CONFORMED
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ________ to ________
Commission file number __ - _____
PREMIER AUTO TRUST 1996-1
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
State of Delaware Applied For
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27777 Franklin Road, Southfield, Michigan 48034
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (810) 948-3058
----------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ___ No __X__
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim financial data presented herein are unaudited, but in the opinion
of management reflect all adjustments necessary for a fair presentation of
such information. Results for interim periods should not be considered
indicative of results for a full year.
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
<TABLE>
<CAPTION>
PREMIER AUTO TRUST 1996-1
STATEMENT OF ASSETS, LIABILITIES AND EQUITY
MARCH 31, 1996
(in millions of dollars)
<S> <C>
ASSETS
Cash and Cash Equivalents (Note 1) $ 133.7
Receivables (Note 3) 1,472.6
--------
TOTAL ASSETS $1,606.3
========
LIABILITIES AND EQUITY
Amounts Held for Future Distribution (Note 1) $ 106.3
Asset Backed Notes (Notes 3 and 4) 1,443.8
Asset Backed Certificates (Notes 3 and 4) 56.2
--------
TOTAL LIABILITIES AND EQUITY $1,606.3
========
<FN>
See Notes to Financial Statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
PREMIER AUTO TRUST 1996-1
STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
FOR THE PERIOD MARCH 1, 1996 (INCEPTION) THROUGH MARCH 31, 1996
(in millions of dollars)
<S> <C>
CASH RECEIPTS
Proceeds from Sale of Notes and Certificates $1,500.0
Collections of Principal & Interest, and Other 133.7
--------
TOTAL CASH RECEIPTS 1,633.7
--------
CASH DISBURSEMENTS
Purchase of Receivables 1,500.0
--------
TOTAL CASH DISBURSEMENTS 1,500.0
--------
CASH RECEIPTS IN EXCESS OF CASH DISBURSEMENTS $ 133.7
========
<FN>
See Notes to Financial Statements.
</TABLE>
4
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
PREMIER AUTO TRUST 1996-1
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of Premier Auto Trust 1996-1 (the "Trust") are
prepared on the basis of cash receipts and disbursements, which is a
comprehensive basis of accounting other than generally accepted accounting
principles.
Cash and Cash Equivalents
Short-term instruments with a maturity of less than three months when
purchased are considered to be cash equivalents. The Trust received certain
cash deposits from Chrysler Financial Corporation ("CFC") which are held as
liquidity and credit enhancement reserves and invested in short-term
instruments. Under the Sale and Servicing Agreement, the servicer is required
to convey principal and interest collections to the Trust within two business
days after their receipt. The Trust invests these collections in short-term
instruments pending distribution.
Amounts Held for Future Distribution
Amounts held for future distribution represent certain short-term investments
and receivables held for future distributions to Noteholders and
Certificateholders, and for liquidity and credit enhancement reserves. Amounts
held for liquidity and credit enhancement reserves which are not utilized for
future distributions to Noteholders and Certificateholders will be distributed
to Premier Auto Receivables Company ("Premier").
NOTE 2 - RELATED PARTIES
Premier is a wholly-owned subsidiary of CFC.
NOTE 3 - SALE OF ASSET BACKED NOTES AND CERTIFICATES
The Trust was formed under the laws of Delaware pursuant to an Amended and
Restated Trust Agreement dated as of March 1, 1996, among Premier, CFC, and
Chemical Bank Delaware, acting thereunder not in its individual capacity but
solely as trustee of the Trust.
On March 27, 1996, the Trust issued $250,000,000 aggregate principal amount of
5.4375% Asset Backed Notes, Class A-1 (the "Class A-1 Notes"), $645,000,000
aggregate principal amount of Floating Rate Asset Backed Notes, Class A-2 (the
"Class A-2 Notes"), $400,000,000 aggregate principal amount of 6.00% Asset
Backed Notes, Class A-3 (the "Class A-3 Notes"), and $148,750,000 aggregate
principal amount of 6.05% Asset Backed Notes, Class A-4 (the "Class A-4 Notes"
and, together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the
5
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
PREMIER AUTO TRUST 1996-1
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - SALE OF ASSET BACKED NOTES AND CERTIFICATES - continued
"Notes"). The Notes were issued pursuant to an Indenture dated as of March 1,
1996, between the Trust and The Bank of New York, as Indenture Trustee. The
Trust also issued $56,243,689.73 aggregate principal amount of 6.35% Asset
Backed Certificates (the "Certificates"). The Certificates represent
fractional undivided interests in the Trust.
The assets of the Trust include a pool of motor vehicle retail installment
sale contracts ("Receivables"), secured by security interests in the motor
vehicles financed thereby and including certain monies due or received
thereunder on or after March 8, 1996, transferred to the Trust by CFC on March
27, 1996. The Notes are secured by the assets of the Trust pursuant to the
Indenture.
NOTE 4 - PRINCIPAL AND INTEREST PAYMENTS
Interest on the Class A-1 Notes, the Class A-3 Notes and the Class A-4 Notes
will accrue at the respective fixed per annum interest rates specified above.
The per annum rate of interest on the Class A-2 Notes for each monthly
interest period will equal one-month LIBOR plus 0.07%, subject to a maximum
rate of 12% per annum. Interest on the Notes will generally be payable on the
sixth day of each month or, if any such day is not a Business Day, on the next
succeeding Business Day (each, a "Distribution Date"), commencing May 6, 1996.
Principal of the Notes will be payable on each Distribution Date to the extent
described in the Prospectus Supplement dated March 21, 1996, and the
Prospectus dated March 21, 1996 (collectively, the "Prospectus"); however, no
principal payments will be made (i) on the Class A-2 Notes until the Class A-1
Notes have been paid in full, (ii) on the Class A-3 Notes until the Class A-2
Notes have been paid in full, or (iii) on the Class A-4 Notes until the Class
A-3 Notes have been paid in full.
Interest on the Certificates will accrue at the fixed per annum interest rate
specified above and will be distributed to the Certificateholders on each
Distribution Date. No distributions of principal on the Certificates will be
made until all the Notes have been paid in full.
Each class of the Notes and the Certificates will be payable in full on the
applicable final scheduled Distribution Date as set forth in the Prospectus.
However, payment in full of a class of Notes or of the Certificates could
occur earlier than such dates as described in the Prospectus. In addition, the
Class A-4 Notes will be subject to redemption in whole, but not in part, and
the Certificates will be subject to prepayment in whole, but not in part, on
any Distribution Date on which CFC exercises its option to purchase the
Receivables. CFC may purchase the Receivables when the aggregate principal
balance of the Receivables shall have declined to 10% or less of the initial
aggregate principal balance of the Receivables purchased by the Trust.
6
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - (CONTINUED)
PREMIER AUTO TRUST 1996-1
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - FEDERAL INCOME TAXES
In the opinion of outside legal counsel, for federal income tax purposes, the
Class A-2 Notes, Class A-3 Notes, and Class A-4 Notes will be characterized as
debt, and the Trust will not be characterized as an association (or a publicly
traded partnership) taxable as a corporation.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Trust was formed under the laws of Delaware pursuant to an Amended and
Restated Trust Agreement dated as of March 1, 1996, among Premier Auto
Receivables Company ("Premier"), Chrysler Financial Corporation (the
"Seller"), and Chemical Bank Delaware, acting thereunder not in its individual
capacity but solely as trustee of the Trust.
On March 27, 1996, the Trust issued $250,000,000 aggregate principal amount of
5.4375% Asset Backed Notes, Class A-1, $645,000,000 aggregate principal amount
of Floating Rate Asset Backed Notes, Class A-2, $400,000,000 aggregate
principal amount of 6.00% Asset Backed Notes, Class A-3 and $148,750,000
aggregate principal amount of 6.05% Asset Backed Notes, Class A-4
(collectively, the "Notes"). The Notes were issued pursuant to an Indenture
dated as of March 1, 1996, between the Trust and The Bank of New York, as
Indenture Trustee. The Trust also issued $56,243,689.73 aggregate principal
amount of 6.35% Asset Backed Certificates (the "Certificates"). The
Certificates represent fractional undivided interests in the Trust. The assets
of the Trust include a pool of motor vehicle retail installment sale
contracts, secured by security interests in the motor vehicles financed
thereby and including certain monies due or received thereunder on or after
March 8, 1996, transferred to the Trust by the Seller on March 27, 1996. The
Notes are secured by the assets of the Trust pursuant to the Indenture.
The Trust has no employees.
8
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1,2,3,4,5
There is nothing to report with regard to these items.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as a part of this report:
Exhibit No.
3 Certificate of Trust of Premier Auto Trust 1996-1.
4.1 Amended and Restated Trust Agreement, dated as of March 1, 1996,
among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee.
4.2 Indenture, dated as of March 1, 1996, between Premier Auto Trust
1996-1 and The Bank of New York, as Indenture Trustee (excluding
Schedule A).
4.3 Sale and Servicing Agreement, dated as of March 1, 1996, between
Premier Auto Trust 1996-1 and Chrysler Financial Corporation
(excluding Schedules A and C).
27 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Trust during the quarter for
which this report is filed.
9
<PAGE>
PREMIER AUTO TRUST 1996-1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Premier Auto Trust 1996-1 (Registrant)
By: Chrysler Financial Corporation, as Servicer
-------------------------------------------
Date: May 13, 1996 By: s/T. F. Gilman
-------------------------------------------
T. F. Gilman, Vice President and Controller
Principal Accounting Officer
10
<PAGE>
PREMIER AUTO TRUST 1996-1
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ -----------------------
3 Certificate of Trust of Premier Auto Trust 1996-1.
4.1 Amended and Restated Trust Agreement, dated as of
March 1, 1996, among Premier Auto Receivables Company, Chrysler
Financial Corporation and Chemical Bank Delaware, as Owner
Trustee.
4.2 Indenture, dated as of March 1, 1996, between Premier Auto Trust
1996-1 and The Bank of New York, as Indenture Trustee (excluding
Schedule A).
4.3 Sale and Servicing Agreement, dated as of March 1, 1996, between
Premier Auto Trust 1996-1 and Chrysler Financial Corporation
(excluding Schedules A and C).
27 Financial Data Schedule
E-1
Exhibit 3
CERTIFICATE OF TRUST
OF
PREMIER AUTO TRUST 1996-1
THIS Certificate of Trust of Premier Auto Trust 1996-1 (the
"Trust"), dated March 12, 1996, is being duly executed and filed by Chemical
Bank Delaware, a Delaware banking corporation, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del.C. section 3801 et seq.).
1. Name: The name of the business trust formed hereby is
Premier Auto Trust 1996-1.
2. Delaware Trustee: The name and business address of the
trustee of the Trust in the State of Delaware is Chemical Bank Delaware, 1201
Market Street, Wilmington, Delaware 19801, Attention: Corporate Trustee
Administration Department.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust as of the date first-above
written.
CHEMICAL BANK DELAWARE,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
dated as of March 12, 1996
By: /s/ J. J. Cashin
-----------------------
Name: JOHN J. CASHIN
Title: SENIOR TRUST OFFICER
Exhibit 4.1
EXECUTION COPY
==============================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
CHRYSLER FINANCIAL CORPORATION,
as Depositor,
PREMIER AUTO RECEIVABLES COMPANY
and
CHEMICAL BANK DELAWARE,
as Owner Trustee
Dated as of March 1, 1996
==============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
<S> <C> <C>
SECTION 1.01. Capitalized Terms...................................................... 1
SECTION 1.02. Other Definitional Provisions.......................................... 4
<CAPTION>
ARTICLE II
Organization
<S> <C> <C>
SECTION 2.01. Name................................................................... 5
SECTION 2.02. Office................................................................. 5
SECTION 2.03. Purposes and Powers.................................................... 5
SECTION 2.04. Appointment of Owner Trustee........................................... 6
SECTION 2.05. Initial Capital Contribution of Owner Trust Estate..................... 6
SECTION 2.06. Declaration of Trust................................................... 6
SECTION 2.07. Liability of the Owners................................................ 6
SECTION 2.08. Title to Trust Property................................................ 7
SECTION 2.09. Situs of Trust......................................................... 7
SECTION 2.10. Representations and Warranties of the Depositor and the Company........ 7
SECTION 2.11. Maintenance of the Demand Note......................................... 9
SECTION 2.12. Federal Income Tax Allocations......................................... 9
SECTION 2.13. Assignment of Rights and Obligations under the Trust Agreement......... 10
<CAPTION>
ARTICLE III
Trust Certificates and Transfer of Interests
<S> <C> <C>
SECTION 3.01. Initial Ownership...................................................... 10
SECTION 3.02. The Trust Certificates................................................. 10
SECTION 3.03. Authentication of Trust Certificates................................... 10
SECTION 3.04. Registration of Transfer and Exchange of Trust Certificates............ 11
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates................ 11
SECTION 3.06. Persons Deemed Owners.................................................. 12
SECTION 3.07. Access to List of Certificateholders' Names and Addresses.............. 12
SECTION 3.08. Maintenance of Office or Agency........................................ 12
SECTION 3.09. Appointment of Paying Agent............................................ 12
SECTION 3.10. Ownership by Company of Trust Certificates............................. 13
SECTION 3.11. Fixed Value Securities................................................. 13
SECTION 3.12. Book-Entry Trust Certificates.......................................... 14
SECTION 3.13. Notices to Clearing Agency............................................. 15
SECTION 3.14. Definitive Trust Certificates.......................................... 15
i
<PAGE>
<CAPTION>
ARTICLE IV
Actions by Owner Trustee
<S> <C> <C>
SECTION 4.01. Prior Notice to Owners with Respect to Certain Matters................. 16
SECTION 4.02. Action by Owners with Respect to Certain Matters....................... 16
SECTION 4.03. Action by Owners with Respect to Bankruptcy............................ 16
SECTION 4.04. Restrictions on Owners' Power.......................................... 17
SECTION 4.05. Majority Control....................................................... 17
<CAPTION>
ARTICLE V
Application of Trust Funds; Certain Duties
<S> <C> <C>
SECTION 5.01. Establishment of Trust Account......................................... 17
SECTION 5.02. Application of Trust Funds............................................. 17
SECTION 5.03. Method of Payment...................................................... 18
SECTION 5.04. No Segregation of Moneys; No Interest.................................. 18
SECTION 5.05. Accounting and Reports to the Noteholders, Owners,
the Internal Revenue Service and Others................................ 18
SECTION 5.06. Signature on Returns; Tax Matters Partner.............................. 18
<CAPTION>
ARTICLE VI
Authority and Duties of Owner Trustee
<S> <C> <C>
SECTION 6.01. General Authority...................................................... 19
SECTION 6.02. General Duties......................................................... 19
SECTION 6.03. Action upon Instruction................................................ 19
SECTION 6.04. No Duties Except as Specified in this Agreement or in Instructions..... 20
SECTION 6.05. No Action Except Under Specified Documents or Instructions............. 20
SECTION 6.06. Restrictions........................................................... 20
<CAPTION>
ARTICLE VII
Concerning the Owner Trustee
<S> <C> <C>
SECTION 7.01. Acceptance of Trusts and Duties........................................ 21
SECTION 7.02. Furnishing of Documents................................................ 22
SECTION 7.03. Representations and Warranties......................................... 22
SECTION 7.04. Reliance; Advice of Counsel............................................ 22
SECTION 7.05. Not Acting in Individual Capacity...................................... 23
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or
Receivables or Eligible Investment Receivables......................... 23
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes..................... 23
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act Licenses.................. 23
ii
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<CAPTION>
ARTICLE VIII
Compensation of Owner Trustee
<S> <C> <C>
SECTION 8.01. Owner Trustee's Fees and Expenses...................................... 24
SECTION 8.02. Indemnification........................................................ 24
SECTION 8.03. Payments to the Owner Trustee.......................................... 24
<CAPTION>
ARTICLE IX
Termination of Trust Agreement
<S> <C> <C>
SECTION 9.01. Termination of Trust Agreement......................................... 24
SECTION 9.02. Dissolution upon Bankruptcy of the Company............................. 25
<CAPTION>
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
<S> <C> <C>
SECTION 10.01. Eligibility Requirements for Owner Trustee............................. 26
SECTION 10.02. Resignation or Removal of Owner Trustee................................ 26
SECTION 10.03. Successor Owner Trustee................................................ 27
SECTION 10.04. Merger or Consolidation of Owner Trustee............................... 27
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.......................... 28
<CAPTION>
ARTICLE XI
Miscellaneous
<S> <C> <C>
SECTION 11.01. Supplements and Amendments............................................. 29
SECTION 11.02. No Legal Title to Owner Trust Estate in Owners......................... 30
SECTION 11.03. Limitations on Rights of Others........................................ 30
SECTION 11.04. Notices................................................................ 30
SECTION 11.05. Severability........................................................... 31
SECTION 11.06. Separate Counterparts.................................................. 31
SECTION 11.07. Successors and Assigns................................................. 31
SECTION 11.08. Covenants of the Company............................................... 31
SECTION 11.09. No Petition............................................................ 31
SECTION 11.10. No Recourse............................................................ 31
SECTION 11.11. Headings............................................................... 32
SECTION 11.12. GOVERNING LAW.......................................................... 32
SECTION 11.13. Trust Certificate Transfer Restrictions................................ 32
SECTION 11.14. Depositor Payment Obligation........................................... 32
EXHIBIT A Form of Trust Certificate.................................................. A-1
EXHIBIT B Form of Certificate of Trust of Premier Auto Trust 1996-1.................. B-1
EXHIBIT C Form of Certificate Depository Agreement................................... C-1
</TABLE>
iii
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT dated as of March 1, 1996, among
CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as depositor
(the "Depositor"), PREMIER AUTO RECEIVABLES COMPANY (the "Company"), a
Delaware corporation, and CHEMICAL BANK DELAWARE, a Delaware banking
corporation, as owner trustee (the "Owner Trustee").
WHEREAS, the Depositor, the Owner Trustee and Premier Receivables
L.L.C. entered into a Trust Agreement dated as of March 12, 1996 (the "Trust
Agreement");
WHEREAS, Premier Receivables L.L.C. wishes to transfer all of its
rights and obligations under the Trust Agreement to the Company and the
Company wishes to accept such rights and obligations;
WHEREAS, the Trust Agreement is being amended and restated as of March
1, 1996;
WHEREAS, the Depositor and the Company have entered into a Purchase
Agreement dated as of March 1, 1996 (the "Purchase Agreement"), pursuant to
which the Depositor will assign to the Company any and all of the Depositor's
rights and interests with respect to the receipt of amounts from the Reserve
Account and with respect to any Fixed Value Payments and Eligible Investment
Fixed Value Payments; and
WHEREAS, in connection therewith, the Company is willing to assume
certain obligations pursuant hereto;
NOW, THEREFORE, the Depositor, the Company and the Owner Trustee
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Administration Agreement" shall mean the Administration Agreement
dated as of March 1, 1996, among the Trust, the Indenture Trustee and Chrysler
Financial Corporation, as Administrator.
"Agreement" shall mean this Amended and Restated Trust Agreement, as
the same may be amended and supplemented from time to time.
"Assignee Company" shall mean a Person that becomes the assignee of
the Rights (as defined in the Purchase Agreement) pursuant to Section 5.06 of
the Purchase Agreement.
"Basic Documents" shall mean the Purchase Agreement, the Sale and
Servicing Agreement, the Indenture, the Administration Agreement, the Note
Depository Agreement, the Certificate Depository Agreement and the other
documents and certificates delivered in connection therewith.
1
<PAGE>
"Benefit Plan" shall have the meaning assigned to such term in Section
11.13.
"Book-Entry Trust Certificate" shall mean a beneficial interest in the
Trust Certificates, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 3.12.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code section 3801 et seq., as the same may be amended
from time to time.
"Certificate Depository Agreement" shall mean the agreement dated
March 26, 1996, among the Trust, the Owner Trustee, the Administrator and The
Depository Trust Company, as the initial Clearing Agency, substantially in the
form attached hereto as Exhibit C, relating to the Trust Certificates, as the
same may be amended and supplemented from time to time.
"Certificate Distribution Account" shall have the meaning assigned to
such term in Section 5.01.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"Certificate Owner" shall mean, with respect to a Book-Entry Trust
Certificate, a Person who is the beneficial owner of such Book-Entry Trust
Certificate, as reflected on the books of the Clearing Agency or on the books
of a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned in and the registrar appointed pursuant to Section 3.04.
"Certificateholder" or "Holder" shall mean a Person in whose name a
Trust Certificate is registered.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
"Company" shall mean Premier Auto Receivables Company, a Delaware
corporation, and any successor in interest or, if the Rights (as defined in
the Purchase Agreement) are assigned to an Assignee Company in accordance with
Section 5.06 of the Purchase Agreement, such Assignee Company and any
successor in interest.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
1201 Market Street, Wilmington, Delaware 19801, or at such other address as
the Owner Trustee may designate by notice to the Owners, the Depositor and the
Company, or the principal corporate trust office of any successor Owner
Trustee at the address designated by such successor Owner Trustee by notice to
the Owners, the Depositor and the Company.
2
<PAGE>
"Definitive Trust Certificates" shall have the meaning set forth in
Section 3.12.
"Demand Note" shall mean, in the case of Premier Auto Receivables
Company, the Demand Note dated April 8, 1992, from CFC to Premier Auto
Receivables Company and, in the case of any Assignee Company, the demand note,
if any, referred to in the assumption agreement in respect of such Company
referred to in Section 3.10.
"Depositor" shall mean Chrysler Financial Corporation in its capacity
as depositor hereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Expenses" shall have the meaning assigned to such term in Section
8.02.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.02.
"Indenture" shall mean the Indenture dated as of March 1, 1996 between
the Trust and The Bank of New York, as Indenture Trustee.
"Initial Certificate Balance" shall mean $56,243,689.73.
"Note Depository Agreement" shall mean the agreement dated March 26,
1996 among the Trust, the Indenture Trustee, the Administrator and The
Depository Trust Company, as the initial Clearing Agency, relating to the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, as the same may
be amended and supplemented from time to time.
"Owner" shall mean each Holder of a Trust Certificate.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the
Owner Trustee and the Trust pursuant to the Sale and Servicing Agreement and
the Administration Agreement.
"Owner Trustee" shall mean Chemical Bank Delaware, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.09 and shall initially be Chemical Bank.
3
<PAGE>
"Record Date" shall mean, with respect to any Distribution Date, the
close of business on the day immediately preceding such Distribution Date or,
if Definitive Trust Certificates are issued pursuant to Section 3.14, the 15th
day of the month preceding such Distribution Date.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement dated as of March 1, 1996, between the Trust, as issuer, and the
Depositor, as seller and servicer, as the same may be amended or supplemented
from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Treasury Regulations" shall mean regulations, including proposed or
temporary Regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a certificate evidencing the beneficial
interest of an Owner in the Trust, substantially in the form attached hereto
as Exhibit A.
"Underwriters" shall mean those underwriters named in and parties to
the Certificate Underwriting Agreement dated March 21, 1996, with the
Depositor, pursuant to which the Trust Certificates will be offered publicly.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms
used and not otherwise defined herein have the meanings assigned to them in
the Sale and Servicing Agreement or, if not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
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(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument
or statute as from time to time amended, modified or supplemented and includes
(in the case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; references to a Person are also
to its permitted successors and assigns.
ARTICLE II
Organization
SECTION 2.01. Name. The Trust created hereby shall be known as
"Premier Auto Trust 1996-1," in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the Owners,
the Depositor and the Company.
SECTION 2.03. Purposes and Powers. (a) The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Agreement and to sell the Notes and the
Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to purchase the Receivables, to fund the Reserve
Account, to pay the organizational, start-up and transactional
expenses of the Trust and to pay the balance to the Depositor pursuant
to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Estate pursuant to the Indenture and to hold, manage and
distribute to the Owners pursuant to the terms of the Sale and
Servicing Agreement any portion of the Trust Estate released from the
Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to sell the Fixed Value Payments to the Depositor and, if
requested by the Company (as assignee of the Depositor), subsequently
to acquire the Fixed Value Payments and to issue and sell the Fixed
Value Securities;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Owners and the Noteholders and in respect of the Fixed Value
Securities.
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The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the Basic Documents.
SECTION 2.04. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.05. Initial Capital Contribution of Owner Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of
the foregoing contribution, which shall constitute the initial Owner Trust
Estate and shall be deposited in the Certificate Distribution Account. The
Depositor shall pay organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Owners, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the
Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall be treated
as a partnership, with the assets of the partnership being the Receivables,
the Eligible Investment Receivables and other assets held by the Trust, the
partners of the partnership being the Certificateholders (including the
Company, as assignee of the Depositor pursuant to the Purchase Agreement, in
its capacity as recipient of distributions from the Reserve Account), and the
Notes being debt of the partnership. The parties agree that, unless otherwise
required by appropriate tax authorities, the Trust will file or cause to be
filed annual or other necessary returns, reports and other forms consistent
with the characterization of the Trust as a partnership for such tax purposes.
Effective as of the date hereof, the Owner Trustee shall have all rights,
powers and duties set forth herein and in the Business Trust Statute with
respect to accomplishing the purposes of the Trust.
SECTION 2.07. Liability of the Owners. (a) The Company shall be liable
directly to and will indemnify any injured party for all losses, claims,
damages, liabilities and expenses of the Trust (including Expenses, to the
extent not paid out of the Owner Trust Estate) to the extent that the Company
would be liable if the Trust were a partnership under the Delaware Revised
Uniform Limited Partnership Act in which the Company were a general partner;
provided, however, that the Company shall not be liable for any losses
incurred by a Certificateholder in the capacity of an investor in the Trust
Certificates, a Noteholder in the capacity of an investor in the Notes or the
holder of a Fixed Value Security in the capacity of an investor in the Fixed
Value Securities. In addition, any third party creditors of the Trust (other
than in connection with the obligations described in the preceding sentence
for which the Company shall not be liable) shall be deemed third party
beneficiaries of this paragraph and paragraph (c) below. The obligations of
the Company under this paragraph and paragraph (c) below shall be evidenced by
the Trust Certificates described in Section 3.10, which for purposes of the
Business Trust Statute shall be deemed to be a separate class of Trust
Certificates from all other Trust Certificates issued by the Trust; provided
that the rights and obligations evidenced by all Trust Certificates,
regardless of class, shall, except as provided in this Section, be identical.
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(b) No Owner, other than to the extent set forth in paragraphs (a) and
(c), shall have any personal liability for any liability or obligation of the
Trust.
(c) The Company agrees to be liable directly to and will indemnify any
injured party for all losses, claims, damages, liabilities and expenses (other
than those incurred by a Certificateholder in the capacity of an investor in
the Trust Certificates, a Noteholder in the capacity of an investor in the
Notes or a holder of a Fixed Value Security in the capacity of an investor in
the Fixed Value Securities) arising out of or based on the arrangements
pursuant to which the Fixed Value Payments and the Amortizing Payments are
held by the Company and the Trust, respectively, as though such arrangements
were partnerships under the Delaware Revised Uniform Limited Partnership Act
in which the Company were a general partner.
SECTION 2.08. Title to Trust Property. Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
SECTION 2.09. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware
or the State of New York. The Trust shall not have any employees in any state
other than Delaware; provided, however, that nothing herein shall restrict or
prohibit the Owner Trustee from having employees within or without the State
of Delaware. Payments will be received by the Trust only in Delaware or New
York, and payments will be made by the Trust only from Delaware or New York.
The only office of the Trust will be at the Corporate Trust Office in
Delaware.
SECTION 2.10. Representations and Warranties of the Depositor and the
Company. (a) The Depositor hereby represents and warrants to the Owner Trustee
that:
(i) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Michigan,
with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(ii) The Depositor is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of its property or the conduct of its business shall require
such qualifications.
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(iii) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has
full power and authority to sell and assign the property to be sold
and assigned to and deposited with the Trust and the Depositor has
duly authorized such sale and assignment and deposit to the Trust by
all necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by the
Depositor by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a
party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best
of the Depositor's knowledge, any order, rule or regulation applicable
to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties.
(v) To the Depositor's best knowledge, there are no proceedings
or investigations pending or threatened before any court, regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties: (A)
asserting the invalidity of this Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement
or (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement.
(vi) The representations and warranties of the Company and the
Depositor in Sections 3.01 and 3.02 of the Purchase Agreement are true
and correct.
(b) The Company hereby represents and warrants to the Owner Trustee
that:
(i) The Company has been duly organized and is validly
existing as a corporation (in the case of an Assignee Company, such
legal entity as is applicable) in good standing under the laws of the
jurisdiction of its organization, with the power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is presently conducted.
(ii) The Company is duly qualified to do business as a foreign
corporation (in the case of an Assignee Company, such legal entity as
is applicable) in good standing and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of its property or the conduct of its business shall require
such qualifications.
(iii) The Company has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Company has
full power and authority to purchase the Trust Certificates that the
Company has agreed to purchase pursuant to Section 3.10; and the
execution, delivery and performance of this Agreement has been duly
authorized by the Company by all necessary corporate action.
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(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Company (in the case of
an Assignee Company, its governing documents), or any indenture,
agreement or other instrument to which the Company is a party or by
which it is bound; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Basic Documents); nor violate any law or, to the best of the Company's
knowledge, any order, rule or regulation applicable to the Company of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Company or its properties.
(v) There are no proceedings or investigations pending or, to
the Company's best knowledge, threatened before any court, regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Company or its properties: (A) asserting
the invalidity of this Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement
or (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Company of its obligations
under, or the validity or enforceability of, this Agreement.
SECTION 2.11. Maintenance of the Demand Note. To the fullest extent
permitted by applicable law, the Company agrees that it shall not sell,
convey, pledge, transfer or otherwise dispose of the Demand Note.
SECTION 2.12. Federal Income Tax Allocations. Net income of the Trust
for any month as determined for federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof) shall
be allocated:
(a) among the Certificate Owners as of the first day following the end
of such month, in proportion to their ownership of principal amount of Trust
Certificates on such date, net income in an amount up to the sum of (i) the
Certificateholders' Monthly Interest Distributable Amount for such month, (ii)
interest on the excess, if any, of the Certificateholders' Interest
Distributable Amount for the preceding Distribution Date over the amount in
respect of interest that is actually deposited in the Certificate Distribution
Account on such preceding Distribution Date, to the extent permitted by law,
at the Pass-Through Rate from such preceding Distribution Date through the
current Distribution Date, (iii) the portion of the market discount on the
Receivables accrued during such month that is allocable to the excess, if any,
of the initial aggregate principal amount of the Trust Certificates over their
initial aggregate issue price, (iv) any amount expected to be distributed to
the Certificateholders pursuant to Section 5.07(g) of the Sale and Servicing
Agreement (to the extent not previously allocated pursuant to this clause),
and (v) any other amounts of income payable to the Certificateholders for such
month; such sum to be reduced by any amortization by the Trust of premium on
Receivables that corresponds to any excess of the issue price of Certificates
over their principal amount; and
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(b) to the Company, to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the
allocations described in clause (a) above, subsequent net income shall first
be allocated to make up such shortfall before being allocated as provided in
the preceding sentence. Net losses of the Trust, if any, for any month as
determined for federal income tax purposes (and each item of income, gain,
loss and deduction entering into the computation thereof) shall be allocated
to the Company to the extent the Company is reasonably expected to bear the
economic burden of such net losses, and any remaining net losses shall be
allocated among the Certificate Owners as of the first Record Date following
the end of such month in proportion to their ownership of principal amount of
Trust Certificates on such Record Date. The Company is authorized to modify
the allocations in this paragraph if necessary or appropriate, in its sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the Company or to the Certificate Owners, or as otherwise required by
the Code.
SECTION 2.13. Assignment of Rights and Obligations under the Trust
Agreement. Premier Receivables L.L.C. hereby transfers and assigns all of its
rights and obligations under that Trust Agreement dated as of March 12, 1996,
among the Depositor, the Owner Trustee and Premier Receivables L.L.C., to the
Company, and the Company hereby accepts such transfer and assignment.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Ownership. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.05 and until the
issuance of the Trust Certificates, the Depositor shall be the sole
beneficiary of the Trust.
SECTION 3.02. The Trust Certificates. The Trust Certificates shall be
issued in minimum denominations of $20,000 and in integral multiples of $1,000
in excess thereof; provided, however, that the Trust Certificates issued to
the Company pursuant to Section 3.10 may be issued in such denomination as
required to include any residual amount. The Trust Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. Trust Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefit of this Agreement,
notwithstanding that such individuals or any of them shall have ceased to be
so authorized prior to the authentication and delivery of such Trust
Certificates or did not hold such offices at the date of authentication and
delivery of such Trust Certificates.
A transferee of a Trust Certificate shall become a Certificateholder
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Trust
Certificate duly registered in such transferee's name pursuant to Section
3.04.
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SECTION 3.03. Authentication of Trust Certificates. On the Closing
Date, the Owner Trustee shall cause the Trust Certificates in an aggregate
principal amount equal to the Initial Certificate Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order
of the Depositor, signed by its chairman of the board, its president, any vice
president, secretary or any assistant treasurer, without further corporate
action by the Depositor, in authorized denominations. No Trust Certificate
shall entitle its Holder to any benefit under this Agreement or be valid for
any purpose unless there shall appear on such Trust Certificate a certificate
of authentication substantially in the form set forth in Exhibit A, executed
by the Owner Trustee or Chemical Bank, as the Owner Trustee's authenticating
agent, by manual signature; such authentication shall constitute conclusive
evidence that such Trust Certificate shall have been duly authenticated and
delivered hereunder. All Trust Certificates shall be dated the date of their
authentication.
SECTION 3.04. Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.08, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Owner Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. Chemical
Bank shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.08, the Owner Trustee
shall execute, authenticate and deliver (or shall cause Chemical Bank as its
authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Trust Certificates in
authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of a Holder, Trust Certificates may be exchanged for other Trust Certificates
of authorized denominations of a like aggregate amount upon surrender of the
Trust Certificates to be exchanged at the office or agency maintained pursuant
to Section 3.08.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Trust Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Owner Trustee in
accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of, Trust Certificates for a period of 15 days
preceding the due date for any payment with respect to the Trust Certificates.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate and
(b) there shall be delivered to the Certificate Registrar and the Owner
Trustee such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Trust Certificate has
been acquired by a bona fide purchaser, the Owner Trustee on behalf of the
Trust shall execute and the Owner Trustee or Chemical Bank, as the Owner
Trustee's authenticating agent, shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Certificate, a new Trust Certificate of like tenor and denomination. In
connection with the issuance of any new Trust Certificate under this Section,
the Owner Trustee or the Certificate Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Trust Certificate issued
pursuant to this Section shall constitute conclusive evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.
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SECTION 3.06. Persons Deemed Owners. Prior to due presentation of a
Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Paying Agent may treat the Person in whose name
any Trust Certificate is registered in the Certificate Register as the owner
of such Trust Certificate for the purpose of receiving distributions pursuant
to Section 5.02 and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar or any Paying Agent shall be bound by any
notice to the contrary.
SECTION 3.07. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, within 15 days after receipt by the Owner Trustee
of a written request therefor from the Servicer or the Depositor, a list, in
such form as the Servicer or the Depositor may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record
Date. If three or more Certificateholders or one or more Holders of Trust
Certificates evidencing not less than 25% of the Certificate Balance apply in
writing to the Owner Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their
rights under this Agreement or under the Trust Certificates and such
application is accompanied by a copy of the communication that such applicants
propose to transmit, then the Owner Trustee shall, within five Business Days
after the receipt of such application, afford such applicants access during
normal business hours to the current list of Certificateholders. Each Holder,
by receiving and holding a Trust Certificate, shall be deemed to have agreed
not to hold any of the Depositor, the Company, the Certificate Registrar or
the Owner Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 3.08. Maintenance of Office or Agency. The Owner Trustee shall
maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Trust Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Trust Certificates and the Basic Documents
may be served. The Owner Trustee initially designates Chemical Bank, 55 Water
Street, New York, New York 10041 as its office for such purposes. The Owner
Trustee shall give prompt written notice to the Company and to the
Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
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SECTION 3.09. Appointment of Paying Agent. The Paying Agent shall make
distributions to Certificateholders from the Certificate Distribution Account
pursuant to Section 5.02 and shall report the amounts of such distributions to
the Owner Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Certificate Distribution Account for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent initially shall be
Chemical Bank, and any co-paying agent chosen by Chemical Bank and acceptable
to the Owner Trustee. Chemical Bank shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Owner Trustee. In the event that
Chemical Bank shall no longer be the Paying Agent, the Owner Trustee shall
appoint a successor to act as Paying Agent (which shall be a bank or trust
company). The Owner Trustee shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Owner Trustee that, as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for
the benefit of the Certificateholders entitled thereto until such sums shall
be paid to such Certificateholders. The Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon removal of a Paying Agent such
Paying Agent shall also return all funds in its possession to the Owner
Trustee. The provisions of Sections 7.01, 7.03, 7.04 and 8.01 shall apply to
the Owner Trustee also in its role as Paying Agent, for so long as the Owner
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 3.10. Ownership by Company of Trust Certificates. The Company
shall on the Closing Date purchase from the Underwriters Trust Certificates
representing at least 1% of the Initial Certificate Balance and shall
thereafter retain beneficial and record ownership of Trust Certificates
representing at least 1% of the Certificate Balance. Except for a transfer to
an Assignee Company, any attempted transfer of any Trust Certificate that
would reduce such interest of the Company below 1% of the Certificate Balance
shall be void. The Owner Trustee shall cause any Trust Certificate issued to
the Company to contain a legend stating "THIS CERTIFICATE IS NON-TRANSFERABLE
EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED IN SECTION 3.10 OF THE TRUST
AGREEMENT".
Notwithstanding the foregoing paragraph, as a condition to any
registration of transfer of a Trust Certificate to an Assignee Company, (1)
such Assignee Company shall expressly assume, by an assumption agreement
executed and delivered to the Owner Trustee, all of the obligations of the
Company hereunder and (2) the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel to the effect that the conditions precedent to
such transfer in the Purchase Agreement and in this Trust Agreement have been
satisfied.
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SECTION 3.11. Fixed Value Securities. Pursuant to the Sale and
Servicing Agreement and the Purchase Agreement, promptly following the sale of
the Standard Receivables and Fixed Value Receivables to the Trust on the
Closing Date or the investment by the Indenture Trustee on the Closing Date or
any Transfer Date of funds in the Reserve Account in Eligible Investment Fixed
Value Receivables, the Trust will sell to the Depositor the Fixed Value
Payments in accordance with Sections 2.03 and 2.05(c) of the Sale and
Servicing Agreement. Neither the Depositor nor the Company (as assignee of the
Depositor) shall transfer such Fixed Value Payments to any Person other than
the Trust and except as contemplated by the Purchase Agreement. At any time
after the Trust sells the Fixed Value Payments to the Depositor, at the option
of the Company (as assignee of the Depositor) and upon 10 days prior written
notice to the Owner Trustee and the Indenture Trustee, the Company will be
permitted to sell to the Trust, and the Trust shall be obligated to purchase
from the Company (subject to the availability of funds), all or any portion of
the Fixed Value Payments due under the Receivables, subject to the terms and
conditions of the Sale and Servicing Agreement. Upon any such sale, (i) the
Depositor, the Company and the Owner Trustee will enter into an amendment to
this Agreement to provide for, at the election of the Company, the issuance of
certificates representing ownership interests in the Trust to the extent of
the Fixed Value Payments due under the Receivables or the issuance of
indebtedness by the Trust secured by the Fixed Value Payments due under the
Receivables and to make any other provisions herein that are necessary or
desirable in connection therewith and (ii) the Owner Trustee and the Depositor
will enter into any other agreements or instruments related thereto as may be
requested by the Company; provided, however, that the Owner Trustee may, but
shall not be obligated to, enter into any such amendment,
agreement or instrument that affects the Owner Trustee's own rights, duties or
immunities under this Agreement; and provided, further, that the obligation of
the Owner Trustee to enter into any such amendment or other agreement or
instrument is subject to the following conditions precedent:
(a) Such amendment and other agreements and instruments, in forms
satisfactory to the Owner Trustee and, in the case of amendments or agreements
to be executed and delivered by the Indenture Trustee, the Indenture Trustee,
shall have been executed by each other party thereto and delivered to the
Owner Trustee;
(b) The Company shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel to the
effect that each condition precedent (including the requirement with respect
to all required filings) provided by this Section has been complied with and
such amendment or other agreement or instrument is authorized or permitted by
this Agreement;
(c) The Rating Agency Condition shall have been satisfied with respect
to such sale and issuance;
(d) Such sale and issuance and such amendment or other agreement or
instrument shall not adversely affect in any material respect the interest of
any Noteholder or Certificateholder, and the Company shall have provided to
the Owner Trustee and the Indenture Trustee an Officer's Certificate to such
effect;
(e) The Owner Trustee and the Indenture Trustee shall have received an
Opinion of Counsel to the effect that such sale and issuance will not have any
material adverse tax consequence to the Trust or to any Noteholder or
Certificateholder; and
(f) All filings and other actions required to continue the first
perfected interest of the Trust in the Owner Trust Estate and of the Indenture
Trustee in the Collateral shall have been duly made or taken by the Company.
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SECTION 3.12. Book-Entry Trust Certificates. The Trust Certificates,
upon original issuance, will be issued in the form of a typewritten Trust
Certificate or Trust Certificates representing Book-Entry Trust Certificates,
to be delivered to The Depository Trust Company, the initial Clearing Agency,
by, or on behalf of, the Trust; provided, however, that one Definitive Trust
Certificate may be issued to the Company pursuant to Section 3.10. Such Trust
Certificate or Trust Certificates shall initially be registered on the
Certificate Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Certificate Owner will receive a definitive Trust
Certificate representing such Certificate Owner's interest in such Trust
Certificate, except as provided in Section 3.14. Unless and until definitive,
fully registered Trust Certificates (the "Definitive Trust Certificates") have
been issued to Certificate Owners pursuant to Section 3.14:
(a) The provisions of this Section shall be in full force and effect;
(b) The Certificate Registrar and the Owner Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Agreement (including
the payment of principal of and interest on the Trust Certificates and the
giving of instructions or directions hereunder) as the sole Holder of the
Trust Certificates and shall have no obligation to the Certificate Owners;
(c) To the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control;
(d) The rights of Certificate Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Certificate Depository
Agreement, unless and until Definitive Trust Certificates are issued pursuant
to Section 3.14, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Trust Certificates to such Clearing Agency
Participants; and
(e) Whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Trust Certificates
evidencing a specified percentage of the Certificate Balance, the Clearing
Agency shall be deemed to represent such percentage only to the extent that it
has received instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Trust Certificates and
has delivered such instructions to the Owner Trustee.
SECTION 3.13. Notices to Clearing Agency. Whenever a notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Trust Certificates shall have been issued to
Certificate Owners pursuant to Section 3.14, the Owner Trustee shall give all
such notices and communications specified herein to be given to
Certificateholders to the Clearing Agency, and shall have no obligations to
the Certificate Owners.
SECTION 3.14. Definitive Trust Certificates. If (i) the Administrator
advises the Owner Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Trust Certificates and the Administrator is unable to locate a qualified
successor, (ii) the Administrator at its option advises the Owner Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency or (iii) after the occurrence of an Event of Default or a Servicer
Default, Certificate Owners representing beneficial interests aggregating at
least a majority of the Certificate Balance advise the Clearing Agency in
writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interest of the Certificate Owners, then the
Clearing Agency shall notify all Certificate Owners and the Owner Trustee of
the occurrence of any such event and of the availability of the Definitive
Trust Certificates to Certificate Owners requesting the same. Upon surrender
to the Owner Trustee of the typewritten Trust Certificate or Trust
Certificates representing the Book-Entry Trust Certificates by the Clearing
Agency, accompanied by registration instructions, the Owner Trustee shall
execute and authenticate the Definitive Trust Certificates in accordance with
the instructions of the Clearing Agency. Neither the Certificate Registrar nor
the Owner Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Trust Certificates, the
Owner Trustee shall recognize the Holders of the Definitive Trust Certificates
as Certificateholders. The Definitive Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Owner Trustee, as evidenced by its execution
thereof.
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ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice to Owners with Respect to Certain Matters.
With respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action
and the Owners shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that such Owners have withheld consent
or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of the Receivables and
Eligible Investment Receivables) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of the Receivables and
Eligible Investment Receivables);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business
Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interests of the Owners;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner or add any provision that would not materially adversely
affect the interests of the Owners; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of
a successor Certificate Registrar, or the consent to the assignment by the
Note Registrar, Paying Agent or Indenture Trustee or Certificate Registrar of
its obligations under the Indenture or this Agreement, as applicable.
SECTION 4.02. Action by Owners with Respect to Certain Matters. The
Owner Trustee shall not have the power, except upon the direction of the
Owners, to (a) remove the Administrator under the Administration Agreement
pursuant to Section 8 thereof, (b) appoint a successor Administrator pursuant
to Section 8 of the Administration Agreement, (c) remove the Servicer under
the Sale and Servicing Agreement pursuant to Section 8.01 thereof or (d)
except as expressly provided in the Basic Documents, sell the Receivables
after the termination of the Indenture. The Owner Trustee shall take the
actions referred to in the preceding sentence only upon written instructions
signed by the Owners.
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SECTION 4.03. Action by Owners with Respect to Bankruptcy. The Owner
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the delivery to the Owner Trustee by each such Owner of a
certificate certifying that such Owner reasonably believes that the Trust is
insolvent.
SECTION 4.04. Restrictions on Owners' Power. The Owners shall not
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Basic Documents or would be
contrary to Section 2.03, nor shall the Owner Trustee be obligated to follow
any such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided herein,
any action that may be taken by the Owners under this Agreement may be taken
by the Holders of Trust Certificates evidencing not less than a majority of
the Certificate Balance. Except as expressly provided herein, any written
notice of the Owners delivered pursuant to this Agreement shall be effective
if signed by Holders of Trust Certificates evidencing not less than a majority
of the Certificate Balance at the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account. The Owner Trustee, for
the benefit of the Certificateholders, shall establish and maintain in the
name of the Trust an Eligible Deposit Account (the "Certificate Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Certificate Distribution Account and
in all proceeds thereof. Except as otherwise expressly provided herein, the
Certificate Distribution Account shall be under the sole dominion and control
of the Owner Trustee for the benefit of the Certificateholders. If, at any
time, the Certificate Distribution Account ceases to be an Eligible Deposit
Account, the Owner Trustee (or the Depositor on behalf of the Owner Trustee,
if the Certificate Distribution Account is not then held by the Owner Trustee
or an affiliate thereof) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Certificate Distribution Account as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new
Certificate Distribution Account.
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SECTION 5.02. Application of Trust Funds. (a) On each Distribution
Date, the Owner Trustee will distribute to Certificateholders, on a pro rata
basis, amounts deposited in the Certificate Distribution Account pursuant to
Sections 5.06 and 5.07 of the Sale and Servicing Agreement with respect to
such Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement or statements provided to the Owner Trustee by
the Servicer pursuant to Section 5.09 of the Sale and Servicing Agreement with
respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to an Owner, such tax shall reduce the
amount otherwise distributable to the Owner in accordance with this Section.
The Owner Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Owners sufficient funds for the payment of any
tax that is legally owed by the Trust (but such authorization shall not
prevent the Owner Trustee from contesting any such tax in appropriate
proceedings and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to an Owner shall be treated as cash distributed to such Owner at
the time it is withheld by the Trust and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S. Owner), the
Owner Trustee may in its sole discretion withhold such amounts in accordance
with this paragraph (c).
SECTION 5.03. Method of Payment. Subject to Section 9.01(c),
distributions required to be made to Certificateholders on any Distribution
Date shall be made to each Certificateholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the account
of such Holder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior
to such Distribution Date and such Holder's Trust Certificates in the
aggregate evidence a denomination of not less than $1,000,000, or, if not, by
check mailed to such Certificateholder at the address of such holder appearing
in the Certificate Register.
SECTION 5.04. No Segregation of Moneys; No Interest. Subject to
Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need
not be segregated in any manner except to the extent required by law or the
Sale and Servicing Agreement and may be deposited under such general
conditions as may be prescribed by law, and the Owner Trustee shall not be
liable for any interest thereon.
SECTION 5.05. Accounting and Reports to the Noteholders, Owners, the
Internal Revenue Service and Others. The Owner Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis and
the accrual method of accounting, (b) deliver to each Owner, as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1) to enable each Owner to prepare its
federal and state income tax returns, (c) file such tax returns relating to
the Trust (including a partnership information return, IRS Form 1065) and make
such elections as from time to time may be required or appropriate under any
applicable state or federal statute or any rule or regulation thereunder so as
to maintain the Trust's characterization as a partnership for federal income
tax purposes, (d) cause such tax returns to be signed in the manner required
by law and (e) collect or cause to be collected any withholding tax as
described in and in accordance with Section 5.02(c) with respect to income or
distributions to Owners. The Owner Trustee shall elect under Section 1278 of
the Code to include in income currently any market discount that accrues with
respect to the Receivables. The Owner Trustee shall not make the election
provided under Section 754 of the Code.
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SECTION 5.06. Signature on Returns; Tax Matters Partner. (a) The Owner
Trustee shall sign on behalf of the Trust the tax returns of the Trust, unless
applicable law requires an Owner to sign such documents, in which case such
documents shall be signed by the Company.
(b) The Company shall be designated the "tax matters partner" of the
Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and
any amendment or other agreement or instrument described in Section 3.11, in
each case, in such form as the Company shall approve, as evidenced
conclusively by the Owner Trustee's execution thereof. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Basic Documents. The
Owner Trustee is further authorized from time to time to take such action as
the Administrator recommends with respect to the Basic Documents.
SECTION 6.02. General Duties. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and the Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the Owners,
subject to the Basic Documents and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be held
liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement.
SECTION 6.03. Action upon Instruction. (a) Subject to Article IV and
in accordance with the terms of the Basic Documents, the Owners may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the Owners
pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any Basic Document or is otherwise contrary
to law.
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(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or
under any Basic Document, the Owner Trustee shall promptly give notice (in
such form as shall be appropriate under the circumstances) to the Owners
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Owners received, the Owner Trustee shall not be liable on
account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement or the
Basic Documents, as it shall deem to be in the best interests of the Owners,
and shall have no liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any
such provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Owners requesting instruction and, to the extent that the Owner Trustee acts
or refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement or the
Basic Documents, as it shall deem to be in the best interests of the Owners,
and shall have no liability to any Person for such action or inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided by
the terms of this Agreement or in any document or written instruction received
by the Owner Trustee pursuant to Section 6.03; and no implied duties or
obligations shall be read into this Agreement or any Basic Document against
the Owner Trustee. The Owner Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any
liens on any part of the Owner Trust Estate that result from actions by, or
claims against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.
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SECTION 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction delivered
to the Owner Trustee pursuant to Section 6.03.
SECTION 6.06. Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for federal income tax
purposes. The Owners shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts, but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct or negligence or (ii) in the case of
the inaccuracy of any representation or warranty contained in Section 7.03
expressly made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) The Owner Trustee shall not be liable for any error of judgment
made by a Trust Officer of the Owner Trustee;
(b) The Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Administrator or any Owner;
(c) No provision of this Agreement or any Basic Document shall require
the Owner Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder or under
any Basic Document if the Owner Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured or provided to it;
(d) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) The Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution hereof
by the Depositor or the Company or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate, or for or in
respect of the validity or sufficiency of the Basic Documents, other than the
certificate of authentication on the Trust Certificates, and the Owner Trustee
shall in no event assume or incur any liability, duty or obligation to any
Noteholder or to any Owner, other than as expressly provided for herein or
expressly agreed to in the Basic Documents;
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(f) The Owner Trustee shall not be liable for the default or
misconduct of the Administrator, Chrysler Financial Corporation, as Seller or
Depositor, the Company, the Indenture Trustee or the Servicer under any of the
Basic Documents or otherwise, and the Owner Trustee shall have no obligation
or liability to perform the obligations of the Trust under this Agreement or
the Basic Documents that are required to be performed by the Administrator
under the Administration Agreement, the Indenture Trustee under the Indenture
or the Servicer or Chrysler Financial Corporation, as Depositor or as Seller
under the Sale and Servicing Agreement; and
(g) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or otherwise or in relation to
this Agreement or any Basic Document, at the request, order or direction of
any of the Owners, unless such Owners have offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of any such act.
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall furnish
to the Owners, promptly upon receipt of a written request therefor, duplicates
or copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee under the
Basic Documents.
SECTION 7.03. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Company, for the benefit of the Owners, that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution or the delivery by it of this Agreement, nor
the consummation by it of the transactions contemplated hereby, nor compliance
by it with any of the terms or provisions hereof will contravene any federal
or Delaware law, governmental rule or regulation governing the banking or
trust powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or bylaws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
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SECTION 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to such fact
or matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such agents
or attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants
and other skilled Persons to be selected with reasonable care and employed by
it. The Owner Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written opinion or advice
of any such counsel, accountants or other such Persons and not contrary to
this Agreement or any Basic Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created Chemical Bank
Delaware acts solely as Owner Trustee hereunder and not in its individual
capacity, and all Persons having any claim against the Owner Trustee by reason
of the transactions contemplated by this Agreement or any Basic Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or
Receivables or Eligible Investment Receivables. The recitals contained herein
and in the Trust Certificates (other than the signature and countersignature
of the Owner Trustee on the Trust Certificates) shall be taken as the
statements of the Depositor and the Company, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Basic Document or of the Trust Certificates (other than the signature and
countersignature of the Owner Trustee on the Trust Certificates) or the Notes,
or of any Receivable or Eligible Investment Receivable or related documents.
The Owner Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any Receivable or
Eligible Investment Receivable, or the perfection and priority of any security
interest created by any Receivable or Eligible Investment Receivable in any
Financed Vehicle or the maintenance of any such perfection and priority, or
for or with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to Certificateholders under
this Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Financed Vehicle;
the existence and enforceability of any insurance thereon; the existence and
contents of any Receivable or Eligible Investment Receivable on any computer
or other record thereof; the validity of the assignment of any Receivable or
Eligible Investment Receivable to the Trust or of any intervening assignment;
the completeness of any Receivable or Eligible Investment Receivable; the
performance or enforcement of any Receivable or Eligible Investment
Receivable; the compliance by the Depositor, the Company or the Servicer with
any warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Administrator, the Indenture Trustee or the Servicer or any subservicer
taken in the name of the Owner Trustee.
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SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Company, the Administrator, the Indenture Trustee and the Servicer in banking
transactions with the same rights as it would have if it were not Owner
Trustee.
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act Licenses.
The Owner Trustee, in its individual capacity, shall use its best efforts to
maintain, and the Owner Trustee, as Owner Trustee, shall cause the Trust to
use its best efforts to maintain, the effectiveness of all licenses required
under the Pennsylvania Motor Vehicle Sales Finance Act in connection with this
Agreement and the Basic Documents and the transactions contemplated hereby and
thereby until such time as the Trust shall terminate in accordance with the
terms hereof.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have
been separately agreed upon before the date hereof between the Depositor and
the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by
the Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder.
SECTION 8.02. Indemnification. The Depositor shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from
and against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever (collectively, "Expenses") which may at any time be imposed
on, incurred by, or asserted against the Owner Trustee or any Indemnified
Party in any way relating to or arising out of this Agreement, the Basic
Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee hereunder, except only
that the Depositor shall not be liable for or required to indemnify an
Indemnified Party from and against Expenses arising or resulting from any of
the matters described in the third sentence of Section 7.01. The indemnities
contained in this Section shall survive the resignation or termination of the
Owner Trustee or the termination of this Agreement. In any event of any claim,
action or proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee's choice of legal counsel shall be subject to the
approval of the Depositor, which approval shall not be unreasonably withheld.
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SECTION 8.03. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part
of the Owner Trust Estate immediately after such payment.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement. (a) This Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect (i) upon the final distribution by the Owner Trustee of all
moneys or other property or proceeds of the Owner Trust Estate in accordance
with the terms of the Indenture, the Sale and Servicing Agreement and Article
V or (ii) at the time provided in Section 9.02. The bankruptcy, liquidation,
dissolution, death or incapacity of any Owner, other than the Company as
described in Section 9.02, shall not (x) operate to terminate this Agreement
or the Trust or (y) entitle such Owner's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Owner Trust Estate
or (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in Section 9.01(a), none of the Depositor, the
Company or any Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which Certificateholders shall surrender their Trust
Certificates to the Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of
such termination from the Servicer given pursuant to Section 9.01(c) of the
Sale and Servicing Agreement, stating (i) the Distribution Date upon or with
respect to which final payment of the Trust Certificates shall be made upon
presentation and surrender of the Trust Certificates at the office of the
Paying Agent therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Distribution Date is
not applicable, payments being made only upon presentation and surrender of
the Trust Certificates at the office of the Paying Agent therein specified.
The Owner Trustee shall give such notice to the Certificate Registrar (if
other than the Owner Trustee) and the Paying Agent at the time such notice is
given to Certificateholders. Upon presentation and surrender of the Trust
Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.02.
In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give
a second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this Agreement.
Subject to applicable escheat laws, any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Owner Trustee to the
Company.
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(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.02. Dissolution upon Bankruptcy of the Company. In the event
that an Insolvency Event shall occur with respect to the Company, this
Agreement shall be terminated in accordance with Section 9.01 90 days after
the date of such Insolvency Event, unless, before the end of such 90-day
period, the Owner Trustee shall have received written instructions from (a)
Holders of Certificates (other than the Company) representing more than 50% of
the Certificate Balance (not including the Certificate Balance of the Trust
Certificates held by the Company), (b) each of the (i) Holders (as defined in
the Indenture) of Class A-1 Notes representing more than 50% of the
Outstanding Amount of the Class A-1 Notes, (ii) Holders (as defined in the
Indenture) of Class A-2 Notes representing more than 50% of the Outstanding
Amount of the Class A-2 Notes, (iii) Holders (as defined in the Indenture) of
Class A-3 Notes representing more than 50% of the Outstanding Amount of the
Class A-3 Notes and (iv) Holders (as defined in the Indenture) of Class A-4
Notes representing more than 50% of the Outstanding Amount of the Class A-4
Notes, and (c) holders of Fixed Value Securities representing more than 50% of
the outstanding principal balance of each class thereof, to the effect that
each such party disapproves of the liquidation of the Receivables and
termination of the Trust. Promptly after the occurrence of any Insolvency
Event with respect to the Company, (A) the Company shall give the Indenture
Trustee and the Owner Trustee written notice of such Insolvency Event, (B) the
Owner Trustee shall, upon the receipt of such written notice from the Company,
give prompt written notice to the Certificateholders, the holders of Fixed
Value Securities, if any, and the Indenture Trustee, of the occurrence of such
event and (C) the Indenture Trustee shall, upon receipt of written notice of
such Insolvency Event from the Owner Trustee or the Company, give prompt
written notice to the Noteholders of the occurrence of such event; provided,
however, that any failure to give a notice required by this sentence shall not
prevent or delay, in any manner, a termination of the Trust pursuant to the
first sentence of this Section 9.02. Upon a termination pursuant to this
Section, the Owner Trustee shall direct the Indenture Trustee promptly to sell
the assets of the Trust (other than the Trust Accounts and the Certificate
Distribution Account) and, on behalf of the Company, the Fixed Value Payments
owned by the Company, if any, in a commercially reasonable manner and on
commercially reasonable terms. The proceeds of such a sale of the assets of
the Trust shall be treated as collections under the Sale and Servicing
Agreement.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) time deposits that are
rated at least A-1 by Standard & Poor's and P-1 by Moody's. If such
corporation shall publish reports of condition at least annually pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.02.
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SECTION 10.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator. Upon receiving
such notice of resignation, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Owner Trustee may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Administrator shall
promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner Trustee, and
shall pay all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Administrator shall provide notice of
such resignation or removal of the Owner Trustee to each of the Rating
Agencies.
SECTION 10.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or
removal of the predecessor Owner Trustee shall become effective, and such
successor Owner Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees
and expenses deliver to the successor Owner Trustee all documents and
statements and monies held by it under this Agreement; and the Administrator
and the predecessor Owner Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Owner Trustee all such rights, powers,
duties and obligations.
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No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Administrator shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies. If the Administrator shall fail to mail such notice within 10 days
after acceptance of such appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.
SECTION 10.04. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant to
Section 10.01 and, provided, further, that the Owner Trustee shall mail notice
of such merger or consolidation to the Rating Agencies.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Vehicle may at the time be
located, the Administrator and the Owner Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Administrator and Owner Trustee to act as co-trustee,
jointly with the Owner Trustee, or as separate trustee or separate trustees,
of all or any part of the Owner Trust Estate, and to vest in such Person, in
such capacity, such title to the Trust or any part thereof and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Administrator and the Owner Trustee may consider necessary or
desirable. If the Administrator shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, the Owner
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee under this Agreement shall be required to meet the terms of
eligibility as a successor Owner Trustee pursuant to Section 10.01 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by
the Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Owner Trust
Estate or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
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(b) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) The Administrator and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments. This Agreement may be
amended by the Depositor, the Company and the Owner Trustee, with prior
written notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
in this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Depositor,
the Company and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of the Holders (as defined in the Indenture) of
Notes evidencing not less than a majority of the Outstanding Amount of the
Notes and the consent of the Holders of Certificates evidencing not less than
a majority of the Certificate Balance, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance required to consent to any
such amendment, without the consent of the holders of all the outstanding
Notes and Certificates.
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Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders,
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Certificateholders provided
for in this Agreement or in any other Basic Document) and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall
not be obligated to, enter into any such amendment that affects the Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
In connection with the execution of any amendment to this Trust
Agreement or any amendment of any other agreement to which the Issuer is a
party, the Owner Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel to the effect that such amendment is authorized or
permitted by the Basic Documents and that all conditions precedent in the
Basic Documents for the execution and delivery thereof by the Issuer or the
Owner Trustee, as the case may be, have been satisfied.
SECTION 11.02. No Legal Title to Owner Trust Estate in Owners. The
Owners shall not have legal title to any part of the Owner Trust Estate. The
Owners shall be entitled to receive distributions with respect to their
undivided ownership interest therein only in accordance with Articles V and
IX. No transfer, by operation of law or otherwise, of any right, title or
interest of the Owners to and in their ownership interest in the Owner Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Owner Trust Estate.
SECTION 11.03. Limitations on Rights of Others. Except for Section
2.07, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Company, the Owners, the Administrator and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders,
and nothing in this Agreement (other than Section 2.07 hereof), whether
express or implied, shall be construed to give to any other Person any legal
or equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
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SECTION 11.04. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that notice
to the Owner Trustee shall be deemed given only upon actual receipt by the
Owner Trustee), if to the Owner Trustee, addressed to the Corporate Trust
Office; if to the Depositor, addressed to Chrysler Financial Corporation,
27777 Franklin Road, Southfield, Michigan 48034, Attention of Secretary; if to
the Company, addressed to Premier Auto Receivables Company, 27777 Franklin
Road, Southfield, Michigan 48034, Attention of Secretary; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice.
SECTION 11.05. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 11.06. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the Depositor, the Company and its permitted assignees, the Owner Trustee and
its successors and each Owner and its successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of such
Owner.
SECTION 11.08. Covenants of the Company. In the event that (a) the
Certificate Balance shall be reduced by Realized Losses and (b) any litigation
with claims in excess of $1,000,000 to which the Company is a party which
shall be reasonably likely to result in a material judgment against the
Company that the Company will not be able to satisfy shall be commenced by an
Owner, during the period beginning nine months following the commencement of
such litigation and continuing until such litigation is dismissed or otherwise
terminated (and, if such litigation has resulted in a final judgment against
the Company, such judgment has been satisfied), the Company shall not pay any
dividend to CFC, or make any distribution on or in respect of its capital
stock to CFC, or repay the principal amount of any indebtedness of the Company
held by CFC, unless (i) after giving effect to such payment, distribution or
repayment, the Company's liquid assets shall not be less than the amount of
actual damages claimed in such litigation or (ii) the Rating Agency Condition
shall have been satisfied with respect to any such payment, distribution or
repayment. The Company will not at any time institute against the Trust any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Trust
Certificates, the Notes, the Trust Agreement or any of the Basic Documents.
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SECTION 11.09. No Petition. The Owner Trustee, by entering into this
Agreement, each Certificateholder, by accepting a Trust Certificate, and the
Indenture Trustee and each Noteholder, by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Company or the Trust, or join in any institution against the
Company or the Trust of, any bankruptcy proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Trust Certificates, the Notes, this Agreement or any of the
Basic Documents.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the Servicer, the
Company, the Administrator, the Owner Trustee, the Indenture Trustee or any
Affiliate thereof and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this
Agreement, the Trust Certificates or the Basic Documents.
SECTION 11.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. Trust Certificate Transfer Restrictions. The Trust
Certificates may not be acquired by or for the account of (i) an employee
benefit plan (as defined in Section 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Code or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Trust Certificate, the Holder thereof shall be deemed
to have represented and warranted that it is not a Benefit Plan.
SECTION 11.14. Depositor Payment Obligation. The Depositor shall be
responsible for payment of the Administrator's fees under the Administration
Agreement and shall reimburse the Administrator for all expenses and
liabilities of the Administrator incurred thereunder. In addition, the
Depositor shall be responsible for the payment of all fees and expenses of the
Trust, the Owner Trustee and the Indenture Trustee paid by any of them in
connection with any of their obligations under the Basic Documents to obtain
or maintain any required license under the Pennsylvania Motor Vehicle Sales
Finance Act.
* * * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
CHRYSLER FINANCIAL CORPORATION,
as Depositor
by: /s/ David H. Olsen
-------------------------
Name: David H. Olsen
Title: Assistant Treasurer
PREMIER AUTO RECEIVABLES COMPANY
by: /s/ David H. Olsen
-------------------------
Name: David H. Olsen
Title: Assistant Treasurer
CHEMICAL BANK DELAWARE,
not in its individual capacity but solely as
Owner Trustee
by: /s/ J. J. Cashin
-------------------------
Name: John J. Cashin
Title: Senior Trust Officer
Acknowledged and Accepted:
PREMIER RECEIVABLES L.L.C.
By: CHRYSLER FINANCIAL CORPORATION
By: /s/ B. C. Babbish
--------------------------
Name: Byron C. Babbish
Title: Assistant Secretary
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EXHIBIT A
Form of Trust Certificate
[THIS CERTIFICATE IS NON-TRANSFERABLE EXCEPT UNDER THE LIMITED CIRCUM-
STANCES DESCRIBED IN SECTION 3.10 OF THE TRUST AGREEMENT.]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
NUMBER $__________
R- CUSIP NO. _________
PREMIER AUTO TRUST 1996-1
6.35% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts and the
Amortizing Payments on the Fixed Value Receivables (each, as defined herein)
secured by new and used automobiles and light duty trucks.
(This Trust Certificate does not represent an interest in or obligation of
Chrysler Financial Corporation or any of its affiliates, except to the extent
described below.)
THIS CERTIFIES THAT ______________________ is the registered owner of
_________ DOLLARS nonassessable, fully-paid, fractional undivided interest in
Premier Auto Trust 1996-1 (the "Trust"), formed by Chrysler Financial
Corporation, a Michigan corporation (the "Depositor"), and Premier Auto
Receivables Company, a Delaware corporation (the "Company").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned
Trust Agreement.
CHEMICAL BANK DELAWARE, CHEMICAL BANK DELAWARE,
as Owner Trustee or as Owner Trustee
by: CHEMICAL BANK, as
Authenticating Agent
by: _________________________
Authorized Signatory
by: _____________________
Authorized Signatory
A-1
<PAGE>
The Trust was created pursuant to a Trust Agreement dated as of March
12, 1996, as amended and restated by an Amended and Restated Trust Agreement
dated as of March 1, 1996 (as so amended and restated and further amended or
supplemented from time to time, the "Trust Agreement"), among the Depositor,
the Company and Chemical Bank Delaware, as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Trust Agreement or the
Sale and Servicing Agreement dated as of March 1, 1996 (as amended and
supplemented from time to time, the "Sale and Servicing Agreement"), between
the Trust and the Depositor, as seller and as servicer (in such capacity, the
"Servicer"), as applicable.
This Certificate is one of the duly authorized Certificates designated
as 6.35% Asset Backed Certificates" (herein called the "Trust Certificates").
Also issued under an Indenture dated as of March 1, 1996 (the "Indenture"),
between the Trust and The Bank of New York, as indenture trustee, are the four
classes of Notes designated as "Class A-1 5.4375% Asset Backed Notes," "Class
A-2 Floating Rate Asset Backed Notes," "Class A-3 6.00% Asset Backed Notes"
and "Class A-4 6.05% Asset Backed Notes" (collectively, the "Notes"). This
Trust Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Trust Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound. The property of the Trust consists of a pool of retail
installment sale contracts for new and used automobiles and light duty trucks
and the Amortizing Payments on the Fixed Value Receivables (collectively, the
"Receivables"), all monies due under such Receivables on or after April 1,
1996, in the case of Precomputed Receivables, or received on or after March 8,
1996, in the case of Simple Interest Receivables, security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof,
proceeds from claims on certain insurance policies and certain other rights
under the Trust Agreement and the Sale and Servicing Agreement and all
proceeds of the foregoing. The term "Fixed Value Receivables" shall mean
retail sale contracts secured by new automobiles or light duty trucks with a
series of fixed level payment monthly installments (the "Amortizing Payments")
and a final fixed value payment that is greater than each Amortizing Payment.
The rights of the Holders of the Trust Certificates are subordinated to the
rights of the Holders of the Notes, as set forth in the Sale and Servicing
Agreement.
Under the Trust Agreement, there will be distributed on the sixth day
of each month or, if such sixth day is not a Business Day, the next Business
Day (each, a "Distribution Date"), commencing on May 6, 1996, to the Person in
whose name this Trust Certificate is registered at the close of business on
the day immediately preceding such Distribution Date, or if Definitive
Certificates are issued, the fifteenth day of the immediately preceding month
(the "Record Date"), such Certificateholder's fractional undivided interest in
the amount to be distributed to Certificateholders on such Distribution Date.
No distributions of principal will be made on any Certificate until all of the
Notes have been paid in full.
The Holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Depositor, the Company, the Servicer and the
Certificateholders that, for purposes of federal income, state and local
income and single business tax and any other income taxes, the Trust will be
treated as a partnership and the Certificateholders (including the Company)
will be treated as partners in that partnership. The Company and the
other Certificateholders, by acceptance of a Trust Certificate, agree to
treat, and to take no action inconsistent with the treatment of, the Trust
Certificates for such tax purposes as partnership interests in the Trust.
A-2
<PAGE>
Each Certificateholder or Certificate Owner, by its acceptance of a
Trust Certificate or, in the case of a Certificate Owner, a beneficial
interest in a Trust Certificate, covenants and agrees that such
Certificateholder or Certificate Owner, as the case may be, will not at any
time institute against the Company, or join in any institution against the
Company of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state bankruptcy or similar law in connection with any obligations relating
to the Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Trust Agreement and notwithstanding the above,
the final distribution on this Trust Certificate will be made after due notice
by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Trust Certificate at the office or agency
maintained for that purpose by the Owner Trustee in the Borough of Manhattan,
The City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the Holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
A-3
<PAGE>
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Trust Certificate to be duly
executed.
PREMIER AUTO TRUST 1996-1
by: CHEMICAL BANK DELAWARE, not
in its individual capacity but solely
as Owner Trustee
Dated: by: ____________________________________
Authorized Signatory
A-4
<PAGE>
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, the Servicer, the Company, the Owner Trustee or
any affiliates of any of them and no recourse may be had against such parties
or their assets, except as expressly set forth or contemplated herein or in
the Trust Agreement or the Basic Documents. In addition, this Trust
Certificate is not guaranteed by any governmental agency or instrumentality
and is limited in right of payment to certain collections and recoveries with
respect to the Receivables (and certain other amounts), all as more
specifically set forth herein and in the Sale and Servicing Agreement. A copy
of each of the Sale and Servicing Agreement and the Trust Agreement may be
examined by any Certificateholder upon written request during normal business
hours at the principal office of the Depositor and at such other places, if
any, designated by the Depositor.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Depositor and the Company and the rights of the Certificateholders under
the Trust Agreement at any time by the Depositor, the Company and the Owner
Trustee with the consent of the Holders of the Trust Certificates and the
Notes, each voting as a class, evidencing not less than a majority of the
Certificate Balance and the outstanding principal balance of the Notes of each
such class. Any such consent by the Holder of this Trust Certificate shall be
conclusive and binding on such Holder and on all future Holders of this Trust
Certificate and of any Trust Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent is
made upon this Trust Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in
the Certificate Register upon surrender of this Trust Certificate for
registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Owner Trustee in the Borough of Manhattan, The
City of New York, accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed
by the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Trust Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Trust Agreement is Chemical Bank, New York, New York.
Except as provided in the Trust Agreement, the Trust Certificates are
issuable only as registered Trust Certificates without coupons in
denominations of $20,000 and in integral multiples of $1,000 in excess
thereof. As provided in the Trust Agreement and subject to certain limitations
therein set forth, Trust Certificates are exchangeable for new Trust
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
A-5
<PAGE>
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of
all property held as part of the Owner Trust Estate. The Servicer of the
Receivables may at its option purchase the Owner Trust Estate at a price
specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of
the Trust Certificates; however, such right of purchase is exercisable only as
of the last day of any Collection Period as of which the Pool Balance is less
than or equal to 10% of the Original Pool Balance.
The Trust Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions
of Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or
(c) any entity whose underlying assets include plan assets by reason of a
plan's investment in the entity or which uses plan assets to acquire Trust
Certificates (each, a "Benefit Plan"). By accepting and holding this Trust
Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
A-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, and hereby
irrevocably constitutes and appoints ______ , attorney, to transfer said Trust
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
- -----------------
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial
bank or trust company.
A-7
<PAGE>
EXHIBIT B
Form of Certificate of Trust of Premier Auto Trust 1996-1
THIS Certificate of Trust of PREMIER AUTO TRUST 1996-1 (the "Trust"),
dated March 12, 1996, is being duly executed and filed by Chemical Bank
Delaware, a Delaware banking corporation, as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del. Code, section 3801 et seq.).
1. Name. The name of the business trust formed hereby is PREMIER AUTO
TRUST 1996-1.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is Chemical Bank Delaware, 1201 Market
Street, Wilmington, Delaware 19801, Attention: Corporate Trustee
Administration Department.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
CHEMICAL BANK DELAWARE,
not in its individual capacity but solely as
owner trustee under a Trust Agreement dated
as of March 12, 1996
By: _____________________________________
Name: John J. Cashin
Title: Senior Trust Officer
B-1
<PAGE>
EXHIBIT C
Form of Certificate Depository Agreement
Letter of Representations
[To be Completed by Issuer and Trustee]
______________________________________
[Name of Issuer]
______________________________________
[Name of Trustee]
___________
(Date)
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: ________________________________________________________________
________________________________________________________________
________________________________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee
will act as trustee with respect to the Securities pursuant to a trust
indenture dated ___________ , 199_ (the "Document"). _____________________
___ (the "Underwriter") is distributing the Securities through The Depository
Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC,
and to act in accordance with its Rules with respect to the Securities, Issuer
and Trustee make the following representations to DTC:
C-1
<PAGE>
1. Prior to closing on the Securities on _____________________, 199_,
there shall be deposited with DTC one Security certificate registered in the
name of DTC's nominee, Cede & Co., for each stated maturity of the Securities
in the face amounts set forth on Schedule A hereto, the total of which
represents 100% of the principal amount of such Securities. If, however, the
aggregate principal amount of any maturity exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each $200 million certificate shall bear the
following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Issuer or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date for
such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and
receipt of such notices shall be confirmed by telephoning (212) 709-6870.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to DTC's Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer
or Trustee shall forward such notice either in a separate secure transmission
for each CUSIP number or in a secure transmission for multiple CUSIP numbers
(if applicable) which includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Call Notification Department
at (516) 227-4039 or (516) 227-4190. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant
to this Paragraph by mail or by any other means shall be sent to:
C-2
<PAGE>
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities, notice by
Issuer or Trustee to Security holders specifying the terms of the tender and
the Publication Date of such notice shall be sent to DTC by a secure means in
the manner set forth in the preceding Paragraph. Notices to DTC pursuant to
this Paragraph and notices of other corporate actions (including mandatory
tenders, exchanges, and capital changes) by telecopy shall be sent to DTC's
Reorganization Department at (212) 709-1093 or (212) 709-1094, and receipt of
such notices shall be confirmed by telephoning (212) 709-6884. Notices to DTC
pursuant to the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the
CUSIP number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices, which
shall also contain the current pool factor and Trustee contact's name and
telephone number, shall be sent by telecopy to DTC's Dividend Department at
(212) 709-1723, or if by mail or by any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
7. [Note: Issuer must represent one of the following, and cross out
the other:] [The interest accrual period is record date to record date.] [The
interest accrual period is payment date to payment date.]
8. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds on each payment date (or the
equivalent in accordance with existing arrangements between Issuer or Trustee
and DTC). Such payments shall be made payable to the order of Cede & Co.
Absent any other existing arrangements, such payments shall be addressed as
follows:
C-3
<PAGE>
Manager; Cash Receipts
Dividend Department
The Depository Trust Company
7 Hanover Square; 24th Floor
New York, NY 10004-2695
9. [Note: Issuer must represent one of the following, and cross out
the other:]
Securities Eligible for DTC's Same-Day Funds Settlement ("SDFS")
System. Other principal payments (redemption payments) shall be made in
same-day funds by Trustee in the manner set forth in the SDFS Paying Agent
Operating Procedures, a copy of which previously has been furnished to
Trustee.
Securities Eligible for DTC's Next-Day Funds Settlement ("NDFS")
System. Other principal payments (redemption payments) shall be made in
next-day funds by Trustee to Cede & Co., as nominee of DTC, or its registered
assigns, on each payment date. Such payments shall be made payable to the
order of Cede & Co., and shall be addressed as follows:
NDFS Redemptions Manager
Reorganization/Redemptions Department
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
10. DTC may direct Issuer or Trustee to use any other number or
address as the number or address to which notices or payments of interest or
principal may be sent.
11. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity, in
which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
12. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
13. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Trustee (at which time DTC will confirm with Issuer or
Trustee the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
C-4
<PAGE>
14. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in
the Securities any information contained in the Security certificate(s); and
(b) acknowledges that neither DTC's Participants nor any person having an
interest in the Securities shall be deemed to have notice of the provisions of
the Security certificates by virtue of submission of such certificate(s) to
DTC.
15. Nothing herein shall be deemed to require Trustee to advance funds
on behalf of Issuer.
Notes:
A. If there is a Trustee (as defined in this Letter of Representations),
Trustee as well as Issuer must sign this Letter. If there is no Trustee, in
signing this Letter Issuer itself undertakes to perform all of the obligations
set forth herein.
B. Schedule B contains statements that DTC believes accurately describe DTC,
the method of effecting book-entry transfers of securities distributed through
DTC, and certain related matters.
Very truly yours,
_________________________________
(Issuer)
By: _____________________________
(Authorized Officer's Signature)
_________________________________
(Trustee)
By: _____________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: ________________________
cc: Underwriter
Underwriter's Counsel
C-5
<PAGE>
SCHEDULE A
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
- ----- ---------------- ------------- -------------
C-6
<PAGE>
SCHEDULE B
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC--bracketed material may be applicable only to certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered pin the name of Cede
& Co. (DTC's partnership nominee). One fully-registered Security certificate
will be issued for [each issue of the Securities, [each] in the aggregate
principal amount of such issue, and will be deposited with DTC. [If, however,
the aggregate principal amount of [any] issue exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The Rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Securities are to be accomplished by entries made
on the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
Securities, except in the event that use of the book-entry system for the
Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
C-7
<PAGE>
[6. Redemption notices shall be sent to Cede & Co. If less than all of the
Securities within an issue are being redeemed, DTC's practice is to determine
by lot the amount of the interest of each Direct Participant in such issue to
be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, the Agent, or
the Issuer, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to DTC is the
responsibility of the Issuer or the Agent, disbursement of such payments to
Direct Participants shall be the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct
and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to the [Tender/Remarketing]
Agent, and shall effect delivery of such Securities by causing the Direct
Participant to transfer the Participant's interest in the Securities, on DTC's
records, to the [Tender/Remarketing] Agent. The requirement for physical
delivery of Securities in connection with a demand for purchase or a mandatory
purchase will be deemed satisfied when the ownership rights in the Securities
are transferred by Direct Participants on DTC's records.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to the
Issuer or the Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to
be printed and delivered.
11. The Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Issuer believes to be reliable,
but the Issuer takes no responsibility for the accuracy thereof.
C-8
Exhibit 4.2
EXECUTION COPY
==============================================================================
INDENTURE
between
PREMIER AUTO TRUST 1996-1,
as Issuer
and
THE BANK OF NEW YORK,
as Indenture Trustee
Dated as of March 1, 1996
==============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions and Incorporation by Reference
<S> <C> <C>
SECTION 1.01. Definitions.......................................................... 2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.................... 9
SECTION 1.03. Rules of Construction................................................ 9
<CAPTION>
ARTICLE II
The Notes
<S> <C> <C>
SECTION 2.01. Form................................................................. 10
SECTION 2.02. Execution, Authentication and Delivery............................... 10
SECTION 2.03. Temporary Notes...................................................... 11
SECTION 2.04. Limitations on Transfer of the Class A-1 Notes....................... 11
SECTION 2.05. Registration; Registration of Transfer and Exchange.................. 12
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes........................... 13
SECTION 2.07. Persons Deemed Owner................................................. 13
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest................ 14
SECTION 2.09. Cancellation......................................................... 14
SECTION 2.10. Release of Collateral................................................ 15
SECTION 2.11. Book-Entry Notes..................................................... 15
SECTION 2.12. Notices to Clearing Agency........................................... 16
SECTION 2.13. Definitive Notes..................................................... 16
SECTION 2.14. Tax Treatment........................................................ 16
SECTION 2.15. Determination of LIBOR............................................... 16
SECTION 2.16. Initial Calculation Agent; Replacement of Calculation Agent.......... 17
<CAPTION>
ARTICLE III
Covenants
<S> <C> <C>
SECTION 3.01. Payment of Principal and Interest.................................... 17
SECTION 3.02. Maintenance of Office or Agency...................................... 17
SECTION 3.03. Money for Payments To Be Held in Trust............................... 17
SECTION 3.04. Existence............................................................ 19
SECTION 3.05. Protection of Trust Estate........................................... 19
SECTION 3.06. Opinions as to Trust Estate.......................................... 19
SECTION 3.07. Performance of Obligations; Servicing of Receivables................. 20
SECTION 3.08. Negative Covenants................................................... 21
SECTION 3.09. Annual Statement as to Compliance.................................... 22
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.................. 22
SECTION 3.11. Successor or Transferee.............................................. 24
SECTION 3.12. No Other Business.................................................... 24
i
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SECTION 3.13. No Borrowing......................................................... 24
SECTION 3.14. Servicer's Obligations............................................... 24
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.................... 24
SECTION 3.16. Capital Expenditures................................................. 24
SECTION 3.17. Removal of Administrator............................................. 24
SECTION 3.18. Restricted Payments.................................................. 24
SECTION 3.19. Notice of Events of Default.......................................... 25
SECTION 3.20. Further Instruments and Acts......................................... 25
<CAPTION>
ARTICLE IV
Satisfaction and Discharge
<S> <C> <C>
SECTION 4.01. Satisfaction and Discharge of Indenture.............................. 25
SECTION 4.02. Application of Trust Money........................................... 26
SECTION 4.03. Repayment of Moneys Held by Paying Agent............................. 26
<CAPTION>
ARTICLE V
Remedies
<S> <C> <C>
SECTION 5.01. Events of Default.................................................... 26
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment................... 27
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee............................................... 28
SECTION 5.04. Remedies; Priorities................................................. 30
SECTION 5.05. Optional Preservation of the Receivables............................. 31
SECTION 5.06. Limitation of Suits.................................................. 32
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest....................................................... 32
SECTION 5.08. Restoration of Rights and Remedies................................... 32
SECTION 5.09. Rights and Remedies Cumulative....................................... 33
SECTION 5.10. Delay or Omission Not a Waiver....................................... 33
SECTION 5.11. Control by Noteholders............................................... 33
SECTION 5.12. Waiver of Past Defaults.............................................. 33
SECTION 5.13. Undertaking for Costs................................................ 34
SECTION 5.14. Waiver of Stay or Extension Laws..................................... 34
SECTION 5.15. Action on Notes...................................................... 34
SECTION 5.16. Performance and Enforcement of Certain Obligations................... 34
<CAPTION>
ARTICLE VI
The Indenture Trustee
<S> <C> <C>
SECTION 6.01. Duties of Indenture Trustee.......................................... 35
SECTION 6.02. Rights of Indenture Trustee.......................................... 36
SECTION 6.03. Individual Rights of Indenture Trustee............................... 36
ii
<PAGE>
SECTION 6.04. Indenture Trustee's Disclaimer....................................... 37
SECTION 6.05. Notice of Defaults................................................... 37
SECTION 6.06. Reports by Indenture Trustee to Holders.............................. 37
SECTION 6.07. Compensation and Indemnity........................................... 37
SECTION 6.08. Replacement of Indenture Trustee..................................... 37
SECTION 6.09. Successor Indenture Trustee by Merger................................ 38
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.................................................. 39
SECTION 6.11. Eligibility; Disqualification........................................ 40
SECTION 6.12. Preferential Collection of Claims Against Issuer..................... 40
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act Licenses................ 40
<CAPTION>
ARTICLE VII
Noteholders' Lists and Reports
<S> <C> <C>
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders..................................................... 40
SECTION 7.02. Preservation of Information; Communications to Noteholders........... 40
SECTION 7.03. Reports by Issuer.................................................... 41
SECTION 7.04. Reports by Indenture Trustee......................................... 41
<CAPTION>
ARTICLE VIII
Accounts, Disbursements and Releases
<S> <C> <C>
SECTION 8.01. Collection of Money.................................................. 41
SECTION 8.02. Trust Accounts....................................................... 42
SECTION 8.03. General Provisions Regarding Accounts................................ 42
SECTION 8.04. Release of Trust Estate.............................................. 43
SECTION 8.05. Opinion of Counsel................................................... 44
iii
<PAGE>
<CAPTION>
ARTICLE IX
Supplemental Indentures
<S> <C> <C>
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders............... 44
SECTION 9.02. Supplemental Indentures with Consent of Noteholders.................. 45
SECTION 9.03. Execution of Supplemental Indentures................................. 46
SECTION 9.04. Effect of Supplemental Indenture..................................... 46
SECTION 9.05. Conformity with Trust Indenture Act.................................. 47
SECTION 9.06. Reference in Notes to Supplemental Indentures........................ 47
<CAPTION>
ARTICLE X
Redemption of Notes
<S> <C> <C>
SECTION 10.01. Redemption........................................................... 47
SECTION 10.02. Form of Redemption Notice............................................ 47
SECTION 10.03. Notes Payable on Redemption Date..................................... 48
<CAPTION>
ARTICLE XI
Miscellaneous
<S> <C> <C>
SECTION 11.01. Compliance Certificates and Opinions, etc............................ 48
SECTION 11.02. Form of Documents Delivered to Indenture Trustee..................... 50
SECTION 11.03. Acts of Noteholders.................................................. 50
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies...... 51
SECTION 11.05. Notices to Noteholders; Waiver....................................... 51
SECTION 11.06. Alternate Payment and Notice Provisions.............................. 52
SECTION 11.07. Conflict with Trust Indenture Act.................................... 52
SECTION 11.08. Effect of Headings and Table of Contents............................. 52
SECTION 11.09. Successors and Assigns............................................... 52
SECTION 11.10. Separability......................................................... 53
SECTION 11.11. Benefits of Indenture................................................ 53
SECTION 11.12. Legal Holidays....................................................... 53
SECTION 11.13. GOVERNING LAW........................................................ 53
SECTION 11.14. Counterparts......................................................... 53
SECTION 11.15. Recording of Indenture............................................... 53
SECTION 11.16. Trust Obligation..................................................... 53
SECTION 11.17. No Petition.......................................................... 54
SECTION 11.18. Inspection........................................................... 54
<S> <C>
SCHEDULE A - Schedule of Receivables
EXHIBIT A-1 - Form of Class A-1 Note
EXHIBIT A-2 - Form of Class A-2 Note
EXHIBIT A-3 - Form of Class A-3 Note
EXHIBIT A-4 - Form of Class A-4 Note
EXHIBIT B - Form of the Note Depository Agreement
EXHIBIT - Transferor Certificate
EXHIBIT - Investment Letter
EXHIBIT - Rule 144A Letter
</TABLE>
iv
<PAGE>
INDENTURE dated as of March 1, 1996, between PREMIER AUTO TRUST 1996-1,
a Delaware business trust (the "Issuer"), and THE BANK OF NEW YORK, a New York
banking corporation, as trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's Class A-1 5.4375%
Asset Backed Notes (the "Class A-1 Notes"), Class A-2 Floating Rate Asset
Backed Notes (the "Class A-2 Notes"), Class A-3 6.00% Asset Backed Notes (the
"Class A-3 Notes"), and Class A-4 6.05% Asset Backed Notes (the "Class A-4
Notes" and, together with the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to (a) the Receivables and all
moneys due thereon on or after April 1, 1996, in the case of Precomputed
Receivables, and all moneys received thereon on and after March 8, 1996, in
the case of Simple Interest Receivables; (b) the security interests in the
Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of the Issuer in such Financed Vehicles; (c) any proceeds with
respect to the Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors; (d) any
proceeds with respect to the Receivables or Eligible Investment Receivables
from recourse to Dealers thereon with respect to which the Servicer has
determined in accordance with its customary servicing procedures that eventual
payment in full is unlikely; (e) any Financed Vehicle that shall have secured
a Receivable or an Eligible Investment Receivable and that shall have been
acquired by or on behalf of the Seller, the Servicer, the Company or the
Issuer; (f) all funds on deposit from time to time in the Trust Accounts,
including the Reserve Account Initial Deposit, and in all investments
(including Eligible Investment Receivables) and proceeds thereof (including
all income thereon); (g) the Sale and Servicing Agreement (including the
Issuer's right to cause the Seller to repurchase Standard Receivables or Fixed
Value Receivables from the Issuer under certain circumstances described
therein); and (h) all present and future claims, demands, causes of action and
choses in action in respect of any or all of the foregoing and all payments on
or under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion thereof,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards,
rights to payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time constitute all
or part of or are included in the proceeds of any of the foregoing
(collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of
the Notes, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that
the interests of the Holders of the Notes may be adequately and effectively
protected.
1
<PAGE>
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. (a) Definitions. Except as otherwise specified herein or
as the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated as
of March 1, 1996, among the Administrator, the Issuer and the Indenture
Trustee.
"Administrator" means Chrysler Financial Corporation, a Michigan
corporation, or any successor Administrator under the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter) and, so long as the Administration Agreement is in effect, any
Vice President or more senior officer of the Administrator who is authorized
to act for the Administrator in matters relating to the Issuer and to be acted
upon by the Administrator pursuant to the Administration Agreement and who is
identified on the list of Authorized Officers delivered by the Administrator
to the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
the Sale and Servicing Agreement, the Purchase Agreement, the Administration
Agreement, the Note Depository Agreement, the Certificate Depository Agreement
and other documents and certificates delivered in connection therewith.
"Book-Entry Notes" means a beneficial interest in the Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 2.11.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in The City of New York are
authorized or obligated by law, regulation or executive order to remain
closed.
2
<PAGE>
"Calculation Agent" means the Indenture Trustee or any other Person
authorized by the Issuer to make the calculations described in Section 2.16 on
behalf of the Trust and the Noteholders. The Indenture Trustee shall be the
initial Calculation Agent.
"Certificate Depository Agreement" has the meaning specified in Section
1.01 of the Trust Agreement.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A-1 Interest Rate" means 5.4375% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-1 Notes" means the Class A-1 5.4375% Asset Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-2 Interest Rate" means a per annum rate equal to LIBOR plus
0.07%, subject to a maximum rate with respect to any Floating Rate Interest
Accrual Period of 12% per annum (computed on the basis of the actual number of
days in each Floating Rate Interest Accrual Period divided by 360).
"Class A-2 Notes" means the Class A-2 Floating Rate Asset Backed Notes,
substantially in the form of Exhibit A-2.
"Class A-3 Interest Rate" means 6.00% per annum (computed on the basis
of a 360 day year consisting of twelve 30-day months).
"Class A-3 Notes" means the Class A-3 6.00% Asset Backed Notes,
substantially in the form of Exhibit A-3.
"Class A-4 Interest Rate" means 6.05% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-4 Notes" means the Class A-4 6.05% Asset Backed Notes,
substantially in the form of Exhibit A-4.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means March 27, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
3
<PAGE>
"Company" means Premier Auto Receivables Company, a Delaware
corporation, any successor in interest and any assignee of the Rights (as
defined in the Purchase Agreement) that becomes such assignee in accordance
with Section 5.06 of the Purchase Agreement.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Agreement is
located at 101 Barclay Street, New York, New York 10286; Attention: Corporate
Trust Administration, or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders and the Issuer, or
the principal corporate trust office of any successor Indenture Trustee at the
address designated by such successor Indenture Trustee by notice to the
Noteholders and the Issuer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.11.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
"Floating Rate Interest Accrual Period" means, with respect to the Class
A-2 Notes, the period from and including the most recent Distribution Date on
which interest has been paid (or, in the case of the first Distribution Date,
the Closing Date) to but excluding the following Distribution Date.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and a right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring Proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indenture Trustee" means The Bank of New York, a New York banking
corporation, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
4
<PAGE>
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor on
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any
Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Interest Accrual Period" means, with respect to any Distribution Date
and the Class A-1 Notes, the Class A-3 Notes and the Class A-4 Notes, the
period from and including the sixth day of the month preceding the month of
such Distribution Date (or, in the case of the first Distribution Date, the
Closing Date) to and including the fifth day of the month of such Distribution
Date.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2
Interest Rate, the Class A-3 Interest Rate or the Class A-4 Interest Rate.
"Interest Reset Date" means the first day of the applicable Interest
Reset Period.
"Interest Reset Period" means with respect to any Distribution Date, the
related Floating Rate Interest Accrual Period.
"Issuer" means Premier Auto Trust 1996-1 until a successor replaces it
and, thereafter, means the successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the Notes.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"LIBOR" means, with respect to the applicable Interest Reset Period, the
London interbank offered rate for U.S. dollar deposits for one month
determined by the Calculation Agent on the related LIBOR Determination Date
pursuant to Section 2.15.
"LIBOR Business Day" means any day that is both a Business Day and a day
on which banking institutions in the City of London, England are not required
or authorized by law to be closed.
"LIBOR Determination Date" means (i) with respect to the first Interest
Reset Period, the second LIBOR Business Day prior to the Closing Date and (ii)
with respect to each Interest Reset Period thereafter, the second LIBOR
Business Day prior to the Interest Reset Date for such Interest Reset Period
for so long as the Class A-2 Notes are outstanding.
5
<PAGE>
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note or a
Class A-4 Note.
"Note Depository Agreement" means the agreement dated March 26, 1996,
among the Issuer, the Administrator, the Indenture Trustee and The Depository
Trust Company, as the initial Clearing Agency, relating to the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes, substantially in the form
of Exhibit B.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.05.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Indenture Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be an employee
of or counsel to the Issuer and who shall be satisfactory to the Indenture
Trustee, and which opinion or opinions shall be addressed to the Indenture
Trustee as Indenture Trustee, shall comply with any applicable requirements of
Section 11.01 and shall be in form and substance satisfactory to the Indenture
Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes
are held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned
by the Issuer, any other obligor upon the Notes, the Seller or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall
6
<PAGE>
be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that the Indenture Trustee
knows to be so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Issuer,
any other obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or Class of Notes, as applicable, Outstanding at the date of determination.
"Owner Trustee" means Chemical Bank Delaware, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any
successor Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make payments to and distributions
from the Collection Account and the Note Distribution Account, including
payments of principal of or interest on the Notes on behalf of the Issuer.
"Payment Date" means a Distribution Date.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced
by such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Agreement" means the Purchase Agreement dated as of March 1,
1996, between the Seller and Premier Auto Receivables Company.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days (or such shorter period as is
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer and the Issuer in
writing that such action will not result in a reduction or withdrawal of the
then current rating of the Notes.
"Rating Agency" means Moody's and Standard & Poor's. If no such
organization or successor is any longer in existence, "Rating Agency" shall be
a nationally recognized statistical rating organization or other comparable
Person designated by the Issuer, notice of which designation shall be given to
the Indenture Trustee, the Owner Trustee and the Servicer. Any notice required
to be given to a Rating Agency pursuant to this Indenture shall also be given
to Fitch Investors Service, L.P. and Duff & Phelps Credit Rating Co., although
neither shall be deemed to be a Rating Agency for any purposes of this
Indenture.
7
<PAGE>
"Record Date" means, with respect to a Distribution Date or Redemption
Date, the close of business on the day immediately preceding such Distribution
Date or Redemption Date or, if Definitive Notes have been issued pursuant to
Section 2.13, the 15th day of the preceding month.
"Redemption Date" means, in the case of a redemption of the Notes
pursuant to Section 10.01(a) or a payment to Noteholders pursuant to Section
10.01(b), the Distribution Date specified by the Servicer or the Issuer
pursuant to Section 10.01(a) or (b), as applicable.
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a), an amount equal to the unpaid principal amount
of the Notes redeemed plus accrued and unpaid interest thereon at the weighted
average of the Interest Rates for each Class of Notes being so redeemed to but
excluding the Redemption Date, or (b) in the case of a payment made to
Noteholders pursuant to Section 10.01(b), the amount on deposit in the Note
Distribution Account, but not in excess of the amount specified in clause (a)
above.
"Registered Holder" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of March 1, 1996, between the Issuer and Chrysler Financial
Corporation, as Seller and Servicer.
"Schedule of Receivables" means the list of the Standard Receivables and
the Fixed Value Receivables set forth in Schedule A (which Schedule may be in
the form of microfiche).
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Chrysler Financial Corporation, in its capacity as seller
under the Sale and Servicing Agreement, and its successor in interest.
"Servicer" means Chrysler Financial Corporation, in its capacity as
servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"State" means any one of the 50 States of the United States of America
or the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Telerate Page 3750" means the page so designated on the Dow Jones
Telerate Service or such other page as may replace that page on that service,
or such other service as may be nominated as the information vendor, for the
purpose of displaying London interbank offered rates of major banks.
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"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest
of this Indenture for the benefit of the Noteholders (including, without
limitation, all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from
time to time.
(b) Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein have the
respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular; and
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(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
The Notes
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes, in each case together with the Indenture
Trustee's certificate of authentication, shall be in substantially the form
set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 and Exhibit A-4,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Notes, as evidenced by their execution of the
Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3 and Exhibit A-4
are part of the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$250,000,000, Class A-2 Notes for original issue in an aggregate principal
amount of $645,000,000, Class A-3 Notes for original issue in an aggregate
principal amount of $400,000,000, and Class A-4 Notes for original issue in an
aggregate principal amount of $148,750,000. The aggregate principal amount of
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes
outstanding at any time may not exceed such respective amounts except as
provided in Section 2.06.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000
and in integral multiples thereof; provided that the minimum denomination of
the Class A-1 Notes shall be $1,000,000.
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No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated
and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Issuer shall cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer
shall execute, and the Indenture Trustee shall authenticate and deliver in
exchange therefor, a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.04. Limitations on Transfer of the Class A-1 Notes. The Class
A-1 Notes have not been and will not be registered under the Securities Act
and will not be listed on any exchange. No transfer of a Class A-1 Note shall
be made unless such transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under said Act and such state
securities laws. In the event that a transfer is to be made in reliance upon
an exemption from the Securities Act and state securities laws, in order to
assure compliance with the Securities Act and such laws, the Holder desiring
to effect such transfer and such Holder's prospective transferee shall each
certify to the Indenture Trustee and the Issuer in writing the facts
surrounding the transfer in substantially the forms set forth in Exhibit C
(the "Transferor Certificate") and either Exhibit D (the "Investment Letter")
or Exhibit E (the "Rule 144A Letter"). Except in the case of a transfer as to
which the proposed transferee has provided a Rule 144A Letter, there shall
also be delivered to the Indenture Trustee an opinion of counsel that such
transfer may be made pursuant to an exemption from the Securities Act and
state securities laws, which opinion of counsel shall not be an expense of the
Trust, the Owner Trustee or the Indenture Trustee; provided that such opinion
of counsel in respect of the applicable state securities laws may be a
memorandum of law rather than an opinion if such counsel is not licensed in
the applicable jurisdiction. The Seller shall provide to any Holder of a Class
A-1 Note and any prospective transferee designated by any such Holder,
information regarding the Class A-1 Notes and the Receivables and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Class A-1 Note without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. Each Holder of a Class A-1 Note desiring to
effect such a transfer shall, and does hereby agree to, indemnify the Issuer,
the Owner Trustee, the Indenture Trustee and the Seller against any liability
that may result if the transfer is not so exempt or is not made in accordance
with federal and state securities laws.
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The Owner Trustee shall cause each Class A-1 Note to contain a legend
stating that transfer of the Class A-1 Notes is subject to certain
restrictions and referring prospective purchasers of the Class A-1 Notes to
this Section 2.04 with respect to such restrictions.
SECTION 2.05. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe and the
restrictions on transfers of the Class A-1 Notes set forth herein, the Issuer
shall provide for the registration of Notes and the registration of transfers
of Notes. The Indenture Trustee initially shall be the "Note Registrar" for
the purpose of registering Notes and transfers of Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint
a successor or, if it elects not to make such an appointment, assume the
duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Exchange Act.
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No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other
than exchanges pursuant to Section 2.03 or 9.06 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute, and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same
Class; provided, however, that if any such destroyed, lost or stolen Note, but
not a mutilated Note, shall have become or within seven days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the Indenture
Trustee shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of
any loss, damage, cost or expense incurred by the Issuer or the Indenture
Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
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SECTION 2.07. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the owner of
such Note for the purpose of receiving payments of principal of and interest,
if any, on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and none of the Issuer, the Indenture Trustee or any
agent of the Issuer or the Indenture Trustee shall be affected by notice to
the contrary.
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes shall accrue interest at the Class A-1 Interest Rate, the
Class A-2 Interest Rate, the Class A-3 Interest Rate and the Class A-4
Interest Rate, respectively, as set forth in Exhibits A-1, A-2, A-3 and A-4,
respectively, and such interest shall be payable on each Distribution Date as
specified therein, subject to Section 3.01. Any installment of interest or
principal payable on a Note that is punctually paid or duly provided for by
the Issuer on the applicable Distribution Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered on the
Record Date by check mailed first-class postage prepaid to such Person's
address as it appears on the Note Register on such Record Date, except that,
unless Definitive Notes have been issued pursuant to Section 2.13, with
respect to Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payment will
be made by wire transfer in immediately available funds to the account
designated by such nominee and except for the final installment of principal
payable with respect to such Note on a Distribution Date or on the applicable
class final scheduled Distribution Date (and except for the Redemption Price
for any Note called for redemption pursuant to Section 10.01(a)) which shall
be payable as provided below. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of the Notes set forth in Exhibit
A-1, Exhibit A-2, Exhibit A-3 and Exhibit A-4. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and payable, if
not previously paid, on the date on which an Event of Default shall have
occurred and be continuing, if the Indenture Trustee or Holders of the Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02. All principal payments on each Class of Notes shall
be made pro rata to the Noteholders of such Class entitled thereto. The
Indenture Trustee shall notify the Person in whose name a Note is registered
at the close of business on the Record Date preceding the Distribution Date on
which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed or transmitted
by facsimile prior to such final Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the applicable Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are Noteholders
on a subsequent special record date, which date shall be at least five
Business Days prior to the payment date. The Issuer shall fix or cause to be
fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Issuer shall mail to each Noteholder
a notice that states the special record date, the payment date and the amount
of defaulted interest to be paid.
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SECTION 2.09. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at
any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Notes may be
held or disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be destroyed or returned to it; provided,
that such Issuer Order is timely and the Notes have not been previously
disposed of by the Indenture Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA sections 314(c) and 314(d)(1) or an
Opinion of Counsel in lieu of such Independent Certificates to the effect that
the TIA does not require any such Independent Certificates.
SECTION 2.11. Book-Entry Notes. The Notes (other than the Class A-1
Notes), upon original issuance, will be issued in the form of typewritten
Notes representing the Book-Entry Notes, to be delivered to The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer.
The Class A-1 Notes will be issued on the Closing Date in the form of a single
typewritten Definitive Note, which will be purchased by and registered in the
name of the Seller. The Book-Entry Notes shall be registered initially on the
Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Owner thereof will receive a definitive Note representing such
Note Owner's interest in such Note, except as provided in Section 2.13. Unless
and until definitive, fully registered Notes (the "Definitive Notes") have
been issued to such Note Owners pursuant to Section 2.13:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole holder of the Notes, and shall have no obligation to the Note
Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants pursuant to the Note Depository
Agreement. Unless and until Definitive Notes are issued pursuant to
Section 2.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
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(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect
from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the
Indenture Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders (other than Holders of the Class A-1 Notes)
is required under this Indenture, unless and until Definitive Notes shall have
been issued to such Note Owners pursuant to Section 2.13, the Indenture
Trustee shall give all such notices and communications specified herein to be
given to Holders of the Notes to the Clearing Agency, and shall have no
obligation to such Note Owners.
SECTION 2.13. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-Entry
Notes and the Administrator is unable to locate a qualified successor, (ii)
the Administrator at its option advises the Indenture Trustee in writing that
it elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of an Event of Default or a Servicer Default,
Owners of the Book-Entry Notes representing beneficial interests aggregating
at least a majority of the Outstanding Amount of such Notes advise the
Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of such Note
Owners, then the Clearing Agency shall notify all Note Owners and the
Indenture Trustee of the occurrence of any such event and of the availability
of Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Notes representing the Book-Entry Notes
by the Clearing Agency, accompanied by registration instructions, the Issuer
shall execute and the Indenture Trustee shall authenticate the Definitive
Notes in accordance with the instructions of the Clearing Agency. None of the
Issuer, the Note Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive
Notes as Noteholders.
SECTION 2.14. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes
will qualify as indebtedness of the Issuer secured by the Trust Estate. The
Issuer, by entering into this Indenture, and each Noteholder, by its
acceptance of a Note (and each Note Owner by its acceptance of an interest in
the applicable Book-Entry Note), agree to treat the Notes for federal, state
and local income, single business and franchise tax purposes as indebtedness
of the Issuer.
SECTION 2.15. Determination of LIBOR. (a) On each LIBOR Determination
Date, the Calculation Agent shall calculate LIBOR for the related Interest
Reset Period using the following method. If the offered rate for United States
dollar deposits for one month appears on Telerate Page 3750 as of 11:00 A.M.,
London Time, on such LIBOR Determination Date, LIBOR for the
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related Interest Reset Period shall be such rate as it appears on Telerate
Page 3750. If such rate does not appear on Telerate Page 3750 on any LIBOR
Determination Date, the Calculation Agent will request each of the reference
backs (which shall be major banks that are engaged in transactions in the
London interbank market selected by the Calculation Agent) to provide the
Calculation Agent with its offered quotation for United States dollar deposits
for one month to prime banks in the London interbank market as of 11:00 A.M.,
London time, on such date. If at least two reference banks provide the
Calculation Agent with such offered quotations, LIBOR on such date will be the
arithmetic mean, rounded upwards, if necessary, to the nearest 1/100,000 of
1%, with five one-millionths of a percentage point rounded upwards, of all
such quotations. If on such date fewer than two reference banks provide the
Calculation Agent with such offered quotations, LIBOR on such date will be the
arithmetic mean, rounded upwards, if necessary, to the nearest 1/100,000 of
1%, with five one-millionths of a percentage point rounded upwards, of the
offered per annum rates that one or more leading banks in The City of New York
selected by the Calculation Agent are quoting as of 11:00 A.M., New York City
time, on such date to leading European banks for United States dollar deposits
for one month. If such banks in The City of New York are not quoting as
provided above, LIBOR for such date will be LIBOR applicable to the Interest
Reset Period immediately preceding such Interest Reset Period.
SECTION 2.16. Initial Calculation Agent; Replacement of Calculation
Agent. The Indenture Trustee shall be the initial Calculation Agent. If the
Calculation Agent is unable to perform its obligations under Section 2.15, the
Owner Trustee shall appoint a successor Calculation Agent, which successor
Calculation Agent shall be acceptable to the Indenture Trustee and shall meet
the eligibility requirements hereunder for the Indenture Trustee.
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly
and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), the Issuer will cause to be
distributed all amounts on deposit in the Note Distribution Account on a
Distribution Date deposited therein pursuant to the Sale and Servicing
Agreement (i) for the benefit of the Class A-1 Notes, to the Class A-1
Noteholders, (ii) for the benefit of the Class A-2 Notes, to the Class A-2
Noteholders, (iii) for the benefit of the Class A-3 Notes, to the Class A-3
Noteholders, and (iv) for the benefit of the Class A-4 Notes, to the Class A-4
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer will give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and
the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders, notices and demands.
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SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Collection
Account and the Note Distribution Account pursuant to Section 8.02(c) shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Collection Account and the Note
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before the Business Day preceding each Distribution Date and
Redemption Date, the Issuer shall deposit or cause to be deposited in the Note
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the Notes, such sum to be held in trust for the benefit of
the Persons entitled thereto, and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee of its action or failure
so to act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect
to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
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Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on Issuer Request; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Issuer
for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuer. The Indenture Trustee shall also adopt and employ, at the
expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer will from time to
time execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee and the Noteholders in such Trust Estate
against the claims of all persons and parties.
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The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.05.
SECTION 3.06. Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to
the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and
security interest of this Indenture and reciting the details of such action,
or stating that, in the opinion of such counsel, no such action is necessary
to make such lien and security interest effective.
(b) On or before March 31, in each calendar year, beginning in 1997,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action, or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien
and security interest of this Indenture until March 31 in the following
calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Receivables. (a)
The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate, including
but not limited to filing or causing to be filed all UCC financing statements
and continuation statements required to be filed by the terms of this
Indenture and the Sale and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without
the consent of the Indenture Trustee or the Holders of at least a majority of
the Outstanding Amount of the Notes.
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(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Sale and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect
to such default. If a Servicer Default shall arise from the failure of the
Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 8.01
of the Sale and Servicing Agreement, the Issuer shall appoint a successor
servicer (the "Successor Servicer"), and such Successor Servicer shall accept
its appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in
such event will be released from such duties and obligations, such release not
to be effective until the date a new servicer enters into a servicing
agreement with the Issuer as provided below. Upon delivery of any such notice
to the Issuer, the Issuer shall obtain a new servicer as the Successor
Servicer under the Sale and Servicing Agreement. Any Successor Servicer other
than the Indenture Trustee shall (i) be an established financial institution
having a net worth of not less than $100,000,000 and whose regular business
includes the servicing of Contracts and (ii) enter into a servicing agreement
with the Issuer having substantially the same provisions as the provisions of
the Sale and Servicing Agreement applicable to the Servicer. If within 30 days
after the delivery of the notice referred to above, the Issuer shall not have
obtained such a new servicer, the Indenture Trustee may appoint, or may
petition a court of competent jurisdiction to appoint, a Successor Servicer.
In connection with any such appointment, the Indenture Trustee may make such
arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Sale and
Servicing Agreement, and in accordance with Section 8.02 of the Sale and
Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing of the Receivables (such agreement to be in form
and substance satisfactory to the Indenture Trustee). If the Indenture Trustee
shall succeed to the Servicer's duties as servicer of the Receivables as
provided herein, it shall do so in its individual capacity and not in its
capacity as Indenture Trustee and, accordingly, the provisions of Article VI
hereof shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Servicer and the servicing of the Receivables. In case the
Indenture Trustee shall become successor to the Servicer under the Sale and
Servicing Agreement, the Indenture Trustee shall be entitled to appoint as
Servicer any one of its affiliates, provided that it shall be fully liable for
the actions and omissions of such affiliate in such capacity as Successor
Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Servicer is appointed, the Issuer
shall notify the Indenture Trustee of such appointment, specifying in such
notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without
the prior written consent of the Indenture Trustee or the Holders of at least
a majority in Outstanding Amount of the Notes, amend, modify, waive,
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supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement)
or the Basic Documents, or waive timely performance or observance by the
Servicer or the Seller under the Sale and Servicing Agreement; and (ii) that
any such amendment shall not (A) increase or reduce in any manner the amount
of, or accelerate or delay the timing of, distributions that are required to
be made for the benefit of the Noteholders or (B) reduce the aforesaid
percentage of the Notes that is required to consent to any such amendment,
without the consent of the Holders of all the Outstanding Notes. If any such
amendment, modification, supplement or waiver shall be so consented to by the
Indenture Trustee or such Holders, the Issuer agrees, promptly following a
request by the Indenture Trustee to do so, to execute and deliver, in its own
name and at its own expense, such agreements, instruments, consents and other
documents as the Indenture Trustee may deem necessary or appropriate in the
circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Purchase
Agreement or the Sale and Servicing Agreement, sell, transfer, exchange
or otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Trust Estate, unless directed to do so
by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or otherwise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on any of the
Financed Vehicles and arising solely as a result of an action or
omission of the related Obligor) or (C) permit the lien of this
Indenture not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien) security interest in
the Trust Estate.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year 1996), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuer during such year and
of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
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(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year or, if there has been a
default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted (A) shall be a United States citizen or a Person
organized and existing under the laws of the United States of America
or any State, (B) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agrees by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of
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Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and (E)
expressly agrees by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Premier Auto Trust 1996-1 will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice to the Indenture Trustee stating that Premier
Auto Trust 1996-1 is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Standard Receivables and Fixed Value Receivables in the manner contemplated by
this Indenture and the Basic Documents and activities incidental thereto. The
Issuer shall not fund the purchase of any new Contracts except Eligible
Investment Receivables purchased with funds in the Reserve Account.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes and the Fixed Value Securities as provided
in Section 2.04 of the Sale and Servicing Agreement.
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SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 4.09, 4.10, 4.11 and 5.09(b) and Article IX
of the Sale and Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Sale and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make
any capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection
with such removal.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made, (x)
distributions as contemplated by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement or the Trust Agreement
and (y) payments to the Indenture Trustee pursuant to Section 1(a)(ii) of the
Administration Agreement. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder, each default on the part of the Servicer or the Seller
of its obligations under the Sale and Servicing Agreement and each default on
the part of the Company or the Seller of its obligations under the Purchase
Agreement.
SECTION 3.20. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
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ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon,
(iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.06 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
a. have become due and payable,
b. will become due and payable at the Class A-4 Final
Scheduled Distribution Date within one year, or
c. are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving
of notice of redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of a., b. or c. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Indenture Trustee for cancellation
when due to the applicable final scheduled Distribution Date or
Redemption Date (if Notes shall have been called for redemption
pursuant to Section 10.01(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
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(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the
TIA or the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements
of Section 11.01(a) and, subject to Section 11.02, each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
SECTION 4.02. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the
particular Notes for the payment or redemption of which such moneys have been
deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal and interest; but such moneys need not be segregated
from other funds except to the extent required herein or in the Sale and
Servicing Agreement or required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of five days; or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant
or agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer
and the Indenture Trustee by the Holders of at least 25% of the
Outstanding Amount of the Notes, a written notice specifying such
default or incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a notice of Default hereunder;
or
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(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of 60
consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Issuer to the entry
of an order for relief in an involuntary case under any such law, or
the consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of any action by the
Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii), its status and what action the Issuer
is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Notes may declare all the Notes to
be immediately due and payable, by a notice in writing to the Issuer (and to
the Indenture Trustee if given by Noteholders), and upon any such declaration
the unpaid principal amount of such Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately
due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided,
the Holders of Notes representing a majority of the Outstanding Amount of the
Notes, by written notice to the Issuer and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon
such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
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(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in
the payment of the principal of or any installment of the principal of any
Note when the same becomes due and payable, the Issuer will, upon demand of
the Indenture Trustee, pay to it, for the benefit of the Holders of the Notes,
the whole amount then due and payable on such Notes for principal and
interest, with interest on the overdue principal and, to the extent payment at
such rate of interest shall be legally enforceable, on overdue installments of
interest at the rate borne by the Notes and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final decree,
and may enforce the same against the Issuer or other obligor upon such Notes
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon such Notes, wherever situated, the moneys adjudged or
decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders,
by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest
in the Trust Estate, Proceedings under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, or liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Issuer or its property or such
other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Notes, or to the
creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by intervention in such Proceedings or otherwise:
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(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any Proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay
to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without
the possession of any of the Notes or the production thereof in any trial or
other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Notes.
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(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary
to make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of
the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained and collect
from the Issuer and any other obligor upon such Notes moneys adjudged
due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event
of Default described in Section 5.01(i) or (ii), unless (A) the Holders of
100% of the Outstanding Amount of the Notes consent thereto, (B) the proceeds
of such sale or liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for
principal and interest or (C) the Indenture Trustee determines that the Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee obtains
the consent of Holders of 66 2/3% of the Outstanding Amount of the Notes. In
determining such sufficiency or insufficiency with respect to clause (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national reputation
as to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
interest (including any premium), ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for interest (including any premium);
THIRD: to Holders of the Class A-1 Notes for amounts due and unpaid
on the Class A-1 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-1 Notes for principal, until the Outstanding Amount of the
Class A-1 Notes is reduced to zero;
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FOURTH: to Holders of the Class A-2 Notes for amounts due and
unpaid on the Class A-2 Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-2 Notes for principal, until the Outstanding
Amount of the Class A-2 Notes is reduced to zero;
FIFTH: to Holders of the Class A-3 Notes for amounts due and unpaid
on the Class A-3 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-3 Notes for principal, until the Outstanding Amount of the
Class A-3 Notes is reduced to zero;
SIXTH: to Holders of the Class A-4 Notes for amounts due and unpaid
on the Class A-4 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-4 Notes for principal, until the Outstanding Amount of the
Class A-4 Notes is reduced to zero; and
SEVENTH: to the Issuer for amounts required to be distributed to
the Certificateholders pursuant to the Trust Agreement.
The Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least 15 days before such record
date, the Issuer shall mail to each Noteholder and the Indenture Trustee a
notice that states the record date, the payment date and the amount to be
paid.
SECTION 5.05. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded
and annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to maintain
possession of the Trust Estate. In determining whether to maintain possession
of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
SECTION 5.06. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount
of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
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(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a
majority of the Outstanding Amount of the Notes, the Indenture Trustee in its
sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of Default
or an acquiescence therein. Every right and remedy given by this Article V or
by law to the Indenture Trustee or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture
Trustee or by the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be
by Holders of Notes representing not less than 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Trust Estate shall be of
no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject
to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Noteholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the
Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note. In the
case of any such waiver, the Issuer, the Indenture Trustee and the Holders of
the Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
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SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of a Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this Indenture
(or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance
with Section 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by the Seller or the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement or by the Seller or the Company, as applicable, of each of their
obligations under or in connection with the Purchase Agreement, and to
exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller or
the Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Seller or the Servicer
of each of their obligations under the Sale and Servicing Agreement.
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(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66 2/3% of the Outstanding Amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, or against the Company or the Seller under or in connection with
the Purchase Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Servicer, or
the Company or the Seller, as the case may be, of each of their obligations to
the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Sale and Servicing Agreement or the
Purchase Agreement, as the case may be, and any right of the Issuer to take
such action shall be suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
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(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed
or presented by the proper person. The Indenture Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within
its rights or powers; provided, that the Indenture Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent may do the same with
like rights. However, the Indenture Trustee must comply with Sections 6.11 and
6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
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SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to each Noteholder notice of the Default within
90 days after it occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note), the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of
Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required
to enable such holder to prepare its federal and state income tax returns.
SECTION 6.07. Compensation and Indemnity. The Issuer shall, or shall
cause the Administrator to, pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall, or shall cause the Administrator to, reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall, or shall cause the
Administrator to, indemnify the Indenture Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Indenture Trustee shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer and the Administrator shall not
relieve the Issuer or the Administrator of its obligations hereunder. The
Issuer shall, or shall cause the Administrator to, defend any such claim, and
the Indenture Trustee may have separate counsel and the Issuer shall, or shall
cause the Administrator to, pay the fees and expenses of such counsel. Neither
the Issuer nor the Administrator need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Indenture Trustee
through the Indenture Trustee's own willful misconduct, negligence or bad
faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.01(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar
law.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee
by so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
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(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
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SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part hereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Indenture Trustee or separately, as may be provided therein, subject to
all the provisions of this Indenture, specifically including every provision
of this Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Indenture Trustee. Every such instrument shall be
filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
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SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA section 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition, and the time deposits of the Indenture Trustee shall be rated at
least A-1 by Standard & Poor's and P-1 by Moody's. The Indenture Trustee shall
comply with TIA section 310(b), including the optional provision permitted by
the second sentence of TIA section 310(b)(9); provided, however, that there
shall be excluded from the operation of TIA section 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA section 311(a), excluding any creditor
relationship listed in TIA section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA section 311(a) to the extent
indicated.
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act Licenses.
The Indenture Trustee shall use its best efforts to maintain the effectiveness
of all licenses required under the Pennsylvania Motor Vehicle Sales Finance
Act in connection with this Indenture and the transactions contemplated hereby
until the lien and security interest of this Indenture shall no longer be in
effect in accordance with the terms hereof.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, and (b) at such
other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the
Note Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
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(b) Noteholders may communicate pursuant to TIA section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA section 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA section
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Indenture Trustee. If required by TIA section
313(a), within 60 days after each February 1 beginning with February 1, 1997,
the Indenture Trustee shall mail to each Noteholder as required by TIA section
313(c) a brief report dated as of such date that complies with TIA section
313(a). The Indenture Trustee also shall comply with TIA section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this Indenture, if
any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
a Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
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SECTION 8.02. Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Servicer to establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 5.01 of the Sale
and Servicing Agreement.
(b) On or before each Distribution Date, the Total Distribution Amount
with respect to the preceding Collection Period will be deposited in the
Collection Account as provided in Section 5.02 of the Sale and Servicing
Agreement. On or before each Distribution Date, all amounts required to be
deposited in the Note Distribution Account with respect to the preceding
Collection Period pursuant to Sections 5.06 and 5.07 of the Sale and Servicing
Agreement will be transferred from the Collection Account and/or the Reserve
Account to the Note Distribution Account.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Distribution
Account to Noteholders in respect of the Notes to the extent of amounts due
and unpaid on the Notes for principal and interest (including any premium) in
the following amounts and in the following order of priority (except as
otherwise provided in Section 5.04(b)):
(i) accrued and unpaid interest on the Notes; provided, that if
there are not sufficient funds in the Note Distribution Account to pay
the entire amount of accrued and unpaid interest then due on the Notes,
the amount in the Note Distribution Account shall be applied to the
payment of such interest on the Notes pro rata on the basis of the
total such interest due on the Notes;
(ii) to the Holders of the Class A-1 Notes on account of
principal until the Outstanding Amount of the Class A-1 Notes is
reduced to zero;
(iii) to the Holders of the Class A-2 Notes on account of
principal until the Outstanding Amount of the Class A-2 Notes is
reduced to zero;
(iv) to the Holders of the Class A-3 Notes on account of
principal until the Outstanding Amount of the Class A-3 Notes is
reduced to zero; and
(v) to the Holders of the Class A-4 Notes on account of principal
until the Outstanding Amount of the Class A-4 Notes is reduced to zero.
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SECTION 8.03. General Provisions Regarding Accounts. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and reinvested by the Indenture Trustee (or the investment manager
referred to in clause (2) of Section 5.01(b) of the Sale and Servicing
Agreement) upon Issuer Order, subject to the provisions of Section 5.01(b) of
the Sale and Servicing Agreement. All income or other gain from investments of
moneys deposited in the Trust Accounts shall be deposited by the Indenture
Trustee in the Collection Account (except that Investment Earnings in respect
of Eligible Investment Receivables shall be treated as funds in the Reserve
Account and shall be applied and distributed in accordance with Section 5.07
of the Sale and Servicing Agreement), and any loss resulting from such
investments shall be charged to such account. The Issuer will not direct the
Indenture Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
Granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on
such Eligible Investments issued by the Indenture Trustee, in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(c) If (i) the Issuer (or the Servicer or any investment manager
pursuant to Section 5.01(b) of the Sale and Servicing Agreement) shall have
failed to give investment directions for any funds on deposit in the Trust
Accounts to the Indenture Trustee by 11:00 a.m. Eastern Time (or such other
time as may be agreed by the Issuer and Indenture Trustee) on any Business Day
or (ii) a Default or Event of Default shall have occurred and be continuing
with respect to the Notes but the Notes shall not have been declared due and
payable pursuant to Section 5.02 or (iii) if such Notes shall have been
declared due and payable following an Event of Default but amounts collected
or receivable from the Trust Estate are being applied in accordance with
Section 5.05 as if there had not been such a declaration, then the Indenture
Trustee shall, to the fullest extent practicable, invest and reinvest funds in
the Trust Accounts in one or more Eligible Investments.
SECTION 8.04. Release of Trust Estate. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and
when required by the provisions of this Indenture shall, execute instruments
to release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are
not inconsistent with the provisions of this Indenture. No party relying upon
an instrument executed by the Indenture Trustee as provided in this Article
VIII shall be bound to ascertain the Indenture Trustee's authority, inquire
into the satisfaction of any conditions precedent or see to the application of
any moneys.
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(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid, release any remaining portion of the Trust Estate that secured
the Notes from the lien of this Indenture and release to the Issuer or any
other Person entitled thereto any funds then on deposit in the Trust Accounts.
The Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.04(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01.
(c) Each Noteholder, by the acceptance of a Note, acknowledges that
promptly following the Closing Date and each Transfer Date the Indenture
Trustee shall release the lien of this Indenture on each Fixed Value Payment
assigned by the Issuer to the Seller, and consents to such release.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.04(c), as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this
Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Trust Estate.
Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by
an Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of this Indenture, or to subject to the
lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
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(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not adversely affect the
interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the Outstanding Amount of the Notes, by
Act of such Holders delivered to the Issuer and the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place
of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
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(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell
or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Distribution Date
(including the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of
such supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
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SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and immunities
under this Indenture of the Indenture Trustee, the Issuer and the Holders of
the Notes shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the
terms and conditions of any such supplemental indenture shall be and be deemed
to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption. (a) The Class A-4 Notes are subject to
redemption in whole, but not in part, at the direction of the Servicer
pursuant to Section 9.01(a) of the Sale and Servicing Agreement, on any
Distribution Date on which the Servicer exercises its option to purchase the
Trust Estate pursuant to said Section 9.01(a), for a purchase price equal to
the Redemption Price; provided, that the Issuer has available funds sufficient
to pay the Redemption Price. The Servicer or the Issuer shall furnish the
Rating Agencies notice of such redemption. If the Class A-4 Notes are to be
redeemed pursuant to this Section 10.01(a), the Servicer or the Issuer shall
furnish notice of such election to the Indenture Trustee not later than 20
days prior to the Redemption Date and the Issuer shall deposit by 10:00 A.M.
New York City time on the Redemption Date with the Indenture Trustee in the
Note Distribution Account the Redemption Price of the Class A-4 Notes to be
redeemed, whereupon all such Class A-4 Notes shall be due and payable on the
Redemption Date upon the furnishing of a notice complying with Section 10.02
to each Holder of the Notes.
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(b) In the event that the assets of the Trust are sold pursuant to
Section 9.02 of the Trust Agreement, all amounts on deposit in the Note
Distribution Account shall be paid to the Noteholders up to the Outstanding
Amount of the Notes and all accrued and unpaid interest thereon. If amounts
are to be paid to Noteholders pursuant to this Section 10.01(b), the Servicer
or the Issuer shall, to the extent practicable, furnish notice of such event
to the Indenture Trustee not later than 20 days prior to the Redemption Date,
whereupon all such amounts shall be payable on the Redemption Date.
SECTION 10.02. Form of Redemption Notice. (a) Notice of redemption
under Section 10.01(a) shall be given by the Indenture Trustee by first-class
mail, postage prepaid, or by facsimile mailed or transmitted not later than 10
days prior to the applicable Redemption Date to each Holder of Notes, as of
the close of business on the Record Date preceding the applicable Redemption
Date, at such Holder's address or facsimile number appearing in the Note
Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
(b) Prior notice of redemption under Section 10.01(b) is not
required to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption as required by
Section 10.02 (in the case of redemption pursuant to Section 10.01(a)), on the
Redemption Date become due and payable at the Redemption Price and (unless the
Issuer shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable
requirements of this Section, except that, in the case of any such application
or request as to which the furnishing of such documents is specifically
required by any provision of this Indenture, no additional certificate or
opinion need be furnished.
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Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed
in Section 11.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the securities to be so deposited and of all other such securities made
the basis of any such withdrawal or release since the commencement of
the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
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(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii) above,
the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as
contemplated by clause (v) below or securities released from the lien
of this Indenture since the commencement of the then-current calendar
year, as set forth in the certificates required by clause (iii) above
and this clause (iv), equals 10% or more of the Outstanding Amount of
the Notes, but such certificate need not be furnished in the case of
any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.10 or any other provision of this
Section, the Issuer may, without compliance with the requirements of
the other provisions of this Section, (A) collect, liquidate, sell or
otherwise dispose of Receivables, Eligible Investment Receivables and
Financed Vehicles as and to the extent permitted or required by the
Basic Documents, (B) make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Basic Documents and (C)
convey to the Seller each Fixed Value Payment in accordance with
Section 8.04(c), so long as the Issuer shall deliver to the Indenture
Trustee every six months, commencing December 15, 1996, an Officer's
Certificate of the Issuer stating that all the dispositions of
Collateral described in clauses (A), (B) or (C) above that occurred
during the preceding six calendar months were in the ordinary course of
the Issuer's business and that the proceeds thereof were applied in
accordance with the Basic Documents.
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application
or at the effective date of such certificate or report (as the case may be),
of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Indenture Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at its
Corporate Trust Office, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and
mailed first-class, postage prepaid to the Issuer addressed to: Premier
Auto Trust 1996-1, in care of Chemical Bank Delaware, 1201 Market
Street, Wilmington, Delaware 19801, Attention of Corporate Trustee
Administration Department, or at any other address previously furnished
in writing to the Indenture Trustee by the Issuer or the Administrator.
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.
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Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in the
case of Moody's, at the following address: Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007, (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's
Ratings Services, a Division of the McGraw Hill Companies, Inc., 25 Broadway
(15th Floor), New York, New York 10004, Attention of Asset Backed Surveillance
Department, (iii) in the case of Fitch's Investors Service, L.P., at the
following address: One State Street Plaza, New York, N.Y. 10004, and (iv) in
the case of Duff & Phelps Credit Rating Co. at the following address: 17 State
Street, 12th Floor, New York, N.Y. 10004; 60603; or as to each of the
foregoing, at such other address as shall be designated by written notice to
the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Holder's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Noteholders is given by
mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default
or Event of Default.
SECTION 11.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the
Issuer may enter into any agreement with any Holder of a Note providing for a
method of payment, or notice by the Indenture Trustee or any Paying Agent to
such Holder, that is different from the methods provided for in this Indenture
for such payments or notices. The Issuer will furnish to the Indenture Trustee
a copy of each such agreement and the Indenture Trustee will cause payments to
be made and notices to be given in accordance with such agreements.
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SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
The provisions of TIA sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
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SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity. For all purposes of this Indenture, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Company or the
Issuer, or join in any institution against the Company or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall, and shall cause its representatives to, hold in confidence all
such information except to the extent disclosure may be required by law (and
all reasonable applications for confidential treatment are unavailing) and
except to the extent that the Indenture Trustee may reasonably determine that
such disclosure is consistent with its obligations hereunder.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized and duly attested, all as of the day and year first above
written.
PREMIER AUTO TRUST 1996-1,
by: CHEMICAL BANK DELAWARE, not in its individual
capacity but solely as Owner Trustee,
by: /s/ J. J. Cashin
-------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
THE BANK OF NEW YORK,
not in its individual capacity but solely as
Indenture Trustee,
by: /s/ Melissa Beneduce
------------------------------------
Name: Melissa Beneduce
Title: Assistant Vice President
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STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK }
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared John J. Cashin, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
PREMIER AUTO TRUST 1996-1, a Delaware business trust, and that he executed the
same as the act of said business trust for the purpose and consideration
therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 27th day of March, 1996.
/s/ Elizabeth H. Kim
----------------------------
Notary Public in and for the
State of New York.
My commission expires:
- ------------------------------------------------
ELIZABETH H. KIM
Notary Public, State of New York
No. 01K15035237
Qualified in New York County
Commission Expires Oct. 31, 1996
57
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STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK }
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Melissa Beneduce,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of THE
BANK OF NEW YORK, a New York banking corporation, and that she/he executed the
same as the act of said corporation for the purpose and consideration therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 27th day of March, 1996.
/s/ Elizabeth H. Kim
----------------------------
Notary Public in and for the
State of New York.
My commission expires:
- ----------------------------------------
ELIZABETH H. KIM
Notary Public, State of New York
No. 01K15035237
Qualified in New York County
Commission Expires Oct. 31, 1996
58
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SCHEDULE A
[To be Provided on the Closing Date]
59
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EXHIBIT A-1
[FORM OF CLASS A-1 NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM. IN ADDITION, THE TRANSFER OF THIS NOTE IS SUBJECT TO
CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN SECTION 2.04 OF THE INDENTURE
UNDER WHICH THIS NOTE IS ISSUED (A COPY OF WHICH INDENTURE IS AVAILABLE FROM
THE OWNER TRUSTEE OR INDENTURE TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE
OWNER TRUSTEE AND THE INDENTURE TRUSTEE OF AN INVESTMENT LETTER IN WHICH THE
TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $250,000,000
No. R-1
PREMIER AUTO TRUST 1996-1
CLASS A-1 5.4375% ASSET BACKED NOTES
Premier Auto Trust 1996-1, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Chrysler Financial Corporation,
or registered assigns, the principal sum of TWO HUNDRED FIFTY MILLION DOLLARS
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $250,000,000 and the
denominator of which is $250,000,000 by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the
Class A-1 Notes pursuant to Section 3.01 of the Indenture dated as of March 1,
1996 (the "Indenture"), between the Issuer and The Bank of New York, a New
York banking corporation, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the February 1997 Distribution Date (the
"Class A-1 Final Scheduled Distribution Date") and the Redemption Date, if
any, pursuant to Section 10.01(a) of the Indenture. Capitalized terms used but
not defined herein are defined in Article I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
A-1-1
<PAGE>
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the sixth day of the month
preceding the month of such Distribution Date (in the case of the first
Distribution Date, from the Closing Date) to and including the fifth day of
the month of such Distribution Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months. Such principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST 1996-1,
by: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner Trustee
under the Trust Agreement,
by: ___________________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: THE BANK OF NEW YORK, not in its individual capacity
but solely as Indenture Trustee,
by: __________________________________________
Authorized Signatory
A-1-2
<PAGE>
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 5.4375% Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-1 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes (collectively, the "Notes") are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
Principal of the Class A-1 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
sixth day of each month or, if any such date is not a Business Day, the next
succeeding Business Day, commencing May 6, 1996.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-1 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section
10.01(a) of the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable on the date on which an
Event of Default shall have occurred and be continuing and the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class A-1 Notes shall be made pro rata to the Class
A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
unless such Person holds Class A-1 Notes having an initial aggregate principal
amount of $5,000,000 or more and notifies the Paying Agent in writing at least
seven Business Days prior to a Distribution Date that payments are to be made
by wire transfer in immediately available funds to the account designated by
such Person. Payments by check shall be mailed to the Person entitled thereto
at the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or
any one or more Predecessor Notes) effected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the Registered Holder hereof as of the Record Date
preceding such Distribution Date by notice mailed or transmitted by facsimile
prior to such Distribution Date, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in The City of New York.
A-1-3
<PAGE>
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture and subject to the limitations set forth
therein and on the face hereof, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
A-1-4
<PAGE>
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Indenture Trustee or any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and
the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
A-1-5
<PAGE>
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Chemical Bank Delaware in its
individual capacity, The Bank of New York in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors
or assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on this Note or performance
of, or failure to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-1-6
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
____________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________________________ , attorney, to
transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated: __________________________ _______________________________________ */
Signature Guaranteed:
_______________________________________ */
- ------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-1-7
<PAGE>
EXHIBIT A-2
[FORM OF CLASS A-2 NOTE]
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $ _________ <F1>
No. R- CUSIP NO. ____________
PREMIER AUTO TRUST 1996-1
CLASS A-2 FLOATING RATE ASSET BACKED NOTES
Premier Auto Trust 1996-1, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of [ ] DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $ [INSERT INITIAL PRINCIPAL AMOUNT OF
NOTE] and the denominator of which is $645,000,000 by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-2 Notes pursuant to Section 3.01 of the Indenture
dated as of March 1, 1996 (the "Indenture"), between the Issuer and The Bank
of New York, a New York banking corporation, as Indenture Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the earlier of the September
1998 Distribution Date (the "Class A-2 Final Scheduled Distribution Date") and
the Redemption Date, if any, pursuant to Section 10.01(a) of the Indenture. No
payments of principal of the Class A-2 Notes shall be made until the Class A-1
Notes have been paid in full. Capitalized terms used but not defined herein
are defined in Article I of the Indenture, which also contains rules as to
construction that shall be applicable herein.
The Issuer will pay interest on this Note at a rate per annum equal to
LIBOR plus 0.07%, subject to a maximum rate of 12.00% per annum, on each
Distribution Date until the principal of this Note is paid or made available
for payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on
the preceding Distribution Date), subject to certain limitations contained in
Section 3.01 of the
<F1>
- --------
1 Denominations of $1,000 and integral multiples thereof.
A-2-1
<PAGE>
Indenture. LIBOR for each Interest Reset Period and related Distribution
Date will be determined on the related LIBOR Determination Date by the
Calculation Agent as set forth in Section 2.15 of the Indenture. All
determinations of LIBOR by the Calculation Agent shall, in the absence
of manifest error, be conclusive for all purposes, and each Holder
of this Note, by accepting a Class A-2 Note, agrees to be bound by such
determination. Interest on this Note will accrue for each Distribution Date
from the Closing Date (in the case of the first Distribution Date) or from the
most recent Distribution Date on which interest has been paid to but excluding
such Distribution Date. Interest will be computed on the basis of the actual
number of days in each Floating Rate Interest Accrual Period divided by 360.
Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST 1996-1,
by: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner Trustee
under the Trust Agreement,
by: _______________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: THE BANK OF NEW YORK, not in its individual capacity
but solely as Indenture Trustee,
by: __________________________
Authorized Signatory
A-2-2
<PAGE>
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 Floating Rate Asset Backed Notes (herein called
the "Class A-2 Notes"), all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Class A-2 Notes are
subject to all terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes (collectively, the "Notes") are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
Principal of the Class A-2 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
sixth day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing May 6, 1996.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-2 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section
10.01(a) of the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable on the date on which an
Event of Default shall have occurred and be continuing and the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class A-2 Notes shall be made pro rata to the Class
A-2 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the Registered Holder hereof as of the Record Date
preceding such Distribution Date by notice mailed or transmitted by facsimile
prior to such Distribution Date, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
A-2-3
<PAGE>
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
A-2-4
<PAGE>
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and
the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Chemical Bank Delaware in its
individual capacity, The Bank of New York in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors
or assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on this Note or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-2-5
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_____________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________________________ , attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated: ______________________ __________________________________________*/
Signature Guaranteed:
__________________________________________*/
- ------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-2-6
<PAGE>
EXHIBIT A-3
[FORM OF CLASS A-3 NOTE]
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $ ___________ <F2>
No. R- CUSIP NO. ____________
PREMIER AUTO TRUST 1996-1
CLASS A-3 6.00% ASSET BACKED NOTES
Premier Auto Trust 1996-1, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of [ ] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $ [INSERT INITIAL
PRINCIPAL AMOUNT OF NOTE] and the denominator of which is $400,000,000 by (ii)
the aggregate amount, if any, payable from the Note Distribution Account in
respect of principal on the Class A-3 Notes pursuant to Section 3.01 of the
Indenture dated as of March 1, 1996 (the "Indenture"), between the Issuer and
The Bank of New York, a New York banking corporation, as Indenture Trustee
(the "Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the earlier of the October
1999 Distribution Date (the "Class A-3 Final Scheduled Distribution Date") and
the Redemption Date, if any, pursuant to Section 10.01(a) of the Indenture. No
payments of principal of the Class A-3 Notes shall be made until the Class A-1
Notes and the Class A-2 Notes have been paid in full. Capitalized terms used
but not defined herein are defined in Article I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
<F2>
- --------
1 Denominations of $1,000 and integral multiples thereof.
A-3-1
<PAGE>
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the sixth day of the month
preceding the month of such Distribution Date (in the case of the first
Distribution Date, from the Closing Date) to and including the fifth day of
the month of such Distribution Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months. Such principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST 1996-1,
by: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner Trustee
under the Trust Agreement,
by: ______________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: THE BANK OF NEW YORK, not in its individual capacity
but solely as Indenture Trustee,
by: ____________________________
Authorized Signatory
A-3-2
<PAGE>
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 6.00% Asset Backed Notes (herein called the "Class
A-3 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-3 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes (collectively, the "Notes") are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
Principal of the Class A-3 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
sixth day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing May 6, 1996.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-3 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section
10.01(a) of the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable on the date on which an
Event of Default shall have occurred and be continuing and the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class A-3 Notes shall be made pro rata to the Class
A-3 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the Registered Holder hereof as of the Record Date
preceding such Distribution Date by notice mailed or transmitted by facsimile
prior to such Distribution Date, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
A-3-3
<PAGE>
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
A-3-4
<PAGE>
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and
the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
A-3-5
<PAGE>
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Chemical Bank Delaware in its
individual capacity, The Bank of New York in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors
or assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on this Note or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-3-6
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
__________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________________________ , attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated: __________________ _____________________________________________ */
Signature Guaranteed:
_____________________________________________ */
- ------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-3-7
<PAGE>
EXHIBIT A-4
[FORM OF CLASS A-4 NOTE]
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $ ___________ <F3>
No. R- CUSIP NO. _____________
PREMIER AUTO TRUST 1996-1
CLASS A-4 6.05% ASSET BACKED NOTES
Premier Auto Trust 1996-1, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of [ ] DOLLARS payable on
each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $ [INSERT INITIAL
PRINCIPAL AMOUNT OF NOTE] and the denominator of which is $148,750,000 by (ii)
the aggregate amount, if any, payable from the Note Distribution Account in
respect of principal on the Class A-4 Notes pursuant to Section 3.01 of the
Indenture dated as of March 1, 1996 (the "Indenture"), between the Issuer and
The Bank of New York, a New York banking corporation, as Indenture Trustee
(the "Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the earlier of the April 2000
Distribution Date (the "Class A-4 Final Scheduled Distribution Date") and the
Redemption Date, if any, pursuant to Section 10.01(a) of the Indenture. No
payments of principal of the Class A-4 Notes shall be made until the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes have been paid in full.
Capitalized terms used but not defined herein are defined in Article I of the
Indenture, which also contains rules as to construction that shall be
applicable herein.
<F3>
- --------
1 Denominations of $1,000 and integral multiples thereof.
A-4-1
<PAGE>
The Issuer will pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the sixth day of the month
preceding the month of such Distribution Date (in the case of the first
Distribution Date, from the Closing Date) to and including the fifth day of
the month of such Distribution Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months. Such principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: PREMIER AUTO TRUST 1996-1,
by: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner Trustee
under the Trust Agreement,
by: _____________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: THE BANK OF NEW YORK, not in its individual capacity
but solely as Indenture Trustee,
by: ___________________________
Authorized Signatory
A-4-2
<PAGE>
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 6.05% Asset Backed Notes (herein called the "Class
A-4 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-4 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes (collectively, the "Notes") are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
Principal of the Class A-4 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
sixth day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing May 6, 1996.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-4 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section
10.01(a) of the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable on the date on which an
Event of Default shall have occurred and be continuing and the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class A-4 Notes shall be made pro rata to the Class
A-4 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the Registered Holder hereof as of the Record Date
preceding such Distribution Date by notice mailed or transmitted by facsimile
prior to such Distribution Date, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Interest Rate to the extent lawful.
A-4-3
<PAGE>
As provided in the Indenture, the Class A-4 Notes may be redeemed in
whole but not in part at the option of the Servicer on any Distribution Date
on and after the date on which the Pool Balance is less than or equal to 10%
of the Original Pool Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the Company or the Issuer,
or join in any institution against the Seller, the Company or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
A-4-4
<PAGE>
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Holders of the Notes under the Indenture at
any time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and
the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
A-4-5
<PAGE>
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Chemical Bank Delaware in its
individual capacity, The Bank of New York in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors
or assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on this Note or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-4-6
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
______________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________ , attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated: _____________________ ____________________________________________ */
Signature Guaranteed:
____________________________________________ */
- ------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-4-7
<PAGE>
EXHIBIT B
[Form of Note Depository Agreement]
Letter of Representations
[To be Completed by Issuer and Trustee]
_______________________________
[Name of Issuer]
_______________________________
[Name of Trustee]
_____________
(Date)
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: _________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Trustee will act as
trustee with respect to the Securities pursuant to a trust indenture dated
______________, 199_ (the "Document"). _______________________________________
________________________________________ (the "Underwriter") is distributing
the Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC, and
to act in accordance with its Rules with respect to the Securities, Issuer and
Trustee make the following representations to DTC:
1. Prior to closing on the Securities on _____________________, 199_, there
shall be deposited with DTC one Security certificate registered in the name of
DTC's nominee, Cede & Co., for each stated maturity of the Securities in the
face amounts set forth on Schedule A hereto, the total of which represents
100% of the principal amount of such Securities. If, however, the aggregate
principal amount of any maturity exceeds $150 million, one certificate
will be issued with respect to each $150 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount. Each $150 million certificate shall bear the following legend:
B-1
<PAGE>
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by holders
of the Securities, Issuer or Trustee shall establish a record date for such
purposes (with no provision for revocation of consents or votes by subsequent
holders) and shall, to the extent possible, send notice of such record date to
DTC not less than 15 calendar days in advance of such record date. Notices to
DTC pursuant to this Paragraph by telecopy shall be sent to DTC's
Reorganization Department at (212) 709-6896 or (212) 709-6897, and receipt of
such notices shall be confirmed by telephoning (212) 709-6870. Notices to DTC
pursuant to this Paragraph by mail or by any other means shall be sent to
DTC's Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee shall
send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer
or Trustee shall forward such notice either in a separate secure transmission
for each CUSIP number or in a secure transmission for multiple CUSIP numbers
(if applicable) which includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Call Notification Department
at (516) 227-4039 or (516) 227-4190. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant
to this Paragraph by mail or by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
B-2
<PAGE>
4. In the event of an invitation to tender the Securities, notice by Issuer
or Trustee to Security holders specifying the terms of the tender and the
Publication Date of such notice shall be sent to DTC by a secure means in the
manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions (including mandatory tenders,
exchanges, and capital changes) by telecopy shall be sent to DTC's
Reorganization Department at (212) 709-1093 or (212) 709-1094, and receipt of
such notices shall be confirmed by telephoning (212) 709-6884. Notices to DTC
pursuant to the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar amount
per $1,000 original face value (or other minimum authorized denomination if
less than $1,000 face value) payable on each payment date allocated as to the
interest and principal portions thereof preferably 5, but not less than 2,
business days prior to such payment date. Such notices, which shall also
contain the current pool factor and Trustee contact's name and telephone
number, shall be sent by telecopy to DTC's Dividend Department at (212)
709-1723, or if by mail or by any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
7. [Note: Issuer must represent one of the following, and cross out the
other:] [The interest accrual period is record date to record date.] [The
interest accrual period is payment date to payment date.]
8. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds on each payment date (or the
equivalent in accordance with existing arrangements between Issuer or Trustee
and DTC). Such payments shall be made payable to the order of Cede & Co.
Absent any other existing arrangements, such payments shall be addressed as
follows:
Manager; Cash Receipts
Dividend Department
The Depository Trust Company
7 Hanover Square; 24th Floor
New York, NY 10004-2695
9. [Note: Issuer must represent one of the following, and cross out the
other:]
B-3
<PAGE>
Securities Eligible for DTC's Same-Day Funds Settlement ("SDFS") System.
Other principal payments (redemption payments) shall be made in same-day funds
by Trustee in the manner set forth in the SDFS Paying Agent Operating
Procedures, a copy of which previously has been furnished to Trustee.
Securities Eligible for DTC's Next-Day Funds Settlement ("NDFS") System.
Other principal payments (redemption payments) shall be made in next-day funds
by Trustee to Cede & Co., as nominee of DTC, or its registered assigns, on
each payment date. Such payments shall be made payable to the order of Cede &
Co., and shall be addressed as follows:
NDFS Redemptions Manager
Reorganization/Redemptions Department
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
10. DTC may direct Issuer or Trustee to use any other number or address as
the number or address to which notices or payments of interest or principal
may be sent.
11. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity, in
which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
12. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer or
Trustee shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
13. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Trustee (at which time DTC will confirm with Issuer or Trustee the
aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
14. Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
15. Nothing herein shall be deemed to require Trustee to advance funds on
behalf of Issuer.
B-4
<PAGE>
Notes:
A. If there is a Trustee (as defined in this Letter of Representations),
Trustee as well as Issuer must sign this Letter. If there is no Trustee, in
signing this Letter Issuer itself undertakes to perform all of the obligations
set forth herein.
B. Schedule B contains statements that DTC believes accurately describe DTC,
the method of effecting book-entry transfers of securities distributed through
DTC, and certain related matters.
Very truly yours,
_______________________________
(Issuer)
By: ___________________________
(Authorized Officer's Signature)
_______________________________
(Trustee)
By: ___________________________
(Authorized Officer's Signature)
CHRYSLER FINANCIAL CORPORATION
(Administrator)
By: ___________________________
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: ________________________
cc: Underwriter
Underwriter's Counsel
B-5
<PAGE>
SCHEDULE A
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
- ----- ---------------- ------------- -------------
B-6
<PAGE>
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
[Indenture Trustee]
[Indenture Trustee Address]
Re: Premier Auto Trust 1996-1
Class A-1 5.4375% Asset Backed Notes
------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-referenced Class A-1
5.4375% Asset Backed Notes (the "Notes") we certify that (a) we understand
that the Notes have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are being transferred by us in a transaction that is
exempt from the registration requirements of the Act and (b) we have not
offered or sold any Notes to, or solicited offers to buy any Notes from, any
person, or otherwise approached or negotiated with any person with respect
thereto, in a manner that would be deemed, or taken any other action which
would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By: ____________________________
Authorized Officer
C-1
<PAGE>
EXHIBIT D
FORM OF INVESTMENT LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
[Indenture Trustee]
[Indenture Trustee Address]
Re: Premier Auto Trust 1996-1
Class A-1 5.4375% Asset Backed Notes
------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Class A-1
5.4375% Asset Backed Notes (the "Notes) we certify that (a) we understand that
the Notes are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the
Act and any such laws, (b) we are an "accredited investor," as defined in
Regulation D under the Act, and have such knowledge and experience in
financial and business matters that we are capable of evaluating the merits
and risks of investments in the Notes, (c) we have had the opportunity to ask
questions of and receive answers from the seller concerning the purchase of
the Notes and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Notes, (d) we are acquiring
the Notes for investment for our own account and not with a view to any
distribution of such Notes (but without prejudice to our right at all times to
sell or otherwise dispose of the Notes in accordance with clause (f) below),
(e) we have not offered or sold any Notes to, or solicited offers to buy any
Notes from, any person, or otherwise approached or negotiated with any person
with respect thereto, or taken any other action that would result in a
violation of Section 5 of the Act or any state securities laws and (f) we will
not sell, transfer or otherwise dispose of any Notes unless (1) such sale,
transfer or other disposition is made pursuant to an effective registration
statement under the Act and in compliance with any relevant state securities
laws or is exempt from such registration requirements and, if requested, we
will at our expense provide an opinion of counsel satisfactory to the
addressees of this certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Note has executed and delivered to you a certificate to
substantially the same effect as this certificate and (3) the purchaser or
transferee has
D-1
<PAGE>
otherwise complied with any conditions for transfer set forth in the
Indenture dated as of March 1, 1996, between Premier Auto Trust 1996-1
and The Bank of New York, as Indenture Trustee.
Very truly yours,
[NAME OF TRANSFEREE]
By: ___________________________________
Authorized Officer
D-2
<PAGE>
EXHIBIT E
FORM OF RULE 144A LETTER
[DATE]
[Seller]
[Seller Address]
[Owner Trustee]
[Owner Trustee Address]
[Indenture Trustee]
[Indenture Trustee Address]
Re: Premier Auto Trust 1996-1
Class A-1 5.4375% Asset Backed Notes
------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Class A-1
5.4375% Asset Backed Notes (the "Notes) we certify that (a) we understand that
the Notes are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the
Act and any such laws, (b) we have such knowledge and experience in financial
and business matters that we are capable of evaluating the merits and risks of
investments in the Notes, (c) we have had the opportunity to ask questions of
and receive answers from the seller concerning the purchase of the Notes and
all matters relating thereto or any additional information deemed necessary to
our decision to purchase the Notes, (d) we have not, nor has anyone acting on
our behalf, offered, transferred, pledged, sold or otherwise disposed of the
Notes or any interest in the Notes, or solicited any offer to buy, transfer,
pledge or otherwise dispose of the Notes or any interest in the Notes from any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action that would
constitute a distribution of the Notes under the Act or that would render the
disposition of the Notes a violation of Section 5 of the Act or any state
securities laws or require registration pursuant thereto, and we will not act,
or authorize any person to act, in such manner with respect to the Notes, (e)
we are a "qualified institutional buyer" as that term is defined in Rule 144A
under the Act. We are aware that the sale to us is being made in reliance on
Rule 144A. We are acquiring the Notes for our own account or for resale
pursuant to Rule 144A and understand that such Notes may be resold,
pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
E-1
<PAGE>
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A or (ii)
pursuant to another exemption from registration under the Act.
Very truly yours,
[NAME OF TRANSFEREE]
By: _________________________________
Authorized Officer
E-2
Exhibit 4.3
EXECUTION COPY
==============================================================================
SALE AND SERVICING AGREEMENT
between
PREMIER AUTO TRUST 1996-1,
Issuer,
and
CHRYSLER FINANCIAL CORPORATION,
Seller and Servicer
Dated as of March 1, 1996
==============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
<S> <C> <C>
SECTION 1.01. Definitions................................................................. 1
SECTION 1.02. Other Definitional Provisions............................................... 18
<CAPTION>
ARTICLE II
Conveyance of Receivables
<S> <C> <C>
SECTION 2.01. Conveyance of Receivables................................................... 19
SECTION 2.02. [RESERVED].................................................................. 20
SECTION 2.03. Conveyance of Fixed Value Payments.......................................... 20
SECTION 2.04. Fixed Value Securities...................................................... 20
SECTION 2.05. Purchase of Eligible Investment Receivables................................. 21
<CAPTION>
ARTICLE III
The Receivables
<S> <C> <C>
SECTION 3.01. Representations and Warranties of the Seller with Respect to the Receivables 23
SECTION 3.02. Repurchase upon Breach...................................................... 27
SECTION 3.03. Custody of Receivable Files................................................. 27
SECTION 3.04. Duties of Servicer as Custodian............................................. 28
SECTION 3.05. Instructions; Authority To Act.............................................. 28
SECTION 3.06. Custodian's Indemnification................................................. 28
SECTION 3.07. Effective Period and Termination............................................ 29
<CAPTION>
ARTICLE IV
Administration and Servicing of Receivables
<S> <C> <C>
SECTION 4.01. Duties of Servicer.......................................................... 29
SECTION 4.02. Collection and Allocation of Receivable Payments............................ 30
SECTION 4.03. Realization upon Receivables................................................ 30
SECTION 4.04. Physical Damage Insurance................................................... 30
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles...................... 30
SECTION 4.06. Covenants of Servicer....................................................... 31
SECTION 4.07. Purchase of Receivables upon Breach......................................... 31
SECTION 4.08. Servicing Fee............................................................... 31
SECTION 4.09. Servicer's Certificate...................................................... 31
SECTION 4.10. Annual Statement as to Compliance; Notice of Default........................ 31
SECTION 4.11. Annual Independent Certified Public Accountants' Report..................... 32
SECTION 4.12. Access to Certain Documentation and Information Regarding Receivables....... 32
SECTION 4.13. Servicer Expenses........................................................... 33
SECTION 4.14. Appointment of Subservicer.................................................. 33
i
<PAGE>
<CAPTION>
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
<S> <C> <C>
SECTION 5.01. Establishment of Trust Accounts............................................. 33
SECTION 5.02. Collections................................................................. 35
SECTION 5.03. Application of Collections.................................................. 36
SECTION 5.04. Advances.................................................................... 36
SECTION 5.05. Additional Deposits......................................................... 37
SECTION 5.06. Distributions............................................................... 37
SECTION 5.07. Reserve Account............................................................. 38
SECTION 5.08. [Reserved].................................................................. 40
SECTION 5.09. Statements to Certificateholders and Noteholders............................ 40
SECTION 5.10. Net Deposits................................................................ 41
SECTION 5.11. Transfer of the Class A-1 Notes............................................. 41
<CAPTION>
ARTICLE VI
The Seller
<S> <C> <C>
SECTION 6.01. Representations of Seller................................................... 41
SECTION 6.02. Corporate Existence......................................................... 43
SECTION 6.03. Liability of Seller; Indemnities............................................ 43
SECTION 6.04. Merger or Consolidation of, or Assumption of the Obligations of, Seller..... 44
SECTION 6.05. Limitation on Liability of Seller and Others................................ 44
SECTION 6.06. Seller May Own Certificates or Notes........................................ 44
<CAPTION>
ARTICLE VII
The Servicer
<S> <C> <C>
SECTION 7.01. Representations of Servicer................................................. 45
SECTION 7.02. Indemnities of Servicer..................................................... 46
SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations of, Servicer... 46
SECTION 7.04. Limitation on Liability of Servicer and Others.............................. 47
SECTION 7.05. CFC Not To Resign as Servicer............................................... 47
<CAPTION>
ARTICLE VIII
Default
<S> <C> <C>
SECTION 8.01. Servicer Default............................................................ 48
SECTION 8.02. Appointment of Successor.................................................... 49
SECTION 8.03. Repayment of Advances....................................................... 49
SECTION 8.04. Notification to Noteholders and Certificateholders.......................... 50
SECTION 8.05. Waiver of Past Defaults..................................................... 50
ii
<PAGE>
<CAPTION>
ARTICLE IX
Termination
<S> <C> <C>
SECTION 9.01. Optional Purchase of All Receivables........................................ 50
<CAPTION>
ARTICLE X
Miscellaneous
<S> <C> <C>
SECTION 10.01. Amendment.................................................................. 51
SECTION 10.02. Protection of Title to Trust............................................... 52
SECTION 10.03. Notices.................................................................... 54
SECTION 10.04. Assignment by the Seller or the Servicer................................... 54
SECTION 10.05. Limitations on Rights of Others............................................ 55
SECTION 10.06. Severability............................................................... 55
SECTION 10.07. Separate Counterparts...................................................... 55
SECTION 10.08. Headings................................................................... 55
SECTION 10.09. Governing Law.............................................................. 55
SECTION 10.10. Assignment by Issuer....................................................... 55
SECTION 10.11. Nonpetition Covenants...................................................... 55
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee............. 56
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of Receivable Files
SCHEDULE C Schedule of Eligible Investment Receivables
EXHIBIT A Form of Distribution Statement to Certificateholders....................... A-1
EXHIBIT B Form of Distribution Statement to Noteholders.............................. B-1
EXHIBIT C Form of Servicer's Certificate............................................. C-1
EXHIBIT D [Reserved]................................................................. D-1
EXHIBIT E [Reserved]................................................................. E-1
EXHIBIT F Form of Assignment for Eligible Investment Receivables..................... F-1
</TABLE>
iii
<PAGE>
SALE AND SERVICING AGREEMENT dated as of March 1, 1996, between PREMIER
AUTO TRUST 1996-1, a Delaware business trust (the "Issuer"), and
CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as seller and
servicer.
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with automobile retail installment sale contracts
generated by Chrysler Financial Corporation in the ordinary course of
business; and
WHEREAS Chrysler Financial Corporation is willing to sell such
receivables to, and to service such receivables on behalf of, the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Accelerated Principal Distribution Amount" means, with respect to any
Distribution Date, an amount equal to that portion of the Total Distribution
Amount for such Distribution Date that remains after the payment of (i) the
Servicing Fee, (ii) the Noteholders' Interest Distributable Amount, (iii) the
Regular Principal Distribution Amount, (iv) the Certificateholders' Interest
Distributable Amount, and (v) the amount, if any, required to be deposited
into the Reserve Account on such Distribution Date pursuant to Section
5.06(b)(ii)(F).
"Advance" means either a Precomputed Advance or Simple Interest Advance
or both, as applicable.
"Amortizing Payment" means with respect to each Fixed Value Receivable
or Eligible Investment Fixed Value Receivable and each Collection Period prior
to the date on which the Fixed Value Payment is due, the amount specified in
the applicable Contract in the payment schedule as the "Amount of Each
Payment", except that in the case of a prepayment, liquidation or repurchase
by the Seller or purchase by the Servicer, the Amortizing Payment shall be
equal to the aggregate "Amount of Each Payment" that has not yet been paid for
the period through and including the last payment prior to the date when the
Fixed Value Payment is due less the amount of the unearned finance charges
under the related Contract allocable to such amount in accordance with the
Servicer's customary procedures.
"Amount Financed" means (i) with respect to a Standard Receivable or
Eligible Investment Standard Receivable, as applicable, the amount advanced
under the Standard Receivable or Eligible Investment Standard Receivable, as
applicable, toward the purchase price of the Financed Vehicle and any related
costs, exclusive of any amount allocable to the premium of force-placed
physical damage insurance covering the Financed Vehicle; and (ii) with respect
to a Fixed Value Receivable or Eligible Investment Fixed Value Receivable, as
applicable, an amount equal to the present value of the fixed level payment
monthly installments (not including the amount designated as the Fixed Value
Payment) under the Fixed Value Receivable or Eligible Investment Fixed Value
Receivable, as applicable, assuming that each payment is made on the due date
in the month in which such payment is due, discounted at the APR for such
Fixed Value Receivable or Eligible Investment Fixed Value Receivable, as
applicable.
1
<PAGE>
"Annual Percentage Rate" or "APR" of a Receivable or Eligible Investment
Receivable means the annual rate of finance charges stated in the related
Contract.
"Available Amount" means, with respect to any Distribution Date, the
amount of funds on deposit in the Reserve Account on such Distribution Date
(other than Investment Earnings on Eligible Investments that are not Eligible
Investment Receivables) less the Certificate Interest Reserve Amount with
respect to such Distribution Date before giving effect to any reduction
thereto on such date.
"Certificate Balance" equals, initially, $56,243,689.73 and, thereafter,
equals the Initial Certificate Balance reduced by all amounts allocable to
principal previously distributed to Certificateholders.
"Certificate Distribution Account" has the meaning assigned to such term
in the Trust Agreement.
"Certificate Interest Reserve Amount" means, at the time of reference,
the lesser of (i) $892,868.57 less the amount of any application of the
Certificate Interest Reserve Amount to pay interest on the Certificates on any
prior Distribution Date and (ii) 1.5875% of the Certificate Balance on such
Distribution Date (before giving effect to any reduction thereof on such
Distribution Date); provided, however, that the Certificate Interest Reserve
Amount shall be zero subsequent to any reduction by any Rating Agency of its
rating of any Class of Notes to less than "A-" or its equivalent, or
withdrawal by any Rating Agency of its rating of any Class of Notes, unless
such rating has been restored.
"Certificate Pool Factor" means, as of the close of business on the last
day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made
on the immediately following Distribution Date) divided by the Initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Closing Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Certificateholders' Principal Distributable
Amount and the Certificateholders' Interest Distributable Amount for such
date.
"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess of the sum of the Certificateholders'
Monthly Interest Distributable Amount for the preceding Distribution Date and
any outstanding Certificateholders' Interest Carryover Shortfall on such
preceding Distribution Date, over the amount in respect of interest that is
actually deposited in the Certificate Distribution Account on such preceding
Distribution Date, plus 30 days' interest on such excess, to the extent
permitted by law, at the Pass-Through Rate.
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"Certificateholders' Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date. Interest with respect
to the Certificates shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of this Agreement and the
Basic Documents.
"Certificateholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest accrued from and including the Closing Date
to but excluding May 6, 1996) at the Pass- Through Rate on the Certificate
Balance on the last day of the preceding Collection Period (or, in the case of
the first Distribution Date, on the Closing Date).
"Certificateholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date prior to the Distribution Date on which the
Notes are paid in full, zero; and with respect to any Distribution Date on or
after the Distribution Date on which the Notes are paid in full, the Regular
Principal Distribution Amount for such Distribution Date (less, on the
Distribution Date on which the Notes are paid in full, the portion thereof
payable on the Notes).
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Certificateholders' Monthly
Principal Distributable Amount and any outstanding Certificateholders'
Principal Carryover Shortfall from the preceding Distribution Date, over the
amount in respect of principal that is actually deposited in the Certificate
Distribution Account on such current Distribution Date.
"Certificateholders' Principal Distributable Amount" means, with respect
to any Distribution Date, the sum of the Certificateholders' Monthly Principal
Distributable Amount for such Distribution Date and the Certificateholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided, however, that the Certificateholders' Principal Distributable
Amount shall not exceed the Certificate Balance. In addition, on the Final
Scheduled Distribution Date, the principal required to be included in the
Certificateholders' Principal Distributable Amount will include the lesser of
(a) (i) any Scheduled Payments of principal due and remaining unpaid on each
Precomputed Receivable and (ii) any principal due and remaining unpaid on each
Simple Interest Receivable, in each case, in the Trust as of the Final
Scheduled Maturity Date or (b) the amount that is necessary (after giving
effect to the other amounts to be deposited in the Certificate Distribution
Account on such Distribution Date and allocable to principal) to reduce the
Certificate Balance to zero.
"Certificates" means the Trust Certificates (as defined in the Trust
Agreement).
"CFC" means Chrysler Financial Corporation, a Michigan corporation, or
its successors.
"Class" means any one of the classes of Notes.
"Class A-1 Final Scheduled Distribution Date" means the February 1997
Distribution Date.
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"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
"Class A-2 Final Scheduled Distribution Date" means the September 1998
Distribution Date.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
is registered in the Note Register.
"Class A-3 Final Scheduled Distribution Date" means the October 1999
Distribution Date.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.
"Class A-4 Final Scheduled Distribution Date" means the April 2000
Distribution Date.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a)(i).
"Collection Period" means a calendar month. Any amount stated as of the
last day of a Collection Period or as of the first day of a Collection Period
shall give effect to the following calculations as determined as of the close
of business on such last day: (1) all applications of collections, (2) all
current and previous Payaheads, (3) all applications of Payahead Balances, (4)
all Advances and reductions of Outstanding Precomputed Advances or Outstanding
Simple Interest Advances and (4) all distributions to be made on the following
Distribution Date.
"Company" means Premier Auto Receivables Company, a Delaware corporation
and any successor in interest or, if the Rights (as defined in the Purchase
Agreement) have been assigned to a Person that becomes an assignee in
accordance with Section 5.06 of the Purchase Agreement, such assignee Person
and any successor in interest.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at 101 Barclay Street, 21st Floor, New York, New York 10286, Corporate
Trust Administration; or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders and the Seller, or
the principal corporate trust office of any successor Indenture Trustee (of
which address such successor Indenture Trustee will notify the Noteholders and
the Seller).
"Cutoff Date" means the Initial Cutoff Date or a Subsequent Cutoff Date.
"Dealer" means the dealer who sold a Financed Vehicle and who originated
and assigned the related Receivable, directly or indirectly, to CFC under an
existing agreement between such dealer and CFC or Chrysler Credit Corporation.
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"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and
are susceptible of physical delivery, transfer thereof to the Indenture
Trustee or its nominee or custodian by physical delivery to the
Indenture Trustee or its nominee or custodian endorsed to, or registered
in the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank, and, with respect to a certificated security (as
defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of
such certificated security endorsed to, or registered in the name of,
the Indenture Trustee or its nominee or custodian or endorsed in blank
to a financial intermediary (as defined in Section 8-313 of the UCC) and
the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian and the sending by such
financial intermediary of a confirmation of the purchase of such
certificated security by the Indenture Trustee or its nominee or
custodian, or (ii) by delivery thereof to a "clearing corporation" (as
defined in Section 8-102(3) of the UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate
securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of
the certificated securities for the sole and exclusive account of the
financial intermediary, the maintenance of such certificated securities
by such clearing corporation or a "custodian bank" (as defined in
Section 8-102(4) of the UCC) or the nominee of either subject to the
clearing corporation's exclusive control, the sending of a confirmation
by the financial intermediary of the purchase by the Indenture Trustee
or its nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying
such certificated securities as belonging to the Indenture Trustee or
its nominee or custodian (all of the foregoing, "Physical Property"),
and, in any event, any such Physical Property in registered form shall
be in the name of the Indenture Trustee or its nominee or custodian; and
such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property (as defined herein) to the Indenture Trustee or
its nominee or custodian, consistent with changes in applicable law or
regulations or the interpretation thereof;
(b) with respect to any securities issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National
Mortgage Association that is a book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations, the
following procedures, all in accordance with applicable law, including
applicable Federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such Trust Account Property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a financial
intermediary which is also a "depository" pursuant to applicable Federal
regulations and issuance by such financial intermediary of a deposit
advice or other written confirmation of such book-entry registration to
the Indenture Trustee or its nominee or custodian of the purchase by the
Indenture Trustee or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in its
books and records identifying such book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations as
belonging to the Indenture Trustee or its nominee or custodian and
indicating that such custodian holds such Trust Account Property solely
as agent for the Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become appropriate
to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof; and
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(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the purchase
by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or
custodian.
"Depositor" means the Seller in its capacity as Depositor under the
Trust Agreement.
"Distribution Date" means, with respect to each Collection Period, the
sixth day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on May 6, 1996.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit
rating from each Rating Agency in one of its generic rating categories that
signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee, the Owner Trustee or Chemical Bank so long as it shall be
Paying Agent under the Trust Agreement or (b) a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a
foreign bank), which (i) has either (A) a long-term unsecured debt rating of
AAA or better by Standard & Poor's and A1 or better by Moody's or (B) a
certificate of deposit rating of A-1+ by Standard & Poor's and P-1 or better
by Moody's, or any other long-term, short-term or certificate of deposit
rating acceptable to the Rating Agencies and (ii) whose deposits are insured
by the FDIC. If so qualified, the Indenture Trustee, the Owner Trustee or
Chemical Bank may be considered an Eligible Institution for the purposes of
clause (b) of this definition.
"Eligible Investment Fixed Value Receivable" means any Contract listed
on Schedule C (which Schedule may be in the form of microfiche), as such
Schedule shall be supplemented to reflect the transfer of Eligible Investment
Receivables to the Issuer on Transfer Dates pursuant to Section 2.05, which
provides for amortization of the loan over a series of fixed level payment
monthly installments in accordance with the actuarial method, the simple
interest method or the Rule of 78s, but also requires a final payment that is
greater than the scheduled monthly payments and is due after payment of such
scheduled monthly payments and that may be made by (i) payment in full in cash
of a fixed value amount, (ii) return of the Financed Vehicle to the Servicer
provided certain conditions are satisfied or (iii) refinancing the final fixed
value payment in accordance with certain conditions.
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"Eligible Investment Receivable" means (i) any Eligible Investment
Standard Receivable and (ii) the Amortizing Payments with respect to any
Eligible Investment Fixed Value Receivable.
"Eligible Investment Standard Receivable" means any Contract listed on
Schedule C (which Schedule may be in the form of microfiche), as such Schedule
shall be supplemented to reflect the transfer of Eligible Investment
Receivables to the Issuer pursuant to Section 2.05, which is not an Eligible
Investment Fixed Value Receivable.
"Eligible Investment Receivables Transfer Assignment" has the meaning
assigned thereto in Section 2.05(b)(i).
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
the full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws
of the United States of America or any state thereof (or any domestic
branch of a foreign bank) and subject to supervision and examination by
Federal or State banking or depository institution authorities;
provided, however, that at the time of the investment or contractual
commitment to invest therein, the commercial paper or other short-term
unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from
each of the Rating Agencies in the highest investment category granted
thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee or
any of their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b);
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(g) repurchase obligations with respect to any security or whole
loan, entered into with (i) a depository institution or trust company
(acting as principal) described in clause (b) above (except that the
rating referred to in the proviso in such clause (b) shall
be A-1 or higher in the case of Standard & Poor's) (such depository
institution or trust company being referred to in this definition as a
"financial institution"), (ii) a broker/dealer (acting as principal)
registered as a broker or dealer under Section 15 of the Exchange Act (a
"broker/dealer") the unsecured short-term debt obligations of which are
rated P-1 by Moody's and at least A-1 by Standard & Poor's at the time
of entering into such repurchase obligation (a "rated broker/dealer"),
(iii) an unrated broker/dealer (an "unrated broker/dealer"), acting as
principal, that is a wholly-owned subsidiary of a non-bank holding
company the unsecured short-term debt obligations of which are rated P-1
by Moody's and at least A-1 by Standard & Poor's at the time of entering
into such repurchase obligation (a "Rated Holding Company") or (iv) an
unrated subsidiary (a "Guaranteed Counterparty"), acting as principal,
that is a wholly-owned subsidiary of a direct or indirect parent Rated
Holding Company, which guarantees such subsidiary's obligations under
such repurchase agreement; provided that the following conditions are
satisfied:
(A) the aggregate amount of funds invested in repurchase
obligations of a financial institution, a rated broker/dealer, an
unrated broker/dealer or Guaranteed Counterparty in respect of
which the Standard & Poor's unsecured short-term ratings are A-1
(in the case of an unrated broker/dealer or Guaranteed
Counterparty, such rating being that of the related Rated Holding
Company) shall not exceed 20% of the sum of the then outstanding
principal balance of the Notes and the Certificate Balance (there
being no limit on the amount of funds that may be invested in
repurchase obligations in respect of which such Standard & Poor's
rating is A-1+ (in the case of an unrated broker/dealer or
Guaranteed Counterparty, such rating being that of the related
Rated Holding Company));
(B) in the case of the Reserve Account, the rating from
Standard & Poor's in respect of the unsecured short-term debt
obligations of the financial institution, rated broker/dealer,
unrated broker/dealer or Guaranteed Counterparty (in the case of
an unrated broker/dealer or Guaranteed Counterparty, such rating
being that of the related Rated Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within 30 days of
the date on which the Indenture Trustee or the Issuer, as
applicable, enters into such repurchase obligation;
(D) the repurchase obligation shall not be subordinated to
any other obligation of the related financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase obligation is
held, in the appropriate form, by a custodial bank on behalf of
the Indenture Trustee or the Issuer, as applicable;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
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(i) the Indenture Trustee or the Issuer, as
applicable, shall have received an opinion of counsel (which
may be in-house counsel) to the effect that the guarantee of
the related Rated Holding Company is a legal, valid and
binding agreement of the Rated Holding Company, enforceable
in accordance with its terms, subject as to enforceability to
bankruptcy, insolvency, reorganization and moratorium or
other similar laws affecting creditors' rights generally and
to general equitable principles;
(ii) the Indenture Trustee or the Issuer, as
applicable, shall have received (x) an incumbency certificate
for the signer of such guarantee, certified by an officer of
such Rated Holding Company and (y) a resolution, certified by
an officer of the Rated Holding Company, of the board of
directors (or applicable committee thereof) of the Rated
Holding Company authorizing the execution, delivery and
performance of such guarantee by the Rated Holding Company;
(iii) the only conditions to the obligation of such
Rated Holding Company to pay on behalf of the Guaranteed
Counterparty shall be that the Guaranteed Counterparty shall
not have paid under such repurchase obligation when required
(it being understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is
necessary) and that the Indenture Trustee or the Issuer shall
make a demand on the Rated Holding Company to make the
payment due under such guarantee;
(iv) the guarantee of the Rated Holding Company shall
be irrevocable with respect to such repurchase obligation and
shall not be subordinated to any other obligation of the
Rated Holding Company; and
(v) each of Standard & Poor's and Moody's has
confirmed in writing to the Indenture Trustee or Issuer, as
applicable, that it has reviewed the form of the guarantee of
the Rated Holding Company and has determined that the
issuance of such guarantee will not result in the downgrade
or withdrawal of the ratings assigned to the Notes or the
Certificates.
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide
that, upon any failure to maintain such over collateralization,
the repurchase obligation shall become due and payable, and unless
the repurchase obligation is satisfied immediately, the collateral
subject to the repurchase agreement shall be liquidated and the
proceeds applied to satisfy the unsatisfied portion of the
repurchase obligation;
(h) Eligible Investment Receivables; provided that Eligible
Investment Receivables shall be Eligible Investments only for funds in
the Reserve Account and only to the extent of the portion of the
Specified Reserve Account Balance specified in clause (ii) of the
definition of "Specified Reserve Account Balance"; and
(i) any other investment with respect to which the Issuer or the
Servicer has received written notification from the Rating Agencies that
the acquisition of such investment as an Eligible Investment will not
result in a withdrawal or downgrading of the ratings on the Notes or
Certificates.
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"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means the Distribution Date
immediately following the Final Scheduled Maturity Date.
"Final Scheduled Maturity Date" means January 31, 2001.
"Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable, Fixed Value Receivable or Eligible Investment
Receivable, as the case may be.
"Fixed Value Payment" means, with respect to each Fixed Value Receivable
or Eligible Investment Fixed Value Receivable, the amount specified on the
applicable Contract as the "Amount of Fixed Value Payment" reduced (i) in the
case of a prepayment or repurchase, by the amount of the unearned finance
charges under the Contract allocable to such payment in accordance with the
Servicer's customary procedures and (ii) in the case of a liquidation, by the
excess of Liquidation Proceeds collected by the Servicer over the Amortizing
Payment on such date.
"Fixed Value Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that provides for amortization of
the loan over a series of fixed level payment monthly installments in
accordance with the actuarial method, the simple interest method or the Rule
of 78s, but also requires a final payment that is greater than the scheduled
monthly payments and is due after payment of such scheduled monthly payments
and that may be made by (i) payment in full in cash of a fixed value amount,
(ii) return of the Financed Vehicle to the Servicer provided certain
conditions are satisfied or (iii) refinancing the final fixed value payment in
accordance with certain conditions.
"Fixed Value Securities" has the meaning assigned to such term in
Section 2.04.
"Indenture" means the Indenture dated as of March 1, 1996, between the
Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Initial Certificate Balance" shall have the meaning set forth in the
Trust Agreement.
"Initial Cutoff Date" means March 8, 1996.
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"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its property,
or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such
debts become due, or the taking of action by such Person in furtherance of any
of the foregoing.
"Interest Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the Receivables (i.e., not Eligible Investment Receivables) in respect of the
Collection Period preceding such Distribution Date: (a) that portion of all
collections on Receivables (including Payaheads) allocable to interest plus
that portion of Payaheads allocable to principal, (b) Liquidation Proceeds
with respect to the Receivables to the extent allocable to interest due
thereon in accordance with the Servicer's customary servicing procedures, (c)
all Advances made by the Servicer of interest due on Receivables, (d) the
Purchase Amount of each Receivable that became a Purchased Receivable during
such Collection Period to the extent attributable to accrued interest on such
Receivable, (e) Recoveries for such Collection Period, and (f) Investment
Earnings (exclusive of Investment Earnings in respect of Eligible Investment
Receivables) for the related Distribution Date; provided, however, that in
calculating the Interest Distribution Amount the following will be excluded:
(i) amounts received on Precomputed Receivables to the extent of any
unreimbursed Precomputed Advances of interest; (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any
unreimbursed Precomputed Advances of interest; (iii) all payments and proceeds
(including Liquidation Proceeds) of any Purchased Receivables the Purchase
Amount of which has been included in the Interest Distribution Amount in a
prior Collection Period; (iv) the sum for all the Simple Interest Receivables
of collections on each such Simple Interest Receivable received during such
preceding Collection Period in excess of the amount of interest that would be
due on the aggregate Principal Balance of the Simple Interest Receivables
during such Collection Period at their respective APRs if a payment were
received on each Simple Interest Receivable during such Collection Period on
the date payment is due under the terms of such Simple Interest Receivable;
and (v) Liquidation Proceeds with respect to a Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not including
interest for the then current Collection Period) but only to the extent of any
unreimbursed Simple Interest Advances.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b); provided that Investment
Earnings on Eligible Investment Receivables shall be applied as part of the
Reserve Account in accordance with Section 2.05 rather than deposited in the
Collection Account.
"Issuer" means Premier Auto Trust 1996-1.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of
any act or omission by the related Obligor.
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"Liquidated Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, liquidated by the Servicer through the sale of a
Financed Vehicle or otherwise.
"Liquidation Proceeds" means, with respect to any Liquidated Receivable,
the moneys collected in respect thereof, from whatever source on a Liquidated
Receivable during the Collection Period in which such Receivable or
Eligible Investment Receivable, as applicable, became a Liquidated Receivable,
net of the sum of any amounts expended by the Servicer in connection with
such liquidation and any amounts required by law to be remitted to the
Obligor on such Liquidated Receivable.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Note Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the outstanding principal balance of such Class of
Notes (after giving effect to any reductions thereof to be made on the
immediately following Distribution Date) divided by the original outstanding
principal balance of such Class of Notes. The Note Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Note Pool Factor will
decline to reflect reductions in the outstanding principal balance of such
Class of Notes.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable Amount
and the Noteholders' Interest Distributable Amount for such Distribution Date.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the sum of the Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Noteholders' Interest Carryover Shortfall on such preceding Distribution Date,
over the amount in respect of interest that is actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the respective Interest
Rates borne by each Class of the Notes for the related Interest Period.
"Noteholders' Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Distribution Date and the Noteholders' Interest Carryover
Shortfall for such Distribution Date. For all purposes of this Agreement and
the Basic Documents, interest with respect to all Classes of Notes other than
the Class A-2 Notes shall be computed on the basis of a 360-day year
consisting of twelve 30-day months; and interest with respect to the Class A-2
Notes shall be computed on the basis of the actual number of days in each
applicable Floating Rate Interest Accrual Period divided by 360.
"Noteholders' Monthly Interest Distributable Amount" means, with respect
to any Distribution Date, interest accrued for the related Interest Accrual
Period or Floating Rate Interest Accrual Period, as applicable, on each Class
of Notes at the respective Interest Rate for such Class on the outstanding
principal balance of the Notes of such Class on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date), after giving effect to all distributions of principal to the
Noteholders of such Class on or prior to such Distribution Date (or, in the
case of the first Distribution Date, on the Closing Date).
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"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of (i) the Regular Principal
Distribution Amount plus (ii) the Accelerated Principal Distribution Amount
plus (iii) any accelerated payments of principal required to be made from
amounts on deposit in the Reserve Account pursuant to Section 5.07(b)(ii).
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Distribution Date, over the amount in respect of
principal that is actually deposited in the Note Distribution Account on such
current Distribution Date.
"Noteholders' Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Principal Distributable
Amount for such Distribution Date and the Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date; provided,
however, that the Noteholders' Principal Distributable Amount shall not exceed
the outstanding principal balance of the Notes. In addition, (a) on the Class
A-1 Final Scheduled Distribution Date, the principal required to be deposited
in the Note Distribution Account will include the amount necessary (after
giving effect to the other amounts to be deposited in the Note Distribution
Account on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-1 Notes to zero; (b) on the Class A-2 Final
Scheduled Distribution Date, the principal required to be deposited in the
Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account
on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-2 Notes to zero; (c) on the Class A-3 Final
Scheduled Distribution Date, the principal required to be deposited in the
Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account
on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-3 Notes to zero; and (d) on the Class A-4
Final Scheduled Distribution Date, the principal required to be deposited in
the Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account
on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-4 Notes to zero.
"Obligor" on a Receivable or an Eligible Investment Receivable means the
purchaser or co-purchasers of the Financed Vehicle and any other Person who
owes payments under the Receivable or Eligible Investment Receivable,
respectively.
"Officers' Certificate" means a certificate signed by (a) the chairman
of the board, any vice president, the controller or any assistant controller
and (b) the president, a treasurer, assistant treasurer, secretary or
assistant secretary of the Seller, the Company or the Servicer, as
appropriate.
"OMSC" means Overseas Military Sales Corporation, or its successor.
"OMSC Receivable" means any Standard Receivable acquired by CFC from
OMSC.
"Opinion of Counsel" means one or more written opinions of counsel, who
may be an employee of or counsel to the Seller, the Company or the Servicer,
which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee
or the Rating Agencies, as applicable.
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"Original Pool Balance" means $1,499,993,689.73.
"Outstanding Precomputed Advances" on the Precomputed Receivables means
the sum, as of the close of business on the last day of a Collection Period,
of all Precomputed Advances as reduced as provided in Section 5.04(a).
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances as reduced as provided in
Section 5.04(b).
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means the Person acting as Owner Trustee under the Trust
Agreement, its successors in interest and any successor owner trustee under
the Trust Agreement.
"Pass-Through Rate" means 6.35% per annum.
"Payahead" on a Receivable that is a Precomputed Receivable means the
amount, as of the close of business on the last day of a Collection Period,
computed in accordance with Section 5.03 with respect to such Receivable.
"Payahead Balance" on a Receivable that is a Precomputed Receivable
means the sum, as of the close of business on the last day of a Collection
Period, of all Payaheads made by or on behalf of the Obligor with respect to
such Precomputed Receivable, as reduced by applications of previous Payaheads
with respect to such Precomputed Receivable pursuant to Sections 5.03 and
5.04.
"Payment Determination Date" means, with respect to any Distribution
Date, the Business Day immediately preceding such Distribution Date.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of
such day (excluding Purchased Receivables and Liquidated Receivables).
"Precomputed Advance" means the amount, as of the close of business on
the last day of a Collection Period, which the Servicer is required to advance
on the related Precomputed Receivables pursuant to Section 5.04(a).
"Precomputed Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, under which the portion of a payment allocable to
earned interest (which may be referred to in the related Contract as an add-on
finance charge) and the portion allocable to the Amount Financed is determined
according to the sum of periodic balances or the sum of monthly balances or
any equivalent method or which is a monthly actuarial receivable.
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"Principal Balance" of (a) a Precomputed Receivable, as of the close of
business on the last day of a Collection Period, means the Amount Financed
minus the sum of (i) that portion of all Scheduled Payments due on or prior to
such day allocable to principal using the actuarial or constant yield method,
(ii) any refunded portion of extended warranty protection plan costs or of
physical damage, credit life or disability insurance premiums included in the
Amount Financed, (iii) any payment of the Purchase Amount with respect to the
Precomputed Receivable allocable to principal and (iv) any prepayment in full
or any partial prepayments applied to reduce the Principal Balance of the
Precomputed Receivable and (b) a Simple Interest Receivable, as of the close
of business on the last day of a Collection Period, means the Amount Financed
minus the sum of (i) the portion of all payments made by or on behalf of the
related Obligor on or prior to such day and allocable to principal using the
Simple Interest Method and (ii) any payment of the Purchase Amount with
respect to the Simple Interest Receivable allocable to principal.
"Purchase Agreement" means the Purchase Agreement dated as of March 1,
1996, between the Seller and the Company.
"Purchase Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full a Receivable or
Eligible Investment Receivable, as applicable, under the terms thereof
including interest to the end of the month of purchase.
"Purchased Receivable" means a Receivable or Eligible Investment
Receivable, as applicable, purchased as of the close of business on the last
day of a Collection Period by the Servicer pursuant to Section 4.07 or by the
Seller pursuant to Section 3.02.
"Rating Agency" means Moody's and Standard & Poor's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Seller, notice of which designation shall be given to the Indenture Trustee,
the Owner Trustee and the Servicer. Any notice required to be given to a
Rating Agency pursuant to this Agreement shall also be given to Fitch
Investors Service, L.P. and Duff & Phelps Credit Rating Co., although, except
as set forth above, neither shall be deemed to be a Rating Agency for any
purposes of this Agreement.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall
be acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Company, the Servicer, the
Owner Trustee and the Indenture Trustee in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Notes or
the Certificates.
"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Liquidation Proceeds to the extent allocable to principal.
"Receivable" means (i) any Standard Receivable and (ii) the Amortizing
Payments with respect to any Fixed Value Receivable. An Eligible Investment
Receivable is not a Receivable.
"Receivable Files" means the documents specified in Section 3.03.
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"Recoveries" means, with respect to any Receivable that becomes a
Liquidated Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Liquidated Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Regular Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of the following amounts, without duplication, with
respect to the Receivables (i.e., not any Eligible Investment Receivables) in
respect of the Collection Period preceding such Distribution Date: (a) that
portion of all collections on Receivables allocable to principal (exclusive of
Payaheads allocable to principal that have not been applied as payments under
the related Receivables in such Collection Period and inclusive of Payaheads
allocable to principal that have been applied as payments under the related
Receivables in such Collection Period), (b) all Liquidation Proceeds
attributable to the principal amount of Receivables that became Liquidated
Receivables during such Collection Period in accordance with the Servicer's
customary servicing procedures, plus the amount of Realized Losses with
respect to such Liquidated Receivables, (c) all Precomputed Advances made by
the Servicer of principal due on the Precomputed Receivables, (d) to the
extent attributable to principal, the Purchase Amount of each Receivable that
became a Purchased Receivable during such Collection Period, (e) partial
prepayments on Precomputed Receivables relating to refunds of extended
warranty protection plan costs or of physical damage, credit life or
disability insurance policy premiums, but only if such costs or premiums were
financed by the respective Obligors thereon as of the date of the original
contract and only to the extent not included under clause (a) above, and (f)
on the Final Scheduled Distribution Date, any amounts advanced by the Servicer
on such Final Scheduled Distribution Date with respect to principal on the
Receivables; provided, however, that in calculating the Regular Principal
Distribution Amount the following will be excluded: (i) amounts received on
Precomputed Receivables to the extent that the Servicer has previously made an
unreimbursed Precomputed Advance of principal, (ii) Liquidation Proceeds with
respect to a particular Precomputed Receivable to the extent of any
unreimbursed Precomputed Advances of principal, (iii) all payments and
proceeds (including Liquidation Proceeds) of any Purchased Receivables the
Purchase Amount of which has been included in the Principal Distribution
Amount in a prior Collection Period, and (iv) Recoveries.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01.
"Reserve Account Initial Deposit" means an amount equal to the Specified
Reserve Account Balance on the Closing Date (which is equal to
$86,249,637.16).
"Scheduled Payment" on a Precomputed Receivable means that portion of
the payment required to be made by the Obligor during the respective
Collection Period sufficient to amortize the Principal Balance under the
actuarial method over the term of the Receivable and to provide interest at
the APR.
"Seller" means CFC and its successors in interest to the extent
permitted hereunder.
"Servicer" means CFC, as the servicer of the Receivables, and each
successor to CFC (in the same capacity) pursuant to Section 7.03 or 8.02.
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit C.
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"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08.
"Servicing Fee Rate" means 1.00% per annum.
"Simple Interest Advance" means the amount of interest, as of the close
of business on the last day of a Collection Period, which the Servicer is
required to advance on the Simple Interest Receivables pursuant to Section
5.04(b).
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made and
the remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable or Eligible Investment
Receivable, as applicable, under which the portion of a payment allocable to
interest and the portion allocable to principal is determined in accordance
with the Simple Interest Method.
"Specified Reserve Account Balance" means, with respect to any
Distribution Date, the sum of (i) 1.90% of the Original Pool Balance as of
such date and (ii) 3.85% of the Pool Balance on the first day of the related
Collection Period; provided, however, that with respect to the portion of the
Specified Reserve Account Balance set forth in clause (i) above, so long as on
any Distribution Date (except the first Distribution Date) the sum of (x) the
outstanding principal balance of the Notes and the Certificate Balance (after
giving effect to all distributions made on the prior Distribution Date) and
(y) the aggregate amount of Payaheads that have been collected but not yet
applied as payments under the related Receivables as of the first day of the
related Collection Period is less than or equal to 96.2% of the Pool Balance
on the first day of the related Collection Period, then the portion of the
Specified Reserve Account Balance specified in clause (i) above shall equal
1.45% of the Original Pool Balance; provided, further, that so long as on any
Distribution Date (except the first Distribution Date) the sum of (x) the
outstanding principal balance of the Notes and the Certificate Balance (after
giving effect to all distributions made on the prior Distribution Date) and
(y) the aggregate amount of Payaheads that have been collected but not yet
applied as payments under the related Receivables as of the first day of the
related Collection Period is less than or equal to 94.50% of the Pool Balance
on the first day of the related Collection Period, then the portion of the
Specified Reserve Account Balance specified in clause (i) above shall equal
1.0% of the Original Pool Balance. With respect to the portion of the
Specified Reserve Account Balance set forth in clause (ii) above, so long as
on any Distribution Date (except the first Distribution Date) the sum of (x)
the outstanding principal balance of the Notes and the Certificate Balance
(after giving effect to payments made on the prior Distribution Date) and (y)
the aggregate amount of Payaheads that have been collected but not yet applied
as payments under the related Receivables as of the first day of the related
Collection Period is less than or equal to 98.35% of the Pool Balance on the
first day of the related Collection Period, then the portion of the Specified
Reserve Account Balance set forth in clause (ii) above will be reduced to an
amount equal to the product of (I) the Pool Balance on the first day of the
related Collection Period and (II) the percentage (which shall not be greater
than 3.85% or less than zero) equal to (X) the percentage derived from the
fraction, the numerator of which is the sum of (x) the outstanding principal
balance of the Notes and the Certificate Balance (after giving effect to all
distributions made on the prior Distribution Date) and (y) the aggregate
amount of Payaheads that have been collected but not yet applied as payments
under the related Receivables as of the first day of the related Collection
Period, and the denominator of which is such Pool Balance less (Y) 94.50%. The
portion of the Specified Reserve Account Balance specified in clause (ii)
above may be invested in Eligible Investment Receivables.
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"Standard & Poor's" means Standard & Poor's Ratings Services, a Division
of the McGraw-Hill Companies, or its successor.
"Standard Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that is not a Fixed Value
Receivable.
"Subsequent Cutoff Date" means the date as of which particular Eligible
Investment Receivables are conveyed to the Trust pursuant to Section 2.05.
"Total Distribution Amount" means, for each Distribution Date, the sum
of the applicable Interest Distribution Amount and the applicable Regular
Principal Distribution Amount (other than the portion thereof attributable to
Realized Losses).
"Transfer Date" means any date on which Eligible Investment Receivables
are to be transferred to the Issuer and an Eligible Investment Receivables
Transfer Assignment is executed and delivered to the Owner Trustee and the
Indenture Trustee pursuant to Section 2.05.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and
all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.01.
"Trust Agreement" means the Amended and Restated Trust Agreement dated
as of March 1, 1996, among the Seller, the Company and the Owner Trustee.
"Trust Officer" means, in the case of the Indenture Trustee, any Officer
within the Corporate Trust Office of the Indenture Trustee, including any Vice
President, Assistant Vice President, Secretary, Assistant Secretary or any
other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
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(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of the Seller of $1,499,993,689.73,
less the amount to be deposited to the Reserve Account on the Closing Date,
the Seller does hereby sell, transfer, assign, set over and otherwise convey
to the Issuer, without recourse (subject to the obligations of the Seller set
forth herein), all right, title and interest of the Seller in and to:
(a) the Receivables and all moneys due thereon on or after April
1, 1996, in the case of Precomputed Receivables, and all moneys received
thereon on and after March 8, 1996, in the case of Simple Interest
Receivables;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the
Seller in the Financed Vehicles;
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(c) any proceeds with respect to the Receivables from claims on
any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors;
(d) any proceeds from recourse to Dealers with respect to
Receivables with respect to which the Servicer has determined in
accordance with its customary servicing procedures that eventual payment
in full is unlikely;
(e) any Financed Vehicle that shall have secured a Receivable and
shall have been acquired by or on behalf of the Seller, the Servicer,
the Company or the Trust;
(f) all right, title and interest in all funds on deposit from
time to time in the Trust Accounts, including the Reserve Account
Initial Deposit and the Certificate Distribution Account, and in all
investments and proceeds thereof (including all income thereon); and
(g) the proceeds of any and all of the foregoing.
SECTION 2.02. [RESERVED]
SECTION 2.03. Conveyance of Fixed Value Payments. Promptly following the
transfer to the Issuer of the Receivables on the Closing Date, the Issuer
shall, without further action hereunder, be deemed to sell, transfer, assign,
set over and otherwise convey to the Seller, effective as of the Closing Date,
without recourse, representation or warranty, all the right, title and
interest of the Issuer in and to the Fixed Value Payments, all monies due and
to become due and all amounts received with respect thereto and all proceeds
thereof, subject to Section 5.03(b).
SECTION 2.04. Fixed Value Securities. (a) At any time after the Closing
Date, at the option of the Seller and upon 10 days prior notice to the Owner
Trustee and the Indenture Trustee, the Seller will be permitted to sell to the
Issuer, and the Issuer shall be obligated to purchase from the Seller (subject
to the availability of funds), all or any portion of the Fixed Value Payments,
subject to the terms and conditions described below. Upon any such sale, (x)
the Seller and the Owner Trustee will enter into an amendment to this
Agreement and the Basic Documents to provide for, at the election of the
Seller, the issuance of certificates representing ownership interests in the
Trust to the extent of such Fixed Value Payments or the issuance of
indebtedness by the Issuer secured by such Fixed Value Payments (collectively,
the "Fixed Value Securities") and to make any other provisions herein or
therein that are necessary or desirable in connection therewith and (y) the
Owner Trustee will enter into any other agreements or instruments related
thereto as requested by the Seller; provided, however, that the Owner Trustee
may, but shall not be obligated to, enter into any such amendment, agreement
or instrument that affects the Owner Trustee's own rights, duties or
immunities under this Agreement; and provided, further, that the obligation of
the Issuer to purchase such Fixed Value Payments and of the Owner Trustee to
enter into any such amendment or other agreement or instrument is subject to
the following conditions precedent:
(i) such amendment and other agreements and instruments, in forms
satisfactory to the Owner Trustee and, in the case of amendments or
agreements to be executed and delivered by the Indenture Trustee, in
forms satisfactory to the Indenture Trustee, shall have been executed by
each other party thereto and delivered to the Owner Trustee or the
Indenture Trustee as appropriate;
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(ii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel to
the effect that each condition precedent (including the requirement with
respect to all required filings) provided by this Section has been
complied with and such amendment or other agreement or instrument is
authorized or permitted by this Agreement;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such sale and issuance;
(iv) such sale and issuance and such amendment or other agreement
or instrument shall not adversely affect in any material respect the
interest of any Noteholder or Certificateholder, and the Depositor shall
have provided to the Owner Trustee and the Indenture Trustee an
Officers' Certificate to such effect;
(v) the Owner Trustee and the Indenture Trustee shall have
received an Opinion of Counsel to the effect that such sale and issuance
will not have any material tax consequence to any Noteholder or
Certificateholder; and
(vi) all filings and other actions required to continue the first
perfected interest of the Trust in the Owner Trust Estate and the
Indenture Trustee in the Collateral shall have been duly made or taken
by the Seller.
(b) Except as described in Section 10.04, the Seller will not sell,
transfer, assign, set over or otherwise convey the Fixed Value Payments other
than to the Issuer pursuant to paragraph (a).
SECTION 2.05. Purchase of Eligible Investment Receivables. (a) Pursuant
to Section 5.01(b), the Indenture Trustee may invest funds in the Reserve
Account in Eligible Investment Receivables, but only up to the portion of the
Specified Reserve Account Balance specified in clause (ii) of the definition
"Specified Reserve Account Balance". Eligible Investment Receivables shall be
part of the Reserve Account and shall not be Receivables hereunder or under
the Indenture, and collections and Investment Earnings on and Purchase Amounts
in respect of Eligible Investment Receivables shall be applied as part of the
Reserve Account pursuant to Section 5.07 and shall not be part of the Interest
Distribution Amount. Upon delivery by the Indenture Trustee to the Seller of
an amount equal to the aggregate Principal Balance of the Eligible Investment
Receivables then being purchased by the Indenture Trustee on behalf of the
Issuer, the Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Issuer, without recourse (subject to the obligations herein),
all right, title and interest of the Seller in and to:
(1) the Eligible Investment Receivables listed on Schedule C to
the related Eligible Investment Receivables Transfer Assignment, and all
moneys due thereon on or after the related Subsequent Cutoff Date, in
the case of Precomputed Receivables, and all moneys received thereon on
and after the related Subsequent Cutoff Date, in the case of Simple
Interest Receivables;
(2) the security interests in the Financed Vehicles granted by
Obligors pursuant to such Eligible Investment Receivables and any other
interest of the Seller in such Financed Vehicles;
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(3) any proceeds with respect to such Eligible Investment
Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors;
(4) any proceeds with respect to such Eligible Investment
Receivables from recourse to Dealers thereon with respect to which the
Servicer has determined in accordance with its customary servicing
procedures that eventual payment in full is unlikely;
(5) any Financed Vehicle that shall have secured any such Eligible
Investment Receivable and shall have been acquired by or on behalf of
the Seller, the Servicer, the Company or the Trust; and
(6) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Issuer the Eligible Investment
Receivables and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions precedent on or prior to the related Transfer Date:
(i) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee a duly executed Eligible Investment Receivables
Transfer Assignment substantially in the form of Exhibit F, which shall
include supplements to Schedule C listing the Eligible Investment
Receivables;
(ii) the Seller shall, to the extent required by Section 5.02,
have deposited in the Reserve Account all amounts (A) due on or after
the applicable Subsequent Cutoff Date in respect of Eligible Investment
Receivables that are Precomputed Receivables or (b) received on or after
the applicable Subsequent Cutoff Date in respect of the Eligible
Investment Receivables that are Simple Interest Receivables;
(iii) as of each Transfer Date, (A) the Seller was not insolvent
and will not become insolvent as a result of the transfer of Eligible
Investment Receivables on such Transfer Date, (B) the Seller did not
intend to incur or believe that it would incur debts that would be
beyond the Seller's ability to pay as such debts matured, (C) such
transfer was not made with actual intent to hinder, delay or defraud any
Person and (D) the assets of the Seller did not constitute unreasonably
small capital to carry out its business as conducted;
(iv) each of the representations and warranties made by the Seller
pursuant to Section 3.01 (other than clauses (v) and (aa)) shall be true
and correct with respect to the Eligible Investment Receivables as of
the related Transfer Date, and the Seller shall have performed all
obligations to be performed by it hereunder on or prior to such Transfer
Date;
(v) not more than 40% of the Principal Balances of the Eligible
Investment Receivables in the Reserve Account, including the Eligible
Investment Receivables to be conveyed to the Trust on such Transfer Date
(based on the characteristics of the Eligible Investment Receivables on
the related Subsequent Cutoff Date) represent previously titled
vehicles;
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(vi) the Seller shall, at its own expense, on or prior to the
related Transfer Date indicate in its computer files that the Eligible
Investment Receivables identified in the Eligible Investment Receivables
Transfer Assignment have been sold to the Issuer pursuant to this
Agreement and the related Eligible Investment Receivables Transfer
Assignment;
(vii) the Seller shall have taken any action required to maintain
the first perfected ownership interest of the Issuer in the Owner Trust
Estate and the first perfected security interest of the Indenture
Trustee in the Collateral;
(viii) no selection procedures believed by the Seller to be adverse
to the interests of the Certificateholders or the Noteholders shall have
been utilized in selecting the Eligible Investment Receivables;
(ix) the addition of any such Eligible Investment Receivables will
not result in a material adverse tax consequence to the Trust, the
Noteholders or the Certificateholders;
(x) the Seller shall have delivered (A) to the Rating Agencies an
Opinion of Counsel with respect to the transfer of such Eligible
Investment Receivables in the form of the Opinion of Counsel delivered
to the Rating Agencies on the Closing Date and (B) to the Owner Trustee
and Indenture Trustee the Opinion of Counsel required by Section
10.02(i)(1); provided that the Opinions of Counsel referred to in
clauses (A) and (B) shall only be delivered on or before the 15th day of
the month following the Transfer Date on which the aggregate Principal
Balance (calculated as of the respective Subsequent Cutoff Dates) of the
Eligible Investment Receivables delivered under this Section 2.05 and
not previously covered by an Opinion of Counsel required by this proviso
equals or exceeds $5,000,000; and
(xi) the Seller shall have delivered to the Indenture Trustee and
the Owner Trustee an Officers' Certificate confirming the satisfaction
of each condition specified in this paragraph (b).
(c) Promptly following the transfer to the Issuer of Eligible Investment
Receivables on any Transfer Date, the Issuer shall, without further action
hereunder or thereunder, be deemed to sell, transfer, assign, set over and
otherwise convey to the Seller, effective as of the related Transfer Date,
without recourse, representation or warranty, all the right, title and
interest of the Issuer in and to the related Fixed Value Payments, all monies
due and to become due and all amounts received with respect thereto and all
proceeds thereof, subject to Section 5.03(b).
(d) Except as described in Section 10.04, the Seller will not sell,
transfer, assign, set over or otherwise convey Fixed Value Payments derived
from Eligible Investment Fixed Value Receivables.
(e) Except as otherwise provided herein, all of the provisions of this
Agreement (exclusive of Section 3.01(v) and Section 5.04) applicable to a
Receivable shall also apply to the Eligible Investment Receivables, except
that, pursuant to Section 5.02, collections and Investment Earnings on and
Purchase Amounts in respect of the Eligible Investment Receivables shall be
deposited into the Reserve Account at the time when collections on and
Purchase Amounts in respect of the Receivables are required to be deposited
into the Collection Account. For purposes of calculating the amount in the
Reserve Account, the amount represented by an Eligible Investment Receivable
shall be its Principal Balance. The Servicer shall receive a Servicing Fee in
respect of the Eligible Investment Receivables calculated in the manner
specified in Section 4.08 and payable out of any collections on the Eligible
Investment Receivables allocable to interest.
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ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of the Seller with Respect
to the Receivables. The Seller makes the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied
in acquiring the Receivables. Such representations and warranties speak as of
the execution and delivery of this Agreement and as of the Closing Date, but
shall survive the sale, transfer and assignment of the Receivables to the
Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) Characteristics of Receivables. Each Standard Receivable and
Fixed Value Receivable (A) was originated in the United States of
America by a Dealer for the retail sale of a Financed Vehicle in the
ordinary course of such Dealer's business, was fully and properly
executed by the parties thereto, was purchased by the Seller either from
such Dealer under an existing dealer agreement or from Chrysler Credit
Corporation, which, in turn, had purchased such Standard Receivable or
Fixed Value Receivable from such Dealer under an existing dealer
agreement, and was validly assigned, directly or indirectly, by such
Dealer to CFC in accordance with its terms, (B) has created or shall
create a valid, subsisting and enforceable first priority security
interest in favor of the Seller and is assignable by the Seller to the
Issuer and by the Issuer to the Indenture Trustee, (C) contains
customary and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for realization against the
collateral of the benefits of the security, (D) provides for level
monthly payments (provided, that the payment in the first or last month
in the life of the Standard Receivable or Fixed Value Receivable may be
minimally different from the level payments and that the payment in the
last month of a Fixed Value Receivable may be a Fixed Value Payment)
that fully amortize the Amount Financed by maturity and yield interest
at the Annual Percentage Rate and (E) in the case of Precomputed
Receivables, in the event that such contract is prepaid, provides for a
prepayment that fully pays the Principal Balance and includes a full
month's interest, in the month of prepayment, at the Annual Percentage
Rate. The Obligor on each OMSC Receivable was in the services of the
United States of America military at the time such OMSC Receivable was
originated. No Receivable conveyed to the Issuer on the Closing Date is
an OMSC Receivable.
(b) Schedule of Receivables. The information set forth in Schedule
A to this Agreement and Schedule C to any Eligible Investment
Receivables Transfer Assignment is true and correct in all material
respects as of the opening of business on the applicable Cutoff Date,
and no selection procedures believed to be adverse to the Noteholders or
the Certificateholders were utilized in selecting the Receivables. The
computer tape or other listing regarding the Standard Receivables and
the Fixed Value Receivables made available to the Issuer and its assigns
(which computer tape or other listing is required to be delivered as
specified herein) is true and correct in all respects.
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(c) Compliance with Law. Each Standard Receivable and Fixed Value
Receivable and the sale of the Financed Vehicle complied at the time it
was originated or made and at the execution of this Agreement and each
Eligible Investment Receivables Transfer Assignment complies in all
material respects with all requirements of applicable federal, state and
local laws and regulations thereunder (or, in the case of the OMSC
Receivables, Swiss laws and regulations and the laws and regulations of
the jurisdiction where the Receivable was originated), including usury
laws, the federal Truth-in-Lending Act, the Equal Credit Opportunity
Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act,
the Federal Reserve Board's Regulations B and Z, the Texas Consumer
Credit Code and State adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, and other consumer credit laws and
equal credit opportunity and disclosure laws.
(d) Binding Obligation. Each Standard Receivable and Fixed Value
Receivable represents the genuine, legal, valid and binding payment
obligation in writing of the Obligor, enforceable by the holder thereof
in accordance with its terms.
(e) No Government Obligor. None of the Standard Receivables or
Fixed Value Receivables is due from the United States of America or any
State or from any agency, department or instrumentality of the United
States of America or any State.
(f) Security Interest in Financed Vehicle. Immediately prior to
the sale, assignment and transfer thereof, each Standard Receivable and
Fixed Value Receivable shall be secured by a validly perfected first
security interest in the Financed Vehicle in favor of the Seller as
secured party or all necessary and appropriate actions have been
commenced that would result in the valid perfection of a first security
interest in the Financed Vehicle in favor of the Seller as secured
party.
(g) Receivables in Force. No Standard Receivable or Fixed Value
Receivable has been satisfied, subordinated or rescinded, nor has any
Financed Vehicle been released from the lien granted by the related
Standard Receivable or Fixed Value Receivable in whole or in part.
(h) No Waiver. No provision of a Standard Receivable or Fixed
Value Receivable has been waived.
(i) No Amendments. No Standard Receivable or Fixed Value
Receivable has been amended such that the amount of the Obligor's
Scheduled Payments has been increased except for increases resulting
from the inclusion of any premiums for forced placed physical damage
insurance covering the Financed Vehicle.
(j) No Defenses. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Standard
Receivable or Fixed Value Receivable.
(k) No Liens. To the best of the Seller's knowledge, no liens or
claims have been filed for work, labor or materials relating to a
Financed Vehicle that are liens prior to, or equal to or coordinate
with, the security interest in the Financed Vehicle granted by any
Standard Receivable or Fixed Value Receivable.
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(l) No Default. No Standard Receivable or Fixed Value Receivable
has a payment that is more than 90 days overdue as of the related Cutoff
Date, and, except as permitted in this paragraph, no default, breach,
violation or event permitting acceleration under the terms of any
Standard Receivable or Fixed Value Receivable has occurred; and no
continuing condition that with notice or the lapse of time would
constitute a default, breach, violation or event permitting acceleration
under the terms of any Standard Receivable or Fixed Value Receivable has
arisen; and the Seller has not waived and shall not waive any of the
foregoing.
(m) Insurance. The Seller, in accordance with its customary
procedures, has determined that the Obligor has obtained physical damage
insurance covering the Financed Vehicle and under the terms of the
Standard Receivable and Fixed Value Receivable the Obligor is required
to maintain such insurance.
(n) Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Standard
Receivables and Fixed Value Receivables from the Seller to the Issuer
and that the beneficial interest in and title to the Standard
Receivables and Fixed Value Receivables not be part of the debtor's
estate in the event of the filing of a bankruptcy petition by or against
the Seller under any bankruptcy law. No Standard Receivable or Fixed
Value Receivable has been sold, transferred, assigned or pledged by the
Seller to any Person other than the Issuer. Immediately prior to the
transfer and assignment herein contemplated, the Seller had good and
marketable title to each Standard Receivable and Fixed Value Receivable
free and clear of all Liens, encumbrances, security interests and rights
of others and, immediately upon the transfer thereof, the Issuer shall
have good and marketable title to each Standard Receivable and Fixed
Value Receivable, free and clear of all Liens, encumbrances, security
interests and rights of others; and the transfer has been perfected
under the UCC.
(o) Lawful Assignment. No Standard Receivable or Fixed Value
Receivable has been originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer and assignment of such
Standard Receivable or Fixed Value Receivable or any Receivable under
this Agreement, any Eligible Investment Receivables Transfer
Assignment or the Indenture is unlawful, void or voidable.
(p) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first perfected
ownership interest in the Standard Receivables and Fixed Value
Receivables, and to give the Indenture Trustee a first perfected
security interest therein, shall have been made.
(q) One Original. There is only one original executed copy of each
Standard Receivable and Fixed Value Receivable.
(r) Maturity of Receivables. Each Standard Receivable and Fixed
Value Receivable has a final maturity date not later than January 31,
2001.
(s) Scheduled Payments. (A) Each Standard Receivable and Fixed
Value Receivable has a first Scheduled Payment due, in the case of
Precomputed Receivables, or a scheduled due date, in the case of Simple
Interest Receivables, on or prior to the end of the month following the
related Cutoff Date and (B) no Standard Receivable or Fixed Value
Receivable has a payment that is more than 90 days overdue as of the
related Cutoff Date, and has a final scheduled payment date no later
than the Final Scheduled Maturity Date.
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(t) Location of Receivable Files. The Receivable Files are kept at
one or more of the locations listed in Schedule B.
(u) Remaining Maturity. The latest scheduled maturity of any
Standard Receivable or Fixed Value Receivable shall be no later than the
Final Scheduled Maturity Date.
(v) Outstanding Principal Balance. Each Standard Receivable and
Fixed Value Receivable has an outstanding gross balance of at least
$1,000.
(w) No Bankruptcies or First-Time Buyers. No Obligor on any
Standard Receivable or Fixed Value Receivable as of the related Cutoff
Date was noted in the related Receivable File as having filed for
bankruptcy, and no such Obligor financed a Financed Vehicle under the
Seller's "New Finance Buyer Plan" program.
(x) No Repossessions. No Financed Vehicle securing any Standard
Receivable or Fixed Value Receivable is in repossession status.
(y) Chattel Paper. Each Standard Receivable and Fixed Value
Receivable constitutes "chattel paper" as defined in the UCC.
(z) Agreement. The representations and warranties of the Seller in
Section 6.01 are true and correct.
(aa) Financing. As of the Initial Cutoff Date, approximately
28.29% of the aggregate principal balance of the Receivables,
constituting 32.99% of the number of Receivables, represents previously
titled vehicles; approximately 69.83% of the aggregate principal balance
of the Receivables represents financing of vehicles manufactured or
distributed by Chrysler Corporation; approximately 41.40% of the
aggregate principal balance of the Receivables represents Precomputed
Receivables and the remainder represents Simple Interest Receivables; by
aggregate principal balance, approximately 8.50% of the Receivables are
Fixed Value Receivables. The aggregate principal balance of the
Receivables, as of the Initial Cutoff Date, is $1,499,993,689.73. For
the purposes of this subparagraph (aa), Receivable shall mean only that
portion of the Receivables with respect to which the Trust has an
ownership interest.
SECTION 3.02. Repurchase upon Breach. The Seller, the Servicer or the
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery
of any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01. Unless any such breach shall have been cured by the last
day of the second Collection Period following the discovery thereof by the
Owner Trustee or receipt by the Owner Trustee of written notice from the
Seller or the Servicer of such breach, the Seller shall be obligated to
repurchase any Receivable materially and adversely affected by any such breach
as of such last day (or, at the Seller's option, the last day of the first
Collection Period following the discovery). In consideration of the repurchase
of any such Receivable, the Seller shall remit the Purchase Amount, in the
manner specified in Section 5.05. Subject to the provisions of Section 6.03,
the sole remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders or the Certificateholders with respect to a breach of
representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Seller to repurchase
Receivables pursuant to this Section, subject to the conditions contained
herein.
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SECTION 3.03. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date (in the case of the Receivables) and the
applicable Transfer Date (in the case of Eligible Investment Receivables) with
respect to each Receivable:
(a) the fully executed original of the Standard Receivable or
Fixed Value Receivable;
(b) the original credit application fully executed by the Obligor;
(c) the original certificate of title or such documents that the
Servicer or the Seller shall keep on file, in accordance with its
customary procedures, evidencing the security interest of the Seller in
the Financed Vehicle; and
(d) any and all other documents that the Servicer or the Seller
shall keep on file, in accordance with its customary procedures,
relating to a Standard Receivable or Fixed Value Receivable, an Obligor
or a Financed Vehicle.
SECTION 3.04. Duties of Servicer as Custodian. (a) Safekeeping. The
Servicer shall hold the Receivable Files as custodian for the benefit of the
Issuer and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Issuer to
comply with this Agreement. In performing its duties as custodian the Servicer
shall act with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to the receivable files relating to all
comparable automotive receivables that the Servicer services for itself or
others. The Servicer shall conduct, or cause to be conducted, periodic audits
of the Receivable Files held by it under this Agreement and of the related
accounts, records and computer systems, in such a manner as shall enable the
Issuer or the Indenture Trustee to verify the accuracy of the Servicer's
record keeping. The Servicer shall promptly report to the Issuer and the
Indenture Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records and computer systems as herein provided and
shall promptly take appropriate action to remedy any such failure. Nothing
herein shall be deemed to require an initial review or any periodic review by
the Issuer or the Indenture Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B or at such
other office as shall be specified to the Issuer and the Indenture Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Issuer and the Indenture Trustee or their
respective duly authorized representatives, attorneys or auditors a list of
locations of the Receivable Files and the related accounts, records and
computer systems maintained by the Servicer at such times during normal
business hours as the Issuer or the Indenture Trustee shall instruct.
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(c) Release of Documents. Upon instruction from the Indenture Trustee,
the Servicer shall release any Receivable File to the Indenture Trustee, the
Indenture Trustee's agent or the Indenture Trustee's designee, as the case may
be, at such place or places as the Indenture Trustee may designate, as soon as
practicable.
SECTION 3.05. Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee.
SECTION 3.06. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and
each of their respective officers, directors, employees and agents for any and
all liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or
asserted against the Trust, the Owner Trustee or the Indenture Trustee or any
of their respective officers, directors, employees and agents as the result of
any improper act or omission in any way relating to the maintenance and
custody by the Servicer as custodian of the Receivable Files; provided,
however, that the Servicer shall not be liable to the Owner Trustee for any
portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Owner Trustee, and the Servicer shall not be liable to
the Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Indenture Trustee.
SECTION 3.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Initial Cutoff Date
and shall continue in full force and effect until terminated pursuant to this
Section. If CFC shall resign as Servicer in accordance with the provisions of
this Agreement or if all of the rights and obligations of any Servicer shall
have been terminated under Section 8.01, the appointment of such Servicer as
custodian shall be terminated by the Indenture Trustee or by the Holders of
Notes evidencing not less than 25% of the Outstanding Amount of the Notes or,
with the consent of Holders of the Notes evidencing not less than 25% of the
Outstanding Amount of the Notes, by the Owner Trustee or by Certificateholders
evidencing not less than 25% of the Certificate Balance, in the same manner as
the Indenture Trustee or such Holders may terminate the rights and obligations
of the Servicer under Section 8.01. The Indenture Trustee or, with the consent
of the Indenture Trustee, the Owner Trustee may terminate the Servicer's
appointment as custodian, with cause, at any time upon written notification to
the Servicer and, without cause, upon 30 days' prior written notification to
the Servicer. As soon as practicable after any termination of such
appointment, the Servicer shall deliver the Receivable Files to the Indenture
Trustee or the Indenture Trustee's agent at such place or places as the
Indenture Trustee may reasonably designate.
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ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer. The Servicer, for the benefit of the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it
services for itself or others. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections, furnishing
monthly and annual statements to the Owner Trustee and the Indenture Trustee
with respect to distributions and making Advances pursuant to Section 5.04.
Subject to the provisions of Section 4.02, the Servicer shall follow its
customary standards, policies and procedures in performing its duties as
Servicer. Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and
the Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other
comparable instruments, with respect to such Receivables or to the Financed
Vehicles securing such Receivables. If the Servicer shall commence a legal
proceeding to enforce a Receivable, the Issuer (in the case of a Receivable
other than a Purchased Receivable) shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Receivable
to the Servicer. If in any enforcement suit or legal proceeding it shall be
held that the Servicer may not enforce a Receivable on the ground that it
shall not be a real party in interest or a holder entitled to enforce such
Receivable, the Owner Trustee shall, at the Servicer's expense and direction,
take steps to enforce such Receivable, including bringing suit in its name or
the name of the Owner Trustee, the Indenture Trustee, the Certificateholders
or the Noteholders. The Owner Trustee shall upon the written request of the
Servicer furnish the Servicer with any powers of attorney and other documents
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
SECTION 4.02. Collection and Allocation of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer shall allocate collections between principal and
interest in accordance with the customary servicing procedures it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer may grant extensions, rebates or adjustments on a
Standard Receivable or Fixed Value Receivable, which shall not, for the
purposes of this Agreement, modify the original due dates or amounts of the
Scheduled Payments on a Precomputed Receivable or the original due dates or
amounts of the originally scheduled payments of interest on Simple Interest
Receivables; provided, however, that if the Servicer extends the date for
final payment by the Obligor of any Receivable beyond the Final Scheduled
Maturity Date, it shall promptly repurchase the Receivable from the Issuer in
accordance with the terms of Section 4.07. The Servicer may in its discretion
waive any late payment charge or any other fees that may be collected in the
ordinary course of servicing a Receivable. The Servicer shall not agree to any
alteration of the interest rate on any Receivable or of the amount of any
Scheduled Payment on Precomputed Receivables or the originally scheduled
payments on Simple Interest Receivables.
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SECTION 4.03. Realization upon Receivables. On behalf of the Issuer, the
Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. The Servicer shall follow such customary
and usual practices and procedures as it shall deem necessary or advisable in
its servicing of automotive receivables, which may include reasonable efforts
to realize upon any recourse to Dealers and selling the Financed Vehicle at
public or private sale. The foregoing shall be subject to the provision that,
in any case in which the Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair and/or repossession will increase the Liquidation
Proceeds by an amount greater than the amount of such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Vehicle as
of the execution of the Standard Receivable or the Fixed Value Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures,
take such steps as are necessary to maintain perfection of the security
interest created by each Standard Receivable and Fixed Value Receivable in the
related Financed Vehicle. The Servicer is hereby authorized to take such steps
as are necessary to re-perfect such security interest on behalf of the Issuer
and the Indenture Trustee in the event of the relocation of a Financed Vehicle
or for any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or repossession, nor shall the Servicer impair the
rights of the Issuer, the Indenture Trustee, the Certificateholders or the
Noteholders in such Receivable, nor shall the Servicer increase the number of
scheduled payments due under a Standard Receivable or Fixed Value Receivable.
SECTION 4.07. Purchase of Receivables upon Breach. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee and the
Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the
last day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period),
the Servicer shall purchase any Receivable materially and adversely affected
by such breach as of such last day. If the Servicer takes any action during
any Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in
any Receivable or as otherwise provided in Section 4.02, the Servicer shall
purchase such Receivable as of the last day of such Collection Period. In
consideration of the purchase of any such Receivable pursuant to either of the
two preceding sentences, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.05. For purposes of this Section, the Purchase
Amount shall consist in part of a release by the Servicer of all rights of
reimbursement with respect to Outstanding Precomputed Advances and Outstanding
Simple Interest Advances on the Receivable. Subject to Section 7.02, the sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders with respect to a breach pursuant to
Section 4.02, 4.05 or 4.06 shall be to require the Servicer to purchase
Receivables pursuant to this Section. The Owner Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Receivable pursuant to this Section.
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SECTION 4.08. Servicing Fee. The Servicing Fee for a Distribution Date
shall equal the product of (a) one-twelfth, (b) the Servicing Fee Rate and (c)
the Pool Balance as of the first day of the preceding Collection Period. The
Servicer shall also be entitled to all late fees, prepayment charges
(including, in the case of a Receivable that provides for payments according
to the "Rule of 78s" and that is prepaid in full, the difference between the
Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the "Rule of 78s"), and other administrative fees or similar charges allowed
by applicable law with respect to the Receivables, collected (from whatever
source) on the Receivables, plus any reimbursement pursuant to the last
paragraph of Section 7.02.
SECTION 4.09. Servicer's Certificate. Not later than 11:00 a.m. (New
York time) on each Payment Determination Date, the Servicer shall deliver to
the Owner Trustee, each Paying Agent, the Indenture Trustee and the Seller,
with a copy to the Rating Agencies, a Servicer's Certificate containing all
information necessary to make the distributions to be made on the related
Distribution Date pursuant to Sections 5.06 and 5.07 for the related
Collection Period. Receivables to be purchased by the Servicer or to be
repurchased by the Seller shall be identified by the Servicer by account
number with respect to such Receivable (as specified in Schedule A or C, as
applicable).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Owner Trustee and the Indenture Trustee, on
or before April 30 of each year beginning April 30, 1997, an Officers'
Certificate, dated as of December 31 of the preceding year, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
(or such longer period as shall have elapsed since the Closing Date) and of
its performance under this Agreement has been made under such officers'
supervision and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Indenture Trustee shall send a copy of such
certificate and the report referred to in Section 4.11 to the Rating Agencies.
A copy of such certificate and the report referred to in Section 4.11 may be
obtained by any Certificateholder, Certificate Owner, Noteholder or Note Owner
by a request in writing to the Owner Trustee addressed to the Corporate Trust
Office. Upon the telephone request of the Owner Trustee, the Indenture Trustee
will promptly furnish the Owner Trustee a list of Noteholders as of the date
specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under
Section 8.01(a) or (b).
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SECTION 4.11. Annual Independent Certified Public Accountants' Report.
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer, the Seller or their
Affiliates, to deliver to the Owner Trustee and the Indenture Trustee on or
before April 30 of each year beginning April 30, 1997, a report addressed to
the Board of Directors of the Servicer, to the effect that such firm has
examined the financial statements of CFC and issued its report thereon and
that such examination (a) was made in accordance with generally accepted
auditing standards and accordingly included such tests of the accounting
records and such other auditing procedures as such firm considered necessary
in the circumstances; (b) included tests relating to automotive loans serviced
for others in accordance with the requirements of the Uniform Single Audit
Program for Mortgage Bankers (the "Program"), to the extent the procedures in
such Program are applicable to the servicing obligations set forth in this
Agreement; and (c) except as described in the report, disclosed no exceptions
or errors in the records relating to automobile and light- duty truck loans
serviced for others that, in the firm's opinion, paragraph four of such
Program requires such firm to report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Certificateholders and
Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders shall be required by applicable statutes or
regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours
at the offices of the Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section.
SECTION 4.13. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and
reports to Certificateholders and Noteholders.
SECTION 4.14. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Rating Agency Condition shall
have been satisfied in connection therewith; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders for
the servicing and administering of the Receivables in accordance with the
provisions hereof without diminution of such obligation and liability by
virtue of the appointment of such subservicer and to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering the Receivables. The fees and expenses of the subservicer shall
be as agreed between the Servicer and its subservicer from time to time, and
none of the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders shall have any responsibility therefor.
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ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.01. Establishment of Trust Accounts. (a) (i) The Servicer, for
the benefit of the Noteholders and the Certificateholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(ii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Note Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders.
(iii) The Servicer, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders and the
Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account and the Reserve Account (collectively the "Trust Accounts") shall be
invested (1) by the Indenture Trustee in Eligible Investments selected in
writing by the Servicer or an investment manager selected by the Servicer,
which investment manager shall have agreed to comply with the terms of this
Agreement as it relates to investing such funds or (2) by an investment
manager in Eligible Investments selected by such investment manager; provided
that (A) such investment manager shall be selected by the Servicer, (B) such
investment manager shall have agreed to comply with the terms of this
Agreement as it relates to investing such funds, (C) any investment so
selected by such investment manager shall be made in the name of the Indenture
Trustee and shall be settled by a Delivery to the Indenture Trustee that
complies with the terms of this Agreement as it relates to investing such
funds, and (D) prior to the settlement of any investment so selected by such
investment manager the Indenture Trustee shall affirm that such investment is
an Eligible Investment. It is understood and agreed that the Indenture Trustee
shall not be liable for any loss arising from an investment in Eligible
Investments made in accordance with this Section 5.01(b). All such Eligible
Investments shall be held by the Indenture Trustee for the benefit of the
Noteholders and the Certificateholders or the Noteholders, as applicable;
provided, that (i) on each Payment Determination Date all interest and other
investment income (net of losses and investment expenses) on funds on deposit
in the Trust Accounts other than interest or other investment income on
Eligible Investment Receivables shall be deposited into the Collection Account
and shall be deemed to constitute a portion of the Interest Distribution
Amount for the related Distribution Date and (ii) any interest and other
investment income on Eligible Investment Receivables shall remain in the
Reserve Account and will be available for application and distribution
pursuant to Section 5.07. Other than as permitted by the Rating Agencies,
funds on deposit in the Collection Account, the Reserve Account and the Note
Distribution Account shall be invested in Eligible Investments that will
mature (A) not later than the Business Day immediately preceding the next
Distribution Date or (B) on such next Distribution Date if either (x) such
investment is held in the trust department of the institution with which the
Collection Account, the Reserve Account, the Note Distribution Account or the
Certificate Distribution Account, as applicable, is then maintained and is
invested in a time deposit of the Indenture Trustee rated at least A-1 by
Standard & Poor's and P-1 by Moody's (such account being maintained within the
trust department of the Indenture Trustee) or (y) the Indenture Trustee (so
long as the short-term unsecured debt obligations of the Indenture Trustee are
either (i) rated at least P-1 by Moody's and A-1 by Standard & Poor's on the
date such investment is made or (ii) guaranteed by an entity whose short-term
unsecured debt obligations are rated at least P-1 by Moody's and A-1 by
Standard & Poor's on the date such investment is made) has agreed to advance
funds on such Distribution Date to the Note Distribution Account and the
Certificate Distribution Account in the amount payable on such investment on
such Distribution Date pending receipt thereof to the extent necessary to make
distributions on such Distribution Date; provided that Eligible Investment
Receivables need not satisfy such maturity requirements. The guarantee
referred to in clause (y) of the preceding sentence shall be subject to the
Rating Agency Condition. For the purpose of the foregoing, unless the
Indenture Trustee affirmatively agrees in writing to make such advance with
respect to such investment prior to the time an investment is made, it shall
not be deemed to have agreed to make such advance. Funds deposited in a Trust
Account on a day which immediately precedes a Distribution Date upon the
maturity of any Eligible Investments are not required to be invested
overnight.
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(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (including all income thereon) and all such
funds, investments, proceeds and income shall be part of the Trust
Estate. The Trust Accounts shall be under the sole dominion and control
of the Indenture Trustee for the benefit of the Noteholders or the
Noteholders and the Certificateholders, as the case may be. If, at any
time, any of the Trust Accounts ceases to be an Eligible Deposit
Account, the Indenture Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a
new Trust Account as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Trust Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit Accounts,
subject to the last sentence of Section 5.01(c)(i); and each such
Eligible Deposit Account shall be subject to the exclusive custody
and control of the Indenture Trustee, and the Indenture Trustee
shall have sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee in accordance
with paragraph (a) of the definition of "Delivery" and shall be
held, pending maturity or disposition, solely by the Indenture
Trustee or a financial intermediary (as such term is defined in
Section 8-313(4) of the UCC) acting solely for the Indenture
Trustee;
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal
book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Delivery" and shall be
maintained by the Indenture Trustee, pending maturity or
disposition, through continued book-entry registration of such
Trust Account Property as described in such paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article VIII of the UCC and that is not governed
by clause (C) above shall be delivered to the Indenture Trustee in
accordance with paragraph (c) of the definition of "Delivery" and
shall be maintained by the Indenture Trustee, pending maturity or
disposition, through continued registration of the Indenture
Trustee's (or its nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture
Trustee, to instruct the Indenture Trustee to make withdrawals and
payments from the Trust Accounts for the purpose of permitting the
Servicer or the Owner Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties
under the Indenture.
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SECTION 5.02. Collections. The Servicer shall remit within two Business
Days of receipt thereof to the Collection Account all payments by or on behalf
of the Obligors with respect to the Receivables (other than Purchased
Receivables and not including Fixed Value Payments) and all Liquidation
Proceeds, both as collected during the Collection Period. Notwithstanding the
foregoing, for so long as (i) CFC remains the Servicer, (ii) no Servicer
Default shall have occurred and be continuing and (iii)(x) CFC maintains a
short-term rating of at least A-1 by Standard & Poor's and P-1 by Moody's (and
for five Business Days following a reduction in either such rating) or (y)
prior to ceasing daily remittances, the Rating Agency Condition shall have
been satisfied (and any conditions or limitations imposed by the Rating
Agencies in connection therewith are complied with), the Servicer shall remit
such collections with respect to the preceding calendar month to the
Collection Account on the Payment Determination Date immediately preceding the
related Distribution Date. For purposes of this Article V the phrase "payments
by or on behalf of Obligors" shall mean payments made with respect to the
Receivables by Persons other than the Servicer or the Seller.
SECTION 5.03. Application of Collections. (a) All collections for the
Collection Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased
Receivable), payments by or on behalf of the Obligor shall be applied
first, in the case of Precomputed Receivables, to reduce Outstanding
Precomputed Advances as described in Section 5.04(a) and, in the case of
Simple Interest Receivables, to reduce Outstanding Simple Interest
Advances to the extent described in Section 5.04(b). Next, any excess
shall be applied, in the case of Precomputed Receivables, to the
Scheduled Payment and, in the case of Simple Interest Receivables, to
interest and principal in accordance with the Simple Interest Method.
With respect to Precomputed Receivables, any remaining excess shall be
added to the Payahead Balance, and shall be applied to prepay the
Precomputed Receivable, but only if the sum of such excess and the
previous Payahead Balance shall be sufficient to prepay the Receivable
in full. Otherwise, any such remaining excess payments shall constitute
a Payahead and shall increase the Payahead Balance.
(b) All Liquidation Proceeds and any subsequent recoveries with respect
to any Fixed Value Receivable shall be applied first to the related Receivable
and only after the payment in full of the Principal Balance thereof plus
accrued but unpaid interest thereon shall any such Liquidation Proceeds or
recoveries be applied to, or constitute, the related Fixed Value Payment.
SECTION 5.04. Advances. (a) As of the close of business on the last day
of each Collection Period, if the payments by or on behalf of the Obligor on a
Precomputed Receivable (other than a Purchased Receivable) shall be less than
the Scheduled Payment, the Payahead Balance shall be applied by the Servicer
to the extent of the shortfall and such Payahead Balance shall be reduced
accordingly. Next, the Servicer shall advance any remaining shortfall (such
amount, a "Precomputed Advance"), to the extent that the Servicer, at its sole
discretion, shall determine that the Precomputed Advance shall be recoverable
from the Obligor, the Purchase Amount, Liquidation Proceeds or proceeds of any
other Precomputed Receivables. With respect to each Precomputed Receivable,
the Precomputed Advance shall increase Outstanding Precomputed Advances.
Outstanding Precomputed Advances shall be reduced by subsequent payments by or
on behalf of the Obligor, collections of Liquidation Proceeds in respect of
such Precomputed Receivables or payments of the Purchase Amount with respect
to such Precomputed Receivables.
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If the Servicer shall determine that an Outstanding Precomputed Advance
with respect to any Precomputed Receivable shall not be recoverable as
aforesaid, the Servicer shall be reimbursed from any collections made on other
Precomputed Receivables in the Trust and Outstanding Precomputed Advances with
respect to such Precomputed Receivables shall be reduced accordingly.
(b) As of the close of business on the last day of each Collection
Period, the Servicer shall advance an amount equal to the amount of interest
due on the Simple Interest Receivables at their respective APR's for the
related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to the absolute value of such negative number shall be paid to the
Servicer and the amount of Outstanding Simple Interest Advances shall be
reduced by such amount. In addition, in the event that a Simple Interest
Receivable becomes a Liquidated Receivable, Liquidation Proceeds with respect
to such Simple Interest Receivable attributable to accrued and unpaid interest
thereon (but not including interest for the then current Collection Period)
shall be paid to the Servicer to reduce Outstanding Simple Interest Advances,
but only to the extent of any Outstanding Simple Interest Advances. The
Servicer shall not make any advance in respect of principal of Simple Interest
Receivables or in respect of Eligible Investment Receivables.
SECTION 5.05. Additional Deposits. The Servicer shall deposit in the
Collection Account on the Payment Determination Date for the related
Collection Period the aggregate Advances pursuant to Section 5.04. To the
extent that the Servicer fails to make a Simple Interest Advance pursuant to
Section 5.04(b) on the date required, the Servicer shall notify the Indenture
Trustee to withdraw such amount (or, if determinable, such portion of such
amount as does not represent advances for delinquent interest) from the
Reserve Account and deposit such amount in the Collection Account. The
Servicer and the Seller shall deposit or cause to be deposited in the
Collection Account the aggregate Purchase Amount with respect to Purchased
Receivables and the Servicer shall deposit therein all amounts to be paid
under Section 9.01. The Servicer will deposit the aggregate Purchase Amount
with respect to Purchased Receivables when such obligations are due, unless
the Servicer shall not be required to make daily deposits pursuant to Section
5.02. All such other deposits shall be made on the Payment Determination Date
for the related Collection Period.
SECTION 5.06. Distributions. (a) So long as (i) the long-term unsecured
indebtedness of CFC is rated Baa3 or better by Moody's or (ii) the Rating
Agency Condition is otherwise satisfied, the Servicer will be entitled to
receive the payment of the Servicing Fee in respect of a Collection Period
(and all unpaid Servicing Fees from prior Collection Periods) at the beginning
of each Collection Period from payments on the Receivables received during
such Collection Period.
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(b) (i) On each Payment Determination Date, the Servicer shall
calculate all amounts required to be deposited in the Note Distribution
Account and the Certificate Distribution Account.
(ii) On each Distribution Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Payment Determination Date pursuant
to Section 4.09) to make the following deposits and distributions for
receipt by the Servicer or deposit in the applicable account by 11:00
a.m. (New York time), to the extent of the Total Distribution Amount, in
the following order of priority:
(A) to the extent the Servicer has not received the payment
of the Servicing Fee at the beginning of the related Collection
Period pursuant to clause (a) above, to the Servicer, from the
Interest Distribution Amount, the Servicing Fee (and all unpaid
Servicing Fees from prior Collection Periods);
(B) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clause (A), the Noteholders' Interest Distributable
Amount;
(C) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) and (B), the Noteholders' Principal
Distributable Amount;
(D) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) through (C), the Certificateholders'
Interest Distributable Amount;
(E) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) through (D), the Certificateholders'
Principal Distributable Amount;
(F) to the Reserve Account, from the Total Distribution
Amount remaining after the application of Section 5.06(a) and
clauses (A) through (E) (it being understood that the Accelerated
Principal Distribution Amount is a function of and subject to the
amount required to be deposited in the Reserve Account pursuant to
this clause (F)), the amount, if any, necessary to reinstate the
balance in the Reserve Account up to the Specified Reserve Account
Balance; and
(G) to the Reserve Account, the portion, if any, of the Total
Distribution Amount remaining after the application of Section
5.06(a) and clauses (A) through (F).
Notwithstanding that the Notes have been paid in full, the Indenture Trustee
shall continue to maintain the Collection Account hereunder until the
Certificate Balance is reduced to zero.
SECTION 5.07. Reserve Account. (a) On the Closing Date, the Owner
Trustee will deposit, on behalf of the Seller, the Reserve Account Initial
Deposit into the Reserve Account from the net proceeds of the sale of the
Notes and the Certificates.
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(b) (i) After giving effect to clause (ii) below, if the amount on
deposit in the Reserve Account on any Distribution Date (after giving
effect to all deposits thereto or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance
for such Distribution Date, the Servicer shall instruct the Indenture
Trustee to distribute the amount of such excess to the Seller, which
distribution may include Eligible Investment Receivables.
(ii) On each Distribution Date subsequent to any reduction or
withdrawal by any Rating Agency of its rating of any Class of Notes,
unless such rating has been restored, if the amount on deposit in the
Reserve Account (after taking into account any deposits thereto pursuant
to Section 5.06(b) and withdrawals therefrom pursuant to Section
5.07(c), (d) or (e) on such date) is greater than the Specified Reserve
Account Balance for such Distribution Date, then the Servicer shall
instruct the Indenture Trustee to include the amount of such excess in
the Noteholders' Monthly Principal Distribution Amount and to deposit
the amount of such excess (up to the amount of cash or cash equivalents
in the Reserve Account) to the Collection Account for deposit to the
Note Distribution Account for distribution to Noteholders as an
accelerated payment of principal on such Distribution Date; provided,
that the amount of such deposit shall not exceed the outstanding
principal balance of the Notes after giving effect to all other payments
of principal to be made on such date.
(c) If the Servicer determines pursuant to Section 5.04 that it is
required to make an Advance on a Payment Determination Date and does not do so
from its own funds, the Servicer shall instruct the Indenture Trustee to
withdraw funds from the Reserve Account and deposit them in the Collection
Account to cover any shortfall. Such payment shall be deemed to have been made
by the Servicer pursuant to Section 5.04 for purposes of making distributions
pursuant to this Agreement, but shall not otherwise satisfy the Servicer's
obligation to deliver the amount of the Advances, and the Servicer shall
within two Business Days replace any funds in the Reserve Account so used.
(d) (i) In the event that the Noteholders' Distributable Amount
for a Distribution Date exceeds the sum of the amounts deposited into
the Note Distribution Account pursuant to Section 5.06(b)(ii)(B) and (C)
on such Distribution Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Distribution Date
an amount equal to such excess, to the extent of funds available therein
up to the Available Amount, and deposit such amount into the Note
Distribution Account.
(ii) In the event that the Noteholders' Principal Distributable
Amount on the Class A-1 Final Scheduled Distribution Date, the Class A-2
Final Scheduled Distribution Date, the Class A-3 Final Scheduled
Distribution Date or the Class A-4 Final Scheduled Distribution Date
exceeds the amount deposited into the Note Distribution Account pursuant
to Section 5.06(b)(ii)(C) on such Distribution Date, the Servicer shall
instruct the Indenture Trustee to withdraw from the Reserve Account on
such Distribution Date an amount equal to such excess, to the extent of
funds available therein up to the Available Amount, and deposit such
amount into the Note Distribution Account.
(e) (i) In the event that the Certificateholders' Distributable
Amount for a Distribution Date exceeds the sum of the amounts deposited
into the Certificate Distribution Account pursuant to Section
5.06(b)(ii)(D) and (E) on such Distribution Date, the Servicer shall
instruct the Indenture Trustee to withdraw from the Reserve Account on
such Distribution Date an amount equal to such excess, to the extent of
funds available therein up to the Available Amount after giving effect
to paragraphs (c) and (d) above, and deposit such amount into the
Certificate Distribution Account on such Distribution Date.
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(ii) In the event that the Certificateholders' Monthly Interest
Distributable Amount for a Distribution Date exceeds the amount
deposited in the Certificate Distribution Account pursuant to Section
5.06(b)(ii)(D), the Servicer shall instruct the Indenture Trustee to
withdraw from the Reserve Account on such Distribution Date an amount
equal to such excess, to the extent of funds available therein, after
giving effect to paragraphs (d)(i) and (e)(i) above, up to the
Certificate Interest Reserve Amount with respect to such Distribution
Date, and deposit such amount into the Certificate Distribution Account.
(iii) In the event that the Certificateholders' Principal
Distributable Amount on the Final Scheduled Distribution Date exceeds
the amount deposited in the Certificate Distribution Account pursuant to
Section 5.06(b)(ii)(E), the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Distribution Date
an amount equal to such excess, to the extent of funds available therein
after giving effect to paragraphs (d) and (e)(i) above, and deposit such
amount into the Certificate Distribution Account.
(f) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.06(b) following payment in full of the Outstanding
Amount of the Notes and the Certificate Balance until the Pool Balance is
reduced to zero. Following the payment in full of the aggregate Outstanding
Amount of the Notes and the Certificate Balance and of all other amounts owing
or to be distributed hereunder or under the Indenture or the Trust Agreement
to Noteholders and Certificateholders and the termination of the Trust, any
amount remaining on deposit in the Reserve Account shall be distributed to the
Seller and any Eligible Investment Receivables in the Reserve Account shall be
transferred to the Seller.
(g) On the Final Scheduled Distribution Date, if the amount of funds
remaining in the Reserve Account (after all other distributions to be made
from the Reserve Account pursuant to this Section have been made, other than
paragraphs (b)(i) and (f)) is in excess of the amounts described below, a
portion of such excess according to the following schedule shall be deposited
in the Certificate Distribution Account for distribution to
Certificateholders:
(i) with respect to all such funds in the Reserve Account in
excess of $35,000,000 but which do not exceed $37,000,000, 20% of such
amount;
(ii) with respect to all such funds in the Reserve Account in
excess of $37,000,000 but which do not exceed $38,000,000, 40% of such
amount;
(iii) with respect to all such funds in the Reserve Account in
excess of $38,000,000 but which do not exceed $38,500,000, 60% of such
amount;
(iv) with respect to all such funds in the Reserve Account in
excess of $38,500,000 but which do not exceed $39,000,000, 80% of such
amount; and
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(v) with respect to all such funds in the Reserve Account in
excess of $39,000,000, 100% of such amount.
The amounts to be deposited in the Certificate Distribution Account pursuant
to the preceding sentence are in excess of all amounts otherwise required to
be deposited in the Certificate Distribution Account pursuant to this
Agreement, notwithstanding anything to the contrary contained herein.
SECTION 5.08. [Reserved]
SECTION 5.09. Statements to Certificateholders and Noteholders. On each
Distribution Date, the Servicer shall provide to the Owner Trustee (with a
copy to the Rating Agencies and each Paying Agent) for the Owner Trustee to
forward to each Certificateholder of record as of the most recent Record Date
and to the Indenture Trustee (with a copy to each Paying Agent) for the
Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date a statement substantially in the form of Exhibits A and B,
respectively, setting forth at least the following information as to the Notes
and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal
allocable to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to interest
allocable to each Class of Notes and to the Certificates;
(iii) the outstanding principal balance of each Class of Notes, the
Note Pool Factor for each such Class, the Certificate Balance and the
Certificate Pool Factor as of the close of business on the last day of
the preceding Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above;
(iv) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(v) the amount of Realized Losses, if any, with respect to the
related Collection Period;
(vi) the balance of the Reserve Account on such Payment
Determination Date after giving effect to deposits and withdrawals to be
made on the next following Distribution Date, if any;
(vii) the aggregate Payahead Balance; and
(viii) the Pool Balance as of the close of business on the last day
of the related Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above.
Each amount set forth on the Distribution Date statement under clauses
(i), (ii) or (iv) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Certificate or Note, as applicable.
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SECTION 5.10. Net Deposits. As an administrative convenience, unless the
Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables, aggregate
Advances and Purchase Amounts for or with respect to the Collection Period net
of distributions to be made to the Servicer with respect to the Collection
Period. Similarly, the Servicer may cause a single net transfer to be made
from the Collection Account to the Payahead Account, or vice versa. The
Servicer, however, will account to the Owner Trustee, the Indenture Trustee,
the Noteholders and the Certificateholders as if all deposits, distributions
and transfers were made individually.
SECTION 5.11. Transfer of the Class A-1 Notes. In the event any Holder
of a Class A-1 Note shall wish to transfer such Note, the Seller shall provide
to such Holder and any prospective transferee designated by such Holder
information regarding the Class A-1 Notes and the Receivables and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Class A-1 Note without
registration thereof under the Securities Act of 1933, as amended, pursuant to
the exemption from registration provided by Rule 144A.
ARTICLE VI
The Seller
SECTION 6.01. Representations of Seller. The Seller makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of
this Agreement and as of the Closing Date, in the case of the Receivables, and
as of the applicable Transfer Date, in the case of the Eligible Investment
Receivables, and shall survive the sale of the Receivables to the Issuer and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly organized
and validly existing as a corporation in good standing under the laws of
the State of Michigan, with the corporate power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the corporate power, authority and legal right to
acquire and own the Standard Receivables and Fixed Value Receivables.
(b) Due Qualification. The Seller is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall
require such qualifications.
(c) Power and Authority. The Seller has the corporate power and
authority to execute and deliver this Agreement and any Eligible
Investment Receivables Transfer Assignment and to carry out their
respective terms; the Seller has full power and authority to sell and
assign the property to be sold and assigned to and deposited with the
Issuer, and the Seller shall have duly authorized such sale and
assignment to the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been, and the
execution, delivery and performance of each Eligible Investment
Receivables Transfer Assignment will be on or before the related
Transfer Date, duly authorized by the Seller by all necessary corporate
action.
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(d) Binding Obligation. This Agreement constitutes, and each
Eligible Investment Receivables Transfer Assignment when executed and
delivered by the Seller will constitute, a legal, valid and binding
obligation of the Seller enforceable in accordance with its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws of the Seller, or
any indenture, agreement or other instrument to which the Seller is a
party or by which it is bound; or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Basic Documents); or violate any law or, to the best of the Seller's
knowledge, any order, rule or regulation applicable to the Seller of any
court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
Seller or its properties.
(f) No Proceedings. To the Seller's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties:
(i) asserting the invalidity of this Agreement, the Indenture or any of
the other Basic Documents, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) which might adversely
affect the federal or state income tax attributes of the Notes or the
Certificates.
SECTION 6.02. Corporate Existence. During the term of this Agreement,
the Seller will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby. In
addition, all transactions and dealings between the Seller and its Affiliates
(including the Company) will be conducted on an arm's-length basis.
SECTION 6.03. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement:
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company and the
Servicer and any of the officers, directors, employees and agents of the
Issuer, the Owner Trustee and the Indenture Trustee from and against any
taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated herein and in the Basic
Documents, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, in the case
of the Issuer, not including any taxes asserted with respect to, and as
of the date of, the sale of the Receivables to the Issuer or the
issuance and original sale of the Certificates and the Notes, or
asserted with respect to ownership of the Receivables or Eligible
Investment Receivables, or federal or other income taxes arising out of
distributions on the Certificates or the Notes) and costs and expenses
in defending against the same.
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(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Company, the
Certificateholders and the Noteholders and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and the
Indenture Trustee from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Seller's or the Issuer's violation of federal or
state securities laws in connection with the offering and sale of the
Notes and the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein and in the Trust Agreement contained, in the case of the Owner
Trustee, and in the Indenture contained, in the case of the Indenture
Trustee, except to the extent that such cost, expense, loss, claim,
damage or liability: (i) in the case of the Owner Trustee, shall be due
to the willful misfeasance, bad faith or negligence (except for errors
in judgment) of the Owner Trustee or, in the case of the Indenture
Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or
(ii) in the case of the Owner Trustee, shall arise from the breach by
the Owner Trustee of any of its representations or warranties set forth
in Section 7.03 of the Trust Agreement.
(d) The Seller shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
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SECTION 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Seller shall be a party or (c) which may succeed to the properties and
assets of the Seller substantially as a whole, which person in any of the
foregoing cases executes an agreement of assumption to perform every
obligation of the Seller under this Agreement, shall be the successor to the
Seller hereunder without the execution or filing of any document or any
further act by any of the parties to this Agreement; provided, however, that
(i) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.01 shall have been breached and no
Servicer Default, and no event that, after notice or lapse of time, or both,
would become a Servicer Default shall have occurred and be continuing, (ii)
the Seller shall have delivered to the Owner Trustee and the Indenture Trustee
an Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, (iii) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (iv) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully
to preserve and protect the interest of the Owner Trustee and Indenture
Trustee, respectively, in the Receivables and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests. Notwithstanding
anything herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with clauses (i), (ii), (iii) and (iv) above shall
be conditions to the consummation of the transactions referred to in clauses
(a), (b) or (c) above.
SECTION 6.05. Limitation on Liability of Seller and Others. The Seller
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
SECTION 6.06. Seller May Own Certificates or Notes. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if
it were not the Seller or an Affiliate thereof, except as expressly provided
herein or in any Basic Document.
ARTICLE VII
The Servicer
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Receivables, and as of the applicable Transfer Date, in the case of the
Eligible Investment Receivables, and shall survive the sale of the Receivables
to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
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(a) Organization and Good Standing. The Servicer is duly organized
and validly existing as a corporation in good standing under the laws of
the state of its incorporation, with the corporate power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at all
relevant times, and has, the corporate power, authority and legal right
to acquire, own, sell and service the Standard Receivables and the Fixed
Value Receivables and to hold the Receivable Files as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Standard Receivables and the Fixed Value
Receivables as required by this Agreement) shall require such
qualifications.
(c) Power and Authority. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery and performance of this Agreement
have been duly authorized by the Servicer by all necessary corporate
action.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable in accordance with
its terms.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws of the Servicer,
or any indenture, agreement or other instrument to which the Servicer is
a party or by which it is bound; or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than this Agreement); or
violate any law or, to the best of the Servicer's knowledge, any order,
rule or regulation applicable to the Servicer of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or
its properties.
(f) No Proceedings. To the Servicer's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, any of
the other Basic Documents, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) relating to the
Servicer and which might adversely affect the federal or state income
tax attributes of the Notes or the Certificates.
(g) No Insolvent Obligors. As of the related Cutoff Date, no
Obligor on a Standard Receivable or Fixed Value Receivable is shown on
the Receivable Files as the subject of a bankruptcy proceeding.
SECTION 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders, the Company and the Seller and any of the officers,
directors, employees and agents of the Issuer, the Owner Trustee and the
Indenture Trustee from and against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting from the
use, ownership or operation by the Servicer or any Affiliate thereof of
a Financed Vehicle.
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(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the
Company, the Certificateholders and the Noteholders and any of the
officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that
such cost, expense, loss, claim, damage or liability arose out of, or
was imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its
duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
For purposes of this Section, in the event of the termination of the
rights and obligations of CFC (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter collects any of such amounts from others, such Person
shall promptly repay such amounts to the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to
which the Servicer shall be a party, (c) which may succeed to the properties
and assets of the Servicer substantially as a whole or (d) with
respect to the Servicer's obligations hereunder, which is a corporation 50% or
more of the voting stock of which is owned, directly or indirectly, by
Chrysler Corporation, which Person executed an agreement of assumption to
perform every obligation of the Servicer hereunder, shall be the successor to
the Servicer under this Agreement without further act on the part of any of
the parties to this Agreement; provided, however, that (i) immediately after
giving effect to such transaction, no Servicer Default and no event which,
after notice or lapse of time, or both, would become a Servicer Default shall
have occurred and be continuing, (ii) the Servicer shall have delivered to the
Owner Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (iii) the Rating Agency Condition shall
have been satisfied with respect to such transaction, (iv) immediately after
giving effect to such transaction, the successor to the Servicer shall become
the Administrator under the Administration Agreement in accordance with
Section 8 of such Agreement and (v) the Servicer shall have delivered to the
Owner Trustee and the Indenture Trustee an Opinion of Counsel stating that, in
the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the Owner
Trustee and the Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings or (B) no such action shall be necessary
to preserve and protect such interests. Notwithstanding anything herein to the
contrary, the execution of the foregoing agreement of assumption and
compliance with clauses (i), (ii), (iii), (iv) and (v) above shall be
conditions to the consummation of the transactions referred to in clause (a),
(b) or (c) above.
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SECTION 7.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any person
respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the Basic Documents and the rights and duties of the parties to this
Agreement and the Basic Documents and the interests of the Certificateholders
under this Agreement and the Noteholders under the Indenture.
SECTION 7.05. CFC Not To Resign as Servicer. Subject to the provisions
of Section 7.03, CFC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon a determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination permitting
the resignation of CFC shall be communicated to the Owner Trustee
and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion
of Counsel to such effect delivered to the Owner Trustee and the Indenture
Trustee concurrently with or promptly after such notice. No such resignation
shall become effective until the Indenture Trustee or a successor Servicer
shall (i) have assumed the responsibilities and obligations of CFC in
accordance with Section 8.02 and (ii) have become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
ARTICLE VIII
Default
SECTION 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
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(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts or the Certificate
Distribution Account any required payment or to direct the Indenture
Trustee to make any required distributions therefrom, which failure
continues unremedied for a period of three Business Days after written
notice of such failure is received by the Servicer from the Owner
Trustee or the Indenture Trustee or after discovery of such failure by
an officer of the Servicer; or
(b) failure by the Servicer or the Seller, as the case may be,
duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Seller (as the case may
be) set forth in this Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of
Certificateholders or Noteholders and (ii) continue unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A) to
the Servicer or the Seller (as the case may be) by the Owner Trustee or
the Indenture Trustee or (B) to the Servicer or the Seller (as the case
may be), and to the Owner Trustee and the Indenture Trustee by the
Holders of Notes or Certificates, as applicable, evidencing not less
than 25% of the Outstanding Amount of the Notes or 25% of the
outstanding Certificate Balance; or
(c) the occurrence of an Insolvency Event with respect to the
Seller, the Servicer or the Company;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee or the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Servicer (and to the Indenture Trustee and the
Owner Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.02 hereof) of
the Servicer under this Agreement. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Notes, the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such successor Servicer as may be appointed under
Section 8.02; and, without limitation, the Indenture Trustee and the Owner
Trustee are hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the
Receivables and related documents, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer, the Indenture Trustee and the
Owner Trustee in effecting the termination of the responsibilities and rights
of the predecessor Servicer under this Agreement, including the transfer to
the successor Servicer for administration by it of all cash amounts that shall
at the time be held by the predecessor Servicer for deposit, or shall
thereafter be received by it with respect to any Receivable. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of a Servicer Default, the Owner Trustee shall give notice thereof
to the Rating Agencies.
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SECTION 8.02. Appointment of Successor. (a) Upon the Servicer's receipt
of notice of termination pursuant to Section 8.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation,
until the later of (i) the date 45 days from the delivery to the Owner Trustee
and the Indenture Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement
and (ii) the date upon which the predecessor Servicer shall become unable to
act as Servicer, as specified in the notice of resignation and accompanying
Opinion of Counsel. In the event of the Servicer's termination hereunder, the
Indenture Trustee shall appoint a successor Servicer, and the successor
Servicer shall accept its appointment (including its appointment as
Administrator under the Administration Agreement as set forth in Section
8.02(b)) by a written assumption in form acceptable to the Owner Trustee and
the Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without
further action shall automatically be appointed the successor Servicer and the
Indenture Trustee shall be entitled to the Servicing Fee. Notwithstanding the
above, the Indenture Trustee shall, if it shall be legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint any
established institution, having a net worth of not less than $100,000,000 and
whose regular business shall include the servicing of automotive receivables,
as the successor to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall (i) be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.
(c) The Servicer may not resign unless it is prohibited from serving as
such by law.
SECTION 8.03. Repayment of Advances. If the Servicer shall change, the
predecessor Servicer shall be entitled to receive reimbursement for
Outstanding Advances pursuant to Sections 5.03 and 5.04 with respect to all
Advances made by the predecessor Servicer.
SECTION 8.04. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Owner Trustee shall give prompt written notice thereof
to Certificateholders, and the Indenture Trustee shall give prompt written
notice thereof to Noteholders and the Rating Agencies.
SECTION 8.05. Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes or the Holders
(as defined in the Trust Agreement) of Certificates evidencing not less than a
majority of the outstanding Certificate Balance (in the case of any default
which does not adversely affect the Indenture Trustee or the Noteholders) may,
on behalf of all Noteholders and Certificateholders, waive in writing any
default by the Servicer in the performance of its obligations hereunder and
its consequences, except a default in making any required deposits to or
payments from any of the Trust Accounts in accordance with this Agreement.
Upon any such waiver of a past default, such default shall cease to exist, and
any Servicer Default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto.
50
<PAGE>
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables. (a) As of the last
day of any Collection Period immediately preceding a Distribution Date as of
which the then outstanding Pool Balance is 10% or less of the Original Pool
Balance and the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes have been
paid in full, the Servicer shall have the option to purchase the Owner Trust
Estate, other than the Trust Accounts and the Certificate Distribution
Account; provided, however, that, unless Moody's agrees otherwise, the
Servicer may not effect any such purchase if the rating of CFC's long-term
debt obligations is less than Baa3 by Moody's, unless the Owner Trustee and
the Indenture Trustee shall have received an Opinion of Counsel to the effect
that such purchase would not constitute a fraudulent conveyance. To exercise
such option, the Servicer shall deposit pursuant to Section 5.05 in the
Collection Account an amount equal to the aggregate Purchase Amount for the
Receivables (including defaulted Receivables), plus the appraised value of any
such other property held by the Trust other than the Trust Accounts and the
Certificate Distribution Account, such value to be determined by an appraiser
mutually agreed upon by the Servicer, the Owner Trustee and the Indenture
Trustee, and shall succeed to all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to exercise
such option unless the amount to be deposited in the Collection Account
pursuant to the preceding sentence is greater than or equal to the sum of the
outstanding principal balance of the Notes and the Certificate Balance and all
accrued but unpaid interest (including any overdue interest and premium)
thereon.
(b) Upon any sale of the assets of the Trust pursuant to Section 9.02 of
the Trust Agreement, the Servicer shall instruct the Indenture Trustee to
deposit the proceeds from such sale after all payments and reserves therefrom
have been made (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a
Distribution Date, on the Distribution Date immediately following such
deposit), the Servicer shall instruct the Indenture Trustee to make the
following deposits (after the application on such Distribution Date of the
Total Distribution Amount and funds on deposit in the Reserve Account pursuant
to Sections 5.06 and 5.07) from the Insolvency Proceeds and any funds
remaining on deposit in the Reserve Account (including the proceeds of any
sale of investments therein as described in the following sentence):
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into
the Note Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the outstanding principal
balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the deposits
made in the Note Distribution Account on such Distribution Date and on
prior Distribution Dates);
51
<PAGE>
(iii) to the Certificate Distribution Account, any portion of the
Certificateholders' Interest Distributable Amount not otherwise
deposited into the Certificate Distribution Account on such Distribution
Date; and
(iv) to the Certificate Distribution Account, the Certificate
Balance (after giving effect to the reduction in the Certificate Balance
to result from the deposits made in the Certificate Distribution Account
on such Distribution Date).
Any investments on deposit in the Reserve Account or Note Distribution Account
which will not mature on or before such Distribution Date shall be sold by the
Indenture Trustee at such time as will result in the Indenture Trustee
receiving the proceeds from such sale not later than the Payment Determination
Date preceding such Distribution Date. Any Insolvency Proceeds remaining after
the deposits described above shall be paid to the Seller.
(c) As described in Article IX of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee
and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder
other than Section 5.07(b) and the Owner Trustee will succeed to the rights
of, and assume the obligations of, the Indenture Trustee pursuant to this
Agreement.
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment. This Agreement may be amended by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Indenture Trustee, adversely affect in
any material respect the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Seller, the
Servicer and the Issuer, with the consent of the Indenture Trustee, the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the consent of the Holders (as defined in
the Trust Agreement) of outstanding Certificates evidencing not less than a
majority of the outstanding Certificate Balance, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance, the Holders of which are
required to consent to any such amendment, without the consent of the Holders
of all the outstanding Notes and the Holders (as defined in the Trust
Agreement) of all the outstanding Certificates.
52
<PAGE>
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder, the Indenture Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 10.02(i)(1). The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties
or immunities under this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor the Servicer shall change its name, identity
or corporate structure in any manner that would, could or might make any
financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of section
9-402(7) of the UCC, unless it shall have given the Owner Trustee and the
Indenture Trustee at least five days' prior written notice thereof and shall
have promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Seller and the Servicer shall have an obligation to give
the Owner Trustee and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement
or of any new financing statement and shall promptly file any such amendment
or new financing statement. The Servicer shall at all times maintain each
office from which it shall service Receivables, and its principal executive
office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each Standard
Receivable and each Fixed Value Receivable accurately and in sufficient detail
to permit (i) the reader thereof to know at any time the status of such
Receivable, including payments and recoveries made and payments owing (and the
nature of each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Receivable and the amounts from time to time deposited
in the Collection Account and the Payahead Account in respect of such
Receivable.
53
<PAGE>
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Standard Receivables and
the Fixed Value Receivables, the Servicer's master computer records (including
any backup archives) that refer to a Standard Receivable or a Fixed Value
Receivable shall indicate clearly the interest of the Issuer and the Indenture
Trustee in such Standard Receivable or Fixed Value Receivable and that such
Standard Receivable or Fixed Value Receivable is owned by the Issuer and has
been pledged to the Indenture Trustee. Indication of the Issuer's and the
Indenture Trustee's interest in a Standard Receivable or Fixed Value
Receivable shall be deleted from or modified on the Servicer's computer
systems when, and only when, the related Receivable shall have been paid in
full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Standard
Receivable or Fixed Value Receivable, shall indicate clearly that such
Standard Receivable or such Fixed Value Receivable has been sold and is owned
by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents at
any time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or to
the Indenture Trustee, within five Business Days, a list of all Receivables
(by contract number and name of Obligor) then held as part of the Trust,
together with a reconciliation of such list to the Schedule of Receivables and
to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment hereto and on certain Distribution Dates as
required by Section 2.05(b)(x)(B), an Opinion of Counsel stating that,
in the opinion of such counsel, either (A) all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Owner Trustee and the
Indenture Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) no such action shall be necessary to preserve and
protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Initial Cutoff Date, an Opinion of Counsel, dated as of a date
during such 90-day period, stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and protect
the interest of the Owner Trustee and the Indenture Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) no
such action shall be necessary to preserve and protect such interest.
54
<PAGE>
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Certificates and the Notes to be registered with the Commission pursuant
to Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 10.03. Notices. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Seller or the Servicer, to Chrysler Financial Corporation, 27777
Franklin Road, Southfield, Michigan 48034, Attention of Secretary ((810)
948-3060), (b) in the case of the Issuer or the Owner Trustee, at the
Corporate Trust Office (as defined in the Trust Agreement), (c) in the case of
the Indenture Trustee, at the Corporate Trust Office, (d) in the case of
Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department, 99
Church Street, New York, New York 10007, (e) in the case of Standard & Poor's,
to Standard & Poor's Ratings Services, A Division of The McGraw Hill
Companies, Inc., 25 Broadway (15th Floor), New York, New York 10004, Attention
of Asset Backed Surveillance Department, (f) in the case of Fitch Investors
Service, L.P., to One State Street Plaza, New York, N.Y. 10004, and (g) in the
case of Duff & Phelps Credit Rating Co., to 17 State Street, 12th Floor, New
York, New York 10004; or, as to each of the foregoing, at such other address
as shall be designated by written notice to the other parties.
SECTION 10.04. Assignment by the Seller or the Servicer. Notwithstanding
anything to the contrary contained herein, except as provided in the remainder
of this Section, as provided in Sections 6.04 and 7.03 herein and as provided
in the provisions of this Agreement concerning the resignation of the
Servicer, this Agreement may not be assigned by the Seller or the Servicer.
The Issuer and the Servicer hereby acknowledge and consent to the conveyance
and assignment (i) by the Seller to the Company pursuant to the Purchase
Agreement and (ii) by the Company to a limited liability company or other
Person (provided that conveyance and assignment is made in accordance with
Section 5.06 of the Purchase Agreement), of any and all of the Seller's rights
and interests (and corresponding obligations, if any) hereunder with respect
to receiving amounts from the Reserve Account and with respect to receiving
and conveying any Fixed Value Payments, and the Issuer and the Servicer
hereby agree that the Company, and any such assignee of the Company, shall
be entitled to enforce such rights and interests directly against the
Issuer as if the Company, or such assignee of the Company, were itself a
party to this Agreement.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Company (and any
assignee of the Company pursuant to Section 10.04), the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy
or claim in the Owner Trust Estate or under or in respect of this Agreement or
any covenants, conditions or provisions contained herein.
55
<PAGE>
SECTION 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 10.07. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 10.10. Assignment by Issuer. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest
by the Issuer to the Indenture Trustee pursuant to the Indenture for the
benefit of the Noteholders of all right, title and interest of the Issuer in,
to and under the Receivables and/or the assignment of any or all of the
Issuer's rights and obligations hereunder to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date which is one year and one day after the termination of this Agreement
with respect to the Issuer or the Company, acquiesce, petition or otherwise
invoke or cause the Issuer or the Company (or any assignee of the Company
pursuant to Section 10.04) to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Issuer or the Company (or any assignee of the Company pursuant to Section
10.04) under any federal or state bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Issuer or the Company (or any assignee of the
Company pursuant to Section 10.04) or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer or the
Company (or any assignee of the Company pursuant to Section 10.04).
(b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller.
56
<PAGE>
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Chemical Bank Delaware not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Chemical Bank Delaware in its individual capacity or,
except as expressly provided in the Trust Agreement, as beneficial owner of
the Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Bank of New York, not in its individual
capacity but solely as Indenture Trustee and in no event shall The Bank of New
York have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
57
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
PREMIER AUTO TRUST 1996-1
By: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner Trustee
on behalf of the Trust
By: /s/ J. J. Cashin
-------------------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
CHRYSLER FINANCIAL CORPORATION,
Seller and Servicer
By: /s/ David H. Olsen
-----------------------------------
Name: David H. Olsen
Title: Assistant Treasurer
Acknowledged and accepted
as of the day and year
first above written:
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Melissa Beneduce
----------------------------------
Name: Melissa Beneduce
Title: Assistant Vice President
<PAGE>
SCHEDULE A
Schedule of Receivables
[To be Delivered to the Trust at Closing]
<PAGE>
SCHEDULE B
Location of Receivable Files
Chrysler Financial Corporation
27777 Franklin Road
Southfield, MI 48034-8288
<PAGE>
SCHEDULE C
Schedule of Eligible Investment Receivables
[To be delivered on each Transfer Date on which
Eligible Investment Receivables are transferred to the Trust]
<PAGE>
EXHIBIT A
Form of Distribution Statement to Certificateholders
Chrysler Financial Corporation
Premier Auto Trust 1996-1 Distribution Date Statement to Certificateholders
- ------------------------------------------------------------------------------
Principal Distribution Amount
Principal Per $1,000 Certificate
Interest Distribution Amount
Interest Per $1,000 Certificate
Note Balance:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Note Pool Factor:
Class A-1 Notes:
Class A-2 Notes:
Class A-3 Notes:
Class A-4 Notes:
Certificate Balance
Certificate Pool Factor
Servicing Fee
Servicing Fee Per $1,000 Certificate
Pool Balance
Realized Losses
Reserve Account Balance
Payahead Balance
- ------------------------------------------------------------------------------
A-1
<PAGE>
EXHIBIT B
Form of Distribution Statement to Noteholders
Chrysler Financial Corporation
Premier Auto Trust 1996-1 Distribution Date Statement to Noteholders
- ------------------------------------------------------------------------------
Principal Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Interest Distribution Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Certificate Balance
Servicing Fee
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
Payahead Balance
B-1
<PAGE>
EXHIBIT C
Form of Servicer's Certificate
Chrysler Financial Corporation
Premier Auto Trust 1996-1 Monthly Servicer's Certificate
==============================================================================
Period
Distribution Date
Dates Covered From & Incl. To & Incl.
- ------------------------------------------------------------------------------
Collections
Accrual
30/360 Days
Actual/360 Days
Receivables Balances Beginning Ending
- ------------------------------------------------------------------------------
Pool Balance
Simple Interest
Original Pool Balance
Principal Distribution Amount
- ------------------------------------------------------------------------------
Principal Collections
+ Repurchases
+ Liquidation Proceeds
+ Realized Losses
Interest Distribution Amount
- ------------------------------------------------------------------------------
Collections - Precomputed Contracts
+ Collections - Simple Interest Contracts
+ Simple Interest Advances
+ Investment Earnings (exclusive of Investment Earnings in respect
of Eligible Investment Receivables)
Total Distribution Amount
- ------------------------------------------------------------------------------
Principal Distribution Amount
+ Interest Distribution Amount
-- Realized Losses
Total Distribution Amount:
Loss & Delinquency
C-1
<PAGE>
<TABLE>
<CAPTION>
Account Activity
-----------------------------------------------------------------------
Beginning Ending Interest/Interest
Balance Balance Change Factor Servicing Shortfall
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Initial Pool
Principal Paydown
Payaheads
Advance
Reserve
Available Amount
Certificate
Interest Reserve
Certificate Interest
Reserve Draw
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Certificates
Over Collateralization
<CAPTION>
Principal Allocation
----------------------------------------------------------------------
Mandatory
Regular Accelerated Redemption/ Total Principal
Principal Principal Repayment Principal Shortfall
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Notes
Class A-1
Class A-2
Class A-3
Class A-4
Certificates
Total
<CAPTION>
Miscellaneous
- ------------------------------------------------------------------------------
Noteholders' Percentage
Certificateholders' Percentage
Target Over-Collateralization Amount
Maximum Excess Principal
Available Excess Principal
Reserve Deposit from PFA
Negative Carry Amount
Specified Reserve Account Balance
Certificate Interest Reserve Draw
Distribution Account to Seller
Servicing Fee to Servicer
Allocation of Funds
- ------------------------------------------------------------------------------
Sources
Principal Distribution Amount
Interest Distribution Amount
Available Amount
Certificate Interest Reserve
Reserve Deposit from PFA
Redemption/Prepay Amt.
Total Sources
</TABLE>
C-2
<PAGE>
EXHIBIT D
[Reserved]
D-1
<PAGE>
EXHIBIT E
[Reserved]
E-1
<PAGE>
EXHIBIT F
Form of Assignment for Eligible Investment Receivables
Eligible Investment Receivables Transfer Assignment No.
For value received, in accordance with and subject to the Sale and
Servicing Agreement (the Sale and Servicing Agreement") dated as of , 199__,
between Chrysler Financial Corporation, a Michigan corporation, as seller (in
such capacity, the "Seller") and as servicer (in such capacity, the
"Servicer"), and Premier Auto Trust 199__-__, a Delaware business trust (the
"Issuer"), the Seller does hereby sell, assign, transfer and otherwise convey
unto the Issuer, without recourse (except as expressly provided in the Sale
and Servicing Agreement), all right, title and interest of the Seller in and
to (i) the Eligible Investment Receivables, having an aggregate Principal
Balance equal to $ , set forth on Schedule C hereto (which shall supplement
Schedule C to the Sale and Servicing Agreement) and all monies due thereon on
or after the date hereof (the "Cutoff Date"), in the case of Precomputed
Receivables, and all monies received thereon on and after the Cutoff Date, in
the case of Simple Interest Receivables; (ii) the security interests in the
Financed Vehicles granted by the Obligors pursuant to such Eligible Investment
Receivables and any other interest of the Seller in such Financed Vehicles,
(iii) any proceeds with respect to such Eligible Investment Receivables from
claims on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors; (iv) any proceeds with respect to such
Eligible Investment Receivables from recourse to Dealers thereon with respect
to which the Servicer has determined in accordance with its customary
servicing procedures that eventual payment in full is unlikely, (v) any
Financed Vehicle that shall have secured any such Eligible Investment
Receivables and that shall have been acquired by or on behalf of the Seller,
the Servicer, the Company or the Issuer, and (vi) the proceeds of any and all
of the foregoing. The foregoing sale does not constitute and is not intended
to result in any assumption by the Issuer of any obligation of the Seller to
the Obligors, insurers or any other person in connection with the Eligible
Investment Standard Receivables, Eligible Investment Fixed Value Receivables,
Receivables Files, any insurance policies or any agreement or instrument
relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the Seller contained in the Sale and
Servicing Agreement (including the Officers' Certificate of the Seller
accompanying this Assignment, in the form of Annex A hereto) and is to be
governed in all respects by the Sale and Servicing Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of __________________, 199_.
CHRYSLER FINANCIAL CORPORATION
By: ________________________________
Name:
F-1
<PAGE>
Title:
F-2
<PAGE>
SCHEDULE C TO
Eligible Investment Receivables Transfer Assignment No.____
Schedule of Eligible Investment Receivables
F-3
<PAGE>
ANNEX A TO
Eligible Investment Receivables Transfer Assignment No.____
CHRYSLER FINANCIAL CORPORATION
OFFICER'S CERTIFICATE
The undersigned ___________________________ , and
____________________________ the duly qualified and elected
__________________________ and _________________________ of Chrysler Financial
Corporation (the "Seller"), in connection with the conveyance of Eligible
Receivables to Premier Auto Trust 199 __ - ____ (the "Trust") pursuant to
Section 2.05(b)(x) of the Sale and Servicing Agreement dated as of
_______________ , 199__, between Chrysler Financial Corporation, as seller and
servicer, and the Trust (the "Sale and Servicing Agreement") and Eligible
Investment Receivables Transfer Assignment No. dated as of the date hereof
from the Seller, hereby certify that, as of their respective Cutoff Dates:
(a) ___% of the Principal Balances of the Eligible Investment
Receivables in the Reserve Account on the date hereof (including the
Eligible Investment Receivables conveyed to the Reserve Account on the
date hereof) represent receivables secured by previously titled
vehicles.
(b) All other conditions precedent set forth in Section
2.05(b)(1) of the Sale and Servicing Agreement relating to the
conveyance of Eligible Investment Receivables to the Reserve Account
have been satisfied.
All capitalized terms used but not otherwise defined herein shall have
the meanings assigned to them in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of this ____ day of
__________, 199__.
__________________________
Name:
Title:
__________________________
Name:
Title:
F-4
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAR-01-1996
<PERIOD-END> MAR-31-1996
<CASH> $ 134
<SECURITIES> 0
<RECEIVABLES> 1,472
<ALLOWANCES> 0
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<BONDS> 1,444
<COMMON> 0
0
0
<OTHER-SE> 56
<TOTAL-LIABILITY-AND-EQUITY> 1,606
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