Exhibit 10-FFF
MASTER RECEIVABLES PURCHASE AGREEMENT
among
CHRYSLER CREDIT CANADA LTD.
as seller and collector
- and -
CORE TRUST
as purchaser
- and -
CHRYSLER FINANCIAL CORPORATION
as performance guarantor
Dated as of November 29, 1994
THIS MASTER RECEIVABLES PURCHASE AGREEMENT made as of November 29,
1994.
AMONG:
CHRYSLER CREDIT CANADA LTD., a corporation amalgamated under
the laws of Canada,
(hereinafter referred to as the "Seller")
OF THE FIRST PART
- and -
CHRYSLER CREDIT CANADA LTD., a corporation amalgamated under
the laws of Canada,
(hereinafter referred to, in such capacity, as the
"Collector")
OF THE SECOND PART
- and -
CORE TRUST, by TD Trust Company, a trust company carrying on
business in the Province of Ontario, in its capacity as
Trustee of CoRe Trust, a trust established under the laws of
the Province of Alberta,
(hereinafter referred to as the "Purchaser")
OF THE THIRD PART
- and -
CHRYSLER FINANCIAL CORPORATION, a corporation incorporated
under the laws of the State of Michigan,
(hereinafter referred to as "Chrysler Financial")
OF THE FOURTH PART
WHEREAS the Seller is the creditor under Secured Loans and the Seller
and the Purchaser anticipate entering into one or more transactions whereby
the Seller will sell to the Purchaser its interest in certain of its
Secured Loans;
AND WHEREAS the Collector is willing to carry out the duties and
obligations to be performed by it pursuant to the provisions hereof;
AND WHEREAS Chrysler Financial is willing to act as performance
guarantor with respect to the covenants of Chrysler Credit Canada Ltd., as
the Seller and the Collector hereunder;
AND WHEREAS Toronto Dominion Securities Inc. has the authority as the
Servicing Agent of the Purchaser pursuant to an amended and restated
servicing agreement dated as of November 15, 1994, to enter into this
Agreement as agent for the Purchaser;
NOW THEREFORE the parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Certain Defined Terms
In this Agreement, the following terms have the following meanings:
"APR" means the annual percentage rate of interest received from the
Purchased Assets.
"Administrative Charges" means extension fees, insurance premiums,
charges for returned cheques or dishonoured payments or dishonoured
transfer instructions and other similar charges and, prior to the
appointment of a Person other than the Seller as Collector, late payment
charges and refinancing charges.
"Adverse Claim" means a lien, security interest, charge, encumbrance,
ownership interest or other right or claim of any Person (other than the
Purchaser) where such right or claim ranks ahead of or pari passu with the
interests of the Purchaser created hereunder.
"Affiliate" means, when used with respect to any Person, an affiliate
of such Person as defined in the Canada Business Corporations Act from time
to time in force.
"Aggregate Prepayment Amount" means, in the case of a Transaction
evidenced by a single Terms Schedule, the Prepayment Amount in respect
thereof or, in the case of a Transaction evidenced by Related Terms
Schedules, the sum of the Prepayment Amounts specified in each of the
Related Terms Schedules.
"Agreement" means this agreement and, in the context of a Transaction,
the agreement constituted by the execution of the relevant Terms Schedule
or Terms Schedules, as amended, modified, supplemented, restated or
replaced from time to time, including the Exhibits thereto, and the
expressions "herein", "hereof", "hereto", "hereunder", and similar
expressions refer to this Agreement and not to any particular Article,
Section or other portion hereof; and "including" means "including without
limitation".
"Bill of Sale" means a bill of sale to be entered into pursuant to
Section 2.1 between the Purchaser, as purchaser, and the Seller, as seller,
substantially in the form attached as Exhibit C.
"Billings" means, for any Settlement Period, the total contractual
amount payable by Obligors relating to the Purchased Assets on a date
within a Settlement Period as shown on the applicable Portfolio Report for
such Settlement Period (which amount shall not include Administrative
Charges or any sales taxes or other taxes required to be collected and
remitted by the Seller), other than Billings in respect of Defaulted Loans.
"Business Day" means any day, other than a Saturday or Sunday, on
which banks are open for business in Toronto, Ontario, Canada.
"Canadian Dollars" or "$" means the lawful currency of Canada.
"Chrysler Financial" means Chrysler Financial Corporation, its
successors and permitted assigns.
"Closing Date" means, in respect of each Purchase, the date specified
as such in the relevant Terms Schedule.
"Collections" means all cash collections, including, without
limitation, Pay Aheads, and other cash proceeds of Related Secured Loan
Rights other than Net Proceeds, but not including any sales taxes or other
taxes which are required to be collected and remitted by the Collector or,
prior to the appointment of a Person other than the Seller as Collector,
Administrative Charges.
"Collector" means, at any time, the Seller, its successor or any other
Person or its successor who is then the Collector in respect of any
particular Transaction in accordance with Section 3.1.
"Collector Fee" has the meaning ascribed thereto in Section 3.3.
"Concentration Limit" means the percentage of the Aggregate Prepayment
Amount specified in the relevant Terms Schedule or Related Terms Schedules.
"CoRe Trust" means the trust of that name established under the laws
of the Province of Alberta by an Amended and Restated Declaration of Trust
dated as of June 17, 1994, as amended from time to time.
"Credit and Collection Policy" means the customary policies and
procedures of the Seller as represented to and approved by the Purchaser
relating to certain aspects of the granting of credit, the making of
collections and the enforcing of contracts relating to Secured Loans and
their related servicing as such policies and procedures may be changed from
time to time in accordance with Section 6.2(b). These policies and
procedures have resulted in the historical collection results furnished to
the Purchaser as set out in Exhibit F.
"Cut-Off Date" means, in respect of each Purchase, the date specified
as such in the relevant Terms Schedule.
"Defaulted Loan" means a Secured Loan (i) under which an amount
greater than or equal to the amount required to be paid under such Secured
Loan for the calendar month ending on the last day of the most recently
completed Settlement Period has been outstanding for a period greater than
or equal to three calendar months, or (ii) the Obligor (other than a
guarantor) of which has taken any action, or suffered any event to occur
which is continuing, of the type described in Section 7.1(d); provided,
however, that if a Loan that is a Defaulted Loan is also at the time that
such Loan became a Defaulted Loan an Ineligible Loan, it will be treated as
an Ineligible Loan hereunder.
"Deferred Purchase Account" means, in respect of each Transaction, the
interest bearing account maintained by the Purchaser in trust for the
Seller at the main Toronto branch of TD Trust Company, with the account
number specified as such in the relevant Terms Schedule or Related Terms
Schedules or such other account which is designated by the Purchaser in
writing by notice to the Seller as the Deferred Purchase Account for the
purposes hereof.
"Deferred Purchase Price" means, in respect of each Transaction, the
further amounts payable by the Purchaser to the Seller in consideration for
the transfer of the Purchased Assets in accordance with the terms hereof
equal to, in the aggregate for such Transaction, the sum of (i) the
difference between (a) the Net Book Value of the Purchased Assets as of the
relevant Closing Date, and (b) the Aggregate Prepayment Amount, and (ii)
the amount, if any, by which the aggregate amount of interest receivable by
the Purchaser accruing in a Settlement Period in respect of the Purchased
Assets exceeds the Purchase Discount applicable to such Settlement Period,
as increased, reduced, refunded or paid from time to time in accordance
with Sections 2.2, 2.3(2), 2.3(4), 2.3(5), 2.3(6), 2.4(1)(a), 2.4(1)(b),
2.6, 2.7 and 2.11.
"Discount Rate" means, in respect of each Transaction, the rate for
each Settlement Period as notified to the Seller by the Purchaser in
accordance with Section 2.5(2).
"Eligible Secured Loan" means a Secured Loan which, together with the
Equipment related thereto, meets all of the following criteria on the
relevant Cut-Off Date:
(a) the Obligor thereunder is a Person resident in Canada;
(b) the Secured Loan is not a Defaulted Loan;
(c) the Secured Loan is payable in Canada only and is denominated in
Canadian Dollars;
(d) the principal amount initially owing under the Secured Loan does
not exceed $50,000;
(e) the Secured Loan has been duly authorized, executed and delivered
by the parties thereto, which Secured Loan, together with all
Related Secured Loan Rights (including any guarantee, indemnity
or agreement referred to in clause (h) of the definition of
Secured Loan Rights herein), is in full force and effect and
constitutes the legal, valid and binding obligation of the
Obligor thereof enforceable against such Obligor in accordance
with its terms and remains in full force and effect, unamended,
subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws (including personal property security
laws of any applicable jurisdiction) affecting creditors rights
generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(f) to the best of the Seller's knowledge, the Secured Loan is not
subject to any set-off, counterclaim or defence whatsoever by the
Obligor; the Secured Loan and the Related Equipment are free of
any lien, security interest, charge, encumbrance, ownership
interest or other right or claim of any Person (other than the
Seller) and the Secured Loan has not been extended or otherwise
modified except in the ordinary course of business and in
accordance with the credit and collection policy of the Seller in
effect at the time of such extension or modification;
(g) the terms of the Secured Loan do not contravene any laws, rules
or regulations applicable thereto, except where such
contravention would not materially adversely affect the
collectability or enforceability of the Related Secured Loan
Rights and except to the extent that certain of such terms may be
found to be of no force or effect by application of Section
65.1(5) of the Bankruptcy and Insolvency Act (Canada);
(h) the Secured Loan satisfies the requirements of the credit and
collection policy of the Seller in effect at the date of
origination of the Secured Loan or the assignment of the Secured
Loan to the Seller;
(i) the Obligor thereunder is not the subject of any insolvency or
bankruptcy proceedings and, to the best of the knowledge of the
Seller, there are no such proceedings pending against such
Obligor;
(j) the payments under the Secured Loan of Principal and interest are
required to be made monthly and are calculated on the basis of a
fixed interest rate such that the initial Principal balance of
the Secured Loan will be fully amortized over its contractual
term;
(k) the Seller is permitted to assign its rights under the Secured
Loan (i) without notice to or the consent of the Obligor, except
to the extent notice is required under the Conveyancing and Law
of Property Act (Ontario) or the applicable legislation of other
jurisdictions in order for the assignee to enforce the assignment
against the Obligor, or (ii) with notice to or the consent of the
Obligor and such notice has been given or consent obtained with
respect to the assignments contemplated herein;
(l) the Secured Loan provides that the Obligor is required to insure
the Related Equipment and the Seller has received evidence of
compliance with this requirement at the commencement of the
Secured Loan;
(m) all right, title and interest of the original obligee under the
Secured Loan, together with the applicable Related Equipment, has
been absolutely assigned by the original obligee to the Seller by
an agreement in writing and is not subject to re-assignment to
the original obligee other than pursuant to the exercise of a
right of recourse against the original obligee, and with respect
to each such original obligee located in the Provinces of British
Columbia, Alberta, Saskatchewan, Manitoba or Ontario, the Seller
has made all required registrations and filings under the
applicable Personal Property Security Act;
(n) the Related Equipment shall have been delivered to and accepted
by the Obligor in accordance with the terms of the Secured Loan
applicable thereto;
(o) the Related Equipment consists of either a passenger automobile
or light-duty truck;
(p) the remaining term of the Secured Loan, including any applicable
extension period, does not exceed 60 months;
(q) the Secured Loan complies and the Seller has complied with all
requirements of applicable laws and regulations which would
affect the enforceability of such Secured Loan, including
consumer protection legislation and interest rate disclosure
legislation;
(r) the applicable Obligor is not resident in either the Yukon
Territory or the Northwest Territories;
(s) the original obligee under such Secured Loan is a Chrysler Canada
Ltd. franchised dealer or an Affiliate of such dealer or a
franchised dealer of a manufacturer other than Chrysler Canada
Ltd.; and
(t) all required registrations and filings have been made (i) under
the Personal Property Security Acts of British Columbia, Alberta,
Saskatchewan, Manitoba and Ontario to perfect or preserve a
purchase-money security interest in the applicable Equipment that
is located in those jurisdictions, and (ii) under applicable
conditional sales legislation in the other provinces of Canada to
perfect and preserve the Seller's interest in the Related
Equipment that is located in those jurisdictions.
"Equipment" means the equipment and other personal property that is
collateral for a Secured Loan, including any attachments, additions,
accessories and enhancements thereto.
"Excess Servicing" means, in respect of any Settlement Period, the
amount, if any, by which Collections and Net Proceeds attributable to
interest for that Settlement Period exceed the Purchase Discount for that
Settlement Period.
"Final Collection Date" means, in respect of each Transaction, the
date on which the Program Amount has been reduced to zero in accordance
with the terms hereof and the Collector (if the Seller is not the
Collector) has received the accrued Collector Fee, provided that where any
Related Secured Loan Rights or Seller Receivables have been transferred
pursuant to Section 10.5 to any Person and not repurchased or reassigned
pursuant to Section 2.3(4)(e), the Final Collection Date shall be extended
until the earlier of (i) the receipt by such Person of an amount equal to
the aggregate of the transfer price paid for such Related Secured Loan
Rights or Seller Receivables and accrued interest from the date of such
transfer to the date of receipt of the amount of such transfer price at a
rate equal to the Prime Rate calculated daily and compounded semi-annually,
and (ii) one year after the latest date for the final payment of Principal
under any such transferred Related Secured Loan Rights.
"General Account" means, in respect of each Transaction, an interest
bearing account established by the Purchaser or, at the direction of the
Purchaser, the Collector in trust for the Purchaser, in each case, at the
main Toronto branch of The Toronto-Dominion Bank in accordance with Section
2.3(1) or such other account which is designated by the Purchaser in
writing by notice to the Collector as the General Account for the purposes
hereof.
"Hedging Agreement" means any interest rate exchange agreement,
interest rate cap, collar or floor agreement, forward rate agreement or
similar agreement entered into between the Purchaser and a counterparty,
and includes one or more of such agreements, in connection with a
Transaction, as identified in the relevant Terms Schedule or Related Terms
Schedules, as the case may be.
"Ineligible Secured Loan" has the meaning ascribed thereto in Section
2.11.
"Liquidations" means, with respect to any Settlement Period, the sum
of Collections and Net Proceeds received in such Settlement Period.
"Loan Receivables" means all amounts payable with respect to any
Secured Loan (not including amounts which are due and payable to the Seller
on or prior to the relevant Cut-Off Date) including vehicle damage charges
and other moneys payable by an Obligor under a Secured Loan (exclusive of
Administrative Charges, costs, expenses, amounts payable by way of
indemnity or taxes required to be collected and remitted by the Seller).
"Lock-Up Event" means, in respect of each Transaction, any of the
following events or circumstances:
(a) the Portfolio Loss Ratio is at any time equal to or greater than
1.75%;
(b) the Portfolio Delinquency Ratio is at any time equal to or
greater than 1.875%;
(c) the Collector fails to make any payment or deposit to be made by
it hereunder when due and such failure remains unremedied for two
Business Days after written notice thereof from the Purchaser;
(d) (i) either the Seller or Chrysler Financial shall generally not
pay its debts as they become due; or (ii) either the Seller or
Chrysler Financial shall admit in writing its inability to pay
its debts generally or shall make a general assignment for the
benefit of creditors; or (iii) any proceedings shall be
instituted by or against either the Seller or Chrysler Financial
seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seeking the entry of an order for relief by the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property where
any such proceeding has not been stayed or dismissed within 45
days of a receiver, trustee, custodian or other similar official
being appointed for it or any substantial part of its property;
or (iv) either the Seller or Chrysler Financial takes any
corporate action to authorize any of the actions described in
this clause (d); and
(e) a default by the Seller or Chrysler Financial under a Hedging
Agreement entered into in respect of such Transaction; and
(f) on any Settlement Date, after resort to the Deferred Purchase
Account, in accordance with Sections 2.3(2), 2.3(4) and 2.4(1),
the amounts transferred to any other account of the Purchaser
pursuant to Sections 2.3(2), 2.3(3) and 2.3(4)(d) are less than
the amounts required to be transferred in accordance with such
Sections. For greater certainty, a Lock-Up Event will be deemed
to occur if the transfer required by Section 2.3(4)(d)(i) is not
made, notwithstanding that as a result of the Lock-Up Event the
required transfer will be that specified in Section
2.3(4)(d)(ii).
"Losses" means, for any Settlement Period, (i) an amount equal to the
Net Book Value of such Purchased Assets which become Defaulted Loans in
such Settlement Period, less (ii) the sum of (x) the portion of the Net
Proceeds received by the Purchaser in such Settlement Period with respect
to the disposition of the Related Equipment with respect to Purchased
Assets which became Defaulted Loans in any prior Settlement Period, and (y)
any other Collections received with respect to Purchased Assets which
became Defaulted Loans in any prior Settlement Period.
"Moody's" means Moody's Investors Service, Inc. or any successor
thereof.
"Net Book Value" means, at any particular time with respect to any
Secured Loan purchased on a Closing Date, the original Principal amount
owing under such Secured Loan less (i) all payments of Principal received
with respect to the Loan Receivables which are due and payable and which
form part of the Related Secured Loan Rights, (ii) the Net Proceeds
allocable to Principal owing under such Secured Loan, and (iii) the amount
of the Principal portion of any Loan Receivable that was due and payable on
or prior to the relevant Cut-Off Date to the extent not deducted under item
(i) above.
"Net Proceeds" means, with respect to any Purchased Asset, cash
proceeds received by the Collector either from the disposition of Related
Equipment (including dispositions following default by an Obligor and
amounts received in connection with any early termination of Secured Loans
negotiated between the Collector and the applicable Obligor in accordance
with Section 3.2(8)) or from insurance payments in respect of Related
Equipment that has been written-off for insurance purposes, net of all
reasonable disposition costs and expenses, any taxes required to be
collected and remitted by the Seller and any amounts required by law to be
remitted to the Obligor in respect of such Purchased Assets.
"Notes" means short term and medium term asset-backed notes issued by
the Purchaser as contemplated by Section 2.5.
"Obligor" means a Person obligated to make payments pursuant to a
Secured Loan, including where the context permits or requires, any person
obligated to make such payments pursuant to any guarantee or indemnity
referred to in clause (h) of the definition of Secured Loan Rights herein.
"Pay Aheads" means, collectively, all payments made in a Settlement
Period by Obligors with respect to Loan Receivables forming part of the
Related Secured Loan Rights which are not yet due and payable in such
Settlement Period in accordance with the related Secured Loan.
"Permitted Investments" means investments of a type described in
Exhibit D and accrued interest thereon.
"Person" means an individual, partnership, corporation, trust, joint
venture, unincorporated association, government (or any agency or political
subdivision thereof) or other entity.
"Portfolio Delinquency Ratio" means, in respect of each Transaction,
on each Settlement Date, (but prior to the distributions contemplated by
Sections 2.3(2) and 2.3(3)), the average of (i) the Net Book Value of
Purchased Assets having Loan Receivables in excess of 10% of the amount of
the Billings for a calendar month past due by more than 60 days from their
contractual due date (without reference to any extension of such
contractual due date permitted in accordance with Section 6.2(c)), divided
by (ii) the Net Book Value of the Purchased Assets on the last day of such
calendar month, as determined with respect to each of the three most
recently completed calendar months and expressed as a percentage; provided
that, with respect to any month in respect of which such ratio is to be
determined which is or is prior to the month in which the first relevant
Closing Date falls, the applicable Loan Receivables and Secured Loans shall
be determined for such months as though the Purchased Assets were all of
the Secured Loans owned or serviced by the Seller as determined from the
Records of the Seller.
"Portfolio Loss Ratio" means, in respect of each Transaction, on each
Settlement Date, (but prior to the distributions contemplated by Sections
2.3(2) and 2.3(3)), the average of (i) the aggregate Losses incurred in a
calendar month, divided by (ii) the sum of the Liquidations with respect to
the Purchased Assets for such calendar month as determined with respect to
each of the four most recently completed calendar months and expressed as a
percentage; provided that, with respect to any month in respect of which
such ratio is to be determined which is or is prior to the month in which
the first relevant Closing Date falls, the applicable Losses and
Liquidations to be used for the purpose of calculating this ratio shall be
determined as though the Purchased Assets were all of the Secured Loans
owned or serviced by the Seller as determined from the Records of the
Seller.
"Portfolio Report" means a report substantially in the form of Exhibit
B.
"Prepayment Amount" means, in respect of each Purchase, the amount
specified as such in a Terms Schedule.
"Prime Rate" means a fluctuating rate per annum which, on any day,
shall be equal to the rate of interest from time to time quoted publicly by
The Toronto-Dominion Bank at its principal office in Toronto, Ontario,
Canada as its prime rate for Canadian Dollar demand loans made in Canada on
that day to commercial borrowers.
"Principal" means, with respect to any particular portion of, or
payment on account of, a Loan Receivable included in the Related Secured
Loan Rights, that portion thereof, if any, which represents or should be
applied in reduction of the principal balance of the applicable Secured
Loan.
"Proceeds" has the meaning ascribed thereto in the Personal Property
Security Act (Ontario) and any Act that may be substituted therefor, as
from time to time amended and in addition, includes personal property in
any form derived directly or indirectly from any dealings with the Related
Equipment or that indemnifies or compensates for the Related Equipment if
destroyed or damaged and proceeds whether or not of the type, class or kind
as the original proceeds.
"Program Amount" means, in respect of each Transaction, an amount
initially equal to the Aggregate Prepayment Amount, as such amount may be
adjusted from time to time as a consequence of the liquidation procedures
described in Sections 2.2, 2.3, 2.4, 2.6, 2.7 and 2.11.
"Purchase" means a purchase of Purchased Assets by the Purchaser on a
Closing Date made pursuant to Section 2.1(2).
"Purchase Discount" means, in respect of each Transaction, in respect
of any particular Settlement Period, the amount equal to (i) the product of
the Discount Rate for the period from and including the last day of the
previous Settlement Period (or, in respect of the initial Settlement
Period, from and including the initial Closing Date) to but excluding the
last day of such Settlement Period multiplied by the number of days in such
period, (ii) divided by 365 or 366, as the case may be, and (iii)
multiplied by the daily weighted average of the Program Amount outstanding
during such period.
"Purchased Assets" means, in respect of each Transaction, the Secured
Loans listed or referred to in the microfiche attached as the Appendix to a
Terms Schedule or Appendices to the Related Terms Schedules, as the case
may be, and all Related Secured Loan Rights.
"Purchaser" means CoRe Trust, its successors and permitted assigns.
"Purchaser's Account" means, in respect of each Transaction, the
interest bearing account maintained by the Purchaser at The Toronto-
Dominion Bank, International Centre, Toronto, Transit Number 0073 with the
account number 0360-012164192, or such other account which is designated by
the Purchaser in writing by notice to the Collector as the Purchaser's
Account for the purposes hereof.
"Purchaser's Indebtedness" means any obligation or liability incurred
by the Purchaser in connection with the funding of its obligations herein.
"Records" means all contracts, credit applications, credit analysis
and reports and "quality indicator score" records, books, records, reports
and other documents and information (including, to the extent obtainable by
way of existing software controlled by the Collector, hard copies of all
data maintained in databases of the Collector, tapes, disks and punch
cards) maintained by the Collector or held or created by the Collector with
respect to the Secured Loans and the related Obligors, including any
agreement pursuant to which the Seller acquired its right, title and
interest in and to the Secured Loans under which it is not the original
obligee.
"Related Document" means any agreement, document, exhibit, notice or
other communication in favour of the Purchaser which has at any time been
delivered by the Seller to the Purchaser pursuant hereto and all other
agreements and documents required hereunder or thereunder.
"Related Equipment" means, with respect to any Purchased Asset, the
Equipment relating thereto.
"Related Secured Loan Rights" means any Secured Loan Rights relating
to the Purchased Assets.
"Related Terms Schedule" means each of those Terms Schedules which, by
the terms of the most recent thereof, are expressed to be related such that
the Secured Loans and Secured Loan Rights which are the subject of the
Purchases contemplated by such Terms Schedules are intended to form one
pool of Purchased Assets for the purposes hereof.
"Required APR Amount" means for each Transaction the percentage
specified as such in the Terms Schedule or the Related Terms Schedules, as
the case may be.
"Required Deferred Amount" means, in respect of each Transaction, as
determined for each Settlement Date, the greater of (i) the amount
specified in the Terms Schedule or Related Terms Schedules, as the case may
be, as the "Required Deferred Amount Floor", and (ii) the sum of (a) the
product of (I) the greater of (A) 1% and (B) 120% of the then current
Portfolio Loss Ratio and (II) the Program Amount at such time, as adjusted
in accordance with Sections 2.3(4) and 2.4(1)(a) on such Settlement Date
and (b) the product of (I) the greater of (x) zero and (y) the amount by
which (1) the Required APR Amount exceeds (2) the APR of the Purchased
Assets as determined with respect to the current Settlement Period and (II)
the amount referred to in (ii)(a)(II) above and (III) the remaining dollar
weighted average contractual life (in years) of the Purchased Assets (as
calculated in the manner set forth in Exhibit H), provided that at any time
following the occurrence of a Lock-Up Event, the Required Deferred Amount
shall be equal to the Program Amount.
"Required Reserve" means, in respect of each Transaction, at any time,
the greater of (i) the Reserve Rate multiplied by the Program Amount, and
(ii) the amount specified in the Terms Schedule or the Related Terms
Schedules, as the case may be, as the "Required Reserve Floor".
"Reserve Rate" means, in respect of each Transaction, the percentage
specified as such in the Terms Schedule or Related Terms Schedules, as the
case may be.
"Secured Loans" means retail instalment sale contracts and any other
agreements or combinations of agreements or portions thereof (i) evidencing
indebtedness of an Obligor, and (ii) creating a security interest over
Equipment as security for such indebtedness, other than agreements
evidencing indebtedness of an Obligor as lessee, as any such agreements may
be amended, modified, supplemented, restated or replaced from time to time.
"Secured Loan Rights" means, in respect of any Secured Loan, the
following:
(a) all rights and benefits accruing to the Seller under such Secured
Loan, including all right, title and interest in and to the Loan
Receivables payable in respect of such Secured Loan;
(b) all right, title and interest of the Seller in and to the
applicable Equipment;
(c) all right, title and interest of the Seller in or to payments
(including both proceeds and premium refunds) under any insurance
policies maintained by the Obligor for the benefit of the Seller
pursuant to the terms of such Secured Loan, to the extent the
same indemnify for loss or damage to the applicable Equipment;
(d) all right, title and interest of the Seller in and to payments
made on account of any loss or damage to the applicable Equipment
whether under such Secured Loan or otherwise;
(e) all claims, demands, actions, damages and indemnities owing to
the Seller with respect to any patent and copyright indemnity
agreements or manufacturers' or sellers' warranties relating to
the applicable Equipment;
(f) the benefit of all covenants with respect to the applicable
Equipment by the Obligor under such Secured Loan to the extent
allocable to the outstanding Loan Receivables under the terms of
such Secured Loan, use and insurance obligations;
(g) the right of the Seller to ask, demand, sue for, collect, receive
and enforce any and all amounts payable under such Secured Loan
in respect of the Related Equipment and to enforce all other
covenants, obligations, rights and remedies thereunder with
respect thereto;
(h) all of the Seller's right, title and interest in, to and under
all guarantees, indemnities and other agreements or arrangements
of whatsoever character (including all security interests and all
property subject thereto) from time to time supporting or
securing payment or performance of the Obligor's obligations in
respect of such Secured Loan, whether pursuant to such Secured
Loan or otherwise, including any recourse available to the Seller
from the originating obligee pursuant to the applicable
assignment agreement;
(i) all Records pertaining to such Secured Loan; and
(j) all Proceeds of or relating to the foregoing.
"Seller" means Chrysler Credit Canada Ltd., its successors and
permitted assigns.
"Seller Receivable" means any amount owing by the Seller and Chrysler
Financial to the Purchaser by reason of a failure by the Seller and
Chrysler Financial to meet any of their obligations to make a payment to
the Purchaser hereunder, other than fees payable pursuant to Sections
4.1(m) and (n).
"Seller Receivable Value" means, with respect to each Seller
Receivable, the outstanding amount of such Seller Receivable from time to
time.
"Servicing Agent" means TDSI, its successors and permitted assigns,
acting pursuant to an agreement dated as of November 15, 1994 between TDSI
and the Purchaser, as amended from time to time.
"Settlement Date" means, with respect to any Settlement Period, the
last Business Day of the calendar month following such Settlement Period.
"Settlement Period" means, in respect of each Transaction, (i)
initially, the period from the initial Cut-Off Date to and including the
last Business Day in the calendar month next following the calendar month
in which such Cut-Off Date occurs, and (ii) thereafter, each period from
the day next following the last day of the immediately preceding Settlement
Period to and including the last Business Day in the calendar month next
following the calendar month in which such previous Settlement Period
ended, ending with the calendar month following that in which the Final
Collection Date occurs.
"Significant Event" has the meaning ascribed thereto in Section 7.1.
"Subsidiary" means, with respect to any Person, a subsidiary of such
Person for the purposes of the Canada Business Corporations Act as amended
from time to time.
"Terms Schedule" means the agreement evidencing a Purchase
substantially in the form of Exhibit A.
"Transaction" means an agreement constituted by one or more executed
Terms Schedules which is intended by reference to the Terms Schedule or the
Related Terms Schedules, as the case may be, to be treated by the parties
as a separate agreement with respect to the Purchased Assets which are
subject thereto and which Purchased Assets are intended to form one pool.
1.2 Headings
The Table of Contents, Article and Section headings used herein have
been inserted for convenience of reference only and in no way affect the
interpretation hereof. The Table of Contents does not form part of this
Agreement.
1.3 References to Sections, Articles and Exhibits
Unless otherwise provided, all references herein to Sections, Articles
or Exhibits are references to Sections, Articles and Exhibits of or to this
Agreement.
1.4 Number and Gender
Words importing the singular include the plural and vice versa, and
words importing gender include all genders.
1.5 Accounting Principles
Where the character or amount of any asset or liability or item of
revenue or expense is required to be determined, or any consolidation or
other accounting computation is required to be made for the purpose of this
Agreement, such determination or computation shall, to the extent
applicable and except as otherwise specified herein or as otherwise agreed
in writing by the parties, be made in accordance with generally accepted
accounting principles in Canada applied on a consistent basis. Wherever in
this Agreement reference is made to generally accepted accounting
principles, such reference shall be deemed to be to the generally accepted
accounting principles from time to time approved by the Canadian Institute
of Chartered Accountants, or any successor institute, applicable as at the
date on which such determination or computation is made or required to be
made in accordance with generally accepted accounting principles.
1.6 Currency
Unless otherwise indicated, all amounts stated herein are in Canadian
Dollars.
1.7 Computation of Time Periods
Unless otherwise provided herein or in any Related Document, in the
computation of a period of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to",
"until" and "ending on" each mean "to but excluding". In addition, for the
purposes of determining the second Settlement Date after the occurrence of
a Lock-Up Event in Sections 2.3(4)(d) and 2.4(1)(b), the Settlement Date on
which the Lock-Up Event occurred, if the Lock-Up Event occurred on a
Settlement Date, shall be included in the calculation.
1.8 Summary of the Transaction
Each Purchase described in this Agreement and the Related Documents
contemplates the purchase by the Purchaser and the sale by the Seller of
the Purchased Assets for an amount equal to the sum of the Prepayment
Amount and the portion of the Deferred Purchase Price applicable to such
Purchased Assets, subject to the terms and conditions set forth herein and
in the relevant Terms Schedule. Each agreement constituting a Transaction
is a Securitization Agreement as defined in the Amended and Restated Trust
Indenture made as of November 15, 1994 between the Purchaser and The R-M
Trust Company, as amended.
1.9 List of Exhibits
The following Exhibits shall be included herein and deemed to be part
hereof, namely:
Exhibit A - Form of Terms Schedule
Exhibit B - Sample Portfolio Report
Exhibit C - Bill of Sale
Exhibit D - Permitted Investments
Exhibit E-1 - Form of Opinion of Seller's Counsel
Exhibit E-2 - Form of Opinion of Chrysler Financial's
General Counsel
Exhibit F - Historical Collection Results
Exhibit G - Form of Opinion of Purchaser's Counsel
Exhibit H - Dollar Weighted Average Contractual Life (in
years)
ARTICLE 2
PURCHASE OF SECURED LOANS
2.1 Purchase Procedures
(1) From time to time, the parties may execute and deliver a Terms
Schedule which, upon such execution and delivery shall evidence their
binding agreement with respect to the purchase and sale of Secured Loans
and Related Secured Loan Rights upon the terms and conditions set forth in
such Terms Schedule. Except to the extent modified, replaced, restated or
supplemented in such Terms Schedule, the terms and conditions of this
Agreement are incorporated by reference into such Terms Schedule mutatis
mutandis and shall apply to the Purchase contemplated thereby. If a Terms
Schedule is a Related Terms Schedule, it is the intention of the parties
hereto that the Secured Loans and Related Secured Loan Rights which are the
subject of such Terms Schedule, together with the Secured Loans and Related
Secured Loan Rights which are the subject of each other Terms Schedule that
is a Related Terms Schedule in respect of such Terms Schedule shall form a
single pool of Purchased Assets for all purposes hereof. Related Terms
Schedules which are expressed to be related to each other shall be
considered as one Transaction for the purposes hereof. In the event of any
inconsistency between the provisions herein contained and a Terms Schedule,
the Terms Schedule shall prevail. In the event of any inconsistency
between Related Terms Schedules, the most recently executed Related Terms
Schedule shall prevail.
(2) On the Closing Date of each Purchase, the Purchaser shall pay to the
Seller by certified cheque or wire transfer the Prepayment Amount. Upon
receipt of such payment, all of the Seller's right, title and interest in
and to the Purchased Assets which are the subject of the Purchase shall be
sold, assigned and transferred to the Purchaser effective as of the
relevant Cut-Off Date for a purchase price equal to the sum of the
Prepayment Amount and the portion of the Deferred Purchase Price applicable
to such Purchased Assets, and the Seller shall execute and deliver to the
Purchaser a Bill of Sale in respect thereof.
2.2 Adjustments
If at any time, the Purchaser, the Servicing Agent or the Seller
determines that on a Closing Date in respect of any Purchase the aggregate
Net Book Value of the Purchased Assets was less than the sum of the
Prepayment Amount and the portion of the Deferred Purchase Price applicable
to such Purchased Assets, the Seller shall on the second Business Day
following the date of such determination pay as a refund of a portion of
the Prepayment Amount to the Collector for deposit to the relevant
Purchaser's Account for the benefit of the Purchaser the amount of the
deficiency. To the extent that the aggregate Net Book Value of the
Purchased Assets on a Closing Date was more than the sum of the Prepayment
Amount and the portion of the Deferred Purchase Price applicable to such
Purchased Assets, the Purchaser agrees that it will make such adjustments
as are necessary to account for such excess through an increase in the
Deferred Purchase Price and the portion thereof applicable to such
Purchased Assets.
2.3 Liquidation Procedures
(1) Subject to the next following sentence, from the initial Cut-Off Date
in respect of each Transaction, and on each day thereafter, the Collector
shall hold, for the account of the Purchaser, the Collections and Net
Proceeds received on each day. If the Seller is the Collector, (i) on the
Business Day immediately following the date on which the long term debt
rating of Chrysler Financial by Moody's falls below Baa3 (or its then
equivalent), the Purchaser or, at the direction of the Purchaser, the
Collector shall establish the General Account, and (ii) until such time as
Chrysler Financial's rating is increased by Moody's to at least Baa3 (or
its then equivalent), the Collector shall deposit to the General Account
within two Business Days of receipt (or such other period as may be agreed
upon by the Purchaser) all Collections and Net Proceeds received by the
Collector in respect of each Settlement Period less an amount equal to the
sum of the amounts set forth in Sections 2.3(3)(f), (g) and (h), which
amount shall forthwith be paid to the Seller, provided that, on the
Settlement Date following the Settlement Period in which the amount to be
paid to the Seller in accordance with the foregoing exceeds the amount
otherwise required to be transferred to the Purchaser's Account in such
Settlement Period in accordance with Sections 2.3(3)(a) to (d), inclusive,
the Collector shall be entitled to withdraw the amount of such excess from
the available balance in the General Account which is not allocable to Pay
Aheads. On the Final Collection Date, in addition to the releases
contemplated by Section 2.4(2), the Collector (if the Seller is the
Collector) shall transfer any remaining balance in the General Account to
the Purchaser's Account to be distributed in accordance with Sections
2.3(4) and 2.3(5).
(2) On the last day of each Settlement Period, the Collector is hereby
authorized and directed to transfer from the Collections and Net Proceeds
received in the Settlement Period then just completed to any other account
of the Purchaser an amount equal to the Purchase Discount for the
Settlement Period ending on such date and any portion of the Purchase
Discount calculated with respect to any prior Settlement Period not so
transferred on the last day of any prior Settlement Period in accordance
with the terms hereof, provided that where the sum of the Collections and
Net Proceeds received in the Settlement Period then just completed is less
than the Purchase Discount calculated with respect to such Settlement
Period, the Seller hereby irrevocably directs that, as a refund of a
portion of the Deferred Purchase Price, an amount equal to the lesser of:
(a) the amount of such shortfall; and
(b) the available balance in the Deferred Purchase Account,
shall be transferred from the Deferred Purchase Account to any other
account of the Purchaser designated by the Purchaser.
(3) On each Settlement Date, the Collector is hereby authorized and
directed by the Purchaser to cause to be transferred to the Purchaser's
Account the amount, if any, by which the sum of:
(a) the amount of the Collections received with respect to the Loan
Receivables due and payable in connection with the Related
Secured Loan Rights in the immediately preceding Settlement
Period (including, without limitation, any deemed receipt of
Collections pursuant to Section 2.7) and any other Collections
received with respect to the immediately preceding Settlement
Period or any prior Settlement Period;
(b) any Net Proceeds received by the Collector relating to
dispositions of Related Equipment in the immediately preceding
Settlement Period;
(c) any amounts payable to the Purchaser pursuant to Sections 2.2,
2.9, 2.11, 7.2, 9.1, 10.7, 10.8 and 10.9 since the last
Settlement Date or, with respect to the first Settlement Date,
since the first Closing Date; and
(d) any amount received by the Collector since the last Settlement
Date or, with respect to the first Settlement Date, since the
first Closing Date in payment of any other amount payable
hereunder,
exceeds the sum of:
(e) the amount of the Purchase Discount transferred to any other
account of the Purchaser on the last day of the immediately
preceding Settlement Period pursuant to Section 2.3(2);
(f) any Billings which relate to any Defaulted Loan which were
previously deposited by the Collector to the Purchaser's Account
and remain unpaid by the applicable Obligor (to the extent such
unpaid amounts did not arise in connection with a deemed
Collection pursuant to Section 2.7);
(g) any amount collected by the Collector with respect to a
previously unpaid amount billed to the applicable Obligor as part
of any Billings which the Seller has already remitted to the
Purchaser's Account in respect of a previous Settlement Period as
permitted pursuant to the proviso below; and
(h) any amount in respect of any asserted set-off, reduction or
cancellation by the Obligor received by the Collector from the
Seller or deposited by the Seller to the Purchaser's Account in
accordance with Section 2.7 for which the Obligor has been found,
during the immediately preceding Settlement Period, to be liable,
provided that the Seller shall have the right (but not the obligation) to
deposit to the Purchaser's Account, on any Settlement Date, the amount, if
any by which (i) the aggregate of all Billings for the immediately
preceding Settlement Period, exceeds (ii) the sum of (x) Collections
received with respect to Loan Receivables owing in connection with the
Related Secured Loan Rights for the immediately preceding Settlement
Period, and (y) Net Proceeds received in such immediately preceding
Settlement Period. For greater certainty, in no event shall the Collector
transfer amounts into the Purchaser's Account more than once in respect of
the same item of Collections or be permitted to deduct more than once
amounts in respect of any items of set-off referred to above.
(4) Thereafter from the amounts available in the Purchaser's Account
(including any interest received on amounts held therein) on each
Settlement Date following the deposits thereto contemplated in Section
2.3(3), the Purchaser shall, in the following order of priority:
(a) to the extent that the Seller has deposited any applicable amount
to the Purchaser's Account in accordance with Sections 9.1, 9.2
and 10.7, pay such amount to the applicable party;
(b) pay any costs, fees, expenses or damages or other amounts
incurred by the Purchaser as a result of a default by the Seller
or Chrysler Financial under any Hedging Agreement entered into in
respect of the Transaction;
(c) pay the amount of any Collector Fee then payable;
(d) transfer to any other account of the Purchaser (i) on each
Settlement Date prior to the second Settlement Date after the
occurrence of a Lock-Up Event, determined in accordance with
Section 1.7 (or prior to the Settlement Date on which the Lock-Up
Event occurred if the Lock-Up Event occurred as a result of the
inability of the Purchaser to make the transfers required by
Section 2.3(2) or this subsection 2.3(4)), an amount equal to the
quotient obtained by dividing (a) the amount by which (I) the Net
Book Value of the Purchased Assets (other than Purchased Assets
that are Defaulted Loans) on the first day of the immediately
preceding Settlement Period exceeds (II) the Net Book Value of
the Purchased Assets (other than Purchased Assets that are
Defaulted Loans) on the last day of the immediately preceding
Settlement Period, by (b) 1 plus the Reserve Rate and (ii) on the
second Settlement Date after the occurrence of a Lock-Up Event
(or on the Settlement Date on which the Lock-Up Event occurred if
the Lock-Up Event occurred as a result of the inability of the
Purchaser to make the transfers required by Sections 2.3(2) or
2.3(4)(d)(i)) and on each Settlement Date thereafter, an amount
equal to the lesser of the Program Amount and the remaining
balance in the Purchaser's Account and, in each case, the Program
Amount shall be reduced by the amount so transferred; and
(e) repurchase at their Net Book Value or Seller Receivable Value as
of the date of purchase or assignment pursuant to Section 10.5
plus accrued interest at the Prime Rate less any Collections or
Net Proceeds received by the applicable subsequent purchaser,
Related Secured Loan Rights and Seller Receivables transferred by
the Purchaser in accordance with Section 10.5(2),
provided that where the available balance in the Purchaser's Account on any
Settlement Date is less than the sum of the amounts referred to in (a)
through (d) above, the Seller hereby irrevocably directs that, as a refund
of a portion of the Deferred Purchase Price, an amount equal to the lesser
of:
(x) the amount of such shortfall;
(y) the available balance in the Deferred Purchase Account; and
(z) an amount equal to the sum of the amounts set forth in Sections
2.3(4)(a), (b) and (c) and the amount by which Losses exceed
Excess Servicing in respect of such Settlement Period,
shall be transferred by the Purchaser from the Deferred Purchase Account to
the Purchaser's Account and shall be distributed in accordance with this
Section 2.3(4).
(5) Any amounts available in the Purchaser's Account after giving effect
to Section 2.3(4) shall be applied by the Purchaser on such Settlement Date
in the following priority:
(a) to pay all expenses incurred by the Collector on behalf of the
Purchaser related to the enforcement of the Purchaser's rights in
respect of the Purchased Assets and the Related Equipment or
advice with respect thereto;
(b) to pay the amount of any Adverse Claim upon the Related Equipment
or the interest of the Purchaser in the Related Secured Loan
Rights except where such Adverse Claim has been granted by the
Purchaser; and
(c) to transfer to any other account of the Purchaser an amount equal
to the expenses incurred by the Purchaser or by the Servicing
Agent on behalf of the Purchaser;
provided that if the amount available in accordance with this Section
2.3(5) is less than the sum of the amounts referred to in (a) through (c)
above, the Seller hereby irrevocably directs that, as a refund of a portion
of the Deferred Purchase Price, an amount equal to the lesser of:
(d) the amount of such shortfall; and
(e) the then available balance in the Deferred Purchase Account,
shall be transferred by the Purchaser from the Deferred Purchase Account to
the Purchaser's Account and shall be distributed in accordance with this
Section 2.3(5).
(6) Any amounts then remaining in the Purchaser's Account on each
Settlement Date shall be paid to the Seller by transfer to the Deferred
Purchase Account and allocated in accordance with Section 2.4.
(7) For greater certainty, the foregoing liquidation procedures set forth
in this Section 2.3 shall be complied with separately in respect of each
Transaction.
2.4 Deferred Purchase Account
(1) The Seller hereby irrevocably directs that on each Settlement Date,
the then available balance in the Deferred Purchase Account (including
interest received on amounts held therein), after making the transfers and
adjustments required by Sections 2.3(2), 2.3(4), 2.3(5) and 2.3(6), shall
be held in trust by the Purchaser for the benefit of the Seller, and shall
be applied by the Purchaser in the following priority:
(a) at the Purchaser's option, either deposit to any account of the
Purchaser (which deposit shall be applied as a permanent
reduction of the Program Amount and as a refund of a portion of
the Deferred Purchase Price equal to the amount of such deposit)
or invest in Permitted Investments, in either case in an amount
sufficient to make the sum of the Net Book Value of the Purchased
Assets (other than Purchased Assets that are Defaulted Loans) and
the principal amount of, and accrued interest on, Permitted
Investments, if any, as at such date equal to the sum of the
Program Amount and the Required Reserve as at such date, provided
that such Permitted Investments, if any, shall be liquidated
where not required with respect to any subsequent Settlement
Period and applied in the manner contemplated by this Section
2.4;
(b) to ensure that there is held in the Deferred Purchase Account an
aggregate amount equal to the Required Deferred Amount, except
that on the second Settlement Date following the occurrence of a
Lock-Up Event as determined in accordance with Section 1.7 (or on
the Settlement Date on which the Lock-Up Event occurred, if the
Lock-Up Event resulted from the inability of the Purchaser to
make the transfers required by Section 2.3(2) and 2.3(4)(d)(i)),
an amount equal to the lesser of (i) the amount set forth in
Section 2.3(4)(z), less any amount paid pursuant to Section
2.4(1)(a) on such Settlement Date, and (ii) the then available
balance in the Deferred Purchase Account, if any, and amounts
otherwise transferable to the Deferred Purchase Account in
accordance with the terms hereof shall be paid to the Purchaser
by transfer to any other account of the Purchaser as a refund of
a portion of the Deferred Purchase Price and in reduction of the
Program Amount;
(c) to make any payment due from the Seller to the Purchaser pursuant
to Section 10.8 hereof;
(d) to make any payment otherwise due and unpaid from the Seller
hereunder; and
(e) to release to the Seller any amount then available in the
Deferred Purchase Account after giving effect to the applications
described in (a) through (d) above.
(2) On the Final Collection Date, any balance remaining in the Deferred
Purchase Account shall be released by the Purchaser to the Seller.
(3) For greater certainty, the foregoing provisions in this Section 2.4
shall apply separately in respect of each Transaction.
2.5 Purchaser's Capital
(1) The Purchaser shall finance each Prepayment Amount by incurring
Purchaser's Indebtedness to raise capital. Capital shall, in the ordinary
course, be raised through either the issuance of Notes (accompanied by
Hedging Agreements where appropriate) or borrowings under a liquidity
facility.
(2) Prior to 12:00 noon on the last day of each Settlement Period, the
Seller shall be notified in writing of the Discount Rate for each
Transaction for the next following Settlement Period. Such notified
Discount Rate shall be equal to the sum of (i) the Purchaser's estimate of
the weighted average capital cost (which capital cost shall, for greater
certainty, take into account payments or receipts from Hedging Agreements
entered into in respect of the Transaction) for such Settlement Period,
together with any adjustments determined by the Purchaser to be necessary
by reason of the difference between (x) the actual weighted average capital
cost of the Purchaser for the immediately preceding Settlement Period, and
(y) the estimated weighted average capital cost of the Purchaser for such
immediately preceding Settlement Period and (ii) the percentage specified
in the relevant Terms Schedule or the Related Terms Schedules, as the case
may be, as the "Program Fee".
(3) The cost of borrowings under the liquidity facility shall be equal to
the 30-day bankers' acceptance rate quoted from time to time by The
Toronto-Dominion Bank plus 0.50%.
(4) The Purchaser shall provide the Seller with information with respect
to the Purchaser's Indebtedness as such information is available in hard
copy or that may be produced from available databases with existing
software of the Purchaser as the Seller may reasonably request.
2.6 Clean-Up Repurchase
If on any Settlement Date, after giving effect to the liquidation
procedures in respect of any Transaction described in Sections 2.3 and 2.4
on such date, the Program Amount is less than or equal to 10% of the
Aggregate Prepayment Amount, the Seller shall have the right, at its option
exercisable upon five Business Days' prior notice to the Purchaser through
the Servicing Agent, to repurchase the remaining Purchased Assets which are
the subject of such Transaction from the Purchaser for a price equal to the
Program Amount on such Settlement Date, payable to the Servicing Agent on
such Settlement Date for the account of the Purchaser. Upon any such
repurchase, the Purchaser shall reassign to the Seller without recourse,
representation or warranty all of such remaining Purchased Assets. The
Seller hereby agrees to pay, and to indemnify and hold harmless the
Servicing Agent and the Purchaser from all losses, costs and expenses
incurred in connection with or arising from such clean-up repurchase. The
Purchaser shall pay to the Seller any income received by it in connection
with or arising from such clean-up repurchase in excess of the costs and
expenses described in the preceding sentence.
2.7 Deemed Collections
(1) If on any day from a Closing Date to the relevant Final Collection
Date, any Loan Receivable forming part of any Related Secured Loan Right is
either:
(a) reduced or cancelled as a result of any breach or amendment by
the Seller of the terms of the applicable Secured Loan;
(b) reduced or cancelled as a result of a set-off in respect of any
claim by the applicable Obligor against the Seller (whether such
claim arises out of the same or a related transaction or an
unrelated transaction); or
(c) extended beyond the original contractual maturity date of the
applicable Secured Loan pursuant to the exercise of the
discretion permitted to the Seller pursuant to Section 6.2(b) and
(c);
the Seller shall, for all purposes hereof, be conclusively deemed to have
received for the Purchaser's account on such day a Collection of such Loan
Receivable in the amount of such reduction or extension or the Principal
balance of the Loan Receivable in the case of a cancellation and shall, on
or before the second Settlement Date following the Settlement Period in
which such reduction, cancellation or extension occurred, remit such amount
to the Collector for deposit to the relevant Purchaser's Account.
(2) If on any day prior to the Final Collection Date, the representation
and warranty with respect to any Purchased Asset in Section 5.1(h)(i) as at
the relevant Closing Date was not true, the Seller shall pay to the
Purchaser by deposit to the relevant Purchaser's Account as a refund of a
portion of the Deferred Purchase Price (or the relevant Prepayment Amount
to the extent that such deposit exceeds the aggregate Deferred Purchase
Price paid by the Purchaser as of such date) an amount equal to the Net
Book Value of the Purchased Asset on such day and the Purchaser shall
assign and transfer to the Seller and the Seller shall accept the transfer
of such Purchased Asset. In consideration therefor, the Purchaser shall
waive any rights it may have against the Seller or Chrysler Financial as a
consequence of such representation and warranty not being true.
(3) The parties acknowledge that the deemed receipt of a Collection of all
or part of a Loan Receivable relating to a Related Secured Loan Right
pursuant to this Section 2.7 shall not in any way impair or otherwise
affect any contractual or other right of the Seller or the Purchaser as
against the Obligor under the related Secured Loan or any other Person
(other than the Seller or the Purchaser), and no such Obligor or other
Person shall derive any benefit by virtue of such deemed receipt.
2.8 Reporting
(1) On or before the seventh Business Day of each month, the Collector
shall, with the reasonable cooperation of the Seller if the Seller is not
the Collector, prepare and deliver to the Purchaser, separately in respect
of each Transaction:
(a) a Portfolio Report relating to the Loan Receivables in respect of
the Related Secured Loan Rights for the most recently completed
Settlement Period as of the close of business of the Collector on
the last Business Day of such Settlement Period; and
(b) if requested by the Servicing Agent, a listing by Obligor of the
Net Book Value of the Purchased Assets as of the last Business
Day of such Settlement Period.
(2) The Seller shall provide the Purchaser with such other Records that
are available in hard copy or that may be produced from available databases
with existing software of the Seller as the Purchaser may reasonably
request.
2.9 Payments and Computations
(1) If Collections or Net Proceeds are received by the Seller and the
Seller is not the Collector, the Seller shall remit them to the Collector
on the second Business Day following the date on which such Collections or
Net Proceeds are received. Where such amounts are received in the form of
a cheque, the cheque shall be endorsed in favour of the Collector and
remitted to the Collector directly without prior deposit to any account of
the Seller. If any amounts which are not Collections or Net Proceeds are
received by the Collector and the Collector is not the Seller, the
Collector shall remit such amounts to the Seller on the second Business Day
following the date on which such amounts are received.
(2) All amounts to be paid or deposited by the Seller or the Collector to
the Purchaser will be paid or deposited no later than 11:00 a.m. (Toronto
time) on the day when due in accordance with the terms hereof in same day
funds to the applicable account as required hereunder.
(3) The Seller shall pay to the Purchaser its pro rata share of interest
(both before and after default and judgment, with interest on overdue
interest at the same rate) on all amounts not paid or deposited when due
hereunder (whether owing by the Seller on its own behalf or in its capacity
as Collector) at a rate equal to the Prime Rate plus 1% per annum, payable
on demand. Such interest shall be paid by the Seller to the Collector for
deposit to the relevant Purchaser's Account on the next Settlement Date.
The yearly rate of interest for any day to which the Prime Rate is
applicable is the rate so determined multiplied by the actual number of
days in that year and divided by 365 or 366, as the case may be. Interest
rate charges will be effective for interest computation periods from the
date on which the Prime Rate changes and the Seller and the Purchaser will
be bound by any and all changes of the Prime Rate with or without notice
thereof.
(4) The Seller shall, on its own behalf or in its capacity as Collector,
make all payments required to be made by it hereunder without deduction
(other than for applicable taxes or as otherwise authorized hereunder),
regardless of any defence or counterclaim (whether based on any law, rule
or policy now or hereafter issued or enacted by an government authority or
regulatory body), except as contemplated hereunder.
2.10 Further Action to Protect Purchased Assets
The Seller shall, from time to time at its expense, promptly execute
and deliver all instruments and documents and take all action that the
Purchaser may reasonably request in order to perfect, protect or more fully
evidence the Purchaser's ownership of the Purchased Assets or to enable the
Purchaser to exercise or enforce any of its rights hereunder or thereunder.
2.11 Ineligible Secured Loans
If, on any day after a Closing Date, the Purchaser, the Servicing
Agent or the Seller determines that, on the relevant Cut-Off Date, any
Secured Loan forming part of the Purchased Assets was not an Eligible
Secured Loan (an "Ineligible Secured Loan"), the Purchaser, the Servicing
Agent or the Seller, as the case may be, shall forthwith notify the other
parties of such ineligibility and on the last day of the Settlement Period
following the Settlement Period in which such notice is received or, where
such determination is made following the occurrence of a Significant Event
or Lock-Up Event, on the second Business Day following the date of receipt
of such notice, the Seller shall pay to the Collector for deposit to the
relevant Purchaser's Account as a refund of a portion of the Deferred
Purchase Price an amount equal to the then Net Book Value of such
Ineligible Secured Loan such that the Purchaser shall be kept whole and not
incur any expense or loss as a result of the purchase of such Ineligible
Secured Loan. The Purchaser shall accept such payment as a refund of a
portion of the Deferred Purchase Price applicable to such Ineligible
Secured Loan. Upon such payment being made, the Purchaser shall assign and
transfer to the Seller and the Seller shall accept the assignment and
transfer of such Purchased Asset. In consideration therefor, the Purchaser
shall waive any rights it may have against the Seller or Chrysler Financial
as a consequence of such Secured Loan being an Ineligible Secured Loan.
2.12 Retransfer of Purchased Assets
Upon any retransfer by the Purchaser to the Seller of any Purchased
Asset in accordance with Sections 2.6, 2.7(2) and 2.11, the Seller and the
Purchaser shall execute and deliver such further agreements, instruments or
other assurances as may be reasonably necessary or desirable to evidence
and give full effect to such retransfers.
2.13 Permitted Investments
Subject to Section 2.4(1)(a), the balance available in each Deferred
Purchase Account shall be invested in Permitted Investments by the
Purchaser. If any General Account shall be established, the balance
available in such General Account shall be invested in Permitted
Investments by the Collector as may be directed by the Purchaser. The
Purchaser shall maintain and direct the Collector to maintain a portion of
the aggregate balances in such accounts equal to the portion of the
Purchaser's Indebtedness due and payable on the next following Settlement
Date in Permitted Investments which mature no later than such Settlement
Date. The Purchaser shall, upon the request of the Seller, advise the
Seller of the Permitted Investments in which such balances are invested.
2.14 Allocation of Collections
Any amounts received by the Collector from an Obligor not specifically
allocated by the Obligor to any particular amount owing by the Obligor
shall be applied pro rata to Loan Receivables and other amounts owing by
the Obligor whether or not such Loan Receivables and other amounts are
included in the Related Secured Loan Rights applicable to the Purchased
Assets, provided that, if the Obligor shall specifically allocate any
subsequent amounts to Loan Receivables or other amounts already paid
pursuant to this Section 2.14 or if for any other reason the Collector
determines that amounts received should have been allocated otherwise than
in accordance with the foregoing, the Collector shall make such adjustments
as may be necessary or desirable to ensure that payments are not made more
than once for the same Loan Receivable.
ARTICLE 3
COLLECTION
3.1 Designation of the Collector
The Related Secured Loan Rights will be administered, and the related
Loan Receivables collected, by the Collector in trust for the Purchaser.
In respect of each Transaction, the Seller is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Collector
pursuant to the terms hereof and the Seller shall continue to perform the
duties and obligations of the Collector, and may not resign from such
position, unless and until the Purchaser designates a new Collector in
accordance with this Section 3.1. The Purchaser may, upon notice to the
Seller at any time after the occurrence of a Significant Event in respect
of a Transaction which is continuing, designate as the Collector in respect
of such Transaction any Person with a permanent establishment in Canada to
succeed the Seller or any successor Collector, on the condition in each
case that any such Person so designated shall agree to perform the duties
and obligations of the Collector pursuant to the terms hereof and agree to
be bound by the terms of this Agreement. The Collector, with the
Purchaser's prior written consent, may subcontract with any other Person
for the administration of the Related Secured Loan Rights and the
collecting of the related Loan Receivables; provided, however, that the
Collector will remain liable for the performance of the duties and
obligations so subcontracted and all other duties and obligations of the
Collector pursuant to the terms hereof.
3.2 Duties of the Collector, etc.
(1) The Collector shall, unless the Purchaser directs otherwise at any
time when the Collector is not the Seller, take or cause to be taken all
such actions as may be reasonably necessary or advisable from time to time
to collect the Loan Receivables forming part of the Related Secured Loan
Rights and dispose of the Related Equipment upon termination of or default
under the applicable Secured Loans, including the repossession and sale of
the Related Equipment in accordance with the terms of the relevant Secured
Loans, the Credit and Collection Policy and applicable law provided,
however, that where the Collector is not the Seller in respect of a
Transaction, the Purchaser and the Collector may adopt a policy which is a
modification of the Credit and Collection Policy, such modified policy to
reflect the circumstances under which Collection of the Loan Receivables
will take place and the resources available to the Collector, provided that
such modified policy does not materially impair the collectability of the
Loan Receivables. For such purpose, the Collector is authorized on behalf
of the Purchaser in respect of each Transaction to enforce the Purchaser's
rights and interests in and under the Related Secured Loan Rights, and the
Purchaser hereby grants to the Collector a power of attorney to commence
and prosecute legal action and other available remedies against the
relevant Obligor to enforce the Related Secured Loan Rights, such power to
be revoked in respect of any Transaction only upon replacement of the
Collector in accordance with the terms hereof, provided that the Collector
(if the Collector is not the Seller) shall obtain the prior written consent
of the Purchaser before commencing any legal action to enforce any Related
Secured Loan Rights and, where the Seller is not the Collector, such legal
action shall be commenced and maintained in the name of the Purchaser.
(2) Forthwith upon the Purchaser's request, the Seller, if not the
Collector in respect of any Transaction, shall deliver complete copies of
all Purchased Assets which are the subject of such Transaction (including
any amendments thereto) to the Purchaser, or as the Purchaser shall direct,
for the Purchaser's sole use in facilitating the collection of the
applicable Loan Receivables.
(3) The Collector shall maintain and implement prudent and reasonable
administrative and operating procedures (including an ability to recreate
records evidencing the Related Secured Loan Rights) and keep and maintain
all books, records, documents and other information reasonably necessary or
advisable for the collection of all Loan Receivables forming part of the
Related Secured Loan Rights (including records adequate to permit all
collections of and reductions or adjustments to such Loan Receivables) all
in accordance with the Credit and Collection Policy or a modification
hereof adopted pursuant to Section 3.2(1) in respect of a Transaction where
the Collector is not the Seller.
(4) To the extent the Records consist in whole or in part of computer
programs which are leased by the Seller, the Seller shall, upon the demand
of the Purchaser, use its best efforts to arrange for the license or
sublicense of such programs to the Purchaser to the extent permitted by the
terms of such license for the sole use of the Purchaser or its agent in
facilitating the collection of the applicable Loan Receivables.
(5) The Collector shall, with respect to any amount not paid by the
Collector when required to be paid hereunder, pay interest to the Purchaser
(before and after default and judgment, with interest on overdue interest
at the same rate) at a rate per annum, calculated daily, equal to the Prime
Rate plus 1%, payable on demand, provided that nothing in this Section
3.2(5) shall be construed to require the payment of interest on amounts for
which interest is paid pursuant to Section 2.9(3) above. Such interest
will be for the account of the Purchaser and shall be paid by the Collector
free and clear of, and without deduction for, any taxes of any kind
whatsoever to the relevant Purchaser's Account to be applied in accordance
with Sections 2.3 and 2.4 on the next Settlement Date.
(6) The Collector's appointment as agent of the Purchaser in respect of
each Transaction for the purposes set out herein shall terminate on the
relevant Final Collection Date.
(7) At the request of the Purchaser, the Collector shall mark its computer
records in an appropriate manner to clearly designate the Secured Loans
forming part of the Purchased Assets to be the property of the Purchaser.
(8) For so long as the Seller is the Collector in respect of any
Transaction, it may agree with any Obligor of Purchased Assets which are
the subject of such Transaction as agent for the Purchaser to terminate the
applicable Secured Loan prior to its maturity, provided that the
consideration payable by the Obligor to the Collector as agent for the
Purchaser with respect to such agreement to terminate shall not be less
than the then applicable Net Book Value of such Purchased Asset.
3.3 Collector Fee
If the Collector is not the Seller in respect of any Transaction, the
Collector shall be paid, as a fee in respect of that Transaction (the
"Collector Fee"), such commercially reasonable amount as may be negotiated
between the Purchaser and such Collector from time to time. Such fee shall
be payable in arrears on each Settlement Date.
ARTICLE 4
CONDITIONS PRECEDENT
4.1 Purchaser's Conditions Precedent to Each Purchase
(1) Prior to the first Purchase hereunder, the Purchaser shall have
received, unless waived by it in writing, the following, in form and
substance satisfactory to the Purchaser:
(a) executed copies of this Agreement and the other Related
Documents;
(b) certificates of status, good standing or compliance, as
appropriate, with respect to the Seller and Chrysler Financial
issued by their respective jurisdictions of incorporation and by
each province in which the Seller carries on business and in
which the Secured Loans forming part of the Purchased Assets were
originated;
(c) a certificate from each of the Seller and Chrysler Financial
relating to their respective constating documents and certified
copies of all necessary corporate authorizations of the Seller
and Chrysler Financial to authorize the execution, delivery and
performance of this Agreement and the Terms Schedule relating to
such first Purchase, of the Related Documents to which it is a
party and of the transactions contemplated hereby and thereby;
(d) certificates of the Seller and Chrysler Financial as to the names
and true signatures of the officers authorized to sign this
Agreement and the Related Documents on its behalf, on which
certificates the Purchaser shall be entitled to conclusively rely
in respect of all Purchases until such time as the Purchaser
receives from the Seller or Chrysler Financial, as the case may
be, a replacement certificate meeting the requirements of this
Section 4.1(1)(d);
(e) a certificate of the Seller to the effect that (i) the
representations and warranties set out in Section 5.1 are true
and correct, and (ii) no event has occurred and is continuing, or
would result from the Purchase, which constitutes a Significant
Event;
(f) a certificate of Chrysler Financial to the effect that (i) the
representations and warranties set out in Section 5.2 are true
and correct, and (ii) no event has occurred and is continuing, or
would result from the Purchase, which constitutes a Significant
Event;
(g) executed copies of the relevant Bill of Sale;
(h) certified copies of any instruments (other than the instrument
giving rise to the Secured Loans or referred to therein) by which
the Seller took title to the Purchased Assets;
(i) an Advance Ruling Certificate under the Competition Act (Canada)
in respect of such Purchase contemplated herein, if required;
(j) an executed copy of the confirmation confirming any Hedging
Agreement entered into with respect to the Purchase, together
with any fee payable by the Purchaser or the Seller or to
Chrysler Financial on the relevant Closing Date in connection
with such Hedging Agreement;
(k) favourable opinions of counsel for the Seller and the General
Counsel for Chrysler Financial in substantially the form of
Exhibits E-1 and E-2, respectively;
(l) a financial advisory fee in the amount set forth in the Terms
Schedule, inclusive of applicable goods and services taxes,
payable by the Seller to the Servicing Agent in connection with
the Purchase; and
(m) a structuring fee in the amount set forth in the Terms Schedule
payable by the Seller to the Servicing Agent in connection with
the Purchase.
(2) Prior to each Purchase subsequent to the first Purchase hereunder, the
Purchaser shall have received, unless waived by it in writing, the
following, in form and substance satisfactory to the Purchaser:
(a) executed copies of the Terms Schedule in respect of such Purchase
and the other Related Documents;
(b) certificates of status, good standing or compliance, as
appropriate, with respect to the Seller and Chrysler Financial
issued by their respective jurisdictions of incorporation and by
each province in which the Seller carries on business and in
which the Secured Loans forming part of the Purchased Assets were
originated;
(c) a certificate from each of the Seller and Chrysler Financial
relating to any changes in their respective constating documents
since the latest certificate delivered pursuant to Section
4.1(1)(c) or this Section 4.1(2)(c), and certified copies of all
necessary corporate authorizations of the Seller and Chrysler
Financial to authorize the execution, delivery and performance of
the Terms Schedule relating to such Purchase of the Related
Documents to which it is a party and of the transactions
contemplated hereby and thereby; and
(d) the documents referred to in Section 4.1(1)(e), (f), (g), (h)
(with respect only to instruments created or amended since the
immediately preceding Purchase), (i), (j), (k), (l) and (m), each
with respect to such Purchase.
4.2 Seller's Conditions Precedent
(1) Prior to the first Purchase, the Seller shall have received, unless
waived by it in writing, the following, in form and substance satisfactory
to the Seller:
(a) payment of the Prepayment Amount;
(b) executed copies of this Agreement and other Related Documents;
(c) a certificate of the Purchaser to the effect that the
representations and warranties set out in Section 5.3 hereof are
true and correct;
(d) an executed copy of the confirmation confirming any Hedging
Agreement entered into with respect to the Purchase;
(e) a certificate of the Purchaser relating to the amended and
restated declaration of trust establishing the Purchaser dated as
of June 17, 1994, the Servicing Agreement between the Purchaser
and the Servicing Agent, and the Amended and Restated Trust
Indenture between the Purchaser and The R-M Trust Company, both
dated as of November 15, 1994, as further amended; and
(f) the favourable opinion of counsel to the Purchaser as to the due
execution and binding effect of this Agreement and all Related
Documents to which the Purchaser is a party in the form of
Exhibit G.
(2) Prior to each Purchase subsequent to the first Purchase hereunder, the
Seller shall have received, unless waived by it in writing, the following,
in form and substance satisfactory to the Seller:
(a) payment of the Prepayment Amount;
(b) executed copies of the Terms Schedule in respect of such Purchase
and the other Related Documents; and
(c) the documents referred to in Section 4.2(1)(c), (d), (e) and (f)
with respect to such Purchase.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of the Seller
The Seller hereby represents and warrants to the Purchaser with
respect to each Purchase on a continuous basis (unless otherwise indicated
in the applicable representation and warranty to be made as at a particular
point in time) as follows:
(a) it is a corporation validly existing under the laws of its
jurisdiction of incorporation and is duly qualified to do
business as an extra-provincial corporation in every jurisdiction
where failure to be so qualified would adversely affect the
collectability of a material portion of the Related Secured Loan
Rights;
(b) as at the relevant Closing Date, the execution, delivery and
performance by it of this Agreement, the Related Documents to be
delivered by it hereunder and the transactions contemplated
hereby and thereby are within its corporate powers, have been
duly authorized by all necessary corporate action, and do not
contravene:
(i) its constating documents or by-laws;
(ii) any law, rule or regulation applicable to it;
(iii) any indenture, loan or credit agreement, lease under
which it is the lessee, mortgage, security agreement,
bond, note or other agreement or instrument binding
upon it or affecting its property; or
(iv) any order, writ, judgment, award, injunction or decree
binding on it or affecting its property;
and will not result in or require the creation of any security
interest upon or with respect to any of its properties other than
as contemplated by this Agreement;
(c) as at the relevant Closing Date, this Agreement and all Related
Documents delivered by it hereunder have been duly executed and
delivered by or on behalf of it;
(d) as at the relevant Closing Date or on the date of delivery of the
applicable Related Documents, no authorization, approval or other
action by and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution,
delivery and performance by it of this Agreement or the Related
Documents to which it is a party, except for (i) such notices or
filings that are required to record or perfect the transfer
constituted by the Purchase, (ii) any action or filings required
pursuant to any applicable bills of sale legislation, and (iii)
such notices, filings or rulings required pursuant to the
Competition Act (Canada);
(e) this Agreement and the Related Documents to which it is a party
are its legal, valid and binding obligations enforceable against
it in accordance with their terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(f) as at the relevant Closing Date, there are no actions, suits or
proceedings of which it has not advised the Purchaser in writing
against or affecting it or any of its property before any court,
governmental body or arbitrator (nor to its knowledge, any such
actions pending or threatened) which may materially adversely
affect its ability to perform its obligations hereunder or under
the Related Documents to which it is a party and it is not in
default with respect to any order of any court, governmental body
or arbitrator which material adversely affects its ability to
perform its obligations hereunder or thereunder;
(g) as at the relevant Closing Date, no material default has occurred
and is outstanding under any agreement or instrument referred to
in Section 5.1(b)(iii) which default would materially and
adversely affect the collectability of any Loan Receivables
forming part of the Related Secured Loan Rights, the
enforceability of any Related Secured Loan Rights or its ability
to perform its obligations hereunder or under the Related
Documents to which it is a party;
(h) as at the relevant Closing Date,
(i) it holds title to the Secured Loans forming part of the
Purchased Assets (other than Secured Loans paid in full from
the relevant Cut-Off Date to and including the relevant
Closing Date) free and clear of any Adverse Claim, and upon
the Purchase of the Purchased Assets hereunder, the
Purchaser shall hold title thereto free and clear of any
Adverse Claim, other than any Adverse Claim held by any
person claiming through or under the Purchaser; and
(ii) each Secured Loan forming part of the Purchased Assets
(other than Secured Loans paid in full from the relevant
Cut-Off Date to and including the relevant Closing Date) is
in full force and effect, unamended, except for any
amendments made in accordance with the Credit and Collection
Policy, and shall constitute, to the best of its knowledge,
a legal, valid and binding obligation of the parties thereto
enforceable in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law)
and to the application of Section 65.1(5) of the Bankruptcy
and Insolvency Act (Canada), and it shall not have given any
consents, approvals or waivers under or in respect of any
such Purchased Assets, except in accordance with the Credit
and Collection Policy;
(i) as at the relevant Closing Date, its chief executive office is
located at Suite 308, 390 Brant Street, Burlington, Ontario, L7R
2E9;
(j) as at the relevant Closing Date, it has places of business in the
Province of Quebec;
(k) no Portfolio Report, exhibit, financial statement, Record or
report furnished by the Collector hereunder or in connection
herewith is or shall be inaccurate in any material respect as of
the date it is or shall be dated or omits or shall omit to state
a material fact or any fact necessary to make the statements
contained therein not materially misleading;
(l) the Purchased Assets have been selected from the Seller's
portfolio of Secured Loans, subject only to the requirement that
the related Secured Loan be an Eligible Secured Loan, and all
information regarding each such Secured Loan and Related
Equipment made available to the Purchaser is true and correct in
all material respects;
(m) as of the relevant Cut-Off Date, the names listed on the Appendix
to the Terms Schedule are the names for notice for each Obligor
under the Purchased Assets recorded in the Records of the Seller;
(n) the aggregate Net Book Value of all Purchased Assets which are
the subject of the Transaction under which any one Person is the
applicable Obligor does not exceed the Concentration Limit;
(o) as of the relevant Cut-Off Date, the aggregate Net Book Value of
Purchased Assets secured by Related Equipment that are financed
at the Seller's used vehicle rates does not exceed the percentage
set forth in the relevant Terms Schedule as the "Used Vehicle
Rate Percentage" of the aggregate Net Book Value of the Purchased
Assets, which percentage in any event will not exceed 30%;
(p) the Seller does not maintain any policies of insurance with
respect to loss of, damage to or third party liability with
respect to Related Equipment; and
(q) the Seller is not a non-resident as defined under the Income Tax
Act (Canada).
5.2 Representations and Warranties of Chrysler Financial
Chrysler Financial hereby represents and warrants to the Purchaser
with respect to each Purchase on a continuous basis (unless otherwise
indicated in the applicable representation and warranty to be made as at a
particular point in time) as follows:
(a) it is a corporation validly existing under the laws of its
jurisdiction of incorporation;
(b) as at the relevant Closing Date, the execution, delivery and
performance by it of this Agreement and the Related Documents to
be delivered by it hereunder are within its corporate powers,
have been duly authorized by all necessary corporate action and
do not contravene:
(i) its articles of incorporation or by-laws;
(ii) any law, rule or regulation applicable to it;
(iii) any indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note or other
agreement or instrument binding upon it or affecting
its property; or
(iv) any order, writ, judgment, award, injunction or decree
binding on it or affecting its property;
(c) as at the relevant Closing Date, this Agreement and all Related
Documents delivered by it hereunder have been duly executed and
delivered by or on behalf of it;
(d) as at the relevant Closing Date or on the date of delivery of the
applicable Related Documents to which it is a party, no
authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by it of
this Agreement or the Related Documents to which it is a party;
(e) this Agreement is its legal, valid and binding obligation
enforceable against it in accordance with its terms subject to
applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject,
as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(f) as at the relevant Closing Date, no material default has occurred
and is outstanding under any agreement or instrument referred to
in Section 5.2(b)(iii) which default would materially and
adversely affect its ability to perform its obligations hereunder
or under the Related Documents to which it is a party; and
(g) as at the relevant Closing Date, there are no actions, suits or
proceedings of which it has not advised the Purchaser in writing
against or affecting it or any of its property before any court,
governmental body or arbitrator (nor to its knowledge, any such
actions pending or threatened) which may materially adversely
affect its ability to perform its obligations hereunder or under
the Related Documents to which it is a party and it is not in
default with respect to any order of any court, governmental body
or arbitrator which materially adversely affects its ability to
perform its obligations hereunder or thereunder.
5.3 Representations and Warranties of the Purchaser
The Purchaser hereby represents and warrants to the Seller with
respect to each Purchase on a continuous basis (unless otherwise indicated
in the applicable representation to be made as at a particular point in
time) as follows:
(a) it is a trust validly existing under the laws of the Province of
Alberta;
(b) as at the relevant Closing Date, the execution, delivery and
performance by it of this Agreement, the Related Documents to be
delivered by it hereunder and the transactions contemplated
hereby and thereby are within its purposes and powers, have been
authorized by all necessary action of its trustee and do not
contravene:
(i) its declaration of trust;
(ii) any law, rule or regulation applicable to it in any province
or territory of Canada;
(iii) any indenture, loan or credit agreement, lease under
which it is the lessee, mortgage, security agreement,
bond, note or other agreement or instrument binding
upon it or affecting its property; or
(iv) any order, writ, judgment, award, injunction or decree
binding on it or affecting its property;
(c) as at the relevant Closing Date, this Agreement and all Related
Documents delivered by it hereunder have been duly executed and
delivered by or on behalf of it;
(d) as at the relevant Closing Date or on the date of delivery of the
applicable Related Documents, no authorization, approval or other
action by and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution,
delivery and performance by it of this Agreement or the Related
Documents to be delivered by it hereunder, except (i) such
notices or filings required to perfect the transfer constituted
by the Purchase, and (ii) any actions or filings required
pursuant to any applicable bills of sale legislation;
(e) this Agreement and the Related Documents to which it is a party
are its legal, valid and binding obligations enforceable against
it in accordance with their terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(f) as at the relevant Closing Date, there are, to its knowledge, no
actions, suits or proceedings of which it has not advised the
Seller in writing, pending or threatened, against or affecting it
or any of its property before any court, governmental body or
arbitrator which may adversely affect its ability to perform its
obligations hereunder or under the Related Documents to which it
is a party and it is not in default with respect to any order of
any court, governmental body or arbitrator which materially
adversely affects its ability to perform its obligations
hereunder or thereunder; and
(g) it is not a non-resident as defined under the Income Tax Act (Canada).
ARTICLE 6
COVENANTS OF THE SELLER
6.1 Affirmative Covenants of the Seller
From the date hereof until the last Final Collection Date, the Seller
covenants with the Purchaser that it shall, unless the Purchaser otherwise
consents in writing:
(a) comply with all laws, rules, regulations and orders applicable to
it and all or any of its businesses, its properties and the
Related Secured Loan Rights, except where the failure to do so
would not materially adversely affect the Purchaser's interests
hereunder, the enforceability of the Related Secured Loan Rights
(including the collectability of the related Loan Receivables) or
its ability to perform its obligations hereunder or under the
Purchased Assets;
(b) preserve and maintain its corporate existence and qualify and
remain qualified as a foreign, extra-provincial or extra-
territorial corporation in each jurisdiction in which the failure
to do so would materially adversely affect the interests of the
Purchaser hereunder, the enforceability of the Related Secured
Loan Rights (including the collectability of the related Loan
Receivables) or its ability to perform its obligations hereunder
or under the Purchased Assets;
(c) at any time and from time to time during regular business hours,
permit the Purchaser, its agents or representatives upon five
Business Days' prior written notice to (i) examine and make
copies of all Records relating to the Related Secured Loan Rights
in its possession (or under its control), including the
applicable Secured Loans, and (ii) visit its branch offices for
the purpose of examining such Records and discussing matters
relating to the Related Secured Loan Rights and its performance
under the Purchased Assets or hereunder with any of its officers
or employees having knowledge of such matters;
(d) direct and require its auditors, at its own expense, to assist
the Purchaser's auditors to the extent and in such manner as is
reasonably required for the Purchaser's auditors to report on the
status of the Purchased Assets and the Related Secured Loan
Rights hereunder;
(e) fully perform in a timely manner and comply with all terms,
covenants and other provisions required to be performed and
observed by it under Purchased Assets;
(f) notify the Purchaser promptly following any change of its
corporate name or any change of its chief executive office;
(g) comply in all respects with the Credit and Collection Policy in
regard to each of the Purchased Assets and the related Loan
Receivables;
(h) furnish to the Purchaser:
(i) as soon as possible and in any event within five Business
Days after its chief operating officer or chief financial
officer becomes aware or ought to have become aware of the
occurrence of a Significant Event or of any event that with
the giving of notice or passage of time or both may become a
Significant Event, a statement of such officer setting forth
details as to such Significant Event and the action which it
has taken or is proposing to take with respect thereto; and
(ii) promptly, from time to time, such other documents, records,
information or reports with respect to the Related Secured
Loan Rights or the condition or operations, financial or
otherwise, of it as may be in existence in written form or,
if available in databases, may be produced with existing
software and which the Purchaser may from time to time
reasonably request;
(i) instruct all Obligors to remit all Collections in respect of any
Transaction to the address of the Collector (provided that so
long as the Seller shall remain the Collector in respect of such
Transaction, no special instruction need be given by the Seller
to any Obligor which currently is instructed to remit such
Collections to the Seller);
(j) if (i) the Seller obtains or is otherwise a loss payee or named
insured under, any policy of insurance with respect to damage or
third party liability claims relating to the Equipment, and (ii)
the long term debt rating of Chrysler Financial by Moody's falls
below Ba2 (or its then equivalent), obtain and maintain
equivalent coverage with respect to the Related Equipment under
which the Purchaser is named insured or loss payee, as the case
may be, and provide prompt notice to the Purchaser of the
availability of such insurance or the receipt of notice of
termination thereof or the deletion of the Purchaser as a named
insured or loss payee thereunder;
(k) make all payments payable by it to government agencies in
accordance with applicable law and others where a statutory lien
or deemed trust might arise having priority over the Purchaser's
interest in any Related Secured Loan Rights or Related Equipment;
(l) record the Purchases constituted hereby as sales of assets for
accounting purposes;
(m) upon the written request of the Purchaser, or immediately upon
the occurrence of a Significant Event in respect of a Transaction
and for so long as such Significant Event is continuing, advise
the Purchaser, in writing, of the name or address of any Obligor
with respect to the applicable Related Secured Loan Rights;
(n) make all renewal and other registrations which it is entitled to
make and which are necessary to maintain the Purchaser's interest
in the Related Equipment as against third parties; and
(o) take all steps necessary to obtain the discharge of any financing
statement, registration, recording, filing or other document
similar in effect relating to any Related Secured Loan Rights,
Collections related thereto or Related Equipment on file except
those in favour of the Purchaser in accordance herewith or
subordinate to the rights of the Purchaser thereunder.
6.2 Negative Covenants of the Seller
From the date hereof until the last Final Collection Date, the Seller
covenants with the Purchaser that it shall not, without the Purchaser's
written consent:
(a) except as otherwise provided or permitted herein, sell, assign
(by operation of law or otherwise) or otherwise dispose of, or
create any Adverse Claim upon or with respect to, any Purchased
Assets or any Related Equipment, including the related Loan
Receivables and Collections or any account to which any such
Collections are deposited, or assign any right to receive income
in respect of any thereof or do any other thing to derogate from
its grant hereunder or prejudice the rights of the Purchaser
hereunder or thereunder;
(b) make any change in the Credit and Collection Policy, which change
would materially impair the collectability of any Loan Receivable
forming part of the Purchased Assets;
(c) extend, amend or otherwise modify or waive any term or condition
of any of the Purchased Assets which modification or waiver would
materially impair the collectability of any Loan Receivable
forming part of the Purchased Assets;
(d) identify to any of its branch personnel the Purchased Assets as
having been purchased by the Purchaser or take any other action
not contemplated by this Agreement which would differentiate the
Purchased Assets from the other Secured Loans to which it is a
party; or
(e) permit to exist any financing statement, registration, recording,
filing or other publicly recorded document similar in effect
registered against or otherwise identifying its interest in any
Related Secured Loan Rights or Collections related thereto to be
on file except in favour of the Purchaser other than
registrations in favour of Persons who have expressly postponed
in favour of the Purchaser any claim they may have to the
Purchased Assets.
6.3 Covenants of Chrysler Financial
From the date hereof until the last Final Collection Date, Chrysler
Financial covenants with the Purchaser that it shall, unless the Purchaser
otherwise consents in writing:
(a) comply with all laws, rules, regulations and orders applicable to
it and all or any of its businesses and properties, except where
the failure to do so would not materially adversely affect the
Purchaser's interest hereunder or its ability to perform its
obligations hereunder;
(b) preserve and maintain its corporate existence, except in the case
of a merger or other action permitted under the Revolving Credit
Agreement dated as of May 23, 1994 between it and Chemical Bank,
as agent, and the several banks party thereto, as amended,
modified, supplemented or restated from time to time, and where
the continuing or surviving entity assumes Chrysler Financial's
obligations hereunder;
(c) furnish to the Purchaser, unless the Seller has previously
complied with Section 6.1(h)(i), as soon as possible and in any
event within five Business Days after an officer of Chrysler
Financial becomes aware or ought to have become aware of the
occurrence of each Significant Event and each event which, with
the giving of notice or lapse of time or both, would constitute a
Significant Event, a statement of an officer of Chrysler
Financial setting forth details as to such Significant Event or
event and the action which Chrysler Financial has taken or is
proposing to take with respect thereto;
(d) at any time following the occurrence of a Significant Event which
is continuing, ensure the due performance of all of the
obligations of the Seller (including those arising in its
capacity as Collector, if the Seller is at such time the
Collector) under this Agreement and any Related Document to which
it is a party and, in the event of any failure of the Seller to
perform such obligations, assume all of the liabilities of the
Seller (including those arising in its capacity as Collector, if
the Seller is at such time the Collector) hereunder and
thereunder;
(e) make all payments to be made by it in the performance of its
obligations hereunder without set-off or counterclaim and without
deduction or withholding for or on account of any present or
future taxes, levies, imposts, duties, charges, assessments or
fees of any nature (including any interest, penalties and
additions thereto) unless such deduction or withholding is
required by any applicable treaty, law, rule or regulation (as
modified by the practice of any relevant governmental revenue
authority then in effect), in which case it shall pay to the
Purchaser, in addition to any payment to which the Purchaser is
otherwise entitled under this Agreement or any Related Document,
such additional amount as is necessary to ensure that the net
amount actually received by the Purchaser will equal the full
amount the Purchaser would have received had no such deduction or
withholding been required; and
(f) continue to hold such number of shares in the capital of the
Seller such that the Seller is at all times a Subsidiary of
Chrysler Financial.
ARTICLE 7
SIGNIFICANT EVENTS
7.1 Meaning of Significant Event
The term "Significant Event" means, in respect of each Transaction,
any of the following events or circumstances:
(a) the Seller or the Collector (if the Seller is the Collector)
fails to make any payment or deposit to be made by it hereunder
when due and such failure remains unremedied for two Business
Days after written notice thereof from the Purchaser;
(b) the Seller, the Collector (if the Seller is the Collector) or
Chrysler Financial fails to perform or observe any term,
condition or covenant to be performed or observed by it hereunder
or under any Related Document (other than that specified in
Section 7.1(a)) and such failure remains unremedied for ten
Business Days after written notice thereof has been given to the
Seller or Chrysler Financial, as the case may be, by the
Purchaser (except with respect to any failure on the part of the
Seller or Chrysler Financial to perform its obligations under
Section 6.1(h)(i) or 6.3(c), as the case may be, in which case no
notice shall be required and no cure period shall apply);
(c) any representation or warranty made in writing by the Seller or
Chrysler Financial or any of their respective officers in or
pursuant to this Agreement, any Portfolio Report or any other
Related Document proves to have been false or incorrect in any
material adverse respect when made, provided that, if any such
representation or warranty that is capable of being subsequently
made true and correct is made true and correct within ten
Business Days of the receipt of written notice to the Seller or
Chrysler Financial, as the case may be, from the Purchaser of
such false or incorrect representation or warranty, it shall not
constitute a Significant Event (for greater certainty, the
parties hereto acknowledge and agree that the representations
contained in Section 5.1(n) and (o) shall be deemed remediable
for the purposes of this Section by the repurchase by the Seller
of a sufficient dollar value of Purchased Assets under which the
relevant Person is the applicable Obligor);
(d) (i) either the Seller or Chrysler Financial shall generally not
pay its debts as they become due; (ii) either the Seller or
Chrysler Financial shall admit in writing its inability to pay
its debts generally or shall make a general assignment for the
benefit of creditors; (iii) a receiver shall be appointed for
either the Seller or Chrysler Financial or any substantial part
of its property; (iv) any proceedings shall be instituted by or
against the Seller or Chrysler Financial seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or
seeking the entry of an order for relief by the appointment of a
receiver, trustee, custodian or other similar official for it or
for any substantial part of its property where any such
proceeding has not been stayed or dismissed within 45 days of a
receiver, custodian or other similar official being appointed for
it or any substantial part of its property; or (v) either the
Seller or Chrysler Financial takes any corporate action to
authorize any of the actions described in this Section 7.1(d);
(e) there has occurred any material adverse change in the financial
condition or operations of the Seller or Chrysler Financial which
materially adversely affects the Seller's ability to service the
Related Secured Loan Rights or to perform any other of its
obligations hereunder;
(f) the Portfolio Loss Ratio is at any time equal to or greater than
4.0%;
(g) the Portfolio Delinquency Ratio is at any time equal to or
greater than 4.0%;
(h) the long term debt rating of Chrysler Financial by Moody's falls
below Ba1 (or its then equivalent); or
(i) an event of default as defined in any Hedging Agreement shall
have occurred and be continuing with respect to the Seller or
Chrysler Financial.
7.2 Action Upon a Significant Event
(1) If any Significant Event in respect of any Transaction has occurred
and is continuing, the Purchaser shall have, in addition to the right to
appoint a new Collector in respect of such Transaction pursuant to Section
3.1 hereof, its rights under Section 10.5 hereof and its other rights and
remedies hereunder and under the Related Documents, all other rights and
remedies under any applicable law and otherwise, which rights and remedies
shall be cumulative; provided that, where the applicable Significant Event
is only the occurrence of one or both of the Significant Events set out in
Sections 7.1(f) or (g), the Purchaser shall, unless there is an event which
with the giving of notice or the lapse of time or both would constitute a
Significant Event other than a Significant Event set out in Section 7.1(f)
or (g), not be entitled to exercise its right to designate a successor
Collector in accordance with Section 3.1 or make any sale, assignment or
transfer pursuant to Section 10.5(2) until 2:00 p.m. (Toronto time) on the
Business Day immediately following the Business Day upon which the
Purchaser has given notice to the Seller of the occurrence of a Significant
Event set out in Section 7.1(f) or (g).
(2) From time to time following the designation by the Purchaser of a
Collector other than the Seller pursuant to Section 3.1:
(a) the Seller shall, at the Purchaser's request and at the Seller's
expense, notify all or any Obligors under the relevant Purchased
Assets of the Purchaser's ownership in any or all of the Related
Secured Loan Rights and direct that payments in respect thereof
be made directly to the Purchaser or its designee;
(b) the Seller shall, at the Purchaser's request and at the Seller's
expense, assemble all or any of the relevant Purchased Assets and
Records relating to, and the guarantees, indemnities and other
agreements forming part of, the Related Secured Loan Rights, and
make the same available to the Purchaser at a place selected by
it or its designee, and segregate, in a manner reasonably
acceptable to the Purchaser, all cash, cheques and other
instruments constituting Collections, Net Proceeds or Permitted
Investments received or held by the Seller from time to time,
and, promptly upon receipt, remit same to the Purchaser or its
designee duly endorsed or with duly executed instruments of
transfer; and
(c) the Purchaser may take any and all steps, in the Seller's name
and on its behalf, necessary or desirable in the Purchaser's
opinion, to collect the relevant Loan Receivables forming part of
the Related Secured Loan Rights, including taking actions
contemplated in Section 7.2(2)(a) where the Seller has failed to
do so, and to remit the proceeds of such Loan Receivables to the
Collector for deposit in the relevant Purchaser's Account.
ARTICLE 8
MATTERS RELATING TO LIABILITY AND RESPONSIBILITIES
8.1 Delegation in Favour of Servicing Agent
The Purchaser may delegate to the Servicing Agent all or any of its
powers, rights and discretions hereunder and under any Related Documents,
and the Servicing Agent may from time to time take such actions and
exercise such powers as are delegated to it hereunder or thereunder or
contemplated hereby or thereby and all such actions and powers as are
reasonably incidental thereto.
8.2 Liability of Purchaser and Servicing Agent
Neither the Purchaser, the Servicing Agent nor any of their respective
directors, officers, agents or employees shall be liable pursuant to this
Agreement or any Related Document for any action taken or omitted by it or
them hereunder or thereunder or in connection herewith or therewith, except
for its or their own gross negligence or wilful misconduct.
Notwithstanding any provision of this Agreement, other than the preceding
sentence, or of any Related Document, neither the Seller nor Chrysler
Financial nor any Person acting on their behalf shall have recourse against
the Purchaser or the Servicing Agent, at law or in equity, in respect of
any of the obligations of the Purchaser or the Servicing Agent under this
Agreement or any Related Document other than against the assets included in
the Purchased Assets then held by the Purchaser.
8.3 The Servicing Agent and Affiliates
The Servicing Agent, any successor Servicing Agent and their
respective Affiliates may generally engage in any kind of business with the
Seller, Chrysler Financial, any Obligor, any of their respective Affiliates
and any Person who may do business with or own securities of any of them,
all as if the Servicing Agent or any such successor were not the Servicing
Agent and without any duty to account therefor to the Seller, Chrysler
Financial, the Purchaser or any other Person.
8.4 Responsibilities of the Seller and the Purchaser
Notwithstanding anything herein to the contrary:
(a) the Seller agrees to perform all of the non-financial duties and
obligations of the obligee under the Purchased Assets
notwithstanding any of the transactions contemplated hereby;
(b) the exercise by the Purchaser or the Servicing Agent of any of
their rights hereunder or under any Related Document will not
relieve the Seller from any of the duties or obligations that the
Seller has agreed to perform with respect to any Purchased
Assets;
(c) neither the Purchaser nor the Servicing Agent nor any of their
respective agents shall have any duty or obligation with respect
to any Related Secured Loan Rights nor shall any of them be
obligated to perform any of the non-financial duties or
obligations which the Seller has agreed to perform with respect
to related Secured Loans; and
(d) the Seller shall promptly notify the Purchaser of any claim or
threatened claim of which the Seller is aware which may, in the
reasonable opinion of the Seller, result in any liability to
indemnify the Purchaser pursuant to Article 9.
8.5 Power of Attorney
The Seller hereby irrevocably constitutes and appoints the Purchaser,
the Servicing Agent, any officer of the trustee of the Purchaser or any
officer of the Servicing Agent from time to time, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Seller and in the name of
the Seller or in its own name, from time to time in the Purchaser's or the
Servicing Agent's discretion, as the case may be, for the purpose of
enforcing the Related Secured Loan Rights.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnities by the Seller
Without prejudice to any other rights of the Purchaser or the
Servicing Agent or their respective agents hereunder or under any
applicable law, the Seller hereby agrees to indemnify the Purchaser, the
Servicing Agent and their respective agents and agrees to save them
harmless from and against any and all damages, losses, claims, liabilities,
costs and expenses (including legal fees and disbursements on a solicitor
and client basis) awarded against or incurred by them arising out of or as
a result of:
(a) reliance on any written representation or warranty made by the
Seller (or any of its officers) in or pursuant to this Agreement,
any Portfolio Report or any other Related Document which was
incorrect in any materially adverse respect when made or deemed
made or delivered;
(b) the failure by the Seller on its own behalf or in its capacity as
Collector, to comply with any applicable law, rule or regulation
with respect to any Purchased Assets or with respect to any
Related Secured Loan Rights or to perform its obligations
thereunder, or the non-conformity of any applicable Secured Loan
with any applicable law, rule or regulation; provided that this
clause (b) shall not apply to any law, rule or regulation
relating to the perfection of ownership or security interests;
(c) the failure of the Seller to transfer to the Purchaser its
interest in the Purchased Assets contemplated hereunder free and
clear of any Adverse Claim except to the extent otherwise
contemplated herein;
(d) any dispute, claim, set-off or defense of an Obligor against the
Seller to the performance of any obligation in connection with a
Related Secured Loan Right or the payment of any Loan Receivable
forming part thereof;
(e) any product liability claim or personal injury or property damage
suit or other similar or related claim or action of whatsoever
sort arising out of or in connection with any Related Equipment
to the extent not covered by insurance;
(f) any failure of the Seller to perform or observe any of its duties
or obligations hereunder or under the Related Documents,
including its duties and obligations as Collector;
(g) any Canadian, foreign, federal, provincial, state, municipal,
local or other tax of any kind or nature whatsoever which may be
imposed on the Purchaser or the Servicing Agent on account of any
payment made by the Seller under this Section 9.1 after giving
effect to any deduction relating to the matters indemnified;
(h) any claims, disputes, damages, penalties and losses arising from
the Related Secured Loan Rights relating to the Purchased Assets,
other than (i) losses attributable to any Obligor's failure to
discharge its payment obligations or other default under the
applicable Secured Loan, or (ii) losses attributable to the gross
negligence or wilful misconduct of the Purchaser or the Servicing
Agent;
(i) the return or transfer by the Purchaser in error of any amount of
Collections or Net Proceeds received pursuant to Article 2 to the
Seller for any reason whatsoever other than pursuant hereto;
(j) any failure of the Seller to comply with any applicable law
regarding the filing or discharge of registrations required to be
made in respect of the Purchased Assets in accordance with the
laws of the applicable province or territory of Canada; or
(k) actual losses as a result of the failure of the Seller or the
Purchaser to comply with the requirements of any applicable bulk
sales legislation;
any such amount to be paid to the Collector for deposit to the relevant
Purchaser's Account.
9.2 Limited Indemnity by the Seller
Without prejudice to any other rights of the Purchaser or the
Servicing Agent hereunder or under any applicable law, the Seller hereby
indemnifies the Purchaser, the Servicing Agent and their respective agents
and agrees to save them harmless from and against any and all damages,
losses, claims, liabilities, costs and expenses (including reasonable legal
fees and disbursements on a solicitor and client basis) incurred in respect
of a Transaction by or on behalf of the Purchaser or the Servicing Agent in
respect of any amounts payable by the Purchaser arising out of or as a
result of any breach of the terms hereof or of any Related Document by the
Seller or Chrysler Financial and not otherwise recoverable from the Seller
or Chrysler Financial, provided, however, that (i) the liability of the
Seller hereunder shall not be greater than the then available balance in
the relevant Deferred Purchase Account, and (ii) this limited indemnity
shall in no circumstances be available to recover amounts not otherwise
recovered by the Purchaser because of any default by an Obligor under the
terms of any Purchased Asset.
9.3 Co-operation in Litigation and Proceedings
The Seller, on the one hand, and the Purchaser, on the other, agree to
assist the other party, at the request of such other party and at such
requesting party's expense, in any action, suit or proceeding brought by or
against, or any investigation involving such requesting party (including
the Servicing Agent, with respect to the Purchaser), but not including
actions between the Seller and the Purchaser relating to any of the
transactions contemplated hereby or to any of the Related Secured Loan
Rights. If the Seller may be liable under Section 9.1 or 9.2 in respect of
any damages, losses, claims, liabilities, costs or expenses as a result of
or in connection with any such action, suit, proceeding or investigation,
the Seller will have the right, on behalf of the Purchaser but at the
Seller's expense, to defend such action, suit or proceeding, or participate
in such investigation, with counsel selected by it, and will have sole
discretion as to whether to litigate, appeal or settle.
ARTICLE 10
MISCELLANEOUS
10.1 Amendments, etc.
No amendment or waiver of any provision hereof nor consent to any
departure by the Seller or Chrysler Financial therefrom shall in any event
be effective (in whole or in part) unless in writing and signed by the
Seller, the Collector, Chrysler Financial, the Purchaser and, to the extent
it affects the rights, duties or obligations of the Servicing Agent, the
Servicing Agent.
10.2 Entire Agreement
This Agreement contains the entire agreement between the parties
relative to the subject matter hereof and supersedes all contrary prior and
contemporaneous agreements, term sheets, commitments, understandings,
negotiations and discussions, whether oral or written. There are no
warranties, express or implied, representations or other agreements between
the parties in connection with the subject matter hereof except as
specifically set forth herein.
10.3 Notices, etc.
All notices and other communications provided for hereunder must,
unless otherwise stated herein, be in writing and telecopied or delivered,
as to each party hereto, at its address set forth under its name on the
signature pages hereof, or at such other address designated by such party
in a written notice in the manner contemplated in this Section 10.3 to each
of the other parties hereto. Any such notice or other communication shall
be deemed to have been given, made and received on the day of delivery if
delivered and on the first Business Day after telecopying if telecopied.
10.4 No Waiver; Remedies
No failure on the part of the Purchaser, the Servicing Agent or the
Seller to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor will any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the
exercise of any other right. Except as otherwise provided, the remedies
herein provided are cumulative and not exclusive of any remedies provided
by law.
10.5 Binding Effect; Assignability; Termination, etc.
(1) This Agreement shall be binding upon and enure to the benefit of the
Seller, Chrysler Financial, the Purchaser and the Servicing Agent, and
their respective successors and permitted assigns. Except as provided in
this Agreement, no party hereto may assign its rights hereunder, any
interest herein or any interest in any Purchased Assets without the prior
written consent of the other parties hereto.
(2) Notwithstanding any other provision of this Agreement but only if
permitted pursuant to the provisions of Section 7.2, the Purchaser may
sell, assign and transfer any Purchased Asset or Seller Receivable (in
whole or in part) to any Person (including secondary purchasers, issuers of
letters of credit to the Purchaser, and their assignees) without the
consent of or notice to the Seller or Chrysler Financial and may also sell,
assign or transfer to such Person any of its rights hereunder or under any
Related Document or interest herein or therein for the purpose of giving
effect to any such sale, assignment or transfer of Purchased Assets or
Seller Receivables. Upon any sale, assignment or transfer referred to in
this subsection, such Person shall be fully subrogated to all rights,
benefits and privileges of the Purchaser hereunder or thereunder and shall
assume all obligations relating thereto.
(3) This Agreement shall remain in full force and effect until the last
Final Collection Date provided, however, that:
(a) the Purchaser's rights and remedies with respect to any incorrect
representation or warranty made or deemed to be made by the
Seller or Chrysler Financial herein; and
(b) the indemnification and payment provisions of Article 9 and
Section 10.7;
shall be continuing and shall survive any termination hereof for a period
of five (5) years.
10.6 Governing Law
This Agreement shall be governed by and construed in accordance with,
the laws of the Province of Ontario, except to the extent that the validity
or perfection of the Purchaser's interests in any Related Secured Loan
Rights or Related Equipment or its remedies hereunder in respect thereof
are governed by the laws of a different jurisdiction.
10.7 Costs, Expenses and Taxes
(1) Notwithstanding the rights of indemnification provided for in Article
9, the Seller shall not be responsible for payment of any costs and
expenses of the Purchaser and the Servicing Agent in connection with the
preparation, execution and delivery of this Agreement and the Related
Documents, or any of their out-of-pocket expenses, or of any fees or
disbursements of counsel for the Purchaser and the Servicing Agent with
respect thereto.
(2) The Seller shall:
(a) pay on demand any and all stamp, filing, recording and other
taxes and fees payable or determined to be payable in connection
with the enforcement of this Agreement or any Related Document
(other than any applicable goods and services tax);
(b) to the extent not reimbursed pursuant to Section 2.2, reimburse
on demand the Purchaser for any loss resulting from a
miscalculation by the Purchaser in the administration of the
Agreement and the Related Documents; provided, however, that the
Purchaser shall request such reimbursement in writing and will
explain, in reasonable detail, such miscalculation; and,
provided, further, however, that the amount of such reimbursement
shall not exceed the amount which should initially have been paid
to the Purchaser but for such miscalculation, plus interest at
the applicable Discount Rate;
(c) subject to Section 10.7(1), pay on demand any other costs,
expenses and taxes (excluding any taxes except amounts referred
to in Section 10.7(2)(a)), incurred by the Purchaser in
connection with the Purchase (including costs and expenses
incurred in performing the Purchaser's obligations hereunder);
provided, however, that the Purchaser will request such amounts
in writing and will explain, in reasonable detail, the
calculation of such amounts; and
(d) pay on demand any costs and expenses of the Purchaser and the
Servicing Agent with respect to advising the Purchaser and the
Servicing Agent as to their respective rights and remedies
hereunder and under the Related Documents or any costs related to
enforcement actions by the Purchaser against any Obligor related
to enforcement or advice with respect to the Purchaser's rights
against such Obligor.
10.8 Change in Circumstance
If either:
(a) the introduction of or any change (including, without limitation,
any change by way of imposition of a capital or other tax) in or
in the interpretation of any law or regulation by any court or
governmental authority charged with the administration thereof;
or
(b) the compliance by the Purchaser with any guideline or request
from any governmental authority (whether or not having the force
of law) has the effect of
(i) increasing the cost to the Purchaser of making, funding or
maintaining a Purchase hereunder or agreeing to make a
Purchase hereunder, or reducing the rate of return to the
Purchaser in connection therewith; or
(ii) reducing the amount receivable with regard to any Loan
Receivable forming part of the Related Secured Loan Rights;
the Seller shall, from time to time, upon demand by the Purchaser and to
the extent not otherwise recovered pursuant to Section 2.4(1)(c), pay to
the Purchaser that portion of such increased costs incurred, amounts not
received or receivable, or compensation for such reduction in rate of
return which is attributable to making, funding or maintaining such
Purchase hereunder. The Purchaser shall provide the Seller with a
certificate setting forth its computation of such increased costs, amounts
not received or receivable or reduction in rate of return, which
computation may utilize such averaging and attribution methods the
Purchaser believes to be reasonable. Such certificate shall be prima facie
evidence, absent manifest error, of the amount payable to the Purchaser
pursuant to this Section 10.8. The Purchaser shall, upon becoming aware of
an event or circumstance that is likely to, with the passage of time or
otherwise, entitle it to demand payment pursuant to this Section 10.8,
promptly notify the Seller.
10.9 Failure to Perform
If the Seller, the Collector (if the Seller is the Collector) or
Chrysler Financial fails to perform any of its agreements or obligations
hereunder or under any Related Document, the Purchaser may (but will not be
required to) itself perform, or cause to be performed, such agreement or
obligation, and the expenses of the Purchaser incurred in connection
therewith shall be payable by the Seller as provided in Section 10.7(2)(c).
10.10 Consent to Jurisdiction; Waiver of Immunities
(1) The Seller hereby irrevocably submits to the non-exclusive
jurisdiction of any court sitting in the City of Toronto in any action or
proceeding arising out of or relating to this Agreement or to any Related
Document, and the Seller hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such
court. The Seller hereby irrevocably waives, to the extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action
or proceeding. The Seller agrees that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law.
(2) Nothing in this Section 10.10 shall affect the right of the Purchaser
to serve legal process in any other manner permitted by law or affect its
right to bring any action or proceeding against the Seller or Chrysler
Financial or their respective properties in the courts of other
jurisdictions.
(3) To the extent that the Seller has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise) with respect to itself or its
property, the Seller hereby irrevocably waives, to the extent permitted by
law, such immunity in respect of its obligations hereunder.
10.11 Confidentiality
The parties hereto acknowledge that any Terms Schedule and any
document which contains any of the information set forth in paragrahs 3 and
4 of any Terms Schedule, or any agreement that one party has received from
the other to which the receiving party is not a signatory (including for
clarity, the Program Agreements as defined in the Amended and Restated
Trust Indenture dated as of November 15, 1994 between the Purchaser and The
R-M Trust Company, except for this Master Receivables Purchase Agreement)
and all data and information provided hereunder by one to the other shall
be considered as confidential information by the other and shall not be
disclosed by the recipient to any other Person except that the Purchaser
may disclose any such data and information to the Servicing Agent, rating
agencies, trustees, prospective credit enhancers or secondary purchasers or
prospective liquidity lenders, professional advisors and governmental or
regulatory authorities as required by law or to implement the terms of this
Agreement, the Related Documents, the Purchaser's securitization program or
the financing thereof and the Seller and Chrysler Financial may disclose
any such Terms Schedule, documents, agreements, data and information to
governmental and regulatory authorities as required by law or to implement
the terms of this Agreement, their lenders, professional advisors, taxing
authorities in connection with the preparation of financial statements or
tax returns or to satisfy any of the conditions precedent set out in
Section 4.1.
10.12 Further Assurances
The parties hereto agree, from time to time, to enter into such
further agreements and to execute all such further instruments as may be
reasonably necessary or desirable to give full effect to the terms of this
Agreement or any Related Document.
10.13 Execution in Counterparts
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
10.14 Severability
Any provision hereof which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, to the extent permitted by
law, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
10.15 Limitation of Liability
The obligations hereunder are not binding upon TD Trust Company except
in its capacity as trustee of the Purchaser, nor will resort be had to the
property of TD Trust Company except in its capacity as trustee of the
Purchaser, but the assets only of the Purchaser will be bound hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CHRYSLER CREDIT CANADA LTD., as Seller and
Collector
By: "David H. Olsen"
---------------------------------------
Name: David H. Olsen
Title: Assistant Treasurer
Address for Notices:
27777 Franklin Road
Southfield, Michigan
48034-8286
U.S.A.
Attn: Secretary
Telecopier No.: (810) 948-3138
CORE TRUST, by its Servicing Agent,
TORONTO DOMINION SECURITIES INC.
By: "W.C. Archibald"
---------------------------------------
Name: W.C. Archibald
Title: Officer
Address for Notices:
Toronto Dominion Securities Inc.
P.O. Box 100, 7th Floor
Toronto Dominion Bank Tower
Toronto-Dominion Centre
Toronto, Ontario
M5K 1G8
Attn: Asset Securitization Group
Telecopier No.: (416) 307-8840
CHRYSLER FINANCIAL CORPORATION
BY: "David H. Olsen"
---------------------------------------
Name: David H. Olsen
Title: Assistant Treasurer
Address for Notices:
27777 Franklin Road
Southfield, Michigan
48034-8286
U.S.A.
Attn: Secretary
Telecopier No.: (810) 948-3138