.
Additional Representations and Warranties of the Seller
Section 5.01. Additional Representations and Warranties of the Seller.
---------------------------------------------------------
The Seller makes the following representations and warranties on which the
Trustee relies in accepting the Standard Receivables in trust and executing
and authenticating the Certificates. Such representations and warranties speak
as of the execution and delivery of this Agreement and as of the Closing Date,
in the case of the Initial Receivables, and as of the applicable Subsequent
Transfer Date, in the case of the Subsequent Receivables, but shall survive
the sale, transfer and assignment of the Initial Standard Receivables and the
Subsequent Standard Receivables to the Trustee.
(i) Maturity of Receivables. Each Standard Receivable and Fixed
Value Receivable has a final maturity date not later than
; the weighted average remaining term of the Initial
--------------
Receivables is months as of the Initial Cutoff Date.
-----------
(ii) Financing. Approximately % of the aggregate principal
-----
balance of the Initial Receivables, constituting % of the
-----
number of Initial Receivables as of the Initial Cutoff Date,
represent vehicles financed at new vehicle rates; the remainder of
the Initial Receivables represent financing of used vehicles;
approximately % of the aggregate principal balance of the
-----
Initial Receivables represent financing of vehicles manufactured or
distributed by DaimlerChrysler Corporation; approximately % of
-----
the aggregate principal balance of the Initial Receivables as of the
Initial Cutoff Date represent Precomputed Receivables and the
remainder of the Initial Receivables represent Simple Interest
Receivables; and % of the aggregate principal balance of the
-----
Initial Receivables as of the Initial Cutoff Date consists of Fixed
Value Receivables. The aggregate Principal Balance of the Initial
Receivables, as of the Initial Cutoff Date, is $ .
----------
ARTICLE VI.
Additional Provisions Relating to Servicer
Section 6.01. Chrysler Financial Company L.L.C. Not to Resign as
---------------------------------------------------------
Servicer. Subject to the provisions of Section 17.03 of the Standard Terms and
- --------
Conditions of Agreement, Chrysler Financial Company L.L.C. shall not resign
from the obligations and duties hereby imposed on it as Servicer under this
Agreement except upon 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 Chrysler Financial
Company L.L.C. shall be communicated to the 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 Trustee concurrently with or promptly after such notice. No
such resignation shall become effective until the Trustee or a successor
Servicer shall have assumed the responsibilities and obligations of Chrysler
Financial Company L.L.C. in accordance with Section 18.02 of the Standard
Terms and Conditions of Agreement.
Section 6.02. Additional Covenant of the Servicer. If the Servicer takes
-----------------------------------
any action pursuant to Section 13.02 of the Standard Terms and Conditions of
Agreement that impairs the rights of the Certificateholders in any Receivable,
the Servicer shall purchase such Receivable pursuant to Section 13.07 of the
Standard Terms and Conditions of Agreement.
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have caused
this Pooling and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
CHRYSLER FINANCIAL COMPANY L.L.C.
By:
-------------------------
Name:
Title:
CHRYSLER FINANCIAL COMPANY L.L.C.
By:
-------------------------
Name:
Title:
[ ],
----------------------------
as Trustee
By:
-------------------------
Name:
Title:
Schedule A
Schedule of Receivables
(To be delivered to the Trustee at Closing and supplemented on each Subsequent
Transfer Date on which Subsequent Standard Receivables are transferred to the
Trust)
Schedule B
Location of Receivable Files
Chrysler Financial Company L.L.C.
27777 Franklin Road
Southfield, Michigan 48034-8288
Schedule C
Schedule of Eligible Investment Receivables
(To be delivered on each Subsequent Transfer Date on which Eligible Investment
Receivables are delivered to the Trust)
PREMIER AUTO GRANTOR TRUSTS
STANDARD TERMS AND CONDITIONS OF AGREEMENT
Dated as of_______________
INTRODUCTION
These Standard Terms and Conditions of Agreement shall be applicable to
Premier Auto Trust grantor trusts formed on or after the date hereof with
respect to which a Pooling and Servicing Agreement incorporating by reference
these Standard Terms and Conditions of Agreement shall have been executed.
ARTICLES I-X
Reserved
ARTICLE XI
Definitions
-----------
SECTION 11.01 Definitions. Whenever used in this Agreement, the following
-----------
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Additional Amount" means the aggregate of all amounts required to be
------------------
deposited to the Reserve Account in connection with any conveyance of
Subsequent Receivables pursuant to an Agreement.
"Advance" means either a Precomputed Advance or a Simple Interest
-------
Advance or both, as applicable.
"Affiliate" means, with respect to any specified Person, any other Person
---------
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" means a pooling and servicing agreement among CFC, as seller
---------
and servicer, and the Trustee named in such agreement in respect of any
Premier Auto Trust that is a grantor trust.
"Amortizing Payment" means with respect to each Fixed Value Receivable or
------------------
Eligible Investment Fixed Value Receivable, as applicable, and each Collection
Period prior to the date on which the Fixed Value Payment is due, the amount
specified on the applicable Contract prepayment schedule as the "Amount of
Each Payment," except that in the case of a prepayment, liquidation or
repurchase 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 (a) with respect to a Standard Receivable or
----------------
Eligible Investment Standard Receivable, as applicable, the amount advanced
under such Standard Receivable or Eligible Investment Standard Receivable
toward the purchase price of the Financed Vehicle and any related costs,
exclusive of any amount allocable to the premium of force-placed physical
damage insurance covering the Financed Vehicle; and (b) 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) thereunder, 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 means the annual rate
------------------------ ---
of finance charges stated in the related Contract.
"Benefit Plan" has the meaning set forth in Section 15.04(b).
------------
"Book-Entry Certificates" means, unless otherwise specified in the
------------------------
Agreement, a beneficial interest in the Class A Certificates, ownership and
transfers of which shall be registered through book entries by a Clearing
Agency as described in Section 15.09.
"Business Day" means any day other than a Saturday, a Sunday or a day on
------------
which banking institutions or trust companies in The City of New York are
authorized or obligated by law, regulation or executive order to be closed.
"Certificate Balance" means, as of any date, the aggregate outstanding
--------------------
principal amount of the Certificates at such date.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
-----------------
Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Certificateholder" or "Holder" means a Person in whose name a
----------------- ------
Certificate is registered in the Certificate Register.
"Certificate Register" and "Certificate Registrar" mean the register
--------------------- ----------------------
maintained and the registrar appointed pursuant to Section 15.03.
"Certificates" shall have the meaning set forth in the Agreement.
------------
"CFC" means Chrysler Financial Company L.L.C., a Michigan limited
---
liability company, or its successors.
"Class A Certificate Balance" means, as of any date of determination, the
---------------------------
Initial Class A Certificate Balance, as specified in the Agreement, reduced by
all amounts previously distributed to Holders of Class A Certificates and
allocable to principal.
"Class A Distributable Amount" means, with respect to any Distribution
-----------------------------
Date, the sum of the Class A Principal Distributable Amount and the Class A
Interest Distributable Amount for such date.
"Class A Interest Carryover Shortfall" means, with respect to any
----------------------------------------
Distribution Date, the excess of the sum of the Class A Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Class A Interest Carryover Shortfall on such preceding Distribution Date, over
the amount in respect of interest that Holders of the Class A Certificates
actually received on such preceding Distribution Date, plus 30 days' interest
on such excess, to the extent permitted by law, at the Class A Pass-Through
Rate.
"Class A Interest Distributable Amount" means, with respect to any
----------------------------------------
Distribution Date, the sum of the Class A Monthly Interest Distributable
Amount for such Distribution Date and the Class A Interest Carryover Shortfall
for such Distribution Date. Unless otherwise specified in the Agreement,
interest with respect to the Class A Certificates shall be computed on the
basis of a 360-day year consisting of twelve 30-day months.
"Class A 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 such Distribution Date) at the Class A Pass-Through Rate on the
Class A Certificate Balance on the last day of the preceding Collection Period
(or, in the case of the first Distribution Date, on the Closing Date).
"Class A Monthly Principal Distributable Amount" means, with respect to
------------------------------------------------
any Distribution Date, the Class A Percentage of the Principal Distribution
Amount.
"Class A Pass-Through Rate" shall have the meaning specified in the
---------------------------
Agreement.
"Class A Percentage" means the aggregate undivided ownership interest in
------------------
the Trust represented by the Class A Certificates, as specified in the
Agreement.
"Class A Principal Carryover Shortfall" means, as of the close of any
---------------------------------------
Distribution Date, the excess of the Class A Monthly Principal Distributable
Amount and any outstanding Class A Principal Carryover Shortfall from the
preceding Distribution Date, over the amount in respect of principal that is
actually distributed to Holders of the Class A Certificates on such current
Distribution Date.
"Class A Principal Distributable Amount" means, with respect to any
-----------------------------------------
Distribution Date, the sum of the Class A Monthly Principal Distributable
Amount for such Distribution Date and the Class A Principal Carryover
Shortfall as of the closing of the preceding Distribution Date; PROVIDED,
HOWEVER, that the Class A Principal Distributable Amount shall not exceed the
Class A Certificate Balance. In addition, on the Final Scheduled Distribution
Date, the principal required to be included in the Class A Principal
Distributable Amount will include the lesser of (a) the Class A Percentage of
(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 Distribution Account on
such Distribution Date and allocable to principal) to reduce the Class A
Certificate Balance to zero.
"Class B Certificate Balance" means, as of any date of determination, the
---------------------------
Initial Class B Certificate Balance, as specified in the Agreement, reduced by
all amounts previously distributed to Holders of Class B Certificates and
allocable to principal.
"Class B Distributable Amount" means, with respect to any Distribution
-----------------------------
Date, the sum of the Class B Principal Distributable Amount and the Class B
Interest Distributable Amount.
"Class B Interest Carryover Shortfall" means, with respect to any
----------------------------------------
Distribution Date, the excess of the sum of the Class B Interest Distributable
Amount for the preceding Distribution Date and any outstanding Class B
Interest Carryover Shortfall on such preceding Distribution Date, over the
amount in respect of interest that Holders of the Class B Certificates
actually received on such preceding Distribution Date, plus 30 days' interest
on such excess, to the extent permitted by law, at the Class B Pass-Through
Rate.
"Class B Interest Distributable Amount" means, with respect to any
----------------------------------------
Distribution Date, the sum of the Class B Monthly Interest Distributable
Amount for such Distribution Date and the Class B Interest Carryover Shortfall
for such Distribution Date. Unless otherwise specified in the Agreement,
interest with respect to the Class B Certificates shall be computed on the
basis of a 360-day year consisting of twelve 30-day months.
"Class B 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 such Distribution Date) at the Class B Pass-Through Rate on the
Class B Certificate Balance on the last day of the preceding Collection Period
(or, in the case of the first Distribution Date, on the Closing Date).
"Class B Monthly Principal Distributable Amount" means, with respect to
------------------------------------------------
any Distribution Date, the Class B Percentage of the Principal Distribution
Amount.
"Class B Pass-Through Rate" shall have the meaning specified in the
---------------------------
Agreement.
"Class B Percentage" means the aggregate undivided ownership interest in
------------------
the Trust represented by the Class B Certificates, as specified in the
Agreement.
"Class B Principal Carryover Shortfall" means, as of the close of any
---------------------------------------
Distribution Date, the excess of the Class B Monthly Principal Distributable
Amount and any outstanding Class B Principal Carryover Shortfall from the
preceding Distribution Date, over the amount in respect of principal that is
actually distributed to Holders of the Class B Certificates on such current
Distribution Date.
"Class B Principal Distributable Amount" means, with respect to any
-----------------------------------------
Distribution Date, the sum of the Class B Monthly Principal Distributable
Amount for such Distribution Date and the Class B Principal Carryover
Shortfall as of the close of the preceding Distribution Date; PROVIDED,
HOWEVER, that the Class B Principal Distributable Amount shall not exceed the
Class B Certificate Balance. In addition, on the Final Scheduled Distribution
Date, the principal required to be included in the Class B Principal
Distributable Amount will include the lesser of (a) the Class B Percentage of
(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 Distribution Account on
such Distribution Date and allocable to principal) to reduce the Class B
Certificate Balance to zero.
"Clearing Agency" means an organization registered as a "clearing agency"
---------------
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
"Clearing Agency Participant" means a broker, dealer, bank, other
-----------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" with respect to each Trust shall have the meaning set
-------------
forth in the applicable Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collection Account" means the account designated as such, established
-------------------
and maintained pursuant to Section 14.01.
"Collection Period" means a calendar month (or in the case of the first
------------------
Distribution Date, the period from and including the Initial Cutoff Date to
and including the last day of the calendar month in which the Closing Date
occurs). 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
Advances and (5) all distributions to be made on the following Distribution
Date.
"Corporate Trust Office" means the principal office of the Trustee at the
----------------------
address set forth in the related Agreement or at such other address as the
Trustee may designate from time to time by notice to Certificateholders, the
Seller and the Servicer, or the principal corporate trust office of any
successor Trustee (of which address such successor Trustee shall notify the
Certificateholders, the Seller and Servicer).
"Cutoff Date" means, with respect to any Receivable or Eligible
------------
Investment Receivable, as applicable, the date as of which collections on such
Receivable or Eligible Investment Receivable will be included in a Trust
pursuant to the related Agreement.
"Dealer" means the dealer who sold a Financed Vehicle and who originated
------
and assigned the related Receivable to , under an existing agreement between
such dealer and CFC.
"Definitive Certificates" shall have the meaning specified in Section
------------------------
15.11.
"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 Trustee or its nominee or custodian
by physical delivery to the Trustee or its nominee or custodian endorsed to,
or registered in the name of, the 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 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 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 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 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 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 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 to the 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 that 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 Trustee or its nominee or custodian of the
purchase by the 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
Trustee or its nominee or custodian and indicating that such custodian holds
such Trust Account Property solely as agent for the Trustee or its nominee or
custodian; and such additional or alternative procedures as may hereafter
become appropriate to effect complete transfer of ownership of any such Trust
Account Property to the 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 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 Trustee or its nominee or
custodian.
"Determination Date" means the Business Day of each calendar
------------------- ------
month, unless a different date is identified in an Agreement as the
Determination Date for the purposes of such Agreement.
"Distribution Account" means the account designated as such, established
---------------------
and maintained pursuant to Section 14.01.
"Distribution Date" with respect to each Trust shall have the meaning set
-----------------
forth in the applicable Agreement.
"Duff & Phelps" means Duff & Phelps Credit Rating Company, or its
--------------
successor.
"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
Colombia (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
---------------------
Trustee or any other entity specified in the 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 Trustee or any such other entity specified in the
Agreement 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 to an Agreement (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 related Trust on Subsequent Transfer Dates,
which contract 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.
"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 that is not
----------------------------------------
an Eligible Investment Fixed Value Receivable, which contract is listed on
Schedule C to an Agreement (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 related Trust on Subsequent Transfer Dates.
"Eligible Investment Transfer Assignment" means a written assignment
------------------------------------------
substantially in the form of Exhibit K.
"Eligible Investments" mean 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 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 (of 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 Trustee or any of its 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 provision in such clause (b) shall be A-1 or higher in the case of
Standard & Poor's)(such depository institution or trust company being referred
to in this definition as a "financial institution"), (ii) a broker/dealer
(acting as principal) registered as a broker or dealer under Section 15 of the
Exchange Act (a "broker/dealer") the unsecured short-term debt obligations of
which are rated P-1 by Moody's and at least A-1 by Standard & Poor's at the
time of entering into such repurchase obligation (a "rated broker/dealer"),
(iii) an unrated broker/dealer (an "unrated broker/dealer"), acting as
principal, that is a wholly-owned subsidiary of a non-bank holding company the
unsecured short-term debt obligations of which are rated P-1 by Moody's and at
least A-1 by Standard & Poor's at the time of entering into such repurchase
obligation (a "Rated Holding Company") or (iv) an unrated subsidiary (a
"Guaranteed Counterparty"), acting as principal, that is a wholly-owned
subsidiary of a direct or indirect parent Rated Holding Company, that
guarantees such subsidiary's obligations under such repurchase agreement;
PROVIDED that the following conditions are satisfied:
(1) 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 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
Rated Holding Company) shall not exceed 20% of 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));
(2) in the case of the Reserve Account and the Pre-Funding 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+;
(3) the repurchase obligation must mature within 30 days of the date
on which the Trustee on behalf of the Trust, enters into such repurchase
obligation;
(4) 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;
(5) the collateral subject to the repurchase obligation is held, in
the appropriate form, by a custodial bank on behalf of the Trustee;
(6) the repurchase obligation shall require that the collateral
subject thereto shall be marked to market daily;
(7) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
(A) the Trustee shall have received an opinion of counsel
(which may be in-house counsel) to the effect that the guarantee of
the related Rated Holding Company is a legal, valid and binding
agreement of the Rated Holding Company, enforceable in accordance
with its terms, subject as to enforceability to bankruptcy,
insolvency, reorganization and moratorium or other similar laws
affecting creditor's rights generally and to general equitable
principles;
(B) the Trustee shall have received (x) an incumbency
certificate for the signer of such guarantee, certified by an
officer of such Rated Holding Company, (y) a resolution, certified
by an officer of the Rated Holding Company and (z) 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;
(C) 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 not
notice to, demand on or other action in respect of the Guaranteed
Counterparty is necessary) and that Trustee or the Trust shall make
a demand on the Rated Holding Company to make the payment due under
such guarantee;
(D) 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
(E) each of Standard & Poor's and Moody's has confirmed in
writing to the Trustee 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 Certificates.
(8) the repurchase obligation shall require that the repurchase
obligation be overcollateralized and shall provide that, upon any failure
to maintain such overcollateralization, the repurchase obligation shall
become due and payable, and unless the repurchase obligation is satisfied
immediately, the collateral subject to the repurchase agreement shall be
liquidated and the proceeds applied to satisfy the unsatisfied portion of
the repurchase obligation; and
(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 the Agreement in clause (ii) of the definition of
"Specified Reserve Account Balance"; and
(i) any other investment with respect to which the Trustee 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 of the Certificates.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Event of Default" means an event specified in Section 18.01.
----------------
"FDIC" means the Federal Deposit Insurance Corporation.
----
"Final Scheduled Distribution Date" means the date specified in an
------------------------------------
Agreement as the final scheduled distribution date with respect to the related
Certificates.
"Final Scheduled Maturity Date" means the final scheduled maturity date
------------------------------
specified in an Agreement in respect of the Receivables transferred to the
Trust under such Agreement.
"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.
"Fitch" means Fitch Investors Service, Inc., or its successor.
-----
"Fixed Value Payment" means, with respect to each Fixed Value Receivable
-------------------
or Eligible Investment Fixed Value Receivable, as applicable, the amount
specified in 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 to an
-----------------------
Agreement (which Schedule may be in the form of a microfiche), as such
Schedule shall be supplemented to reflect the transfer of Subsequent
Receivables to the Trust on each Subsequent Transfer Date pursuant to Section
3.02, 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 such final payment is
due after payment of such scheduled monthly payments and 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.
"Funding Period" with respect to each Trust shall have the meaning set
---------------
forth in the applicable Agreement.
"Initial Cutoff Date" means the date or dates as of which Initial
---------------------
Receivables, if any, are conveyed to a Trust pursuant to the related
Agreement.
"Initial Receivables" means the Standard Receivables, if any, and the
--------------------
Fixed Value Receivables, if any, conveyed to a Trust on the Closing Date and
listed on Schedule A to the related Agreement.
"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 or such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by, a receiver,
liquidator, assignee, custodian, trustee, sequestrator, or similar official
for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of 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 in respect of the preceding Collection
Period: (i) that portion of all collections on Receivables (including
Payaheads) allocable to interest, (ii) Liquidation Proceeds with respect to
the Receivables to the extent allocable to interest due thereon in accordance
with the Servicer's customary servicing procedures; (iii) all Advances made by
the Servicer of interest due on Receivables, (iv) the Purchase Amount of each
Receivable that became a Purchased Receivable during the related Collection
Period to the extent attributable to accrued interest on such Receivable (v)
Recoveries for such Collection Period, and (vi) Investment Earnings for such
Collection Period; PROVIDED, HOWEVER, that in calculating the Interest
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 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; (v) the sum for all Simple Interest Receivables of
collections on each such Simple Interest Receivable received during the
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 the related Contract; (vi)
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; and (vii) amounts released from the Pre-Funding
Account.
"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 to the Distribution Account on
such Distribution Date pursuant to Section 14.01(b).
"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 sale of a
Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to a Liquidated Receivable,
---------------------
the monies collected in respect thereof, from whatever source, 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 connection with such liquidation, plus any amounts
required by law to be remitted to the Obligor.
"Moody's" means Moody's Investors Service, Inc., or its successor.
-------
"Obligor" on a Receivable means the purchaser or co-purchasers of the
-------
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by the (a) chairman of
---------------------
the board, the president, any executive vice president or any vice president
and (b) any treasurer, assistant treasurer, secretary or assistant secretary
of the Seller 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 or the Servicer, which counsel
shall be acceptable to the Trustee or Rating Agencies, as applicable.
"Original Pool Balance" means the sum, as of any date, of the Pool
-----------------------
Balance as of the Initial Cutoff Date, plus the aggregate Principal Balance of
the Subsequent Receivables, if any, sold to the Trust, as of their respective
Cutoff Dates.
"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, reduced as provided by Section 14.04(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, reduced as provided in Section
14.04(b).
"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 14.03 with respect to such Receivable.
"Payahead Balance" on 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 14.03 and 14.04.
"Person" means any individual, corporation, estate, partnership, joint
------
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"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 date (excluding Purchased Receivables and Liquidated Receivables).
"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 Pool Balance
divided by the Original Pool Balance. The Pool Factor will be 1.0000000 as of
the Initial Cutoff Date; thereafter, the Pool Factor will decline to reflect
reductions in the Pool Balance.
"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 any Precomputed Receivable pursuant to Section 14.04(a).
"Precomputed Receivable" means any Receivable or Eligible Investment
-----------------------
Receivable, as applicable, under which the portion of each payment allocable
to earned interest (which may be referred to in the Receivable as an add-on
finance charge) and the portion allocable to the Amount Financed are
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.
"Pre-Funded Amount" means, with respect to any Distribution Date, the
------------------
amount on deposit in the Pre-Funding Account. The amount, if any, to be
deposited initially to the PreFunding Account will be specified in the
Agreement.
"Pre-Funded Percentage" means, with respect to the Class A Certificates
----------------------
and the Class B Certificates, the quotient (expressed as a percentage) of (i)
the initial Class A Certificate Balance or Class B Certificate Balance, as the
case may be, and (ii) the Initial Certificate Balance.
"Pre-Funding Account" means the Trust Account established pursuant to
--------------------
Section 14.01(a)(ii).
"Prepayment Premium" means the Class A Prepayment Premium or the Class B
-------------------
Prepayment Premium, or both, as specified in the Agreement.
"Principal Balance" means the Amount Financed minus the sum, as of the
------------------
close of business on the last day of a Collection Period, of (a) with respect
to a Precomputed Receivable (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
allocable to principal and (iv) any prepayment in full or any partial
prepayments applied to reduce the Principal Balance and (b) with respect to a
Simple Interest Receivable (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 allocable to principal.
"Principal Distribution Amount" means, for any Distribution Date, the sum
-----------------------------
of the following amounts with respect to the preceding Collection Period: (i)
that portion of all collections on Receivables (including amounts withdrawn
from the Payahead Account but excluding amounts deposited into the Payahead
Account) allocable to principal; (ii) all Liquidation Proceeds attributable to
the principal amount of Receivables that became Liquidated Receivables during
the Collection Period in accordance with the Servicer's customary servicing
procedures, plus the amount of Realized Losses with respect to such Liquidated
Receivables; (iii) all Precomputed Advances made by the Servicer of principal
due on the Precomputed Receivables; (iv) to the extent attributable to
principal, the Purchase Amount received with respect to each Receivable that
became a Purchased Receivable during the related Collection Period; (v)
partial prepayments 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
Obligor as of the date of the original contract; and (vi) 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.
"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 13.07 or by the
Seller pursuant to Section 12.04.
"Rating Agency" means Moody's and Standard & Poor's and, for purposes of
--------------
Section 3.02(b) of the Agreement only, Fitch and Duff & Phelps. If no such
organization or successor is any longer in existence, "Rating Agency" shall
mean any nationally recognized statistical rating organization or other
comparable Person designated by the Seller, notice of which designation shall
be given to the Trustee and the Servicer. Any notice required to be given to a
Rating Agency pursuant to this Agreement shall also be given to Fitch and Duff
& Phelps, although, except as set forth above, neither shall be deemed 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 Servicer and the Trustee
in writing that such action will not result in a reduction or withdrawal of
the then current rating of the Certificates.
"Realized Losses" means, with respect to any Receivable or Eligible
----------------
Investment Receivable, as applicable, 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 12.05.
----------------
"Record Date" with respect to each Distribution Date means the first day
-----------
of the calendar month in which such Distribution Date occurs, unless otherwise
specified in the Agreement.
"Recoveries" means, with respect to any Receivable or Eligible Investment
----------
Receivable, as applicable, 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 or Eligible
Investment 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.
"Reserve Account" means the account designated as such, established and
---------------
maintained pursuant to Section 14.01(a)(iv).
"Reserve Account Initial Deposit" with respect to a Trust shall have the
--------------------------------
meaning set forth in the Agreement.
"Scheduled Payment" on a Precomputed Receivable means that portion of the
-----------------
payment required to be made by the Obligor during each Collection Period
sufficient to amortize the Principal Balance thereof under the actuarial
method over the term of the Receivable and to provide interest at the APR.
"Seller" means Chrysler Financial Company L.L.C., a Michigan limited
------
liability company, and its successors in interest to the extent permitted
hereunder.
"Servicer" means Chrysler Financial Company L.L.C., a Michigan limited
--------
liability company, as the servicer of the Receivables, and each successor
Servicer pursuant to Section 17.03 or 18.02.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
-----------------------
delivered pursuant to Section 13.09, substantially in the form of Exhibit E.
"Servicing Fee" means the fee payable to the Servicer for services
--------------
rendered during each Collection Period, determined pursuant to Section 13.08.
"Servicing Rate" means, unless otherwise specified in the Agreement,
---------------
1.00%
"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
14.04(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 the amount of funds generally
-----------------------------------
required to be maintained in the Reserve Account, determined as specified in
the Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Group, or its
-------------------
successor.
"Standard Receivable" means any contract that is not a Fixed Value
--------------------
Receivable and that is listed on Schedule A (which schedule may be in the form
of microfiche), as such Schedule shall be supplemented to reflect the transfer
of Subsequent Receivables, if any, to the Trust pursuant to the Agreement.
"Subsequent Cutoff Date" means any date as of which particular Subsequent
----------------------
Receivables are conveyed to a Trust pursuant to the Agreement.
"Subsequent Receivables" means the Standard Receivables and Fixed Value
-----------------------
Receivables transferred to a Trust pursuant to the Agreement, which shall be
listed on Schedule A to the related Subsequent Transfer Assignment.
"Subsequent Transfer Assignment" means a written assignment substantially
------------------------------
in the form of Exhibit J.
"Subsequent Transfer Date" means, with respect to Subsequent Receivables,
------------------------
any date during the Funding Period on which Subsequent Receivables are to be
transferred to a Trust and a Subsequent Transfer Assignment is executed and
delivered to the related Trustee pursuant to the Agreement and, with respect
to Eligible Investment Receivables, any date on which Eligible Investment
Receivables are to be transferred to a Trust and an Eligible Investment
Transfer Assignment is executed and delivered to the related Trustee pursuant
to the Agreement.
"Total Distribution Amount" means, for each Distribution Date, the sum of
-------------------------
the Interest Distribution Amount and the Principal Distribution Amount (other
than the portion thereof attributable to Realized Losses).
"Trust" shall have the meaning set forth in the Agreement.
-----
"Trust Account Property" with respect to each Trust 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 14.01.
--------------
"Trustee" with respect to each Trust shall have the meaning assigned
-------
thereto in the Agreement.
"Trustee Officer" means any officer within the Corporate Trust Office of
----------------
the Trustee, including the chairman or vice-chairman of the board of
directors, the chairman or vice-chairman of the executive committee of the
board of directors, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"UCC" means the Uniform Commercial Code as in effect in the State of New
---
York on the date hereof.
SECTION 11.02. Other Definitional Provisions. (a) All terms defined in
------------------------------
this Standard Terms and Conditions of Agreement or any Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto or thereto unless otherwise defined therein.
(b) As used herein, in any Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined herein or in such Agreement or in any such certificate or other
document, and accounting terms partly defined herein or in such 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 herein, in
any related 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 herein, in such Agreement or
in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and word of similar import
when used herein shall refer to these Standard Terms and Conditions of
Agreement and the Agreement as a whole and not to any particular provision of
the Standard Terms and Conditions of Agreement or the Agreement; Article,
Section, Schedule and Exhibit references contained in the Standard Terms and
Conditions of Agreement or any Agreement are references to Articles, Sections,
Schedules and Exhibits in or to the Standard Terms and Conditions of Agreement
and the Agreement, respectively; and the term "including" shall mean
"including without limitation".
(d) The definitions contained in these Standard Terms and Conditions of
Agreement and the 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.
(e) 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 XII
The Receivables
---------------
SECTION 12.01. Representations and Warranties of Seller. The Seller makes
----------------------------------------
the following representations and warranties as to the Receivables on which
the Trustee shall be deemed to rely in accepting the Receivables in trust and
executing and authenticating the Certificates. Such representations and
warranties speak as of the execution and delivery of the Agreement and as of
the Closing Date, in the case of the Initial Receivables, if any, and as of
the applicable Subsequent Transfer Date, in the case of the Subsequent
Receivables, if any, but shall survive the sale, transfer and assignment of
any Initial Receivables and Subsequent Receivables to the Trustee.
(i) Characteristics of Receivables. Each Standard Receivable and
-------------------------------
each Fixed Value Receivable (a) shall have been originated in the United
States of America (except for any OMSC Receivables) by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties
thereto, shall have been purchased by the Seller from CFC, which, in
turn, shall have purchased such Standard Receivable or Fixed Value
Receivable from such Dealer under an existing dealer agreement with CFC,
(b) shall have created or shall create a valid, subsisting and
enforceable first priority security interest in favor of CFC in the
Financed Vehicle, which security interest has been assigned by CFC to the
Seller, and shall be assignable by the Seller, (c) shall contain
customary and enforceable provisions such that the rights and remedies of
the holder thereof shall be adequate for realization against the
collateral of the benefits of the security, (d) shall provide 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 (v) in the case of a Precomputed Receivable,
in the event that such contract is prepaid, shall provide 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 service of the
United States of America military at the time such OMSC Receivable was
originated.
(ii) Schedule of Receivables. The information set forth in Schedule
-----------------------
A to each Agreement and Schedule A to any Subsequent Transfer Assignment
shall be true and correct in all material respects as of the opening of
business on the related Cutoff Date, and no selection procedures believed
to be adverse to the Certificateholders shall have been utilized in
selecting the Standard Receivables or the Fixed Value Receivables. Each
computer tape or other listing regarding the Standard Receivables and
Fixed Value Receivables made available to the Trustee shall be true and
correct in all respects.
(iii) Compliance with Law. Each Standard Receivable and Fixed Value
-------------------
Receivable and the sale of the Financed Vehicle shall comply at the time
of the execution of the Agreement in all material respects with all
requirements of applicable federal, state and local laws and regulations
thereunder (or, in the case of OMSC Receivables, Swiss laws and
regulations and the laws and regulations of the jurisdiction where the
Receivable was originated), including, without limitation, usury laws,
the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board's Regulations B and Z, 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.
(iv) Binding Obligation. Each Standard Receivable and Fixed Value
-------------------
Receivable shall represent the genuine, legal, valid and binding payment
obligation in writing of the Obligor, enforceable by the holder thereof
in accordance with its terms.
(v) No Government Obligor. None of the Standard Receivables or Fixed
---------------------
Value Receivables shall be due from the United States of America or any
State or from any agency, department or instrumentality of the United
States of America or any State.
(vi) Security Interest in Financed Vehicle. Immediately prior to the
-------------------------------------
sale, assignment and transfer thereof, each Standard Receivable and each
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 shall have been
commenced that would result in the valid perfection of a first security
interest in the Financed Vehicle in favor of the Seller as secured party.
(vii) Receivables in Force. No Standard Receivable or Fixed Value
--------------------
Receivable shall have been satisfied, subordinated or rescinded, nor
shall any Financed Vehicle have been released from the lien granted by
the related Standard Receivable or Fixed Value Receivable in whole or in
part.
(viii) No Waiver. No provision of a Standard Receivable or Fixed
---------
Value Receivable shall have been waived.
(ix) No Amendments. No Standard Receivable or Fixed Value Receivable
-------------
shall have been amended such that the amount of the Obligor's Scheduled
Payments shall have been increased except for increases resulting from
the inclusion of any premiums for forced placed physical damage insurance
covering the Financed Vehicle.
(x) No Defenses. No right of rescission, setoff, counterclaim or
-----------
defense shall have been asserted or threatened with respect to any
Standard Receivable or Fixed Value Receivable.
(xi) No Liens. To the best of the Seller's knowledge, no liens or
--------
claims shall have been filed for work, labor or materials relating to a
Financed Vehicle that shall be liens prior to, or equal or coordinate
with, the security interest in the Financed Vehicle granted by the
Standard Receivable or Fixed Value Receivable.
(xii) No Default. No Standard Receivable or Fixed Value Receivable
----------
has a payment that is more than 90 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.
(xiii) Insurance. The Seller, in accordance with its customary
---------
procedures, shall have determined that the Obligor has obtained physical
damage insurance covering the Financed Vehicle and under the terms of the
Standard Receivable or Fixed Value Receivable the Obligor is required to
maintain such insurance.
(xiv) 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 Trust 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 Trustee. 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 Trustee, for the benefit of the
Certificateholders, shall have good and marketable title to each such
Standard Receivable and Fixed Value Receivable, free and clear of all
Liens, encumbrances, security interests and rights of others; and the
transfer has been perfected under the UCC.
(xv) Lawful Assignment. No Standard Receivable or Fixed Value
------------------
Receivable shall have been originated in, or shall be subject to the laws
of, any jurisdiction under which the sale, transfer and assignment of
such Standard Receivable or Fixed Value Receivable under the Agreement or
any Subsequent Transfer Assignment or pursuant to transfers of the
Certificates shall be unlawful, void or voidable.
(xvi) All Filings Made. All filings (including UCC filings)
------------------
necessary in any jurisdiction to give the Trustee a first perfected
ownership interest in the Standard Receivables and the Fixed Value
Receivables shall have been made.
(xvii) One Original. There shall be only one original executed copy
------------
of each Standard Receivable and each Fixed Value Receivable.
(xviii) 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 90 days overdue as of the
related Cutoff Date, and has a final scheduled payment date no later than
the Final Scheduled Maturity Date.
(xix) Location of Receivable Files. The Receivable Files are kept at
----------------------------
one or more of the locations listed in Schedule B to the Agreement.
(xx) Remaining Maturity. The latest scheduled maturity of any
-------------------
Standard Receivable or Fixed Value Receivable shall be no later than the
Final Scheduled Maturity Date.
(xxi) Outstanding Principal Balance. Each Standard Receivable and
------------------------------
Fixed Value Receivable has an outstanding gross balance of at least
$1,000.
(xxii) No Bankruptcies or First-Time Buyers. No Obligor on any
----------------------------------------
Standard Receivable or Fixed Value Receivable as of the related
Subsequent Cutoff Date was noted in the related Receivable File as having
filed for bankruptcy, and no such Obligor financed a Financed Vehicle
under CFC's "New Finance Buyer Plan" program.
(xxiii) No Repossessions. No Financed Vehicle securing any Standard
----------------
Receivable or Fixed Value Receivable is in repossession status.
(xxiv) Chattel Paper. Each Standard Receivable and each Fixed Value
-------------
Receivable constitutes "chattel paper" under the UCC.
(xxv) Agreement. The representations and warranties contained herein
---------
and in the Agreement shall be true and correct.
(xxvi) Remaining Maturity. The latest scheduled maturity of any
-------------------
Standard Receivable or Fixed Value Receivable shall be no later than the
Final Scheduled Maturity Date.
SECTION 12.02. Conveyance of Fixed Value Payments. (a) Promptly following
----------------------------------
the transfer to the Trustee of the Initial Receivables on the Closing Date and
of Subsequent Receivables on any Subsequent Transfer Date, the Trustee shall,
and without further action hereunder or thereunder, be deemed to sell,
transfer, assign, set over and otherwise convey to the Seller, effective as of
the Closing Date or the related Subsequent Transfer Date, as applicable,
without recourse, representation or warranty, all the right, title and
interest of the Trustee 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 14.03(b).
(b) The Seller shall not, after any such transfer to it of Fixed Value
Payments by the Trustee, sell, transfer, assign, set over or otherwise convey
such Fixed Value Payments to any other Person.
SECTION 12.03. Purchase of Eligible Investment Receivables. (a) Pursuant
-------------------------------------------
to Section 14.01(b), the Trustee may invest funds in the Reserve Account in
Eligible Investment Receivables, but only up to the portion of the Specified
Reserve Account Balance, if any, specified in the definition "Specified
Reserve Account Balance" contained in the Agreement. Eligible Investment
Receivables shall be part of the Reserve Account and shall not be Receivables
hereunder and, except for Investment Earnings in respect of the Eligible
Investment Receivables (which Investment Earnings shall be deposited in the
Collection Account pursuant to Section 14.01(b) and are part of the Interest
Distribution Amount), collections on and Purchase Amounts in respect of
Eligible Investment Receivables shall be applied as part of the Reserve
Account pursuant to Section 14.07 and shall not be part of the Total
Distribution Amount. Upon delivery by the Trustee to the Seller of an amount
equal to the aggregate Principal Balance of the Eligible Investment
Receivables then being purchased by the Trustee, the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Trustee, without
recourse (subject to the obligations set forth herein), all right, title and
interest of the Seller in and to:
(i) the Eligible Investment Receivables listed on Schedule A to the
related Eligible Investment Transfer Assignment, and all moneys due
thereon, on or after the related Cutoff Date, in the case of Precomputed
Receivables, and all moneys received thereon, on and after the related
Cutoff Date, in the case of Simple Interest Receivables;
(ii) 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;
(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 from recourse to Dealers with respect to Eligible
Investment Receivables in respect of 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 Receivable and shall have been acquired by or on behalf of the
Seller, the Servicer or the Trustee; and
(vi) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Trustee 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 Subsequent Transfer Date:
(i) the Seller shall have delivered to the Trustee a duly executed
Eligible Investment Transfer Assignment substantially in the form of
Exhibit K, which shall include supplements to Schedule C listing the
Eligible Investment Receivables;
(ii) the Seller shall, to the extent required by Section 14.02, have
deposited in the Reserve Account all amounts (A) due on or after the
applicable Cutoff Date in respect of such Eligible Investment Receivables
that are Precomputed Receivables or (B) received on or after the
applicable Cutoff Date in respect of such Eligible Investment Receivables
that are Simple Interest Receivables;
(iii) as of each related Subsequent Transfer Date, (A) the Seller
shall not be insolvent and shall not become insolvent as a result of the
transfer of Eligible Investment Receivables on such Subsequent Transfer
Date, (B) the Seller shall not intend to incur or believe that it shall
incur debts that would be beyond its ability to pay as such debts mature,
(C) such transfer shall not be made with actual intent to hinder, delay
or defraud any Person and (D) the assets of the Seller shall 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 12.01 (other than clause (xxi)) shall be true and
correct with respect to the Eligible Investment Receivables as of the
related Subsequent Transfer Date, and the Seller shall have performed all
obligations to be performed by it hereunder on or prior to such
Subsequent Transfer Date;
(v) not more than [30]% of the Principal Balances of the Eligible
Investment Receivables in the Reserve Account, including the Eligible
Investment Receivables to be conveyed to the Trustee on such Subsequent
Transfer Date (based on the characteristics of all of the Eligible
Investment Receivables included in the Reserve Account of their related
Cutoff Dates) shall represent vehicles financed at CFC's used vehicle
rates;
(vi) the Seller shall, at its own expense, on or prior to the
related Subsequent Transfer Date indicate in its computer files that the
Eligible Investment Receivables identified in the Eligible Investment
Transfer Assignment have been sold to the Trustee pursuant to this
Agreement and the related Eligible Investment Transfer Assignment;
(vii) the Seller shall have taken any action required to maintain
the first perfected ownership interest of the Trustee in the Trust
Estate;
(viii) no selection procedures believed by the Seller to be adverse
to the interests of the Certificateholders shall have been utilized in
selecting the Eligible Investment Receivables;
(ix) the addition of any such Eligible Investment Receivables shall
not result in a material adverse tax consequence to the Trust 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 Trustee the
Opinion of Counsel required by Section 21.02(i)(1); PROVIDED that the
Opinions of Counsel referred to in clauses (A) and (B) shall be delivered
only (X) during the Funding Period, on the date on which the Opinion of
Counsel required by the Agreement is required to be delivered and shall
relate to the Eligible Investment Receivables transferred in the
preceding Collection Period and (Y) after the Pre-Funding Period, on the
Subsequent Transfer Date on which the aggregate Principal Balance
(calculated as of the respective Cutoff Dates) of the Eligible Investment
Receivables delivered under this Section 12.03 and not previously covered
by an Opinion of Counsel required by this clause (Y) equals or exceeds
$5,000,000; and
(xi) the Seller shall have delivered to the Trustee an Officers'
Certificate confirming the satisfaction of each condition specified in
this paragraph (b).
(c) Promptly following the transfer to the Trustee of Eligible Investment
Receivables on any Subsequent Transfer Date, the Trustee shall, and 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 Trustee 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 14.03(b).
(d) Except as described in Section 21.08, the Seller shall not sell,
transfer, assign, set over or otherwise convey the Fixed Value Payments
derived from the Eligible Investment Receivables.
(e) Except as otherwise provided herein, all of the provisions of this
Agreement (exclusive of Section 12.01(xxi) and Section 14.04) applicable to a
Receivable shall also apply to the Eligible Investment Receivables, except
that, pursuant to Section 14.02, collections 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 13.08 and
payable out of any collections on the Eligible Investment Receivables
allocable to interest.
SECTION 12.04. Repurchase Upon Breach. The Seller, the Servicer or the
----------------------
Trustee, as the case may be, shall inform the other parties to the Agreement
promptly, in writing, upon the discovery of any breach of the Seller's
representations and warranties made pursuant to Section 12.01 or 16.01. Unless
any such breach shall have been cured by the last day of the second Collection
Period following the discovery thereof by the Trustee or receipt by the
Trustee of notice from the Seller or the Servicer of such breach, the Seller
shall be obligated to repurchase any Standard Receivable or Fixed Value
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 such discovery or notice). In consideration of the repurchase
of any Standard Receivable or Fixed Value Receivable, the Seller shall remit
the Purchase Amount, in the manner specified in Section 14.05. Subject to the
provisions of Section 16.03, the sole remedy of the Trustee, the Trust or the
Certificateholders with respect to a breach of representations and warranties
pursuant to Section 12.01 or 16.01 and the agreement contained in this Section
shall be to require the Seller to repurchase Standard Receivables or Fixed
Value Receivables pursuant to this Section 12.04, subject to the conditions
contained herein.
SECTION 12.05. Custody of Receivable Files. To assure uniform quality in
---------------------------
servicing the Receivables and to reduce administrative costs, the Trustee,
upon the execution and delivery of the Agreement, hereby revocably appoints
the Servicer, and the Servicer hereby accepts such appointment, to act as the
agent of the Trustee as custodian of the following documents or instruments
which are hereby constructively delivered to the Trustee as of the earlier of
the Initial Cutoff Date and the Closing Date (in the case of Initial
Receivables) and as of each Subsequent Transfer Date (in the case of
Subsequent Receivables) with respect to each Receivable:
(i) the original of the Standard Receivable or the Fixed Value
Receivable;
(ii) the original credit application fully executed by the Obligor;
(iii) 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
(iv) 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 a Fixed Value Receivable, an Obligor or a
Financed Vehicle.
SECTION 12.06. Duties of Servicer as Custodian. (a) Safekeeping. The
-------------------------------
Servicer shall hold the Receivable Files as custodian on behalf of the Trustee
for the benefit of all present and future Certificateholders, and shall
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Trustee to comply with
these Standard Terms and Conditions of Agreement and the 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 the Agreement, and of the related accounts, records and
computer systems, in such a manner as shall enable the Trustee to verify the
accuracy of the Servicer's record keeping. The Servicer shall promptly report
to the 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 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 to the
Agreement or at such other office as shall be specified to the Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Trustee or its 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 Trustee shall
instruct.
(c) Release of Documents. Upon instruction from the Trustee, the Servicer
--------------------
shall release any Receivable File to the Trustee, the Trustee's agent or the
Trustee's designee, as the case may be, at such place or places as the Trustee
may designate, as soon as practicable.
SECTION 12.07. 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 Trustee Officer.
SECTION 12.08. Custodian's Indemnification. The Servicer as custodian
----------------------------
shall indemnify the Trustee and each of its 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 Trustee or any of its officers, directors,
employees or 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 Trustee or any such officers, director, employee or agent of the Trustee
for any portion of any such amount resulting from the willful misfeasance, bad
faith or negligence of the Trustee or any such officer, director, employee or
agent of the Trustee.
SECTION 12.09. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
or, if no Initial Receivables are conveyed to the Trustee, the Closing Date
and shall continue in full force and effect until terminated pursuant to this
Section 12.09. If CFC shall resign as Servicer in accordance with the
provisions hereof or if all of the rights and obligations of any Servicer
shall have been terminated under Section 18.01, the appointment of such
Servicer as custodian shall be terminated by the Trustee, or by Holders of the
[Class A] Certificates evidencing not less than 25% of the [Class A]
Certificate Balance, in the same manner as the Trustee or such Holders may
terminate the rights and obligations of the Servicer under Section 18.01. The
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. As soon as practicable after any termination
of such appointment, the Servicer shall deliver the Receivable Files to the
Trustee or the Trustee's agent at such place or places as the Trustee may
reasonably designate.
ARTICLE XIII
Administration and Servicing of Receivables
-------------------------------------------
SECTION 3.01. Duties of Servicer. The Servicer, as agent for the Trustee
------------------
(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 Trustee with respect to distributions,
and making Advances pursuant to Section 14.04. Subject to the provisions of
Section 13.02, 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 by the
Trustee to execute and deliver, on behalf of itself, the Trust, the
Certificateholders, the Trustee, 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 Trustee (in the case of any
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 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 Certificateholders. The Trustee shall, upon 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 13.02. Collection and Allocation of Receivable Payments. The
--------------------------------------------------
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer shall allocate collections between principal and
interest in accordance with the customary servicing procedures it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer may grant extensions, rebates or adjustments on a
Standard Receivable or a Fixed Value Receivable, which shall not, for the
purposes of the 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 Trust in
accordance with the terms of Section 13.07. 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 13.03. Realization Upon Receivables. On behalf of the Trust, 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 13.04. Physical Damage Insurance. The Servicer, in accordance
--------------------------
with its customary servicing procedures, shall 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 13.05. 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 each Fixed Value Receivable
in the related Financed Vehicle. The Trustee hereby authorizes the Servicer to
take such steps as are necessary to re-perfect such security interest on
behalf of the Trust in the event of the relocation of a Financed Vehicle or
for any other reason.
SECTION 13.06. 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 Trust or the Certificateholders in such Receivables, nor shall
the Servicer increase the number of scheduled payments due under a Standard
Receivable or a Fixed Value Receivable.
SECTION 13.07. Purchase of Receivables Upon Breach. The Servicer or the
-----------------------------------
Trustee shall inform the other party and the Seller promptly, in writing, upon
the discovery of any breach pursuant to Section 13.02, 13.05 or 13.06. Unless
the breach shall have been cured by the last day of the second Collection
Period following such discovery (or, at the Servicer's election, the last day
of the first following Collection Period), the Servicer shall purchase any
Receivable materially and adversely affected by such breach as of such last
day. If the Servicer takes any action in any Collection Period pursuant to
Section 13.02 that impairs the right of the Trustee, the Trust or the
Certificateholders in any Receivable or as otherwise provided in Section
13.02, 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 14.05. For purposes of
this Section 13.07, the Purchase Amount shall consist in part of a release by
the Servicer of all rights of reimbursement with respect to Outstanding
Precomputed Advances or Outstanding Simple Interest Advances on the
Receivable. Subject to Section 17.02, the sole remedy of the Trustee, the
Trust or the Certificateholders with respect to a breach pursuant to Section
13.02, 13.05 or 13.06 shall be to require the Servicer to repurchase
Receivables pursuant to this Section 13.07. The 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 13.08. Servicing Fee. The Servicing Fee for a Distribution Date
-------------
shall equal the product of (a) one twelfth, (b) the Servicing 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 Section 17.02.
SECTION 13.09. Servicer's Certificate. Not later than 11:00 am (New York
----------------------
time) on each Determination Date, the Servicer shall deliver to the Trustee,
the Rating Agencies and the Seller, a Servicer's Certificate containing all
information necessary to make the distributions on the related Distribution
Date pursuant to Section 14.06 for the related Collection Period. Receivables
to be purchased by the Servicer or to be repurchased by the Seller shall be
identified by the Servicer by account number with respect to such Receivable
(as specified in Schedule A).
SECTION 13.10. Annual Statement as to Compliance; Notice of Default. (a)
-----------------------------------------------------
The Servicer shall deliver to the Trustee, on or before April 30 of each year,
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 shorter period as shall have elapsed since
the Closing Date) and of its performance hereunder and under the 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 hereunder and under the 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 Trustee shall send a copy of such certificate and the report referred to
in Section 13.11 to the Rating Agencies. A copy of such certificate and the
report referred to in Section 13.11 may be obtained by any Certificateholder
by a request in writing to the Trustee addressed to the Corporate Trust
Office.
(b) The Servicer shall deliver to the Trustee and to the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later than 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
an Event of Default under clause (iii) or (iv) of Section 18.01(a) or (b).
SECTION 13.11. Annual Independent Certified Public Accountant's Report.
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The Servicer shall cause a firm of independent certified public accountants,
who may also render other services to the Servicer, the Seller or their
Affiliates, to deliver to the Trustee on or before April 30 of each year
beginning April 30, 199__, 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 (1) 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; (2) included tests
relating to automotive loans serviced for others in accordance with the
requirements of the Uniform Single Audit Program for Mortgage Bankers (the
"Program"), to the extent the procedures in such Program are applicable to the
servicing obligations set forth herein; and (3) except as described in the
report, disclosed no exceptions or errors in the records relating to
automobile and light truck loans serviced for others that, in the firm's
opinion, paragraph four of such Program requires such firm to report.
The 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 13.12. Access to Certain Documentation and Information Regarding
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Receivables. The Servicer shall provide to the Certificateholders access to
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the Receivable Files in such cases where the Certificateholder 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 13.13. 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.
SECTION 13.14. 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 that the Rating Agency Condition shall have been
satisfied in connection therewith; and, PROVIDED, FURTHER, that the Servicer
shall remain obligated and shall be liable to the Trustee and the
Certificateholders for the servicing and administering of the Receivables in
accordance with the provisions hereof without diminution of such obligation
and liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Receivables. The fees and expenses of the
subservicer shall be as agreed between the Servicer and its subservicer from
time to time, and none of the Trust, the Trustee or the Certificateholders
shall have any responsibility therefor.
ARTICLE XI.
Distributions; Reserve Account;
Statements to Certificateholders
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SECTION 14.01. Establishment of Trust Accounts. (a)(i) The Servicer, for
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the benefit of the Certificateholders, shall establish and maintain in the
name of the 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 Certificateholders.
(i) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee an Eligible Deposit
Account (the "Pre-Funding Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of
the Certificateholders.
(ii) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee an Eligible Account
(the "Distribution Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders.
(iii) The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the 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 Certificateholders.
(b) Funds on deposit in the Collection Account, the Pre-Funding Account,
the Distribution Account and the Reserve Account (collectively the "Trust
Accounts") shall be invested by the 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 these
Standard Terms and Conditions of Agreement and the Agreement as they relate to
investing such funds; PROVIDED, HOWEVER, that it is understood and agreed that
the Trustee shall not be liable for any loss arising from such investment in
Eligible investments. All such Eligible Investments shall be held by the
Trustee for the benefit of the Certificateholders; PROVIDED, that on each
Determination Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit therein shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Interest
Distribution Amount; and, PROVIDED, FURTHER, that any interest and other
investment income on Eligible Investment Receivables in the Reserve Account
earned in respect of a Collection Period shall be deposited in the Collection
Account on the second Determination Date following such Collection Period and
shall be deemed to constitute a portion of the Interest Distribution Amount
for the related Distribution Date. Other than as permitted by the Rating
Agencies, funds on deposit in the Collection Account, the Pre-Funding Account,
the Reserve Account and the 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 Pre-Funding Account, the Reserve
Account or the Distribution Account, as applicable, is then maintained and is
invested in a time deposit of [the 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 Trustee]) or (y) the Trustee (so long as the short-term
unsecured debt obligations of the 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 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 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 upon the
maturity of any Eligible Investments on the day immediately preceding a
Distribution Date are not required to be invested overnight.
(c) (i) The 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
Trustee for the benefit of the Certificateholders. If, at any time, any
of the Trust Accounts ceases to be an Eligible Deposit Account, the
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 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 14.01(c)(i); and each such Eligible
Deposit Account shall be subject to the exclusive custody and
control of the Trustee, and the Trustee shall have sole signature
authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Trustee or a
financial intermediary (as such term is defined in Section 8-313(4)
of the UCC) acting solely for the Trustee;
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by the 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 Trustee in accordance
with paragraph (c) of the definition of "Delivery" and shall be
maintained by the Trustee, pending maturity or disposition, through
continued registration of the Trustee's (or its nominee's) ownership
of such security.
(iii) The Servicer shall have the power, revocable by the Trustee,
to instruct the Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Servicer to carry out its
respective duties hereunder.
(d) (i) The Servicer shall establish and maintain with the Trustee an
Eligible Deposit Account (the "Payahead Account"). The Payahead Account
shall not be property of the Trust.
(ii) The Servicer shall on or prior to each Distribution Date (and
prior to deposits to the Distribution Account) transfer from the
Collection Account to the Payahead Account all Payaheads as described in
Section 14.03 received by the Servicer during the Collection Period.
Notwithstanding the foregoing and the first sentence of Section 14.02,
for so long as the Servicer is permitted to make monthly remittances to
the Collection Account pursuant to Section 14.02, Payaheads need not be
remitted to and deposited in the Payahead Account but instead may be
remitted to and held by the Servicer. So long as such condition is met,
the Servicer shall not be required to segregate or otherwise hold
separate any Payaheads remitted to the Servicer as aforesaid but shall be
required to remit Payaheads to the Collection Account in accordance with
Section 14.06(a).
SECTION 14.02. Collections. The Servicer shall remit within two Business
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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 Event of
Default shall have occurred and be continuing and (iii)(x) CFC is a
wholly-owned subsidiary of CFC and 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
Determination Date immediately preceding the related Distribution Date. For
purposes of this Article XIV 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 14.03. Application of Collections. 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 14.04(a) and, in the case of Simple
Interest Receivables, to reduce Outstanding Simple Interest Advances to
the extent described in Section 14.04(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.
(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 Liquidation Proceeds or
recoveries be applied to, or constitute, the related Fixed Value Payment.
SECTION 14.04. Advances. (a) As of the close of business on the last day
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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
Precomputed Receivables, or payments of the Purchase Amount in respect of
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 Receivable shall be reduced accordingly.
(b) At 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
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 with respect to principal of Simple Interest Receivables or
in respect of Eligible Investment Receivables.
SECTION 14.05. Additional Deposits. The Servicer shall deposit in the
--------------------
Collection Account the aggregate Advances pursuant to Section 14.04. To the
extent that the Servicer fails to make a Simple Interest Advance pursuant to
Section 14.04(b) on the date required, the Trustee shall 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 to Purchased Receivables, and the Servicer shall deposit therein
all amounts to be paid under Section 20.02. The Servicer shall 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 14.02.
SECTION 14.06. Distributions. (a) On each Distribution Date, the Trustee
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shall cause to be transferred
(i) From the Collection Account to the Distribution Account, in
immediately available funds, the entire amount then on deposit in the
Collection Account; PROVIDED, HOWEVER, that in the event that the
Servicer is required to make deposits to the Collection Account on a
daily basis pursuant to Section 14.02, the amount of the funds
transferred from the Collection Account to the Distribution Account will
include only those funds that were deposited in the Collection Account
for the Collection Period related to such Distribution Date.
(ii) From the Payahead Account, or from the Servicer in the event
that the second and third sentences of Section 14.01(d)(ii) are
applicable, to the Distribution Account, in immediately available funds,
the aggregate previous Payaheads to be applied to Scheduled Payments on
Precomputed Receivables for the related Collection Period or prepayments
for the related Collection Period, pursuant to Sections 14.03 and 14.04,
in the amounts set forth in the Servicer's Certificate delivered on the
related Determination Date. A single, net transfer may be made.
(b) On each Distribution Date, the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 14.09) shall distribute amounts on deposit in the
Distribution Account and, if applicable, the Reserve Account in the manner and
priority set forth below:
(i) to the Servicer, from the Interest Distribution Amount, the
Servicing Fee and all unpaid Servicing Fees from prior Collection
Periods;
(ii) to the Class A Certificateholders:
(A) from the Class A Percentage of the Interest Distribution
Amount (except as provided in the proviso to subsection (c)(i)
below) (as such Interest Distribution Amount has been reduced by
Servicing Fee payments), the Class A Interest Distributable Amount;
(B) from the Class A Percentage of the Principal Distribution
Amount, the Class A Principal Distributable Amount;
(iii) to the Class B Certificateholders:
(A) from the Class B Percentage of the Interest Distribution
Amount (as such Interest Distribution Amount has been reduced by
Servicing Fee payments), the Class B Interest Distributable Amount;
and
(B) from the Class B Percentage of the Principal Distribution
Amount, the sum of the Class B Principal Distributable Amount.
(c) The rights of the Class B Certificateholders to receive distributions
in respect of the Class B Certificates shall be and hereby are subordinated to
the rights of the Class A Certificateholders to receive distributions in
respect of the Class A Certificates and the rights of the Servicer to receive
the Servicing Fee (and any accrued and unpaid Servicing Fees from prior
Collection Periods) in the event of delinquency or defaults on the
Receivables. Such subordination shall be effected as follows, and all payments
shall be effected pursuant to clause (i) below prior to any payments pursuant
to clause (ii):
(i) If the Class A Percentage of the Interest Distribution Amount
(as such Interest Distribution Amount has been reduced by Servicing Fee
payments) is less than the Class A Interest Distributable Amount on any
Distribution Date, the Class A Certificateholders shall be entitled to
receive distributions in respect of such deficiency first, from the Class
B Percentage of the Interest Distribution Amount; second, if such amounts
are insufficient, from amounts on deposit in the Reserve Account; and
third, if such amounts are insufficient, from the Class B Percentage of
the Principal Distribution Amount; PROVIDED, HOWEVER, that if the amount
of Simple Interest Advances required to be made for the Collection Period
have not been paid by the Servicer or withdrawn from the Reserve Account,
the shortfall in either such amount shall be allocated pro rata between
the Class A Certificates and the Class B Certificates and any such
shortfall with respect to the Class A Certificates (and any Class A
Carryover Shortfalls attributable thereto) shall be paid only from
amounts that are or become available in the Reserve Account after giving
effect to any deposit thereto on such day.
(ii) If the Class A Percentage of the Principal Distribution Amount
is less than the sum of the Class A Principal Distributable Amount on any
Distribution Date, the Class A Certificateholders shall be entitled to
receive distributions in respect of such deficiency first, from the Class
B Percentage of the Principal Distribution Amount; second, if such
amounts are insufficient, from amounts on deposit in the Reserve Account;
and third, if such amounts are insufficient, from the Class B Percentage
of the Interest Distribution Amount.
(d) Subject to Section 20.01 respecting the final payment upon retirement
of each Certificate, the Servicer shall on each Distribution Date instruct the
Trustee to distribute to each Certificateholder of record on the preceding
Record Date either by wire transfer in immediately available funds to the
account of such Holder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Servicer
appropriate instructions prior to such Distribution Date and such Holder's
Certificates of either Class in the aggregate evidence a denomination of not
less than $1,000,000, or, if not, by check mailed to such Certificateholder at
the address of such Holder appearing in the Certificate Register, the amounts
to be distributed to such Certificateholder pursuant to such Holder's
Certificates.
SECTION 14.07. Reserve Account. (a) On the Closing Date, the Trustee will
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deposit, on behalf of the Seller, the Reserve Account Initial Deposit into the
Reserve Account from the net proceeds of the sale of the Certificates.
(b) 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 Trustee to
distribute the amount of such excess to the Seller, which distribution may
include Eligible Investment Receivables; PROVIDED, that no such excess shall
be distributed unless the letter from a firm of independent certified public
accountants required to be delivered under the Agreement in respect of the
Collection Period immediately following the Closing Date has been delivered to
the Trustee.
(c) If the Servicer determines pursuant to Section 14.04 that it is
required to make an Advance on any Distribution Date and does not do so from
its own funds, the Servicer shall instruct the 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 14.04 for purposes of making distributions pursuant to the
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 Class A Distributable Amount for a
Distribution Date exceeds the sum of the amounts distributed to Holders
of the Class A Certificates pursuant to Section 14.06(b)(ii) on such
Distribution Date, the Servicer shall instruct the Trustee to withdraw
from the Reserve Account on such Distribution Date an amount equal to
such excess, to the extent of funds available therein, and distribute
such amount to the Holders of the Class A Certificates.
(ii) In the event that the Class A Principal Distributable Amount on
the Final Scheduled Distribution Date exceeds the amount distributed to
Holders of Class A Certificates pursuant to Section 14.06(b)(ii)(B) on
such Distribution Date, the Servicer shall instruct the Trustee to
withdraw from the Reserve Account on such Distribution Date an amount
equal to such excess, to the extent of funds available therein, and
distribute such amount to the Holders of the Class A Certificates.
(e) (i) In the event that the Class B Distributable Amount for a
Distribution Date exceeds the sum of the amounts distributed to Holders
of the Class B Certificates pursuant to Section 14.06(b)(iii) on such
Distribution Date, the Servicer shall instruct the 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 (c) and (d) above, and distribute such amount to the
Holders of the Class B Certificates.
(ii) In the event that the Certificateholders' Principal
Distributable Amount on the Final Scheduled Distribution Date exceeds the
amount distributed to Holders of the Class B Certificates pursuant to
Section 14.06(b)(iii)(B), the Servicer shall instruct the 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 distribute such
amount to the Holders of the Class B Certificates.
(f) Following the payment in full of the Certificate Balance and of all
other amounts owing or to be distributed under the Agreement to
Certificateholders and the termination of the Trust, any amount remaining on
deposit in the Reserve Account shall be distributed to the Seller and any
Eligible Investment Receivables in the Reserve Account shall be transferred to
the Seller.
SECTION 14.08. Pre-Funding Account. (a) On the Closing Date, the Trustee
--------------------
will deposit the amount, if any, specified in the Agreement in the Pre-Funding
Account on behalf of the Seller from the net proceeds of the sale of the
Certificates. On each Subsequent Transfer Date, the Servicer shall instruct
the Trustee to withdraw from the Pre-Funding Account an amount equal to (i)
the Principal Balance of the Subsequent Receivables transferred to the Trust
on such Subsequent Transfer Date less the Reserve Account Initial Deposit for
such Subsequent Transfer Date, and to distribute such amount to or upon the
order of the Seller upon satisfaction of the conditions set forth in the
Agreement with respect to such transfer, and (ii) the Reserve Account Initial
Deposit for such Subsequent Transfer Date and, on behalf of the Seller, to
deposit such amount in the Reserve Account. If Subsequent Receivables are
transferred to the Trust on the Closing Date, the Closing Date shall also be a
Subsequent Transfer Date for the purposes of this Section.
(b) If (x) the Pre-Funded Amount has not been reduced to zero on the
Distribution Date on which the Funding Period ends (or, if the Funding Period
does not end on a Distribution Date, on the first Distribution Date following
the end of the Funding Period) or (y) the Pre-Funded Amount has been reduced
to $ or less on any Determination Date, in either case after giving
-------
effect to any reductions in the Pre-Funded Amount on such Distribution Date or
Determination Date pursuant to paragraph (a) above, the Servicer shall
instruct the Trustee to withdraw from the Pre-Funding Account, in the case of
(x), on such Distribution Date or, in the case of (y), on the Distribution
Date immediately succeeding such Determination Date, (i) if the Pre-Funded
Amount is equal to or less than $ , the Pre-Funded Amount and deposit
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such amount in the Distribution Account for payment as principal of the Class
A-1 Certificates up to the Class A Certificate Balance and then for payment of
principal of the Class A-2 Certificates, and (ii) if the Pre-Funded Amount is
greater than $ , amounts equal to the Pre-Funded Percentage for each
----------
Class of Certificates of the Pre-Funded Amount and deposit such amounts in the
Distribution Account. In addition, if the Pre-Funded Amount is greater than
$ , the Seller will deposit into the Distribution Account an amount
---------
equal to the sum of the Class A Prepayment Premium and the Class B Prepayment
Premium.
SECTION 14.09. Statements to Certificateholders. On each Distribution
---------------------------------
Date, the Servicer shall provide to the Trustee for the Trustee to forward to
each Certificateholder of record as of the most recent Record Date, a
statement substantially in the form of Exhibit E setting forth at least the
following information as to each Class of Certificates to the extent
applicable:
(i) the amount of such distribution allocable to principal allocable
to each class of Certificates;
(ii) the amount of such distribution allocable to interest allocable
to each class of Certificates;
(iii) for the final Distribution Date with respect to the Funding
Period, the amount of any remaining Pre-Funded Amount that has not been
used to fund the purchase of Subsequent Receivables;
(iv) 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 (i) above;
(v) the Class A Certificate Balance and the Class B Certificate
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 (i) above;
(vi) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(vii) the amount of the Class A Principal Carryover Shortfall and
Class A Interest Carryover Shortfall and Class B Principal Carryover
Shortfall and Class B Interest Carryover Shortfall, as applicable, if
any, on such Distribution Date and the change in the Class A Principal
Carryover Shortfall and Class A Interest Carryover Shortfall and Class B
Principal Carryover Shortfall and Class B Interest Carryover Shortfall,
as applicable, from the preceding Distribution Date;
(viii) the amount of Realized Losses, if any, with respect to the
related Collection Period;
(ix) the amount otherwise distributable to the Class B
Certificateholders that is distributed to Class A Certificateholders on
such Distribution Date;
(x) the balance of the Reserve Account on such Distribution Date,
after giving effect to deposits and withdrawals made on such Distribution
Date;
(xi) the aggregate Payahead Balance and the change in such balance
from the preceding Distribution Date; and
(xii) for Distribution Dates during the Funding Period, the
remaining Pre-Funded Amount.
Each amount set forth pursuant to subclauses (i), (ii), (vi) or (vii) above
shall be expressed as a dollar amount per $1,000 of original principal balance
of a Class A or Class B Certificate, as applicable.
SECTION 14.10. Accounting and Tax Returns. The Trustee shall (a) maintain
--------------------------
(or cause to be maintained) the books of the Trust on a calendar year basis
and the accrual method of accounting and (b) deliver to each Holder of a
Certificate, as may be required by the Code and applicable Treasury
Regulations, such information as may be required (including Schedule K-1) to
enable each Holder to prepare its federal and state income tax returns.
SECTION 14.11. 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 each Collection Period
net of distributions to be made to the Servicer with respect to such
Collection Period. The Servicer, however, will account to the Trustee and to
the Certificateholders as if all deposits, distributions and transfers were
made individually.
[SECTION 14.12. Transfer of the Class B Certificates. In the event any
-------------------------------------
Holder of a Class B Certificate shall wish to transfer such Certificate, the
Seller shall provide to such Holder and any prospective transferee designated
by such Holder information regarding the Class B Certificates 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 B Certificate without registration thereof under the Securities Act of
1933, as amended, pursuant to the exemption from registration provided by Rule
144A.]
ARTICLE XV
The Certificates
----------------
SECTION 15.01. The Certificates. Unless otherwise specified in the
-----------------
Agreement, the Certificates shall be issued in fully registered form in
minimum denominations of $1,000. The Certificates shall be executed on behalf
of the Trust by manual or facsimile signature of an authorized officer of the
Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been
affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefit of the Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of authentication and delivery of such Certificates.
A transferee of a Certificate shall become a Certificateholder and shall
be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 15.03.
SECTION 15.02. Authentication of Certificates. The Trustee shall cause
-------------------------------
the Certificates to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Seller, signed by its chairman
of the board, its president, any vice president, secretary, or assistant
treasurer, without further corporate action by the Seller, in authorized
denominations, pursuant to the Agreement. No Certificate shall entitle its
Holder to any benefit under the Agreement or shall be valid for any purpose
unless there shall appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A or Exhibit B to the
Agreement, as appropriate, executed by the Trustee by manual signature. Such
authentication shall constitute conclusive evidence that such Certificate
shall have been duly authenticated and delivered hereunder. All Certificates
shall be dated the date of their authentication.
SECTION 15.03. Registration of Transfer and Exchange of Certificates. The
-----------------------------------------------------
Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 15.08, a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Trustee shall provide
for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Unless otherwise specified in the Agreement,
the Trustee shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Trustee shall execute, authenticate and deliver,
in the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Trustee. At the option of a Holder, Certificates
may be exchanged for other Certificates of authorized denominations of a like
aggregate amount upon surrender at the Corporate Trust Office of the
Certificates to be exchanged.
Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer and exchange shall be cancelled and
subsequently disposed of by the Trustee.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
[SECTION 15.04. Limitations on Transfer of the Class B Certificates. (a)
---------------------------------------------------
Unless otherwise set forth in the Agreement, the Class B Certificates shall
not have been and will not be registered under the Securities Act and will not
be listed on any exchange. No transfer of a Class B Certificate shall be made
unless such transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under said Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and state securities laws, in order to assure
compliance with the Securities Act and such laws, the Holder desiring to
effect such transfer and such Holder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer in
substantially the forms set forth in Exhibit F (the "Transferor Certificate")
and either Exhibit G (the "Investment Letter") or Exhibit H (the "Rule 144A
Letter"). Except in the case of a transfer as to which the proposed transferee
has provided a Rule 144A Letter, there shall also be delivered to the Trustee
an opinion of counsel that such transfer may be made pursuant to an exemption
from the Securities Act and state securities laws, which opinion of counsel
shall not be an expense of the Trust or Trustee; PROVIDED that such opinion of
counsel in respect of the applicable state securities laws may be a memorandum
of law rather than an opinion if such counsel is not licensed in the
applicable jurisdiction. The Seller shall provide to any Holder of a Class B
Certificate and any prospective transferee designated by any such Holder,
information regarding the Class B Certificates 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 B
Certificates without registration thereof under the Securities Act pursuant to
the registration exemption provided by Rule 144A. Each Holder of a Class B
Certificate desiring to effect such a transfer shall, and does hereby agree
to, indemnify the Trust, the Trustee and the Seller against any liability that
may result if the transfer is not so exempt or is not made in accordance with
federal and state securities laws.
(b) No transfer of a Class B Certificate shall be made unless the Trustee
shall have received a representation from the transferee of such Class B
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan,
trust or account (each a "Benefit Plan") subject to the fiduciary
responsibility provisions of ERISA or Section 4975 of the Code or a Person
acting on behalf of any such Benefit Plan or using assets of a Benefit Plan to
acquire Class B Certificates. For purposes of the preceding sentence, such
representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of a Class B
Certificate. Notwithstanding anything else to the contrary herein, any
proposed transfer of a Class B Certificate to or on behalf of a Benefit Plan
subject to ERISA or to the Code without the delivery to the Trustee of an
opinion of counsel satisfactory to the Trustee as described above shall be
void and of no effect. The Trustee shall be under no liability to any Person
for any registration of transfer of any Class B Certificate that is in fact
not permitted by this Section 15.04 or for making any payments due on such
Class B Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of the Agreement so long as the
transfer was registered by the Trustee in accordance with the foregoing
requirements. The Trustee shall be entitled, but not obligated, to recover
from any Holder of any Class B Certificate that was in fact a Benefit Plan
subject to Section 406 of ERISA or to Section 4975 of the Code or a Person
acting on behalf of any such Benefit Plan at the time it became a Holder or
subsequently became such a Benefit Plan or Person acting on behalf of such a
Benefit Plan, all payments made on such Class B Certificate at and after
either such time. Any such payments so recovered by the Trustee shall be paid
and delivered by the Trustee to the last preceding Holder of such Certificate
that is not, and was not at the time it held such Certificate, such a Benefit
Plan or Person acting on behalf of a Benefit Plan.
(c) The Trustee shall cause each Class B Certificate to contain a legend
stating that transfer of the Class B Certificates is subject to certain
restrictions and referring prospective purchasers of the Class B Certificates
to this Section 15.04 with respect to such restrictions.
(d) Unless otherwise set forth in the Agreement, no transfer of a Class B
Certificate or any interest therein shall be made unless prior to such
transfer the Holder of such Class B Certificate delivers to the Seller and the
Trustee either a ruling of the Internal Revenue Service or an Opinion of
Counsel, to the effect that the proposed transfer will not result in the
arrangement contemplated by the Agreement being treated as an association
taxable as a corporation under either the Code or [the tax laws of the State
of New York].]
SECTION 15.05. Mutilated, Destroyed, Lost, or Stolen Certificates. If (a)
--------------------------------------------------
any mutilated Certificate shall be surrendered to the Certificate Registrar,
or if the Certificate Registrar shall receive evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (b) there shall be
delivered to the Certificate Registrar and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then in
the absence of notice that such Certificate has been acquired by a bona fide
purchaser, the Trustee on behalf of the Trust shall execute, and the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate
under this Section, the Trustee and the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 15.06. Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 14.06 and for all other purposes whatsoever,
and neither the Trustee nor the Certificate Registrar shall be bound by any
notice to the contrary.
SECTION 15.07. Access to List of Certificateholders' Names and Addresses.
---------------------------------------------------------
The Trustee shall furnish or cause to be furnished to the Servicer, within 15
days after receipt by the Trustee of a request therefor from the Servicer in
writing, a list, in such form as the Servicer may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record
Date. If three or more Certificateholders, or one or more Holders of [Class A]
Certificates evidencing not less than 25% of the Certificate Balance apply in
writing to the Trustee, and such application states that the applicants desire
to communicate with other Certificateholders with respect to their rights
under the Agreement or under the Certificates and such application shall be
accompanied by a copy of the communication that such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt
for such application, afford such applicants access during normal business
hours to the current list of Certificateholders. Each Holder, by receiving and
holding a Certificate, shall be deemed to have agreed to hold neither the
Servicer nor the Trustee accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
SECTION 15.08. Maintenance of Office or Agency. The Trustee shall
----------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustee in respect of the Certificates and the Agreement may be served.
The Trustee initially designates the Corporate Trust Office as specified in
the Agreement as its office for such purposes. The Trustee shall give prompt
written notice to the Servicer and to Certificateholders of any change in the
location of the Certificate Register or any such office or agency.
SECTION 15.09. Book-Entry Certificates. The Class A Certificates and, if
-----------------------
so specified in the Agreement, the Class B Certificates may be issued in the
form of one or more typewritten Certificates representing Book-Entry
Certificates, to be delivered by, or on behalf of, the Seller to the initial
Clearing Agency, which, unless otherwise specified in the Agreement, shall be
The Depository Trust Company. In such case, the Certificates delivered to the
Depository Trust Company shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Certificates, except as
provided in Section 15.11. Unless and until definitive, fully registered
Certificates (the "Definitive Certificates") have been issued to such
Certificate Owners pursuant to Section 15.11:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Seller, the Servicer, the Certificate Registrar and the
Trustee may deal with the Clearing Agency for all purposes (including the
making of distributions on such Certificates) as the sole Holder of such
Certificates and shall have no obligation to the related Certificate
Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control;
(iv) the rights of such Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement, unless and until Definitive Certificates are issued
pursuant to Section 15.11, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal and interest on such Certificates
to such Clearing Agency Participants; and
(v) whenever the Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Certificates
evidencing a specified percentage of the Certificate Balance, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Certificate
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in such
Certificates and has delivered such instructions to the Trustee.
SECTION 15.10. Notices to Clearing Agency. Whenever notice or other
----------------------------
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 15.11, the Trustee and the Servicer shall give all
such notices and communications specified herein to be given to Certificate
Owners to the Clearing Agency.
SECTION 15.11. Definitive Certificates. If (i) the Servicer advises the
------------------------
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities under the Depository Agreement and the
Trustee or the Seller is unable to locate a qualified successor, (ii) the
Seller at its option advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than a majority of the aggregate outstanding
principal amount of the Book-Entry Certificates advise the Trustee and the
Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of the
Certificate Owners, then the Clearing Agency shall notify all Certificate
Owners and the Trustee of the occurrence of such event and of the availability
of Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the typewritten Certificates representing the
Book-Entry Certificates by the Clearing Agency, accompanied by registration
instructions, the Trustee shall execute and authenticate the Definitive
Certificates in accordance with the instructions of the Clearing Agency. None
of the Seller, the Certificate Registrar or the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates, the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder. The Definitive
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Trustee, as evidenced by
its execution thereof.
ARTICLE XVI
The Seller
----------
SECTION 16.01. Representations of Seller. The Seller makes the following
-------------------------
representations on which the Trustee shall be deemed to have relied in
accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of
the Agreement and as of the Closing Date, in the case of Initial Receivables,
if any, and as of the applicable Subsequent Transfer Date, in the case of
Subsequent Receivables, if any, and shall survive the sale of the Receivables
to the Trustee.
(i) Organization and Good Standing. The Seller is duly organized and
------------------------------
validly existing as a limited liability company in good standing under
the laws of the State of Michigan, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the power, authority and legal right to acquire and own
the Standard Receivables and the Fixed Value Receivables.
(ii) Due Qualification. The Seller is duly qualified to do business
-----------------
as a foreign limited liability company in good standing, and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall
require such qualifications.
(iii) Power and Authority. The Seller has the power and authority to
-------------------
execute and deliver the Agreement and to carry out its terms; the Seller
has full power and authority to sell and assign the property to be sold
and assigned to and deposited with the Trustee as part of the Trust, and
the Seller shall have duly authorized such sale and assignment to the
Trustee by all necessary action; and the execution, delivery and
performance of the Agreement and of each Subsequent Transfer Assignment
or Eligible Investment Transfer Assignment, as applicable, shall have
been duly authorized by the Seller by all necessary action.
(iv) Binding Obligation. The Agreement, each Subsequent Transfer
-------------------
Assignment and Eligible Investment Transfer Assignment, when executed and
delivered by the Seller, shall constitute a legal, valid and binding
obligation of the Seller enforceable in accordance with its terms.
(v) No Violation. The consummation of the transactions contemplated
------------
by the Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of organization or operating agreement of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party
or by which it is bound; or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Agreement); 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.
(vi) 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 the Agreement or the Certificates; (ii)
seeking to prevent the issuance of the Certificates or the consummation
of any of the transactions contemplated by the Agreement; (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, the Agreement or the Certificates, or (iv) that
might adversely affect the federal income tax attributes of the
Certificates.
SECTION 16.02. Existence. During the term of the Agreement, the Seller
---------
will keep in full force and effect its existence, rights and franchises as a
limited liability company under the laws of the jurisdiction of its
organization and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Agreement and each other
instrument or agreement necessary or appropriate to the proper administration
of the Agreement and the transactions contemplated hereby.
SECTION 16.03. Liabilities of Seller; Indemnities. The Seller shall be
-----------------------------------
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under the Agreement.
(i) The Seller shall indemnify, defend and hold harmless the Trustee
and the Trust from and against any taxes that may at any time be asserted
against the Trustee or the Trust with respect to the transactions
contemplated in the Agreement, including any sales, gross receipts,
general corporation, tangible personal property, privilege, or license
taxes (but, in the case of the Trust, not including any taxes asserted
with respect to, and as the date of, the sale of the Receivables to the
Trust or the issuance and original sale of the Certificates, or asserted
with respect to ownership of the Receivables or Eligible Investment
Receivables, or federal or other income taxes arising out of the
distributions on the Certificates) and costs and expenses in defending
against the same.
(ii) The Seller shall indemnify, defend and hold harmless the
Trustee and the Certificateholders from and against any loss, liability
or expense incurred by reason of (a) the Seller's willful misfeasance,
bad faith or negligence in the performance of its duties under the
Agreement, or by reason of reckless disregard of its obligations and
duties under the Agreement, and (b) the Seller's or Trust's violation of
federal or state securities laws in connection with the offering and sale
of the Certificates.
(iii) The Seller shall indemnify, defend and hold harmless the
Trustee and its 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 Agreement
contained, except to the extent that such cost, expense, loss, claim,
damage or liabilities shall be due to the willful misfeasance, bad faith
or negligence (except for errors in judgment) of the Trustee.
Indemnification under this Section 16.03 shall survive the resignation or
removal of the Trustee and the termination of the Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Seller shall have made any indemnity payments to the Trustee pursuant to this
Section and the Trustee thereafter shall collect any of such amounts from
others, the Trustee shall promptly repay such amounts to the Seller, without
interest.
SECTION 16.04. 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
foregoing cases executes an agreement of assumption to perform every
obligation of the Seller under the 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 the Agreement; PROVIDED, HOWEVER, that
(i) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 12.01 shall have been breached and no Event
of Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default shall have happened and be continuing, (ii) the
Seller shall have delivered to the 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 the Agreement relating to such
transaction have been complied with, (iii) the Rating Agency Requirement shall
have been satisfied with respect to such transaction and (iv) the Seller shall
have delivered to the Trustee an Opinion of Counsel stating that, in the
opinion of such Counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Trustee in the
Receivables and reciting the details of such filings or (B) no such action
shall be necessary to preserve and protect such interest. 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 16.05. 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 the Agreement and that in its opinion may involve it in any
expense or liability.
SECTION 16.06. Seller May Own Certificates. The Seller and any Affiliate
---------------------------
thereof may in its individual or any other capacity become the owner or
pledgee of Certificates with the same rights as it would have if it were not
the Seller or an Affiliate thereof, except as otherwise provided herein.
ARTICLE XVII
The Servicer
------------
SECTION 17.01. Representations of Servicer. The Servicer makes the
-----------------------------
following representations on which the Trustee shall be deemed to have relied
in accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of
the Agreement and as of the Closing Date, in the case of the Initial
Receivables, if any, and as of the applicable Subsequent Transfer Date, in the
case of the Subsequent Receivables or Eligible Investment Receivables, if any,
and shall survive the sale of the Receivables to the Trustee.
(a) Organization and Good Standing. The Servicer is duly organized and
-------------------------------
validly existing as a limited liability company in good standing under the
laws of the state of its organization, with power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire, own, sell and service
the Standard Receivables and the Fixed Value Receivables and to hold the
Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do business as a
-----------------
foreign limited liability company in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership
or lease of property or the conduct of its business (including the servicing
of the Standard Receivables and the Fixed Value Receivables as required by the
Agreement) shall require such qualifications.
(c) Power and Authority. The Servicer has the power and authority to
--------------------
execute and deliver the Agreement and to carry out its terms; and the
execution, delivery and performance of the Agreement have been duly authorized
by the Servicer by all necessary action.
(d) Binding Obligation. The 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
------------
the 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
organization or operating agreement 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 the 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 the Agreement or the Certificates, (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Agreement, (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, the Agreement or the
Certificates, or (iv) relating to the Servicer and which might adversely
affect the federal income tax attributes of the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no Obligor on a
---------------------
Standard Receivable or Fixed Value Receivable shall be shown on the Receivable
Files as the subject of a bankruptcy proceeding.
SECTION 17.02. Indemnities of Servicer. The Servicer shall be liable in
-----------------------
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under the Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the Trustee,
the Trust, the Certificateholders and the Seller from and against any and all
costs, expenses, losses, damages, claims, and liabilities, arising out of or
resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Trustee,
the Seller, the Trust and the Certificateholders 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 the Agreement
or by reason of reckless disregard of its obligations and duties under the
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
17.03) as Servicer pursuant to Section 18.01, or a resignation by such
Servicer pursuant to the Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Trustee)
pursuant to Section 18.02.
Indemnification under this Section shall survive the resignation or
removal of the Trustee or the termination of the 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 recipient thereafter collects any of such amounts from others, such Person
shall promptly repay such amounts to the Servicer, without interest.
SECTION 17.03. 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 DaimlerChrysler
Corporation, which Person executed an agreement of assumption to perform every
obligation of the Servicer hereunder shall be the successor to the Servicer
under the Agreement without further act on the part of any of the parties to
the Agreement; PROVIDED, HOWEVER, that (i) immediately after giving effect to
such transaction, no Event of Default and no event which, after notice or
lapse of time, or both, would become an Event of Default shall have happened
and be continuing, (ii) the Servicer shall have delivered to the 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 the
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 Servicer shall have delivered to the Trustee an
Opinion of Counsel stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary fully to preserve and protect
the interest of the Trustee in the Receivables and reciting the details of
such filings or (B) no such action shall be necessary to preserve and protect
such interest. 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 17.04. 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 Trust or the Certificateholders,
except as provided under the Agreement, for any action taken or for refraining
from the taking of any action pursuant to the 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 the 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 the Agreement.
Except as provided in the 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 the
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 the Agreement and the rights
and duties of the parties to the Agreement and the interests of the
Certificateholders under the Agreement.
ARTICLE XVIII
Default
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SECTION 18.01. Events of Default. If any one of the following events
-----------------
("Events of Default") shall occur and be continuing:
(a) Any failure by the Servicer to deliver to the Trustee for deposit to
any Trust Account any proceeds or payment required to be so delivered under
the terms of the Certificates and the Agreement that shall continue unremedied
for a period of three Business Days after written notice of such failure is
received by the Servicer from the 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 the
Certificates or in the Agreement, which failure shall (a) materially and
adversely affect the rights of Certificateholders and (b) continue unremedied
for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (1) to the
Servicer or the Seller (as the case may be) by the Trustee or (2) to the
Servicer or the Seller (as the case may be) and to the Trustee by the Holders
of [Class A] Certificates evidencing not less than 25% of the [Class A]
Certificate Balance; or
(c) The occurrence of an Insolvency Event with respect to the Servicer or
the Seller;
then, and in each and every case, so long as the Event of Default shall not
have been remedied, either the Trustee or the Holders of [Class A]
Certificates evidencing not less than 25% of the [Class A] Certificate
Balance, by notice then given in writing to the Servicer (and to the Trustee
if given by Certificateholders) may terminate all of the rights and
obligations (other than the obligations set forth in Section 17.02) of the
Servicer under the Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under the Agreement,
whether with respect to the Certificates or the Receivables or otherwise,
shall, without further action, pass to and be vested in the Trustee or such
successor Servicer as may be appointed under Section 18.02; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer and the
Trustee in effecting the termination of the responsibilities and rights of the
predecessor Servicer under the 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 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 the 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 an Event of
Default, the Trustee shall give notice thereof to the Rating Agencies.
SECTION 18.02. Appointment of Successor. (a) Upon the Servicer's receipt
------------------------
of notice of termination pursuant to Section 18.01 or the Servicer's
resignation in accordance with the terms of the Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under the
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 (x) the date 45 days from the delivery to the Trustee of
written notice of such resignation (or written confirmation of such notice) in
accordance with the terms of the Agreement and (y) 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 Trustee shall appoint a successor
Servicer, and the successor Servicer shall accept its appointment by a written
assumption in form acceptable to the 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 Trustee without
further action shall automatically be appointed the successor Servicer and
shall be entitled to the Servicing Fee. Notwithstanding the above, the 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
the Agreement.
(b) Upon appointment, the successor Servicer (including the Trustee
acting as successor Servicer) shall 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 of the rights
granted to the predecessor Servicer by the terms and provisions of the
Agreement.
(c) The Servicer may not resign unless it is prohibited from serving as
such by law.
SECTION 18.03. Repayment of Advances. If the Servicer shall change, the
---------------------
predecessor Servicer shall be entitled to receive reimbursement for
Outstanding Advances pursuant to Sections 14.03 and 14.04 with respect to all
Advances made by the predecessor Servicer.
SECTION 18.04. Notification to Certificateholders. Upon any termination
----------------------------------
of, or appointment of a successor to, the Servicer pursuant to this Article
XVIII, the Trustee shall give prompt written notice thereof to
Certificateholders and to the Rating Agencies.
SECTION 18.05. Waiver of Past Defaults. The Holders of [Class A]
-------------------------
Certificates evidencing not less than a majority of the [Class A] Certificate
Balance may, on behalf of all Holders of Certificates, waive 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 the Trust Accounts in accordance with the Agreement. Upon any such waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
the Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
ARTICLE XIX
The Trustee
-----------
SECTION 19.01. Duties of Trustee. (a) If an Event of Default has occurred
-----------------
and is continuing, the Trustee shall exercise the rights and powers vested in
it by the Agreement and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs; PROVIDED, HOWEVER, that if the
Trustee shall assume the duties of the Servicer pursuant to Section 18.02, the
Trustee in performing such duties shall use the degree of skill and attention
customarily exercised by a servicer with respect to automobile receivables
that it services for itself or others.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in the Agreement and no implied
covenants or obligations shall be read into the Agreement against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of the
Agreement; PROVIDED, HOWEVER, that the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of the Agreement.
(c) The Trustee shall take and maintain custody of the Schedule of
Receivables included as an exhibit to the Agreement and shall retain all
Servicer's Certificates identifying Receivables that become Purchased
Receivables and Liquidated Receivables.
(d) The Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken in good faith in accordance with the Agreement
or at the direction of the Holders of [Class A] Certificates evidencing not
less than 25% of the [Class A] Certificate Balance relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under the
Agreement;
(e) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of clause (d) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Trustee Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to the Agreement.
(f) No provision of the Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
SECTION 19.02. Certain Matters Affecting Trustee. Except as otherwise
-----------------------------------
provided in Section 19.01:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in any such document.
(b) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters or relating to the Agreement or the
Certificates shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it under the
Agreement in good faith and in accordance with such advice or opinion of such
counsel.
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Agreement, or to institute, conduct or
defend any litigation under the Agreement at the request, order or direction
of any of the Certificateholders pursuant to the provisions of the Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that may be
incurred therein or thereby.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith which it believes to be authorized or within its
rights or powers conferred upon it by the Agreement; PROVIDED, that such
conduct does not constitute willful misconduct, bad faith or negligence on the
part of the Trustee.
(e) The Trustee may execute any of the trusts or powers or perform any
duties hereunder either directly or by or through agents or attorneys or a
custodian, and the Trustee shall not be responsible for any misconduct or
negligence of any such agent, attorney or custodian appointed with due care by
it hereunder.
SECTION 19.03. Trustee Not Liable for Certificates or Receivables. The
---------------------------------------------------
recitals contained herein and in the Certificates (other than the certificate
of authentication on the Certificates) shall be taken as the statements of the
Seller or the Servicer, as the case may be, and the Trustee assumes no
responsibility for the correctness thereof. The Trustee shall make no
representations as to the validity or sufficiency of the Agreement or of the
Certificates (other than the certificate of authentication on the
Certificates), or of any Receivable or Eligible Investment Receivable or
related document. The Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Receivable or Eligible Investment Receivable, or the perfection and
priority of any security interest created by any Receivable or Eligible
Investment Receivable in any Financed Vehicle or the maintenance of any such
perfection and priority, or for or with respect to the efficacy of the Trust
or its ability to generate the payments to be distributed to
Certificateholders under the Agreement, including, without limitation: the
existence, condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable or Eligible Investment Receivable or any computer or other record
thereof; the validity of the assignment of any Receivable or Eligible
Investment Receivable to the Trust or of any intervening assignment; the
completeness of any Receivable or Eligible Investment Receivable; the
performance or enforcement of any Receivable or Eligible Investment
Receivable; the compliance by the Seller or the Servicer with any warranty or
representation made under the Agreement or in any related document and the
accuracy of any such warranty or representation or any action of the Servicer
taken in the name of the Trustee.
SECTION 19.04. Trustee May Own Certificates. The Trustee in its
-------------------------------
individual or any other capacity may become the owner or pledgee of
Certificates and may deal with the Seller and the Servicer in banking
transactions with the same rights as it would have if it were not Trustee.
SECTION 19.05. Trustee's Fees and Expenses. The Servicer shall pay to the
---------------------------
Trustee, and the Trustee shall be entitled to receive, reasonable compensation
as shall have been separately agreed upon before the date of the Agreement
between the Seller and the Trustee (which shall not be limited by any
provision of law regarding the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts created by the
Agreement and in the exercise and performance of any of the Trustee's powers
and duties under the Agreement. The Trustee shall be entitled to be reimbursed
by the Seller for its reasonable expenses under the Agreement, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Trustee may employ in connection
with the exercise and performance of its rights and duties under the
Agreement.
SECTION 19.06. Eligibility Requirements for Trustee. The Trustee shall at
------------------------------------
all times be a corporation having an office in the same state as the location
of the Corporate Trust Office; organized and doing business under the laws of
such state or the United States of America; authorized under such laws to
exercise corporate trust powers; having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or
state authorities; and having (or having a parent that has) a rating of at
least Baa3 by Moody's. If such corporation shall publish reports of condition
at least annually pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section
19.07.
SECTION 19.07. Resignation or Removal of Trustee. The Trustee may at any
---------------------------------
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Servicer. Upon receiving such notice of resignation, the
Servicer shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 19.06 and shall fail to resign after written request
therefor by the Servicer, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Servicer may
remove the Trustee. If the Servicer shall remove the Trustee under the
authority of the immediately preceding sentence, the Servicer shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the outgoing Trustee so removed and one
copy to the successor Trustee, and shall pay all fees owed to the outgoing
Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
Section 19.08 and payment of all fees and expenses owed to the outgoing
Trustee. The Servicer shall provide notice of such resignation or removal of
the Trustee to each of the Rating Agencies.
SECTION 19.08. Successor Trustee. Any successor Trustee appointed
------------------
pursuant to Section 19.07 shall execute, acknowledge and deliver to the
Servicer and to its predecessor Trustee an instrument accepting such
appointment under the Agreement, and thereupon the resignation or removal of
the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor under the
Agreement, with like effect as if originally named as Trustee. The predecessor
Trustee shall upon payment of its fees and expenses deliver to the successor
Trustee all documents and statements and monies held by it under the
Agreement; and the Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor Trustee shall be eligible
pursuant to Section 19.06.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section, the Servicer shall mail notice thereof to all Certificateholders and
to the Rating Agencies. If the Servicer shall fail to mail such notice within
10 days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.
SECTION 19.09. Merger or Consolidation of Trustee. Any corporation into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, PROVIDED such
corporation shall be eligible pursuant to Section 19.06, without the execution
or filing of any instrument or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. The Trustee
shall mail notice of any such merger or consolidation to the Rating Agencies
SECTION 19.10. Appointment of Co-Trustee or Separate Trustee.
-----------------------------------------------------
Notwithstanding any other provisions of the Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust or any Financed Vehicle may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such
Person, in such capacity and for the benefit of the Certificateholders, such
title to the Trust or any part thereof and, subject to the other provisions of
this Section, such powers, duties, obligations, rights, and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by
it of a request so to do, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under the Agreement shall be
required to meet the terms of eligibility as a successor Trustee pursuant to
Section 19.06 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 19.08.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon any such separate trustee or co-trustee shall be conferred upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Trustee shall be incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee under the Agreement shall be personally liable by
reason of any act or omission of any other trustee under the Agreement;
and
(iii) The Servicer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to the Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of the
Agreement, specifically including every provision of the Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Each such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Trustee
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of the Agreement
on its behalf and in its name. If any separate trustee or co-trustee shall
die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor co-trustee or separate trustee.
SECTION 19.11. Representations and Warranties of Trustee. The Trustee
-------------------------------------------
shall make the following representations and warranties on which the Seller
and Certificateholders shall be deemed to rely:
(i) The Trustee is a banking corporation duly organized, validly
existing and in good standing under the laws of its place of
incorporation.
(ii) The Trustee has full corporate power, authority and legal right
to execute and deliver, and to perform its obligations under, the
Agreement, and shall have taken all necessary action to authorize the
execution and delivery of, and the performance of its obligations under,
the Agreement.
(iii) The Agreement shall have been duly executed and delivered by
the Trustee.
SECTION 19.12. No Bankruptcy Petition. The Trustee, by entering into the
----------------------
Agreement, and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against, or join
any other Person in instituting against, the Seller or the Trust any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other similar proceedings under any federal or state
bankruptcy or similar law in connection with the Certificates or the
Agreement.
ARTICLE XX
Termination
-----------
SECTION 20.01. Termination of the Trust. (a) The respective obligations
------------------------
and responsibilities of the Seller, the Servicer and the Trustee created
hereby and the Trust created by the Agreement shall terminate (i) upon the
payment to Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Trust and (ii) at the time provided in Section 20.02; PROVIDED, HOWEVER,
that in no event shall the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of Joseph P. Kennedy, the late ambassador of the United States to the Court of
St. James, living on the date of the Agreement. The Servicer shall promptly
notify the Trustee of any prospective termination pursuant to this Section.
(b) Except as provided in Section 20.01(a), neither the Seller nor any
Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which Certificateholders shall surrender their Certificates to the
Trustee for payment of the final distribution and cancellation of the
Certificates, shall be given by the Trustee by letter to Certificateholders
mailed not earlier than the 15th day and not later than the 25th day of the
month next preceding the specified Distribution Date stating (A) the
Distribution Date upon which final payment of the Certificates shall be made
upon presentation and surrender of the Certificates at the office of the
Trustee therein designated, (B) the amount of such final payment and (C) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee therein specified. The Trustee shall
give such notice to the Certificate Registrar (if other than the Trustee) at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Trustee shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 14.06.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within one year after such second notice all of the Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to the Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Trustee to the Seller.
SECTION 20.02. Optional Purchase of All Receivables. On the last day of
------------------------------------
any Collection Period as of which the Pool Balance shall be less than or equal
to 10% of the Original Pool Balance, the Servicer shall have the option to
purchase the corpus of the Trust; provided, however, that the Servicer may not
effect any such purchase if at such time the rating of CFC's long-term debt
obligations is less than Baa3 by Moody's, unless the 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 an amount into the Collection Account pursuant to Section 14.05
equal to the aggregate Purchase Amount for the Receivables (including
defaulted Receivables), plus the appraised value of any other property held by
the Trust, such value to be determined by an appraiser mutually agreed upon by
the Servicer and the Trustee. The Servicer thereafter shall succeed to all
interests in and to the Trust.
ARTICLE XXI
Miscellaneous Provisions
------------------------
SECTION 21.01. Amendment. The Agreement may be amended by the Seller, the
---------
Servicer and the Trustee, without the consent of the Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in the Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any provision in the Agreement or of modifying in any manner the
rights of the Certificateholders; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely
affect in any material respect the interests of any Certificateholder.
The Agreement may also be amended from time to time by the Seller, the
Servicer and the Trustee with the consent of the Holders of Class A
Certificates and Class B Certificates (which consent shall be conclusive and
binding on such Holders and on all future Holders of such Certificates and of
any Certificates issued upon the transfer therefor or in exchange thereof or
in lieu thereof, whether or not notation of such consent is made upon the
Certificates), each voting as a class, evidencing not less than a majority of
the Class A Certificate Balance and Class B Certificate Balance, respectively,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Agreement, or of modifying in any
manner the rights of 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 on any Certificate or (b)
reduce the aforesaid percentage of the Class A Certificate Balance and Class B
Certificate Balance required to consent to any such amendment without the
consent of the Holders of all Certificates then outstanding.
Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders 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. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement) and of
evidencing the authorization of any action by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to the Agreement, the 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 the Agreement
and the Opinion of Counsel referred to in Section 21.02(i)(1). The Trustee
may, but shall not be obligated to, enter into any such amendment that affects
the Trustee's own rights, duties or immunities under the Agreement or
otherwise.
SECTION 21.02. 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
Certificateholders and the Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the 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 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 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 its principal executive
office and each office from which it shall service Receivables 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 Distribution Account and Payahead Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under the Agreement of the Standard Receivables and the
Fixed Value Receivables, the Servicer's master computer records (including any
back-up archives) that refer to a Standard Receivable or a Fixed Value
Receivable shall indicate clearly the interest of the Trust in such Standard
Receivable or Fixed Value Receivable and that such Standard Receivable or
Fixed Value Receivable is owned by the Trustee. Indication of the Trustee's
ownership of a Standard Receivable or Fixed Value Receivables shall be deleted
from or modified on the Servicer's computer systems when, and only when, such
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 print-outs (including any restored from back-up
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 Trustee.
(g) The Servicer shall permit the 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 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 Trustee:
(1) promptly after the execution and delivery of the Agreement and,
if required pursuant to Section 21.01, of each amendment hereto and on
certain Distribution Dates as required by Sections 3.02(b)(2)(iii) (B)
and 12.03(b)(x)(B) of the Agreement, 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 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 Trustee in the Receivables, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such
details are given, or (B) no such action shall be necessary to preserve
and protect such interest.
Each Opinion of Counsel referred to in clause (l) 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 to be registered with the Securities and Exchange Commission
pursuant to Section 12(b) or Section 12(g) of the Securities Exchange Act of
1934 within the time periods specified in such sections.
SECTION 21.03. Separate Counterparts. The 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 21.04. Limitation on Rights of Certificateholders. (a) The death
------------------------------------------
or incapacity of any Certificateholder shall not operate to terminate the
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties to the Agreement or any of them.
(b) No Certificateholder shall have any right to vote (except as provided
in Section 21.01 or 18.05) or in any manner otherwise control the operation
and management of the Trust or the obligations of the parties to the
Agreement; nor shall any provision in the Agreement or contained in the
Certificates be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken pursuant to any provision of the Agreement.
(c) No Certificateholder shall have any right to institute any suit,
action or proceeding in equity or at law upon or under or with respect to the
Agreement, unless: (i) such Holder previously shall have given to the Trustee
written notice of a continuing Event of Default; (ii) the Holders of
Certificates evidencing not less than 25% of the Certificate Balance shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee under the Agreement and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby; (iii) the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit
or proceeding; and (iv) during such 60-day period no request or waiver
inconsistent with such written request shall have been given to the Trustee by
Holders representing a majority of the Certificate Balance. It is understood
and intended that no one or more Holders of Certificates shall have any right
in any manner whatever by virtue of, or by availing of, any provisions of the
Agreement to affect, disturb or prejudice the rights of any other Holders of
Certificates, or to obtain or seek to obtain priority over or preference to
any other such Holder, or to enforce any right under the Agreement, except in
the manner provided in the Agreement.
SECTION 21.05. Governing Law. THE 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 UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 21.06. Notices. All demands, notices and communications upon or
-------
to the Seller, the Servicer, the Trustee or the Rating Agencies under the
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, to Chrysler Financial Company
L.L.C., 27777 Franklin Road, Southfield, Michigan 48034, Attention of
Secretary, ((810) 948-3060); (b) in the case of the Servicer, to Chrysler
Financial Company L.L.C., 27777 Franklin Road, Southfield, Michigan 48034,
Attention of Secretary ((810) 948-3060); (c) in the case of the Trustee, at
the Corporate Trust Office; (d) in the case of Moody's, to Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007; (e) in the case of Standard & Poor's, to Standard & Poor's Ratings
Group, 25 Broadway - 15th Floor, New York, New York 10004, Attention: Asset
Backed Surveillance Department; (f) in the case of Duff and Phelps, to Duff &
Phelps Credit Rating Company, 55 East Monroe Street, 35th Floor, Chicago,
Illinois 60603, Attention: Structured Finance; and (g) in the case of Fitch,
to Fitch Investors Service, Inc., One State Street Plaza, New York, New York
10004, Attention: Structured Surveillance Department. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in the
Agreement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder shall receive such notice.
SECTION 21.07. Severability of Provisions. Any provision of the 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 of the
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 21.08. Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Sections 16.04 and 17.03 and as
provided in the provisions of the Agreement concerning the resignation of the
Servicer, the Agreement may not be assigned by the Seller or the Servicer
without the prior written consent of the Trustee and the Holders of
Certificates evidencing not less than 66% of the Certificate Balance.
SECTION 21.09. Certificates Nonassessable and Fully Paid.
---------------------------------------------------
Certificateholders shall not be personally liable for obligations of the
Trust. The interests represented by the Certificates shall be nonassessable
for any losses or expenses of the Trust or for any reason whatsoever.
SECTION 21.10. Limitations on Rights of Others. The provisions of this
---------------------------------
Agreement are solely for the benefit of the Seller, the Servicer, the Trustee
and the Certificateholders, and nothing in this Agreement, whether express or
implied, shall be construed to give any other Person any legal or equitable
right, remedy or claim in respect of the Trust or under or in respect of the
Agreement or any covenants, conditions or provisions contained herein.
SECTION 21.11. Headings. The headings of the various Articles and
--------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 21.12. Nonpetition Covenants. (a) Notwithstanding any prior
----------------------
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date that is one year and one day after the termination of the Agreement
with respect to the Trust, acquiesce to, petition or otherwise invoke or cause
the Trust to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Trust 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 Trust or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Trust.
(b) Notwithstanding any prior termination of the Agreement, the Servicer
shall not, prior to the date that is one year and one day after the
termination of the Agreement with respect to the Seller, acquiesce to,
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, 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.
EXHIBIT A
FORM OF CLASS A CERTIFICATE
---------------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS A
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS B CERTIFICATE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $
R- CUSIP NO.
PREMIER AUTO TRUST 199 -
- -
% ASSET BACKED CERTIFICATE, CLASS A
----
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts and the
Amortizing Payments on the Fixed Value Receivables (each, as defined herein)
secured by new and used automobiles and light duty trucks.
(This Class A Certificate does not represent an interest in or obligation of
Chrysler Financial Company L.L.C., Chrysler Financial Company L.L.C. or any of
their respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT is the registered owner of
-------------------
DOLLARS nonassessable, fully-paid, fractional
- ---------------------------
undivided interest in Premier Auto Trust 199 - (the "Trust") formed pursuant
- -
to the Pooling and Servicing Agreement (the "Agreement") dated as of
, among Chrysler Financial Company L.L.C., a Michigan limited
- -----------------
liability company, as seller (the "Seller"), Chrysler Financial Company
L.L.C., a Michigan limited liability company, as servicer (the "Servicer") and
, a banking
- ---------------------- --------------------------------
association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them
in the Agreement.
This Certificate is one of a duly authorized series of Certificates,
designated as the % Asset Backed Certificates, Class A (herein called the
--
"Class A Certificates"), all issued under the Agreement, to which Agreement
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Seller, the Servicer, the Trustee and Holders of
the Certificates. The Class A Certificates are subject to all terms of the
Agreement.
The property of the Trust includes a pool of retail installment sale
contracts for new and used automobiles and light duty trucks and the
Amortizing Payments on the Fixed Value Receivables (collectively, the
"Receivables"), all monies due under such Receivables on or after the related
Cutoff Date, in the case of Precomputed Receivables, or received on or after
the related Cutoff Date, in the case of Simple Interest Receivables, security
interests in the vehicles financed thereby, certain bank accounts and the
proceeds thereof, proceeds from claims on certain insurance policies and all
proceeds of the foregoing. The term "Fixed Value Receivables" shall mean
retail sale contracts secured by new automobiles or light duty trucks with a
series of fixed level payment monthly installments (the "Amortizing Payments")
and a final fixed value payment that is greater than each Amortizing Payment.
Under the Agreement, there will be distributed on the day of each
----
month or, if such day is not a Business Day, the next Business Day (each,
----
a "Distribution Date"), commencing on , to the Person in
----------------------
whose name this Class A Certificate is registered at the close of business on
the first day of the month in which such Distribution Date occurs (the "Record
Date"), such Certificateholder's fractional undivided interest in the amount
to be distributed to Class A Certificateholders on such Distribution Date.
It is the intent of the Seller, the Trustee and the Certificateholders
that, for purposes of federal income, state and local income and single
business tax and any other income taxes, the Trust will be treated as a
grantor trust and the Certificates will be treated as interests in a grantor
trust. The Seller, the Servicer, the Trustee and the Certificateholders, by
acceptance of a Certificate, agree to treat, and to take no action
inconsistent with the treatment of, the Certificates for such tax purposes as
interests in a grantor trust.
Distributions on this Class A Certificate will be made as provided in the
Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class A Certificate or the making of any
notation hereon, except that with respect to Class A Certificates registered
on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Class A Certificate will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class A Certificate at the office or agency
maintained for that purpose by the Trustee in the Borough of Manhattan, The
City of New York.
Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Trustee, by manual signature, this Class A
Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
THIS TRUST CERTIFICATE 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.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Class A Certificate to be duly executed.
Date: PREMIER AUTO TRUST 199 -
-- --
By: , not in its
------------------------
individual capacity but solely as
Trustee
By:
-----------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the within-mentioned
Agreement.
Date:
---------------------------------
as Trustee
By:
-----------------------------
Authorized Signatory
[REVERSE OF CLASS A CERTIFICATE]
The Class A Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Trustee or any affiliates of any of
them, and no recourse may be had against such parties or their assets except
as expressly set forth or contemplated herein or in the Agreement. In
addition, this Class A Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections and recoveries with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Agreement. A
copy of the Agreement may be examined by any Certificateholder upon written
request during normal business hours at the principal office of the Seller and
at such other places, if any, designated by the Seller.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer and the Trustee and the rights of the Certificateholders
at any time by the Seller, the Servicer and the Trustee with the consent of
the Holders of Certificates evidencing not less than a majority of the
Certificate Balance. Any such consent by the Holder of this Class A
Certificate shall be conclusive and binding on such Holder and on all future
Holders of this Certificate and of any Class A Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent is made upon this Class A Certificate. The Agreement
also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Class A Certificate is registerable in the
Certificate Register upon surrender of this Class A Certificate for
registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, The City of
New York, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Class A Certificates of authorized denominations evidencing the
same aggregate interest in the Trust will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Agreement is
.
- --------------------------------
Except as provided in the Agreement, the Class A Certificates are
issuable only as registered certificates without coupons in a minimum
denomination of $ . As provided in the Agreement and subject to certain
--------
limitations therein set forth, Class A Certificates are exchangeable for new
Class A Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Trustee or the Certificate Registrar may require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Class A
Certificate is registered as the owner hereof for all purposes, and none of
the Trustee, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held by the Trust. The Servicer of the Receivables
may at its option purchase the Trust property at a price specified in the
Agreement, and such purchase of the Receivables and other property of the
Trust will effect early retirement of the Certificates; HOWEVER, such right of
purchase is exercisable only as of the last day of any Collection Period as of
which the Pool Balance is less than or equal to 10% of the Original Pool
Balance.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- -------------------------------------------------------------------------------
the within Class A Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing to
------------------------------------------
transfer said Class A Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
*/
-------------------------------------------
Signature Guaranteed:
*/
----------------------------
- -----------------------
*/ NOTICE: The signature to this assignment must correspond with the name as
- -
it appears upon the face of the within Class A Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock Exchange
or a commercial bank or trust company.
EXHIBIT B
FORM OF CLASS B CERTIFICATE
---------------------------
THIS CLASS B CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM. THE TRANSFER OF THIS CLASS B
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN THE
AGREEMENT UNDER WHICH THIS CLASS B CERTIFICATE IS ISSUED (A COPY OF WHICH IS
AVAILABLE FROM THE TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE TRUSTEE OF
AN INVESTMENT LETTER IN WHICH THE TRANSFEREE SHALL MAKE CERTAIN
REPRESENTATIONS.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT IS
AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW THAT IS, TO A MATERIAL EXTENT, SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN") OR ANY
PERSON INVESTING THE ASSETS OF A PLAN EXCEPT AS PROVIDED IN THE AGREEMENT
REFERRED TO HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CLASS B
CERTIFICATE WILL BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS B CERTIFICATE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NUMBER $
R- CUSIP NO.
PREMIER AUTO TRUST 199 -
- -
% ASSET BACKED CERTIFICATE, CLASS B
----
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts and the
Amortizing Payments on the Fixed Value Receivables (each, as defined herein)
secured by new and used automobiles and light duty trucks.
(This Class B Certificate does not represent an interest in or obligation of
Chrysler Financial Company L.L.C., Chrysler Financial Company L.L.C. or any of
their respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT is the
------------------------------------
registered owner of DOLLARS nonassessable,
----------------------------
fully-paid, fractional undivided interest in Premier Auto Trust 199 - (the
- -
"Trust") formed pursuant to a Pooling and Servicing Agreement (the
"Agreement") dated as of , among Chrysler Financial Company
-----------------
L.L.C., a Michigan limited liability company, as seller (the "Seller"),
Chrysler Financial Company L.L.C., a Michigan limited liability company, as
servicer (the "Servicer") and , a
-------------------- ---------------------
banking association, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings
assigned to them in the Agreement.
This Certificate is one of a duly authorized series of Certificates,
designated as the % Asset Backed Certificates, Class B (herein called the
--
"Class B Certificates") all, issued under the Agreement, to which Agreement
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Seller, the Servicer, the Trustee and HolderS of
the Certificates. The Class B Certificates are subject to all terms of the
Agreement.
The property of the Trust includes a pool of retail installment sale
contracts for new and used automobiles and light duty trucks and the
Amortizing Payments on the Fixed Value Receivables (collectively, the
"Receivables"), all monies due under such Receivables on or after
, in the case of Precomputed Receivables, or received on or
- ----------------
after , in the case of Simple Interest Receivables, security
---------------
interests in the vehicles financed thereby, certain bank accounts and the
proceeds thereof, proceeds from claims on certain insurance policies and all
proceeds of the foregoing. The term "Fixed Value Receivables" shall mean
retail sale contracts secured by new automobiles or light duty trucks with a
series of fixed level payment monthly installments (the "Amortizing Payments")
and a final fixed value payment that is greater than each Amortizing Payment.
Under the Agreement, there will be distributed on the day of
--------
each month or, if such day is not a Business Day, the next Business
-------
Day (each, a "Distribution Date"), commencing on , to
----------------------
the Person in whose name this Class B Certificate is registered at the close
of business on the first day of the month in which such Distribution Date
occurs (the "Record Date"), such Certificateholder's fractional undivided
interest in the amount to be distributed to Class B Certificateholders on such
Distribution Date.
It is the intent of the Seller, the Servicer, the Trustee and the
Certificateholders that, for purposes of federal income, state and local
income and single business tax and any other income taxes, the Trust will be
treated as a grantor trust and the Certificates will be treated as interests
in a grantor trust. The Seller, the Servicer, the Trustee and the
Certificateholders, by acceptance of a Certificate, agree to treat, and to
take no action inconsistent with the treatment of, the Certificates for such
tax purposes as interests in a grantor trust.
Distributions on this Class B Certificate will be made as provided in the
Agreement by the Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Class B Certificate or the making of any
notation hereon, except that with respect to Class B Certificates registered
on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Class B Certificate will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class B Certificate at the office or agency
maintained for that purpose by the Trustee in the Borough of Manhattan, The
City of New York.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Trustee, by manual signature, this Class B
Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
THIS CLASS B CERTIFICATE 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.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Class B Certificate to be duly executed.
PREMIER AUTO TRUST 199_-_
by: , not in its
-------------------------
individual capacity but solely as
Trustee
Date: by:
--------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-mentioned
Trust Agreement.
Date:
-----------------------------------
as Trustee
by: ------------------------------------
Authorized Signatory
[REVERSE OF CLASS B CERTIFICATE]
The Class B Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Trustee or any affiliates of any of
them, and no recourse may be had against such parties or their assets except
as expressly set forth or contemplated herein or in the Agreement. In
addition, this Class B Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections and recoveries with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Agreement. A
copy of the Agreement may be examined by any Certificateholder upon written
request during normal business hours at the principal office of the Seller and
at such other places, if any, designated by the Seller.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Seller, the Servicer and the Trustee
with the consent of the Holders of Certificates evidencing not less than a
majority of the Certificate Balance. Any such consent by the Holder of this
Class B Certificate shall be conclusive and binding on such Holder and on all
future Holders of this Class B Certificate and of any Class B Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent is made upon this Class B Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
No transfer of this Class B Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act and any
applicable state securities laws or is made in accordance with said Act and
laws. In the event that the Holder hereof desires to make such a transfer, the
Holder and such Holder's transferee will be required to comply with certain
procedures set forth in the Agreement, including the delivery of certain
certificates and investment letters. The Holder hereof, by acceptance of this
Certificate, does hereby agree to indemnify the Trustee, the Seller, the
Servicer and the Certificate Registrar against any liability that may result
if any such transfer is not so exempt or is not made in accordance with
federal and state laws. In connection with any such transfer, the Trustee will
also require (i) a representation letter, in the form described in the
Agreement, stating that the transferee is not a Plan and is not acting on
behalf of a Plan or using the assets of a Plan to effect such purchase or (ii)
if such transferee is a Plan, an opinion of counsel acceptable to and in form
and substance satisfactory to the Trustee and the Depository with respect to
certain matters described in the Agreement.
Except as provided in the Agreement, the Class B Certificates are
issuable only as registered certificates without coupons in a minimum
denominations of $ . As provided in the Agreement and subject to
--------
certain limitations therein set forth, Class B Certificates are exchangeable
for new Class B Certificates of authorized denominations evidencing the same
aggregate denomination, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange,
but the Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and none of
the Trustee, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property by the Trust. The Servicer of the Receivables may
at its option purchase the Trust property at a price specified in the
Agreement, and such purchase of the Receivables and other property of the
Trust will effect early retirement of the Class B Certificates; HOWEVER, such
right of purchase is exercisable only as of the last day of any Collection
Period as of which the Pool Balance is less than or equal to 10% of the
Original Pool Balance.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- -------------------------------------------------------------------------------
the within Class B Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
---------------------------------------------------
to transfer said Class B Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated:
*/
-------------------------------------------
Signature Guaranteed:
*/
----------------------------
- -----------------------
*/ NOTICE: The signature to this assignment must correspond with the name as
- -
it appears upon the face of the within Class B Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock Exchange
or a commercial bank or trust company.
EXHIBIT C
[FORM OF DEPOSITORY AGREEMENT]
EXHIBIT D
FORM OF SERVICER'S CERTIFICATE
PREMIER AUTO RECEIVABLES TRUST 199 -
-- --
% Asset Backed Certificates, Class A
---
% Asset Backed Certificates, Class B
---
Distribution Date:
Collection Period:
Under the Pooling and Servicing Agreement dated as of by and
-----------
among Chrysler Financial Company L.L.C., as Seller, Chrysler Financial Company
L.L.C., as Servicer, and , as Trustee, the Servicer is required to
-----------
prepare certain information each month regarding current distributions to
Certificateholders and the performance of the Trust during the previous month.
The information that is required to be prepared with respect to the
Distribution Date and Collection Period listed above is set forth below.
Certain of the information is presented on the basis of an original principal
amount of $1,000 per Class A Certificate or Class B Certificate, as
appropriate, and certain other information is presented based upon the
aggregate amounts for the Trust as a whole.
A. Information Regarding the Current Monthly Distribution.
------------------------------------------------------
1. Class A Certificates.
--------------------
(a) The aggregate amount of the distribution
to Class A Certificateholders ...........................$
-------
(b) The amount of the distribution set forth in
paragraph A.1.(a) above in respect of interest...........$
-------
(c) The amount of the distribution set forth in
paragraph A.1.(a) above in respect of principal..........$
-------
(d) The amount of the distribution set forth in
paragraph A.1.(a) above per $1,000 interest..............$
-------
(e) The amount of the distribution set forth in
paragraph A.1.(b) above per $1,000 interest..............$
-------
(f) The amount of the distribution set forth in
paragraph A.1.(c) above per $1,000 interest..............$
-------
2. Class B Certificates.
--------------------
(a) The aggregate amount of the distribution
to Class B Certificateholders ...........................$
-------
(b) The amount of the distribution set forth in
paragraph A.2(a) above in respect of interest............$
-------
(c) The amount of the distribution set forth in
paragraph A.2(a) above in respect of principal...........$
-------
(d) The amount of the distribution set forth in
paragraph A.2(a) above per $1,000 interest...............$
-------
(e) The amount of the distribution set forth in
paragraph A.2(b) above per $1,000 interest...............$
-------
(f) The amount of the distribution set forth in
paragraph A.2(c) above per $1,000 interest...............$
-------
B. Information Regarding the Performance of the Trust.
--------------------------------------------------
1. Pool Balance and Certificate Balances.
-------------------------------------
(a) The Pool Balance close of business on the last
day of the preceding Collection Period...................$
-------
(b) The Class A Certificate Balance as of the close of
business on the last day of the preceding Collection
Period, after giving effect to payments allocated to
principal set forth in Paragraph A.1(c) above............$
-------
(c) The Class B Certificate Balance as of the close of
business of the last day of the preceding Collection
Period, after giving effect to payments allocated to
principal set forth in paragraph A.2(c) above............$
-------
(d) The Pool Factor as of the close of business on
the last day of the preceding Collection Period..........$
-------
2. Servicing Fee and Advances.
--------------------------
(a) The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Collection Period.......................$
-------
(b) The amount of such Servicing Fee per
$1,000 interest..........................................$
-------
(c) The amount of any unpaid Servicing Fee...................$
-------
(d) The change in the amount of any unpaid Servicing Fee
from the previous Distribution Date......................$
-------
(e) Aggregate Advances on such
Distribution Date........................................$
-------
3. Payment Shortfalls.
------------------
(a) The amount of the Class A Interest Carryover Shortfall
after giving effect to the payments
set forth in paragraph A.1(b) above.....................$
-------
(b) The amount of the Class A Principal Carryover Shortfall
after giving effect to the payment
set forth in paragraph A.1(c) above.....................$
-------
(c) The amount of the Class B Interest Carryover Shortfall
after giving effect to the payments
set forth in paragraph A.2(b) above.....................$
-------
(d) The amount of the Class B Principal Carryover Shortfall
after giving effect to the payments
set forth in paragraph A.2(c) above.....................$
-------
(e) The amount otherwise distributable to Class B
Certificateholders that is distributed
to Class A Certificateholders ..........................$
-------
4. Payahead Account.
----------------
(a) The aggregate Payahead Balance .........................$
-------
(b) The change in the Payahead Balance from
the previous Distribution Date..........................$
-------
5. Reserve Account.
(a) The Reserve Account balance after
giving effect to distributions made on
such Distribution Date..................................$
-------
(b) The change in the Reserve Account
on such Distribution Date ..............................$
-------
EXHIBIT E
[FORM OF ACCOUNTANTS' LETTER]
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
[Seller]
[Seller Address]
[Trustee]
[Trustee Address]
Re: Premier Auto Trust 199 -
-- --
Asset Backed Certificates, Class B
----------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-referenced % Asset
------
Certificates, Class B (the "Certificates") we certify that (a) we understand
that the Certificates have not been registered under the Securities Act of
1933, as amended (the "Act"), and are being transferred by us in a transaction
that is exempt from the registration requirements of the Act and (b) we have
not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By:
---------------------------------
Authorized Officer
EXHIBIT G
FORM OF INVESTMENT LETTER
[DATE]
[Seller]
[Seller Address]
[Trustee]
[Trustee Address]
Re: Premier Auto Trust 199 -
-- --
Asset Backed Certificates, Class B
----------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Asset Backed
Certificates, Class B (the "Certificates") we certify that (a) we understand
that the Certificates are not being registered under the Securities Act of
1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited
investor," as defined in Regulation D under the Act, and have such knowledge
and experience in financial and business matters that we are capable of
evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
seller concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan or trust
account that is subject to the Employee Retirement Income Security Act of
1974, as amended, or section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such Plan or using the assets of
any such Plan to acquire Class B Certificates, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with
clause (g) below), (f) we have not offered or sold any Certificates to, or
solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, or taken any
other action that would result in a violation of Section 5 of the Act or any
state securities laws and (g) we will not sell, transfer or otherwise dispose
of any Certificates unless (1) such sale, transfer or other disposition is
made pursuant to an effective registration statement under the Act and in
compliance with any relevant state securities laws or is exempt from such
registration requirements and, if requested, we will at our expense provide an
opinion of counsel satisfactory to the addressees of this certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Note has executed and
delivered to you a certificate to substantially the same effect as this
certificate and (3) the purchaser or transferee has otherwise complied with
any conditions for transfer set forth in the Pooling and Servicing Agreement
dated as of , among Chrysler Financial Company L.L.C., Chrysler
----------
Financial Company L.L.C. and .
----------
Very truly yours,
[NAME OF TRANSFEREE]
By:
----------------------------------
Authorized Officer
EXHIBIT H
FORM OF RULE 144A LETTER
[DATE]
[Seller]
[Seller Address]
[Trustee]
[Trustee Address]
Re: Premier Auto Trust 199 -
-- --
Asset Backed Certificates, Class B
----------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced % Asset
-----
Backed Certificates, Class B (the "Certificates") we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are
being transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of investments in the Certificates, (c) we have had the
opportunity to ask questions of and receive answers from the seller concerning
the purchase of the Certificates and all matters relating thereto or any
additional information deemed necessary to our decision to purchase the
Certificates, (d) we are not an employee benefit plan, trust or account that
is subject to the Employee Retirement Income Security Act of 1974, as amended,
or section 4975 of the Internal Revenue Code of 1986, as amended, nor are we
acting on behalf of any such Plan or using the assets of any such Plan to
acquire Class B Certificates, (e) we have not, nor has anyone acting on our
behalf, offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any other
similar security from or otherwise approached or negotiated with respect to
the Certificates, any interest in the Certificates or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action
that would constitute a distribution of the Certificates under the Act or that
would render the disposition of the Certificates a violation of Section 5 of
the Act or any state securities laws or require registration pursuant thereto,
and we will not act, or authorize any person to act, in such manner with
respect to the Certificates, and (f) we are a "qualified institutional buyer"
as that term is defined in Rule 144A under the Act. We are aware that the sale
to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
understand that such Certificates may be resold, pledged or transferred only
(i) to a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being
made in reliance on Rule 144A or (ii) pursuant to another exemption from
registration under the Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:
---------------------------------
Authorized Officer
EXHIBIT J
SUBSEQUENT TRANSFER ASSIGNMENT NO.
---
For value received, in accordance with and subject to the Pooling and
Servicing Agreement dated as of , 199 (the "Agreement"), among
----------- -
Chrysler Financial Company L.L.C., a Michigan limited liability company (the
"Seller"), Chrysler Financial Company L.L.C., a Michigan limited liability
company (the "Servicer"), and , a (the "Trustee"),
------------ --------------
the Seller does hereby sell, assign, transfer and otherwise convey unto the
Trustee, for the benefit of the Certificateholders, without recourse (except
as expressly provided in the Agreement), all right, title and interest of the
Seller in and to (i) the Subsequent Receivables, having an aggregate Principal
Balance equal to $ , set forth on Schedule A hereto (which shall supplement
Schedule A to the Agreement) and all monies due thereon on or after the date
hereof (the "Subsequent Cutoff Date"), in the case of Precomputed Receivables,
and all monies received thereon on and after the Subsequent Cutoff Date, in
the case of Simple Interest Receivables; (ii) the security interests in the
Financed Vehicles granted by the Obligors pursuant to such Subsequent
Receivable and any other interest of the Seller in such Financed Vehicles;
(iii) any proceeds with respect to such Subsequent 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
Subsequent 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 Subsequent Receivable and that shall have
been acquired by or on behalf of the Seller, the Servicer or the Trust; 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 Trust of any
obligation of the Seller to the Obligors, insurers or any other person in
connection with the Standard Receivables, Fixed Value Receivables, Receivable
Files, any insurance policies or any agreement or instrument relating to any
of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the Seller contained in the 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 Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of , 199 .
-
Chrysler Financial Company L.L.C.
By:
-------------------------------------
Name:
Title:
SCHEDULE A TO
Subsequent Transfer Assignment
Schedule of Subsequent Receivables
----------------------------------
ANNEX A TO
Subsequent Transfer Assignment
Chrysler Financial Company L.L.C.
OFFICERS' CERTIFICATE
The undersigned, and , the duly qualified and
------------- --------------
elected and of Chrysler Financial Company L.L.C.
---------- ----------------
(the "Seller"), in connection with the conveyance of Subsequent Receivables to
Premier Auto Trust 199 - (the "Trust") pursuant to Section 3.02(b) of the
Pooling and Servicing Agreement dated as of , 199 , (the
--------- -
"Agreement"), among the Seller, , as trustee, and Chrysler
-----------
Financial Company L.L.C., as servicer, and Subsequent Transfer Assignment No.
dated as of the date hereof from the Seller, hereby certify that:
- ---
(a) % of the Principal Balances of the Receivables in the
------
Trust on the date hereof (including the Subsequent Receivables conveyed
to the Trust on the date hereof) represent vehicles financed at CFC's
used vehicle rate.
(b) The weighted average APR of the Receivables in the Trust on the
date hereof (including the Subsequent Receivables conveyed to the Trust
on the date hereof) is %.
-----
(c) The weighted average remaining term of the Subsequent
Receivables in the Trust on the date hereof (including the Subsequent
Receivables conveyed to the Trust on the date hereof) is
------------
months.
(d) All other conditions precedent set forth in Section 3.02(b)(1)
of the Agreement relating to the conveyance of Subsequent Receivables to
the Trust have been satisfied.
All capitalized terms used but not otherwise defined herein shall have
the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this day of
----
, 199 .
- ------------- -
----------------------------------------
Name:
Title:
----------------------------------------
Name:
Title:
EXHIBIT K
ELIGIBLE INVESTMENT TRANSFER ASSIGNMENT NO.
---
For value received, in accordance with and subject to the Pooling and
Servicing Agreement dated as of , 199 (the "Agreement"), among
----------- --
Chrysler Financial Company L.L.C., a Michigan limited liability company (the
"Seller"), Chrysler Financial Company L.L.C., a Michigan limited liability
company (the "Servicer"), and , as trustee, the Seller does hereby
--------
sell, assign, transfer and otherwise convey unto the Issuer, without recourse
(except as expressly provided in the 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 A
---------
hereto (which shall supplement Schedule C to the Agreement) and all monies due
thereon on or after the date hereof (the "Subsequent Cutoff Date"), in the
case of Precomputed Receivables, and all monies received thereon on and after
the Subsequent 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 Receivable and that shall have been acquired by or on
behalf of the Seller, the Servicer or the Trust, 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 Trust 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, Receivable File, 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 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 Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of , 199 .
------------------ -
Chrysler Financial Company L.L.C.
By:
-----------------------------------
Name:
Title:
SCHEDULE A TO
Eligible Investment Transfer Assignment
Schedule of Eligible Investment Receivables
-------------------------------------------
ANNEX A TO
Eligible Investment Transfer Assignment
Chrysler Financial Company L.L.C.
OFFICER'S CERTIFICATE
The undersigned and ,
------------------------- --------------------------
the duly qualified and elected and
------------------------------
of Chrysler Financial Company L.L.C. (the
- ---------------------------
"Seller'), in connection with the conveyance of Eligible Investment
Receivables to Premier Auto Trust 199 - (the "Trust") pursuant to Section
-- --
12.03 of the Pooling and Servicing Agreement dated as of , 199
------ ---
(the "Agreement"), among the Seller, as trustee, and Chrysler Financial Company
L.L.C., as servicer, and Eligible Investment Transfer Assignment No. ,
---
dated as of the date hereof from the Seller, hereby certify that:
(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 vehicles financed at CFC's used vehicle rate.
(b) All other conditions precedent set forth in Section 12.03 of the
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 thereto in the Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this day of
----
, 199 .
- ---------- -
-----------------------------------
Name:
Title:
-----------------------------------
Name:
Title:
EXHIBIT 5.1
[Brown & Wood LLP Letterhead]
January 26, 1999
Chrysler Financial Company L.L.C.
27777 Franklin Road
Southfield, Michigan 48034
Re: Chrysler Financial Company L.L.C.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel for you in connection with the
Registration Statement on Form S-3 (the "Registration Statement"), filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), for the registration under the Act of $4,000,000,000
aggregate principal amount of asset backed notes (the "Notes") and asset
backed certificates ("Certificates" and, together with the Notes, the
"Securities"). Each series of such Securities will be issued pursuant to (i) a
separate pooling and servicing agreement (the "Pooling and Servicing
Agreement"), among Chrysler Financial Company L.L.C. (the "Registrant") and a
trustee to be identified in the prospectus supplement for such series of
Securities, (ii) a trust agreement (the "Trust Agreement") among a trustee
named in the related prospectus supplement, the Registrant and another entity
named in such prospectus supplement and/or (iii) an indenture (the
"Indenture") between the trust formed pursuant to the Trust Agreement and the
indenture trustee named in the related prospectus supplement.
We have made such investigation of law as we deemed appropriate and
have examined the proceedings heretofore taken and are familiar with the
procedures proposed to be taken by the Registrant in connection with the
authorization, issuance and sale of the Securities.
Based on the foregoing, we are of the opinion that:
1. When each Pooling and Servicing Agreement and/or Indenture in
respect of which we have participated has been duly authorized by all
necessary action and has been duly executed and delivered, the Pooling and
Servicing Agreement will constitute a valid and binding obligation of the
Registrant and the Indenture will constitute a valid and binding obligation of
the trust referred to therein, in each case enforceable in accordance with its
terms, subject to applicable bankruptcy, reorganization, insolvency and
similar laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law); and
2. When the issuance, execution and delivery of the Securities issued
pursuant to a Pooling and Servicing Agreement or an Indenture in respect of
which we have participated have been duly authorized by all necessary action,
and when such Securities have been duly executed and delivered and sold and
paid for as described in the Registration Statement, such Securities will be
legally and validly issued and the holders of such Securities will be entitled
to the benefits provided by the Pooling and Servicing Agreement or the
Indenture, as applicable, pursuant to which such Securities were issued.
In rendering the foregoing opinions, we have assumed the accuracy and
truthfulness of all public records regarding the Registrant and of all
certifications, documents and other proceedings examined by us that have been
executed or certified by officials of the Registrant acting within the scope
of their official capacities and have not verified the accuracy or
truthfulness thereof. We have also assumed the genuineness of the signatures
appearing upon such public records, certifications, documents and proceedings.
In addition, we have assumed that each such Pooling and Servicing Agreement
and Indenture and the related Securities, as applicable, will be executed and
delivered in substantially the form filed as exhibits to the Registration
Statement with such changes acceptable to us, and that such Securities will be
sold as described in the Registration Statement. We express no opinion as to
the laws of any jurisdiction other than the laws of the State of New York and
the federal laws of the United States of America.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus forming a part of the Registration
Statement, without implying or admitting that we are "experts" within the
meaning of the Act or the rules and regulations of the Securities and Exchange
Commission issued thereunder, with respect to any part of the Registration
Statement, including this exhibit.
Very truly yours,
/s/ Brown & Wood LLP
--------------------
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger, P.A.]
January 25, 1999
Chrysler Financial Company L.L.C.
27777 Franklin Road
Southfield, Michigan 48034
Re: Chrysler Financial Company L.L.C.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Chrysler Financial
Company L.L.C. (the "Registrant") in connection with the Registration
Statement on Form S-3 (the "Registration Statement"), filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), for the registration under the Act of up to
$4,000,000,000 aggregate principal amount of asset backed notes (the "Notes")
and asset backed certificates (the "Certificates"; and together with the
Notes, the "Securities"). Each series of such Securities may be issued
pursuant to a trust agreement (the "Trust Agreement") among a trustee named in
the related prospectus supplement, the Registrant and another entity named in
such prospectus supplement. This opinion is being delivered to you at your
request.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The form of Trust Agreement (including the form of Certificate of
Trust (the "Certificate of Trust") attached as Exhibit B thereto); and
(b) The Registration Statement.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed above, and we have assumed that there exists
no provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to
be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement will constitute the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, (ii) the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the
legal capacity of natural persons who are parties to the documents examined by
us, and (iv) that each of the parties to the documents examined by us has the
power and authority to execute and deliver, and to perform its obligations
under, such documents. We have not participated in the preparation of the
Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary
or appropriate, and subject to the assumptions, qualifications, limitations
and exceptions set forth herein, we are of the opinion that:
1. When each Trust Agreement in respect of which we have participated
as your counsel has been duly authorized by all necessary corporate action and
has been duly executed and delivered, it will constitute a valid and binding
obligation of the Registrant enforceable in accordance with its terms; and
2. When the issuance, execution and delivery of the Certificates in
respect of which we have participated as your counsel have been duly
authorized by all necessary corporate action, and when such Certificates have
been duly executed and delivered and sold as described in the Registration
Statement, such Certificates will be legally and validly issued and the
holders of such Certificates will be entitled to the benefits provided by the
Trust Agreement pursuant to which such Certificates were issued.
The foregoing opinions regarding enforceability are subject to (i)
applicable bankruptcy, insolvency, moratorium, reorganization, receivership,
fraudulent conveyance and similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity (regardless of
whether considered and applied in a proceeding in equity or at law) and (iii)
the effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus forming a part of the Registration
Statement. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7
of the Act, or the rules and regulations of the Securities and Exchange
Commission thereunder with respect to any part of the Registration Statement,
including this exhibit.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
EAM
Exhibit 8.1
[Brown & Wood LLP Letterhead]
January 26, 1999
Chrysler Financial Company L.L.C.
27777 Franklin Road
Southfield, Michigan 48034
Re: Chrysler Financial Company L.L.C.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special federal tax counsel to the trusts referred
to below in connection with the filing by Chrysler Financial Company L.L.C., a
Michigan limited liability company (the "Registrant"), of a Registration
Statement on Form S-3 (such registration statement, together with the exhibits
and any amendments thereto as of the date hereof, the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act") for the registration
under the Act of asset backed notes (the "Notes") and asset backed
certificates (the "Certificates") in an aggregate principal amount of up to
$4,000,000,000. As described in the Registration Statement, the Notes and/or
the Certificates will be issued from time to time in series, with each series
being issued by a trust (each, a "Trust") to be formed by the Registrant
pursuant to a Trust Agreement (each, a "Trust Agreement") among the
Registrant, a wholly-owned subsidiary of the Registrant and an owner trustee,
or a Pooling and Servicing Agreement (each, a "Pooling and Servicing
Agreement") between the Registrant and a trustee. Each series may include one
or more classes of Notes, which will be issued pursuant to an Indenture
between the related Trust and an indenture trustee. Each series may include
one or more classes of Certificates, which will be issued pursuant to a Trust
Agreement or a Pooling and Servicing Agreement.
We have advised the Registrant with respect to certain federal income
tax consequences of the proposed issuance of the notes and the Certificates.
This advice is summarized under the headings "Summary of Terms -- Tax Status"
and "Certain Federal Income Tax Consequences" in the Prospectus and "Summary
of Terms - Tax Status" in the Prospectus Supplements, all a part of the
Registration Statement. Such description does not purport to discuss all
possible federal income tax ramifications of the proposed issuance, but with
respect to those federal income tax consequences that are discussed, in our
opinion, the description is accurate in all material respects.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to a reference to this firm (as special federal tax
counsel to the Trust) under the heading "Certain Federal Income Tax
Consequences" in the Prospectus forming a part of the Registration Statement,
without implying or admitting that we are "experts" within the meaning of the
Act or the rules and regulations of the Commission issued thereunder, with
respect to any part of the Registration Statement, including this exhibit.
Very truly yours,
/s/ Brown & Wood LLP
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned Managers
of Chrysler Financial Company L.L.C. hereby severally constitutes and appoints
CHRISTOPHER TARAVELLA, BYRON C. BABBISH and SILVIA M. KLEER, or any one or
more of them, to be his agents, proxies and attorneys-in-fact, to sign and
execute in his name, place and stead and on his behalf as a Manager of
Chrysler Financial Company L.L.C., and to file with the Securities and
Exchange Commission, the Registration Statement of Chrysler Financial Company
L.L.C. on Form S-3, registering under the Securities Act of 1933, as amended,
asset backed securities having an aggregate initial public offering price of $
billion and any and all further amendments (including post-effective
amendments) to such Registration Statement, and to file all exhibits thereto
and other documents in connection therewith, granting unto said
attorneys-in-fact and agents and each of them, full power and authority to do
and perform each and every act and thing required to be done that may be
necessary or desirable, hereby approving, ratifying and confirming all that
the aforesaid agents, proxies and attorneys-in-fact do, or that any one of
them does or causes to be done, on his behalf pursuant to this Power of
Attorney.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as
of this 25th day of January, 1999.
/s/ T. P. Capo
- ----------------------
T. P. Capo
/s/ D. L. Davis
- ----------------------
D. L. Davis
/s/ R. L. Franson
- ----------------------
R. L. Franson
/s/ W. J. O'Brien III
- ----------------------
W. J. O'Brien III
/s/ G. C. Valade
- ----------------------
G. C. Valade
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)_____
--------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
--------
PREMIER AUTO TRUST ____-__ AND EACH OTHER
PREMIER AUTO TRUST _____ - __ THAT ISSUES NOTES
UNDER THE RELATED PROSPECTUS AND PROSPECTUS SUPPLEMENT
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
C/O CHASE MANHATTAN BANK DELAWARE, AS OWNER TRUSTEE
1201 MARKET STREET
9TH FLOOR
WILMINGTON, DELAWARE
or such other address specified in
the applicable Prospectus Supplement 19801
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Asset Backed Notes
(title of the indenture securities)
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
-------------------
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington D.C..
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
-----------------------------
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
-----------------
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 21st day of January, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY /S/ STEVEN M. WAGNER
-------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
* EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL
BANK OF CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3
OF U S WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON MAY 6, 1998 (REGISTRATION NO. 333-51907-01).
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 21, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Premier Auto
Trust _____-__ and each other Premier Auto Trust ____ - __ that issues notes
under the related prospectus and prospectus supplement and The First National
Bank of Chicago, as Trustee, the undersigned, in accordance with Section
321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that
the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request
therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /S/ STEVEN M. WAGNER
----------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
DOLLAR AMOUNTS IN THOUSANDS C400
----
RCFD BIL MIL THOU
---- ------------
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1) ......... 0081 4,898,646 1.a
b. Interest-bearing balances(2).................. 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) ..... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCFD
----
RC-C)............................................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses ..................... 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve ......................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
----
reserve (item 4.a minus 4.b and 4.c) .......................... 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)............................... 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases) ......... 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M) ..................... 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) ................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)............................ 2143 295,823 10.
11. Other assets (from Schedule RC-F) ................................ 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11).......................... 2170 61,971,271 12.
- --------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN
THOUSANDS
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
----
from Schedule RC-E, part 1)..................... 2200 20,965,124 13.a
(1) Noninterest-bearing(1)...................... 6631 9,191,662 13.a1
(2) Interest-bearing............................ 6636 11,773,462 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and RCFN
----
IBFs (from Schedule RC-E, part II).............. 2200 15,912,956 13.b
(1) Noninterest bearing......................... 6631 475,182 13.b1
(2) Interest-bearing............................ 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 359,381 15.a
b. Trading Liabilities(from Sechedule RC-D)........ RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
----
a. With original maturity of one year or less...... 2332 4,603,402 16.a
b. With original maturity of more than one year... A547 328,001 16.b
c. With original maturity of more than three years.. A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding .. 2920 352,324 18.
19. Subordinated notes and debentures................ 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)........... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20)... 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.... 3838 0 23.
24. Common stock..................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 3,192,857 25.
26. a. Undivided profits and capital reserves........ 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27) 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............ 3300 61,971,271 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external Number auditors as of any date Number
during 1996 . . . . . . . . . . . . . . . . . . . . . . .RCFD 6724. . . . /N.A./ M.1.
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the chartering authority)
bank
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
EXHIBIT 25.2
========================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
PREMIER AUTO TRUST ___-_ AND EACH OTHER
PREMIER AUTO TRUST ___-_ THAT ISSUES NOTES
UNDER THE RELATED PROSPECTUS AND PROSPECTUS SUPPLEMENT
(Exact name of obligor as specified in its charter)
Delaware Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o Chase Manhattan Bank
Delaware, as Owner Trustee
1201 Market Street
9th Floor
Wilmington, DE 19801
or such other address specified in (Zip code)
the applicable Prospectus Supplement
(Address of principal executive offices)
-------------
Asset Backed Notes
(Title of the indenture securities)
========================================================================
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) ____ NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY
TO WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) ____ WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York,
and State of New York, on the 21st day of January, 1999.
THE BANK OF NEW YORK
By: /s/ VAN K. BROWN
---------------------------------------
Name: VAN K. BROWN
Title: ASSISTANT VICE PRESIDENT
- -----------------------------------------------------------------------------
Exhibit 7 - Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30,
1998, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $7,301,241
Interest-bearing balances........................... 1,385,944
Securities:
Held-to-maturity securities......................... 1,000,737
Available-for-sale securities....................... 4,240,655
Federal funds sold and Securities purchased under
agreements to resell................................ 971,453
Loans and lease financing receivables:
Loans and leases, net of unearned
income............................................ 38,788,269
LESS: Allowance for loan and
lease losses...................................... 632,875
LESS: Allocated transfer risk
reserve........................................... 0
Loans and leases, net of unearned income,
allowance, and reserve............................ 38,155,394
Assets held in trading accounts........................ 1,307,562
Premises and fixed assets (including capitalized
leases)............................................. 670,445
Other real estate owned................................ 13,598
Investments in unconsolidated subsidiaries and
associated companies................................ 215,024
Customers' liability to this bank on acceptances
outstanding......................................... 974,237
Intangible assets...................................... 1,102,625
Other assets........................................... 1,944,777
----------
Total assets........................................... $59,283,692
==========
LIABILITIES
Deposits:
In domestic offices................................. $26,930,258
Noninterest-bearing................................. 11,579,390
Interest-bearing.................................... 15,350,868
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 16,117,854
Noninterest-bearing................................. 187,464
Interest-bearing.................................... 15,930,390
Federal funds purchased and Securities sold under
agreements to repurchase............................ 2,170,238
Demand notes issued to the U.S.Treasury................ 300,000
Trading liabilities.................................... 1,310,867
Other borrowed money:
With remaining maturity of one year or less......... 2,549,479
With remaining maturity of more than one year
through three years............................... 0
With remaining maturity of more than three years.... 46,654
Bank's liability on acceptances executed and
outstanding......................................... 983,398
Subordinated notes and debentures...................... 1,314,000
Other liabilities...................................... 2,295,520
----------
Total liabilities...................................... 54,018,268
==========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 731,319
Undivided profits and capital reserves................. 3,385,227
Net unrealized holding gains (losses) on
available-for-sale securities....................... 51,233
Cumulative foreign currency translation adjustments.... ( 37,639)
----------
Total equity capital................................... 5,265,424
----------
Total liabilities and equity capital................... $59,283,692
==========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and to the
best of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
EXHIBIT 99.1
================================================================================
[FORM OF SALE AND SERVICING AGREEMENT]
SALE AND SERVICING AGREEMENT
between
PREMIER AUTO TRUST ___-_
Issuer,
and
CHRYSLER FINANCIAL COMPANY L.L.C.,
Seller and Servicer
Dated as of [_______], 199_
===============================================================================
Table of Contents
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions.................................................1
SECTION 1.02. Other Definitional Provisions..............................16
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables..................................17
SECTION 2.02. Conveyance of Fixed Value Payments and Fixed Value
Finance Charges............................................17
SECTION 2.03. Fixed Value Securities.....................................18
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of Seller with
Respect to the Receivables.................................19
SECTION 3.02. Repurchase upon Breach.....................................22
SECTION 3.03. Custody of Receivable Files................................23
SECTION 3.04. Duties of Servicer as Custodian............................23
SECTION 3.05. Instructions; Authority To Act.............................24
SECTION 3.06. Custodian's Indemnification................................24
SECTION 3.07. Effective Period and Termination...........................24
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer.........................................25
SECTION 4.02. Collection and Allocation of Receivable Payments...........25
SECTION 4.03. Realization upon Receivables...............................26
SECTION 4.04. Physical Damage Insurance..................................26
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles.....26
SECTION 4.06. Covenants of Servicer......................................26
SECTION 4.07. Purchase of Receivables upon Breach........................26
SECTION 4.08. Servicing Fee..............................................27
SECTION 4.09. Servicer's Certificate.....................................27
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.......27
SECTION 4.11. Annual Independent Certified Public Accountants' Report....28
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables................................................28
SECTION 4.13. Servicer Expenses..........................................28
SECTION 4.14. Appointment of Subservicer.................................28
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders
and Noteholders
SECTION 5.01. Establishment of Collection Account........................29
SECTION 5.02. Collections................................................31
SECTION 5.03. Application of Collections.................................31
SECTION 5.04. [ Reserved ]...............................................32
SECTION 5.05. Additional Deposits........................................32
SECTION 5.06. Distributions..............................................32
SECTION 5.07. Reserve Account............................................34
SECTION 5.08. [ Reserved ]...............................................35
SECTION 5.09. Statements to Noteholders and Certificateholders...........35
SECTION 5.10. Net Deposits...............................................36
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller..................................36
SECTION 6.02. Existence..................................................37
SECTION 6.03. Liability of Seller; Indemnities...........................37
SECTION 6.04. Merger or Consolidation of, or Assumption of
Obligations of, Seller.....................................38
SECTION 6.05. Limitation on Liability of Seller and Others...............39
SECTION 6.06. Seller May Own Notes.......................................39
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer................................39
SECTION 7.02. Indemnities of Servicer....................................40
SECTION 7.03. Merger or Consolidation of, or Assumption of
Obligations of, Servicer...................................41
SECTION 7.04. Limitation on Liability of Servicer and Others.............42
SECTION 7.05. CFC Not To Resign as Servicer..............................42
ARTICLE VIII
Default
SECTION 8.01. Servicer Default...........................................43
SECTION 8.02. Appointment of Successor...................................44
SECTION 8.03. Notification to Noteholders and Certificateholders.........44
SECTION 8.04. Waiver of Past Defaults....................................45
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables.......................45
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment..................................................46
SECTION 10.02. Protection of Title to Trust...............................47
SECTION 10.03. Notices....................................................49
SECTION 10.04. Assignment by the Seller or the Servicer...................49
SECTION 10.05. Limitations on Rights of Others............................49
SECTION 10.06. Severability...............................................49
SECTION 10.07. Separate Counterparts......................................50
SECTION 10.08. Headings...................................................50
SECTION 10.09. Governing Law..............................................50
SECTION 10.10. Assignment by Issuer.......................................50
SECTION 10.11. Nonpetition Covenants......................................50
SECTION 10.12. Limitation of Liability of Owner Trustee and
Indenture Trustee..........................................50
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
EXHIBIT A [ Reserved ]
EXHIBIT B Form of Distribution Statement to Noteholders.............B-1
EXHIBIT C Form of Servicer's Certificate............................C-1
SALE AND SERVICING AGREEMENT dated as of [_______], 199_, between
PREMIER AUTO TRUST ____-_, a Delaware business trust (the "Issuer"),
and CHRYSLER FINANCIAL COMPANY L.L.C., a Michigan limited liability
company, as seller and servicer.
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with automobile retail installment sale contracts
generated by Chrysler Financial Company L.L.C. in the ordinary course of
business; and
WHEREAS Chrysler Financial Company L.L.C. is willing to sell such
receivables to, and to service such receivables on behalf of, the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Definitions. Whenever used in this Agreement, the
-----------
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Accelerated Principal Distribution Amount" means, with respect to any
------------------------------------------
Distribution Date, an amount equal to that portion, if any, of the Total
Distribution Amount for such Distribution Date that remains after the payment of
(i) the Servicing Fee (together with any Servicing Fee that remains unpaid from
prior Distribution Dates), (ii) the Noteholders' Interest Distributable Amount,
(iii) the Regular Principal Distribution Amount and (iv) the amount, if any,
required to be allocated to the Reserve Account on such Distribution Date
pursuant to Section 5.06(a)(ii)(C).
"Amortizing Payment" means, with respect to each Fixed Value Receivable
------------------
and each Collection Period prior to the date on which the Fixed Value Payment
relating to such Receivable is due, the amount specified in the applicable
Contract in the payment schedule as the "Amount of Each Payment", except that in
the case of a prepayment, liquidation or repurchase by the Seller or purchase by
the Servicer, the Amortizing Payment shall be equal to the aggregate "Amount of
Each Payment" that has not yet been paid for the period through and including
the last payment prior to the date when the Fixed Value Payment is due less the
amount of the unearned finance charges under the related Contract allocable to
such amount in accordance with the Servicer's customary procedures.
"Amortizing Payment Finance Charge" means, with respect to each payment
---------------------------------
collected on a Fixed Value Receivable, the finance charge included in such
payment (as determined in accordance with the Servicer's customary procedures)
that is allocable to the related Principal Balance.
"Amount Financed" means (i) with respect to a Standard Receivable, the
---------------
amount advanced under such Standard Receivable toward the purchase price of the
Financed Vehicle and any related costs, exclusive of any amount allocable to the
premium of force-placed physical damage insurance covering the Financed Vehicle;
and (ii) with respect to a Fixed Value Receivable, an amount equal to the
present value of the fixed level payment monthly installments (not including the
amount designated as the Fixed Value Payment) under such Fixed Value Receivable,
assuming that each payment is made on the due date in the month in which such
payment is due, discounted at the APR for such Fixed Value Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
----------------------
of finance charges stated in the related Contract.
"Basic Documents" means the Indenture, the Trust Agreement, the
----------------
Administration Agreement and the Purchase Agreement.
"Cash Release Amount" means on each Distribution Date during the
---------------------
Release Period, the portion, if any, of the Total Distribution Amount which
remains after payment of (a) the Servicing Fee, (b) the Noteholders' Interest
Distributable Amount, (c) the Release Period Noteholders' Principal
Distributable Amount and (d) the amount, if any, required to increase the amount
in the Reserve Account to the Specified Reserve Amount; provided that on the
Last Release Distribution Date the Cash Release Amount shall equal the Initial
Overcollateralization Amount less the aggregate of the Cash Release Amounts for
all prior Distribution Dates.
"Certificate Balance" has the meaning assigned to such term in the
-------------------
Trust Agreement.
"Certificateholders" has the meaning assigned to such term in the Trust
------------------
Agreement.
"Certificates" means the Trust Certificates and the Overcollateraliza-
------------
tion Certificates.
"CFC" means Chrysler Financial Company L.L.C., a Michigan limited
---
liability company, or its successors.
"Class" means any one of the classes of Notes
-----
"Class A-1 Final Scheduled Distribution Date" means the [_______] 199_
--------------------------------------------
Distribution Date.
"Class A-1 Initial Principal Balance" shall mean $[_______].
------------------------------------
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
--------------------
is registered in the Note Register.
"Class A-2 Final Scheduled Distribution Date" means the April 2001
-----------------------------------------------
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" mean the July 2002
-------------------------------------------
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 April 2003
-----------------------------------------------
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, and (2) all
distributions to be made on the following Distribution Date.
"Company" means [__________], a [__________] [__________], 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 [________], [___], [___], [___]; Corporate Trust Services Division;
or at such other address as the Indenture Trustee may designate from time to
time by notice to the Noteholders and the Seller, or the principal corporate
trust office of any successor Indenture Trustee (of which address such successor
Indenture Trustee will notify the Noteholders and the Seller).
"Cutoff Date" means [_______], 199_.
-----------
"Dealer" means the dealer who sold a Financed Vehicle and who
------
originated and assigned the related Receivable to CFC under an existing
agreement between such dealer and CFC.
"Delivery" when used with respect to Trust Account Property means:
--------
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Indenture Trustee or its nominee or custodian by physical delivery
to the Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC) transfer thereof (i)
by delivery of such certificated security endorsed to, or registered in
the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank to a securities intermediary (as defined in Section
8-102 of the UCC) and the making by such securities intermediary of
entries on its books and records identifying such certificated
securities (as defined in Section 8-102 of the UCC) of the Indenture
Trustee or its nominee or custodian or (ii) by delivery thereof to a
"clearing corporation" (as defined in Section 8-102 of the UCC) and the
making by such clearing corporation of appropriate entries on its books
reducing the appropriate securities account of the transferor and
increasing the appropriate securities account of a securities
intermediary by the amount of such certificated security, the
identification by the clearing corporation on its books and records
that the certificated securities are credited to the sole and exclusive
securities account of the securities intermediary, the maintenance of
such certificated securities by such clearing corporation or a
custodian or the nominee of such clearing corporation subject to the
clearing corporation's exclusive control, and the making by such
securities intermediary of entries on its books and records identifying
such certificated securities as being credited to the securities
account of the Indenture Trustee or its nominee or custodian (all of
the foregoing, "Physical Property"), and, in any event, any such
Physical Property in registered form shall be in the name of the
Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect
the complete transfer of ownership of any such Trust Account Property
(as defined herein) to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that are book-entry securities held
through the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable Federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal
Reserve Bank by a securities intermediary which is also a "depository"
pursuant to applicable Federal regulations; the identification by the
Federal Reserve Bank of such book-entry securities on its record being
credited to the securities intermediary's securities account; the
making by such securities intermediary of entries in its books and
records identifying such book-entry security held through the Federal
Reserve System pursuant to Federal book-entry regulations as being
credited to the Indenture Trustee's securities account; and such
additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust
Account Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof; and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not
governed by clause (a) above, registration on the books and records of
the issuer thereof in the name of the securities intermediary, the
sending of a confirmation by the securities intermediary of the
purchase by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such securities intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or
custodian.
"Depositor" means the Seller in its capacity as Depositor under the
---------
Trust Agreement.
"Distribution Date" means, with respect to each Collection Period, the
------------------
eighth day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on [_______], 199_.
"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 [__________] 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 [__________] may be
considered an Eligible Institution for the purposes of clause (b) of this
definition.
"Eligible Investments" means book-entry securities, negotiable
----------------------
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to the full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or State banking or depository institution
authorities; provided, however, that at the time of the investment or
contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such
depository institution or trust company) thereof shall have a credit
rating from each of the Rating Agencies in the highest applicable
rating category granted thereby;
(c) commercial paper, variable amount notes or other short
term debt obligations having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest applicable rating category granted
thereby;
(d) investments in money market or common trust funds having a
rating from each of the Rating Agencies in the highest applicable
rating category granted thereby (including funds for which the
Indenture Trustee or the Owner Trustee or any of their respective
Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause;
(g) repurchase obligations with respect to any security or
whole loan, entered into with (i) a depository institution or trust
company (acting as principal) described in clause (b) above (except
that the rating referred to in the proviso in such clause (b) shall be
A-1 or higher in the case of Standard & Poor's) (such depository
institution or trust company being referred to in this definition as a
"financial institution"), (ii) a broker/dealer (acting as principal)
registered as a broker or dealer under Section 15 of the Exchange Act
(a "broker/dealer") the unsecured short-term debt obligations of which
are rated P-1 by Moody's and at least A-1 by Standard & Poor's at the
time of entering into such repurchase obligation (a "rated
broker/dealer"), (iii) an unrated broker/dealer (an "unrated
broker/dealer"), acting as principal, that is a wholly-owned subsidiary
of a non-bank holding company the unsecured short-term debt obligations
of which are rated P-1 by Moody's and at least A-1 by Standard & Poor's
at the time of entering into such repurchase obligation (a "Rated
Holding Company") or (iv) an unrated subsidiary (a "Guaranteed
Counterparty"), acting as principal, that is a wholly-owned subsidiary
of a direct or indirect parent Rated Holding Company, which guarantees
such subsidiary's obligations under such repurchase agreement; provided
that the following conditions are satisfied:
(A) the aggregate amount of funds invested in
repurchase obligations of a financial institution, a rated
broker/dealer, an unrated broker/dealer or Guaranteed
Counterparty in respect of which the Standard & Poor's
unsecured short-term ratings are A-1 (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such rating
being that of the related Rated Holding Company) shall not
exceed 20% of the sum of the then outstanding principal
balance of the Notes (there being no limit on the amount of
funds that may be invested in repurchase obligations in
respect of which such Standard & Poor's rating is A-1+ (in the
case of an unrated broker/dealer or Guaranteed Counterparty,
such rating being that of the related Rated Holding Company));
(B) in the case of the Reserve Account, the rating
from Standard & Poor's in respect of the unsecured short-term
debt obligations of the financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed
Counterparty (in the case of an unrated broker/dealer or
Guaranteed Counterparty, such rating being that of the related
Rated Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within 30
days of the date on which the Indenture Trustee or the Issuer,
as applicable, enters into such repurchase obligation;
(D) the repurchase obligation shall not be
subordinated to any other obligation of the related financial
institution, rated broker/dealer, unrated broker/dealer or
Guaranteed Counterparty;
(E) the collateral subject to the repurchase
obligation is held, in the appropriate form, by a custodial
bank on behalf of the Indenture Trustee or the Issuer, as
applicable;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a
Guaranteed Counterparty, the following conditions shall also
be satisfied:
(i) the Indenture Trustee or the
Issuer, as applicable, shall have received an opinion
of counsel (which may be in-house counsel) to the
effect that the guarantee of the related Rated
Holding Company is a legal, valid and binding
agreement of the Rated Holding Company, enforceable
in accordance with its terms, subject as to
enforceability to bankruptcy, insolvency,
reorganization and moratorium or other similar laws
affecting creditors' rights generally and to general
equitable principles;
(ii) the Indenture Trustee or the
Issuer, as applicable, shall have received (x) an
incumbency certificate for the signer of such
guarantee, certified by an officer of such Rated
Holding Company and (y) a resolution, certified by an
officer of the Rated Holding Company, of the board of
directors (or applicable committee thereof) of the
Rated Holding Company authorizing the execution,
delivery and performance of such guarantee by the
Rated Holding Company;
(iii) the only conditions to the
obligation of such Rated Holding Company to pay on
behalf of the Guaranteed Counterparty shall be that
the Guaranteed Counterparty shall not have paid under
such repurchase obligation when required (it being
understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is
necessary) and that the Indenture Trustee or the
Issuer shall make a demand on the Rated Holding
Company to make the payment due under such guarantee;
(iv) the guarantee of the Rated
Holding Company shall be irrevocable with respect to
such repurchase obligation and shall not be
subordinated to any other obligation of the Rated
Holding Company; and
(v) each of Standard & Poor's and
Moody's has confirmed in writing to the Indenture
Trustee or Issuer, as applicable, that it has
reviewed the form of the guarantee of the Rated
Holding Company and has determined that the issuance
of such guarantee will not result in the downgrade or
withdrawal of the ratings assigned to the Notes.
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide
that, upon any failure to maintain such overcollateralization,
the repurchase obligation shall become due and payable, and
unless the repurchase obligation is satisfied immediately, the
collateral subject to the repurchase agreement shall be
liquidated and the proceeds applied to satisfy the unsatisfied
portion of the repurchase obligation;
(h) any other investment with respect to which the Issuer or
the Servicer has received written notification from the Rating Agencies
that the acquisition of such investment as an Eligible Investment will
not result in a withdrawal or downgrading of the ratings on the Notes.
"FDIC" means the Federal Deposit Insurance Corporation.
----
"Final Scheduled Maturity Date" means October 23, 2004.
-----------------------------
"Financed Vehicle" means an automobile or light-duty truck, together
-----------------
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable or Fixed Value Receivable.
"First Release Distribution Date" means the first Distribution Date
---------------------------------
that is the later of (a) the Distribution Date following the Distribution Date
on which the Overcollateralization Amount is at least equal to the sum of (i)
the Initial Overcollateralization Amount and (ii) the product of (x) 2% and (y)
the excess of the Related Pool Balance for such preceding Distribution Date over
the Initial Overcollateralization Amount and (b) the Distribution Date next
succeeding the Distribution Date on which the Class A-1 Notes have been paid in
full.
"Fixed Value Finance Charge" means, with respect to each payment
-----------------------------
collected on a Fixed Value Receivable, the finance charge included in such
payment (as determined in accordance with the Servicer's customary procedures)
that is allocable to the related Fixed Value Payment.
"Fixed Value Payment" means, with respect to each Fixed Value
---------------------
Receivable, the amount specified on the applicable Contract as the "Amount of
Fixed Value Payment" reduced (i) in the case of a prepayment or repurchase, by
the amount of the unearned finance charges under the Contract allocable to such
payment in accordance with the Servicer's customary procedures and (ii) in the
case of a liquidation, by the excess of Liquidation Proceeds collected by the
Servicer over the Amortizing Payment on such date.
"Fixed Value Receivable" means any Contract listed on Schedule A (which
----------------------
Schedule may be in the form of microfiche) that provides for amortization of the
loan over a series of fixed level payment monthly installments in accordance
with the simple interest method, but also requires a final payment that is
greater than the scheduled monthly payments and is due after payment of such
scheduled monthly payments and that may be made by (i) payment in full in cash
of a fixed value amount, (ii) return of the Financed Vehicle to the Servicer
provided certain conditions are satisfied or (iii) refinancing the final fixed
value payment in accordance with specified conditions.
"Fixed Value Securities" has the meaning assigned to such term in
------------------------
Section 2.03.
"Indenture" means the Indenture dated as of [_______], 199_, between
---------
the Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee under
------------------
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Overcollateralization Amount" means $[_______].
------------------------------------
"Insolvency Event" means, with respect to a specified Person, (a) the
-----------------
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of 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 in respect of the Collection Period preceding such Distribution
Date: (a) that portion of all collections on Receivables allocable to interest
(exclusive of collections allocable to Fixed Value Finance Charges in accordance
with Section 5.03(b)), (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) 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, (d) Recoveries
for such Collection Period, and (e) Investment Earnings for the related
Distribution Date; provided, however, that in calculating the Interest
Distribution Amount 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 shall be excluded.
"Investment Earnings" means, with respect to any Distribution Date, the
-------------------
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Collection Account to be applied on such Distribution Date
pursuant to Section 5.01(b).
"Issuer" means Premier Auto Trust ____-_.
------
"Last Release Distribution Date" means the Distribution Date on which
--------------------------------
the aggregate amount of the Cash Release Amounts released from the lien of the
Indenture pursuant to Section 5.06(a)(ii)(D) on such Distribution Date and all
prior Distribution Dates is equal to the Initial Overcollateralization Amount.
"Lien" means a security interest, lien, charge, pledge, equity or
----
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable liquidated by the Service
---------------------
through the sale of a Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated
----------------------
Receivable, the moneys collected in respect thereof, from whatever source on a
Liquidated Receivable during the Collection Period in which such Receivable
became a Liquidated Receivable, net of the sum of any amounts expended by the
Servicer in connection with such liquidation and any amounts required by law to
be remitted to the Obligor on such Liquidated Receivable.
"Moody's" means Moody's Investors Service, Inc., or its successor.
-------
"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' Interest Distributable Amount and
the Noteholders' Principal 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 paid on the Notes 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-1 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months; and interest with respect to the Class A-1 Notes shall be
computed on the basis of the actual number of days in each applicable Class A-1
Interest Accrual Period divided by 360.
"Noteholders' Monthly Interest Distributable Amount" means, with
-------------------------------------------------------
respect to any Distribution Date, interest accrued for the related Interest
Accrual Period or, in the case of the Class A-1 Notes, the related Class A-1
Interest Accrual Period, 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, on 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 required to be made from amounts
allocated to 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 paid as principal of the Notes 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
allocated for distribution to the Class A-1 Noteholders will include the amount
necessary (after giving effect to the other amounts to be allocated for
distribution to the Class A-1 Noteholders 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 allocated for distribution to the Class A-2 Noteholders will
include the amount necessary (after giving effect to the other amounts to be
allocated for distribution to the Class A-2 Noteholders 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 allocated for distribution to the Class A-3 Noteholders
will include the amount necessary (after giving effect to the other amounts to
be allocated for distribution to the Class A-3 Noteholders on such Distribution
Date and allocable to principal) to reduce the Outstanding Amount of the Class
A-3 Notes to zero; (d) on the Class A-4 Final Scheduled Distribution Date, the
principal required to be allocated for distribution to the Class A-4 Noteholders
will include the amount necessary (after giving effect to the other amounts to
be allocated for distribution to the Class A-4 Noteholders on such Distribution
Date and allocable to principal) to reduce the Outstanding Amount of the Class
A-4 Notes to zero.
"Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and
-----
Class A-4 Notes.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
-------
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by (a) the chairman
----------------------
of the board, any vice president, the controller or any assistant controller and
(b) the president, a treasurer, assistant treasurer, secretary or assistant
secretary of the Seller, the Company or the Servicer, as appropriate.
"OMSC" means Overseas Military Sales Corporation, or its successor.
----
"OMSC Receivable" means any Standard Receivable acquired by CFC from
---------------
OMSC.
"Opinion of Counsel" means one or more written opinions of counsel, who
------------------
may be an employee of or counsel to the Seller, the Company or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or
the Rating Agencies, as applicable.
"Original Pool Balance" means $[_______].
---------------------
"Overcollateralization Amount" means, with respect to any Distribution
-----------------------------
Date, (i) the Related Pool Balance minus (ii) the Securities Amount.
"Overcollateralization Certificates" has the meaning assigned to such
----------------------------------
term in the Trust Agreement.
"Overcollateralization Percentage" means, with respect to any
----------------------------------
Distribution Date, the percentage derived from the fraction, the numerator of
which is the Overcollateralization Amount for such Distribution Date and the
denominator of which is the Related Pool Balance.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
------------------
Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under the
--------------
Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.
"Payment 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).
"Principal Balance" of a 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 Receivable
allocable to principal.
"Purchase Agreement" means the Purchase Agreement dated as of
--------------------
[_______], 199_, between the Seller and the Company.
"Purchase Amount" means the amount, as of the close of business on the
----------------
last day of a Collection Period, required to prepay in full a Receivable under
the terms thereof including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable purchased as of the close of
---------------------
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or by the Seller pursuant to Section 3.02.
"Rating Agency" means Moody's and Standard & Poor's or, if no such
--------------
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Seller, notice of which designation shall be given to the Indenture Trustee, the
Owner Trustee and the Servicer. Any notice required to be given to a Rating
Agency pursuant to this Agreement shall also be given to Fitch IBCA, Inc. and
Duff & Phelps 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.
"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.
"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 in respect of the Collection Period preceding such
Distribution Date: (a) that portion of all collections on Receivables allocable
to principal, (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 and (c) to
the extent attributable to principal, the Purchase Amount of each Receivable
that became a Purchased Receivable during such Collection Period.
"Related Pool Balance" means, with respect to any Distribution Date,
--------------------
the Pool Balance as of the end of the related Collection Period.
"Release Period" means the period from and including the First Release
---------------
Distribution Date to and including the Last Release Distribution Date.
"Release Period Noteholders' Principal Distributable Amount" means,
--------------------------------------------------------------
with respect to any Distribution Date during the Release Period, the amount
equal to the excess, if any, of (a) the Securities Amount on such Distribution
Date (but prior to giving effect to any distributions on such Distribution Date)
over (b) the product of (1) 95.00% and (2) the Related Pool Balance; provided
further that on the Last Release Distribution Date, the Release Period
Noteholders' Principal Distributable Amount shall equal (x) the Noteholders'
Principal Distributable Amount less (y) the Cash Release Amount.
"Reserve Account" means the account that is part of the Collection
----------------
Account and is designated as such, established and maintained pursuant to
Section 5.01.
"Reserve Account Initial Deposit" means the initial deposit of cash and
-------------------------------
Eligible Investments in the amount of $[_______] made by the Seller into the
Collection Account on the Closing Date.
"Securities Amount" means, with respect to any Distribution Date, the
------------------
sum of the aggregate Outstanding Principal Amount of the Notes and the
Certificate Balance of the Overcollateralization Certificates after giving
effect to payments of principal made on the Notes and the Overcollateralization
Certificates on such Distribution Date.
"Seller" means CFC and its successors in interest to the extent
------
permitted hereunder.
"Servicer" means CFC, as the servicer of the Receivables, and each
--------
successor to CFC (in the same capacity) pursuant to Section 7.03 or 8.02.
"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.
------------------
"Simple Interest Method" means the method of allocating a fixed level
------------------------
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by a fraction,
the numerator of which is the number of days elapsed since the preceding payment
of interest was made, the denominator of which is 365, and the remainder of such
payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
----------------------------
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Amount" means, with respect to any Distribution
--------------------------
Date, an amount equal to the Reserve Account Initial Deposit.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
-------------------
division of The McGraw-Hill Companies, Inc., or its successor.
"Standard Receivable" means any Contract listed on Schedule A (which
--------------------
Schedule may be in the form of microfiche) that is not a Fixed Value Receivable.
"Total Distribution Amount" means, 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).
"Trust" means the Issuer.
-----
"Trust Account Property" means the Collection Account, all amounts and
----------------------
investments held from time to time in the Collection 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 Agreement" means the Amended and Restated Trust Agreement dated
----------------
as of [_______], 199_, among the Seller, the Company and the Owner Trustee.
"Trust Certificates" has the meaning assigned to such term in the Trust
------------------
Agreement.
"Trust Officer" means, in the case of the Indenture Trustee, any
--------------
Officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms used
-----------------------------
herein and not otherwise defined herein shall have the meanings assigned to them
in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
Conveyance of Receivables
-------------------------
SECTION 2.01. Conveyance of Receivables. In consideration of the
---------------------------
Issuer's delivery to or upon the order of the Seller of (x) $[_______] (which
amount represents the Original Pool Balance less (i) the Reserve Account Initial
Deposit, (ii) the Initial Overcollateralization Amount, (iii) the Class A-1
Initial Principal Balance, (iv) the Initial Certificate Balance (as defined in
the Trust Agreement) and (v) certain other expenses of the Issuer), and (y) the
Certificates, the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Issuer, without recourse (subject to the obligations of
the Seller set forth herein), all right, title and interest of the Seller in and
to:
(a) the Receivables and all moneys received thereon on and after
[_______], 199_;
(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 Collection Account, including the Reserve Account
Initial Deposit, and in all investments and proceeds thereof (including
all income thereon); and
(g) the proceeds of any and all of the foregoing.
(h) The Seller hereby directs the Issuer to issue the Certificates
to the Company. The Seller and the Issuer acknowledge that $[_______]
of the purchase price of the Receivables owed by the Issuer to the
Seller pursuant to this Section 2.01 shall be offset by the Issuer
against delivery of the Class A-1 Notes to the Seller.
SECTION 2.02. Conveyance of Fixed Value Payments and Fixed Value
-------------------------------------------------------
Finance Charges. Promptly following the transfer to the Issuer of the
- ----------------
Receivables on the Closing Date, the Issuer shall, without further action
hereunder, be deemed to sell, transfer, assign, set over and otherwise convey to
the Seller, effective as of the Closing Date, without recourse, representation
or warranty, all the right, title and interest of the Issuer in and to the Fixed
Value Payments and the Fixed Value Finance Charges, all monies due and to become
due and all amounts received with respect thereto and all proceeds thereof,
subject to Section 5.03(b).
SECTION 2.03. Fixed Value Securities. (a) At any time after the Closing
----------------------
Date, at the option of the Seller and upon 10 days prior notice to the Owner
Trustee and the Indenture Trustee, the Seller will be permitted to sell to the
Issuer, and the Issuer shall be obligated to purchase from the Seller (subject
to the availability of funds), all or any portion of the Fixed Value Payments
and/or Fixed Value Finance Charges, subject to the terms and conditions
described below. Upon any such sale, (x) the Seller and the Owner Trustee will
enter into an amendment to this Agreement and the Basic Documents to provide
for, at the election of the Seller, the issuance of certificates representing
ownership interests in the Trust to the extent of such Fixed Value Payments
and/or Fixed Value Finance Charges or the issuance of indebtedness by the Issuer
secured by such Fixed Value Payments (collectively, the "Fixed Value
Securities") and to make any other provisions herein or therein that are
necessary or desirable in connection therewith and (y) the Owner Trustee will
enter into any other agreements or instruments related thereto as requested by
the Seller; provided, however, that the Owner Trustee may, but shall not be
obligated to, enter into any such amendment, agreement or instrument that
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or any other Basic Document; and provided, further, that the
obligation of the Issuer to purchase such Fixed Value Payments and/or Fixed
Value Finance Charges and of the Owner Trustee to enter into any such amendment
or other agreement or instrument is subject to the following conditions
precedent:
(i) such amendment and other agreements and instruments, in forms
satisfactory to the Owner Trustee and, in the case of amendments or
agreements to be executed and delivered by the Indenture Trustee, in
forms satisfactory to the Indenture Trustee, shall have been executed
by each other party thereto and delivered to the Owner Trustee or the
Indenture Trustee as appropriate;
(ii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel to
the effect that each condition precedent (including the requirement
with respect to all required filings) provided by this Section has been
complied with and such amendment or other agreement or instrument is
authorized or permitted by this Agreement;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such sale and issuance;
(iv) such sale and issuance and such amendment or other agreement
or instrument shall not adversely affect in any material respect the
interest of any Noteholder or Certificateholder, and the Depositor
shall have provided to the Owner Trustee and the Indenture Trustee an
Officers' Certificate to such effect;
(v) the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such sale and
issuance will not have any material tax consequence to any Noteholder
or Certificateholder; and
(vi) all filings and other actions required to continue the first
perfected interest of the Trust in the Owner Trust Estate and the
Indenture Trustee in the Collateral shall have been duly made or taken
by the Seller.
(b) Except as described in Section 10.04, the Seller will not sell,
transfer, assign, set over or otherwise convey the Fixed Value Payments and
Fixed Value Finance Charges other than to the Issuer pursuant to paragraph (a) .
ARTICLE III
The Receivables
---------------
SECTION 3.01. Representations and Warranties of Seller with Respect to
--------------------------------------------------------
the Receivables. The Seller makes the following representations and warranties
- ---------------
as to the Receivables on which the Issuer is deemed to have relied in acquiring
the Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Receivables to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. Each Standard Receivable and
------------------------------
Fixed Value Receivable (A) was originated in the United States of
America by a Dealer for the retail sale of a Financed Vehicle in the
ordinary course of such Dealer's business, was fully and properly
executed by the parties thereto, was purchased by the Seller from such
Dealer under an existing dealer agreement, (B) has created or shall
create a valid, subsisting and enforceable first priority security
interest in favor of the Seller and is assignable by the Seller to the
Issuer and by the Issuer to the Indenture Trustee, (C) contains
customary and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for realization against the
collateral of the benefits of the security, and (D) provides for level
monthly payments (provided, that the payment in the first or last month
in the life of the Standard Receivable or Fixed Value Receivable may be
minimally different from the level payments and that the payment in the
last month of a Fixed Value Receivable may be a Fixed Value Payment)
that fully amortize the Amount Financed by maturity and yield interest
at the Annual Percentage Rate. No Receivable conveyed to the Issuer on
the Closing Date is an OMSC Receivable.
(b) Schedule of Receivables. The information set forth in Schedule
-----------------------
A to this Agreement is true and correct in all material respects as of
the opening of business on the applicable Cutoff Date, and no selection
procedures believed to be adverse to the Noteholders or
Certificateholders were utilized in selecting the Receivables. The
computer tape or other listing regarding the Standard Receivables and
the Fixed Value Receivables made available to the Issuer and its
assigns (which computer tape or other listing is required to be
delivered as specified herein) is true and correct in all respects.
(c) Compliance with Law. Each Standard Receivable and Fixed Value
-------------------
Receivable and the sale of the Financed Vehicle complied at the time it
was originated or made and, at the execution of this Agreement,
complies in all material respects with all requirements of applicable
federal, state and local laws and regulations thereunder (or, in the
case of the OMSC Receivables, Swiss laws and regulations and the laws
and regulations of the jurisdiction where the Receivable was
originated), including usury laws, the federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the
Fair Debt Collection Practices Act, the Federal Trade Commission Act,
the Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations
B and Z, the Texas Consumer Credit Code and State adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and
other consumer credit laws and equal credit opportunity and disclosure
laws.
(d) Binding Obligation. Each Standard Receivable and Fixed Value
-------------------
Receivable represents the genuine, legal, valid and binding payment
obligation in writing of the Obligor, enforceable by the holder thereof
in accordance with its terms.
(e) No Government Obligor. None of the Standard Receivables or
----------------------
Fixed Value Receivables is due from the United States of America or any
State or from any agency, department or instrumentality of the United
States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior to
---------------------------------------
the sale, assignment and transfer thereof, each Standard Receivable and
Fixed Value Receivable shall be secured by a validly perfected first
security interest in the Financed Vehicle in favor of the Seller as
secured party or all necessary and appropriate actions have been
commenced that would result in the valid perfection of a first security
interest in the Financed Vehicle in favor of the Seller as secured
party.
(g) Receivables in Force. No Standard Receivable or Fixed Value
--------------------
Receivable has been satisfied, subordinated or rescinded, nor has any
Financed Vehicle been released from the lien granted by the related
Standard Receivable or Fixed Value Receivable in whole or in part.
(h) No Amendments. No Standard Receivable or Fixed Value
--------------
Receivable has been amended such that the amount of the Obligor's
scheduled payments has been increased except for increases resulting
from the inclusion of any premiums for forced placed physical damage
insurance covering the Financed Vehicle.
(i) No Waiver. No provision of a Standard Receivable or Fixed
---------
Value Receivable has been waived.
(j) No Defenses. No right of rescission, setoff, counterclaim or
-----------
defense has been asserted or threatened with respect to any Standard
Receivable or Fixed Value Receivable.
(k) No Liens. To the best of the Seller's knowledge, no liens or
--------
claims have been filed for work, labor or materials relating to a
Financed Vehicle that are liens prior to, or equal to or coordinate
with, the security interest in the Financed Vehicle granted by any
Standard Receivable or Fixed Value Receivable.
(l) No Default. No Standard Receivable or Fixed Value Receivable
----------
has a payment that is more than 30 days overdue as of the related
Cutoff Date, and, except as permitted in this paragraph, no default,
breach, violation or event permitting acceleration under the terms of
any Standard Receivable or Fixed Value Receivable has occurred; and no
continuing condition that with notice or the lapse of time would
constitute a default, breach, violation or event permitting
acceleration under the terms of any Standard Receivable or Fixed Value
Receivable has arisen; and the Seller has not waived and shall not
waive any of the foregoing.
(m) Insurance. The Seller, in accordance with its customary
---------
procedures, has determined that, at the origination of the Standard
Receivable or Fixed Value Receivable, the Obligor had obtained physical
damage insurance covering the Financed Vehicle and under the terms of
the Standard Receivable and Fixed Value Receivable the Obligor is
required to maintain such insurance.
(n) Title. It is the intention of the Seller that the transfer and
-----
assignment herein contemplated constitute a sale of the --------------
Standard Receivables and Fixed Value Receivables from the Seller to the
Issuer and that the beneficial interest in and title to the Standard
Receivables and Fixed Value Receivables not be part of the debtor's
estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. No Standard Receivable or
Fixed Value Receivable has been sold, transferred, assigned or pledged
by the Seller to any Person other than the Issuer. Immediately prior to
the transfer and assignment herein contemplated, the Seller had good
and marketable title to each Standard Receivable and Fixed Value
Receivable free and clear of all Liens, encumbrances, security
interests and rights of others and, immediately upon the transfer
thereof, the Issuer shall have good and marketable title to each
Standard Receivable and Fixed Value Receivable, free and clear of all
Liens, encumbrances, security interests and rights of others; and the
transfer has been perfected under the UCC.
(o) Lawful Assignment. No Standard Receivable or Fixed Value
------------------
Receivable has been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer and assignment of such
Standard Receivable or Fixed Value Receivable or any Receivable under
this Agreement or the Indenture is unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings)
------------------
necessary in any jurisdiction to give the Issuer a first perfected
ownership interest in the Standard Receivable and Fixed Value
Receivables, and to give the Indenture Trustee a first perfected
security interest therein, shall have been made.
(q) One Original. There is only one original executed copy of each
------------
Standard Receivable and Fixed Value Receivable.
(r) Maturity of Receivables. Each Standard Receivable and Fixed
------------------------
Value Receivable has a final maturity date not later than October 31,
2004.
(s) Scheduled Payments. (A) Each Standard Receivable and Fixed
-------------------
Value Receivable has a first scheduled due date on or prior to the end
of the month following the related Cutoff Date and (B) no Standard
Receivable or Fixed Value Receivable has a payment that is more than 30
days overdue as of the related Cutoff Date, and has a final scheduled
payment date no later than the Final Scheduled Maturity Date.
(t) Location of Receivable Files. The Receivable Files are kept at
----------------------------
one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
-------------------
Standard Receivable or Fixed Value Receivable shall be no later than
the Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Standard Receivable and
------------------------------
Fixed Value Receivable has an outstanding principal balance of at least
$300.00.
(w) No Bankruptcies or First-Time Buyers. No Obligor on any
----------------------------------------
Standard Receivable or Fixed Value Receivable as of the related Cutoff
Date was noted in the related Receivable File as the subject of a
bankruptcy proceeding, and no such Obligor financed a Financed Vehicle
under the Seller's "New Finance Buyer Plan" program.
(x) No Repossessions. No Financed Vehicle securing any Standard
-----------------
Receivable or Fixed Value Receivable is in repossession status.
(y) Chattel Paper. Each Standard Receivable and Fixed Value
--------------
Receivable constitutes "chattel paper" as defined in the UCC.
(z) Agreement. The representations of the Seller in Section 6.01
---------
are true and correct.
(aa) Financing. As of the Cutoff Date, approximately [___]% of the
---------
aggregate principal balance of the Receivables, constituting [___]% of
the number of Receivables, represents previously titled vehicles;
approximately [___]% of the aggregate principal balance of the
Receivables, constituting [___]% of the number of Receivables,
represents financing of vehicles manufactured or distributed by
DaimlerChrysler Corporation; all of the Receivables are Simple Interest
Receivables; by aggregate principal balance, approximately [___]% of
the Receivables are Fixed Value Receivables. The aggregate principal
balance of the Receivables, as of the Cutoff Date is $[_______].
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 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.
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 Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section. If
CFC shall resign as Servicer in accordance with the provisions of this Agreement
or if all of the rights and obligations of any Servicer shall have been
terminated under Section 8.01, the appointment of such Servicer as custodian
shall be terminated by the Indenture Trustee or by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes or, with the
consent of Holders of the Notes evidencing not less than 25% of the Outstanding
Amount of the Notes, by the Owner Trustee, in the same manner as the Indenture
Trustee or such Holders may terminate the rights and obligations of the Servicer
under Section 8.01. The Indenture Trustee or, with the consent of the Indenture
Trustee, the Owner Trustee may terminate the Servicer's appointment as
custodian, with cause, at any time upon written notification to the Servicer
and, without cause, upon 30 days' prior written notification to the Servicer. As
soon as practicable after any termination of such appointment, the Servicer
shall deliver the Receivable Files to the Indenture Trustee or the Indenture
Trustee's agent at such place or places as the Indenture Trustee may reasonably
designate.
ARTICLE IV
Administration and Servicing of Receivables
-------------------------------------------
SECTION 4.01. Duties of Servicer. The Servicer, for the benefit of the
------------------
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting tax
information to Obligors, accounting for collections and furnishing monthly and
annual statements to the Owner Trustee and the Indenture Trustee with respect to
distributions. Subject to the provisions of Section 4.02, the Servicer shall
follow its customary standards, policies and procedures in performing its duties
as Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Receivables or to the Financed Vehicles
securing such Receivables. If the Servicer shall commence a legal proceeding to
enforce a Receivable, the Issuer (in the case of a Receivable other than a
Purchased Receivable) shall thereupon be deemed to have automatically assigned,
solely for the purpose of collection, such Receivable to the Servicer. If in any
enforcement suit or legal proceeding it shall be held that the Servicer may not
enforce a Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce such Receivable, the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders. The Owner Trustee
shall upon the written request of the Servicer furnish the Servicer with any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.
SECTION 4.02. Collection and Allocation of Receivable Payments. The
--------------------------------------------------
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself or others. The
Servicer shall allocate collections between principal and interest in accordance
with the customary servicing procedures it follows with respect to all
comparable automotive receivables that it services for itself or others. The
Servicer may grant extensions, rebates or adjustments on a Standard Receivable
or Fixed Value Receivable, which shall not, for the purposes of this Agreement,
modify the original due dates or amounts of the originally scheduled payments of
interest on such Standard Receivable or Fixed Value Receivable; provided,
however, that if the Servicer extends the date for final payment by the Obligor
of any Receivable beyond the Final Scheduled Maturity Date, it shall promptly
repurchase the Standard Receivable or Fixed Value Receivable from the Issuer in
accordance with the terms of Section 4.07. The Servicer may in its discretion
waive any late payment charge or any other fees that may be collected in the
ordinary course of servicing a Standard Receivable or Fixed Value Receivable.
The Servicer shall not agree to any alteration of the interest rate or the
originally scheduled payments on any Standard Receivable or Fixed Value
Receivable.
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer,
-----------------------------
the Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. The Servicer shall follow such customary
and usual practices and procedures as it shall deem necessary or advisable in
its servicing of automotive receivables, which may include reasonable efforts to
realize upon any recourse to Dealers and selling the Financed Vehicle at public
or private sale. The foregoing shall be subject to the provision that, in any
case in which the Financed Vehicle shall have suffered damage, the Servicer
shall not expend funds in connection with the repair or the repossession of such
Financed Vehicle unless it shall determine in its discretion that such repair
and/or repossession will increase the Liquidation Proceeds by an amount greater
than the amount of such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
---------------------------
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Vehicle as
of the execution of the Standard Receivable or Fixed Value Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles.
-------------------------------------------------------
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Standard Receivable and Fixed Value Receivable in the related
Financed Vehicle. The Servicer is hereby authorized to take such steps as are
necessary to re-perfect such security interest on behalf of the Issuer and the
Indenture Trustee in the event of the relocation of a Financed Vehicle or for
any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not release the
---------------------
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the rights
of the Issuer, the Indenture Trustee, the Certificateholders or the Noteholders
in such Receivable, nor shall the Servicer increase the number of scheduled
payments due under a Standard Receivable or Fixed Value Receivable.
SECTION 4.07. Purchase of Receivables upon Breach. The Servicer or the
-----------------------------------
Owner Trustee shall inform the other party and the Indenture Trustee and the
Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the last
day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period), the
Servicer shall purchase any Receivable materially and adversely affected by such
breach as of such last day. If the Servicer takes any action during any
Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in any
Receivable or as otherwise provided in Section 4.02, the Servicer shall purchase
such Receivable as of the last day of such Collection Period. In consideration
of the purchase of any such Receivable pursuant to either of the two preceding
sentences, the Servicer shall remit the Purchase Amount in the manner specified
in Section 5.05. 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 (or, in the case of the initial
Collection Period, a fraction, the numerator of which is equal to the number of
days elapsed from the Cutoff Date through the last day of such initial
Collection Period and the denominator of which is 360), (b) the Servicing Fee
Rate and (c) the Pool Balance as of the first day of the preceding Collection
Period. The Servicer shall also be entitled to all late fees, prepayment
charges, and other administrative fees or similar charges allowed by applicable
law with respect to the Receivables, collected (from whatever source) on the
Receivables, plus any reimbursement pursuant to the last paragraph of Section
7.02.
SECTION 4.09. Servicer's Certificate. Not later than 11:00 A.M. (New
-----------------------
York time) on each Payment Determination Date, the Servicer shall deliver to the
Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller, with a
copy to the Rating Agencies, a Servicer's Certificate containing all information
necessary to make the distributions to be made on the related 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).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a)
----------------------------------------------------
The Servicer shal ldeliver to the Owner Trustee and the Indenture Trustee, on or
before April 30 of each year beginning April 30, ____, 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,
Noteholder or Note Owner by a request in writing to the Owner Trustee addressed
to the Corporate Trust Office. Upon the telephone request of the Owner Trustee,
the Indenture Trustee will promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officers' Certificate of any event which with the giving of notice
or lapse of time, or both, would become a Servicer Default under Section 8.01(a)
or (b).
SECTION 4.11. Annual Independent Certified Public Accountants' Report.
--------------------------------------------------------
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer, the Seller or their
Affiliates, to deliver to the Owner Trustee and the Indenture Trustee on or
before April 30 of each year beginning April 30, ___, 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 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 Collection Account. (a) The Servicer,
------------------------------------
for the benefit of the Noteholders and the Certificateholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders and the
Certificateholders. The Servicer shall establish the Reserve Account as part of
the Collection Account.
(b) Funds on deposit in the Collection Account shall be invested (1) by
the Indenture Trustee in Eligible Investments selected in writing by the
Servicer or an investment manager selected by the Servicer, which investment
manager shall have agreed to comply with the terms of this Agreement as it
relates to investing such funds or (2) by an investment manager in Eligible
Investments selected by such investment manager; provided that (A) such
investment manager shall be selected by the Servicer, (B) such investment
manager shall have agreed to comply with the terms of this Agreement as it
relates to investing such funds, (C) any investment so selected by such
investment manager shall be made in the name of the Indenture Trustee and shall
be settled by a Delivery to the Indenture Trustee that complies with the terms
of this Agreement as it relates to investing such funds, and (D) prior to the
settlement of any investment so selected by such investment manager the
Indenture Trustee shall affirm that such investment is an Eligible Investment.
The Servicer initially appoints the Indenture Trustee investment manager
hereunder, which the Indenture Trustee hereby accepts. It is understood and
agreed that the Indenture Trustee shall not be liable for any loss arising from
an investment in Eligible Investments made in accordance with this Section
5.01(b). All such Eligible Investments shall be held by the Indenture Trustee
for the benefit of the Noteholders and the Certificateholders, as applicable;
provided, that on each Payment Determination Date all interest and other
investment income (net of losses and investment expenses) on funds on deposit in
the Collection Account shall be deemed to constitute a portion of the Interest
Distribution Amount for the related Distribution Date. Other than as permitted
by the Rating Agencies, funds on deposit in the Collection Account shall be
invested in Eligible Investments that will mature (1) not later than the
Business Day immediately preceding the next Distribution Date or (2) on such
next Distribution Date if either (x) such investment is held in the corporate
trust department of the institution with which the Collection Account is then
maintained and is invested either 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 corporate trust department of the Indenture Trustee) or in
the Indenture Trustee's common trust fund so long as such fund is rated in the
highest applicable rating category by Standard & Poor's and Moody's 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 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. 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 the Collection 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 Collection Account and
in all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The
Collection Account shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders, as
applicable. If, at any time, the Collection Account ceases to be an Eligible
Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30 calendar days,
as to which each Rating Agency may consent) establish a new Collection Account
as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Collection Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit Accounts,
subject to the last sentence of Section 5.01(c)(i); and each such
Eligible Deposit Account shall be subject to the exclusive custody
and control of the Indenture Trustee, and the Indenture Trustee
shall have sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee in accordance
with paragraph (a) of the definition of "Delivery" and shall be
held, pending maturity or disposition, solely by the Indenture
Trustee or a securities intermediary (as such term is defined in
Section 8-102 of the UCC) acting solely for the Indenture Trustee;
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by the Indenture Trustee, pending maturity or
disposition, through continued book-entry registration of such
Trust Account Property as described in such paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article VIII of the UCC and that is not governed
by clause (C) above shall be delivered to the Indenture Trustee in
accordance with paragraph (c) of the 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 Collection Account for the purpose of
permitting the Servicer to carry out its respective duties hereunder or
permitting the Indenture Trustee to carry out its duties under the
Indenture.
SECTION 5.02. Collections. Subject to the continued satisfaction of the
-----------
commingling conditions described below, the Servicer shall remit to the
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), all Liquidation Proceeds and any subsequent Recoveries, both as
collected during a Collection Period, on or prior to the Payment Determination
Date preceding the related Distribution Date. Notwithstanding the foregoing, if
any of the commingling conditions ceases to be met, the Servicer shall remit 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), all Liquidation Proceeds and any subsequent Recoveries within
two Business Days of receipt thereof. The commingling conditions are as follows:
(i) CFC must be the Servicer, (ii) no Servicer Default shall have occurred and
be continuing and (iii) (x) CFC must maintain a short-term rating of at least
A-1 by Standard & Poor's and P-1 by Moody's or (y) if daily remittances occur
hereunder, prior to ceasing daily remittances, the Rating Agency Condition shall
have been satisfied (and any conditions or limitations imposed by the Rating
Agencies in connection therewith are complied with). Notwithstanding anything
herein to the contrary, so long as CFC is the Servicer, CFC may withhold from
the deposit into the Collection Account any amounts indicated on the related
Servicer's Certificate as being due and payable to CFC or the Seller and pay
such amounts directly to CFC or the Seller, as applicable. For purposes of this
Article V, the phrase "payments by or on behalf of Obligors" shall mean payments
made with respect to the Receivables by Persons other than the Servicer or the
Seller. In the event the commingling conditions cease to be met, the Servicer
shall make daily remittance of collections to the Collection Account within two
Business Days of receipt thereof; provided however, daily remittance may
commence no later than five Business Days following a reduction of CFC's
short-term ratings below A-1 by Standard & Poor's or P-1 by Moody's.
SECTION 5.03. Application of Collections. (a) All collections for the
--------------------------
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be applied
to interest and principal in accordance with the Simple Interest
Method.
(b) All collections of finance charges on a Fixed Value Receivable (as
determined in accordance with the Servicer's customary procedures) shall be
applied, first, to the Amortizing Payment Finance Charges due and unpaid on the
related Principal Balance and then to the Fixed Value Finance Charges due and
unpaid on the related Fixed Value Payment. The Servicer shall release to the
Company the Collections allocated to Fixed Value Finance Charges pursuant to the
preceding sentence. All Liquidation Proceeds and any subsequent Recoveries with
respect to any Fixed Value Receivable shall be applied first to the related
Receivable and only after the payment in full of the Principal Balance thereof
plus accrued but unpaid interest thereon shall any such Liquidation Proceeds or
Recoveries be applied to, or constitute, the related Fixed Value Payment.
SECTION 5.04. [Reserved]
SECTION 5.05. Additional Deposits. The Servicer and the Seller shall
--------------------
deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Section 9.01. The Servicer will
deposit the aggregate Purchase Amount with respect to Purchased Receivables when
such obligations are due, unless the Servicer shall not be required to make
daily deposits pursuant to Section 5.02. All such other deposits shall be made
on the Payment Determination Date for the related Collection Period.
SECTION 5.06. Distributions.
-------------
(a) (i) On each Payment Determination Date, the Servicer shall
calculate all amounts required to be distributed to the Noteholders and the
Certificateholders and all amounts to be allocated within the Collection Account
as described below. For purposes of this Section, the Servicing Fee for the
related Distribution Date and any previously unpaid Servicing Fees shall, and
the Cash Release Amount to be distributed to the Holders of the Trust
Certificates may, be deducted from the Total Distribution Amount at any time on
or prior to the Distribution Date.
(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 allocations and
distributions by 11:00 A.M. (New York time), to the extent of the Total
Distribution Amount (net of the Servicing Fee for such Distribution
Date and any previously unpaid Servicing Fees and any Cash Release
Amount deducted pursuant to Section 5.06(a)(i)), in the following order
of priority:
(A) allocate to the Noteholders for distribution pursuant to
Section 8.02 of the Indenture, from the Total Distribution Amount,
the Noteholders' Interest Distributable Amount;
(B) allocate to the Noteholders for distribution pursuant to
Section 8.02 of the Indenture, from the Total Distribution Amount
remaining after the application of clause (A), the Noteholders'
Principal Distributable Amount; provided, however, that on each
Distribution Date during the Release Period, the Release Period
Noteholder's Principal Distributable Amount (rather than the
Noteholders' Principal Distributable Amount) shall be allocated to
the Noteholders for distribution to the Noteholders pursuant to
Section 8.02 of the Indenture;
(C) allocate to the Reserve Account, from the Total
Distribution Amount remaining after the application of clauses (A)
and (B) (it being understood that the Accelerated Principal
Distribution Amount and the Cash Release Amount are a function of
and subject to the amount required to be allocated to the Reserve
Account pursuant to this clause (C)), the excess, if any, of the
Specified Reserve Amount over the amount then allocated to the
Reserve Account;
(D) if all of the conditions set forth in Section 5.06(b)
are satisfied, distribute to the Holders of the Trust
Certificates, from the Total Distribution Amount remaining after
the application of clauses (A) through (C), the Cash Release
Amount for such Distribution Date to the extent not already
deducted pursuant to Section 5.06(a)(i);
(E) distribute to the Holders of the Overcollateralization
Certificates, the Total Distribution Amount remaining after the
application of clauses (A) through (D) and only after the Notes
have been paid in full, until the Certificate Balance has been
reduced to zero; and
(F) distribute to the Holders of the Trust Certificates the
portion, if any, of the Total Distribution Amount remaining after
the application of clauses (A) through (E).
If pursuant to Section 5.02, the Servicer is permitted to remit collections on
the Receivables to the Collection Account on the Payment Determination Date
preceding the related Distribution Date, then the Servicer may net the amounts,
if any, distributable pursuant to clauses (D), (E) and (F) out of the Total
Distribution Amount before depositing the Total Distribution Amount into the
Collection Account and pay such amounts directly to the related recipient.
Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Collection Account hereunder until the
Pool Balance is reduced to zero.
(b) The distribution of a Cash Release Amount pursuant to Section
5.06(a)(ii)(D) on a Distribution Date shall be subject to the satisfaction of
all of the following conditions:
(i) no such distribution or release shall be made until the First
Release Distribution Date; and
(ii) the amount allocated to the Reserve Account is equal to the
Specified Reserve Amount and the aggregate amount of Cash Release
Amounts distributed pursuant to Section 5.06(a)(ii)(D) on or prior to
such Distribution Date shall not exceed the Initial
Overcollateralization Amount.
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 Collection Account from the net proceeds of the sale of the
Notes which amount shall be allocated to the Reserve Account.
(b) (i) After giving effect to clause (ii) below, if the amount
allocated to the Reserve Account on any Distribution Date (after giving effect
to all allocations thereto or withdrawals therefrom on such Distribution Date)
is greater than the Specified Reserve Amount, the Servicer shall instruct the
Indenture Trustee to distribute the amount of such excess to the Seller.
(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 allocated to the
Reserve Account (after taking into account any allocations thereto
pursuant to Section 5.06(a) and withdrawals therefrom pursuant to
Section 5.07(c) or (d) on such date) is greater than the Specified
Reserve Amount, then the Servicer shall instruct the Indenture Trustee
to include the amount of such excess in the Noteholders' Monthly
Principal Distribution Amount and to allocate the amount of such excess
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) (i) In the event that the Noteholders' Distributable Amount for a
Distribution Date exceeds the sum of the amounts allocated for distribution to
the Noteholders pursuant to Section 5.06(a)(ii)(A) and (B) 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, and allocate such amount for distribution to
the Noteholders; provided that such amount shall be applied first, to the
payment of interest due on the Notes to the extent, if any, that the amount
allocated pursuant to Section 5.06(a)(ii)(A) is not sufficient to cover such
payment of interest; and second, to the payment of principal of the Notes.
(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, the Class A-3 Final Scheduled
Distribution Date or the Class A-4 Final Scheduled Distribution Date
exceeds the amount allocated for distribution to the Noteholders
pursuant to Section 5.06(a)(ii)(B) 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, and allocate such
amount for distribution to the Noteholders.
(d) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.06(a) following payment in full of both the Outstanding
Amount of the Notes and of the Certificate Balance of the Overcollateralization
Certificates until the Pool Balance is reduced to zero. Following the payment in
full of the aggregate Outstanding Amount of the Notes and of the Certificate
Balance of the Overcollateralization Certificates and of all other amounts owing
or to be distributed hereunder or under the Indenture or the Trust Agreement to
Noteholders and the termination of the Trust, any amount then allocated to the
Reserve Account shall be distributed to the Seller.
SECTION 5.08. [ Reserved ]
SECTION 5.09. Statements to Noteholders and Certificateholders. 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 Exhibit B, setting forth at least the
following information as to the Notes, to the extent applicable:
(i) the amount of such distribution allocable to principal
allocable to each Class of Notes;
(ii) the amount of such distribution allocable to interest
allocable to each Class of Notes;
(iii) the outstanding principal balance of each Class of Notes and
the Note Pool Factor for each such Class 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 amount allocated to the Reserve Account on such Payment
Determination Date after giving effect to allocations thereto and
withdrawals therefrom to be made on the next following Distribution
Date, if any;
(vii) the Pool Balance as of the close of business on the last day
of the related Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above; and
(viii) the amount, if any, allocated for distribution to the
Certificateholders.
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 Note.
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 and Purchase
Amounts for or with respect to the Collection Period net of distributions to be
made to the Servicer with respect to the Collection Period. The Servicer,
however, will account to the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
ARTICLE VI
The Seller
----------
SECTION 6.01. Representations of Seller. The Seller makes the following
-------------------------
representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of this
Agreement and as of the Closing Date, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly organized
-------------------------------
and validly existing as a limited liability company in good standing
under the laws of the State of Michigan, with the power and authority
to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had
at all relevant times, and has, the power, authority and legal right to
acquire and own the Standard Receivables and the Fixed Value
Receivables.
(b) Due Qualification. The Seller is duly qualified to do business
-----------------
as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of property or the conduct of its business
shall require such qualifications.
(c) Power and Authority. The Seller has the power and authority to
-------------------
execute and deliver this Agreement 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 action; and the execution, delivery and
performance of this Agreement has been duly authorized by the Seller by
all necessary action.
(d) Binding Obligation. This Agreement constitutes a legal, valid
------------------
and binding obligation of the Seller enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions
--------------
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the articles of organization or the operating
agreement of the Seller, or any indenture, agreement or other
instrument to which the Seller is a party or by which it is bound; or
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to this Agreement and the Basic
Documents); or violate any law or, to the best of the Seller's
knowledge, any order, rule or regulation applicable to the Seller of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Seller or its properties.
(f) No Proceedings. To the Seller's best knowledge, there are no
--------------
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties:
(i) asserting the invalidity of this Agreement, the Indenture or any of
the other Basic Documents, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates or (iv) which might
adversely affect the federal or state income tax attributes of the
Notes or the Certificates.
SECTION 6.02. Existence. During the term of this Agreement, the Seller
---------
will keep in full force and effect its existence, rights and franchises as a
limited liability company (or another legal entity) under the laws of the
jurisdiction of its organization and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Basic Documents and each other instrument or agreement necessary or appropriate
to the proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Seller and its
Affiliates (including the Company) will be conducted on an arm's-length basis.
SECTION 6.03. Liability of Seller; Indemnities. The Seller shall be
---------------------------------
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement:
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company and the
Servicer and any of the officers, directors, employees and agents of
the Issuer, the Owner Trustee and the Indenture Trustee from and
against any taxes that may at any time be asserted against any such
Person with respect to the transactions contemplated herein and in the
Basic Documents, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes
(but, in the case of the Issuer, not including any taxes asserted with
respect to, and as of the date of, the sale of the Receivables to the
Issuer or the issuance and original sale of the Certificates and the
Notes, or asserted with respect to ownership of the Receivables, or
federal or other income taxes arising out of distributions on the
Certificates or the Notes) and costs and expenses in defending against
the same.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company, the
Certificateholders and the Noteholders and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and
the Indenture Trustee from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, or
by reason of reckless disregard of its obligations and duties under
this Agreement and (ii) the Seller's or the Issuer's violation of
federal or state securities laws in connection with the offering and
sale of the Notes and the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein and in the Trust Agreement contained, in the case of the Owner
Trustee, and in the Indenture contained, in the case of the Indenture
Trustee, except to the extent that such cost, expense, loss, claim,
damage or liability: (i) in the case of the Owner Trustee, shall be due
to the willful misfeasance, bad faith or negligence (except for errors
in judgment) of the Owner Trustee or, in the case of the Indenture
Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or
(ii) in the case of the Owner Trustee, shall arise from the breach by
the Owner Trustee of any of its representations or warranties set forth
in Section 7.03 of the Trust Agreement.
(d) The Seller shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 6.04. Merger or Consolidation of, or Assumption of Obligations
--------------------------------------------------------
of, Seller. Any Person (a) into which the Seller may be merged or consolidated,
- ----------
(b) which may result from any merger or consolidation to which the Seller shall
be a party or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement; provided, however, that (i) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.01 shall
have been breached and no Servicer Default, and no event that, after notice or
lapse of time, or both, would become a Servicer Default shall have occurred and
be continuing, (ii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Rating Agency Condition shall have been satisfied with respect
to such transaction and (iv) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating that,
in the opinion of such counsel, all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
Indenture Trustee, respectively, in the Receivables and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (i), (ii), (iii) and (iv)
above shall be conditions to the consummation of the transactions referred to in
clauses (a) , (b) or (c) above.
SECTION 6.05. Limitation on Liability of Seller and Others. The Seller
--------------------------------------------
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
SECTION 6.06. Seller May Own Notes. The Seller and any Affiliate
---------------------
thereof may in its individual or any other capacity become the owner or pledgee
of Notes with the same rights as it would have if it were not the Seller or an
Affiliate thereof, except as expressly provided herein or in any Basic Document.
The Seller shall not own any Certificates unless the Rating Agency Condition is
satisfied.
ARTICLE VII
The Servicer
------------
SECTION 7.01. Representations of Servicer. The Servicer makes the
----------------------------
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly organized
------------------------------
and validly existing as a limited liability company in good standing
under the laws of the state of its organization, with the power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, the power, authority
and legal right to acquire, own, sell and service the Standard
Receivables and the Fixed Value Receivables and to hold the Receivable
Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
------------------
business as a foreign limited liability company in good standing, and
has obtained all necessary licenses and approvals, in all jurisdictions
in which the ownership or lease of property or the conduct of its
business (including the servicing of the Standard Receivables and the
Fixed Value Receivables as required by this Agreement) shall require
such qualifications.
(c) Power and Authority. The Servicer has the power and authority
-------------------
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 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 organization or the operating
agreement 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:
(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 Obligations
--------------------------------------------------------
of, Servicer. Any Person (a) into which the Servicer may be merged or
- -------------
consolidated, (b) which may result from any merger or consolidation to which the
Servicer shall be a party, (c) which may succeed to the properties and assets of
the Servicer substantially as a whole or (d) with respect to the Servicer's
obligations hereunder, which is a legal entity 50% or more of the voting power
of which is owned, directly or indirectly, by DaimlerChrysler Corporation or an
affiliate of or successor to DaimlerChrysler Corporation or an affiliate of such
successor, which Person executed an agreement of assumption to perform every
obligation of the Servicer hereunder, shall be the successor to the Servicer
under this Agreement without further act on the part of any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no Servicer Default and no event which, after notice or lapse
of time, or both, would become a Servicer Default shall have occurred and be
continuing, (ii) the Servicer shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with,
(iii) the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) immediately after giving effect to such transaction, the
successor to the Servicer shall become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement and (v)
the Servicer shall have delivered to the Owner Trustee and the Indenture Trustee
an Opinion of Counsel stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings or (B) no such action shall
be necessary to preserve and protect such interests. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of assumption
and compliance with clauses (i), (ii), (iii), (iv) and (v) above shall be
conditions to the consummation of the transactions referred to in clause (a) ,
(b) or (c) above.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither
----------------------------------------------
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this Agreement
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties under this Agreement. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any person respecting any
matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the Basic
Documents and the rights and duties of the parties to this Agreement and the
Basic Documents and the interests of the Certificateholders under this Agreement
and the Noteholders under the Indenture.
SECTION 7.05. CFC Not To Resign as Servicer. Subject to the provisions
-----------------------------
of Section 7.03, CFC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon a determination that
the performance of its duties under this Agreement shall no longer be
permissible under applicable law and cannot be cured. Notice of any such
determination permitting the resignation of CFC shall be communicated to the
Owner Trustee and the Indenture Trustee at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall (i) have assumed the responsibilities and obligations of CFC in
accordance with Section 8.02 and (ii) have become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
ARTICLE VIII
Default
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SECTION 8.01. Servicer Default. If any one of the following events (a
----------------
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit in the Collection
Account any required payment or to direct the Indenture Trustee to make
any required distributions therefrom, which failure continues
unremedied for a period of five Business Days after written notice of
such failure is received by the Servicer from the Owner Trustee or the
Indenture Trustee or after discovery of such failure by an officer of
the Servicer; or
(b) failure by the Servicer or the Seller, as the case may be,
duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Seller (as the case may
be) set forth in this Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of
Certificateholders or Noteholders and (ii) continue unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A)
to the Servicer or the Seller (as the case may be) by the Owner Trustee
or the Indenture Trustee or (B) to the Servicer or the Seller (as the
case may be), and to the Owner Trustee and the Indenture Trustee by the
Holders of Notes, Trust Certificates or Overcollateralization
Certificates, as applicable, evidencing not less than 25% of the
Outstanding Amount of the Notes, evidencing Percentage Interests (as
defined in the Trust Agreement) aggregating at least 25% or evidencing
not less than 25% of the Certificate Balance; or
(c) the occurrence of an Insolvency Event with respect to the
Seller, the Servicer or the Company;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee or the Holders of Notes evidencing
not less than 25% of the Outstanding Amount of the Notes, by notice then given
in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee
if given by the Noteholders) may terminate all the rights and obligations (other
than the obligations set forth in Section 7.02 hereof) of the Servicer under
this Agreement. On or after the receipt by the Servicer of such written notice,
all authority and power of the Servicer under this Agreement, whether with
respect to the Notes, the Certificates or the Receivables or otherwise, shall,
without further action, pass to and be vested in the Indenture Trustee or such
successor Servicer as may be appointed under Section 8.02; and, without
limitation, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, for the benefit of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and related documents,
or otherwise. The predecessor Servicer shall cooperate with the successor
Servicer, the Indenture Trustee and the Owner Trustee in effecting the
termination of the responsibilities and rights of the predecessor Servicer under
this Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
predecessor Servicer for deposit, or shall thereafter be received by it with
respect to any Receivable. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable Files
to the successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Owner Trustee
shall give notice thereof to the Rating Agencies.
SECTION 8.02. Appointment of Successor. (a) Upon the Servicer's receipt
------------------------
of notice of termination pursuant to Section 8.01 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (i) the date 45 days
from the delivery to the Owner Trustee and the Indenture Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (ii) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment
(including its appointment as Administrator under the Administration Agreement
as set forth in Section 8.02(b)) by a written assumption in form acceptable to
the Owner Trustee and the Indenture Trustee. In the event that a successor
Servicer has not been appointed at the time when the predecessor Servicer has
ceased to act as Servicer in accordance with this Section, the Indenture Trustee
without further action shall automatically be appointed the successor Servicer
and the Indenture Trustee shall be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be legally
unable so to act, appoint or petition a court of competent jurisdiction to
appoint any established institution, having a net worth of not less than
$100,000,000 and whose regular business shall include the servicing of
automotive receivables, as the successor to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall (i) be the successor in all respects
to the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement and (ii) become the Administrator under the Administration Agreement
in accordance with Section 8 of such Agreement.
(c) The Servicer may not resign unless it is prohibited from serving as
such by law.
SECTION 8.03. Notification to Noteholders and Certificateholders. Upon
--------------------------------------------------
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Owner Trustee shall give prompt written notice thereof to
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to Noteholders and the Rating Agencies.
SECTION 8.04. Waiver of Past Defaults. The Holders of Notes evidencing
-----------------------
not less than a majority of the Outstanding Amount of the Notes, the Holders (as
defined in the Trust Agreement) of Trust Certificates evidencing not less than a
majority of the Percentage Interests (as defined in the Trust Agreement) or the
Holders (as defined in the Trust Agreement) of Overcollateralization
Certificates evidencing not less than a majority of the Certificate Balance may,
on behalf of all Noteholders, the Holders of the Trust Certificates or the
Holders of the Overcollateralization Certificates, as the case may be, waive in
writing any default by the Servicer in the performance of its obligations
hereunder and its consequences, except a default in making any required
allocations or distributions from the Collection Account in accordance with this
Agreement. Upon any such waiver of a past default, such default shall cease to
exist, and any Servicer Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto.
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 Collection 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 Collection
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 of the Overcollateralization Certificates and all accrued
but unpaid interest (including any overdue interest and premium) thereon.
(b) As described in Article IX of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee and
the Indenture Trustee as soon as practicable after the Servicer has received
notice thereof.
ARTICLE X
Miscellaneous
-------------
SECTION 10.01. Amendment. This Agreement may be amended by the Seller,
---------
the Servicer and the Issuer, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Agreement (including for the issuance of Fixed
Value Securities pursuant to Section 2.03) or of modifying in any manner the
rights of the Noteholders or the Certificateholders; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel delivered to the
Owner Trustee and the Indenture Trustee, adversely affect in any material
respect the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Seller, the
Servicer and the Issuer, with the consent of the Indenture Trustee, the consent
of the Holders of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes, the consent of the Holders (as defined in the Trust
Agreement) of outstanding Trust Certificates evidencing not less than a majority
of the Percentage Interests (as defined in the Trust Agreement) and the consent
of the Holders (as defined in the Trust Agreement) of Overcollateralization
Certificates evidencing not less than a majority of the Certificate Balance of
the Overcollateralization Certificates, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes, the
Percentage Interests (as defined in the Trust Agreement) or the aforesaid
percentage of the Certificate Balance of the Overcollateralization Certificates,
the Holders of which are required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes, the Holders (as defined in
the Trust Agreement) of all the outstanding Trust Certificates and the Holders
(as defined in the Trust Agreement) of all the outstanding Overcollateralization
Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
10.02(i)(1). The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust. (a) The Seller shall
-----------------------------
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor the Servicer shall change its name, identity
or corporate structure in any manner that would, could or might make any
financing statement or continuation statement filed in accordance with paragraph
(a) above seriously misleading within the meaning of ss. 9-402(7) of the UCC,
unless it shall have given the Owner Trustee and the Indenture Trustee at least
five days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of the Seller and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement and shall promptly file any such amendment or new
financing statement. The Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal executive office, within
the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Standard Receivable and each Fixed Value Receivable accurately and in sufficient
detail to permit (i) the reader thereof to know at any time the status of such
Standard Receivable or Fixed Value Receivable, including payments and recoveries
made and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Standard Receivable or Fixed
Value Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Standard Receivable or Fixed Value Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Standard Receivables and the
Fixed Value Receivables, the Servicer's master computer records (including any
backup archives) that refer to a Standard Receivable or Fixed Value Receivable
shall indicate clearly the interest of the Issuer and the Indenture Trustee in
such Standard Receivable or Fixed Value Receivable and that such Standard
Receivable or Fixed Value Receivable is owned by the Issuer and has been pledged
to the Indenture Trustee. Indication of the Issuer's and the Indenture Trustee's
interest in a Standard Receivable or Fixed Value Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
related Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Standard
Receivable or Fixed Value Receivable, shall indicate clearly that such Standard
Receivable or Fixed Value Receivable has been sold and is owned by the Issuer
and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents at
any time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Standard Receivable or Fixed
Value Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or to
the Indenture Trustee, within five Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment hereto, an Opinion of Counsel stating that, in
the opinion of such counsel, either (A) all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Owner Trustee and the
Indenture Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) no such action shall be necessary to preserve and
protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 90-day period, stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee and the Indenture Trustee in
the Receivables, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify any
action necessary (as of the date of such opinion) to be taken in the following
year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
SECTION 10.03. Notices. All demands, notices, communications and
-------
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Seller or the Servicer, to Chrysler Financial Company L.L.C., 27777
Franklin Road, Southfield, Michigan 48034, Attention of Assistant Secretary
((248) 948-3067), (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 Moody's Investors Service, Inc., ABS Monitoring Department, 99
Church Street, New York, New York 10007, (e) in the case of Standard & Poor's,
to Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., 25 Broadway (15th Floor), New York, New York 10004, Attention of Asset
Backed Surveillance Department, (f) in the case of Fitch IBCA, Inc., to One
State Street Plaza, New York, N.Y. 10004, and (g) in the case of Duff & Phelps
Credit Rating Co., to 17 State Street, 12th Floor, New York, New York 10004; 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 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 [__________] not in its individual capacity
but solely in its capacity as Owner Trustee of the Issuer and in no event shall
[__________] in its individual capacity or, except as expressly provided in the
Trust Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of its
duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by [__________], not in its individual capacity but
solely as Indenture Trustee and in no event shall [__________] have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.
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 ____-_
By: [__________], not in its individual
capacity but solely as Owner Trustee
on behalf of the Trust
By: ___________________________________
Name:
Title:
CHRYSLER FINANCIAL COMPANY L.L.C.,
Seller and Servicer
By: ________________________________________
Name:
Title:
Acknowledged and accepted
as of the day and year
first above written:
[___________],
not in its individual capacity
but solely as Indenture Trustee
By: ______________________________
Name:
Title:
Schedule B
SCHEDULE A
Schedule of Receivables
------------------------
Delivered to the Owner Trustee and Indenture Trustee at Closing
SCHEDULE B
Location of Receivable Files
----------------------------
Chrysler Financial Company L.L.C.
27777 Franklin Road
Southfield, MI 48034-8288
EXHIBIT A
[Reserved]
EXHIBIT B
Form of Distribution Statement to Noteholders
Chrysler Financial Company L.L.C.
Premier Auto Trust ____-_ 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
Servicing Fee
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
EXHIBIT C
Form of Servicer's Certificate
Chrysler Financial Company L.L.C.
Premier Auto Trust ____-_ 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 - Simple Interest Contracts
+ Investment Earnings
Total Distribution Amount
- --------------------------------------------------------------------------------
Principal Distribution Amount
+ Interest Distribution Amount
-- Realized Losses
Total Distribution Amount:
Loss & Delinquency
Account Activity
--------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Beginning Ending Interest/Interest
Balance Balance Change Factor Servicing
--------------------------------------------------------------
Shortfall
- ------------------------------------------------------------------------------------------------------
Initial Pool
Principal Paydown
Reserve
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Overcollateralization
Overcollateralization Percentage
Principal Allocation
-----------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Mandatory
Regular Accelerated Redemption/ Total Principal
Principal Principal Repayment Principal Shortfall
---------------------------------------------------------------------------
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Total ======================================================
===============================================================================
Miscellaneous
- -------------------------------------------------------------------------------
Amounts allocated for distribution to Certificateholders
Release Period Noteholders' Principal Distributable Amount
Cash Release Amount
Receivables to be released
Specified Reserve Amount
Distribution Amount to Seller
Servicing Fee to Servicer
Allocation of Funds
- --------------------------------------------------------------------------------
Sources
- -------
Principal Distribution Amount
Interest Distribution Amount
Redemption/Prepay Amount
TOTAL SOURCES
EXHIBIT 99.2
[FORM OF ADMINISTRATION AGREEMENT]
This ADMINISTRATION AGREEMENT dated as of [________], 199_,
among PREMIER AUTO TRUST ____-_ a Delaware business trust (the
"Issuer"), CHRYSLER FINANCIAL COMPANY L.L.C., a Michigan limited
liability company, as administrator (the "Administrator"), and
[____________], a [_______], not in its individual capacity but solely
as Indenture Trustee (the "Indenture Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer is issuing the Class A-1 [___]% Asset Backed Notes,
the Class A-2 [___]% Asset Backed Notes, the Class A-3 [___]% Asset Backed Notes
and the Class A-4 [___]% Asset Backed Notes (collectively, the "Notes") pursuant
to the Indenture dated as of [________], 199_ (as amended and supplemented from
time to time, the "Indenture"), between the Issuer and the Indenture Trustee
(capitalized terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Indenture);
WHEREAS, the Issuer has entered into certain agreements in connection
with the issuance of the Notes and of certain beneficial ownership interests in
the Issuer, including (i) a Sale and Servicing Agreement dated as of [________],
199_ (as amended and supplemented from time to time, the "Sale and Servicing
Agreement"), between the Issuer and Chrysler Financial Company L.L.C., as seller
(in such capacity, the "Seller") and servicer (in such capacity, the
"Servicer"), (ii) a Letter of Representations dated [________], 199_ (as amended
and supplemented from time to time, the "Note Depository Agreement"), among the
Issuer, the Indenture Trustee, the Administrator and The Depository Trust
Company relating to the Notes and (iii) the Indenture (the Sale and Servicing
Agreement, the Note Depository Agreement and the Indenture being referred to
hereinafter collectively as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and the Owner
Trustee are required to perform certain duties in connection with (a) the Notes
and the collateral therefor pledged pursuant to the Indenture (the "Collateral")
and (b) the beneficial ownership interests in the Issuer (the registered holders
of such interests being referred to herein as the "Owners");
WHEREAS, the Issuer and the Owner Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Owner Trustee
referred to in the preceding clause and to provide such additional services
consistent with the terms of this Agreement and the Related Agreements as the
Issuer and the Owner Trustee may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Duties of the Administrator. (a) Duties with Respect to the Note
---------------------------- ---------------------------------
Depository Agreement and the Indenture. (i) The Administrator agrees to perform
- --------------------------------------
all its duties as Administrator and the duties of the Issuer and the Owner
Trustee under the Note Depository Agreement. In addition, the Administrator
shall consult with the Owner Trustee regarding the duties of the Issuer or the
Owner Trustee under the Indenture and the Note Depository Agreement. The
Administrator shall monitor the performance of the Issuer and shall advise the
Owner Trustee when action is necessary to comply with the Issuer's or the Owner
Trustee's duties under the Indenture and the Note Depository Agreement. The
Administrator shall prepare for execution by the Issuer, or shall cause the
preparation by other appropriate persons of, all such documents, reports,
filings, instruments, certificates and opinions that it shall be the duty of the
Issuer or the Owner Trustee to prepare, file or deliver pursuant to the
Indenture or the Note Depository Agreement. In furtherance of the foregoing, the
Administrator shall take all appropriate action that is the duty of the Issuer
or the Owner Trustee to take pursuant to the Indenture including, without
limitation, such of the foregoing as are required with respect to the following
matters under the Indenture (references are to sections of the Indenture):
(A) the duty to cause the Note Register to be kept and to give
the Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note
Register (Section 2.05);
(B) the notification of Noteholders of the final principal
payment on their Notes (Section 2.08(b));
(C) the fixing or causing to be fixed of any specified record
date and the notification of the Indenture Trustee and Noteholders
with respect to special payment dates, if any (Section 2.08(c));
(D) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes and delivery of
the same to the Indenture Trustee (Section 2.02);
(E) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release
of collateral (Section 2.10);
(F) the maintenance of an office in the Borough of Manhattan,
City of New York, for registration of transfer or exchange of Notes
(Section 3.02);
(G) the duty to cause newly appointed Paying Agents, if any, to
deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
(H) the direction to the Indenture Trustee to deposit moneys with
Paying Agents, if any, other than the Indenture Trustee (Section
3.03);
(I) the obtaining and preservation of the Issuer's qualification
to do business in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of the
Indenture, the Notes, the Collateral and each other instrument and
agreement included in the Trust Estate (Section 3.04);
(J) the preparation of all supplements and amendments to the
Indenture and all financing statements, continuation statements,
instruments of further assurance and other instruments and the taking
of such other action as is necessary or advisable to protect the Trust
Estate (Section 3.05);
(K) the delivery of an Opinion of Counsel on the Closing Date and
the annual delivery of Opinions of Counsel as to the Trust Estate, and
the annual delivery of the Officer's Certificate and certain other
statements as to compliance with the Indenture (Sections 3.06 and
3.09);
(L) the identification to the Indenture Trustee in an Officer's
Certificate of a Person with whom the Issuer has contracted to perform
its duties under the Indenture (Section 3.07(b));
(M) the notification of the Indenture Trustee and the Rating
Agencies of a Servicer Default under the Sale and Servicing Agreement
and, if such Servicer Default arises from the failure of the Servicer
to perform any of its duties under the Sale and Servicing Agreement
with respect to the Receivables, the taking of all reasonable steps
available to remedy such failure (Section 3.07(d));
(N) the duty to cause the Servicer to comply with Sections 4.09,
4.10, 4.11 and 5.09(b) and Article XI of the Sale and Servicing
Agreement (Section 3.14);
(O) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10(b));
(P) the delivery of written notice to the Indenture Trustee and
the Rating Agencies of each Event of Default under the Indenture and
each default by the Servicer or the Seller under the Sale and
Servicing Agreement and by the Seller or the Company under the
Purchase Agreement (Section 3.19);
(Q) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officer's Certificate and the obtaining of an Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.01);
(R) the compliance with any written directive of the Indenture
Trustee with respect to the sale of the Trust Estate in a commercially
reasonable manner if an Event of Default shall have occurred and be
continuing (Section 5.04);
(S) the preparation and delivery of notice to Noteholders of the
removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee (Section 6.08);
(T) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee (Sections
6.08 and 6.10);
(U) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee
is not the Note Registrar (Section 7.01);
(V) the preparation and, after execution by the Issuer, the
filing with the Commission, any applicable state agencies and the
Indenture Trustee of documents required to be filed on a periodic
basis with, and summaries thereof as may be required by rules and
regulations prescribed by, the Commission and any applicable state
agencies and the transmission of such summaries, as necessary, to the
Noteholders (Section 7.03);
(W) the opening of one or more accounts in the Issuer's name, the
preparation and delivery of Issuer Orders, Officer's Certificates and
Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Collection Account
(Sections 8.02 and 8.03);
(X) the preparation of an Issuer Request and Officer's
Certificate and the obtaining of an Opinion of Counsel and Independent
Certificates, if necessary, for the release of the Trust Estate
(Sections 8.04 and 8.05);
(Y) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders of notices with respect
to such supplemental indentures (Sections 9.01, 9.02 and 9.03);
(Z) the execution and delivery of new Notes conforming to any
supplemental indenture (Section 9.06);
(AA) the duty to notify Noteholders of redemption of the Notes or
to cause the Indenture Trustee to provide such notification (Section
10.02);
(BB) the preparation and delivery of all Officer's Certificates,
Opinions of Counsel and Independent Certificates with respect to any
requests by the Issuer to the Indenture Trustee to take any action
under the Indenture (Section 11.01(a));
(CC) the preparation and delivery of Officer's Certificates and
the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section 11.01(b));
(DD) the notification of the Rating Agencies, upon the failure of
the Indenture Trustee to give such notification, of the information
required pursuant to Section 11.04 of the Indenture (Section 11.04);
(EE) the preparation and delivery to Noteholders and the
Indenture Trustee of any agreements with respect to alternate payment
and notice provisions (Section 11.06);
(FF) the recording of the Indenture, if applicable (Section
11.15); and
(GG) the preparation of Definitive Notes in accordance with the
instructions of the Clearing Agency (Section 2.13).
(ii) The Administrator will:
(A) pay the Indenture Trustee (and any separate trustee or
co-trustee appointed pursuant to Section 6.10 of the Indenture (a
"Separate Trustee")) from time to time reasonable compensation for all
services rendered by the Indenture Trustee or Separate Trustee, as the
case may be, under the Indenture (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(B) except as otherwise expressly provided in the Indenture,
reimburse the Indenture Trustee or any Separate Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Indenture Trustee or Separate Trustee, as the
case may be, in accordance with any provision of the Indenture
(including the reasonable compensation, expenses and disbursements of
its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith;
(C) indemnify the Indenture Trustee and any Separate Trustee and
their respective agents for, and hold them harmless against, any
losses, liability or expense incurred without negligence or bad faith
on their part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Indenture,
including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or
performance of any of their powers or duties under the Indenture; and
(D) indemnify the Owner Trustee and its agents for, and hold them
harmless against, any losses, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection
with the acceptance or administration of the transactions contemplated
by the Trust Agreement, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with
the exercise or performance of any of their powers or duties under the
Trust Agreement.
(b) Additional Duties. (i) In addition to the duties of the
Administrator set forth above, the Administrator shall perform such calculations
and shall prepare or shall cause the preparation by other appropriate persons
of, and shall execute on behalf of the Issuer or the Owner Trustee, all such
documents, reports, filings, instruments, certificates and opinions that it
shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to the Related Agreements or Section 5.05 of the Trust Agreement, and
at the request of the Owner Trustee shall take all appropriate action that it is
the duty of the Issuer or the Owner Trustee to take pursuant to the Related
Agreements. In furtherance thereof, the Owner Trustee shall, on behalf of itself
and of the Issuer, execute and deliver to the Administrator and to each
successor Administrator appointed pursuant to the terms hereof, one or more
powers of attorney substantially in the form of Exhibit A hereto, appointing the
Administrator the attorney-in-fact of the Owner Trustee and the Issuer for the
purpose of executing on behalf of the Owner Trustee and the Issuer all such
documents, reports, filings, instruments, certificates and opinions. Subject to
Section 5 of this Agreement, and in accordance with the directions of the Owner
Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Related Agreements) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator. Such responsibilities
shall include the obtainment and maintenance of any licenses required to be
obtained or maintained by the Trust under the Pennsylvania Motor Vehicle Sales
Finance Act. In addition, the Administrator shall promptly notify the Indenture
Trustee and the Owner Trustee in writing of any amendment to the Pennsylvania
Motor Vehicle Sales Finance Act that would affect the duties or obligations of
the Indenture Trustee or the Owner Trustee under any Basic Document and shall
assist the Indenture Trustee or the Owner Trustee in its obtainment and
maintenance of any licenses required to be obtained or maintained by the
Indenture Trustee or the Owner Trustee thereunder. In connection therewith, the
Administrator shall cause the Seller to pay all fees and expenses under such
Act.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for promptly
notifying the Owner Trustee and the Paying Agent in the event that any
withholding tax is imposed on the Trust's payments (or allocations of income) to
an Owner as contemplated in Section 5.02(c) of the Trust Agreement. Any such
notice shall specify the amount of any withholding tax required to be withheld
by the Paying Agent pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Owner Trustee set forth in Section 5.05 of the
Trust Agreement.
(iv) The Administrator shall satisfy its obligations with respect
to clauses (ii) and (iii) above by retaining, at the expense of the Trust
payable by the Administrator, a firm of independent public accountants (the
"Accountants") acceptable to the Owner Trustee, which shall perform the
obligations of the Administrator thereunder. In connection with paragraph (ii)
above, the Accountants will provide prior to [________], 199_, a letter in form
and substance satisfactory to the Owner Trustee and the Paying Agent as to
whether any tax withholding is then required and, if required, the procedures to
be followed with respect thereto to comply with the requirements of the Code.
The Accountants shall be required to update the letter in each instance that any
additional tax withholding is subsequently required or any previously required
tax withholding shall no longer be required.
(v) The Administrator shall perform the duties of the
Administrator specified in Section 10.02 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner Trustee,
and any other duties expressly required to be performed by the Administrator
under the Trust Agreement.
(vi) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into transactions
or otherwise deal with any of its affiliates; provided, however, that the terms
of any such transactions or dealings shall be in accordance with any directions
received from the Issuer and shall be, in the Administrator's opinion, no less
favorable to the Issuer than would be available from unaffiliated parties.
(c) Non-Ministerial Matters. (i) With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Owner Trustee of the
proposed action and the Owner Trustee shall not have withheld consent or
provided an alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the
Issuer (other than in connection with the collection of the
Receivables);
(C) the amendment, change or modification of the Related
Agreements;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Administrators or Successor
Servicers, or the consent to the assignment by the Note Registrar,
Paying Agent or Indenture Trustee of its obligations under the
Indenture; and
(E) the removal of the Indenture Trustee.
(ii)Notwithstanding anything to the contrary in this Agreement,
the Administrator shall not be obligated to, and shall not, (x) make any
payments to the Noteholders under the Related Agreements, (y) sell the Trust
Estate pursuant to Section 5.04 of the Indenture or (z) take any other action
that the Issuer directs the Administrator not to take on its behalf.
2. Records. The Administrator shall maintain appropriate books of
-------
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer and the
Company at any time during normal business hours.
3. Compensation. As compensation for the performance of the
------------
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to $200 per month
which shall be solely an obligation of the Seller.
4. Additional Information To Be Furnished to Issuer. The Administrator
-------------------------------------------------
shall furnish to the Issuer from time to time such additional information
regarding the Collateral as the Issuer shall reasonably request.
5. Independence of Administrator. For all purposes of this Agreement,
------------------------------
the Administrator shall be an independent contractor and shall not be subject to
the supervision of the Issuer or the Owner Trustee with respect to the manner in
which it accomplishes the performance of its obligations hereunder. Unless
expressly authorized by the Issuer, the Administrator shall have no authority to
act for or represent the Issuer or the Owner Trustee in any way and shall not
otherwise be deemed an agent of the Issuer or the Owner Trustee.
6. No Joint Venture. Nothing contained in this Agreement (i) shall
-----------------
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
7. Other Activities of Administrator. Nothing herein shall prevent the
---------------------------------
Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.
8. Term of Agreement; Resignation and Removal of Administrator. (a)
--------------------------------------------------------------
This Agreement shall continue in force until the dissolution of the Issuer, upon
which event this Agreement shall automatically terminate.
(b) Subject to Section 8(e), the Administrator may resign its duties
hereunder by providing the Issuer with at least 60 days' prior written notice.
(c) Subject to Section 8(e), the Issuer may remove the Administrator
without cause by providing the Administrator with at least 60 days' prior
written notice.
(d) Subject to Section 8(e), at the sole option of the Issuer, the
Administrator may be removed immediately upon written notice of termination from
the Issuer to the Administrator if any of the following events shall occur:
(i) the Administrator shall default in the performance of any of its
duties under this Agreement and, after notice of such default, shall not cure
such default within ten days (or, if such default cannot be cured in such time,
shall not give within ten days such assurance of cure as shall be reasonably
satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises shall enter a
decree or order for relief, and such decree or order shall not have been vacated
within 60 days, in respect of the Administrator in any involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect or appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Administrator or any substantial part
of its property or order the winding-up or liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, shall consent to the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator or similar official for the
Administrator or any substantial part of its property, shall consent to the
taking of possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of creditors or
shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in clauses
(ii) or (iii) of this Section shall occur, it shall give written notice thereof
to the Issuer and the Indenture Trustee within seven days after the happening of
such event.
(e) No resignation or removal of the Administrator pursuant to this
Section shall be effective until (i) a successor Administrator shall have been
appointed by the Issuer and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder.
(f) The appointment of any successor Administrator shall be effective
only after satisfaction of the Rating Agency Condition with respect to the
proposed appointment.
(g) Subject to Sections 8(e) and 8(f), the Administrator acknowledges
that upon the appointment of a Successor Servicer pursuant to the Sale and
Servicing Agreement, the Administrator shall immediately resign and such
Successor Servicer shall automatically become the Administrator under this
Agreement.
9. Action upon Termination, Resignation or Removal. Promptly upon the
------------------------------------------------
effective date of termination of this Agreement pursuant to Section 8(a) or the
resignation or removal of the Administrator pursuant to Section 8(b) or (c),
respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to Section 8(a) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to Section
8(b) or (c), respectively, the Administrator shall cooperate with the Issuer and
take all reasonable steps requested to assist the Issuer in making an orderly
transfer of the duties of the Administrator.
10. Notices. Any notice, report or other communication given hereunder
-------
shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to:
Premier Auto Trust ___-_
c/o [__________________]
[_________________]
[_________________]
Attention: Corporate Trustee Administration Department
(b) if to the Administrator, to:
Chrysler Financial Company L.L.C.
27777 Franklin Road
Southfield, Michigan 48034
Attention: Assistant Secretary
(c) if to the Indenture Trustee, to:
[__________________]
[__________________]
[__________________]
[__________________]
Attention: Corporate Trust Services Division
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
11. Amendments. This Agreement may be amended from time to time by a
__________
written amendment duly executed and delivered by the Issuer, the Administrator
and the Indenture Trustee, with the written consent of the Owner Trustee,
without the consent of the Noteholders and the Certificateholders, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Noteholders or Certificateholders; provided that such amendment will not, in
an Opinion of Counsel satisfactory to the Indenture Trustee, materially and
adversely affect the interest of any Noteholder or Certificateholder. This
Agreement may also be amended by the Issuer, the Administrator and the Indenture
Trustee with the written consent of the Owner Trustee and the holders of Notes
evidencing at least a majority of the Outstanding Amount of the Notes, the
holders of Trust Certificates evidencing at least a majority of the percentage
interests evidenced by the Trust Certificates and the holders of
Overcollateralization Certificates evidencing at least a majority of the
Certificate Balance of the Overcollateralization Certificates for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of
Noteholders or the Certificateholders; provided, however, that no such amendment
may (i) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Receivables or distributions that are
required to be made for the benefit of the Noteholders or Certificateholders or
(ii) reduce the aforesaid percentage of the holders of Notes, Trust Certificates
or Overcollateralization Certificates which are required to consent to any such
amendment, without the consent of the holders of all the outstanding Notes,
Trust Certificates and Overcollateralization Certificates. Notwithstanding the
foregoing, the Administrator may not amend this Agreement without the permission
of the Seller and the Company, which permission shall not be unreasonably
withheld.
12. Successors and Assigns. This Agreement may not be assigned by the
---------------------
Administrator unless such assignment is previously consented to in writing by
the Issuer and the Owner Trustee and subject to the satisfaction of the Rating
Agency Condition in respect thereof. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in
the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer or the Owner Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator; provided that such successor organization executes
and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an
agreement in which such corporation or other organization agrees to be bound
hereunder by the terms of said assignment in the same manner as the
Administrator is bound hereunder. Subject to the foregoing, this Agreement shall
bind any successors or assigns of the parties hereto.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
-------------
THE LAWS OF THE STATE OF NEW YORK, 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.
14. Headings. The section headings hereof have been inserted for
--------
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
15. Counterparts. This Agreement may be executed in counterparts, each
------------
of which when so executed shall be an original, but all of which together shall
constitute but one and the same agreement.
16. Severability. Any provision of this Agreement that is prohibited or
------------
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
17. Not Applicable to Chrysler Financial Company L.L.C. in Other
-------------------------------------------------------------------
Capacities. Nothing in this Agreement shall affect any obligation Chrysler
- ---------- --------
Financial Company L.L.C. may have in any other capacity.
- -----------------------
18. Limitation of Liability of Owner Trustee and Indenture Trustee. (a)
--------------------------------------------------------------
Notwithstanding anything contained herein to the contrary, this instrument has
been countersigned by [___________] not in its individual capacity but solely in
its capacity as Owner Trustee of the Issuer and in no event shall [___________]
in its individual capacity or any beneficial owner of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder, as to all of which recourse shall be had
solely to the assets of the Issuer. For all purposes of this Agreement, in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by [___________] not in its individual capacity
but solely as Indenture Trustee and in no event shall [___________] have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.
19. Third-Party Beneficiary. The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
* * * * * * *
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
PREMIER AUTO TRUST ____-_
By: [___________],
not in its individual capacity
solely as Owner Trustee
By:__________________________________
Name:
Title:
[________________],
not in its individual capacity
but solely as Indenture Trustee
By:__________________________________
Name:
Title:
CHRYSLER FINANCIAL COMPANY L.L.C.,
as Administrator
By:___________________________________
Name:
Title:
EXHIBIT A
POWER OF ATTORNEY
STATE OF NEW YORK }
}
COUNTY OF NEW YORK }
KNOW ALL MEN BY THESE PRESENTS, that
___________________________________, a ______________ banking corporation, not
in its individual capacity but solely as owner trustee (the "Owner Trustee") for
Premier Auto Trust ____-_ (the "Trust"), does hereby make, constitute and
appoint Chrysler Financial Company L.L.C., as administrator under the
Administration Agreement dated ______________ (the "Administration Agreement"),
among the Trust, Chrysler Financial Company L.L.C. and
___________________________________________, as Indenture Trustee, as the same
may be amended from time to time, and its agents and attorneys, as
Attorneys-in-Fact to execute on behalf of the Owner Trustee or the Trust any and
all such documents, reports, filings, instruments, certificates and opinions as
it should be the duty of the Owner Trustee or the Trust to prepare, file or
deliver pursuant to the Basic Documents, or pursuant to Section 5.05 of the
Trust Agreement, including, without limitation, to appear for and represent the
Owner Trustee and the Trust in connection with the preparation, filing and audit
of federal, state and local tax returns pertaining to the Trust, if any, and
with full power to perform any and all acts associated with such returns and
audits, if any, that the Owner Trustee could perform, including without
limitation, the right to distribute and receive confidential information, defend
and assert positions in response to audits, initiate and defend litigation, and
to execute waivers of restrictions on assessments of deficiencies, consents to
the extension of any statutory or regulatory time limit, and settlements.
All powers of attorney for this purpose heretofore filed or executed by
the Owner Trustee are hereby revoked.
Capitalized terms that are used and not otherwise defined herein shall
have the meanings ascribed thereto in the Administration Agreement.
EXECUTED this ___ of _____________, 199_.
[____________________],
not in its individual capacity
but solely as Owner Trustee
Name:
Title:
STATE OF ___________ }
}
COUNTY OF __________ }
Before me, the undersigned authority, on this day personally appeared ,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he/she signed the same for the purposes
and considerations therein expressed.
Sworn to before me this ___
day of _______, 199__.
______________________________
Notary Public - State of
EXHIBIT 99.3
[FORM OF PURCHASE AGREEMENT]
This PURCHASE AGREEMENT dated as of [_______], 199_, between CHRYSLER
FINANCIAL COMPANY L.L.C., a Michigan limited liability company (the "Seller"),
and [__________________], a [_______] [_______] (the "Company").
W I T N E S S E T H :
WHEREAS the Seller and the Company have entered into an Amended and
Restated Trust Agreement dated as of [_______], 199_, among the Seller, the
Company and [_________], as owner trustee (as amended and supplemented from time
to time, the "Trust Agreement"), pursuant to which the Company has agreed to
assume certain obligations with respect to Premier Auto Trust ____-_ a Delaware
business trust (the "Issuer"); and
WHEREAS the Company has agreed to acquire all of the Asset Backed
Certificates (the "Certificates"), which represent undivided percentage
interests in the assets of the Issuer;
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows.
ARTICLE I
Definitions
-----------
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Sale and Servicing Agreement dated as of
[_______], 199_ (the "Sale and Servicing Agreement"), between the Issuer and
Chrysler Financial Company L.L.C., as seller and as servicer, which also
contains rules as to usage and construction that shall be applicable herein.
ARTICLE II
Conveyance of Rights to Excess Cash Flow from Reserve Account
-------------------------------------------------------------
and Fixed Value Payments with respect to Receivables
----------------------------------------------------
Section 2.01. Conveyance of Rights. In consideration of the Company's
--------------------
delivery to or upon the order of the Seller of approximately $[___________] on
the Closing Date and, in the case of the items in clauses (b) and (c), as a
contribution to the Company, (i) the Seller does hereby sell, transfer, assign,
set over and otherwise convey to the Company, without recourse (subject to the
obligations herein), all of the Seller's right, title and interest in and to the
following: (a) any amounts to be released from the Reserve Account from time to
time to the Seller pursuant to the Sale and Servicing Agreement, (b) any Fixed
Value Payments and Fixed Value Finance Charges (subject to Section 5.03(b) of
the Sale and Servicing Agreement) arising in connection with the Fixed Value
Receivables and transferred by the Trust to the Seller pursuant to Section 2.02
of the Sale and Servicing Agreement, (c) all rights to sell any or all of such
Fixed Value Payments and/or Fixed Value Finance Charges to the Trust and to
cause the Trust to issue Fixed Value Securities pursuant to Section 2.03 of the
Sale and Servicing Agreement and (d) all rights with respect to the enforcement
of any or all of the foregoing, all present and future claims, demands, causes
of action and choses in action in respect of any or all of the foregoing and all
payments on or under, and any and all proceeds of every kind and nature with
respect to, any or all of the foregoing (collectively, the "Rights") and (ii)
the Seller shall cause the Overcollateralization Certificates and the Trust
Certificates to be issued to the Company. The items referred to in clauses (b)
and (c) shall be a contribution of capital to the Company.
ARTICLE III
Representations and Warranties
------------------------------
Section 3.01. Representations and Warranties of the Company. The
-------------------------------------------------
Company hereby represents and warrants to the Seller as of the date hereof and
as of the Closing Date:
(a) Organization and Good Standing. The Company has been duly organized
------------------------------
and is validly existing as a limited liability company in good standing under
the laws of the State of Michigan, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire, own, hold and convey the
Rights.
(b) Due Qualification. The Company is duly qualified to do business as
-----------------
a foreign limited liability company in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of its property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Company has the 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 Company by all necessary action.
(d) No Violation. The consummation of the transactions contemplated by
------------
this Agreement and the fulfillment of the terms hereof will not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the articles of
organization or operating agreement of the Company, or any indenture, agreement
or other instrument to which the Company is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than the Basic Documents); nor violate any law or, to the best of the
Company's knowledge, any order, rule or regulation applicable to the Company of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Company or its
properties.
(e) No Proceedings. There are no proceedings or investigations pending
--------------
or, to the Company's best knowledge, threatened, before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties: (i) asserting the invalidity of
this Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any determination
or ruling that might materially and adversely affect the performance by the
Company of its obligations under, or the validity or enforceability of, this
Agreement.
Section 3.02. Representations and Warranties of the Seller. The Seller
--------------------------------------------
hereby represents and warrants to the Company as of the date hereof and as of
the Closing Date and any Transfer Date:
(a) Organization and Good Standing. The Seller has been duly organized
------------------------------
and is validly existing as a limited liability company in good standing under
the laws of the State of Michigan, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to convey and assign the Rights.
(b) Due Qualification. The Seller is duly qualified to do business as a
-----------------
foreign limited liability company in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Seller has the power and authority to
--------------------
execute and deliver this Agreement and to carry out its terms; the Seller has
duly authorized the sale and assignment of the Rights to the Company by all
necessary action; and the execution, delivery and performance of this Agreement
have been duly authorized by the Seller by all necessary action.
(d) No Violation. The consummation of the transactions contemplated by
------------
this Agreement and the fulfillment of the terms hereof will not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the articles of
organization or operating agreement of the Seller, or any indenture, agreement
or other instrument to which the Seller is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than the Basic Documents); nor violate any law or, to the best of the
Seller's knowledge, any order, rule or regulation applicable to the Seller of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Seller or its
properties.
(e) 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, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (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.
ARTICLE IV
Conditions
----------
Section 4.01. Conditions to Obligation of the Company. The obligation
---------------------------------------
of the Company to purchase the Rights and the Certificates is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
--------------------------------------
warranties of the Seller hereunder shall be true and correct as of the date of
execution of this Agreement and as of the Closing Date with the same effect as
if then made, and the Seller shall have performed all obligations to be
performed by it hereunder on or prior to the Closing Date.
(b) Other Transactions. The transactions contemplated by the Sale and
------------------
Servicing Agreement to be consummated as of the Closing Date shall be
consummated as of such date.
Section 4.02. Conditions to Obligation of the Seller. The obligation of
--------------------------------------
the Seller to sell the Rights to the Company and cause the Certificates to be
issued to the Company is subject to the satisfaction of the following
conditions:
(a) Representations and Warranties True. The representations and
--------------------------------------
warranties of the Company hereunder shall be true and correct as of the date of
execution of this Agreement and as of the Closing Date with the same effect as
if then made, and the Company shall have performed all obligations to be
performed by it hereunder on or prior to the Closing Date.
(b) Purchase Price. On the Closing Date, the Company shall have
---------------
delivered to the Seller the purchase price specified in Section 2.01.
ARTICLE V
Covenants
---------
Section 5.01. Legal Existence. (a) During the term of this Agreement
----------------
and the Trust Agreement, the Company will keep in full force and effect its
existence, rights and franchises as a limited liability company under the laws
of the jurisdiction of its organization and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement, the Basic Documents and each other instrument or agreement necessary
or appropriate to the proper administration of this Agreement, the Basic
Documents and the transactions contemplated hereby and thereby.
(b) During the term of this Agreement and the Trust Agreement, the
Company shall observe the applicable legal requirements for the recognition of
the Company as a legal entity separate and apart from its Affiliates, including
as follows:
(i) the Company shall maintain records and books of account
separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement, the Company
shall not commingle its assets and funds with those of its Affiliates;
(iii) the Company shall hold such appropriate meetings of its
members as are necessary to authorize all of the Company's actions
required by law to be authorized by the members thereof, shall keep
minutes of such meetings and observe all other customary formalities
respecting limited liability companies (and any successor Company that
is not a limited liability company shall observe similar procedures in
accordance with its governing documents and applicable law);
(iv) the Company shall at all times hold itself out to the public
under the Company's own name as a legal entity separate and distinct
from its Affiliates; and
(v) all transactions and dealings between the Company and its
Affiliates, including this Agreement, will be conducted on an
arm's-length basis.
Section 5.02. Merger or Consolidation of, or Assumption of the
-------------------------------------------------------
Obligations of, the Company. Any Person (a) into which the Company may be merged
- ---------------------------
or consolidated, (b) which may result from any merger or consolidation to which
the Company shall be a party or (c) which may succeed to the properties and
assets of the Company substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Company under this Agreement and the Trust Agreement, shall be the
successor to the Company hereunder and thereunder without the execution or
filing of any document or any further act by any of the parties to this
Agreement or the Trust 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, (ii) the Company shall have delivered
to the Owner Trustee and the Indenture Trustee an Officer's 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 and (iii) the Rating Agency Condition shall
have been satisfied with respect to such transaction. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of assumption
and compliance with clauses (i), (ii) and (iii) above shall be conditions to the
consummation of the transactions referred to in clause (a), (b) or (c) above.
Section 5.03. Limitation on Liability of the Company and Others. The
--------------------------------------------------
Company and any director, officer, employee or agent of a member of the Company
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 Company 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 or under the Trust Agreement, and that in its
opinion may involve it in any expense or liability.
Section 5.04. The Company May Own Notes. The Company may in its
----------------------------
individual or any other capacity become the owner or pledgee of Notes with the
same rights as it would have if it were not the Company, except as expressly
provided herein or in any Basic Document.
Section 5.05. Covenants of the Seller. (a) The Seller hereby agrees to
-----------------------
provide to the Company copies of each notice and certificate the Seller receives
pursuant to the Sale and Servicing Agreement insofar as such notice or
certificate relates to the Rights (including each Servicer's Certificate
delivered for each Distribution Date pursuant thereto). In addition, the Seller
hereby agrees to sell any vehicle that is received by the Company at any time in
satisfaction of a Fixed Value Payment on behalf and for the benefit of the
Company.
(b) The Seller hereby agrees that it will not, without the prior
written consent of the Company, enter into any amendment to the Sale and
Servicing Agreement or the Trust Agreement.
(c) The Seller shall not, prior to the date which is one year and one
day after the termination of the Sale and Servicing Agreement, acquiesce,
petition or otherwise invoke or cause the Company to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Company 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 Company or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Company.
Section 5.06. Sale of the Rights by the Company. After the Closing
----------------------------------
Date, the Company may sell, transfer and assign the Rights to another Person (a
"Transferee"); provided, that the Indenture Trustee and the Owner Trustee shall
have received an Opinion of Counsel to the effect that such transfer will not
cause the Trust to be characterized as an association (or a publicly traded
partnership) taxable as a corporation for federal income tax purposes or
Michigan income and single business tax purposes. Notwithstanding anything
herein to the contrary, compliance with the proviso of the preceding sentence
shall be a condition to the consummation of the transaction referred to above.
ARTICLE VI
Miscellaneous
-------------
Section 6.01. Amendment. This Agreement may be amended from time to
---------
time by a written amendment duly executed and delivered by the Seller and the
Company, with the consent of the Indenture Trustee, but without the consent 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 of
this Agreement or of modifying in any manner the rights of the Seller or the
Company; provided, however, that such amendment will not, as evidenced by an
Opinion of Counsel delivered to the Indenture Trustee, materially and adversely
affect the interest of any Noteholder or Certificateholder. This Agreement may
also be amended by the Seller and the Company with the consent of the Indenture
Trustee, the consent of the Holders of Notes evidencing at least a majority of
the Outstanding Amount of the Notes, the consent of the Holders (as defined in
the Trust Agreement) of Trust Certificates evidencing at least a majority of all
the percentage interests evidenced by the Trust Certificates and the consent of
the Holders (as defined in the Trust Agreement) of Overcollateralization
Certificates evidencing at least a majority of the Certificate Balance of the
Overcollateralization Certificates, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Seller or the Company; provided,
however, that no such amendment shall (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that are required to be made for the benefit of
Noteholders or Certificateholders or (ii) reduce the aforesaid percentage of the
Outstanding Amount of the Notes, the percentage interests evidenced by the Trust
Certificates or the percentage of the Certificate Balance of the
Overcollateralization Certificates required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes, the Holders (as
defined in the Trust Agreement) of all the outstanding Trust Certificates and
the Holders (as defined in the Trust Agreement) of all the outstanding
Overcollateralization Certificates.
Promptly after the execution of any such amendment or consent, the
Seller shall furnish written notification of the substance of such amendment or
consent to each of the Rating Agencies.
Section 6.02. Waivers. No failure or delay on the part of the Company
-------
in exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or further exercise thereof or the exercise
of any other power, right or remedy.
Section 6.03. Notices. All demands, notices and communications under
-------
this Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the Seller, to Chrysler Financial Company L.L.C.,
27777 Franklin Road, Southfield, Michigan 48034, Attention of Assistant
Secretary ((248) 948-3067) and (b) in the case of the Company, to [___________],
[___________], [___________], [___________], Attention of Assistant Secretary
[___________]; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other party.
Section 6.04. Limitations on Rights of Others. The provisions of this
-------------------------------
Agreement are solely for the benefit of the Seller, the Company, 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 under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
Section 6.05. Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 6.06. Representations of the Seller and the Company. The
-------------------------------------------------
respective agreements, representations, warranties and other statements by the
Seller and the Company set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the execution of this
Agreement.
Section 6.07. Headings. The various headings in this Agreement are
--------
included for convenience only and shall not affect the meaning or interpretation
of any provision of this Agreement. References in this Agreement to Section
names or numbers are to such Sections of this Agreement.
Section 6.08. 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 6.09. Counterparts. This Agreement may be executed in two or
------------
more counterparts and by different parties on separate counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
* * * * * * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized as of the date and year
first above written.
CHRYSLER FINANCIAL COMPANY L.L.C.
By: _______________________________
Name:
Title:
[-----------]
By: [_______],
as a Member
By: _______________________________
Name:
Title: